CHARLOTTE, N.C., March 9, 2012 /PRNewswire/ -- Piedmont Natural
Gas (NYSE: PNY) today announced results for its first fiscal
quarter ended January 31, 2012. For
the quarter, the Company reported net income of $76.2 million, or $1.05 per diluted share, compared to net income
of $84.4 million, or $1.16 per diluted share for the same period in
2011.
Margin for the quarter was $220.2
million, a decrease of $9.8
million from the prior year's quarter. The decrease
was primarily attributable to weather that was 16 percent
warmer than normal and 31 percent warmer than last year, resulting
in lower volatility and reduced opportunities in the secondary
wholesale markets and lower volume deliveries to weather sensitive
retail markets.
Customer additions in the Company's residential and commercial
market increased by 22 percent and 10 percent, respectively, for
the quarter compared to the same period in 2011. Residential
gains were driven primarily by growth in the Company's residential
new construction and conversion markets where building permits
increased modestly and lower wholesale natural gas costs continued
to favorably position natural gas relative to other energy sources.
Increased commercial growth reflected improvements in both
commercial new construction activity and commercial conversion
opportunities. During the quarter, the Company also completed
an expansion project to initiate natural gas delivery service to
Duke Energy's new Dan River,
Rockingham County plant in
North Carolina.
Piedmont's Chairman, President,
and CEO, Thomas E. Skains, commented
on the results, "Our financial results were directly impacted by
unseasonably warmer than normal weather during our first fiscal
quarter in 2012. At the same time, we are pleased with our customer
growth for the quarter, which showed measurable improvement over
last year and an increase in consumer demand for natural gas in
both the residential and commercial markets. We are also
pleased with our progress on our substantial capital expansion
program to serve new gas fired power generation facilities in
North Carolina."
Gross utility construction expenditures during the quarter
totaled $98.1 million, an increase of
approximately $60 million over the
first quarter of 2011. The increase is primarily due to
capital expenditures related to the Company's construction of new
transmission and compression facilities to serve new natural gas
fired power generation facilities in North Carolina. The Company's expansion
projects that will serve Progress Energy's Wayne County complex and Progress Energy's
Sutton Plant site near Wilmington, North Carolina remain on schedule
for natural gas delivery service commencing in June 2012 and June
2013, respectively. Piedmont anticipates expenditures
of $260 - $280 million, including
allowance for funds used during construction, during the current
fiscal year for those projects.
Operations and maintenance expenses totaled $58.4 million during the first quarter of 2012,
an increase of $7.3 million from the
first quarter of 2011. The increase in O&M expenses for the
quarter is primarily due to expected increases in pension expenses,
medical coverage expenses, and contract labor expenses for ongoing
internal process improvement programs.
Pre-tax income from Piedmont's
joint ventures was $6.3 million
compared to $7.8 million for the same
period in 2011. The decrease is primarily due to reduced
customer usage related to warmer weather and the recording of a
lower of cost or market storage inventory adjustment due to lower
natural gas prices at SouthStar Energy Services, partially offset
by quarter over quarter improvements for the Company's three other
joint ventures.
Utility interest charges for the quarter were $7.2 million compared to $11 million for the same period in 2011.
The decrease is primarily due to lower interest expense
resulting from the combination of an increase in the allowance for
funds used during construction (AFUDC) and a decrease in interest
expense on long-term debt.
DIVIDEND INCREASED FOR THIRTY-FOURTH CONSECUTIVE YEAR
As previously announced, the Board of Directors on March 8 approved an increase in the Company's
quarterly dividend on Common Stock. The new quarterly dividend of
30 cents per share reflects a 3.4
percent increase and will be payable on April 13, 2012 to holders of record at the close
of business on March 23, 2012.
COMPANY REAFFIRMS FISCAL YEAR 2012 EARNINGS GUIDANCE, POINTS
TO LOWER END OF RANGE
As a result of substantially warmer than normal weather during
the Company's first fiscal quarter, Piedmont Natural Gas reaffirms
its fiscal year 2012 earnings guidance of $1.58 to $1.68 per diluted share with emphasis
toward the lower end of the range.
CONFERENCE CALL
In conjunction with the first-quarter earnings release, you are
invited to listen to the conference call that will broadcast live
over the Internet on Monday, March 12
at 11 a.m. Eastern Time, hosted by
Chairman, President and CEO Thomas E.
Skains. Log onto the web at www.piedmontng.com and click on
Investor Relations, then on Presentations. The conference call will
be archived on the Presentation page of the website within the
Investor Relations section.
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Summary of Operations
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(in thousands except per share
amounts and degree days)
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Three Months Ended
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January
31
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%
Increase
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2012
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2011
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(Decrease)
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(Unaudited)
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Operating Revenues
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$
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471,840
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$
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652,056
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(28%)
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Cost of Gas
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251,603
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422,050
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(40%)
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Margin
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220,237
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230,006
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(4%)
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Operations and Maintenance
Expenses
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58,397
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51,058
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14%
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Depreciation
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26,178
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25,047
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5%
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General Taxes
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8,622
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11,097
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(22%)
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Utility Income Taxes
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47,221
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51,935
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(9%)
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Operating Income
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79,819
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90,869
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(12%)
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Other Income (Expense),
net
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3,614
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4,588
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(21%)
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Utility Interest
Charges
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7,206
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11,017
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(35%)
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Net Income
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76,227
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84,440
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(10%)
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Average Shares of Common
Stock:
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Basic
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72,126
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72,194
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-%
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Diluted
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72,433
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72,514
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-%
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Earning Per Share of Common
Stock:
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Basic
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$
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1.06
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$
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1.17
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(9%)
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Diluted
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$
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1.05
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$
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1.16
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(9%)
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System Throughput —
Dekatherms
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90,228
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97,844
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(8%)
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Gas Customers Billed in
January
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983
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980
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-%
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System Average Degree Days —
Actual
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1,568
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2,278
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(31%)
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System Average Degree Days —
Normal
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1,869
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1,865
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-%
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Percent Normal Degree
Days
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84%
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122%
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n/a
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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," "assume," "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 53,000 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 Company