Piedmont Natural Gas Initiates Fiscal Year 2013 Earnings Guidance

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Nov 13, 2012, 07:22 ET

CHARLOTTE, N.C., Nov. 13, 2012 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) is initiating its earnings guidance for the fiscal year ending October 31, 2013 in the range of $1.67 - $1.77 per diluted share. The guidance for the fiscal year 2013 reflects the following assumptions:

Margin growth due to normal weather, gross customer additions of slightly greater than 1% in the Company's North Carolina, South Carolina and Tennessee markets, the full-year impact of the Wayne County power generation delivery project that went into service on June 1, 2012 and the Tennessee general rate case that went into effect on March 1, 2012, and the completion and placement into service of the Sutton power generation delivery project as scheduled for June 1, 2013;
Margin reduction in secondary marketing due to lower price and basis volatility in the wholesale natural gas markets as well as a $1.1 million annual margin decrease pursuant to a settlement approved in the Company's 2012 South Carolina Rate Stabilization proceeding effective November 1, 2012;
Higher O&M expense of about 5% primarily driven by higher pension costs due to lower discount rates, higher payroll costs, and higher utility operations expense related to pipeline integrity, safety and compliance programs;
Higher depreciation expense reflecting additional utility plant in service;
Allowance for Funds Used During Construction (AFUDC) of about $28 million resulting from the amount and timing of capital expenditures;
Modest improvement from equity method investments mostly due to normal weather in the markets served by SouthStar Energy;
Capital expenditures in the range of $525 - $575 million, including $75 - $85 million for the completion of the Sutton power generation delivery project, and higher utility capital expenditures related to pipeline integrity, safety and compliance programs, and system and technology infrastructure;
Higher interest expense reflecting the full-year impact of the $300 million long-term debt issuance in fiscal year 2012, as well as a new $250 million issuance of long-term debt in fiscal year 2013; and
A new equity issuance of approximately 4 million shares during fiscal year 2013.

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 and industrial utility customers in North Carolina, South Carolina and Tennessee, including 53,000 customers served by municipalities who are wholesale customers. Our subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, interstate natural gas storage and intrastate natural gas transportation. More information about Piedmont Natural Gas is available on the Internet at http://www.piedmontng.com/.

SOURCE Piedmont Natural Gas