Piedmont Natural Gas Reports First Quarter 2014 Results

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Mar 06, 2014, 04:15 ET

CHARLOTTE, N.C., March 6, 2014 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its first fiscal quarter ended January 31, 2014. For the quarter, the Company reported net income of $97.6 million, or $1.26 per diluted share, compared to net income of $85.9 million, or $1.18 per diluted share for the same period in 2013.

Margin for the quarter was $261.5 million, an increase of $29.9 million from the prior year's quarter. The increase in margin is primarily attributable to higher margin sales in secondary market activity related to sustained colder-than-normal weather and increased wholesale market volatility, increased volume deliveries in the retail markets due to 22 percent colder weather and customer growth, regulatory rate adjustments, and increased transportation services in the power generation markets.

Operations and maintenance expenses totaled $60.6 million during the first quarter of 2014, an increase of $4.8 million from the first quarter of 2013. The increase in O&M expenses for the quarter is primarily due to increases in payroll and employee benefit expenses.

Pre-tax income from Piedmont's joint ventures was up 39 percent compared to the same period in 2013 due to improved performance at SouthStar Energy from colder weather and the expansion into the unregulated retail markets in Illinois.

Utility interest charges for the quarter were $10.6 million compared to $4.5 million for the same period in 2013. The increase is primarily due to an increase in interest expense on long-term debt primarily due to higher amounts outstanding in 2014 and a decrease in AFUDC as a result of lower utility project construction expenditures compared to the prior year.

Piedmont Natural Gas Chairman, President, and CEO, Thomas E. Skains, commented on the results, "We are off to a strong start in fiscal year 2014. In addition to meeting peak customer demand with safe and reliable natural gas service during significant periods of extreme cold temperatures this winter, we were also successful in our secondary market activities during the quarter. As a result, our performance improved year to year above our expectations and our customers are directly benefiting from lower gas rates with $43 million, or 75 percent of our secondary market gains, reducing customer bills through regulatory gas cost adjustments."

DIVIDEND INCREASED FOR THIRTY-SIXTH CONSECUTIVE YEAR

The Board of Directors on March 6 approved an increase in the Company's quarterly dividend on Common Stock. The new quarterly dividend of 32 cents per share will be payable on April 15, 2014 to holders of record at the close of business on March 25, 2014.

REVISED FISCAL 2014 EARNINGS GUIDANCE

With the Company's first quarter performance, Piedmont Natural Gas is raising its fiscal year 2014 earnings guidance range to $1.80 to $1.90 per diluted share. The previous guidance range was $1.73 to $1.83.

CONFERENCE CALL

Piedmont Natural Gas will conduct its 2014 first quarter conference call, broadcast live over the internet on Friday, March 7, 2014 at 10:00 a.m. Eastern Time. Hosting the conference call will be Chairman, President and Chief Executive Officer Thomas E. Skains. Simply log on to 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	January 31						% Increase
	2014			2013			(Decrease)
	(Unaudited)
Operating Revenues	$	657,733		$	515,875			28	%
Cost of Gas		396,221			284,252			39	%
Margin		261,512			231,623			13	%
Operations and Maintenance Expenses		60,639			55,882			9	%
Depreciation		29,643			26,701			11	%
General Taxes		9,109			9,528			(4%)
Utility Income Taxes		59,802			53,299			12	%
Operating Income		102,319			86,213			19	%
Other Income (Expense), net		5,855			4,167			41	%
Utility Interest Charges		10,602			4,457			138	%
Net Income		97,572			85,923			14	%

Average Shares of Common Stock:
Basic		76,988			72,356			6	%
Diluted		77,327			72,725			6	%

Earning Per Share of Common Stock:
Basic	$	1.27		$	1.19			7	%
Diluted	$	1.26		$	1.18			7	%

System Throughput — Dekatherms		137,138			107,948			27	%
Gas Customers Billed in January		1,009			995			2	%
System Average Degree Days — Actual		2,064			1,691			22	%
System Average Degree Days — Normal		1,843			1,849			-	%
Percent Normal Degree Days		112	%		91	%			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," "may," "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