Piedmont Natural Gas Reports Results For Fiscal Year 2012

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Dec 21, 2012, 08:36 ET

CHARLOTTE, N.C., Dec. 21, 2012 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its fiscal year ended October 31, 2012. For the year, the Company reported net income of $119.8 million and diluted earnings per share of $1.66 compared with net income of $113.6 million and diluted earnings per share of $1.57 for 2011.

Commenting on the Company's fiscal year 2012 results, Piedmont Chairman, President and Chief Executive Officer, Thomas E. Skains said, "It was an excellent year for our Company – a year of significant strategic, operational and financial success. After a winter that was the warmest in more than 35 years, our employees rallied to focus on operational and financing efficiencies, expense discipline and margin growth. We generated a notable improvement in the growth of our core gas utility business with the addition of over 13,000 new customers to our distribution systems, up 26 percent from our customer additions in 2011. We also successfully executed the largest capital expansion program in the Company's history, investing over $550 million for core customer growth, expansion to serve new power generation facilities and system infrastructure and pipeline integrity management programs. With a strong finish in 2012, we look forward to the opportunities ahead in the new year."

System throughput in 2012 totaled 324 million dekatherms, compared with 280 million dekatherms for the previous year. The increase was largely due to an 82 percent increase in volumes delivered to power generation customers, partially offset by a decrease in volumes delivered to residential, commercial, and industrial customers due to weather in 2012 that was 19 percent warmer than normal and 27 percent warmer than 2011.

Utility margin was up $1.8 million from the previous year primarily due to customer growth in the Company's residential and commercial markets, increased base rates in Tennessee and increased services in its power generation markets, partially offset by the impact of warmer weather in the Company's residential, commercial, industrial and secondary markets. Operations and maintenance expenses for the year increased $17.2 million from the previous year primarily due to higher employee benefit expenses in pension and medical plans, higher payroll expenses and increased contract labor expenses incurred in process improvement and pipeline integrity programs.

Utility interest charges were $21.1 million in 2012 compared to $44.0 million in 2011. The reduction in interest charges was due to higher capitalization of borrowing costs to AFUDC (allowance for funds used during construction) as the result of increased project construction expenditures, and the Company's financing activities to minimize the cost of debt.

Pre-tax income from equity method investments was $23.9 million in 2012 compared with $24.0 million in 2011. Warmer weather in the markets served by SouthStar Energy impacted results, but were mostly offset by improved performance from Cardinal Pipeline due to a major expansion project for its customers.

FISCAL 2013 EARNINGS GUIDANCE REAFFIRMED

Piedmont Natural Gas reaffirms its fiscal year 2013 earnings guidance of $1.67 to $1.77 per diluted share issued on November 13, 2012.

DIVIDEND

At its regular quarterly meeting of the Company's Board of Directors on December 13, 2012, Piedmont Natural Gas announced the declaration of a quarterly dividend on Common Stock of $.30 per share, payable December 31, 2012, to holders of record at the close of business on December 24, 2012.

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 Thursday, January 3, 2013, 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
	2012	2011	(Decrease)

Operating Revenues	$1,122,780	$1,433,905	(22)%
Cost of Gas	547,334	860,266	(36)%
Margin	575,446	573,639	-%
Operations and Maintenance Expenses	242,599	225,351	8%
Depreciation	103,192	102,829	-%
General Taxes	34,831	38,380	(9)%
Utility Income Taxes	69,101	64,068	8%
Operating Income	125,723	143,011	(12)%
Other Income (Expense), net	14,221	14,549	(2)%
Utility Interest Charges	20,097	43,992	(54)%
Net Income	119,847	113,568	6%
Average Shares of Common Stock:
Basic	71,977	72,056	- %
Diluted	72,278	72,266	- %
Earnings Per Share of Common Stock:
Basic	$1.67	$1.58	6%
Diluted	$1.66	$1.57	6%
System Throughput - Dekatherms	324,300	279,761	16%
Gas Customers Billed in October	969	958	1%
System Average Degree Days - Actual	2,668	3,662	(27)%
System Average Degree Days - Normal	3,310	3,318	-%
Percent Normal Degree Days	81%	110%	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 51,600 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