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Piedmont's Earnings Decline on Lower Utility Margin

A lower utility margin due to warmer weather and customer conservation because of high wholesale natural gas prices led to a 4% decline in Charlotte, NC-based Piedmont Natural Gas' second quarter 2005 net income. Net income slipped to $39.6 million, or $0.52/share, from $41.3 million. or $0.54/share, posted for the same period in 2004.

In addition, Piedmont noted that operations and maintenance expenses increased from the prior-year quarter primarily because of increases in payroll costs, including vested vacation pay and employee benefit costs, partially offset by decreases in uncollectibles and other operations and maintenance expenses.

Net income from joint venture activities was $9 million for the quarter, compared with $7.7 million for the same quarter of the prior year. The company's interest in SouthStar Energy Services LLC, which is primarily engaged in the unregulated retail natural gas market in Georgia, contributed $8.2 million to net income and $0.11 per diluted share in the second quarter, compared with $6.6 million and $0.09 for the same quarter of the prior year.

Two other joint ventures, Pine Needle LNG and Cardinal Pipeline, contributed combined diluted earnings per share of $0.01 in the second quarters of 2005 and the prior year.

For the six months ended April 30, Piedmont reported that net income was $110.9 million and diluted earnings per share were $1.44, compared with $115.9 million and $1.60 for the prior six-month period. Earnings in the prior year six-month period include $4.6 million, or $0.06 per diluted share, of one-time joint venture gains that were reported in the first quarter of 2004.

Looking ahead, Piedmont reaffirmed its guidance for fiscal year 2005 earnings from continuing operations in the range of $1.23 to $1.30 per diluted share.

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