Piedmont Natural Gas Reports Third Quarter 2015 Results

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Sep 03, 2015, 08:25 ET

CHARLOTTE, N.C., Sept. 3, 2015 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its third fiscal quarter ended July 31, 2015. For the quarter, the Company reported a seasonal loss of $8.3 million, or $(0.10) per diluted share, compared to a seasonal loss of $7.3 million, or $(0.09) per diluted share for the same period in 2014.

For the nine months ended July 31, 2015, net income was $151.1 million and diluted earnings per share were $1.91, compared with net income of $152.8 million and diluted earnings per share of $1.96 for the same period in 2014.

Margin for the quarter was $111.6 million, an increase of $6.7 million from the prior year's quarter. The increase is primarily due to rate adjustments in Tennessee and North Carolina and customer growth. Margin for the nine months ended July 31, 2015 was $607.3 million, an increase of $29.4 million from the prior year period. The increase in margin is primarily attributable to rate adjustments in Tennessee and North Carolina and customer growth, partially offset by lower margin sales from secondary market activity.

Operations and maintenance expenses totaled $69.6 million during the third quarter of 2015, an increase of $1.0 million from the third quarter of 2014. Operations and maintenance expenses totaled $207.2 million during the nine months ended July 31, 2015, an increase of $7.7 million from the same period in 2014. The increase in O&M expenses for both periods is primarily due to increased contract labor, higher employee payroll and benefits, and approved regulatory amortization, partially offset by a decrease in bad debt expense.

Pre-tax income from Piedmont's joint ventures increased 2% for the nine months ended July 31, 2015, compared to same period in 2014. The increase was primarily due to higher capitalized interest associated with increased capital expenditures for the Constitution Pipeline project as development progresses, partially offset by a decrease in SouthStar Energy's income, primarily from decreases in the value of hedged derivatives and lower usage due to warmer weather, partially offset by favorable margins in Georgia, Illinois and Ohio.

Utility interest charges for the quarter were $16.7 million compared to $13.1 million for the same period in 2014. Utility interest charges for the nine months ended July 31, 2015 were $52.5 million compared to $35.8 million for the same period in 2014. The increase in utility interest charges for both periods is primarily due to a decrease in capitalized interest recorded as income and an increase in long-term debt outstanding in 2015, and for the nine months, an increase in regulatory interest expense on net amounts due to customers.

COMPANY ANNOUNCES QUARTERLY DIVIDEND

At its regular quarterly meeting of the Company's Board of Directors on September 2, 2015, the Board of Directors announced the declaration of a quarterly dividend on Common Stock of 33 cents per share, payable October 15, 2015, to holders of record at the close of business on September 24, 2015.

FISCAL 2015 EARNINGS GUIDANCE REAFFIRMED

Piedmont Natural Gas reaffirms its fiscal year 2015 earnings guidance of $1.82 to $1.92 per diluted share.

CONFERENCE CALL

In conjunction with the third-quarter earnings release, you are invited to listen to the conference call that will broadcast live over the Internet on Tuesday, September 8, 2015 at 10:00 a.m. Eastern Daylight Time, hosted by Chairman, President and CEO Thomas E. Skains. Log onto the web at www.piedmontng.com and click on Investor Relations, then on Presentations. The conference call will be archived on the Presentation page of the website within the Investor Relations section.

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

Three Months Ended		July 31						% Increase (Decrease)
		2015			2014
	(Unaudited)
Operating Revenues		$	158,266		$	164,187		(4)	%
Cost of Gas		46,694			59,340			(21)	%
Margin		111,572			104,847			6	%
Operations and Maintenance Expenses		69,587			68,605			1	%
Depreciation		32,317			29,960			8	%
General Taxes		11,532			9,352			23	%
Utility Income Taxes		(7,097)			(6,324)			(12)	%
Operating Income		5,233			3,254			61	%
Other Income (Expense), net		3,181			2,527			26	%
Utility Interest Charges		16,674			13,125			27	%
Net Income		(8,260)			(7,344)			(12)	%

Average Shares of Common Stock:
Basic		79,039			78,185			1	%
Diluted		79,039			78,185			1	%

Earnings Per Share of Common Stock:
Basic		$	(0.10)		$	(0.09)		(11)	%
Diluted		$	(0.10)		$	(0.09)		(11)	%

System Throughput - Dekatherms		104,914			86,767			21	%
Gas Customers Billed in April		1,014			999			2	%
System Average Degree Days – Actual		12			33			(64)	%
System Average Degree Days – Normal		47			49			(4)	%
Percent Normal Degree Days		(74)		%	(33)		%	n/a

Nine Months Ended		July 31						% Increase (Decrease)
		2015			2014

Operating Revenues		$	1,190,462		$	1,284,167		(7)	%
Cost of Gas		583,199			706,285			(17)	%
Margin		607,263			577,882			5	%
Operations and Maintenance Expenses		207,162			199,437			4	%
Depreciation		95,900			87,947			9	%
General Taxes		32,504			27,958			16	%
Utility Income Taxes		85,583			89,668			(5)	%
Operating Income		186,114			172,872			8	%
Other Income (Expense), net		17,472			15,650			12	%
Utility Interest Charges		52,466			35,754			47	%
Net Income		151,120			152,768			(1)	%

Average Shares of Common Stock:
Basic		78,826			77,715			1	%
Diluted		79,175			78,027			1	%

Earnings Per Share of Common Stock:
Basic		$	1.92		$	1.97		(3)	%
Diluted		1.91			$	1.96		(3)	%

System Throughput - Dekatherms		370,834			327,128			13	%
Gas Customers Billed in April		1,014			999			2	%
System Average Degree Days - Actual		3,279			3,391			(3)	%
System Average Degree Days - Normal		3,062			3,070			—	%
Percent Normal Degree Days		7		%	10		%	n/a

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