Piedmont Natural Gas Company Inc. (PNY, Financial) filed Annual Report for the period ended 2010-10-31.
Piedmont Natural Gas Company Inc. has a market cap of $2.12 billion; its shares were traded at around $29.35 with a P/E ratio of 18.3 and P/S ratio of 1.3. The dividend yield of Piedmont Natural Gas Company Inc. stocks is 3.8%. Piedmont Natural Gas Company Inc. had an annual average earning growth of 5.9% over the past 10 years. GuruFocus rated Piedmont Natural Gas Company Inc. the business predictability rank of 2-star.PNY is in the portfolios of Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors, Jim Simons of Renaissance Technologies LLC, Kenneth Fisher of Fisher Asset Management, LLC.
We have two reportable business segments, regulated utility and non-utility activities. The regulated utility segment is the largest segment of our business with approximately 97% of our consolidated assets. Factors critical to the success of the regulated utility segment include operating a safe, reliable natural gas distribution system and the ability to recover the costs and expenses of the business in rates charged to customers. For 2010, our earnings before taxes, including the gain from the sale of half of our ownership interest in SouthStar Energy Services LLC (SouthStar) of $49.7 million, were $205.6 million, 67% of which came from our regulated utility segment. The non-utility activities segment consists of our equity method investments in joint venture, energy-related businesses that are involved in unregulated retail natural gas marketing and regulated interstate natural gas storage and intrastate natural gas transportation. For 2010, the earnings before taxes from our non-utility activities segment, including the gain from the sale of half of our ownership in SouthStar was 33%, with 4% from regulated non-utility activities and 29% from unregulated non-utility activities.
We continually assess alternative rate structures and cost recovery mechanisms that are more appropriate to the changing energy economy. We have been pursuing alternatives to the traditional utility rate design that provide for the collection of margin revenue based on volumetric throughput with new rate designs and incentives that allow utilities to encourage energy efficiency and conservation. By breaking the link between energy consumption and margin revenues, or decoupling as we say, utilities interests are aligned with customers interests around conservation and energy efficiency. In North Carolina, we have decoupled rates. In South Carolina, we operate under a rate stabilization mechanism that achieves the objectives of margin decoupling with a one-year lag. Earlier this year, the TRA denied our filing to decouple residential rates without prejudice to us refiling for a decoupled rate structure in a future general rate proceeding. For 2010, these rate designs have stabilized our gas utility margin by providing fixed recovery of 71% of our utility margins, including margin decoupling in North Carolina, facilities charges to our customers and fixed-rate contracts; semi-fixed recovery of 18% of our utility margins, including the rate stabilization mechanism in South Carolina and WNA in South Carolina and Tennessee; and volumetric or periodic renegotiation of 11% of our utility margins. For 2010, the margin decoupling mechanism in North Carolina reduced margin by $5.9 million, and the WNA in South Carolina and Tennessee reduced margin by $8.8 million.
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Piedmont Natural Gas Company Inc. has a market cap of $2.12 billion; its shares were traded at around $29.35 with a P/E ratio of 18.3 and P/S ratio of 1.3. The dividend yield of Piedmont Natural Gas Company Inc. stocks is 3.8%. Piedmont Natural Gas Company Inc. had an annual average earning growth of 5.9% over the past 10 years. GuruFocus rated Piedmont Natural Gas Company Inc. the business predictability rank of 2-star.PNY is in the portfolios of Chuck Royce of Royce& Associates, Mario Gabelli of GAMCO Investors, Jim Simons of Renaissance Technologies LLC, Kenneth Fisher of Fisher Asset Management, LLC.
Highlight of Business Operations:
On November 16, 2009, we discovered in our fiscal 2009 and early fiscal 2010 that we had inadvertently sold more shares under our dividend reinvestment and stock purchase plan (DRIP) than were registered with the Securities and Exchange Commission (SEC) and authorized by our Board of Directors for issuance under the DRIP. We also discovered that the registration statement we believed had registered shares issued under the DRIP between December 1, 2008 and November 16, 2009 had expired for some of those shares. As a result, from November 1, 2009 through November 16, 2009, we sold 15,029 shares under the DRIP that may not have been registered at the time of issuance for proceeds of $347,000. Our Board of Directors ratified the authorization and issuance of the excess number of shares, and on November 20, 2009, we filed a registration statement covering the sale and issuance of an additional 2.75 million shares of our common stock under the DRIP. On February 8, 2010, we filed a registration statement (Rescission Offer) which offered to rescind the purchase of the shares sold under the DRIP between December 1, 2008 and November 16, 2009 and registered all previously unregistered shares issued under the DRIP during that period. Under the Rescission Offer, the purchase of 711 shares was rescinded for an aggregate consideration of $18,900. We incurred costs related to the Rescission Offer of $.8 million, which have been recorded against retained earnings. We reported these events to the relevant regulatory authorities, including the SEC and the North Carolina Utilities Commission (NCUC). The sale of unregistered securities could subject us to enforcement actions or penalties and fines by these regulatory authorities, though no such regulatory action has been initiated. While we are unable to predict the full consequences of these events, we do not expect them to have a material adverse effect on us.We have two reportable business segments, regulated utility and non-utility activities. The regulated utility segment is the largest segment of our business with approximately 97% of our consolidated assets. Factors critical to the success of the regulated utility segment include operating a safe, reliable natural gas distribution system and the ability to recover the costs and expenses of the business in rates charged to customers. For 2010, our earnings before taxes, including the gain from the sale of half of our ownership interest in SouthStar Energy Services LLC (SouthStar) of $49.7 million, were $205.6 million, 67% of which came from our regulated utility segment. The non-utility activities segment consists of our equity method investments in joint venture, energy-related businesses that are involved in unregulated retail natural gas marketing and regulated interstate natural gas storage and intrastate natural gas transportation. For 2010, the earnings before taxes from our non-utility activities segment, including the gain from the sale of half of our ownership in SouthStar was 33%, with 4% from regulated non-utility activities and 29% from unregulated non-utility activities.
We continually assess alternative rate structures and cost recovery mechanisms that are more appropriate to the changing energy economy. We have been pursuing alternatives to the traditional utility rate design that provide for the collection of margin revenue based on volumetric throughput with new rate designs and incentives that allow utilities to encourage energy efficiency and conservation. By breaking the link between energy consumption and margin revenues, or decoupling as we say, utilities interests are aligned with customers interests around conservation and energy efficiency. In North Carolina, we have decoupled rates. In South Carolina, we operate under a rate stabilization mechanism that achieves the objectives of margin decoupling with a one-year lag. Earlier this year, the TRA denied our filing to decouple residential rates without prejudice to us refiling for a decoupled rate structure in a future general rate proceeding. For 2010, these rate designs have stabilized our gas utility margin by providing fixed recovery of 71% of our utility margins, including margin decoupling in North Carolina, facilities charges to our customers and fixed-rate contracts; semi-fixed recovery of 18% of our utility margins, including the rate stabilization mechanism in South Carolina and WNA in South Carolina and Tennessee; and volumetric or periodic renegotiation of 11% of our utility margins. For 2010, the margin decoupling mechanism in North Carolina reduced margin by $5.9 million, and the WNA in South Carolina and Tennessee reduced margin by $8.8 million.
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