PNY Piedmont Natural Gas Company, Inc.

CHARLOTTE, N.C., March 9 /PRNewswire-FirstCall/ -- Piedmont Natural Gas (NYSE:PNY) today announced results for the first fiscal quarter ended January 31, 2009. For the quarter, the Company reported net income of $80.9 million, or $1.10 per diluted share, compared to net income of $82.3 million, or $1.12 per diluted share for the same period in 2008. Margin for the quarter was $220.7 million, a decrease of $6.3 million from the prior year's quarter. The decrease in margin is primarily attributable to a decrease in commercial and industrial margins from the deepening economic recession and the net adjustments to regulatory gas cost accounts that occurred in the prior year quarter, partially offset by an increase in residential margins from customer growth. Operations and maintenance expenses totaled $50.7 million during the first quarter of 2009, a reduction of $1.9 million from the first quarter of 2008. The decline in O&M expenses for the quarter is due to the Company's continuing process improvement and cost management initiatives and lower incentive plan accruals. Pre-tax income from Piedmont's joint ventures rose to $9.8 million for the quarter, an increase of $1.1 million over the prior year's quarter. The Company's interest in SouthStar Energy delivered stronger results for the quarter due to higher retail margins and lower operating expenses. "We are pleased with our operating performance during the first quarter of fiscal 2009, particularly in light of the deepening economic recession and the resulting slower growth in the new construction market. While our gross customer additions in the first quarter fell to an annualized growth rate of 1.5%, we continue to take advantage of the growth opportunities in our markets and work to lower O&M expenses while providing quality customer service. In this economic environment where energy consumers are trying to use energy wisely and protect the environment, we believe that clean, efficient and reliable natural gas service is both the comfortable and responsible energy choice for our customers," commented Chairman, President and CEO, Thomas E. Skains. DIVIDEND INCREASED FOR THIRTY-FIRST CONSECUTIVE YEAR As previously announced, the Board of Directors on March 6 approved an increase in the Company's quarterly dividend on Common Stock. The new quarterly dividend of 27 cents per share reflects a 3.8% increase and will be payable on April 15 to holders of record at the close of business on March 25. ROBESON COUNTY LNG CONSTRUCTION PLANS PUT ON HOLD The Company also announced today that its previous plans to commence construction of its Robeson Liquefied Natural Gas (LNG) storage facility in the Spring of 2009 will be put on hold. Based on its current customer growth projections, the Company may need to resume development of the project in 2011 to prepare for construction in 2012, and service in 2015. In light of the uncertain economic outlook, the Company will continue to carefully monitor its customer growth trends and will plan for the development of the project when needed to meet the future requirements of its customers. FISCAL 2009 EARNINGS GUIDANCE REVISED In light of the economic recession, the Company is revising its fiscal year 2009 earnings guidance to a range of $1.45 to $1.60 per diluted share. The Company's previous guidance was a range of $1.55 to $1.65 per diluted share. The revised guidance for fiscal year 2009 reflects the following assessments by Company management: -- Gross customer additions forecasted at 1 - 1.5% in the Company's North Carolina, South Carolina and Tennessee service areas, -- Continuing energy conservation practices by the Company's residential and commercial customers, -- A reduction in energy demand by the Company's industrial and power generation customers, -- The continuation of the Company's business process improvement and cost management programs, -- Utility capital expenditures totaling $176 million are forecasted for 2009, a reduction of $70 million, including $54 million for the deferral of the Robeson LNG storage project and $16 million for the deferral of pipeline infrastructure to serve new gas-fired power generation markets in North Carolina. Our original 2009 utility capital expenditure budget was $246 million. -- The deferral of the need to issue $125 million of new long-term debt in 2009, and -- Resumption of the Company's common stock repurchase program for the number of shares issued in fiscal year 2009 under the Company's Dividend Reinvestment Program and other stock based programs. CONFERENCE CALL In conjunction with this first-quarter earnings release, you are invited to listen to the conference call that will broadcast live over the Internet on Friday, March 13 at 2:30 p.m. Eastern Time, hosted by Chairman, President and CEO Thomas E. Skains. Log onto the web at http://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, gross customer additions and degree days) Three Months Ended January 31 % Increase 2009 2008 (Decrease) (Unaudited) Operating Revenues $779,644 $788,470 (1%) Cost of Gas 558,961 561,444 -% Margin 220,683 227,026 (3%) Operations and Maintenance Expenses 50,725 52,578 (4%) Depreciation 24,142 22,706 6% General Taxes 8,737 8,745 -% Utility Income Taxes 48,948 51,061 (4%) Operating Income 88,131 91,936 (4%) Other Income (Expense), net 5,758 5,471 5% Utility Interest Charges 13,013 15,139 (14%) Net Income 80,876 82,268 (2%) Average Shares of Common Stock: Basic 73,319 73,280 -% Diluted 73,646 73,563 -% Earning Per Share of Common Stock: Basic $1.10 $1.12 (2%) Diluted $1.10 $1.12 (2%) System Throughput - Dekatherms 76,531 72,554 5% Gross Customer Additions 3,913 7,163 (45%) Gas Customers Billed in January 965 959 1% System Average Degree Days - Actual 1,944 1,755 11% System Ave. Degree Days - Normal 1,856 1,869 (1%) Percent Normal Degree Days 105 % 94 % n/a Forward-Looking Statements 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 risks and uncertainties 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, rate of customer growth, new legislation and regulations and application of existing laws and regulations, economic and capital market conditions, the cost and availability of natural gas, weather conditions 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 except as required by applicable laws and regulations. More information about the risks and uncertainties relating to these forward-looking statements may be found in Piedmont's latest Form 10-Q and its other filings with the SEC, which are available on the SEC's Web site 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 62,000 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/. DATASOURCE: Piedmont Natural Gas CONTACT: Investor inquiries: John Sutphin, +1-704-731-4314, ; Media inquiries: David Trusty, +1-704-731-4391, , both of Piedmont Natural Gas Company Web Site: http://www.piedmontng.com/

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