Piedmont Natural Gas Reports Results for Fiscal Year 2010

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Dec 23, 2010, 07:48 ET

CHARLOTTE, N.C., Dec. 23, 2010 /PRNewswire-FirstCall/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its fiscal year ended October 31, 2010. For the year, the Company reported record net income of $142 million and diluted earnings per share of $1.96 compared with net income of $123 million and diluted earnings per share of $1.67 for 2009. Results for 2010 include the gain on Piedmont's sale of half its 30 percent ownership interest in SouthStar Energy Services (SouthStar) to AGL Resources (AGLR) on January 1, 2010 for $57.5 million. The after-tax gain on the transaction was $30.3 million or $0.42 per diluted share.

Commenting on the Company's fiscal year 2010 results, Piedmont Chairman, President and Chief Executive Officer, Thomas E. Skains said, "We are pleased to announce another year of record earnings for our shareholders. Piedmont continues to grow its core gas utility business and added 11,000 new customers to its distribution systems this year even during weak economic times. We monetized a portion of our equity ownership in unregulated retail gas marketing for an attractive gain and are pursuing large utility capital expansions to serve natural gas fired power generation growth in our home state of North Carolina. As we look ahead, we will continue to focus on business process improvements, high quality customer service and long term growth and shareholder value as key components of our overall business strategy."

System throughput in 2010 totaled 253 million dekatherms, compared with 217 million dekatherms for the previous year. The increase was largely due to weather in 2010 that was 6% colder than normal and 4% colder than 2009, and an increase in deliveries to industrial customers (up 11%) and power generation customers (up 59%).

Margin decreased by $9 million from the previous year primarily due to warmer weather in the shoulder months of April and October and changes in adjustments to regulatory gas cost accounts. Margin from industrial customers increased 6% from 2009 to 2010. Operations and maintenance expenses for the year increased $11.7 million from the previous year primarily due to increased payroll, pension and contract labor expense.

Pre-tax income from equity method investments decreased $4.6 million year to year primarily due to lower earnings contributions from SouthStar at the new 15% ownership interest following the transaction with AGLR on January 1, 2010.

FISCAL 2011 EARNINGS GUIDANCE REAFFIRMED

Piedmont Natural Gas reaffirms its fiscal year 2011 earnings guidance of $1.50 to $1.60 per diluted share issued on November 1, 2010.

DIVIDEND

At its regular quarterly meeting of the Company's Board of Directors on December 16, 2010, Piedmont Natural Gas announced the declaration of a quarterly dividend on Common Stock of $0.28 per share, payable January 18, 2011, to holders of record at the close of business on December 27, 2010.

CONFERENCE CALL

In conjunction with this year-end earnings release, you are invited to listen to the conference call that will be broadcast live over the Internet on Wednesday, January 5, 2011, at 10:00 a.m. Eastern Time. Log on to the web at http://www.piedmontng.com and click on Investors, then on Presentations. The conference call will be archived on the Presentations page of the website within the Investor Relations section.


Piedmont Natural Gas
Summary of Operations
(in thousands except per share amounts and degree days)

Twelve Months Ended	October 31		% Increase
	2010	2009	(Decrease)

Operating Revenues	$1,552,295	$1,638,116	(5)%
Cost of Gas	999,703	1,076,542	(7)%
Margin	552,592	561,574	(2)%
Operations and Maintenance Expenses	219,829	208,105	6%
Depreciation	98,494	97,425	1%
General Taxes	33,909	34,590	(2)%
Utility Income Taxes	62,082	70,079	(11)%
Operating Income	138,278	151,375	(9)%
Other Income (Expense), net	47,387	18,124	161%
Utility Interest Charges	43,711	46,675	(6)%
Net Income	141,954	122,824	16%
Average Shares of Common Stock:
Basic	72,275	73,171	(1) %
Diluted	72,525	73,461	(1) %
Earnings Per Share of Common Stock:
Basic	$1.96	$1.68	17%
Diluted	$1.96	$1.67	17%
System Throughput - Dekatherms	252,615	216,874	16%
Gas Customers Billed in October	947	938	1 %
System Average Degree Days - Actual	3,535	3,413	4%
System Average Degree Days - Normal	3,321	3,324	-%
Percent Normal Degree Days	106%	103%	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 rely on these forward-looking statements when making investment decisions. The words "expect," "believe," "project," "anticipate," "intend," "should," "could," "will," "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 52,000 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