Exhibit 99.1
Piedmont Natural Gas Announces Third Quarter Results,
Stock Split, Regular Dividend, Reaffirms 2004 Guidance
and Initiates 2005 Guidance
CHARLOTTE, N.C., August 27 /PRNewswire-FirstCall/ — Charlotte-based Piedmont Natural Gas (NYSE: PNY) announced results for its third fiscal quarter ended July 31, 2004. For the quarter, the Company reported a seasonal loss of $8.2 million and ($0.21) diluted loss per share, compared with a $9.7 million loss and a ($0.29) diluted loss per share for the same quarter in 2003. For the nine months ended July 31, 2004, net income was $107.7 million and diluted earnings per share were $2.92, compared with $79.3 million and $2.37 for the prior nine-month period, respectively.
System throughput in the third quarter totaled 35.8 million dekatherms, compared with throughput of 17.6 million dekatherms for the previous year’s quarter primarily due to the acquisition of North Carolina Natural Gas (NCNG) on September 30, 2003, and continued customer growth. Compared with the historical Piedmont customer base, the NCNG customer base includes relatively higher gas deliveries to lower margin industrial and power generation customers.
Margin for the quarter totaled $69.7 million compared with $49.3 million for the prior-year quarter. The margin increase is primarily attributable to the NCNG acquisition, rate increases for the NCNG and Nashville Gas divisions that became effective November 1, 2003, and customer growth. Operations and maintenance expenses increased from the prior-year quarter primarily due to the acquisition of NCNG.
Other income, net of income taxes, was $3.1 million for the quarter, compared with $2.0 million for the third quarter of the prior year. The increase is primarily related to the avoidance of summer seasonal propane losses due to the sale of the Company’s propane interests during the first fiscal quarter of this year. The Company’s interest in SouthStar Energy Services LLC, which is primarily engaged in the unregulated retail natural gas market in Georgia, contributed $1.6 million to net income in the third quarter compared with $1.5 million in the third quarter of the prior year, or $0.04 per share in both quarters. Two other joint ventures, Pine Needle LNG and Cardinal Pipeline, contributed combined earnings per share of $0.02 in the third quarters of 2004 and 2003.
“Our acquisition of NCNG is generating solid income growth for our shareholders. We continue to enjoy good internal customer growth and focus on our core natural gas distribution business while adding shareholder value with attractive returns from complementary non-utility joint venture investments,” commented Chairman, President and Chief Executive Officer Thomas E. Skains.
Stock Split and Dividend Declared
The Board of Directors today declared a 2-for-1 stock split of the Company’s common stock, subject to regulatory approval by the North Carolina Utilities Commission. The stock split will be in the form of a 100% stock dividend to shareholders of record at the close of business on October 11, 2004. The additional shares will be distributed beginning October 29, 2004. The split will not change the proportionate interest a shareholder has in the Company. Upon completion of the split, the Company will have approximately 77 million shares outstanding.
“With individuals owning about 65% of our stock, we believe our trading range after the split will make purchasing our stock even easier. We also would expect the improved liquidity to help our institutional owners,” commented Mr. Skains.
For the third fiscal quarter ended July 31, 2004, the post-split diluted loss per share would be ($0.11) compared with ($0.14) for the prior year third quarter. For the nine-months ended July 31, 2004, post-split diluted earnings per share would be $1.46, compared with $1.19 for the prior nine-month period.
In separate action today, the Board declared a cash dividend on common stock of $0.43 per share on a pre-split basis. The dividend is payable October 15, 2004, to holders of record on September 24,
2004. The Company has paid a cash dividend every year since 1956 and has increased the dividend for 26 consecutive years.
Fiscal 2004 Earnings Guidance Reaffirmed
Piedmont Natural Gas reaffirms its fiscal year 2004 earnings guidance provided on June 4, 2004. The earnings from continuing operations is expected to be in the range of $2.35 to $2.45 per diluted share on a pre-split basis. The fiscal year 2004 earnings guidance on a post-split basis is $1.18 to $1.23 per diluted share. Management continues to direct the earnings guidance towards the upper end of the range.
The 2004 earnings guidance excludes non-recurring items related to the sale of its propane interests and the resolution of certain disproportionate sharing issues related to the SouthStar venture, both of which were reported in the first fiscal quarter. The fiscal year 2004 earnings-per-share impacts of these two items are expected to be increases of $0.08 and $0.04 on a pre-split basis, and $0.04 and $0.02 on a post-split basis, respectively.
The earnings guidance includes the earnings-per-share accretion related to the NCNG acquisition, integration and permanent financing. Also included are general rate increases for the NCNG and Nashville Gas divisions that became effective November 1, 2003, and management’s assessment of the negative impacts that high wholesale natural gas prices have on the Company’s earnings. The guidance also includes the effect of funding the Piedmont Natural Gas Foundation announced in a separate press release.
Initiating Fiscal 2005 Earnings Guidance
Piedmont Natural Gas is initiating its guidance for fiscal year 2005 earnings from continuing operations in the range of $2.45 to $2.60 per diluted share on a pre-split basis. The fiscal year 2005 earnings guidance range on a post-split basis is $1.23 to $1.30 per diluted share.
The 2005 earnings guidance assumes normal weather, a relatively stable economy and wholesale natural gas prices during fiscal year 2005 in the range of prices that have prevailed during fiscal year 2004. No general rate case activity is expected that would impact 2005 earnings in any of the Company’s jurisdictions.
The fiscal year 2005 utility capital budget is $163.7 million, which includes $6.2 million related to Piedmont’s 50% equity interest in Eastern North Carolina Natural Gas Company. The capital budget also includes investments in technology related to internal process improvements scheduled to begin implementation during fiscal year 2005.
Conference Call
In conjunction with the third quarter earnings release, you are invited to listen to the conference call that will be broadcast live over the Internet on Monday, August 30, 2004, at 2:30 p.m. Eastern Daylight Time, hosted by Chairman, President and Chief Executive Officer Thomas E. Skains. Simply log on to the web at www.piedmontng.com and click on Investor Relations, then on Presentations. The conference call will be archived on the web site.
Piedmont Natural Gas
Summary of Operations
(in thousands except per share amounts and degree days)
| | | | | | | | | | | | | |
Three Months Ended
| | July 31
| | % Increase |
| | | 2004
| | 2003
| | (Decrease)
|
| | | (Unaudited) | | | | |
| Operating Revenues | | $ | 214,750 | | | $ | 140,132 | | | | 53 | % |
| Cost of Gas | | | 145,022 | | | | 90,832 | | | | 60 | % |
| Margin | | | 69,728 | | | | 49,300 | | | | 41 | % |
| Operations and Maintenance Expenses | | | 47,803 | | | | 37,692 | | | | 27 | % |
| Depreciation | | | 20,886 | | | | 15,336 | | | | 36 | % |
| General Taxes | | | 6,974 | | | | 6,032 | | | | 16 | % |
| Utility Income Taxes | | | (7,400 | ) | | | (7,890 | ) | | | 6 | % |
| Operating Income | | | 1,465 | | | | (1,870 | ) | | | 178 | % |
| Other Income (Expense), net | | | 3,067 | | | | 1,966 | | | | 56 | % |
| Utility Interest Charges | | | 12,664 | | | | 9,773 | | | | 30 | % |
| Income Before Minority Interest | | | (8,132 | ) | | | (9,677 | ) | | | 16 | % |
| Less Minority Interest | | | 25 | | | | — | | | | — | |
| Net Income | | | ($8,157 | ) | | | ($9,677 | ) | | | 16 | % |
| Average Shares of Common Stock (Pre-Split): | | | | | | | | | | | | |
| Basic | | | 38,218 | | | | 33,461 | | | | 14 | % |
| Diluted | | | 38,218 | | | | 33,461 | | | | 14 | % |
| Earnings Per Share of Common Stock (Pre-Split): | | | | | | | | | | | | |
| Basic | | | ($0.21 | ) | | | ($0.29 | ) | | | 28 | % |
| Diluted | | | ($0.21 | ) | | | ($0.29 | ) | | | 28 | % |
| System Throughput — Dekatherms | | | 35,784 | | | | 17,615 | | | | 103 | % |
| Gas Customers Billed in July | | | 854 | | | | 718 | | | | 19 | % |
| System Average Degree Days — Actual | | | 29 | | | | 58 | | | | -50 | % |
| System Average Degree Days — Normal | | | 57 | | | | 58 | | | | -2 | % |
| Percent Normal Degree Days | | | 51 | % | | | 100 | % | | | -49 | % |
| | | | | | | | | | | | | |
Nine Months Ended
| | July 31
| | % Increase |
| | | 2004
| | 2003
| | (Decrease)
|
| | | (Unaudited) | | | | |
| Operating Revenues | | $ | 1,315,933 | | | $ | 1,041,397 | | | | 26 | % |
| Cost of Gas | | | 903,870 | | | | 720,389 | | | | 25 | % |
| Margin | | | 412,063 | | | | 321,008 | | | | 28 | % |
| Operations and Maintenance Expenses | | | 148,014 | | | | 114,068 | | | | 30 | % |
| Depreciation | | | 61,549 | | | | 45,895 | | | | 34 | % |
| General Taxes | | | 20,397 | | | | 18,779 | | | | 9 | % |
| Utility Income Taxes | | | 57,385 | | | | 43,889 | | | | 31 | % |
| Operating Income | | | 124,718 | | | | 98,377 | | | | 27 | % |
| Other Income (Expense), net | | | 19,275 | | | | 11,012 | | | | 75 | % |
| Utility Interest Charges | | | 36,199 | | | | 30,070 | | | | 20 | % |
| Income Before Minority Interest | | | 107,794 | | | | 79,319 | | | | 36 | % |
| Less Minority Interest | | | 70 | | | | — | | | | — | |
| Net Income | | $ | 107,724 | | | $ | 79,319 | | | | 36 | % |
| Average Shares of Common Stock (Pre-Split): | | | | | | | | | | | | |
| Basic | | | 36,797 | | | | 33,327 | | | | 10 | % |
| Diluted | | | 36,888 | | | | 33,439 | | | | 10 | % |
| Earnings Per Share of Common Stock (Pre-Split): | | | | | | | | | | | | |
| Basic | | $ | 2.93 | | | $ | 2.38 | | | | 23 | % |
| Diluted | | $ | 2.92 | | | $ | 2.37 | | | | 23 | % |
| System Throughput — Dekatherms | | | 167,229 | | | | 124,064 | | | | 35 | % |
| Gas Customers Billed in July | | | 854 | | | | 718 | | | | 19 | % |
| System Average Degree Days — Actual | | | 3,215 | | | | 3,439 | | | | -7 | % |
| System Average Degree Days — Normal | | | 3,291 | | | | 3,294 | | | | 0 | % |
| Percent Normal Degree Days | | | 98 | % | | | 104 | % | | | -6 | % |
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 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, economic
conditions, competition from other providers of similar products 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” and variations of such words and similar expressions are intended to identify forward-looking statements. 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 filings with the SEC on Forms 10-K and Forms 10-Q, which are available on the SEC’s website at http://www.sec.gov.
Media Contact: David L. Trusty of Piedmont Natural Gas 704-731-4391, or david.trusty@piedmontng.com
Investor Contact: Headen B. Thomas of Piedmont Natural Gas 704-731-4438, or headen.thomas@piedmontng.com
About Piedmont Natural Gas
Piedmont Natural Gas (NYSE:PNY) is an energy services company primarily engaged in the distribution of natural gas to 940,000 residential, commercial and industrial utility customers in North Carolina, South Carolina and Tennessee, including 60,000 customers served by municipalities who are wholesale customers. Its subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas marketing, interstate natural gas storage, intrastate natural gas transportation and regulated natural gas distribution. More information about Piedmont Natural Gas is available on the Internet at www.piedmontng.com.
SOURCE Piedmont Natural Gas Company
