10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2011

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-00643

CORNING NATURAL GAS CORPORATION

(Exact name of Registrant as specified in its charter)

New York	16-0397420
(State of incorporation)	(I.R.S. Employer Identification No.)

330 West William Street, Corning, New York 14830

(Address of principal executive offices) (Zip Code)

(607) 936-3755

(Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [_]

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes [X] No [_]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", "non-accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer [_] Accelerated Filer [_] Non-accelerated Filer [_] Smaller Reporting Company [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [_]No [X]

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Common Stock, $5.00 par value	1,964,068
Class	Shares outstanding as of February 14, 2012

Explanatory Note

Corning Natural Gas Corporation is filing this Amendment No. 1 (the ''Amendment'') on form 10-Q/A to amend its Quarterly Report on Form 10-Q for the quarter ended December 31, 2011 (the ''Report'') that was filed with the Securities and Exchange Commission on February 14, 2012, for the purpose of furnishing Exhibit 101 - Interactive Data File (XBRL Exhibit), which was not included with the original filing.

This Amendment does not reflect any subsequent events occurring after the original filing date of the Report and does not modify or update in any way disclosures made in the Report except to furnish the exhibit described above that should have been attached to the original filing.

Page 2.

Item 6. Exhibits.

31.1* Certification of the Chief Executive Officer and President pursuant to 17 CFR Section 240.13a-14

31.2* Certification of the Chief Financial Officer and Treasurer pursuant to 17 CFR Section 240.13a-14

32.1** Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101** The following materials from the Corning Natural Gas Corporation Quarterly Report on Form 10-Q for the period ended December 31, 2011, formatted in XBRL (eXtensible Business Reporting Language):

(i) the Condensed Consolidated Balance Sheets at December 31, 2011, December 31, 2010 and September 30, 2011,

(ii) the Consolidated Statements of Income for the three months ended December 31, 2011 and December 31, 2010,

(iii) the Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2011 and December 31, 2010, and (iv) related notes to the Condensed Consolidated Financial Statements.

As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections.

* Filed herewith

**Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CORNING NATURAL GAS CORPORATION

Date: February 14, 2012	By: /s/ Michael I. German
	Michael I. German, Chief Executive Officer and President
	(Principal Executive Officer)
Date: February 14, 2012	By: /s/ Firouzeh Sarhangi
	Firouzeh Sarhangi, Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

Page 3.

EX-31

Exhibit 31.1

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

17 CFR SECTION 240.13a-14(a)

I, Michael I. German, certify that:

1. I have reviewed this quarterly report on Form 10-Q/A of Corning Natural Gas Corporation for the period ending December 31, 2011;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 14, 2012

/s/ Michael I. German

Michael I. German, Chief Executive Officer and President

(Principal Executive Officer)

EX-31

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

17 CFR SECTION 240.13a-14(a)

I, Firouzeh Sarhangi, certify that:

1. I have reviewed this quarterly report on Form 10-Q/A of Corning Natural Gas Corporation for the period ending December 31, 2011;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 14, 2012

/s/ Firouzeh Sarhangi

Firouzeh Sarhangi, Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report of Corning Natural Gas Corporation (the "Company") on Form 10-Q/A for the period ending December 31, 2011 (the "Report") with the Securities and Exchange Commission, I, Michael I. German, Chief Executive Officer and President of the Company and I, Firouzeh Sarhangi, Chief Financial Officer and Treasurer of the Company, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and the results of operations of the Company for such period.

Dated: February 14, 2012

/s/ MICHAEL I. GERMAN

Michael I. German, Chief Executive Officer and President

(Principal Executive Officer)

/s/ FIROUZEH SARHANGI

Firouzeh Sarhangi, Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

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Pension and Other Post-retirement Benefit Plans

3 Months Ended

Dec. 31, 2011

Pension And Other Post-Retirement Benefit Plans

Pension and Other Post-retirement Benefit Plans

Note 4 - Pension and Other Post-retirement Benefit Plans

Components of Net Periodic Benefit Cost:

	Three Months Ended December 31,
	Pension Benefits						Other Benefits
	2011			2010			2011			2010
Service cost	$	82,165		$	83,265		$	3,597		$	3,455
Interest cost		192,835			194,015			10,392			10,480
Expected return on plan assets		(194,549	)		(185,759	)		—			—
Amortization of prior service cost		4,105			4,201			(2,923	)		(2,923	)
Amortization of net (gain) loss		176,383			207,342			(6,118	)		(9,018	)
Net periodic benefit cost	$	260,939		$	303,064		$	4,948		$	1,994

Contributions

The Company expects to contribute $1.4 million to its Pension Plan and $53,000 to its other Post Retirement Benefit Plan in fiscal year 2012. A total of $276,464 has been paid to the Pension Plan for the first three months of this fiscal year.

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Statement of Other Comprehensive Income (Loss)

3 Months Ended

Dec. 31, 2011

Statement Of Other Comprehensive Income Loss

Statement of Other Comprehensive Income (Loss)

Note 3 – Statement of Other Comprehensive Income (Loss)

Other comprehensive income (loss) (or “OCI”) is comprised of unrealized gains or losses on securities available for sale as required by FASB ASC 320 and pension liability adjustments as required by FASB ASC 715. There was a drop in the discount rate from 5.5% to 5.25% in 2010 and from 5.25% to 5% in 2011. That drop was offset by changes in assumptions in the rate of compensation increase from 4.5% to 3% in 2010 and from 3% to 2% in 2011.The quarterly accruals for estimated annual pension liability partially offset by the unrealized gain on securities available for sale for the current quarter resulted in an OCI loss of $136,179 for the three months ended December 31, 2011. The larger quarterly accruals for estimated annual pension liability added to the unrealized loss for the three months ended December 31, 2010 resulted in an OCI loss of $163,707 for the period.

	December 31,			December 31,			September 30,
	2011			2010			2011
Pension adjustment		(2,801,961	)		(2,364,451	)		(2,604,296	)
Net unrealized gain on securities available for sale		(27,414	)		(39,108	)		(88,900	)
Accumulated other comprehensive loss		(2,829,375	)		(2,403,559	)		(2,693,196	)

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Consolidated Balance Sheets (Unaudited) (USD $)	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Plant
Utility property, plant and equipment	$ 50,004,178	$ 47,490,565	$ 45,428,888
Less: accumulated depreciation	(14,793,688)	(14,361,951)	(13,305,858)
Total plant utility and non-utility, net	35,210,490	33,128,614	32,123,030
Investments
Marketable securities available-for-sale at fair value	2,379,575	2,267,268	2,450,603
Current assets
Cash and cash equivalents	166,035	173,245	6,861
Customer accounts receivable, (net of allowance for uncollectible accounts of $32,132, $35,584 and $46,080), respectively	2,477,607	1,598,241	2,904,047
Gas stored underground, at average cost	2,279,703	2,832,932	1,938,924
Materials and supplies inventory	928,015	1,188,017	738,234
Deferred income taxes
Prepaid expenses	600,277	703,959	555,933
Total current assets	6,451,637	6,496,394	6,143,999
Regulatory assets
Unrecovered gas costs	1,055,040	536,648	1,253,648
Deferred regulatory costs	1,373,147	1,207,028	989,616
Unamortized debt issuance cost (net of accumulated amortization of $455,139, $408,660 and $443,854), respectively	274,808	286,093	304,932
Deferred income taxes	1,177,891	1,308,298	101,785
Other	211,398	221,089	210,884
Total deferred debits and other assets	4,092,284	3,559,156	2,860,865
Total assets	48,133,986	45,451,432	43,578,497
Current liabilities
Current portion of long-term debt	1,333,559	945,063	1,120,932
Demand notes payable	750,000	750,000	750,000
Borrowings under lines-of-credit	6,020,507	4,178,784	5,148,635
Accounts payable	2,049,786	1,882,249	1,461,543
Accrued expenses	1,303,914	1,338,446	976,380
Customer deposits and accrued interest	1,325,160	1,034,319	1,379,835
Dividends declared	209,538	205,375	197,811
Deferred income taxes	252,432	147,779	332,643
Total current liabilities	13,244,896	10,482,015	11,367,779
Long-term debt, less current installments	10,916,929	11,534,801	10,222,119
Deferred credits and other liabilities
Deferred compensation	1,516,841	1,849,019	1,938,106
Deferred pension costs & post-retirement benefits	6,962,239	6,622,459	6,115,712
Other	338,201	316,556	68,403
Total deferred credits and other liabilities	8,817,281	8,788,034	8,122,221
Common stockholders' equity
Common stock (common stock $5.00 par value per share. Authorized 3,500,000 shares; issued and outstanding 1,823,967 shares at December 31,2011, 1,148,628 shares at December 31,2010 and 1,787,769 at September 30,2011)	9,119,835	8,938,845	5,743,140
Other paid-in capital	7,644,375	7,382,167	8,158,076
Retained earnings	1,220,045	1,018,766	2,368,721
Accumulated other comprehensive loss	(2,829,375)	(2,693,196)	(2,403,559)
Total common stockholders' equity	15,154,880	14,646,582	13,866,378
Total liabilities and capitalization	$ 48,133,986	$ 45,451,432	$ 43,578,497

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Basis of Presentation

3 Months Ended

Dec. 31, 2011

Basis Of Presentation

Basis of Presentation

Note 1 – Basis of Presentation

The information furnished herewith reflects all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to SEC rules and regulations, although the Company believes the disclosures which are made are adequate to make the information presented not misleading.

The condensed consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s latest annual report on Form 10-K for the fiscal year ended September 30, 2011. These interim consolidated financial statements have not been audited by a firm of certified public accountants.

It is the Company’s policy to reclassify amounts in the prior year financial statements to conform to the current year presentation.

Deferred income tax assets and liabilities are netted between short term and long term for presentation on the balance sheet.

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New Accounting Standards

3 Months Ended

Dec. 31, 2011

New Accounting Standards

New Accounting Standards

Note 2 – New Accounting Standards

In July 2010, FASB issued FASB ASU 2010-20, “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses”. The standard amends ASC Topic 310, “Receivables”, to enhance disclosures about the credit quality of financing receivables and the allowance for credit losses by requiring an entity to provide a greater level of disaggregated information and to disclose credit quality indicators, past due information, and modifications of its financing receivables. FASB ASU 2010-20 is effective for annual fiscal years beginning after December 15, 2011 for public entities. The Company adopted FASB ASU 2010-20 and it had no material effect on the consolidated financial statements.

In May 2011, FASB issued FASB ASU 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S GAAP and IRFSs”. This standard amends ASC Topic 820, “Fair Value Measurement”, to clarify intent about the application of existing fair value measurements and standardize standard fair value measurements and disclosures. FASB ASU 2011-04 is effective for interim or annual fiscal years beginning after December 15, 2011 for public entities. The Company is evaluating the impact the adoption of FASB ASU 2011-04 will have on its consolidated financial statements.

In June 2011, FASB issued FASB ASU 2011-05, “Comprehensive Income” (Topic 220). This standard increases the prominence of items reported in other comprehensive income and dictates presentation of these items in financial statements. FASB ASU 2011-05 is effective for interim or annual fiscal years beginning after December 15, 2011 for public entities. The Company is evaluating the impact the adoption of FASB ASU 2011-05 will have on its consolidated financial statements.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Current assets
Allowance for uncollectible accounts	$ 32,132	$ 46,080	$ 35,884
Regulatory assets
Accumulated amortization of debt issuance cost	$ 455,139	$ 443,854	$ 408,660
Common stockholders' equity
Common stock, par value	$ 5.00	$ 5.00	$ 5.00
Commn stock, authorized shares	3,500,000	3,500,000	3,500,000
Common stock, shares outstanding	1,823,967	1,787,769	1,148,628
Common stock, shares issued	1,823,967	1,787,769	1,148,628

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Leatherstocking Gas Company, LLC

3 Months Ended

Dec. 31, 2011

Leatherstocking Gas Company Llc

Leatherstocking Gas Company, LLC

Note 12 – Leatherstocking Gas Company, LLC

The Company, in a joint venture with Mirabito Holdings, Incorporated, formed a limited liability corporation (LLC) in November 2010 for the purpose of providing natural gas in areas of New York and Pennsylvania that currently do not have natural gas service. This new venture, Leatherstocking Gas Company, LLC, (“Leatherstocking”) is currently moving forward on expansions to several areas in the northeast. The Company and Mirabito Holdings, Incorporated each own 50% of the joint venture and each appoint three managers to operate the new company. The seventh manager is a neutral manager agreed to by the Company and Mirabito Holdings, Incorporated who is not an officer, director, shareholder or employee of either company. The current managers are Joseph P. Mirabito, John J. Mirabito and William Mirabito from Mirabito Holdings, Incorporated; Matthew J. Cook, Michael I. German and Russell S. Miller from the Company; and Carl T. Hayden as the neutral manager. Joseph P. Mirabito and William Mirabito are stockholders and current board members of the Company. There are no significant financial transactions to report and therefore no amounts to consolidate at December 31, 2011. Leatherstocking has met with potential customers and public officials, as well as attended public hearings, and believes there is significant interest in acquiring gas service. Leatherstocking received a franchise from the Village of Sidney, New York, on February 28, 2011 and from the Town of Sidney, New York, on November 9, 2011. On November 23, 2011, Leatherstocking filed for thirteen franchises in Susquehanna County, Pennsylvania. Leatherstocking received a franchise from the town of Bainbridge, New York on December 13, 2011. Leatherstocking is actively pursuing another four franchises in the area.

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Document and Entity Information	3 Months Ended
	Dec. 31, 2011	Feb. 14, 2012
Document And Entity Information
Entity Registrant Name	CORNING NATURAL GAS CORP
Entity Central Index Key	0000024751
Document Type	10-Q
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,964,068
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2012

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Stock Dividend

3 Months Ended

Dec. 31, 2011

Stock Dividend

Stock Dividend

Note 13 – Stock Dividend

On March 21, 2011, the Company set April 1, 2011 as the record date for a one for two stock dividend on its outstanding common stock as authorized by the NYPSC in an order dated March 17, 2011. Each shareholder of record as of close of business on the record date was paid one share of common stock for each two shares held by such holder on April 20, 2011. Due to this stock dividend, all computations of number of shares and earnings per share have been adjusted retroactively for prior periods to reflect the change in capital structure.

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Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Income Statement [Abstract]
Utility operating revenues	$ 4,913,295	$ 5,851,785
Natural gas purchased	1,997,114	2,497,048
Gross margin	2,916,181	3,354,737
Cost and expense
Operating and maintenance expense	1,020,411	1,696,494
Taxes other than income taxes	469,236	417,917
Depreciation	419,751	293,458
Other deductions, net	266,577	78,491
Total costs and expenses	2,175,975	2,486,360
Utility operating income	740,206	868,377
Other income and (expense)
Interest expense	(251,359)	(208,642)
Non-utility expense	(2,820)	(2,770)
Other income	266,920	10,703
Investment income	24,318	143,958
Rental income	12,138	12,138
[NonoperatingIncomeExpense]	49,197	(44,613)
Net income from utility operations, before income tax	789,403	823,764
Income tax benefit (expense), current	237,432	(42,367)
Income tax benefit (expense), deferred	(616,031)	(268,990)
Total tax (expense)	(378,599)	(311,357)
Net income	410,804	512,407
Other comprehensive income (loss)	(136,179)	(163,707)
Total comprehensive income (loss)	$ 274,625	$ 348,700
Weighted average earnings per share
basic:	$ 0.23	$ 0.30
diluted:	$ 0.22	$ 0.29
Average shares outstanding - basic	1,815,634	1,721,537
Average shares outstanding - diluted	1,829,486	1,740,852

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Director Compensation

3 Months Ended

Dec. 31, 2011

Director Compensation

Director Compensation

Note 7 – Director Compensation

On December 15, 2009, the board of directors approved an increase in its compensation from 150 shares of our restricted common stock for each quarter of service to 250 restricted shares quarterly effective as of January 1, 2010. The directors’ quarterly compensation was adjusted to 375 restricted shares in April 2011 due to the one for two stock dividend distributed by the Company (see Note 13 for further information). The shares awarded become unrestricted upon a director leaving the board.  Directors who also serve as officers of Corning are not compensated for their service as directors.  On November 9, 2010, directors were issued compensatory shares for service from July 2010 through September 30, 2010. Since these shares are restricted, in recording compensation expense, the expense accrued is 25% less than the closing price of the stock on the day the stock was awarded. Management of the Company believes this discount is reasonable for thinly traded stock such as that of the Company. The Company did not discount the value of the stock paid to the directors who resigned from the board since those shares became unrestricted when held by a non-affiliate for at least six months. On April 29, 2011, shares were issued for service for the quarters ended December 31, 2010 and March 31, 2011. Joseph Mirabito, William Mirabito and John Williamson III were each paid 247 shares of common stock for the quarter ended December 31, 2010 because they served for a portion of that quarter. No shares have been issued for service for the quarters ended June 30, 2011, September 30, 2011 or December 31, 2011. There have been no shares of stock awarded to directors as yet in fiscal 2012.

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Financing Activities

3 Months Ended

Dec. 31, 2011

Financing Activities

Financing Activities

Note 6 – Financing Activities

In October 2008, we obtained $1.0 million of financing in the form of a demand loan from Manufacturers and Traders Trust Company to help with the cost of our new construction. Interest on this loan was payable on a monthly basis at a rate equal to 1% above the prime rate. The initial interest rate on this loan was 5.5% and was 4.25% at the end of December 2010. The Company repaid $500,000 in December 2009 and the balance in December 2010.

On May 7, 2010, the Company entered into a credit agreement with Community Bank N.A. for a $1.05 million promissory note at a fixed interest rate of 6.25% for the purpose of funding construction projects at our new franchise location in the Town of Virgil. This agreement gives our lender a security interest in all fixtures, equipment and inventory related to the Company’s franchise in the Town of Virgil as well as the Rabbi Trust account. The note also required an equity contribution of $350,000 which was accomplished by the exercise of 24,000 stock options by Michael I. German, President and CEO, at $15.00 per share or $360,000. The agreement included the following covenants to be measured at each fiscal year end starting with the September 30, 2009 financial statement:

(i) Maintain a tangible net worth of not less than $11.0 million,

(ii) Maintain a debt to tangible net worth of less than 3.0 to 1.0, and

(iii) Maintain a debt service coverage ratio of 1.10 to 1.

On March 10, 2011, the interest rate on this loan was modified from a fixed interest rate to a floating rate of 30-day LIBOR plus 2.75% with a floor rate of 4.5% and a ceiling rate of 6.25%. The rate was 4.5% as of December 31, 2011.

In September 2010, we entered into an agreement with Five Star Bank to provide $750,000 to fund construction of an upgrade to existing natural gas piping to serve increased gas demands on one of our main supply lines, including three Corning Incorporated plants. Interest is payable monthly at a fixed rate of 4.25% per annum and, unless sooner accelerated or demanded, the note was to mature on September 25, 2011. This note was refinanced with Five Star Bank on September 1, 2011 with the same terms. The new maturity date is August 31, 2012 unless accelerated or demanded sooner.

On October 27, 2010, the Company entered into a Multiple Disbursement Term Note with Manufacturers and Traders Trust Company in the amount of $1,865,000 to refinance construction costs originally financed through internally generated funds. The interest rate of this note is 5.76% and is payable monthly for five years calculated on a ten-year amortization schedule. A final payment equal to the outstanding principal and interest will be due on the maturity date.

In February 2011, we renewed our $7.0 million revolving line of credit with Community Bank N.A. The line of credit bears interest annually at a fluctuating rate equal to the greater of 3.5% or the 30-day LIBOR plus 2.25% and expires on February 28, 2012. Under this agreement, the aggregate borrowings at any one time under the revolving line may not exceed the sum of 100% of all eligible accounts receivable plus 100% of all gas inventory plus 50% of miscellaneous eligible inventories (material and supplies on the balance sheet) plus 100% of the value of the Rabbi Trust investment account up to the $7.0 million limit. The interest rate was 3.5% as of December 31, 2011.

On July 14, 2011, the Company entered into a Multiple Disbursement Term Note and Credit Agreement in the amount of $2 million with Manufacturers and Traders Trust Company to fund construction projects in our NYPSC-mandated repair/replacement program for calendar year 2011. Until October 31, 2011, the note was payable as interest only at a rate of the greater of 3.50% above 30-day LIBOR or 4.25%. On November 1, 2011 the note converted to a permanent loan payable monthly for five years calculated on a ten-year amortization schedule with a variable rate, adjusting daily, based on the greater of 3.25 basis points above 30-day LIBOR or 4.25%. The interest rate was 4.25% as of December 31, 2011.

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Settlement of Lawsuits

3 Months Ended

Dec. 31, 2011

Settlement Of Lawsuits

Settlement of Lawsuits

Note 14 – Settlement of Lawsuits

On December 30, 2011, the Company entered into a definitive Settlement and Release Agreement (the “Agreement”) settling two lawsuits by a former Chairman of the Company. As previously disclosed, Thomas K. Barry sought damages from the Company for failure to transfer to Mr. Barry a key-man life insurance policy and for terminating payments under a deferred compensation agreement. Please refer to the Company’s Form 10-K for the fiscal year ended September 30, 2011 for disclosure regarding the original claims. Under the Agreement, the Company paid to Mr. Barry $285,000 on January 13, 2012, and beginning next year the Company will pay Mr. Barry on or before each January 5, $40,000 plus interest compounded annually at 4% (less than one-half of the amount in Mr. Barry’s deferred compensation agreement) for the longer of ten years or Mr. Barry’s lifetime. The Company will pay for a $500,000 term life insurance policy on Mr. Barry’s life through January 5, 2031, if a policy can be obtained for less than $15,000 annually. If such a policy cannot be obtained, the Company will pay Mr. Barry $15,000 annually for the longer of ten years or Mr. Barry’s lifetime up to a maximum of 20 payments. In addition, the Company will provide certain health and prescription drug insurance benefits to Mr. Barry and his wife for life. The Company and Mr. Barry exchanged mutual general releases. The Company had previously reserved for past due payments as well as accrued a liability for future payments under the deferred compensation agreement and key-man life insurance policy. The savings associated with the reversal of past due payments and change in the liabilities for future payments under the deferred compensation agreement were recognized as a decrease to operating and maintenance expense. The reversal of accrued liability for the key man insurance policy was recognized in other income. The after tax benefit that resulted from these entries is approximately $400,000 after accounting for legal fees associated with the settlement which are shown in other deductions, net.

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311 Transportation Agreement /Compressor Station

3 Months Ended

Dec. 31, 2011

Notes to Financial Statements

311 Transportation Agreement /Compressor Station

Note 10 – 311 Transportation Agreement /Compressor Station

On January 11, 2010, the Company entered into a contract (311 Transportation Agreement) with a local gas producer that provides for the building of a compressor station as well as the transfer of 6” pipeline owned by the gas producer to the Company for nominal consideration. The contract also sets forth the terms, rates and condition of the transport of the local producer gas to the interstate pipeline system. On May 21, 2010, the 311 Transportation Agreement was revised to reflect a change in the projected gas delivery schedule and delivery volumes. The previously agreed to transportation rates did not change. The contract’s maximum daily delivery quantity remained the same. The schedule for attaining the maximum daily delivery quantity was altered to accommodate the project’s construction schedule. The Company bought the $11 million compressor station and $2.1 million pipeline from the local producer for two dollars. The local producer has the right to repurchase these facilities for two dollars in ten years. This transaction became effective on May 12, 2011, when the station began operations. Although the Company has $13.1 million in new plant, only two dollars was recognized in accordance with the Uniform System of Accounts (313.2) which states that in the case of gas plant contributed to the utility, gas plant accounts shall be charged only with such expenses, if any, incurred by the utility. The Company has recognized the tax impact of this transaction as a deferred tax of approximately $1 million (the New York current tax liability) that will be recoverable from customers over the life of the agreement. The Company incurred no federal tax liability related to this gift because of bonus depreciation rules for the current year. This is the largest project undertaken by the Company in its history and will provide direct access to interstate markets for locally produced gas. The project improved management of gas supply and has the potential to lower gas costs for customers throughout the southern tier of the state. The Company expects this agreement to have a significant positive impact on its cash flow and also positively impact earnings.

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Fair Value Measurements

3 Months Ended

Dec. 31, 2011

Fair Value Measurements

Fair Value Measurements

Note 8 - Fair Value Measurements

The Company has determined the fair value of certain assets through application of FASB ASC 820.

Fair value of assets and liabilities measured on a recurring basis at December 31, 2011, December 31, 2010 and September 30, 2011 are as follows:

Fair Value Measurements at Reporting Date Using:
	Fair Value	Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1)	Level 2	Level 3
December 31, 2011
Available-for-sale securities	$2,379,575	$2,379,575	0	0
December 31, 2010
Available-for-sale securities	$2,450,603	$2,450,603	0	0
September 30, 2011
Available-for-sale securities	$2,267,268	$2,267,238	0	0

Gains and losses included in earnings for the periods reported in investment income as follows:

Investment Income
	Three Months Ended December 31,
	2011	2010
Total gains included in earnings	$24,318	$143,958

Financial assets and liabilities valued using level 1 inputs are based on unadjusted quoted market prices within active markets.

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Stock Options

3 Months Ended

Dec. 31, 2011

Stock Options

Stock Options

Note 9 – Stock Options

On November 5, 2007, the board of directors granted stock options to the Company’s President and Chief Executive Officer totaling 75,000 shares at an exercise price of $15.00 per share. 25,000 of the stock options vested immediately and 25,000 additional options vested on each of the first and second anniversary of the grant date. The options expire if not exercised by November 5, 2011. On September 23, 2008, the board of directors approved performance based stock options for the officers totaling 19,000 shares at an exercise price of $17.00 per share. 9,000 of these options vested on the first anniversary of the grant date and 5,000 vested on the second anniversary of the grant date. The remaining 5,000 of these options vest on the third anniversary of the grant date. No additional options were granted during fiscal years ended September 30, 2009 and September 30, 2010. On December 14, 2010, the board of directors granted 9,000 compensatory stock options to certain of the Company’s executive officers at an exercise price of $19.25 per share. These options are exercisable on or after December 15, 2011 and expire on the fourth anniversary of the grant date. No options were issued for the quarter ended December 31, 2011. The number of shares and exercise price of each of the option awards have been adjusted this quarter to reflect the stock dividend paid on April 20, 2011 (see Note 13 – Stock Dividend for additional information) and are shown in the next two tables.

Management has valued the options at their date of vesting utilizing the Black-Scholes Option Pricing Model. The following weighted average assumptions were utilized in the fair value calculations for options granted:

	2010	2011
	Options @	Options @
Adjusted exercise price	$11.33	$12.83
Expected dividend yield	3.16%	2.71%
Expected stock price volatility	36.23%	35.63%
Risk-free interest rate	4.00%	.83%
Expected life of options in years	1.75	4

The following summarizes the stock options outstanding as of December 31, 2011 for the fiscal year to date:

	Stock Options
					Weighted
	Number of		Weighted		Average
	Shares		Average		Remaining
	Remaining		Exercise		Contractual
	Options		Price		Term
Outstanding at October 1, 2011		80,000	$	10.95
Options granted		—
Options exercised during quarter ended December 31, 2011		35,000	$	10.00
Options canceled during quarter ended December 31, 2011		3,000
Outstanding at December 31, 2011		42,000	$	11.81		2.47 years
Exercisable at December 31, 2011		42,000	$	11.81		2.47 years

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Dividends

3 Months Ended

Dec. 31, 2011

Dividends [Abstract]

Dividends

Note 11 – Dividends

Dividends are accrued when declared by the Board of Directors. At its regular meeting on December 14, 2010, the Board of Directors approved an increase in the quarterly dividend from $.15 a share to $.1725 a share. The dividend rate of $.1725 reflects the pre-stock dividend rate (see Note 13 – Stock Dividend for additional information). The Board of Directors reviewed the quarterly dividend rate at its regular meeting on June 14, 2011 and adjusted the dividend rate to $.115. Shareholders of record on December 31, 2011, were paid this dividend on January 14, 2012.

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Subsequent Events

3 Months Ended

Dec. 31, 2011

Subsequent Events [Abstract]

Subsequent Events

Note 16 – Subsequent Events

On January 13, 2012 the Company, the Staff of the NYPSC and other intervenor parties filed a Joint Proposal (the “Proposal”) with the NYPSC to resolve all issues in the rate case. The Proposal provides for revenue increases to Corning’s rates in the first year (May 1, 2012 to April 30, 2013) of $944,310; in year two (May 1, 2012 to April 30, 2014) of $899,674; and in year three (May 1, 2014 to April 30, 2015) of $323,591. The cumulative revenue increases over the three years total $4,955,869. The Proposal also provides the Company the opportunity to earn $545,284 from local production before sharing, a 118% increase from the $250,000 allowed today. The Proposal also provides for property tax reconciliation, treatment of future local production investment, allocations to the Company’s new Leatherstocking operations, consolidation of the three divisional rate tariffs into a single rate tariff and recovery of forecasted capital and operation and maintenance costs for the period May 1, 2012 to April 30, 2015. The rates are based on a 9.5% return on equity. The Proposal will be reviewed by the Administrative Law Judges presiding in the rate case, who will then recommend approval or disapproval of the Proposal to the NYPSC. The NYPSC is expected to render a decision in April 2012, with rates becoming effective May 1, 2012.

On January 27, 2012, the Company completed a private placement of its common stock, par value $5.00 per share, pursuant to the terms of a Purchase Agreement, dated as of January 23, 2012, between the Company and the Article 6 Marital Trust under the First Amended and Restated Jerry Zucker Revocable Trust dated April 2, 2007 (the “Purchaser”). The 138,889 shares of common stock (the “Common Stock”) issued pursuant to the Purchase Agreement were sold at a per share cash price of $14.40 and raised gross proceeds of $2 million for the Company which will be used for general corporate purposes. In connection with the private placement, the Company entered into a Registration Rights Agreement, dated as of January 23, 2012, which grants the Purchaser certain demand and piggy-back registration rights with respect to the Common Stock. The issuance and sale of the Common Stock was not registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and the shares may not be sold in the United States absent registration or an applicable exemption from registration requirements. The Common Stock was offered and sold in reliance on the exemption from registration afforded by Section 4(2) of the Securities Act and corresponding provisions of state securities laws.

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Consolidated Statements of Cash Flows (USD $)	3 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Cash flows from operating activities
Net income	$ 410,804	$ 512,407
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	419,751	293,458
Unamortized debt issuance cost	11,285	11,589
Regulatory Amortizations	405,152	528,740
Stock issued for services and stock option expense	95,911	12,600
Pension adjustment	(197,665)	(124,599)
Loss (Gain) on sale of marketable securities	(24,703)	(102,608)
Deferred income taxes	235,060	(159,431)
Bad debt expense	35,545	39,120
(Increase) decrease in
Accounts receivable	(914,911)	(1,691,583)
Gas stored underground	553,229	757,471
Materials and supplies inventories	260,002	36,443
Prepaid expenses	103,682	411,105
Unrecovered gas costs	(518,392)	(160,619)
Deferred regulatory costs	(300,059)	(62,944)
Other	9,691	(42,550)
Increase (decrease) in
Accounts payable	167,537	93,659
Accrued expenses	(34,532)	133,445
Customer deposits and accrued interest	290,841	296,767
Deferred compensation	(332,178)
Deferred pension costs & post-retirement benefits	65,868	(110,492)
Other liabilities and deferred credits	25,808	(84,667)
Net cash provided by operating activities	767,726	587,311
Cash flows from investing activities
Purchase of securities available-for-sale	(396,126)	(1,288,056)
Sale of securities available-for-sale	370,008	1,267,823
Capital expenditures	(2,501,627)	(1,668,223)
Net cash (used in) provided by investing activities	(2,527,745)	(1,688,456)
Cash flows from financing activities
Proceeds under lines-of-credit	4,750,523	3,688,189
Repayment of lines-of-credit	(2,908,800)	(3,680,203)
Debt issuance cost expense		(13,053)
Cash received from sale of stock	350,000
Dividends paid	(209,538)	(171,719)
Proceeds under long-term debt		1,878,000
Repayment of long-term debt	(229,376)	(662,760)
Net cash (used in) provided by financing activities	1,752,809	1,038,454
Net increase (decrease) in cash	(7,210)	(62,691)
Cash and cash equivalents at beginning of year	173,245	69,552
Cash and cash equivalents at end of year	166,035	6,861
Cash paid during the period for
Interest	248,115	203,162
Income taxes	$ 28,500	$ 386,471

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Rate Cases

3 Months Ended

Dec. 31, 2011

Rate Cases

Rate Cases

Note 5 – Rate Cases

In August 2009, in Case 08-G-1137, the New York Public Service Commission (“NYPSC”) approved a rate increase of $1.5 million effective September 1, 2009 that was included in a gas rate joint proposal dated March 27, 2009. The order also contained a revenue decoupling mechanism (RDM), a refund or surcharge on customer bills to reflect differences between actual delivery revenue from residential customers and a revenue target. The order also contained a year two “capital tracker”. This allowed the Company to file for rate relief in 2010 for new capital projects without a full rate proceeding. In addition, the percentage of revenues from gas producers retained by the Company as an incentive was increased from 10% to 20%. On January 25, 2011, the NYPSC approved an estimated increase in rates of $164,000 associated with the “capital tracker”. The final amount will be determined based on the actual capital expenditures and additional property taxes through August 2011. On February 1, 2011, the Company filed for a re-hearing to include depreciation expense as a component in the calculation. On October 13, 2011, the NYPSC denied the Company’s rehearing request.

On May 24, 2011, the Company filed Case 11-G-0280, a base rate case that requested an increase in revenues of $1,429,281 (or 6.63% on an overall bill rate basis) in the 12 months ending April 30, 2013, (the Rate Year) and by the same dollar amount in the two succeeding 12-month periods (ending April 30, 2014, and April 30, 2015). This multi-year proposal is a leveled alternative to a single-year increase of $2,565,649 in the Rate Year and $901,464 and $583,033 for the years ending April 30, 2014, and April 30, 2015, respectively. It also asked that the Commission permit increases for certain limited expenditures (capital additions and property taxes) for the 12-month periods ending April 30, 2016, and April 30, 2017. The Company proposed to offset the annualized amount by an $844,000 surcharge credit that represents the forecasted customer share of the revenues from transportation of local production gas including operation of the associated compressor facilities. If the Company’s surcharge credit proposal were adopted by the Commission the overall bill impact on customer bills would be 2.71%. The Company in the filing requested a Return on Equity Capital of 10.9 %.

On January 13, 2012 the Company, the Staff of the NYPSC and other intervenor parties filed a Joint Proposal (the “Proposal”) with the NYPSC to resolve all issues in the rate case. The Proposal provides for revenue increases to Corning’s rates in the first year (May 1, 2012 to April 30, 2013) of $944,310; in year two (May 1, 2012 to April 30, 2014) of $899,674; and in year three (May 1, 2014 to April 30, 2015) of $323,591. The cumulative revenue increases over the three years total $4,955,869. The Proposal also provides the Company the opportunity to earn $545,284 from local production before sharing, a 118% increase from the $250,000 allowed today. The Proposal also provides for property tax reconciliation, treatment of future local production investment, allocations to the Company’s new Leatherstocking operations, consolidation of the three divisional rate tariffs into a single rate tariff and recovery of forecasted capital and operation and maintenance costs for the period May 1, 2012 to April 30, 2015. The rates are based on a 9.5% return on equity. The Proposal will be reviewed by the Administrative Law Judges presiding in the rate case, who will then recommend approval or disapproval of the Proposal to the NYPSC. The NYPSC is expected to render a decision in April 2012, with rates becoming effective May 1, 2012.

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Income Taxes

3 Months Ended

Dec. 31, 2011

Income Taxes

Income Taxes

Note 15 – Effective Tax Rate

Income tax expense for the quarters ended December 31 is as follows:

	2011			2010
Current	($	237,432	)	$	42,367
Deferred		616,031			268,990
Total	$	378,599		$	311,357

Actual income tax expense differs from the expected tax expense (computed by applying the

federal corporate tax rate of 34% and state tax rate of 7.1% to income before income tax

expense) as follows:

	2011			2010
Expected federal tax expense	$	268,397		$	280,080
State tax expense (net of federal)		56,048			58,487
Net operating loss carryforwards		67,961			—
Other, net		(13,807	)		(27,210	)
Actual tax expense	$	378,599		$	311,357

The effective tax rate for the period ending December 31, 2011 was 48% instead of the expected rate of 41.1% due to reconciliation of a prior period tax liability. The effective tax rate for the period ending December 31, 2010 was 37.8% instead of the expected 41.1% primarily because of bonus depreciation.