Piedmont Natural Gas announced results for its second fiscal quarter ended April 30, 2015. Net income was $66.4 million, $.84 per diluted share, compared to a net income of $62.5 million, $0.80 per diluted share for the same period in 2014.
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For the six months ended April 30, 2015, net income was $159.4 million and diluted earnings per share were$2.02, compared with net income of $160.1 million and diluted earnings per share of $2.06 for the same period in 2014.
Margin for the quarter was $225.6 million, an increase of $14.1 million from the prior year's quarter. The increase is primarily due to integrity management rider (IMR) rate adjustments in Tennessee and North Carolina, customer growth in all three states and higher margin sales and volumes in secondary market activity.
Margin for the six months ended April 30, 2015 was $495.7 million, an increase of $22.7 million from the prior year period. The increase is primarily attributable to the 2014 general rate case in North Carolina, IMR rate adjustments in Tennessee and North Carolina and customer growth in all three states, partially offset by lower secondary market margin sales and lower industrial customer margin from changes in cost allocation and rate design under the North Carolina general rate case.
Operations and maintenance expenses totaled $71.4 million during the second quarter of 2015, an increase of$1.2 million from the second quarter of 2014. Operations and maintenance expenses totaled $137.6 millionduring the six months ended April 30, 2015, an increase of $6.7 million from the same period in 2014.
The increase for O&M expenses for the quarter is primarily due to higher employee benefit expenses and the increase for the six month period is primarily due to increased contract labor, higher employee benefits, and approved regulatory asset amortizations.
Pre-tax income from Piedmont's joint ventures increased 10.3% for the quarter compared to same period in 2014 primarily due to an increase in Constitution Pipeline's income from higher capitalized interest associated with greater capital expenditures for the project.
Pre-tax income from Piedmont's joint ventures decreased 0.8% for the six month period primarily due to a decrease in SouthStar Energy's income from decreases in the value of hedged derivatives, partially offset by an increase in Constitution Pipeline's income from higher capitalized interest associated with increased capital expenditures for the project.
Utility interest charges for the quarter were $18.1 million compared to $12 million for the same period in 2014. Utility interest charges for the six month period were $35.8 million compared to $22.6 million for the same period in 2014.
The increase in utility interest charges for both periods is primarily due to a decrease in the allowance for funds used during construction (AFUDC) as a result of lower utility project construction expenditures compared to prior periods, an increase in interest expense on long-term debt primarily due to higher amounts of debt outstanding in 2015, and an increase in interest expense on higher amounts due to customers in 2015. ■