Piedmont Natural Gas Reports First Quarter 2013 Results

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Mar 06, 2013, 04:19 ET

CHARLOTTE, N.C., March 6, 2013 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its first fiscal quarter ended January 31, 2013. For the quarter, the Company reported net income of $85.9 million, or $1.18 per diluted share, compared to net income of $76.2 million, or $1.05 per diluted share for the same period in 2012.

Margin for the quarter was $231.6 million, an increase of $11.4 million from the prior year's quarter. The increase in margin is primarily attributable to customer growth and increased volume deliveries in the residential, commercial, and industrial markets due to 8 percent colder weather, increased transportation services in the power generation markets and increased secondary market activity.

Piedmont's Chairman, President and CEO, Thomas E. Skains, commented on the results, "We are pleased with our performance during the first quarter of fiscal year 2013. Customer additions throughout our three-state service area improved by 9 percent over the first quarter of last year. We continue to see positive signs of recovery and growth in our core markets. We are also well on track to execute our 2013 capital expansion program by completing our Sutton power generation delivery project on schedule by June 2013 and making good progress on our system integrity and reliability programs. Our strong first quarter performance is evidence of the value our customers place on natural gas to meet their energy needs in an affordable, clean and reliable fashion."

Operations and maintenance expenses totaled $55.9 million during the first quarter of 2013, a decrease of $2.5 million from the first quarter of 2012. The decrease in O&M expenses for the quarter is primarily due to decreases in employee benefit expenses, partially offset by increases in contract labor expenses related to pipeline integrity and maintenance programs.

Pre-tax income from Piedmont's joint ventures was up 14 percent compared to the same period in 2012 due to improved performance at SouthStar Energy and Cardinal Pipeline.

Utility interest charges for the quarter were $4.5 million compared to $7.2 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, and decreases in interest expense resulting from increased amounts due from customers and lower short-term interest expense, partially offset by an increase in interest expense on long-term debt primarily due to higher amounts outstanding in 2013.

DIVIDEND INCREASED FOR THIRTY-FIFTH CONSECUTIVE YEAR

As previously announced, the Board of Directors on March 6 approved an increase in the Company's quarterly dividend on Common Stock. The new quarterly dividend of 31 cents per share will be payable on April 15, 2013 to holders of record at the close of business on March 25, 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 first-quarter earnings release, you are invited to listen to the conference call that will broadcast live over the Internet on Thursday, March 7, 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 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	January 31				% Increase
	2013		2012		(Decrease)
	(Unaudited)
Operating Revenues	$	515,875	$	471,840		9%
Cost of Gas		284,252		251,603		13%
Margin		231,623		220,237		5%
Operations and Maintenance Expenses		55,882		58,397		(4%)
Depreciation		26,701		26,178		2%
General Taxes		9,528		8,622		11%
Utility Income Taxes		53,299		47,221		13%
Operating Income		86,213		79,819		8%
Other Income (Expense), net		4,167		3,614		15%
Utility Interest Charges		4,457		7,206		(38%)
Net Income		85,923		76,227		13%

Average Shares of Common Stock:
Basic		72,356		72,126		-%
Diluted		72,725		72,433		-%

Earning Per Share of Common Stock:
Basic	$	1.19	$	1.06		12%
Diluted	$	1.18	$	1.05		12%
System Throughput — Dekatherms		107,948		90,965		19%
Gas Customers Billed in January		995		983		1%
System Average Degree Days — Actual		1,691		1,568		8%
System Average Degree Days — Normal		1,849		1,869		(1%)
Percent Normal Degree Days		91%		84%		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, including 52,400 customers served by municipalities who are wholesale customers. 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