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Piedmont releases 3Q16 results

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Hydrocarbon Engineering,


Piedmont Natural Gas has announced the results for its third fiscal quarter ended 31 July 2016. For the quarter, the company reported a seasonal loss of US$6.7 million, or US$0.08 per diluted share, compared to a seasonal loss of US$8.3 million, or US$0.10 per diluted share, for the same period in 2015. Adjusted for merger-related expenses incurred during the company's third quarter, the net loss was US$5.7 million, or US$0.07 per diluted share.

For the nine months ended 31 July 2016, net income was US$154.5 million and diluted earnings per share were US$1.90, compared with net income of US$151.1 million and diluted earnings per share of US$1.91 for the same period in 2015. Adjusted for merger-related expenses incurred during the company's nine months ended 31 July 2016, net income was US$163.4 million, or US$2.01 per diluted share.

Piedmont Natural Gas Chairman, President, and CEO, Thomas E. Skains, commented on the results, "We continue to be pleased with our operating performance and financial results through the first nine months of our fiscal year. Our focus on the strategic directives and operating fundamentals that guide our business, even as we prepare for the close and integration of our acquisition by Duke Energy, is impressive. And, we continue to drive solid customer growth in our residential and commercial markets where total gross customer additions thus far in 2016 are 3% higher than the same period in 2015. The affordability and stability of wholesale natural gas costs continue to favourably position natural gas relative to other energy sources."

Margin for the quarter was US$114.8 million, an increase of US$3.2 million from the same period in 2015. The increase is primarily attributable to integrity management rider (IMR) rate adjustments in North Carolina and Tennessee and customer growth, partially offset by lower margin from industrial customers. Margin for the nine months ended 31 July 2016 increased by US$18.1 million from the same period in 2015 to US$625.4 million. 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.

Operation and maintenance (O&M) expenses totalled US$68.9 million during the third quarter of 2016, a decrease of US$0.7 million from the same quarter in 2015. O&M expenses totalled US$215.7 million during the nine months ended 31 July 2016, an increase of US$8.5 million from the same period in 2015. The decrease in O&M expenses for the quarter is primarily due to decreases in vehicle transportation expenses and employee expenses, partially offset by increases in payroll and acquisition and integration expenses. The increase for the nine month period is primarily due to increases in payroll and US$5.6 million incremental expense from the acceleration and payment of certain equity incentive awards in connection with the proposed Duke Energy acquisition (acquisition) and US$2.6 million integration expenses related to the acquisition, partially offset by lower vehicle transportation expenses and employee expenses.

Pre-tax income from Piedmont's joint ventures decreased 26.9% for the quarter compared to the same period in 2015 due to constitution suspending the recording of capitalised interest costs as income and expensing project development costs after the New York State Department of Environmental Conservation's denial of Constitution's application for a necessary water application certification for the New York portion of the constitution pipeline. This was partially offset by an increase in SouthStar's pre-tax income due to a higher value of hedged derivatives and lower operating expenses. Pre-tax income from Piedmont's joint ventures decreased 6.3% for the nine months ended 31 July 2016 compared to the same period in 2015 due to constitution having no capitalised interest costs as discussed above, partially offset primarily by ACP's higher capitalised interest costs.

Utility interest charges for the quarter were US$15.7 million compared to US$16.7 million for the same period in 2015. Utility interest charges for the nine months ended 31 July 2016 were US$49.4 million compared to US$52.5 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 on amounts due to customers in the prior periods and increased capitalised interest from higher capitalised expenditures, partially offset by additional interest from an increase in short term and long term debt outstanding in 2016.


Adapted from press release by Francesca Brindle

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/08092016/piedmont-natural-gas-releases-third-quarter-results-4047/


 

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