CORNING NATURAL GAS CORPORATION AND SUBSIDIARY

Consolidated Statements of Cash Flows

For the Years Ended September 30, 2000 and 1999

2000

1999

Cash flows from operating activities:

Net income

$471,452

$437,948

Adjustments to reconcile net income to net cash(used in)

provided by operating activities:

Depreciation and amortization

964,958

895,280

Gain on sale of marketable securities

(45,256)

(25,375)

Deferred income taxes

156,017

105,415

Changes in assets and liabilities:

(Increase) decrease in:

Accounts receivable

573,226

(845,391)

Gas stored underground

(2,059,786)

1,405,077

Gas and appliance inventories

(4,543)

(52,583)

Prepaid expenses

(102,447)

84,180

Unrecovered gas costs

(1,362,394)

191,819

Prepaid income taxes

(14,291)

(311,380)

Deferred income tax asset

11,000

---

Deferred charges - pension and other

(649,702)

(198,012)

Other assets and long-term debt issuance costs

---

22,397

Increase (decrease) in:

Accounts payable

311,258

137,452

Customer deposit liability

7,860

---

Accrued general taxes

24,890

(53,178)

Supplier refunds due customers

25,814

198,131

Other liabilities and deferred credits

406,575

(157,923)

Net cash (used in) provided by operating activities

(1,285,369)

1,833,857

Cash flow from investing activities:

Purchase of securities available for sale

(135,362)

(172,719)

Investment in joint venture

(195,000)

---

Acquisitions of businesses, net of cash acquired

---

(600,907)

Capital expenditures, net of minor disposals

(674,773)

(1,150,718)

Net cash used in investing activities

(1,005,135)

(1,924,344)

Cash flows from financing activities:

Net borrowings (repayments) under lines-of-credit

3,010,359

(160,000)

Dividends paid

(598,000)

(598,000)

Borrowings under long-term debt agreements

299,000

916,666

Repayment of long-term debt

(369,607)

(146,818)

Net cash provided by financing activities

2,341,752

11,848

Net increase (decrease) in cash

51,248

(78,639)

Cash and cash equivalents at beginning of year

205,787

284,426

Cash and cash equivalents at end of year

$257,035

$205,787

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Supplemental disclosures of cash flow information:

Cash paid during the period for:

Interest

$1,287,100

$1,121,174

Income taxes

$480,600

$428,208

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Noncash investing and financing activities:

Acquisition of assets financed by seller

$ ---

$1,056,666

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See accompanying notes to consolidated financial statements.