0000024751-13-000009.txt : 20130213 0000024751-13-000009.hdr.sgml : 20130213 20130213103345 ACCESSION NUMBER: 0000024751-13-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20121231 FILED AS OF DATE: 20130213 DATE AS OF CHANGE: 20130213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORNING NATURAL GAS CORP CENTRAL INDEX KEY: 0000024751 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 160397420 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-00643 FILM NUMBER: 13600331 BUSINESS ADDRESS: STREET 1: 330 W WILLIAM ST STREET 2: P O BOX 58 CITY: CORNING STATE: NY ZIP: 14830 BUSINESS PHONE: 6079363755 MAIL ADDRESS: STREET 1: 330 W WILLIAM STREET STREET 2: P O BOX 58 CITY: CORNING STATE: NY ZIP: 14830 10-Q 1 cng10qv3.htm CORNING NATURAL GAS FORM 10Q UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012
[_] 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	2,236,117
Class	Shares outstanding as of February 13, 2013

Page 2.

PART I. FINANCIAL INFORMATION		Page
	Item 1. Financial Statements (Unaudited)	4
	Item 2. Management's discussion and Analysis of Financial
	Condition and Results of Operations	18
	Item 4. Controls and Procedures	28
PART II. OTHER INFORMATION
	Item 1. Legal Proceedings	29
	Item 1A. Risk Factors	30
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	30
	Item 3. Defaults upon Senior Securities	30
	Item 4. Mine Safety Disclosures	30
	Item 5. Other Information	30
	Item 6. Exhibits	31
SIGNATURES		32

As used in this Form 10-Q, the terms "Company," "Corning," "Registrant," "we," "us," and "our" mean Corning Natural Gas Corporation and its subsidiary, taken as a whole, unless the context indicates otherwise. Except as otherwise stated, the information contained in this Form 10-Q is as of December 31, 2012.

Page 3.

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements.

CORNING NATURAL GAS CORPORATION AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
Assets	December 31, 2012	December 31, 2011	September 30, 2012

Plant:
Utility property, plant and equipment	$56,293,395	$50,004,178	$54,198,924
Less: accumulated depreciation	(16,377,735)	(14,793,688)	(15,888,267)
Total plant utility and non-utility, net	39,915,660	35,210,490	38,310,657

Investments:
Marketable securities available-for-sale at fair value	2,277,727	2,379,575	2,271,721
Investment in joint ventures	400,790	-	349,193
Total investments	2,678,517	2,379,575	2,620,914

Current assets:
Cash and cash equivalents	100,218	166,035	70,083
Customer accounts receivable, (net of allowance for
uncollectible accounts of $251,789, $32,132
and $209,615) respectively	2,968,721	2,477,607	1,626,283
Gas stored underground, at average cost	1,333,114	2,279,703	2,111,264
Materials and supplies inventory	1,162,996	928,015	1,173,104
Prepaid expenses	635,942	600,277	726,744
Total current assets	6,200,991	6,451,637	5,707,478

Deferred debits and other assets:
Regulatory assets:
Unrecovered gas costs	1,698,535	1,055,040	1,545,235
Deferred regulatory costs	2,039,785	1,373,147	1,545,790
Unamortized debt issuance cost (net of accumulated
amortization of $501,249, $455,139 and $489,522),
respectively	237,484	274,808	249,211
Deferred income taxes	1,874,872	1,177,891	1,375,665
Other	282,577	211,398	259,254
Total deferred debits and other assets	6,133,253	4,092,284	4,975,155

Total assets	$54,928,421	$48,133,986	$51,614,204

See accompanying notes to consolidated financial statements.

Page 4.

CORNING NATURAL GAS CORPORATION AND SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)

Liabilities and capitalization:	December 31, 2012	December 31, 2011	September 30, 2012

Current liabilities:
Current portion of long-term debt	$1,638,162	$1,333,559	$1,571,553
Demand notes payable	750,000	750,000	750,000
Borrowings under lines-of-credit	4,451,596	6,020,507	2,196,995
Accounts payable	1,767,756	2,049,786	1,501,193
Accrued expenses	1,009,246	1,303,914	872,702
Customer deposits and accrued interest	1,288,524	1,325,160	1,032,739
Dividends declared	-	209,538	266,205
Deferred income taxes	798,645	252,432	270,720
Total current liabilities	11,703,929	13,244,896	8,462,107

Long-term debt, less current installments	12,299,968	10,916,929	12,565,527

Deferred credits and other liabilities:
Deferred compensation	1,510,378	1,516,841	1,499,264
Deferred pension costs & post-retirement benefits	7,820,595	6,962,239	7,680,065
Other	453,575	338,201	431,680
Total deferred credits and other liabilities	9,784,548	8,817,281	9,611,009

Common stockholders' equity:
Common stock (common stock $5.00 par
value per share. Authorized 3,500,000 shares;
issued and outstanding 2,233,267 shares at
December 31, 2012, 1,823,967 shares at December
31, 2011 and 2,220,271 at September 30, 2012)	11,166,335	9,119,835	11,101,355
Other paid-in capital	11,809,321	7,644,375	11,698,763
Retained earnings	1,521,161	1,220,045	1,421,918
Accumulated other comprehensive loss	(3,356,841)	(2,829,375)	(3,246,475)
Total common stockholders' equity	21,139,976	15,154,880	20,975,561

Total liabilities and capitalization	$54,928,421	$48,133,986	$51,614,204

See accompanying notes to consolidated financial statements.

Page 5.

CORNING NATURAL GAS CORPORATION AND SUBSIDIARY
Consolidated Statements of Income
(Unaudited)

		Three Months ended December 31,
		2012	2011

Utility operating revenues		$5,589,201	$4,913,295
	Natural gas purchased	2,033,201	1,997,114
Gross margin		3,556,000	2,916,181

Cost and expense
	Operating and maintenance expense	1,744,427	1,020,411
	Taxes other than income taxes	426,075	469,236
	Depreciation	477,324	419,751
	Other deductions, net	243,736	266,577
Total costs and expenses		2,891,562	2,175,975

Utility operating income		664,438	740,206

Other income and (expense)
	Interest expense	(243,843)	(251,359)
	Non-utility expense	(6,506)	(2,820)
	Other Income	27,842	266,920
	Investment income	29,726	24,318
	Non-utility income from joint ventures	21,597	-
	Rental income	12,138	12,138

Net income from operations, before income tax		505,392	789,403

	Income tax benefit/(expense), current	275,935	237,432
	Income tax (expense), deferred	(414,528)	(616,031)
	Total tax (expense)	(138,593)	(378,599)

Net income		366,799	410,804

Other comprehensive (loss)
Pension adjustment, net of tax		(94,129)	(197,665)
	Net unrealized gain (loss) on securities available for sale	(16,237)	61,486
	Total other comprehensive (loss)	(110,366)	(136,179)

Total comprehensive income		$256,433	$274,625

Weighted average earnings per share-
	basic:	$0.16	$0.23
	diluted:	$0.16	$0.22

Average shares outstanding - basic		2,230,135	1,815,634
Average shares outstanding - diluted		2,240,024	1,829,486

See accompanying notes to consolidated financial statements.

Page 6.

CORNING NATURAL GAS CORPORATION AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
	Three Months ended December 31,
	2012	2011
Cash flows from operating activities:
Net income	$366,799	$410,804
Adjustments to reconcile net income to net cash
used in operating activities:
Depreciation	477,324	419,751
Unamortized debt issuance cost	11,727	11,285
Regulatory Amortizations	354,996	405,152
Stock issued for services and stock option expense	175,542	95,911
Pension adjustment	(94,129)	(197,665)
Loss (Gain) on sale of marketable securities	(5,356)	(24,703)
Deferred income taxes	28,718	235,060
Bad debt expense	73,559	35,545
Undistributed earnings on joint ventures	(21,597)	-

Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable	(1,415,997)	(914,911)
Gas stored underground	778,150	553,229
Materials and supplies inventories	10,108	260,002
Prepaid expenses	90,802	103,682
Unrecovered gas costs	(153,300)	(518,392)
Deferred regulatory costs	(641,027)	(300,059)
Other	(23,323)	9,691
Increase (decrease) in:
Accounts payable	266,563	167,537
Accrued expenses	136,544	(34,532)
Customer deposits and accrued interest	255,785	290,841
Deferred compensation	11,114	(332,178)
Deferred pension costs & post-retirement benefits	(67,434)	65,868
Other liabilities and deferred credits	(244,310)	25,808
Net cash (used in) provided by operating activities	371,258	767,726

Cash flows from investing activities:
Purchase of securities available-for-sale	(452,462)	(396,126)
Sale of securities available-for-sale	435,575	370,008
Investment in joint ventures	(30,000)	-
Capital expenditures	(2,082,327)	(2,501,627)
Net cash (used in) provided by investing activities	(2,129,214)	(2,527,745)

Cash flows from financing activities:
Proceeds under lines-of-credit	3,997,523	4,750,523
Repayment of lines-of-credit	(1,742,922)	(2,908,800)
Cash received from sale of stock	-	350,000
Dividends paid	(267,560)	(209,538)
Proceeds under long-term debt	77,435	-
Repayment of long-term debt	(276,385)	(229,376)
Net cash (used in) provided by financing activities	1,788,091	1,752,809
Net (decrease) increase in cash	30,135	(7,210)

Cash and cash equivalents at beginning of period	70,083	173,245

Cash and cash equivalents at end of period	$100,218	$166,035

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$241,042	$248,115
Income taxes	$24,333	$28,500

See accompanying notes to consolidated financial statements

Page 7.

Notes to Consolidated Financial Statements

(Unaudited)

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 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, 2012. 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.

Our significant accounting policies are described in the notes to the Consolidated Financial Statements in the Company's Form 10-K for the year ended September 30, 2012, filed on December 28, 2012. It is important to understand that the application of generally accepted accounting principles involve certain assumptions, judgments and estimates that affect reported amounts of assets, liabilities, revenues and expenses. Thus, the application of these principles can result in varying results from company to company.

Page 8.

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 adopted FASB ASU 2011-04 and it had no material effect on the 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 adopted FASB ASU 2011-05 it had no material effect on the consolidated financial statements.

In December 2011, FASB issued FASB ASU 2011-12, "Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05" (Topic 220). This standard defers the requirement to present reclassification adjustments in the statement of income in response to concerns raised about implementation of FASB ASU 2011-05. FASB ASU 2011-12 is effective for interim or annual fiscal years beginning after December 15, 2011 for public entities and for fiscal years ending after December 2012 for non-public entities. The Company has already adopted FASB ASU 2011-05, so the deferral of the effective date of FASB ASU 2011-05 provided by FASB ASU 2011-12 will have no impact on the Company's consolidated financial statements.

Note 3 - 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 5.25% to 5% in 2011 and from 5% to 4% in 2012. That drop was partially offset by changes in assumptions in the increase rate of compensation which decreased 3% to 2% in 2011 and 2012. 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 quarterly accruals for estimated annual pension liability added to the unrealized loss for the three months ended December 31, 2012 resulted in an OCI loss of $110,366 for the period.

Page 9.

	December 31,	December 31,	September 30,
	2012	2011	2012
Pension adjustment	(3,393,526)	(2,801,961)	(3,299,397)
Net unrealized gain (loss) on securities available for sale	36,685	(27,414)	52,922
Accumulated other comprehensive loss	(3,356,841)	(2,829,375)	(3,246,475)

Note 4 - Pension and Other Post-retirement Benefit Plans

Components of Net Periodic Benefit Cost:

	Three Months Ended Dec 31,
	Pension Benefits		Other Benefits
	2012	2011	2012	2011

Service cost	$98,979	$82,165	$4,321	$3,597
Interest cost	178,766	192,835	11,556	10,392
Expected return on plan assets	(221,641)	(194,549)	-	-
Amortization of prior service cost	3,557	4,105	887	(2,923)
Amortization of net (gain) loss	155,983	176,383	(3,886)	(6,118)
Net periodic benefit cost	$215,644	$260,939	$12,878	$4,948

Contributions

The Company expects to contribute $1.0 million to its Pension Plan and $63,000 to its other Post Retirement Benefit Plan in fiscal year 2013. A total of $228,966 has been paid to the Pension Plan for the first three months of this fiscal year.

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 determined on the actual capital expenditures and additional property taxes from September 2010 through August 2011 was $228,342.

On April 20, 2012, the NYPSC issued a final order in Case 11-G-0280 approving a Joint Proposal (the "Proposal") for a three-year rate plan. The Proposal provided 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, 2013 to April 30, 2014) of $899,674; and in year three (May 1, 2014 to April 30, 2015) of $323,591. The Proposal also provided the Company the opportunity to earn $545,284 from local production before sharing, a 118% increase from the $250,000 allowed previously. The Proposal also provided 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 cumulative potential revenue increases over the three years total $4,955,869. Rates became effective May 1, 2012.

Page 10.

Note 6 - Financing Activities

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 ratio 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, 2012.

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. On August 13, 2012 the note was refinanced at a variable interest rate of prime rate plus 1.00% until July 30, 2013. Commencing July 30, 2013 and continuing until August 1, 2018, the Company will pay principal and interest at a fixed rate equal to the prevailing Federal Home Loan Bank of New York Fixed Advance Rate as published five days prior to July 30, 2013, plus 3.75%. The interest rate at December 31, 2012 was 4.25%.

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 had a fluctuating interest rate equal to the greater of 3.5% or the 30-day LIBOR plus 2.25% and expired on February 28, 2012. In February 2012, we refinanced the line of credit with Community Bank and the new line of credit bears interest at the greater of 3.25% or the 30-day LIBOR plus 2.25%. The interest rate on this loan is adjusted monthly and was 3.25% at December 31, 2012.

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% above 30-day LIBOR or 4.25%. The interest rate was 4.25% as of December 31, 2012.

Page 11.

On August 13, 2012, the Company entered agreements with Five Star Bank pursuant to two Promissory Notes in the amount of $250,000 each. Each Note will be payable monthly for five years at the fixed interest rate of 4.46% per annum. At that time, the Notes will have the option to be paid-in-full, refinanced or remain in place for an additional five years with a new effective rate established at that time. The purpose of these Notes is to fund construction of two major projects.

Note 7 - Stock Based Compensation

The board of 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. 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 November 9, 2010, directors were issued compensatory shares for service from July 2010 through September 30, 2010. 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. On February 22, 2012, shares were issued for service for the quarters ended June 30, 2011, September 30, 2011 and December 31, 2011. On October 10, 2012, shares were issued for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012. Information regarding shares of stock awarded to directors in fiscal 2013 is summarized below.

	Fees Earned or Paid	10/10/2012
	in Cash	Stock Awards	Stock Awards	Total
	($)	(@ $11.70/Share)	($)	($)
6 Directors	-	6,750	78,975	78,975

At its regularly scheduled meeting on December 11, 2012, the Compensation Committee of the Board of Directors of the Company made restricted stock awards of 600 shares each to the five officers of the Company in lieu of salary increases. Each restricted stock award vested 300 shares immediately and 300 shares on December 12, 2013 if the officer is still employed by the Company or one of its subsidiaries or affiliates on that date. Each award is subject to the terms and conditions of a restricted stock award agreement and the Company's Amended and Restated 2007 Stock Plan. Information regarding the shares of stock issued is summarized below.

	Fees Earned or Paid	12/17/12
	in Cash	Stock Awards	Stock Awards	Total
	($)	(@ $16.00/Share)	($)	($)
5 Officers	-	3,000	48,000	48,000

In addition, the Board of Directors authorized the sale of 600 shares of the Company's common stock to Leatherstocking Gas Company, LLC. Leatherstocking Gas Company, LLC has assigned these shares to Carl T. Hayden in compensation for past service as a director of the Company's joint venture affiliate, Leatherstocking Gas Company, LLC. These shares were issued in January 2013 and will be recognized next quarter.

Page 12.

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, 2012, December 31, 2011 and September 30, 2012 are as follows:

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

	Fair Value Measurements at Reporting Date Using:	Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1)	Level 2	Level 3

December 31, 2012
Available-for-sale securities	$2,277,727	$2,277,727	0	0

December 31, 2011
Available-for-sale securities	$2,379,575	$2,379,575	0	0

September 30, 2012
Available-for-sale securities	$2,271,721	$2,271,721	0	0

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

Note 9 - Stock Options

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 vested 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 were exercisable on or after December 15, 2011 and expire on the fourth anniversary of the grant date. There are no additional options vesting this quarter. No options were issued for the quarter ended December 31, 2012. The number of shares and exercise price of each of the option awards have been adjusted 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.

Page 13.

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	.75	3

The following summarizes the stock options outstanding as of December 31, 2012 for the fiscal year to date:

	2013
	Stock Options
			Weighted
	Number of	Weighted	Average
	Shares	Average	Remaining
	Remaining	Exercise	Contractual
	Options	Price	Term
Outstanding at October 1, 2012	42,000	$11.81
Options granted	-
Options exercised during quarter ended December 31, 2012	-
Options canceled during quarter ended December 31, 2012	-
Outstanding at December 31, 2012	42,000	$11.81	1.47 years
Exercisable at December 31, 2012	42,000	$11.81	1.47 years

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 a 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. 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.

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 split 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. At its regular meeting on February 10, 2012, the board of directors approved an increase in the quarterly dividend to $.12 a share. Shareholders of record on December 21, 2012, were paid this dividend on December 31, 2012.

Page 14.

On May 28, 2009, the Company registered 100,000 shares of common stock with a par value of $5 per share for a dividend reinvestment program. During this quarter 3,246 shares have been issued under this program.

Note 12 - Leatherstocking Companies

The Company, in a joint venture with Mirabito Regulated Industries, 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 venture, Leatherstocking Gas Company, LLC, ("Leatherstocking Gas") is currently moving forward on expansions to several areas in the northeast. The Company and Mirabito Regulated Industries each owns 50% of the joint venture and each appoints three managers to operate Leatherstocking Gas. The seventh manager is a neutral manager agreed to by the Company and Mirabito Regulated Industries who is not an officer, director, shareholder or employee of either company, currently Carl T. Hayden. The current managers are Joseph P. Mirabito, John J. Mirabito and William Mirabito from Mirabito Regulated Industries; 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. Leatherstocking has received franchises from the Village and Town of Sidney, Village and Town of Bainbridge, Village and Town of Windsor and Village and Town of Unadilla in New York. In addition, Leatherstocking Gas has acquired thirteen franchises in Susquehanna County, Pennsylvania. 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.

In September 2010, Leatherstocking Pipeline Company, LLC ("Leatherstocking Pipeline") was formed with the same structure and managers as Leatherstocking Gas. Leatherstocking Pipeline is an unregulated company whose purpose is to serve one customer in Lawton, Pennsylvania. In the spring and summer of 2012, Leatherstocking Pipeline built and placed in service facilities to service that customer.

The investment and equity in both companies has been recognized in the consolidated statements. The Company has accounted for its investment in equity using the equity method of accounting based on the guidelines established in FASB ASC 323. In applying the guidance of FASB ASC 323, the Company recognized the investment in the joint ventures as an asset at cost. The investment will fluctuate in future periods based on the Company's allocable share of earnings or losses from the joint ventures which is recognized through earnings.

Investment in joint ventures as of September 30, 2012	$ 349,193
Investment in joint ventures during quarter ended December 31, 2012	30,000
Earnings in joint ventures during quarter ended December 31, 2012	21,597
Ending Balance in joint ventures as of December 31, 2012	$ 400,790

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. On April 20, 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. 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.

Page 15.

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 in calendar 2013, 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 Mr. Barry $15,000 annually for the longer of ten years or Mr. Barry's lifetime up to a maximum of 20 payments to replace the life insurance policy. The Company has paid the amounts due in January 2013. 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 was approximately $400,000 as of December 31, 2011, after accounting for legal fees associated with the settlement which are shown in other deductions, net and adjustments to pension expense which are shown in operating and maintenance expense.

On March 23, 2012, a complaint filed by Richard M. Osborne and Gas Natural, Inc. in the U.S. District Court for the Northern District of Ohio against four of the Company's directors and, nominally, against the Company (collectively "Defendants"). Richard M. Osborne and Gas Natural Inc. v. Michael I. German, Henry B. Cook, Ted W. Gibson, George J. Welch and Corning Natural Gas Corporation, Civ. Action No. 1:11-CV-744-CAB, N.D. Ohio (the "Action"), was dismissed by the court. The complaint sought to recover compensatory damages in an unspecified amount in excess of $75,000 and to rescind the rights offering, as well as payment of costs and interest. The Action was dismissed for lack of personal jurisdiction.

On August 30, 2012, counsel to Gas Natural, Inc. and Richard M. Osborne sent a letter to counsel representing the Company offering to settle and release, for a $650,000 cash payment, claims related to Gas Natural Inc.'s previous offers to purchase the Company and other activities, including the Company's 2010 rights offering. The Company has been in discussion with representatives of Gas Natural, Inc. and Mr. Osborne. On December 11, 2012, at its regularly scheduled meeting, the Board of Directors approved settling the claims for $200,000 in exchange for general releases and certain other consideration. On December 13, 2012, the Company was notified by counsel for Gas Natural, Inc. that Gas Natural, Inc.'s Board of Directors, Richard Osborne and the Osborne Trust had approved the settlement. The after tax expense that resulted from this agreement was $126,000 and is shown in other deductions, net for the current quarter on the Company's Income Statement. The Company believes its actions in connection with the offers, the rights offering and other activities were in the best interest of the Company and its shareholders.

Page 16.

Note 15 - Effective Tax Rate

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

	2012	2011
Current	($275,935)	($237,432)
Deferred	414,528	616,031
Total	$138,593	$378,599

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:

	2012	2011
Expected federal tax expense	$171,833	$268,397
State tax expense (net of federal)	23,683	56,048
Net operating loss carryforwards	-	67,961
Other, net	(56,923)	(13,807)
Actual tax expense	$138,593	$378,599

The effective tax rate for the period ending December 31, 2012 was 27.4% instead of the expected rate of 41.1% mainly due to components of non-taxable income and reconciliation of tax rates for prior periods. 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.

Note 16 - Private Placement of Common Stock

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.

Note 17 - Employment Agreements

On April 17, 2012, the Company entered into Change of Control Agreements (the "Agreements") with all executive officers other than Michael I. German, the Company's President and Chief Executive Officer. Each Agreement is effective as of April 20, 2012, and terminates on the first to occur of (i) termination of employment prior to a Change of Control (as defined in the Agreements); (ii) one year from the date of the Change of Control; or (iii) May 1, 2017, if no Change of Control has occurred. These Agreements define compensation amounts due upon termination of employment following a Change of Control except in cases of death, good cause or good reason.

Page 17.

Note 18 - Rights Offering

The Company distributed one transferable subscription right for each eight shares of common stock to shareholders of record as of 5:00 pm on July 2, 2012. This right entitled the shareholder to purchase one share of our common stock at a cash exercise price of $15.75 per share. The rights were granted to the shareholders without additional charge to them and expired at 5:00 pm on September 21, 2012. We received $3,838,048, net of cost, with the exercise of 246,524 shares. The Company used the proceeds to help fund capital expenditures, the retirement of debt and future growth opportunities.

Note 19 - Chapter 11 Protection Filed by Significant Customer

On August 2, 2012, the Company received notice that a significant customer filed for protection under Chapter 11 of the United States Bankruptcy Code. The customer received funding from their principal lender to continue to operate and pay bills going forward. As of December 31, 2012, the Company has reserved $220,000 of the $253,148 outstanding which is consistent with the Company's accounting policies.

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview

Our primary business is natural gas distribution. We serve approximately 15,000 customers through 425 miles of pipeline in the Corning, Hammondsport and Virgil, New York areas. The market for natural gas in our traditional service territory is relatively saturated with limited growth potential. However, growth opportunities do exist in extending our mains to areas adjacent or reasonably close to areas we currently serve. In addition, the Company continues to see expansion opportunities in the commercial and industrial markets. Our largest customer, Corning Incorporated, has added additional research capacity in our service area that is increasing our revenue and margins. Several new institutional and commercial facilities have been announced in our service territory. For example, the following projects are moving forward: a new hospital, two local motels, a new dormitory for the local community college, a large expansion to a local museum. A new math/science high school opened in the fall. We completed a project to provide service to a large asphalt plant in May 2012.

We believe that one of our most promising growth opportunities for both revenues and margins is increasing connection with local gas production sources. We completed a new pipeline to Marcellus Shale gas in Pennsylvania in 2009 and we believe that pipeline could, depending on the volume of gas extracted and directed through the pipeline by the producer, significantly increase throughput on our system and have a significant impact on margins. In 2010 we upgraded portions of Lines 4, 7 and 13 to increase our capacity to transport local production gas. We have completed a compressor station that is working in conjunction with our pipeline upgrades to transport gas on our system and into the interstate pipeline system. In addition, we have formed two joint ventures, Leatherstocking Gas Company, LLC and Leatherstocking Gas Pipeline Company, LLC, to pipe gas to areas of the northeast currently without gas service. We have contracts with Corning Incorporated and Woodhull Municipal Gas Company, a small local utility, to provide maintenance service on their gas lines.

Page 18.

We continue to focus on improving the efficiency of our operations and making capital investments to improve our infrastructure. Our infrastructure improvement program has concentrated on the replacement of older distribution mains and customer service lines. In calendar 2012 we exceeded our goals and replaced 9.2 miles of pipe and 432 services. We have begun work on the systematic replacement of 7 1/2 miles of bare steel pipe and 350 bare steel services for 2013. We will also construct approximately 5 miles of new pipe to interconnect Line 15 with Inergy Storage in the Town of Bath. Line 15 is the high pressure distribution main that provides gas supply to the Villages of Bath and Hammondsport and the Town of Urbana, New York. The Company has completed installation of new distribution lines to a local Asphalt Plant and large farm complex to assist them in fuel cost savings. Additionally the Company will continue on its goal to end the calendar year with 10 or fewer repairable leaks remaining on our books.

We believe our key performance indicators are net income, stockholders' equity and the safety of our system. For the three months ended December 31, 2012, net income decreased by $44,005 compared to the same period in 2012 mainly due to the rate increase and new reconciliations provided by the new rate order offsetting higher bad debt expense and administrative and depreciation costs. Also, we recognized the benefits that resulted from the settlement of the Barry lawsuits (see Note 14 - Settlement of Lawsuits in Notes to Consolidated Financial Statements for additional information) in 2012, while we expenses $200,000 to settle Osborne litigations. The Company has increased its bad debt reserve to reflect the poor payment history of one large customer. As a regulated utility company, stockholders' equity is an important performance indicator. The NYPSC allows us to earn a just and reasonable return on stockholders' equity as determined under applicable regulations. Stockholders' equity is, therefore, a precursor of future earnings potential. For the 2013 fiscal year to date, stockholders' equity increased from $15,154,880 to $21,183,167. We currently plan to continue our focus on building stockholders' equity. Safety and efficiency indicators include leak repair, main and service replacements and customer service metrics. In fiscal year 2013 to date, we have spent $2.1 million on projects and safety-related infrastructure improvements. For the first three months of fiscal 2013 we repaired 91 leaks, replaced 147 bare steel services and replaced 27,160 feet of bare steel main.

	2012	2011

Net Income	$366,799	$410,804

Shareholders' equity	$21,139,976	$15,154,880

Shareholders' equity per weighted average share	$9.48	$8.35

Revenue and Margin

The demand for natural gas is directly affected by weather conditions. Significantly warmer than normal weather conditions in our service areas could reduce our earnings and cash flows as a result of lower gas sales. We mitigate the risk of warmer winter weather through the weather normalization and revenue decoupling clauses in our tariffs. These clauses allow the Company to surcharge customers for under recovery of revenue.

Utility operating revenues increased $675,906 in the three months ended December 31, 2012 compared to the same period last year due to the rate increase that became effective in May 2012 and more favorable regulatory amortizations. As of September 1, 2009, 100% of the fixed amount and 80% of the monthly volumetric charge due to line 13 (our pipeline connecting Marcellus production in Pennsylvania to the rest of our distribution system) are now allocated to offset our costs of building the pipeline. As of fiscal year 2011, we are recognizing the revenue and increasing the accumulated depreciation and depreciation expense instead of decreasing the plant account. Other revenue increased for this fiscal year to date compared to last year mainly because of the new reconciliation of contract customer target amounts.

Page 19.

We reconcile several accounts on an annual basis, two of the biggest being the RDM and Lost and Unaccounted For ("LAUF") incentive reconciliations. The RDM was reconciled for the first time in fiscal year 2011 to reflect the difference between actual delivery revenue and the target revenue filed with the NYPSC and resulted in a negative income impact in that year because we had recorded revenues higher than the target. For the annual reconciliation of LAUF in December of 2012, we had a benefit of $15,069 and in December of 2011, we had a benefit of $43,044 that partially offset the reversal of $365,194 for the period ended December 2010. The following tables further summarize other income on the operating revenue table:

	Three months ended December 31,
	2012	2011
Other gas revenues:
Customer discounts forfeited	$11,456	$12,711
Reconnect fees	1,080	1,600
Gas revenues subject to refund (see below)	205,126	(231,108)
Surcharges	3,049	2,849
Total other gas revenues	$220,711	($213,948)

	Three months ended December 31,
	2012	2011
Gas revenues subject to refund:
Rate case amortizations	-	$4,093
DRA carrying costs	3,394	5,547
Line 15 carrying costs	-	18,460
Contract customer reconciliation	185,336	-
Monthly RDM amortizations	1,327	84,764
Annual RDM reconciliation	-	(25,375)
Annual MFC reconciliation	-	3,553
LAUF incentive benefit	15,069	(322,150)
	$205,126	($231,108)
The following table summarizes our operating revenue:

	Three months ended December 31,
	2012		2011
Retail revenue:
Residential	$2,907,021		$2,682,758
Commercial	456,081		434,643
Industrial	23,873		18,137
Transportation	1,059,799		1,171,354
Total retail revenue	4,446,774		4,306,892
Wholesale	636,874		524,758
Local production	284,842		295,593
Other	220,711		(213,948)
Total utility operating revenue	$5,589,201		$4,913,295

Page 20.

Gas purchases are our largest expense. We entered into a new gas management agreement with Conoco Phillips Corporation effective as of April 1, 2011. Purchased gas expense increased $36,087 for the three months ended December 31, 2012 compared to the same periods last year due primarily to lower prices partially offsetting less favorable regulatory adjustments for the period. Margin (the excess of utility operating revenues over the cost of natural gas purchased) percentage increased 4.27% for the three months ended December 31, 2012 compared to the same periods last year primarily because of less favorable GAC adjustments for the period have been offset by the rate increase in May 2012 and lower gas prices.

	Three Months Ended December 31,

	2012	2011

Utility operating revenues	$5,589,201	$4,913,295

Natural gas purchased	2,033,201	1,997,114

Margin	$3,556,000	$2,916,181

Margin %	63.62%	59.35%

Operating Expenses

Operating and maintenance expense increased $724,016 in the first quarter of fiscal 2013 compared to the same quarter of fiscal 2012 mainly because of the recognition of pension savings associated with the settlement of the Barry lawsuits of $674,016 in December 2011 (see Note 14 - Settlement of Lawsuits in Notes to Consolidated Financial Statements for further information). Bad debt expense also increased by $38,014 for the first quarter of 2013 compared to the same period in 2011. Depreciation expense increased by $57,573 in this quarter compared to the same period in 2011 mainly due to increased utility plant depreciation as well as local production revenues which affect depreciation (see Revenue and Margin discussion above) offset by a monthly amortization adjustment to offset prior period over-depreciation as determined by the depreciation study ordered by the NYPSC. Interest expense showed a decrease of $7,516 for the quarter from fiscal 2013 to 2012 due to better interest rates offsetting new loan instruments in the period. The lower borrowings under the lines of credit in this quarter also decreased interest expense for the period.

Net Income

Net income decreased $44,005 for the quarter ended December 31, 2012 compared to the same period in 2011 due primarily to the settlement of two lawsuits (see Note 14 - Settlement of Lawsuits in Notes to Consolidated Financial Statements for additional information). In 2011 we had after tax income of $400,000 from the Barry settlement and in 2012 had an after tax expense of $126,000 from the Osborne settlement. The $526,000 difference due to the Barry and Osborne settlements was offset by the rate increase, new rate case reconciliations and higher firm volumes.

Liquidity and Capital Resources

Capital expenditures are the principal use of internally generated cash flow. Capital expenditures have historically exceeded $4.0 million annually due to an infrastructure investment mandate in our recent rate orders from the NYPSC. In fiscal year 2013 to date, we have spent approximately $2.1 million on projects and safety-related infrastructure improvements. This, in conjunction with our growth projects, creates liquidity pressure on the Company. We anticipate that our aggressive capital construction program will continue to require the Company to raise new debt and/or equity.

Page 21.

Internally generated cash from operating activities consists of net income, adjusted for non-cash expenses, and changes in operating assets and liabilities. Non-cash items include depreciation and amortization; gain on investment and deferred income taxes. Over or under-recovered gas costs significantly impact cash flow. In addition, there are significant year-to-year changes in regulatory assets that impact cash flow. The Company's cash flow is seasonal. Out flows are the highest in the summer and fall months when we refill gas storage and conduct our construction programs. Our cash receipts are highest during the heating season.

Cash flows from financing activities consist of repayment of long-term debt, new long-term borrowing, borrowings and repayments under our lines-of-credit and equity issuances. For our consolidated operations, we have a $7.0 million revolving line of credit with an interest rate of the greater of 3.25% or 2.25% above the 30-day LIBOR. The amount outstanding under this line on December 31, 2012 was approximately $4.5 million with an interest rate of 3.25%. Collateral assignments have been executed which assign to the lender various rights in the Rabbi Trust investment account established to fund the Company's deferred compensation plan obligations, shown on the balance sheet as "Investments". In addition, our lender has a purchase money security interest in all our natural gas purchases utilizing funds advanced by the bank under the credit agreement and all proceeds of sale and accounts receivable from the sale of that gas. We rely heavily on our credit lines to finance the purchase of gas that we place in storage.

We have approximately $13.9 million in long term debt outstanding including current year installments as of December 31, 2012. We repaid $276,385 in the first three months of fiscal 2013 consistent with the requirements of our debt instruments and refinancing activities. On May 7, 2008, we entered into a credit agreement with Manufacturers and Traders Trust Company to provide for a $6.0 million loan for the purpose of retiring a $3.1 million first mortgage and an unsecured senior note in the amount of $1.5 million. The remaining proceeds were used to fund construction projects related to furnishing natural gas within the Company's service area. This loan was converted to a long term loan on October 16, 2008, with an interest rate of 5.96%. On March 4, 2010, the $6 million loan agreement with Manufacturers and Traders Trust Company was amended to increase the interest rate to 6.5% and to make other adjustments.

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 paying for the construction projects of our franchise located 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 ratio 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 one month LIBOR plus 2.75% with a floor rate of 4.5% and a ceiling rate of 6.25%. The interest rate was 4.5% as of December 31, 2012. We are in compliance with the financial covenants in this debt instrument as of its annual measurement date on September 30, 2012.

Page 22

On July 27, 2012, the Company entered into a Line of Credit Agreement and Term Loan Agreement in the amount of $2.45 million with Community Bank, N.A. to fund construction projects in our NYPSC mandated repair/replacement program for 2012. From July 27, 2012 to November 30, 2012 ("Draw Period"), the note will be payable as interest only at a rate of the greater of 3.00 percentage points above 30-day LIBOR or 3.75%. On November 30, 2012, the note converted to a permanent loan payable monthly for five years with the same interest rate calculated on a ten-year amortization schedule. A final payment will be due on the maturity date equal to the outstanding principal and interest.

The Company is in compliance with all of our loan covenants as of December 31, 2012.

During this quarter, we mainly withdrew gas from storage and as of December 31, 2012, had a balance of $1.3 million worth of gas in storage. During the next quarter, we will also be withdrawing gas from storage. We believe we will have sufficient gas to supply our customers for the winter season.

Off Balance Sheet Arrangements

We have no off balance sheet arrangements.

Contractual Obligations

In February 2012, we refinanced our revolving line of credit at an interest rate of the greater of 3.25% or the 30-day LIBOR plus 2.25%. The interest rate on this loan is adjusted monthly and was 3.25% at December 31, 2012. We are in compliance with the financial covenants in this debt instrument as of December 31, 2012.

Page 23.

The Company and Mirabito Holdings, Incorporated each own 50% of Leatherstocking Gas 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, 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. Leatherstocking Gas 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 has received franchises from the Village and Town of Sidney, Village and Town of Bainbridge, Village and Town of Windsor and Village and Town of Unadilla in New York. On November 23, 2011, Leatherstocking Gas filed for thirteen franchises in Susquehanna County, Pennsylvania. The Company received the required approvals to serve in Pennsylvania in September 2012. The Company is in the planning stage regarding the commencement of building facilities. Additionally Leatherstocking continues to be in discussions with municipal officials along the I-88 corridor in New York State. Leatherstocking is still acquiring municipal utility franchises and intends to connect to existing and new gas production in the area. Leatherstocking officials also intend to connect to the Constitution Pipeline which is a joint venture between Cabot Oil & Gas Corp. and Williams Partners, LP, and is scheduled to be operational in 2015.

On June 1, 2012, Leatherstocking Pipeline executed a natural gas transportation agreement with Pennsy Supply, Incorporated ("Pennsy"). Under the terms of the agreement Leatherstocking Pipeline connected Pennsy's Lawton asphalt facility to natural gas suppliers from the Williams Laser gathering line in the Township of Middleton in Susquehanna County, Pennsylvania. The natural gas interconnect was operational in August 2012.

Regulatory Matters

The Company's business is regulated by the NYPSC among other agencies.

On November 17, 2010, Bath Electric Gas & Water Systems (BEGWS), a natural gas customer of the Company, filed a petition with the NYPSC, in Case 10-G-0598 that claimed BEGWS was overbilled for gas by the Company. BEGWS asserted that the Company's meters registered 2.94% more gas than was actually delivered to BEGWS from 2004 through 2010. Based on its calculations, BEGWS has requested that the NYPSC order the Company to refund approximately $1.2 million for overcharges and interest. The Company conducted a comprehensive review of the BEGWS claim. The Company installed new meters for BEGWS in 2009 and believes that those meters and the resulting bills have been accurate. On January 26, 2011, the Company responded that its preliminary review of its billing data and gas cost reconciliation to the NYPSC shows that the Company has already credited BEGWS the amount in the claim. In testimony filed by its consultants on July 8, 2011, BEGWS acknowledged receipt of the amount in the claim but raised new claims not in the original petition. BEGWS now asserts that the Company owes it a refund of $345,747. The Company contested the testimony filed on July 8, 2011. The Company and BEGWS met with the NYPSC Staff on July 11, 2011, to discuss findings to date on the petition. No order has been issued by the NYPSC on this matter. The meter investigation associated with the petition is ongoing. Currently, the Company does not believe that the BEGWS petition, whether it is granted or not, would have a material financial impact.

The NYPSC on January 25, 2011 acted on the Company's second stage request in Case 08-G-1137. The amount of the second stage was estimated to be approximately $164,000. The actual amount of the second stage rate increase was $228,342 determined via a reconciliation process that covered September 2010 to August 2011. That amount was deferred and recovered via the Delivery Rate Adjustment in 2012.

Page 24.

On March 17, 2011, the NYPSC issued an order in Case 10-G-0647 authorizing the Company to issue and distribute a fifty percent stock dividend to its shareholders. 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 order. 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.

On May 19, 2011, the NYPSC, in Case 08-G-1137, issued an Order Modifying the Regulatory Matrix and Establishing Liability. The order granted, with one exception, the request of Corning Natural Gas Corporation to eliminate the Regulatory Matrix that was originally established in Case 05-G-1359. The NYPSC removed the Regulatory Matrix penalties associated with accounting, leak reporting, and gas supply related requirements; but it continued the cathodic protection reporting requirement and associated penalties of $32,750 per deficiency per year. The order concluded that the Company had failed to submit annual reports for 2009 and 2010, and assessed a total penalty of $65,500 for those asserted failures. On June 3, 2011, the Company filed a petition for re-hearing requesting that the penalty determination pertaining to cathodic protection reporting be rescinded, or in the alternative, that the issue of the penalty be incorporated into the Company's base rate case (Case 11-G-0280). On October 13, 2011 the NYPSC denied the Company's rehearing request. The Staff of the NYPSC in Case 11-G-0280 recommended that the penalty amount be amortized over a seven year period. That recommendation was approved by the NYPSC in the rate order issued April 20, 2012.

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). 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, 2013 to April 30, 2014) of $899,674; and in year three (May 1, 2014 to April 30, 2015) of $323,591. 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 previously. The Proposal also provides for property tax reconciliation, treatment of future local production investment, cost 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 cumulative potential revenue increases over the three years total $4,955,869. On April 20, 2012 the NYPSC issued a final order in the case accepting the Proposal, with rates effective May 1, 2012. In the order the NYPSC directed the Company and the other parties to the case, including Staff, to collaborate on a code of conduct for Corning and its affiliates. This code of conduct is contemplated to be used until a more comprehensive code of conduct is established in conjunction with the establishment of a holding company structure for the Company and its affiliates, as requested in Case 12-G-0141 discussed below. As a result of the collaborative process, nearly all issues concerning the code of conduct were resolved. The major exception is a difference between the Company and Staff regarding the extent to which Company employees can be made available to perform services on behalf of affiliates. Except for certain officers who are permitted to carry out functions on behalf of Leatherstocking Gas, Staff asserts that no distribution company employees should be made available. The Company, on the other hand, believes that other employees can and should be used in affiliate operations. The affiliate would be charged for their services on fully loaded basis.On October 18, 2012, the NYPSC issued affiliate standards that prohibited the sharing of distribution company employees with Corning affiliates. These standards are to remain in place unless and until replaced or modified in the proceeding on the Company's request to establish a holding company structure (Case 12-G-0141). On November 19, 2012, the Company filed a petition requesting clarification or rehearing of the October order. To date, the NYPSC has not acted on this petition.

Page 25.

On August 8, 2011, the Company and Mirabito Holdings, Inc. ("MHI") filed a joint petition requesting that the NYPSC authorize the acquisition by MHI of up to 15 percent of the Company's voting capital stock. The petition was submitted pursuant to a provision of the New York Public Service Law (Section 70) that requires NYPSC authorization for acquisitions in excess of 10 percent of such stock of a utility. Pursuant to a NYPSC Notice Consolidating Proceedings and Scheduling Procedural Conference issued August 16, 2012, this proceeding, designated Case 11-G-0417, was consolidated with Case 12-G-0141, discussed below, in which the Company seeks authorization to form a holding company.

On September 15, 2011, the Company filed a petition with the NYPSC seeking amendment of the Certificate of Public Convenience and Necessity (the "Certificate") granted by the NYPSC in its "Order Granting a Certificate of Public Convenience and Necessity" issued June 19, 2009 in Case 09-G-0252 to permit the Company to expand service within the Town of Virgil, Cortland County, beyond those areas in which service was authorized pursuant to the Certificate. The Company's request seeking amendment of the Certificate of Public Convenience and Necessity issued June 19, 2009 was granted by the Commission on June 14, 2012.

On February 8, 2012, the Company filed a petition in Case 12-G-0049 requesting authorization to issue $12,650,000 in debt and $12,650,000 equity to support the utility infrastructure and growth programs ($20,950,000), Leatherstocking ($1,800,000) and non-utility investments ($2,500,000). As a result of discussions with the NYPSC, the Company requested that the petition be bifurcated and that the NYSPC immediately review and approve that portion of the petition's funding request pertaining to the Company's gas distribution system. On May 17, 2012, the NYPSC acted on the petition. The Company was authorized to issue long-term debt up to $9,000,000 and authorized to issue common stock, convertible preferred stock and stock warrants up to $9,000,000, no later than December 31, 2016.

On March 26, 2012, the Company filed a petition with the NYPSC in Case 12-G-0141 requesting authority to reorganize into a holding company structure. The Company is one of the few energy utilities in New York State that does not have a holding company structure. The Company has concluded that the absence of such a structure, and particularly not having the flexibility it affords for financing, is inhibiting the raising of capital. An Administrative Law Judge has been assigned to hear this case. The petition includes a request to use up to $1 million to fund initial construction of Leatherstocking Gas Company, LLC facilities to permit exercise of recently granted franchises for its distribution system in Pennsylvania. By a notice issued by the NYPSC on August 16, 2012, this proceeding was consolidated with Case 11-G-0417 pertaining to the acquisition of stock by MHI. On December 21, 2012, the Administrative Law Judge assigned to these two proceedings issued a schedule for the filing of testimony, the conduct of hearings and the filing of briefs, with the due date for the latter being April 20, 2013. On January 30, 2013, the Company filed a letter notifying the NYPSC that, based on exploratory discussions held with the Staff of the NYPSC, it appeared that some or all of the issues in these proceedings could be settled. Settlement negotiations are in process and the Company and the Staff of the NYPSC have requested that the Administrative Law Judge postpone the litigation schedule pending those negotiations.

Critical Accounting Policies

Our significant accounting policies are described in the notes to the Consolidated Financial Statements in the Company's Form 10-K for the year ended September 30, 2012, filed on December 28, 2012. It is important to understand that the application of generally accepted accounting principles involves certain assumptions, judgments and estimates that affect reported amounts of assets, liabilities, revenues and expenses. Thus, the application of these principles can produce varying results from company to company. The most significant principles that impact us are discussed below.

Page 26.

Accounting for Utility Revenue and Cost of Gas Recognition

We record revenues from residential and commercial customers based on meters read on a cycle basis throughout each month, while certain large industrial and utility customers' meters are read at the end of each month. We do not accrue revenue for gas delivered but not yet billed. We do not currently anticipate adopting unbilled revenue recognition and we do not believe it would have a material impact on our financial results. Our tariffs contain mechanisms that provide for the recovery of the cost of gas applicable to firm customers, which includes estimates. Under these mechanisms, we periodically adjust our rates to reflect increases and decreases in the cost of gas. Annually, we reconcile the difference between the total gas costs collected from customers and the cost of gas. We defer any excess or deficiency and subsequently either recover it from, or refund it to, customers over the following twelve-month period. To the extent estimates are inaccurate; a regulatory asset on the balance sheet is increased or decreased.

Accounting for Regulated Operations - Regulatory Assets and Liabilities

All of our business is subject to regulation by the NYPSC. We record the results of our regulated activities in accordance with FASB ASC 980, which results in differences in the application of generally accepted accounting principles between regulated and non-regulated businesses. FASB ASC 980 requires the recording of regulatory assets and liabilities for certain transactions that would have been treated as revenue and expense in non-regulated businesses. In certain circumstances, FASB ASC 980 allows entities whose rates are determined by third-party regulators to defer costs as "regulatory" assets in the balance sheet to the extent that the entity expects to recover these costs in future rates. Management believes that currently available facts support the continued application of FASB ASC 980 and that all regulatory assets and liabilities are recoverable or refundable through the regulatory environment.

Pension and Post-Retirement Benefits

The amounts reported in our financial statements related to pension and other post-retirement benefits are determined on an actuarial basis; therefore, certain assumptions are required to calculate those amounts. These assumptions include the discount rate, the expected return on plan assets, the rate of compensation increase and, for other post-retirement benefits, the expected annual rate of increase in per capita cost of covered medical and prescription benefits. Changes in actuarial assumptions and actuarial experience could have a material impact on the amount of pension and post-retirement benefit costs and funding requirements. Please refer to Note 3 - Statement of Other Comprehensive Income (Loss) in the Notes to the Financial Statements for further disclosures. However, we expect to recover our entire net periodic pension and other post-retirement benefit costs attributed to employees in accordance with the applicable NYPSC authorization. The Company's pension expense for financial reporting purposes is the amount approved by the NYPSC in the Company's last base rate case. Those amounts are $970,000, $1,285,000 and $520,000 for the periods beginning May 1, 2012, September 1, 2009 and January 1, 2008, respectively. The Company on a monthly basis (1/12 of the annual amount) accrues the amount determined by the latest actuarial estimate of its FASB ASC 715 liability. The Company then compares the FASB ASC 715 amount to the monthly pension allowance approved by the NYPSC. The difference is recorded to expense (plus or minus) in order to match the pension expense included in base delivery rates by order of theNYPSC noted above. The amount (plus or minus) required tomatch the pension expense allowed by the NYPSC is recorded as either a regulatory asset or liability and is deferred for subsequent rate consideration.

Page 27.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report contains statements which, to the extent they are not recitations of historical facts, constitute "forward-looking statements" within the meaning of the Securities Litigation Reform Act of 1995 (Reform Act). The words "estimate", "project", "anticipate", "expect", "intend", "believe", "could" and similar expressions are intended to identify forward-looking statements. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. As forward looking statements, these statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the expected results. Accordingly, actual results may differ materially from those expressed in any forward looking statements. Factors that could cause results to differ materially from our management's expectations include, but are not limited to, those listed under Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended September 30, 2012, in addition to:

*	the effect of any interruption in our supply of natural gas or a substantial increase in the price of natural gas,

*	our ability to successfully negotiate new supply agreements for natural gas as they expire, on terms favorable to us, or at all,

*	the effect on our operations of any action by the NYPSC,

*	the effect of any litigation,

*	the effect on our operations of unexpected changes in any other applicable legal or regulatory requirements,

*	the amount of natural gas produced and directed through our pipeline by producers,
*	our ability to obtain additional equity or debt financing to fund our capital expenditure plans and for general corporate purposes,

*	our successful completion of various capital projects and the use of pipelines, compressor stations and storage by customers and counterparties at levels consistent with our expectations,

*	our ability to retain the services of our senior executives and other key employees,

*	our vulnerability to adverse general economic and industry conditions generally and particularly the effect of those conditions on our major customers,

*	the effect of any leaks in our transportation and delivery pipelines, and

*	competition to our gas transportation business from other pipelines.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement in light of new information or future events.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of December 31, 2012, the Company's management, with the participation of the Company's principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e). Based upon the Company's evaluation, the Company's principal executive officer and principal financial officer each concluded that the Company's disclosure controls and procedures are effective as of December 31, 2012.

Page 28.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that was conducted during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

The Company's management, including our chief executive officer and chief financial officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART II.

OTHER INFORMATION

Item 1. Legal Proceedings.

Page 29.

Item 1A. Risk Factors.

Please refer to risk factors listed under 1A - "Risk Factors" of the Company's Form 10-K for the fiscal year ended September 30, 2012, for disclosure relating to certain risk factors applicable to the Company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information.

None

Item 6. Exhibits.

Page 30.

3.1 The Company's Restated Certificate of Incorporation, (incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated September 26, 2007)

3.2 Second Amended and Restated By-Laws of the Company (incorporated by reference to Annex D to the Company's Definitive Proxy Statement filed on April 24, 2007 with the Securities and Exchange Commission)

10.1* Form of Restricted Stock Agreement - Officers under the Corning Natural Gas Corporation's Amended and Restated 2007 Stock Plan (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated December 11, 2012, and filed with the Securities and Exchange Commission on December 13, 2012)

10.2* Form of Restricted Stock Agreement - Non-employee Directors under the Corning Natural Gas Corporation's Amended and Restated 2007 Stock Plan (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated December 11, 2012, and filed with the Securities and Exchange Commission on December 13, 2012)

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, 2012, formatted in XBRL (eXtensible Business Reporting Language):

(i) the Condensed Consolidated Balance Sheets at December 31, 2012, December 31, 2011 and September 30, 2012,

(ii) the Consolidated Statements of Comprehensive Income for the three months ended December 31, 2012 and December 31, 2011,

(iii) the Condensed Consolidated Statements of Cash Flows for the three months ended

December 31, 2012 and December 31, 2011, 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.

*Management or compensatory contract

**Filed herewith

***Furnished herewith

Page 31.

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 13, 2013

By: /s/ Michael I. German

Michael I. German, Chief Executive Officer and President

(Principal Executive Officer)

Date: February 13, 2013

By: /s/ Firouzeh Sarhangi

Firouzeh Sarhangi, Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

Page 32.

EX-31 2 ex311.htm EXHIBIT 31-1 Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE 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 of Corning Natural Gas Corporation for the period ending December 31, 2012;

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 13, 2013

/s/ Michael I. German

Michael I. German, Chief Executive Officer and President

(Principal Executive Officer)

EX-31 3 ex312.htm EXHIBIT 31-2 Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE 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 of Corning Natural Gas Corporation for the period ending December 31, 2012;

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 13, 2013

/s/ Firouzeh Sarhangi

Firouzeh Sarhangi, Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)

EX-32 4 ex32.htm EXHIBIT 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 for the period ending December 31, 2012 (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 13, 2013

/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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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 consolidated financial statements contained herein should be read in conjunction with the consolidated financial statements and notes thereto included in the Companys latest annual report on Form 10-K for the fiscal year ended September 30, 2012. These interim consolidated financial statements have not been audited by a firm of certified public accountants. It is the Companys 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. Our significant accounting policies are described in the notes to the Consolidated Financial Statements in the Companys Form 10-K for the year ended September 30, 2012, filed on December 28, 2012. It is important to understand that the application of generally accepted accounting principles involve certain assumptions, judgments and estimates that affect reported amounts of assets, liabilities, revenues and expenses. Thus, the application of these principles can result in varying results from company to company.

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 adopted FASB ASU 2011-04 and it had no material effect on the 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 adopted FASB ASU 2011-05 it had no material effect on the consolidated financial statements. In December 2011, FASB issued FASB ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 (Topic 220). This standard defers the requirement to present reclassification adjustments in the statement of income in response to concerns raised about implementation of FASB ASU 2011-05. FASB ASU 2011-12 is effective for interim or annual fiscal years beginning after December 15, 2011 for public entities and for fiscal years ending after December 2012 for non-public entities. The Company has already adopted FASB ASU 2011-05, so the deferral of the effective date of FASB ASU 2011-05 provided by FASB ASU 2011-12 will have no impact on the Companys consolidated financial statements.

Note 3 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 5.25% to 5% in 2011 and from 5% to 4% in 2012. That drop was partially offset by changes in assumptions in the increase rate of compensation which decreased 3% to 2% in 2011 and 2012. 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 quarterly accruals for estimated annual pension liability added to the unrealized loss for the three months ended December 31, 2012 resulted in an OCI loss of $110,366 for the period. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">December 31,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">December 31,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">September 30,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 61%; text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Pension adjustment</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">(3,393,526</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">(2,801,961</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">(3,299,397</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Net unrealized gain (loss) on securities available for sale</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">36,685</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(27,414</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">52,922</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Accumulated other comprehensive loss</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(3,356,841</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(2,829,375</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(3,246,475</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> </table>

Note 4 - Pension and Other Post-retirement Benefit Plans   Components of Net Periodic Benefit Cost:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="14" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Three Months Ended Dec 31,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="6" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Pension Benefits</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="6" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Other Benefits</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 48%; text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Service cost</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">98,979</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">82,165</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">4,321</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">3,597</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Interest cost</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">178,766</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">192,835</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">11,556</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">10,392</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Expected return on plan assets</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(221,641</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(194,549</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Amortization of prior service cost</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">3,557</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,105</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">887</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(2,923</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Amortization of net (gain) loss</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">155,983</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">176,383</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(3,886</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,118</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Net periodic benefit cost</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">215,644</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">260,939</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">12,878</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,948</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>   Contributions   The Company expects to contribute $1.0 million to its Pension Plan and $63,000 to its other Post Retirement Benefit Plan in fiscal year 2013. A total of $228,966 has been paid to the Pension Plan for the first three months of this fiscal year.

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 determined on the actual capital expenditures and additional property taxes from September 2010 through August 2011 was $228,342. On April 20, 2012, the NYPSC issued a final order in Case 11-G-0280 approving a Joint Proposal (the Proposal) for a three-year rate plan. The Proposal provided for revenue increases to Cornings rates in the first year (May 1, 2012 to April 30, 2013) of $944,310; in year two (May 1, 2013 to April 30, 2014) of $899,674; and in year three (May 1, 2014 to April 30, 2015) of $323,591. The Proposal also provided the Company the opportunity to earn $545,284 from local production before sharing, a 118% increase from the $250,000 allowed previously. The Proposal also provided for property tax reconciliation, treatment of future local production investment, allocations to the Companys 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 cumulative potential revenue increases over the three years total $4,955,869. Rates became effective May 1, 2012.

Note 6 Financing Activities 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 Companys 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: <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif"> <td style="width: 0.5in; font: 10pt Times New Roman, Times, Serif"></td><td style="width: 0.5in; font: 10pt Times New Roman, Times, Serif">(i)</td><td style="font: 10pt Times New Roman, Times, Serif">Maintain a tangible net worth of not less than $11.0 million,</td></tr></table> <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif"> <td style="width: 0.5in; font: 10pt Times New Roman, Times, Serif"></td><td style="width: 0.5in; font: 10pt Times New Roman, Times, Serif">(ii)</td><td style="font: 10pt Times New Roman, Times, Serif">Maintain a debt to tangible net worth ratio of less than 3.0 to 1.0, and</td></tr></table> <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt/115% Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif"> <td style="width: 0.5in; font: 10pt Times New Roman, Times, Serif"></td><td style="width: 0.5in; font: 10pt Times New Roman, Times, Serif">(iii)</td><td style="font: 10pt Times New Roman, Times, Serif">Maintain a debt service coverage ratio of 1.10 to 1.</td></tr></table>   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, 2012.   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. On August 13, 2012 the note was refinanced at a variable interest rate of prime rate plus 1.00% until July 30, 2013. Commencing July 30, 2013 and continuing until August 1, 2018, the Company will pay principal and interest at a fixed rate equal to the prevailing Federal Home Loan Bank of New York Fixed Advance Rate as published five days prior to July 30, 2013, plus 3.75%. The interest rate at December 31, 2012 was 4.25%. 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 had a fluctuating interest rate equal to the greater of 3.5% or the 30-day LIBOR plus 2.25% and expired on February 28, 2012. In February 2012, we refinanced the line of credit with Community Bank and the new line of credit bears interest at the greater of 3.25% or the 30-day LIBOR plus 2.25%. The interest rate on this loan is adjusted monthly and was 3.25% at December 31, 2012. 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% above 30-day LIBOR or 4.25%. The interest rate was 4.25% as of December 31, 2012. On August 13, 2012, the Company entered agreements with Five Star Bank pursuant to two Promissory Notes in the amount of $250,000 each. Each Note will be payable monthly for five years at the fixed interest rate of 4.46% per annum. At that time, the Notes will have the option to be paid-in-full, refinanced or remain in place for an additional five years with a new effective rate established at that time. The purpose of these Notes is to fund construction of two major projects.

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, 2012, December 31, 2011 and September 30, 2012 are as follows: Fair Value Measurements at Reporting Date Using:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif"> <td style="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Fair Value</td> <td style="width: 26%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1)</td> <td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Level 2</td> <td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Level 3</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">December 31, 2012</td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Available-for-sale securities</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,277,727 </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,277,727 </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">December 31, 2011</td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: top; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Available-for-sale securities</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,379,575 </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,379,575 </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="background-color: White; font: 10pt Times New Roman, Times, Serif"> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">September 30, 2012</td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Available-for-sale securities</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,271,721 </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,271,721 </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td></tr> </table>   Gains and losses included in earnings for the periods reported in investment income as follows: Investment Income   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="6" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Three Months Ended December 31,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 74%; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Total gains or (losses) included in earnings</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">29,726</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">24,318</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>   Financial assets and liabilities valued using level 1 inputs are based on unadjusted quoted market prices within active markets.

Note 9 Stock Options 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 vested 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 Companys executive officers at an exercise price of $19.25 per share. These options were exercisable on or after December 15, 2011 and expire on the fourth anniversary of the grant date. There are no additional options vesting this quarter. No options were issued for the quarter ended December 31, 2012. The number of shares and exercise price of each of the option awards have been adjusted 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: <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 56%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 22%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">2010</td> <td nowrap="nowrap" style="width: 22%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">2011</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Options @</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Options @</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Adjusted exercise price</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$11.33 </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$12.83 </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Expected dividend yield</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">3.16%</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">2.71%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Expected stock price volatility</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">36.23%</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">35.63%</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Risk-free interest rate</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">4.00%</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">.83%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Expected life of options in years</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">.75</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">3</td></tr> </table>   The following summarizes the stock options outstanding as of December 31, 2012 for the fiscal year to date:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="10" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2013</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="10" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Stock Options</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Weighted</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Number of</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Weighted</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Average</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Shares</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Average</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Remaining</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Remaining</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Exercise</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Contractual</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Options</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Price</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Term</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 61%; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Outstanding at October 1, 2012</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">42,000</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">11.81</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Options granted</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Options exercised during quarter ended December 31, 2012</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Options canceled during quarter ended December 31, 2012</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Outstanding at December 31, 2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">42,000</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: right; font: 10pt Times New Roman, Times, Serif">11.81</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: right; font: 10pt Times New Roman, Times, Serif">1.47 years</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Exercisable at December 31, 2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">42,000</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: right; font: 10pt Times New Roman, Times, Serif">11.81</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: right; font: 10pt Times New Roman, Times, Serif">1.47 years</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr></table> 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 a 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. 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.   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 split 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. At its regular meeting on February 10, 2012, the board of directors approved an increase in the quarterly dividend to $.12 a share. Shareholders of record on December 21, 2012, were paid this dividend on December 31, 2012. On May 28, 2009, the Company registered 100,000 shares of common stock with a par value of $5 per share for a dividend reinvestment program. During this quarter 3,246 shares have been issued under this program. 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. On April 20, 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. 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.

Note 15 Effective Tax Rate   Income tax expense for the quarters ended December 31 is as follows:     <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 74%; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Current</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">($</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">275,935</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">($</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">237,432</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Deferred</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">414,528</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">616,031</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Total</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">138,593</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">378,599</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>   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:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 74%; text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Expected federal tax expense</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">171,833</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">268,397</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">State tax expense (net of federal)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">23,683</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">56,048</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Net operating loss carryforwards</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">67,961</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Other, net</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(56,923</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(13,807</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Actual tax expense</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">138,593</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">378,599</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>   The effective tax rate for the period ending December 31, 2012 was 27.4% instead of the expected rate of 41.1% mainly due to components of non-taxable income and reconciliation of tax rates for prior periods. 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.

Note 16 Private Placement of Common Stock   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.   Note 18 Rights Offering   The Company distributed one transferable subscription right for each eight shares of common stock to shareholders of record as of 5:00 pm on July 2, 2012. This right entitled the shareholder to purchase one share of our common stock at a cash exercise price of $15.75 per share. The rights were granted to the shareholders without additional charge to them and expired at 5:00 pm on September 21, 2012. We received $3,838,048, net of cost, with the exercise of 246,524 shares. The Company used the proceeds to help fund capital expenditures, the retirement of debt and future growth opportunities.

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">December 31,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">December 31,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">September 30,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 61%; text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Pension adjustment</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">(3,393,526</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">(2,801,961</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">(3,299,397</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Net unrealized gain (loss) on securities available for sale</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">36,685</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(27,414</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">52,922</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Accumulated other comprehensive loss</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(3,356,841</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(2,829,375</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(3,246,475</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="14" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Three Months Ended Dec 31,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="6" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Pension Benefits</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="6" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Other Benefits</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 48%; text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Service cost</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">98,979</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">82,165</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">4,321</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">3,597</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Interest cost</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">178,766</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">192,835</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">11,556</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">10,392</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Expected return on plan assets</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(221,641</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(194,549</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Amortization of prior service cost</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">3,557</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,105</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">887</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">(2,923</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Amortization of net (gain) loss</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">155,983</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">176,383</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(3,886</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(6,118</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Net periodic benefit cost</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">215,644</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">260,939</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">12,878</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">4,948</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 74%; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Current</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">($</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">275,935</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">($</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">237,432</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Deferred</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">414,528</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">616,031</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Total</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">138,593</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">378,599</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>     <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: right; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 74%; text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Expected federal tax expense</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">171,833</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">268,397</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">State tax expense (net of federal)</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">23,683</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">56,048</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Net operating loss carryforwards</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">67,961</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Other, net</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(56,923</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(13,807</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Actual tax expense</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">138,593</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">378,599</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>

2236117

Note 7 Stock Based Compensation The board of 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.  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 November 9, 2010, directors were issued compensatory shares for service from July 2010 through September 30, 2010. 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. On February 22, 2012, shares were issued for service for the quarters ended June 30, 2011, September 30, 2011 and December 31, 2011. On October 10, 2012, shares were issued for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012. Information regarding shares of stock awarded to directors in fiscal 2013 is summarized below. <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 23%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Fees Earned or Paid </td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">10/10/2012</td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">in Cash</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Stock Awards</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Stock Awards</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Total</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">(@ $11.70/Share)</td> <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td> <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td></tr> <tr style="background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">6 Directors</td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">- </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">6,750</td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">78,975</td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">78,975</td></tr> </table>   At its regularly scheduled meeting on December 11, 2012, the Compensation Committee of the Board of Directors of the Company made restricted stock awards of 600 shares each to the five officers of the Company in lieu of salary increases. Each restricted stock award vested 300 shares immediately and 300 shares on December 12, 2013 if the officer is still employed by the Company or one of its subsidiaries or affiliates on that date. Each award is subject to the terms and conditions of a restricted stock award agreement and the Companys Amended and Restated 2007 Stock Plan. Information regarding the shares of stock issued is summarized below. <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 23%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Fees Earned or Paid </td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">12/17/12</td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">in Cash</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Stock Awards</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Stock Awards</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Total</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">(@ $16.00/Share)</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">5 Officers</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">-</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">3,000</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">48,000</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">48,000</td></tr> </table>   In addition, the Board of Directors authorized the sale of 600 shares of the Companys common stock to Leatherstocking Gas Company, LLC. Leatherstocking Gas Company, LLC has assigned these shares to Carl T. Hayden in compensation for past service as a director of the Companys joint venture affiliate, Leatherstocking Gas Company, LLC. These shares were issued in January 2013 and will be recognized next quarter.

Note 12 Leatherstocking Companies   The Company, in a joint venture with Mirabito Regulated Industries, 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 venture, Leatherstocking Gas Company, LLC, (Leatherstocking Gas) is currently moving forward on expansions to several areas in the northeast. The Company and Mirabito Regulated Industries each owns 50% of the joint venture and each appoints three managers to operate Leatherstocking Gas. The seventh manager is a neutral manager agreed to by the Company and Mirabito Regulated Industries who is not an officer, director, shareholder or employee of either company, currently Carl T. Hayden. The current managers are Joseph P. Mirabito, John J. Mirabito and William Mirabito from Mirabito Regulated Industries; 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. Leatherstocking has received franchises from the Village and Town of Sidney, Village and Town of Bainbridge, Village and Town of Windsor and Village and Town of Unadilla in New York. In addition, Leatherstocking Gas has acquired thirteen franchises in Susquehanna County, Pennsylvania. 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.   In September 2010, Leatherstocking Pipeline Company, LLC (Leatherstocking Pipeline) was formed with the same structure and managers as Leatherstocking Gas. Leatherstocking Pipeline is an unregulated company whose purpose is to serve one customer in Lawton, Pennsylvania. In the spring and summer of 2012, Leatherstocking Pipeline built and placed in service facilities to service that customer. The investment and equity in both companies has been recognized in the consolidated statements. The Company has accounted for its investment in equity using the equity method of accounting based on the guidelines established in FASB ASC 323. In applying the guidance of FASB ASC 323, the Company recognized the investment in the joint ventures as an asset at cost. The investment will fluctuate in future periods based on the Companys allocable share of earnings or losses from the joint ventures which is recognized through earnings. <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 87%; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Investment in joint ventures as of September 30, 2012</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">349,193</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Investment in joint ventures during quarter ended December 31, 2012</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">30,000</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Earnings in joint ventures during quarter ended December 31, 2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">21,597</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Ending Balance in joint ventures as of December 31, 2012</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">400,790</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>

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 Companys 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 in calendar 2013, 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. Barrys deferred compensation agreement) for the longer of ten years or Mr. Barrys lifetime. The Company will pay Mr. Barry $15,000 annually for the longer of ten years or Mr. Barrys lifetime up to a maximum of 20 payments to replace the life insurance policy. The Company has paid the amounts due in January 2013. 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 was approximately $400,000 as of December 31, 2011, after accounting for legal fees associated with the settlement which are shown in other deductions, net and adjustments to pension expense which are shown in operating and maintenance expense.   On March 23, 2012, a complaint filed by Richard M. Osborne and Gas Natural, Inc. in the U.S. District Court for the Northern District of Ohio against four of the Companys directors and, nominally, against the Company (collectively Defendants). Richard M. Osborne and Gas Natural Inc. v. Michael I. German, Henry B. Cook, Ted W. Gibson, George J. Welch and Corning Natural Gas Corporation, Civ. Action No. 1:11-CV-744-CAB, N.D. Ohio (the Action), was dismissed by the court. The complaint sought to recover compensatory damages in an unspecified amount in excess of $75,000 and to rescind the rights offering, as well as payment of costs and interest. The Action was dismissed for lack of personal jurisdiction.   On August 30, 2012, counsel to Gas Natural, Inc. and Richard M. Osborne sent a letter to counsel representing the Company offering to settle and release, for a $650,000 cash payment, claims related to Gas Natural Inc.s previous offers to purchase the Company and other activities, including the Companys 2010 rights offering. The Company has been in discussion with representatives of Gas Natural, Inc. and Mr. Osborne. On December 11, 2012, at its regularly scheduled meeting, the Board of Directors approved settling the claims for $200,000 in exchange for general releases and certain other consideration. On December 13, 2012, the Company was notified by counsel for Gas Natural, Inc. that Gas Natural, Inc.s Board of Directors, Richard Osborne and the Osborne Trust had approved the settlement. The after tax expense that resulted from this agreement was $126,000 and is shown in other deductions, net for the current quarter on the Companys Income Statement. The Company believes its actions in connection with the offers, the rights offering and other activities were in the best interest of the Company and its shareholders.

Note 17 Employment Agreements   On April 17, 2012, the Company entered into Change of Control Agreements (the Agreements) with all executive officers other than Michael I. German, the Companys President and Chief Executive Officer. Each Agreement is effective as of April 20, 2012, and terminates on the first to occur of (i) termination of employment prior to a Change of Control (as defined in the Agreements); (ii) one year from the date of the Change of Control; or (iii) May 1, 2017, if no Change of Control has occurred. These Agreements define compensation amounts due upon termination of employment following a Change of Control except in cases of death, good cause or good reason.

Note 19 Chapter 11 Protection Filed by Significant Customer   On August 2, 2012, the Company received notice that a significant customer filed for protection under Chapter 11 of the United States Bankruptcy Code. The customer received funding from their principal lender to continue to operate and pay bills going forward. As of December 31, 2012, the Company has reserved $220,000 of the $253,148 outstanding which is consistent with the Companys accounting policies.

138889

14.40

2000000

100000

3246

0.0275

.01

.0375

Floating rate of 30-day LIBOR plus 2.75%

Variable interest rate of prime rate plus 1.00%

Fixed rate equal to the prevailing Federal Home Loan Bank of New York Fixed Advance Rate as published five days prior to July 30, 2013, plus 3.75%.

Interest only at a rate of the greater of 3.50% above 30-day LIBOR or 4.25%

Variable rate, adjusting daily, based on the greater of 3.25% above 30-day LIBOR or 4.25%

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 ratio of less than 3.0 to 1.0, and(iii)Maintain a debt service coverage ratio of 1.10 to 1.

0.045

.035

.0325

.065

.0425

1050000

750000

1865000

2000000

250000

.045

.0425

7000000

.0325

.0225 .0225 Fluctuating interest rate equal to the greater of 3.5% or the 30-day LIBOR plus 2.25% Greater of 3.25% or the 30-day LIBOR plus 2.25% .035 .035

2010-05-07

2012-08-13

2010-10-27

2011-07-14

2011-11-01

2012-08-18

2011-02-28

2012-02-28

40000 0.04 15000 20 400000

200000

Fair value of assets and liabilities measured on a recurring basis at December 31, 2012, December 31, 2011 and September 30, 2012 are as follows: Fair Value Measurements at Reporting Date Using:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top; font: 10pt Times New Roman, Times, Serif"> <td style="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="width: 15%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Fair Value</td> <td style="width: 26%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1)</td> <td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Level 2</td> <td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Level 3</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">December 31, 2012</td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Available-for-sale securities</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,277,727 </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,277,727 </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">December 31, 2011</td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: top; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Available-for-sale securities</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,379,575 </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,379,575 </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="background-color: White; font: 10pt Times New Roman, Times, Serif"> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">September 30, 2012</td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: top; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Available-for-sale securities</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,271,721 </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$2,271,721 </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">0</td></tr> </table>

Gains and losses included in earnings for the periods reported in investment income as follows: Investment Income   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="6" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Three Months Ended December 31,</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2011</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 74%; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Total gains or (losses) included in earnings</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">29,726</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif">24,318</td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr></table>

The following weighted average assumptions were utilized in the fair value calculations for options granted: <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 56%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 22%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">2010</td> <td nowrap="nowrap" style="width: 22%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">2011</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Options @</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; font: 10pt/115% Times New Roman, Times, Serif; text-align: center">Options @</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Adjusted exercise price</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$11.33 </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">$12.83 </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Expected dividend yield</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">3.16%</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">2.71%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Expected stock price volatility</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">36.23%</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">35.63%</td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Risk-free interest rate</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">4.00%</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">.83%</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">Expected life of options in years</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">.75</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">3</td></tr> </table>

The following summarizes the stock options outstanding as of December 31, 2012 for the fiscal year to date:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="10" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">2013</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="10" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Stock Options</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Weighted</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Number of</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Weighted</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Average</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Shares</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Average</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Remaining</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Remaining</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Exercise</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; font: 10pt Times New Roman, Times, Serif">Contractual</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Options</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Price</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td colspan="2" nowrap="nowrap" style="text-align: center; border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">Term</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 61%; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Outstanding at October 1, 2012</td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">42,000</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif">11.81</td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 2%; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 9%; text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="width: 1%; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="text-align: left; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Options granted</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Options exercised during quarter ended December 31, 2012</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Options canceled during quarter ended December 31, 2012</td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"></td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: right; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Outstanding at December 31, 2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">42,000</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: right; font: 10pt Times New Roman, Times, Serif">11.81</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: right; font: 10pt Times New Roman, Times, Serif">1.47 years</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; background-color: White; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-bottom: 1pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif">Exercisable at December 31, 2012</td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left"> </td><td nowrap="nowrap" style="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">42,000</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif">$</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: right; font: 10pt Times New Roman, Times, Serif">11.81</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: right; font: 10pt Times New Roman, Times, Serif">1.47 years</td><td nowrap="nowrap" style="padding-bottom: 1pt; text-align: left; font: 10pt Times New Roman, Times, Serif"> </td></tr> </table>

Information regarding shares of stock awarded to directors in fiscal 2013 is summarized below. <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 23%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Fees Earned or Paid </td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">10/10/2012</td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">in Cash</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Stock Awards</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Stock Awards</td> <td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Total</td></tr> <tr style="font: 10pt Times New Roman, Times, Serif"> <td style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">(@ $11.70/Share)</td> <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td> <td style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td></tr> <tr style="background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt/115% Times New Roman, Times, Serif">6 Directors</td> <td style="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">- </td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">6,750</td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">78,975</td> <td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">78,975</td></tr> </table>   Information regarding the shares of stock issued is summarized below. <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 23%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Fees Earned or Paid </td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">12/17/12</td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="width: 19%; padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">in Cash</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Stock Awards</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Stock Awards</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">Total</td></tr> <tr style="vertical-align: bottom; font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; font: 10pt Times New Roman, Times, Serif"> </td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">(@ $16.00/Share)</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">($)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255); font: 10pt Times New Roman, Times, Serif"> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">5 Officers</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">-</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">3,000</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">48,000</td> <td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font: 10pt/115% Times New Roman, Times, Serif">48,000</td></tr> </table>

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Is Entity a Voluntary Filer? Is Entity's Reporting Status Current? Entity Filer Category Entity Public Float Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Statement of Financial Position [Abstract] Assets Plant Utility property, plant and equipment Less: accumulated depreciation Total plant utility and non-utility, net Investments Marketable securities available-for-sale at fair value Investment in joint ventures Total investments Current assets Cash and cash equivalents Customer accounts receivable, (net of allowance for uncollectible accounts of $251,789, $32,132 and $209,615) respectively Gas stored underground, at average cost Materials and supplies inventory Prepaid expenses Total current assets Deferred debits and other assets: Regulatory assets Unrecovered gas costs Deferred regulatory costs Unamortized debt issuance cost (net of accumulated amortization of $501,249, $455,139 and $489,522), respectively Deferred income taxes Other Total deferred debits and other assets Total assets Liabilities and capitalization: Current liabilities Current portion of long-term debt Demand notes payable Borrowings under lines-of-credit Accounts payable Accrued expenses Customer deposits and accrued interest Dividends declared Deferred income taxes Total current liabilities Long-term debt, less current installments Deferred credits and other liabilities Deferred compensation Deferred pension costs & post-retirement benefits Other Total deferred credits and other liabilities Common stockholders' equity Common stock (common stock $5.00 par value per share. Authorized 3,500,000 shares; issued and outstanding 2,233,267 shares at December 31, 2012, 1,823,967 shares at December 31, 2011 and 2,220,271 at September 30, 2012) Other paid-in capital Retained earnings Accumulated other comprehensive loss Total common stockholders' equity Total liabilities and capitalization Allowance for uncollectible accounts Accumulated amortization of debt issuance cost Common stockholders' equity Common stock, par value Commn stock, authorized shares Common stock, shares outstanding Common stock, shares issued Income Statement [Abstract] Utility operating revenues Natural gas purchased Gross margin Cost and expense Operating and maintenance expense Taxes other than income taxes Depreciation Other deductions, net Total costs and expenses Utility operating income Other income and (expense) Interest expense Non-utility expense Other income Investment income Non-utility income from joint venture Rental income Net income from operations, before income tax Income tax benefit/(expense), current Income tax benefit (expense), deferred Total tax (expense) Net income Other comprehensive income (loss) Pension adjustment, net of tax Net unrealized gain (loss) on securities available for sale Total other comprehensive (loss) Total comprehensive income Weighted average earnings per share Basic: Diluted: Average shares outstanding - basic Average shares outstanding - diluted Statement of Cash Flows [Abstract] Cash flows from operating activities Net income Adjustments to reconcile net income to net cash used in operating activities: Unamortized debt issuance cost Regulatory Amortizations Stock issued for services and stock option expense Pension adjustment Loss (Gain) on sale of marketable securities Deferred income taxes Bad debt expense Undistributed earnings on joint ventures Changes in assets and liabilities: (Increase) decrease in Accounts receivable Gas stored underground Materials and supplies inventories Prepaid expenses Unrecovered gas costs Deferred regulatory costs Other Increase (decrease) in Accounts payable Accrued expenses Customer deposits and accrued interest Deferred compensation Deferred pension costs & post-retirement benefits Other liabilities and deferred credits Net cash (used in) provided by operating activities Cash flows from investing activities Purchase of securities available-for-sale Sale of securities available-for-sale Investment in joint ventures Capital expenditures Net cash (used in) provided by investing activities Cash flows from financing activities Proceeds under lines-of-credit XML 11 R39.htm IDEA: XBRL DOCUMENT

Stock Based Compensation (Details Narrative)	3 Months Ended
Stock Based Compensation (Details Narrative)	Dec. 31, 2012	Dec. 31, 2010
Stock Based Compensation Details Narrative
Board of directors quarterly compensation, restricted shares	375
Compensation expense, percent less than closing price of stock	25.00%
Shares issued for partially served quarter		247

Chapter 11 Protection Filed by Significant Customer (Details Narrative) (USD $)	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Accounts receivable	$ 2,968,721	$ 1,626,283	$ 2,477,607
Allowance for uncollectible accounts	251,789	209,615	32,132
Customer
Accounts receivable	253,148
Allowance for uncollectible accounts	$ 220,000

Leatherstocking Companies (Details Narrative)	Dec. 31, 2012
Leatherstocking Companies Details Narrative
Ownership interest in affiliate, percent	50.00%

Dividends (Details Narrative) (USD $)	3 Months Ended
Dividends (Details Narrative) (USD $)	Dec. 31, 2012	Jun. 30, 2009	Sep. 30, 2012	Dec. 31, 2011	Jun. 14, 2011	May 28, 2009	Dec. 14, 2010 Pre-Stock Dividend Dated 04/20/2011
Quarterly dividend before increase							$ 0.15
Quarterly dividend after increase					$ 0.115		$ 0.1725
Dividends declared	$ 0.12
Date dividend increased declared	Feb. 10, 2012
Date dividend paid	Dec. 21, 2012
Common stock registered for a dividend reinvestment plan		100,000
Common stock, par value			$ 5	$ 5		$ 5.00
Common stock issued, dividend reinvestment plan		3,246

Effective Tax Rate (Details) (USD $)	3 Months Ended
Effective Tax Rate (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Effective Tax Rate Details
Current	$ (275,935)	$ (237,432)
Deferred	414,528	616,031
Total tax (expense)	138,593	378,599
Expected federal tax expense	171,833	268,397
State tax expense (net of federal)	23,683	56,048
Net operating loss carryforwards		67,961
Other, net	(56,923)	(13,807)
Actual tax expense	$ 138,593	$ 378,599

Stock Options (Details) (USD $)	3 Months Ended
Stock Options (Details) (USD $)	Dec. 31, 2012
2010 Options
Adjusted exercise price	$ 11.33
Expected dividend yield	3.16%
Expected stock price volatility	36.23%
Risk-free interest rate	4.00%
Expected life of options in years	0 years 9 months
2011 Options
Adjusted exercise price	$ 12.83
Expected dividend yield	2.71%
Expected stock price volatility	35.63%
Risk-free interest rate	0.83%
Expected life of options in years	3 years

Financing Activities (Details Narrative) (USD $)		3 Months Ended				3 Months Ended	60 Months Ended		3 Months Ended
Financing Activities (Details Narrative) (USD $)	Dec. 31, 2012	Dec. 31, 2012 Line of Credit - Old	Dec. 31, 2012 Line of Credit - New	Dec. 31, 2012 Notes Payable to Community Bank	May 07, 2010 Notes Payable to Community Bank	Dec. 31, 2012 Five Star Bank - Note	Aug. 01, 2018 Five Star Bank - Note	Jul. 30, 2013 Five Star Bank - Note	Dec. 31, 2012 Multiple Disbursement Term Note	Dec. 31, 2011 Multiple Disbursement Term Note and Credit Agreement	Dec. 31, 2012 Manufacturers and Traders Trust Company	Dec. 31, 2012 Five Star Bank - Promissory Notes
Debt, face amount					$ 1,050,000	$ 750,000			$ 1,865,000	$ 2,000,000		$ 250,000
Interest rate, stated					6.25%	4.25%			5.76%			4.46%
Interest rate, at period end				4.50%		4.25%					4.25%
Date of loan				May 07, 2010		Aug. 13, 2012			Oct. 27, 2010	Jul. 14, 2011	Nov. 01, 2011	Aug. 18, 2012
Debt, equity contribution required					350,000
Stock options exercised, shares	42,000				24,000
Stock options exercised, price per share					$ 15.00
Stock options exercised, total amount					360,000
Covenants measured at each fiscal year end				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 ratio of less than 3.0 to 1.0, and(iii)Maintain a debt service coverage ratio of 1.10 to 1.
Interest rate description				Floating rate of 30-day LIBOR plus 2.75%		Variable interest rate of prime rate plus 1.00%	Fixed rate equal to the prevailing Federal Home Loan Bank of New York Fixed Advance Rate as published five days prior to July 30, 2013, plus 3.75%.			Interest only at a rate of the greater of 3.50% above 30-day LIBOR or 4.25%	Variable rate, adjusting daily, based on the greater of 3.25% above 30-day LIBOR or 4.25%
Interest rate, basis spread				2.75%		1.00%		3.75%
Interest rate, floor				4.50%						3.50%	3.25%
Interest rate, ceiling				6.50%						4.25%	4.25%
Revolving line of credit, amount		$ 7,000,000	$ 7,000,000
Revolving line of credit, interest rate description		Fluctuating interest rate equal to the greater of 3.5% or the 30-day LIBOR plus 2.25%	Greater of 3.25% or the 30-day LIBOR plus 2.25%
Revolving line of credit, interest rate, basis spread		2.25%	2.25%
Revolving line of credit, interest rate			3.25%
Revolving line of credit, interest rate, minimum		3.50%	3.50%
Start date		Feb. 28, 2011	Feb. 28, 2012
Expiration date		Feb. 28, 2012

Leatherstocking Companies (Details) (USD $)	3 Months Ended
Leatherstocking Companies (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Leatherstocking Companies Details
Investment in joint ventures as of September 30, 2012	$ 349,193
Investment in joint ventures	30,000
Non-utility income from joint venture	21,597
Ending Balance in joint ventures as of December 31, 2012	$ 400,790

Stock Options (Details1) (USD $)	3 Months Ended
Stock Options (Details1) (USD $)	Dec. 31, 2012
Stock Options Details1
Outstanding beginning	42,000
Awards granted
Awards exercised
Awards expired/canceled
Outstanding ending	42,000
Exercisable ending	42,000
Outstanding beginning	$ 11.81
Outstanding ending	$ 11.81
Exercisable ending	$ 11.81
Outstanding ending	1 year 6 months
Exercisable ending	1 year 6 months

Stock Options (Details Narrative) (USD $)	3 Months Ended			0 Months Ended	1 Months Ended
Stock Options (Details Narrative) (USD $)	Dec. 31, 2012	Dec. 31, 2012 Officers	Sep. 23, 2009 Pre-Stock Dividend Dated 04/20/2011 Officers	Dec. 14, 2010 Pre-Stock Dividend Dated 04/20/2011 Compensatory	Sep. 23, 2008 Pre-Stock Dividend Dated 04/20/2011 Officers	Dec. 14, 2011 Pre-Stock Dividend Dated 04/20/2011 Officers	Sep. 23, 2011 Pre-Stock Dividend Dated 04/20/2011 Officers	Sep. 23, 2010 Pre-Stock Dividend Dated 04/20/2011 Officers
Options, shares				9,000	19,000
Options, price per shares		$ 16.00		$ 19.25	$ 17.00
Options, vested			9,000			9,000	5,000	5,000

Other Comprehensive Income (Loss) (Details) (USD $)	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Other Comprehensive Income Loss Details
Pension adjustment	$ (3,393,526)	$ (3,299,397)	$ (2,801,961)
Net unrealized gain (loss) on securities available for sale	36,685	52,922	(27,414)
Accumulated other comprehensive loss	$ (3,356,841)	$ (3,246,475)	$ (2,829,375)

Fair Value Measurements (Details) (Recurring, USD $)	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Fair Value
Available-for-sale securities	$ 2,277,727	$ 2,271,721	$ 2,379,575
Quoted Prices In Active Markets for Identical Assets/Liabilities (Level 1)
Available-for-sale securities	2,277,727	2,271,721	2,379,575
Level 2
Available-for-sale securities	0	0	0
Level 3
Available-for-sale securities	$ 0	$ 0	$ 0

Rights Offering (Details Narrative) (USD $)	3 Months Ended
Rights Offering (Details Narrative) (USD $)	Dec. 31, 2012
Rights Offering Details Narrative
Exercise price, stock subscription	15.75
Stock issued during period, stock subscriptions	$ 3,838,048
Stock issued during period, stock subscriptions, shares	246,524

Consolidated Balance Sheets (Unaudited) (USD $)	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Plant
Utility property, plant and equipment	$ 56,293,395	$ 54,198,924	$ 50,004,178
Less: accumulated depreciation	(16,377,735)	(15,888,267)	(14,793,688)
Total plant utility and non-utility, net	39,915,660	38,310,657	35,210,490
Investments
Marketable securities available-for-sale at fair value	2,277,727	2,271,721	2,379,575
Investment in joint ventures	400,790	349,193
Total investments	2,678,517	2,620,914	2,379,575
Current assets
Cash and cash equivalents	100,218	70,083	166,035
Customer accounts receivable, (net of allowance for uncollectible accounts of $251,789, $32,132 and $209,615) respectively	2,968,721	1,626,283	2,477,607
Gas stored underground, at average cost	1,333,114	2,111,264	2,279,703
Materials and supplies inventory	1,162,996	1,173,104	928,015
Prepaid expenses	635,942	726,744	600,277
Total current assets	6,200,991	5,707,478	6,451,637
Regulatory assets
Unrecovered gas costs	1,698,535	1,545,235	1,055,040
Deferred regulatory costs	2,039,785	1,545,790	1,373,147
Unamortized debt issuance cost (net of accumulated amortization of $501,249, $455,139 and $489,522), respectively	237,484	249,211	274,808
Deferred income taxes	1,874,872	1,375,665	1,177,891
Other	282,577	259,254	211,398
Total deferred debits and other assets	6,133,253	4,975,155	4,092,284
Total assets	54,928,421	51,614,204	48,133,986
Current liabilities
Current portion of long-term debt	1,638,162	1,571,553	1,333,559
Demand notes payable	750,000	750,000	750,000
Borrowings under lines-of-credit	4,451,596	2,196,995	6,020,507
Accounts payable	1,767,756	1,501,193	2,049,786
Accrued expenses	1,009,246	872,702	1,303,914
Customer deposits and accrued interest	1,288,524	1,032,739	1,325,160
Dividends declared		266,205	209,538
Deferred income taxes	798,645	270,720	252,432
Total current liabilities	11,703,929	8,462,107	13,244,896
Long-term debt, less current installments	12,299,968	12,565,527	10,916,929
Deferred credits and other liabilities
Deferred compensation	1,510,378	1,499,264	1,516,841
Deferred pension costs & post-retirement benefits	7,820,595	7,680,065	6,962,239
Other	453,575	431,680	338,201
Total deferred credits and other liabilities	9,784,548	9,611,009	8,817,281
Common stockholders' equity
Common stock (common stock $5.00 par value per share. Authorized 3,500,000 shares; issued and outstanding 2,233,267 shares at December 31, 2012, 1,823,967 shares at December 31, 2011 and 2,220,271 at September 30, 2012)	11,166,335	11,101,355	9,119,835
Other paid-in capital	11,809,321	11,698,763	7,644,375
Retained earnings	1,521,161	1,421,918	1,220,045
Accumulated other comprehensive loss	(3,356,841)	(3,246,475)	(2,829,375)
Total common stockholders' equity	21,139,976	20,975,561	15,154,880
Total liabilities and capitalization	$ 54,928,421	$ 51,614,204	$ 48,133,986

311 Transportation Agreement/Compressor Station (Details Narrative) (USD $)	Dec. 31, 2012
Transportation Agreementcompressor Station Details Narrative
Compression station, value	$ 11,000,000
Pipeline, value	2,100,000
Total value of new plant	13,100,000
Deferred tax expense	$ 1,000,000

Pension and Other Post-retirement Benefit Plans (Details Narrative) (USD $)	3 Months Ended
	Dec. 31, 2012
Amount paid to pension plan	$ 228,966
Pension Benefits
Expected contribution	1,000,000
Post-retirement Benefits
Expected contribution	$ 63,000

Rate Cases (Details Narrative) (USD $)	1 Months Ended		12 Months Ended
Rate Cases (Details Narrative) (USD $)	Jan. 25, 2011	Aug. 31, 2009	Apr. 30, 2015	Apr. 30, 2014	Apr. 30, 2013	Aug. 31, 2011
Rate Cases Details Narrative
New York Public Service Commission rate increase	$ 164,000	$ 1,500,000
Actual capital expenditures and additional property taxes						228,342
Percentage increase of revenues from gas producers retained by the Company as an incentive, prior		10.00%
Percentage of revenues from gas producers retained by the Company as an incentive, current		20.00%
New York Public Service Commission rate increase, percent		6.63%
Joint proposal, revenue increase			323,591	899,674	944,310
Joint proposal, cumulative revenue increase			4,955,869
Joint proposal, opportunity to earn from local production before sharing, current					545,284
Joint proposal, opportunity to earn from local production before sharing, percent increase					118.00%
Joint proposal, opportunity to earn from local production before sharing, prior					$ 250,000
Return on equity					9.50%

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Current assets
Allowance for uncollectible accounts	$ 251,789	$ 209,615	$ 32,132
Regulatory assets
Accumulated amortization of debt issuance cost	$ 501,249	$ 489,522	$ 455,139
Common stockholders' equity
Common stock, par value		$ 5	$ 5
Commn stock, authorized shares	3,500,000	3,500,000	3,500,000
Common stock, shares outstanding	2,233,267	2,220,271	1,823,967
Common stock, shares issued	2,233,267	2,220,271	1,823,967

Document and Entity Information	3 Months Ended
Document and Entity Information	Dec. 31, 2012	Feb. 14, 2013
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, 2012
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		2,236,117
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2013

Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended
Consolidated Statements of Income (Unaudited) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Income Statement [Abstract]
Utility operating revenues	$ 5,589,201	$ 4,913,295
Natural gas purchased	2,033,201	1,997,114
Gross margin	3,556,000	2,916,181
Cost and expense
Operating and maintenance expense	1,744,427	1,020,411
Taxes other than income taxes	426,075	469,236
Depreciation	477,324	419,751
Other deductions, net	243,736	266,577
Total costs and expenses	2,891,562	2,175,975
Utility operating income	664,438	740,206
Other income and (expense)
Interest expense	(243,843)	(251,359)
Non-utility expense	(6,506)	(2,820)
Other income	27,842	266,920
Investment income	29,726	24,318
Non-utility income from joint venture	21,597
Rental income	12,138	12,138
Net income from operations, before income tax	505,392	789,403
Income tax benefit/(expense), current	275,935	237,432
Income tax benefit (expense), deferred	(414,528)	(616,031)
Total tax (expense)	(138,593)	(378,599)
Net income	366,799	410,804
Other comprehensive income (loss)
Pension adjustment, net of tax	(94,129)	(197,665)
Net unrealized gain (loss) on securities available for sale	(16,237)	61,486
Total other comprehensive (loss)	(110,366)	(136,179)
Total comprehensive income	$ 256,433	$ 274,625
Weighted average earnings per share
Basic:	$ 0.16	$ 0.23
Diluted:	$ 0.16	$ 0.22
Average shares outstanding - basic	2,230,135	1,815,634
Average shares outstanding - diluted	2,240,024	1,829,486

Effective Tax Rate (Details Narrative)	3 Months Ended
Effective Tax Rate (Details Narrative)	Dec. 31, 2012	Dec. 31, 2011
Effective Tax Rate Details Narrative
Federal corporate tax rate	34.00%
State tax rate	7.10%
Effective tax rate	27.40%	48.00%
Expected tax rate	41.10%	41.10%

Settlement of Lawsuits (Details Narrative) (USD $)	3 Months Ended	1 Months Ended
Settlement of Lawsuits (Details Narrative) (USD $)	Dec. 31, 2011 Barry	Aug. 31, 2012 Osborne	Dec. 31, 2012 Osborne
Release agreement for the settlement of lawsuit, amount paid	$ 285,000		$ 126,000
Release agreement for the settlement of lawsuit, annual payment	40,000
Release agreement for the settlement of lawsuit, interest compounded annually	4.00%
Release agreement for the settlement of lawsuit, payment to replace life insurance policy	15,000
Release agreement for the settlement of lawsuit, maximum number of payments to replace life insurance policy	20
Damages sought	75,000	650,000
After tax benefit from the reversal of accrued liability	400,000
Damages paid		$ 200,000

Fair Value Measurements (Details 1) (USD $)	3 Months Ended
Fair Value Measurements (Details 1) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Fair Value Measurements Details 1
Total gains or (losses) included in earnings	$ 29,726	$ 24,318

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities
Net income	$ 366,799	$ 410,804
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	477,324	419,751
Unamortized debt issuance cost	11,727	11,285
Regulatory Amortizations	354,996	405,152
Stock issued for services and stock option expense	175,542	95,911
Pension adjustment	(94,129)	(197,665)
Loss (Gain) on sale of marketable securities	(5,356)	(24,703)
Deferred income taxes	28,718	235,060
Bad debt expense	73,559	35,545
Undistributed earnings on joint ventures	(21,597)
(Increase) decrease in
Accounts receivable	(1,415,997)	(914,911)
Gas stored underground	778,150	553,229
Materials and supplies inventories	10,108	260,002
Prepaid expenses	90,802	103,682
Unrecovered gas costs	(153,300)	(518,392)
Deferred regulatory costs	(641,027)	(300,059)
Other	(23,323)	9,691
Increase (decrease) in
Accounts payable	266,563	167,537
Accrued expenses	136,544	(34,532)
Customer deposits and accrued interest	255,785	290,841
Deferred compensation	11,114	(332,178)
Deferred pension costs & post-retirement benefits	(67,434)	65,868
Other liabilities and deferred credits	(244,310)	25,808
Net cash (used in) provided by operating activities	371,258	767,726
Cash flows from investing activities
Purchase of securities available-for-sale	(452,462)	(396,126)
Sale of securities available-for-sale	435,575	370,008
Investment in joint ventures	(30,000)
Capital expenditures	(2,082,327)	(2,501,627)
Net cash (used in) provided by investing activities	(2,129,214)	(2,527,745)
Cash flows from financing activities
Proceeds under lines-of-credit	3,997,523	4,750,523
Repayment of lines-of-credit	(1,742,922)	(2,908,800)
Cash received from sale of stock		350,000
Dividends paid	(267,560)	(209,538)
Proceeds under long-term debt	77,435
Repayment of long-term debt	(276,385)	(229,376)
Net cash (used in) provided by financing activities	1,788,091	1,752,809
Net (decrease) increase in cash	30,135	(7,210)
Cash and cash equivalents at beginning of period	70,083	173,245
Cash and cash equivalents at end of period	100,218	166,035
Cash paid during the period for
Interest	241,042	248,115
Income Taxes	$ 24,333	$ 28,500

Stock Based Compensation (Details) (USD $)	3 Months Ended	12 Months Ended	3 Months Ended
Stock Based Compensation (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2012 Each Individual Officer	Dec. 31, 2012 Directors	Dec. 31, 2012 Officers
Number of directors			6	5
Fees earned or paid in cash
Stock awards, per share			$ 11.70	$ 16.00
Stock awards, shares	375	600	6,750	3,000
Stock awards, value			$ 78,975	$ 48,000
Shares vested in period		300

Investment Income

Three Months Ended December 31,

Total gains or (losses) included in earnings