Piedmont Natural Gas Co. reported a net loss of $9.7 million, or $0.29 per diluted share, for the third quarter, which includes a decrease in net income of $4.2 million, or $0.13 per diluted share, associated with the change in the way the company records revenues and cost of gas on volumes delivered but not yet billed beginning this fiscal year. The results compare with a net loss of $9 million, or $0.27 per diluted share, in the same period in 2002.

For the nine months ended July 31, net income was $79.3 million, or $2.37 per diluted share, compared with net income of $74 million, or $2.25 per diluted share, for the prior nine-month period, representing a year-over-year 7% increase in net income and 5% increase in diluted earnings per share.

“Our company has performed well this year despite the pressures on our business from higher wholesale commodity natural gas prices and the integration expenses related to the pending [North Carolina Natural Gas] acquisition,” said Thomas E. Skains, CEO. “Without the unbilled revenue timing effect, our operating performance in the third quarter improved $0.11 per diluted share over the same quarter last year. We believe we are on track to close the NCNG transaction with Progress Energy in the fourth quarter and to bring in fiscal year 2003 earnings within the range of guidance previously announced.”

The company recorded total throughput for the third quarter of 17.6 million Dth, which was reduced by 3 million Dth due to the effect of delivered but not yet billed volumes, compared with throughput of 20.9 million Dth for the previous year’s quarter. Piedmont noted that increases in billed throughput to residential and commercial customers were more than offset by decreased industrial volumes due to higher wholesale natural gas prices and competition from alternate fuels.

The company’s board of directors announced a quarterly dividend on common stock of 41.5 cents per share, payable Oct. 15 to holders of record at the close of business on Sept. 24.

Going forward, management reaffirmed diluted earnings per share guidance for the fiscal year ending Oct. 31 of between $2.22-2.32, including $0.17 for the estimated one-time, non-recurring effect of recording revenues for volumes delivered but not yet billed.

Piedmont said the earnings guidance reflects the estimated dilutive effect of integrating NCNG into Piedmont during fiscal year 2003. The proposed $425 million acquisition of NCNG and Progress Energy’s 50% investment in Eastern North Carolina Natural Gas Co. is targeted to close in the fourth fiscal quarter of 2003 following receipt of Securities and Exchange Commission (SEC) approval under the Public Utility Holding Company Act.

Piedmont Natural Gas is an energy services company primarily engaged in the distribution of natural gas to 740,000 residential, commercial and industrial customers in North Carolina, South Carolina and Tennessee.

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