Piedmont Natural Gas Initiates Fiscal Year 2016 Earnings Guidance

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Nov 02, 2015, 07:40 ET

CHARLOTTE, N.C., Nov. 2, 2015 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) is initiating earnings guidance in the range of $1.92 - $2.02 per diluted share for its fiscal year ending October 31, 2016 before any merger-related adjustments. This guidance for fiscal year 2016 reflects the following assumptions:

Higher utility margin due to:
- Expected margin increases under the Integrity Management Riders (IMRs) in North Carolina and Tennessee;
- A $1.7 million margin increase in South Carolina under the annual rate stabilization adjustment;
- Gross utility customer additions of 1.6-2.0% in the Company's three state market area;
- Partially offset by lower wholesale secondary marketing margin due to an assumption of normal weather and additional wholesale pipeline capacity into our markets.
O&M expense increases of less than 2% from fiscal year 2015 due primarily to higher payroll
Higher depreciation expense and general taxes due to additional utility plant in service.
Increased contributions from joint venture equity method investments due to increased allowance for funds used during construction (AFUDC) from the Constitution Pipeline and Atlantic Coast Pipeline projects.
Utility AFUDC of about $13 million reflecting forecasted utility capital expenditure levels and project schedules.
Utility capital expenditures (including AFUDC) in the range of $500-$600 million, including approximately $280 million related to system integrity projects, as well as net contributions of an additional $110 million to fund the Company's joint venture equity interests in the Constitution Pipeline and Atlantic Coast Pipeline projects.
Higher interest expense primarily due to the full-year impact of the Company's $150 million long-term debt issuance in fiscal year 2015.
Issuance of both new long-term debt and equity in fiscal year 2016 to maintain the Company's long term targeted capital ratios of 50% - 60% debt and 40% - 50% equity.