Piedmont Natural Gas Reports Second Quarter 2013 Results

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Jun 07, 2013, 04:20 ET

CHARLOTTE, N.C., June 7, 2013 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its second fiscal quarter ended April 30, 2013. For the quarter, the Company reported net income of $55.8 million, or $.74 per diluted share, compared to net income of $50.2 million, or $.70 per diluted share for the same period in 2012.

For the six months ended April 30, 2013, net income was $141.7 million and diluted earnings per share were $1.91, compared with net income of $126.4 million and diluted earnings per share of $1.75 for the same period in 2012.

Margin for the second quarter was $183.9 million, an increase of $11.9 million from the prior year's quarter. Margin for the six months ended April 30, 2013 was $415.5 million, an increase of $23.3 million from the prior year period. The increase in margin is primarily attributable to customer growth, new rates in Tennessee, increased volume deliveries in the residential, commercial, and industrial markets due to colder weather, and increased transportation services in the power generation markets.

Operations and maintenance expenses totaled $65 million during the second quarter of 2013, an increase of $4.5 million from the second quarter of 2012. The increase in O&M expenses for the quarter is primarily due to increases in contract labor expenses related to pipeline integrity and maintenance programs, employee benefits expense, regulatory expense amortizations, and transportation expense. Operations and maintenance expenses totaled $120.9 million during the six months ended April 30, 2013, an increase of $2 million from the same period in 2012. The increase in O&M expenses for the six month period is primarily due to increases in contract labor expenses related to pipeline integrity and maintenance programs, regulatory expense amortizations, and transportation expense, partially offset by a decrease in employee benefits expense.

Pre-tax income from Piedmont's joint ventures was up 7% for the quarter and 9% for the six month period primarily due to improved performance at SouthStar Energy from increased customer usage related to colder weather.

Utility interest charges for the quarter were $3.3 million compared to $5.7 million for the same period in 2012. Utility interest charges for the six months ended April 30, 2013 were $7.8 million compared to $12.9 million for the same period in 2012. The decrease is primarily due to an increase in AFUDC as a result of increased project construction expenditures, higher interest income from increased amounts due from customers, and lower short-term interest expense, all partially offset by an increase in interest expense on long-term debt, primarily due to higher amounts outstanding in 2013.

Company Announces Quarterly Dividend

At its regular quarterly meeting of the Board of Directors, the Company today announced the declaration of a quarterly dividend on Common Stock of 31 cents per share, payable on July 15, 2013 to holders of record at the close of business on June 24, 2013.

FISCAL 2013 EARNINGS GUIDANCE REAFFIRMED

Piedmont Natural Gas reaffirms its fiscal year 2013 earnings guidance of $1.67 to $1.77 per diluted share.

CONFERENCE CALL

In conjunction with the second-quarter earnings release, you are invited to listen to the conference call that will broadcast live over the Internet on Tuesday, June 11, 2013 at 10:00 a.m. Eastern Time, hosted by Chairman, President and CEO Thomas E. Skains. Log onto the web at www.piedmontng.com and click on For Investors. The conference call will be archived on the Presentation page of the website within the For Investors section.


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

Three Months Ended	April 30						% Increase
	2013			2012			(Decrease)
	(Unaudited)
Operating Revenues	$	399,411		$	308,432			29	%
Cost of Gas		215,555			136,481			58	%
Margin		183,856			171,951			7	%
Operations and Maintenance Expenses		65,037			60,511			7	%
Depreciation		26,867			25,269			6	%
General Taxes		9,068			9,299			(2%)
Utility Income Taxes		31,380			28,090			12	%
Operating Income		51,504			48,782			6	%
Other Income (Expense), net		7,608			7,073			8	%
Utility Interest Charges		3,322			5,663			(41%)
Net Income		55,790			50,192			11	%

Average Shares of Common Stock:
Basic		75,463			71,731			5	%
Diluted		75,904			72,026			5	%

Earnings Per Share of Common Stock:
Basic	$	.74		$	.70			6	%
Diluted	$	.74		$	.70			6	%
System Throughput — Dekatherms		108,884			81,946			33	%
Gas Customers Billed in January		1,000			984			2	%
System Average Degree Days — Actual		1,418			865			64	%
System Average Degree Days — Normal		1,180			1,194			(1%)
Percent Normal Degree Days		120	%		72	%		n/a

Six Months Ended	April 30						% Increase
	2013			2012			(Decrease)
	(Unaudited)
Operating Revenues	$	915,286		$	780,272			17	%
Cost of Gas		499,806			388,085			29	%
Margin		415,480			392,187			6	%
Operations and Maintenance Expenses		120,919			118,908			2	%
Depreciation		53,569			51,447			4	%
General Taxes		18,596			17,920			4	%
Utility Income Taxes		84,679			75,311			12	%
Operating Income		137,717			128,601			7	%
Other Income (Expense), net		11,775			10,686			10	%
Utility Interest Charges		7,779			12,868			(40%)
Net Income		141,713			126,419			12	%

Average Shares of Common Stock:
Basic		73,884			71,931			3	%
Diluted		74,301			72,226			3	%

Earnings Per Share of Common Stock:
Basic	$	1.92		$	1.76			9	%
Diluted	$	1.91		$	1.75			9	%
System Throughput — Dekatherms		216,832			172,911			25	%
Gas Customers Billed in January		1,000			984			2	%
System Average Degree Days — Actual		3,109			2,433			28	%
System Average Degree Days — Normal		3,029			3,063			(1%)
Percent Normal Degree Days		103	%		79	%		n/a

Forward-Looking Statement

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 future events, risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the statements. Factors that may make the actual results differ 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, 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," "should," "could," "assume," "can," "estimate," "forecast," "future," "indicate," "outlook," "plan," "predict," "seek," "target," "would," 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 utility customers in portions of North Carolina, South Carolina and Tennessee. Our subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, and regulated interstate natural gas transportation and storage and 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