CHARLOTTE, N.C., June 8,
2016 /PRNewswire/ -- Piedmont Natural Gas (NYSE: PNY) today
announced results for its second fiscal quarter ended
April 30, 2016. For the quarter, the Company reported net
income of $63.4 million, or
$0.78 per diluted share, compared to
net income of $66.4 million, or
$0.84 per diluted share, for the same
period in 2015. Adjusted for merger-related expenses incurred
during the Company's second quarter, net income was $64.1 million, or $0.79 per diluted share.
For the six months ended April 30, 2016, net income was
$161.2 million and diluted earnings
per share were $1.98, compared with
net income of $159.4 million and
diluted earnings per share of $2.02
for the same period in 2015. Adjusted for merger-related expenses
incurred during the Company's six months ended April 30, 2016,
net income was $169.1 million, or
$2.08 per diluted share.
Margin for the quarter was $224.4
million, a decrease of $1.3
million from the same period in 2015. The decrease in the
three month period is primarily attributable to lower margin sales
from secondary market activity and warmer weather, partially offset
by integrity management rider (IMR) rate adjustments in
North Carolina and Tennessee and customer growth. Margin for the
six months ended April 30, 2016 was $510.6 million, an increase of $14.9 million from the same period in 2015. The
increase is primarily attributable to IMR rate adjustments in
North Carolina and Tennessee and customer growth, partially
offset by lower margin sales from secondary market activity and
warmer weather.
Operation and maintenance (O&M) expenses totaled
$75.5 million during the second
quarter of 2016, an increase of $4.1
million from the same quarter in 2015. O&M expenses
totaled $146.8 million during the six
months ended April 30, 2016, an increase of $9.2 million from the same period in 2015. The
increase in O&M expenses for the quarter is primarily due to
increases in payroll and contract labor, partially offset by a
decrease in employee benefits. The increase for the six month
period is primarily due to increases in payroll and $5.5 million incremental expense from the
acceleration and payment of certain equity incentive awards in
connection with the proposed Duke Energy acquisition and
$2.1 million integration expenses
related to the Duke Energy acquisition.
Pre-tax income from Piedmont's
joint ventures decreased 7.9% for the quarter compared to the same
period in 2015 due to a decrease in SouthStar's income from lower
customer usage due to warmer weather and lower value of hedged
derivatives, partially offset by lower operating expenses. Pre-tax
income from Piedmont's joint
ventures decreased 1.3% for the six months ended April 30, 2016 compared to the same period in
2015 due to the same factors discussed for SouthStar for the
quarter that were partially offset by an increase in ACP's income
due to higher capitalized interest expense and lower outreach
cost.
Utility interest charges for the quarter were $16.6 million compared to $18.1 million for the same period in 2015.
Utility interest charges for the six months ended April 30, 2016 were $33.7
million compared to $35.8
million for the same period in 2015. The decreases in
utility interest charges for both periods is primarily due to
recording interest income on net amounts due from customers
compared with interest expense due to customers in the prior
periods, partially offset by additional interest from an increase
in long-term debt outstanding in 2016.
DIVIDEND DECLARED
At the Company's regular quarterly meeting of its Board of
Directors held June 7, 2016, a
quarterly dividend on Common Stock of 34
cents per share was declared, payable on July 15, 2016 to holders of record at the close
of business on June 24, 2016.
FISCAL 2016 EARNINGS GUIDANCE REVISED
Piedmont Natural Gas revises its fiscal year 2016 earnings
guidance to $1.90 to $1.95 per
diluted share before any merger-related expenses. The
Company's previous guidance was a range of $1.92 to $2.02 per diluted share before any
merger-related expenses. Despite weather during the first six
months of the year that was 19% warmer than normal and 25% warmer
than last year, the Company performed as expected reflecting the
strength of Piedmont's margin
stabilizing rate mechanisms as well as customer growth. The
revised guidance is solely based on the Company's assessment of
lower earnings from its investment in Constitution Pipeline during
fiscal year 2016 pending resolution of Constitution Pipeline's
ongoing legal actions challenging the legality and appropriateness
of the New York Department of Environmental Conservation denial of
a necessary water quality certificate for the New York portion of the pipeline.
|
Summary of
Operations
|
|
|
|
|
|
(in thousands except
per share amounts and degree days)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
April 30
|
|
% Increase
(Decrease)
|
|
|
2016
|
|
2015
|
|
|
|
(Unaudited)
|
|
|
|
Operating
Revenues
|
|
$
|
350,186
|
|
|
$
|
424,924
|
|
|
(18)%
|
|
Cost of
Gas
|
|
125,822
|
|
|
199,303
|
|
|
(37)%
|
|
Margin
|
|
224,364
|
|
|
225,621
|
|
|
(1)%
|
|
Operations and
Maintenance Expenses
|
|
75,508
|
|
|
71,424
|
|
|
6%
|
|
Depreciation
|
|
34,045
|
|
|
31,689
|
|
|
7%
|
|
General
Taxes
|
|
10,882
|
|
|
10,976
|
|
|
(1)%
|
|
Utility Income
Taxes
|
|
32,089
|
|
|
36,409
|
|
|
(12)%
|
|
Operating
Income
|
|
71,840
|
|
|
75,123
|
|
|
(4)%
|
|
Other Income
(Expense), net
|
|
8,176
|
|
|
9,360
|
|
|
(13)%
|
|
Utility Interest
Charges
|
|
16,584
|
|
|
18,081
|
|
|
(8)%
|
|
Net Income
|
|
63,432
|
|
|
66,402
|
|
|
(4)%
|
|
|
|
|
|
|
|
|
Average Shares of
Common Stock:
|
|
|
|
|
|
|
|
Basic
|
|
81,109
|
|
|
78,818
|
|
|
3%
|
|
Diluted
|
|
81,388
|
|
|
79,115
|
|
|
3%
|
|
|
|
|
|
|
|
|
Earnings Per Share of
Common Stock:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.78
|
|
|
$
|
0.84
|
|
|
(7)%
|
|
Diluted
|
|
$
|
0.78
|
|
|
$
|
0.84
|
|
|
(7)%
|
|
|
|
|
|
|
|
|
System Throughput -
Dekatherms
|
|
136,759
|
|
|
125,132
|
|
|
9%
|
|
Gas Customers Billed
in April
|
|
1,043
|
|
|
1,028
|
|
|
2%
|
|
System Average Degree
Days – Actual
|
|
1,008
|
|
|
1,322
|
|
|
(24)%
|
|
System Average Degree
Days – Normal
|
|
1,182
|
|
|
1,176
|
|
|
1%
|
|
Percent Normal Degree
Days
|
|
(15)%
|
|
|
12%
|
|
|
n/a
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
April 30
|
|
% Increase
(Decrease)
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
811,523
|
|
|
$
|
1,032,196
|
|
|
(21)%
|
|
Cost of
Gas
|
|
300,910
|
|
|
536,505
|
|
|
(44)%
|
|
Margin
|
|
510,613
|
|
|
495,691
|
|
|
3%
|
|
Operations and
Maintenance Expenses
|
|
146,808
|
|
|
137,574
|
|
|
7%
|
|
Depreciation
|
|
67,730
|
|
|
63,583
|
|
|
7%
|
|
General
Taxes
|
|
20,804
|
|
|
20,972
|
|
|
(1)%
|
|
Utility Income
Taxes
|
|
93,999
|
|
|
92,680
|
|
|
1%
|
|
Operating
Income
|
|
181,272
|
|
|
180,882
|
|
|
—%
|
|
Other Income
(Expense), net
|
|
13,602
|
|
|
14,291
|
|
|
(5)%
|
|
Utility Interest
Charges
|
|
33,652
|
|
|
35,793
|
|
|
(6)%
|
|
Net Income
|
|
161,222
|
|
|
159,380
|
|
|
1%
|
|
|
|
|
|
|
|
|
Average Shares of
Common Stock:
|
|
|
|
|
|
|
|
Basic
|
|
81,035
|
|
|
78,717
|
|
|
3%
|
|
Diluted
|
|
81,324
|
|
|
79,048
|
|
|
3%
|
|
|
|
|
|
|
|
|
Earnings Per Share of
Common Stock:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.99
|
|
|
$
|
2.02
|
|
|
(1)%
|
|
Diluted
|
|
1.98
|
|
|
$
|
2.02
|
|
|
(2)%
|
|
|
|
|
|
|
|
|
System Throughput -
Dekatherms
|
|
274,751
|
|
|
265,920
|
|
|
3%
|
|
Gas Customers Billed
in April
|
|
1,043
|
|
|
1,028
|
|
|
2%
|
|
System Average Degree
Days - Actual
|
|
2,463
|
|
|
3,267
|
|
|
(25)%
|
|
System Average Degree
Days - Normal
|
|
3,023
|
|
|
3,015
|
|
|
—%
|
|
Percent Normal Degree
Days
|
|
(19)%
|
|
|
8%
|
|
|
n/a
|
|
Non-GAAP
Reconciliation of Merger and Integration-Related
Expenses
|
|
|
$ in thousands
except per share amounts
|
|
|
|
2016
|
|
Three Months
Ended
April 30
|
Six Months Ended
April 30
|
|
GAAP net
income
|
$
|
63,432
|
|
$
|
161,222
|
|
|
|
|
|
|
|
|
|
Merger and
integration-related expenses:
|
|
|
|
|
|
|
|
Related expenses
|
$
|
1,040
|
|
$
|
7,539
|
|
|
Associated income tax benefit (expense)
|
$
|
409
|
|
$
|
(314)
|
|
|
|
|
|
|
|
|
|
After-tax merger and
integration-related expenses
|
$
|
631
|
|
$
|
7,853
|
|
|
|
|
|
Adjusted net
income
|
$
|
64,063
|
|
$
|
169,075
|
|
|
Average basic shares
outstanding (in thousands)
|
81,109
|
|
81,035
|
|
|
Average diluted
shares outstanding (in thousands)
|
81,388
|
|
81,324
|
|
|
Adjusted basic
EPS
|
$
|
0.79
|
|
$
|
2.09
|
|
|
Adjusted diluted
EPS
|
$
|
0.79
|
|
$
|
2.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
materially 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, operational interruptions to our gas distribution and
transmission activities, cybersecurity breaches or failure of
technology systems, inability to complete necessary or desirable
pipeline expansion or infrastructure projects, costs of providing
pension benefits, the cost and availability of labor and materials,
the disposition of Constitution Pipeline Company LLC's ongoing
legal actions challenging the denial of a necessary water quality
certificate for the New York
portion of the pipeline, earnings and losses from the joint venture
businesses in which we invest, risks and uncertainties related to
the proposed acquisition of the Company by Duke Energy Corporation,
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," "may," "should," "could,"
"assume," "estimate," "forecast," "future," "indicate," "outlook,"
"plan," "predict," "seek," "target," "would," "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/.
CONTACT: Investor Relations, Nick
Giaimo, +1-704-731-4952, nick.giaimo@piedmontng.com
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visit:http://www.prnewswire.com/news-releases/piedmont-natural-gas-reports-second-quarter-2016-results-300281574.html
SOURCE Piedmont Natural Gas
