Piedmont Natural Gas Reports Second Quarter 2014 Results

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Jun 06, 2014, 07:54 ET

CHARLOTTE, N.C., June 6, 2014 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today announced results for its second fiscal quarter ended April 30, 2014. For the quarter, the Company reported net income of $62.5 million, or $.80 per diluted share, compared to net income of $55.8 million, or $.74 per diluted share for the same period in 2013.

For the six months ended April 30, 2014, net income was $160.1 million and diluted earnings per share were $2.06, compared with net income of $141.7 million and diluted earnings per share of $1.91 for the same period in 2013.

Margin for the quarter was $211.5 million, an increase of $27.7 million from the prior year's quarter. Margin for the six months ended April 30, 2014 was $473 million, an increase of $57.6 million from the prior year period. The increase in margin is primarily attributable to customer growth, regulatory rate adjustments, increased transportation services in the power generation markets, and higher margin sales from secondary market activity.

Operations and maintenance expenses totaled $70.2 million during the second quarter of 2014, an increase of $5.2 million from the same period in 2013. Operations and maintenance expenses totaled $130.8 million during the six months ended April 30, 2014, an increase of $9.9 million from the same period in 2013. The increase in O&M expenses is primarily due to increases in payroll and approved amortization of regulatory assets, partially offset by a decrease in employee benefits expense.

Pre-tax income from Piedmont's joint ventures increased 15% for the quarter and 24% percent for the year-to-date compared to the same period in 2013 primarily due to improved performance at SouthStar Energy from the expansion into the unregulated retail natural gas markets in Illinois and favorable customer mix and price spreads in the Georgia markets.

Utility interest charges for the quarter were $12 million compared to $3.3 million for the same period in 2013. Utility interest charges for the six months ended April 30, 2014 were $22.6 million compared to $7.8 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.

REVISED FISCAL 2014 EARNINGS GUIDANCE REAFFIRMED

Piedmont Natural Gas reaffirms its revised fiscal year 2014 earnings guidance of $1.80 to $1.90 per diluted share, with emphasis at the upper end of the range.

CONFERENCE CALL

In conjunction with the second-quarter earnings release, you are invited to listen to the conference call that will broadcast live over the Internet on Friday, June 6, 2014 at 11:30 a.m. Eastern Daylight 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	April 30				% Increase
	2014		2013		(Decrease)
	(Unaudited)
Operating Revenues	$	462,247	$	399,411		16%
Cost of Gas		250,724		215,555		16%
Margin		211,523		183,856		15%
Operations and Maintenance Expenses		70,193		65,037		8%
Depreciation		28,344		26,867		6%
General Taxes		9,497		9,068		5%
Utility Income Taxes		36,190		31,380		15%
Operating Income		67,299		51,504		31%
Other Income (Expense), net		7,268		7,608		(5%)
Utility Interest Charges		12,027		3,322		262%
Net Income		62,540		55,790		12%

Average Shares of Common Stock:
Basic		77,982		75,463		3%
Diluted		78,291		75,904		3%

Earning Per Share of Common Stock:
Basic	$	.80	$	.74		8%
Diluted	$	.80	$	.74		8%
System Throughput — Dekatherms		103,222		108,884		(5%)
Gas Customers Billed in January		1,014		1,000		1%
System Average Degree Days — Actual		1,294		1,418		(9%)
System Average Degree Days — Normal		1,178		1,180		-%
Percent Normal Degree Days		110%		120%		n/a

Six Months Ended	April 30				% Increase
	2014		2013		(Decrease)
	(Unaudited)
Operating Revenues	$	1,119,980	$	915,286		22%
Cost of Gas		646,945		499,806		29%
Margin		473,035		415,480		14%
Operations and Maintenance Expenses		130,832		120,919		8%
Depreciation		57,987		53,569		8%
General Taxes		18,606		18,596		-%
Utility Income Taxes		95,992		84,679		13%
Operating Income		169,618		137,717		23%
Other Income (Expense), net		13,123		11,775		11%
Utility Interest Charges		22,629		7,779		191%
Net Income		160,112		141,713		13%

Average Shares of Common Stock:
Basic		77,477		73,884		5%
Diluted		77,802		74,301		5%

Earning Per Share of Common Stock:
Basic	$	2.07	$	1.92		8%
Diluted	$	2.06	$	1.91		8%
System Throughput — Dekatherms		240,361		216,832		11%
Gas Customers Billed in January		1,014		1,000		1%
System Average Degree Days — Actual		3,358		3,109		8%
System Average Degree Days — Normal		3,021		3,029		-%
Percent Normal Degree Days		111%		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 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