Piedmont Natural Gas Reports First Quarter 2008 Results

CHARLOTTE, N.C., March 11 /PRNewswire-FirstCall/ -- Piedmont Natural Gas NYSE: PNY today announced results for the first fiscal quarter ended January 31, 2008. For the quarter, the Company reported net income of $82.3 million, or $1.12 per diluted share, compared with net income of $70.7 million, or $0.94 per diluted share for the same period in 2007.

Margin for the quarter was $227 million, up $18.5 million from the prior year. Continued customer growth, colder weather patterns and increased wholesale marketing and power generation margins all contributed to margin growth for the Company. In addition, the discontinuation of a storage accounting practice pursuant to a regulatory order effective November 1, 2007 increased margin in the first quarter, with offsetting impacts to occur later in the fiscal year. Net adjustments to various gas cost and inventory accounts in the first quarter of 2008 and 2007 also added to the margin increase in the first quarter of 2008.

Operations and maintenance expenses of $52.6 million during the first quarter of 2008 were essentially flat with O&M expenses during the first quarter of 2007, reflecting Piedmont's continuing efforts to streamline its business processes and improve operating efficiencies.

Joint venture income of $8.7 million, before tax, was up $3.2 million from $5.5 million last year. The start of commercial operations of Hardy Storage and strong performance by SouthStar Energy both contributed to the improvement over last year.

"We are pleased with our operating performance in all areas of the Company. We saw improvement in top line margin growth, expense control and joint venture performance. At the same time, we were focused on providing quality customer service and delivering our environmentally friendly product to customers in a safe and reliable manner," commented Chairman, President and CEO, Thomas E. Skains.

DIVIDEND INCREASED FOR THIRTIETH 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 rate of 26 cents per share reflects a 4% increase and will be payable on April 15 to holders of record at the close of business on March 25. Mr. Skains said, "Our thirtieth consecutive annual dividend increase reflects the Board's commitment to shareholder value and its confidence in the future growth of the Company."

FISCAL 2008 EARNINGS GUIDANCE REAFFIRMED

Piedmont Natural Gas reaffirms its fiscal 2008 guidance range of $1.45 to $1.55 per diluted share. The Company's earnings guidance includes management's assessment of overall market conditions, the margin stabilization features of its natural gas tariffs and ongoing business process improvement efficiencies and cost savings. Changes in market conditions which the Company cannot reasonably anticipate could cause earnings for the year to differ from this guidance.

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 Wednesday, March 12 at 2:30 p.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.

    Summary of Operations
    (in thousands except per share amounts and degree days)
    Three Months Ended                             January 31      % Increase
                                               2008          2007   (Decrease)
                                                  (Unaudited)
    Operating Revenues                      $788,470      $677,241      16%
    Cost of Gas                              561,444       468,756      20%
    Margin                                   227,026       208,485       9%
    Operations and Maintenance Expenses       52,578        52,210       1%
    Depreciation                              22,706        21,611       5%
    General Taxes                              8,745         9,259      (6%)
    Utility Income Taxes                      51,061        43,708      17%
    Operating Income                          91,936        81,697      13%
    Other Income (Expense), net                5,471         3,357      63%
    Utility Interest Charges                  15,139        14,338       6%
    Net Income                                82,268        70,716      16%

    Average Shares of Common Stock:
      Basic                                   73,280        74,619      (2%)
      Diluted                                 73,563        74,938      (2%)

    Earning Per Share of Common Stock:
      Basic                                    $1.12         $0.95      18%
      Diluted                                  $1.12         $0.94      19%
    System Throughput - Dekatherms            72,554        66,913       8%
    Gas Customers Billed in January              959           940       2%
    System Average Degree Days - Actual        1,755         1,615       9%
    System Average Degree Days - Normal        1,869         1,900      (2%)
    Percent Normal Degree Days                    94%           85%     n/a

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, regulatory issues, customer growth, economic and capital market conditions, the cost and availability of natural gas, competition from other energy providers, 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 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 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 .