Piedmont Natural Gas Reports First Quarter 2015 Results

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Mar 06, 2015, 08:03 ET

CHARLOTTE, N.C., March 6, 2015 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its first fiscal quarter ended January 31, 2015. For the quarter, the Company reported net income of $93 million, or $1.18 per diluted share, compared to a net income of $97.6 million, or $1.26 per diluted share for the same period in 2014.

Margin for the quarter was $270.1 million, an increase of $8.6 million from the prior year's quarter. The increase in margin is primarily attributable to the full quarter impact of new rates in North Carolina that were effective January 1, 2014, rate adjustments in Tennessee and North Carolina under the Company's integrity management riders and customer growth in all three states. These increases were partially offset by lower secondary market margin compared to the prior year and lower industrial customer margin from changes in cost allocation and rate design under the new North Carolina rates that were effective January 1, 2014.

Piedmont Natural Gas Chairman, President, and CEO, Thomas E. Skains, commented on the results, "We are off to a good start this year in line with our expectations. With an improving economy in our three-state market area our customer growth totals during the quarter exceeded last year's performance by more than 15 percent. We are pleased by these results and now project a higher customer growth rate for the year ranging from 1.6 percent to 2.0 percent. And, our natural gas pipeline delivery system continued to perform very well, delivering natural gas safely and reliably to our customers and the communities we serve, even as we faced significantly colder than normal temperatures during our first fiscal quarter."

Operations and maintenance expenses totaled $66.2 million during the first quarter of 2014, an increase of $5.5 million from the first quarter of 2014. The increase in O&M expenses for the period is primarily due to increased contract labor, higher payroll from additional employees and overtime, and approved amortization of regulatory assets.

Pre-tax income from Piedmont's joint ventures decreased 16.9% for the quarter compared to the same period in 2014. The reduction is primarily due to decreases in the value of hedged derivatives from changes in natural gas prices and increased operating expenses from SouthStar. The overall reduction was partially offset by an increase in income from Constitution from higher capitalized interest associated with capital investments for the project.

Utility interest charges for the quarter were $17.7 million compared to $10.6 million for the same period in 2014. The increase is primarily due to an increase in interest expense on long-term debt primarily due to higher amounts of debt outstanding in 2015, a decrease in the allowance for funds used during construction as a result of lower utility project construction expenditures compared to the prior year and an increase in interest expense on amounts due to customers.

Dividend Increased for Thirty-Seventh Consecutive Year

The Board of Directors on March 5 approved an increase in the Company's quarterly dividend on Common Stock. The new quarterly dividend of 33 cents per share will be payable on April 15, 2015 to holders of record at the close of business on March 25, 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 first-quarter earnings release, you are invited to listen to the conference call that will broadcast live over the Internet on Monday, March 9, 2015 at 9:30 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 (Decrease)
		2015			2014
	(Unaudited)
Operating Revenues		$	607,271		$	657,733		(8)	%
Cost of Gas		337,201			396,221			(15)	%
Margin		270,070			261,512			3	%
Operations and Maintenance Expenses		66,150			60,639			9	%
Depreciation		31,893			29,643			8	%
General Taxes		9,997			9,109			10	%
Utility Income Taxes		56,272			59,802			(6)	%
Operating Income		105,758			102,319			3	%
Other Income (Expense), net		4,931			5,855			(16)	%
Utility Interest Charges		17,711			10,602			67	%
Net Income		92,978			97,572			(5)	%

Average Shares of Common Stock:
Basic		78,620			76,988			2	%
Diluted		78,945			77,327			2	%

Earnings Per Share of Common Stock:
Basic		$	1.18		$	1.27		(7)	%
Diluted		$	1.18		$	1.26		(6)	%

System Throughput - Dekatherms		140,787			137,138			3	%
Gas Customers Billed in January		1,023,245			1,009,313			1	%
System Average Degree Days – Actual		1,945			2,064			(6)	%
System Average Degree Days – Normal		1,838			1,843			—	%
Percent Normal Degree Days		6		%	12		%	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