Piedmont Natural Gas Reports First Quarter 2016 Results

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Mar 09, 2016, 04:17 ET

CHARLOTTE, N.C., March 9, 2016 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its first fiscal quarter ended January 31, 2016. For the quarter, the Company reported net income of $97.8 million, or $1.20 per diluted share, compared to net income of $93 million, or $1.18 per diluted share for the same period in 2015. Adjusted for merger-related expenses incurred during the Company's first quarter, net income was $104.8 million, or $1.29 per diluted share, increases of 13% and 9%, respectively, over the prior year.

Piedmont Natural Gas Chairman, President, and CEO, Thomas E. Skains, commented on the results, "We are pleased with our operating fundamentals and financial results for the first quarter of the new year, even as we experienced winter weather that was 21 percent warmer than normal and 25 percent warmer than last year. Adjusted for after-tax merger-related expenses, net income increased 13 percent compared to the same period last year. The margin stabilizing features of our retail natural gas tariffs have proven once again to be beneficial to both our customers and our shareholders. In addition, our customer growth remains healthy with 4,700 gross customer additions during the first quarter and our employees are focused on profitable investments and disciplined expense control. All in all, we are off to a good start in fiscal year 2016."

Margin for the three months ended January 31, 2016 was $286.2 million, an increase of $16.2 million from the prior year's quarter. The increase in margin is primarily attributable to integrity management rider rate adjustments in North Carolina and Tennessee, as well as customer growth in all three states.

Operations and maintenance (O&M) expenses totaled $71.3 million during the three months ended January 31, 2016, an increase of $5.2 million from the same period in 2015. The increase in O&M expenses for the three month period is primarily due to higher equity incentive plan accruals, including $4.3 million incremental expense from the acceleration and payment of certain equity incentive awards in connection with the Duke Energy acquisition, additional employees and merit increases, and $1.5 million in integration expenses related to the proposed Duke Energy acquisition.

DIVIDEND INCREASED FOR THIRTY-EIGHTH CONSECUTIVE YEAR

The Board of Directors on March 9 approved an increase in the Company's quarterly dividend on Common Stock. The new quarterly dividend of 34 cents per share will be payable on April 15, 2016 to holders of record at the close of business on March 25, 2016.

FISCAL 2016 EARNINGS GUIDANCE REAFFIRMED

Piedmont Natural Gas reaffirms its fiscal year 2016 earnings guidance of $1.92 to $2.02 per diluted share before any merger-related expenses.

Summary of Operations
(in thousands except per share amounts and degree days)

Three Months Ended		January 31						% Increase (Decrease)
		2016			2015
	(Unaudited)
Operating Revenues		$	461,337		$	607,271		(24)	%
Cost of Gas		175,088			337,201			(48)	%
Margin		286,249			270,070			6	%
Operations and Maintenance Expenses		71,300			66,150			8	%
Depreciation		33,686			31,893			6	%
General Taxes		9,922			9,997			(1)	%
Utility Income Taxes		61,909			56,272			10	%
Operating Income		109,432			105,758			3	%
Other Income (Expense), net		5,426			4,931			10	%
Utility Interest Charges		17,068			17,711			(4)	%
Net Income		97,790			92,978			5	%

Average Shares of Common Stock:
Basic		80,963			78,620			3	%
Diluted		81,266			78,945			3	%

Earnings Per Share of Common Stock:
Basic		$	1.21		$	1.18		3	%
Diluted		$	1.20		$	1.18		2	%

System Throughput - Dekatherms		137,992			140,787			(2)	%
Gas Customers Billed in January		1,038			1,023			1	%
System Average Degree Days – Actual		1,455			1,945			(25)	%
System Average Degree Days – Normal		1,840			1,838			—	%
Percent Normal Degree Days		(21)		%	6		%	n/a

Non-GAAP Reconciliation of Merger-Related Expenses
$ in thousands except per share amounts
	2016

GAAP net income	$	97,790
After-tax merger-related expenses	$	7,050

Adjusted net income	$	104,840
Average basic shares outstanding (in thousands)	80,963
Average diluted shares outstanding (in thousands)	81,266
Adjusted basic EPS	$	1.29
Adjusted diluted EPS	$	1.29

Forward-Looking Statements

This press release contains forward-looking statements. These statements are based on management's current expectations and information currently available and are believed to be reasonable and are made in good faith. However, the forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in the statements. Factors that may make the actual results differ materially from anticipated results include, but are not limited to, weather conditions, rate of customer growth, the cost and availability of natural gas, competition from other energy providers, new legislation and regulations and application of existing laws and regulations, economic and capital market conditions, operational interruptions to our gas distribution and transmission activities, change in number of outstanding shares, cybersecurity breaches or failure of technology systems, inability to complete necessary or desirable pipeline expansion or infrastructure projects, costs of providing pension benefits, the cost and availability of labor and materials and other uncertainties, all of which are difficult to predict and some of which are beyond our control. For these reasons, you should not place undue reliance on these forward-looking statements when making investment decisions. The words "expect," "believe," "project," "anticipate," "intend," "may," "should," "could," "assume," "estimate," "forecast," "future," "indicate," "outlook," "plan," "predict," "seek," "target," "would," "guidance," and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements are only as of the date they are made and we do not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise. More information about the risks and uncertainties relating to these forward-looking statements may be found in Piedmont's latest Forms 10-K and 10-Q, which are available on the SEC's website at http://www.sec.gov.

About Piedmont Natural Gas

Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to more than one million residential, commercial, industrial and power generation customers in portions of North Carolina, South Carolina and Tennessee, including customers served by municipalities who are wholesale customers. Our subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, regulated interstate natural gas transportation and storage, and regulated intrastate natural gas transportation businesses. More information about Piedmont Natural Gas is available on the Internet at http://www.piedmontng.com/.

SOURCE Piedmont Natural Gas