vStapleton, N. V., Ffcbruary 3rd, 1908.

TO THK STOCKHOI.DKRS

of the Nkw York and Richmond Gas Co.:

Your Directors beg to submit herewith the following report, and
the annexed financial statement for the year ended December 31st, 1907.

The year shows increases over the previous year of 16.43 per cent,
in gas sales, 13.72 per cent in gross earnings, expenses of operation,
maintenance, taxes and insurance of 18.87 per cent, and Net Profit
after providing  for Fixed Charges, of 11.52 per cent.

There were declared and jiaid during the year 1907 the usual
Dividends of 2 per cent.

High costs of material and labor and the States onerous exactions
continued, and have been responsible for the increased costs of opera¬
tion during 1907.

During the year there was an increase of $16,800 in tlie Capital
Stock; the Bond Account was increased $89,000.00 which were sold
to reimburse the Company on account for the cost of extensions and
additions to its plant and system. Surplus reserves increased 3.60
per cent.

The property has been maintained at a most modern and eificient
standard; considerable extensions and additions made and is capable of
supplying the present and prospective demands satisfactorily. The use
of gas continues to increase and develop.

The relations of the Company with its employees and the public

are most cordial and satisfactory, and the outlook for improving these

conditions and further extending and increasing the business is most

encouraging.

Respectfully submitted,

T. O,  HORTON,

Sefr,-l(ity.
By order of the Board of Directors