|                                                        |
|--------------------------------------------------------|
|                                                        |
| Piedmont Natural Gas Company, Inc.                     |
| (Exact name of registrant as specified in its charter) |

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |
| North Carolina                                                 |    | 56-0556998 |
| (State or other jurisdiction of incorporation or organization) |    | (I.R.S. Employer Identification No.) |

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |
| 4720 Piedmont Row Drive, Charlotte, North Carolina |   | 28210 |
| (Address of principal executive offices)           |   | (Zip Code) |

|                                                                                                     |
|-----------------------------------------------------------------------------------------------------|
|                                                                                                     |  |  |
|    Registrant’s telephone number, including area code |    | (704) 364-3120 |

|                            |
|----------------------------|
|                            |  |  |
| Title of each class        |    | Name of each exchange on which registered |
| Common Stock, no par value |    | New York Stock Exchange |

|                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                          |  |  |
| Large accelerated filer ý                                                                                      |    |     Accelerated filer o |
| Non-accelerated filer o (Do not check if a  smaller reporting company) |    |     Smaller reporting company o |

|                            |
|----------------------------|
|                            |  |  |
| Class                      |    | Outstanding at December 11, 2015 |
| Common Stock, no par value |    | 80,985,282 |

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|                                    |
|------------------------------------|
|                                    |  |  |
| Piedmont Natural Gas Company, Inc. |
|                               |
|                               |
| 2015 FORM 10-K ANNUAL REPORT       |
| TABLE OF CONTENTS                  |
|                               |   |   |
|                               |   | Page |
| Part I.                            |   |   |
|                               |   |   |
| Item 1.                            | Business | 1 |
| Item 1A.                           | Risk Factors | 9 |
| Item 1B.                           | Unresolved Staff Comments | 16 |
| Item 2.                            | Properties | 17 |
| Item 3.                            | Legal Proceedings | 17 |
| Item 4.                            | Mine Safety Disclosures | 17 |
|                               |   |   |
| Part II.                           |   |   |
|                               |   |   |
| Item 5.                            | Market for Registrant’s Common Equity, Related Stockholder   Matters and Issuer Purchases of Equity Securities | 18 |
| Item 6.                            | Selected Financial Data | 21 |
| Item 7.                            | Management’s Discussion and Analysis of Financial Condition and Results  of Operations | 21 |
| Item 7A.                           | Quantitative and Qualitative Disclosures about Market Risk | 47 |
| Item 8.                            | Financial Statements and Supplementary Data | 48 |
| Item 9.                            | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 113 |
| Item 9A.                           | Controls and Procedures | 113 |
| Item 9B.                           | Other Information | 116 |
|                               |   |   |
| Part III.                          |   |   |
|                               |   |   |
| Item 10.                           | Directors, Executive Officers and Corporate Governance | 116 |
| Item 11.                           | Executive Compensation | 116 |
| Item 12.                           | Security Ownership of Certain Beneficial Owners and Management and Related       Stockholder Matters | 116 |
| Item 13.                           | Certain Relationships and Related Transactions, and Director Independence | 116 |
| Item 14.                           | Principal Accounting Fees and Services | 116 |
|                               |   |   |
| Part IV.                           |   |   |
|                               |   |   |
| Item 15.                           | Exhibits, Financial Statement Schedules | 117 |
|                               |   |   |
|                               | Signatures | 123 |

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|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |
|                               |   |   |   | Earnings |
|                               |   | Assets |   | Before Taxes |
| Regulated Utility                  |   | 96 | % |   | 85 | % |
| Non-utility Activities:            |   |   |   |   |
| Regulated non-utility activities   |   | 3 | % |   | 7 | % |
| Unregulated non-utility activities |   | 1 | % |   | 8 | % |
| Total non-utility activities       |   | 4 | % |   | 15 | % |

----

|                                                                                     |
|-------------------------------------------------------------------------------------|
|                                                                                     |  |  |  |  |  |  |
|                                                                                |   | 2015 |   | 2014 |
| Residential customers                                                               |   | 48 | % |   | 46 | % |
| Commercial customers                                                                |   | 27 | % |   | 27 | % |
| Large volume customers, including industrial, power generation and resale customers |   | 15 | % |   | 14 | % |
| Secondary market activities                                                         |   | 10 | % |   | 12 | % |
| Other sources                                                                       |   | — | % |   | 1 | % |
| Total                                                                               |   | 100 | % |   | 100 | % |

----

|                                                                                               |
|-----------------------------------------------------------------------------------------------|
|                                                                                               |  |  |  |  |  |  |  |  |  |
|                                                                                          |   | 2015 |   | 2014 |   | 2013 |
| Fixed margin (from margin decoupling in North Carolina, facilities charges to our customers,  |   |   |   |   |   |   |
|   Tennessee and North Carolina IMRs in 2015 and 2014 only and fixed-rate contracts) |   | 75 | % |   | 72 | % |   | 73 | % |
| Semi-fixed margin (RSA in South Carolina and WNA in South Carolina and Tennessee)             |   | 14 | % |   | 16 | % |   | 16 | % |
| Volumetric or periodic renegotiation (including secondary marketing activity)                 |   | 11 | % |   | 12 | % |   | 11 | % |
| Total                                                                                         |   | 100 | % |   | 100 | % |   | 100 | % |

----

----

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|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                              |  | 2015 |  | 2014 |  | 2013 |  | 2012 |  | 2011 |
| Operating Revenues (in thousands):                           |  |  |  |  |  |  |  |  |
| Sales and Transportation:                                    |  |  |  |  |  |  |  |  |  |  |
| Residential                                                  |  | $ | 656,182 |  |  | $ | 683,848 |  |   | $ | 588,546 |  |   | $ | 534,321 |  |   | $ | 658,892 |  |
| Commercial                                                   |  | 370,339 |  |  | 397,004 |  |   | 331,831 |  |   | 301,013 |  |   | 379,846 |  |
| Industrial                                                   |  | 106,986 |  |  | 115,515 |  |   | 113,182 |  |   | 95,177 |  |   | 104,774 |  |
| Power Generation                                             |  | 85,650 |  |  | 85,902 |  |   | 64,109 |  |   | 36,027 |  |   | 28,969 |  |
| For Resale                                                   |  | 10,208 |  |  | 9,587 |  |   | 9,549 |  |   | 9,512 |  |   | 9,692 |  |
| Total                                                        |  | 1,229,365 |  |  | 1,291,856 |  |   | 1,107,217 |  |   | 976,050 |  |   | 1,182,173 |  |
| Secondary Market Sales                                       |  | 134,322 |  |  | 169,543 |  |   | 164,130 |  |   | 140,380 |  |   | 244,824 |  |
| Miscellaneous                                                |  | 8,031 |  |  | 8,589 |  |   | 6,882 |  |   | 6,350 |  |   | 6,908 |  |
| Total                                                        |  | $ | 1,371,718 |  |  | $ | 1,469,988 |  |   | $ | 1,278,229 |  |   | $ | 1,122,780 |  |   | $ | 1,433,905 |  |
|                                                         |   |   |   |   |   |   |   |   |   |   |
| Gas Volumes - Dekatherms (in thousands)                      |  |   |   |   |   |   |   |   |
| System Throughput:                                           |  |  |  |   |   |   |   |   |   |   |
| Residential                                                  |  | 61,004 |  |  | 61,782 |  |   | 55,283 |  |   | 43,788 |  |   | 57,778 |  |
| Commercial                                                   |  | 44,616 |  |  | 44,259 |  |   | 39,602 |  |   | 33,774 |  |   | 40,749 |  |
| Industrial                                                   |  | 96,380 |  |  | 95,780 |  |   | 95,019 |  |   | 89,234 |  |   | 90,842 |  |
| Power Generation                                             |  | 262,161 |  |  | 201,707 |  |   | 190,862 |  |   | 151,675 |  |   | 83,522 |  |
| For Resale                                                   |  | 7,362 |  |  | 7,174 |  |   | 6,834 |  |   | 5,829 |  |   | 6,870 |  |
| Total                                                        |  | 471,523 |  |  | 410,702 |  |   | 387,600 |  |   | 324,300 |  |   | 279,761 |  |
|                                                         |   |   |   |   |   |   |   |   |   |   |
| Secondary Market Sales                                       |  | 30,759 |  |  | 20,516 |  |   | 41,605 |  |   | 48,373 |  |   | 48,835 |  |
|                                                         |   |   |   |   |   |   |   |   |   |   |
| Number of Customers Billed (12-month average):               |  |   |   |   |   |   |   |   |
| Residential                                                  |  | 916,719 |  |  | 903,067 |  |   | 890,887 |  |   | 878,851 |  |   | 871,401 |  |
| Commercial                                                   |  | 98,544 |  |  | 97,288 |  |   | 96,009 |  |   | 95,100 |  |   | 94,485 |  |
| Industrial                                                   |  | 2,283 |  |  | 2,279 |  |   | 2,271 |  |   | 2,265 |  |   | 2,265 |  |
| Power Generation                                             |  | 25 |  |  | 25 |  |   | 24 |  |   | 22 |  |   | 22 |  |
| For Resale                                                   |  | 15 |  |  | 16 |  |   | 15 |  |   | 15 |  |   | 15 |  |
| Total                                                        |  | 1,017,586 |  |  | 1,002,675 |  |   | 989,206 |  |   | 976,253 |  |   | 968,188 |  |
|                                                         |   |   |   |   |   |   |   |   |   |   |
| Cost of Gas (in thousands):                                  |  |  |  |   |   |   |   |   |   |   |
| Natural Gas Commodity Costs                                  |  | $ | 450,100 |  |  | $ | 621,604 |  |   | $ | 526,703 |  |   | $ | 379,145 |  |   | $ | 666,930 |  |
| Capacity Demand Charges                                      |  | 131,196 |  |  | 144,313 |  |   | 151,369 |  |   | 129,090 |  |   | 136,139 |  |
| Natural Gas Withdrawn From                                   |  |   |  |   |   |   |   |   |   |   |
| (Injected Into) Storage, net                                 |  | 25,715 |  |  | (13,578 | ) |   | (5,867 | ) |   | 27,580 |  |   | 11,362 |  |
| Regulatory Charges (Credits), net                            |  | 37,413 |  |  | 27,441 |  |   | (15,466 | ) |   | 11,519 |  |   | 45,835 |  |
| Total                                                        |  | $ | 644,424 |  |  | $ | 779,780 |  |   | $ | 656,739 |  |   | $ | 547,334 |  |   | $ | 860,266 |  |
|                                                         |   |   |   |   |   |   |   |   |   |   |
| Supply Available for Distribution (dekatherms in thousands): |  |  |  |  |  |  |
| Natural Gas Purchased                                        |  | 144,862 |  |  | 134,986 |  |   | 142,884 |  |   | 132,426 |  |   | 155,550 |  |
| Transportation Gas                                           |  | 359,986 |  |  | 299,166 |  |   | 287,980 |  |   | 235,474 |  |   | 175,005 |  |
| Natural Gas Withdrawn From                                   |  |  |  |   |   |   |   |   |   |   |
| (Injected Into) Storage, net                                 |  | (573 | ) |  | (1,232 | ) |   | (509 | ) |   | (378 | ) |   | 196 |  |
| Company Use                                                  |  | (700 | ) |  | (731 | ) |   | (369 | ) |   | (296 | ) |   | (309 | ) |
| Total                                                        |  | 503,575 |  |  | 432,189 |  |   | 429,986 |  |   | 367,226 |  |   | 330,442 |  |

----

|                                                                                  |
|----------------------------------------------------------------------------------|
|                                                                                  |  |  |
| Williams – Transco                                                         | 632,100 |  |
| Kinder Morgan – Tennessee Pipeline                                         | 37,000 |  |
| Spectra – Texas Eastern (partially through East Tennessee and Transco)     | 11,700 |  |
| Spectra – East Tennessee (through Transco)                                 | 44,800 |  |
| Oneok – Midwestern (through East Tennessee)                                | 25,000 |  |
| Columbia Pipeline Group – Columbia Gas (through Transco and Columbia Gulf) | 42,800 |  |
| Columbia Pipeline Group – Columbia Gulf                                    | 41,000 |  |
| Total                                                                            | 834,400 |  |

|                                                      |
|------------------------------------------------------|
|                                                      |  |  |
| Piedmont Liquefied Natural Gas (LNG)                 | 270,000 |  |
| Pine Needle LNG (through Transco)                    | 263,400 |  |
| Williams – Transco Storage                     | 86,100 |  |
| Columbia Pipeline Group – Columbia Gas Storage | 96,400 |  |
| Hardy Storage (through Columbia Gas and Transco)     | 68,800 |  |
| Kinder Morgan – Tennessee Pipeline Storage     | 55,900 |  |
| Total                                                | 840,600 |  |

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|         |                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | we will have paid certain significant transaction costs, including legal, financial advisory and filing, printing and mailing fees, and in certain circumstances, a termination fee to Duke Energy of $125 million; |

|         |                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the attention of our management may have been diverted to the Acquisition rather than to our operations and the pursuit of other opportunities that could have been beneficial to us; |

|         |                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the potential loss of key personnel during the pendency of the Acquisition as employees may experience uncertainty about their future roles with the combined company; |

|         |                                                                                                                                                                                                                                          |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | we will have been subject to certain restrictions on the conduct of our business, which may prevent us from making certain acquisitions or dispositions or pursuing certain business opportunities while the Acquisition is pending; and |

|         |                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------|
| • | the trading price of our common stock may decline if the market believes the Acquisition may not be completed. |

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|                     |
|---------------------|
|                     |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| 2015                |   | High |  |   | Low |  |   | 2014 |   | High |  |   | Low |  |
| Quarter ended: |   |   |   |   |   | Quarter ended: |   |   |   |   |
| January 31     |   | $ | 41.09 |  |  | $ | 36.62 |  |   | January 31 |   | $ | 34.18 |  |   | $ | 31.94 |  |
| April 30            |   | 40.61 |  |  | 34.95 |  |   | April 30 |   | 36.55 |  |   | 32.12 |  |
| July 31             |   | 38.44 |  |  | 35.09 |  |   | July 31 |   | 37.86 |  |   | 34.30 |  |
| October 31     |   | 59.14 |  |  | 36.11 |  |   | October 31 |   | 38.36 |  |   | 33.38 |  |

|                |
|----------------|
|                |  |  |  |  |  |  |  |  |  |  |
|           |   | Dividends Paid |   |   |   | Dividends Paid |
| 2015           |   | Per Share |   | 2014 |   | Per Share |
| Quarter ended: |   |   |   |   | Quarter ended: |   |   |   |
| January 31     |   | 32 |  | ¢ |   | January 31 |   | 31 |  | ¢ |
| April 30       |   | 33 |  | ¢ |   | April 30 |   | 32 |  | ¢ |
| July 31        |   | 33 |  | ¢ |   | July 31 |   | 32 |  | ¢ |
| October 31     |   | 33 |  | ¢ |   | October 31 |   | 32 |  | ¢ |

----

|                          |
|--------------------------|
|                          |  |  |  |  |  |  |  |  |
| Period                   |   | Total Numberof SharesPurchased |   | Average PricePaid Per Share |   | Total Number ofShares Purchasedas Part of PubliclyAnnounced Program |   | Maximum Numberof Shares that MayYet be PurchasedUnder the Program (1) |
| Beginning of the period  |   |   |   |   |   |   |   | 2,910,074 |
| 8/1/15 – 8/31/15   |   | — |   | — |   | — |   | 2,910,074 |
| 9/1/15 – 9/30/15   |   | — |   | — |   | — |   | 2,910,074 |
| 10/1/15 – 10/31/15 |   | — |   | — |   | — |   | 2,910,074 |
|                     |   |   |   |   |   |   |   |   |
| Total                    |   | — |   | — |   | — |   |   |

|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)  | The Common Stock Open Market Purchase Program was approved by the Board of Directors and announced on June 4, 2004 to purchase up to three million shares of common stock for reissuance under our dividend reinvestment and stock purchase, employee stock purchase and incentive compensation plans. On December 16, 2005, the Board of Directors approved an increase in the number of shares in this program from three million to six million to reflect the two-for-one stock split in 2004. On that date, the Board also approved an amendment of the Common Stock Open Market Purchase Program to provide for the purchase of up to four million additional shares of common stock to maintain our debt-to-equity capitalization ratios at target levels. The additional four million shares were referred to as our accelerated share repurchase (ASR) program. On March 6, 2009, the Board of Directors authorized the repurchase of up to an additional four million shares under the Common Stock Open Market Purchase Program and the ASR program, which were consolidated. |

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|                   |
|-------------------|
|                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|              |   | 2010 |   | 2011 |   | 2012 |   | 2013 |   | 2014 |   | 2015 |
| Piedmont          |   | $ | 100 |  |   | $ | 115 |  |   | $ | 117 |  |   | $ | 130 |  |   | $ | 150 |  |   | $ | 234 |  |
| LDC Peer Group    |   | 100 |  |   | 118 |  |   | 125 |  |   | 149 |  |   | 175 |  |   | 193 |  |
| S&P 500 Index |   | 100 |  |   | 108 |  |   | 125 |  |   | 158 |  |   | 186 |  |   | 195 |  |

----

|                                                                                                                                                                                                                                                                                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands, except per share amounts                                                                                                                                                                                                                                             |  | 2015 |  | 2014 |  | 2013 |  | 2012 |  | 2011 |
| Operating Revenues                                                                                                                                                                                                                                                                 |  | $ | 1,371,718 |  |  | $ | 1,469,988 |  |  | $ | 1,278,229 |  |  | $ | 1,122,780 |  |   | $ | 1,433,905 |  |
| Margin (operating revenues less cost of gas)                                                                                                                                                                                                                                       |  | $ | 727,294 |  |  | $ | 690,208 |  |  | $ | 621,490 |  |  | $ | 575,446 |  |   | $ | 573,639 |  |
| Net Income                                                                                                                                                                                                                                                                         |  | $ | 137,011 |  |  | $ | 143,801 |  |  | $ | 134,417 |  |  | $ | 119,847 |  |   | $ | 113,568 |  |
| Earnings per Share of Common Stock:                                                                                                                                                                                                                                                |  |  |  |  |  |  |  |   |   |   |
| Basic                                                                                                                                                                                                                                                                              |  | $ | 1.74 |  |  | $ | 1.85 |  |  | $ | 1.80 |  |  | $ | 1.67 |  |   | $ | 1.58 |  |
| Diluted                                                                                                                                                                                                                                                                            |  | $ | 1.73 |  |  | $ | 1.84 |  |  | $ | 1.78 |  |  | $ | 1.66 |  |   | $ | 1.57 |  |
| Cash Dividends per Share of Common Stock                                                                                                                                                                                                                                           |  | $ | 1.31 |  |   | $ | 1.27 |  |   | $ | 1.23 |  |   | $ | 1.19 |  |   | $ | 1.15 |  |
| Total Assets (1)                                                                                                                                                                                                                                                                   |  | $ | 5,110,750 |  |  | $ | 4,774,307 |  |  | $ | 4,360,277 |  |   | $ | 3,764,144 |  |   | $ | 3,238,780 |  |
| Long-Term Debt (less current maturities) (1)                                                                                                                                                                                                                                       |  | $ | 1,523,677 |  |  | $ | 1,414,484 |  |  | $ | 1,166,525 |  |   | $ | 969,205 |  |   | $ | 671,239 |  |
| (1) Total assets and long-term debt for the years 2011 through 2014 have been adjusted to reflect the netting of debt issuance costs with its debt carrying value in accordance with the 2015 adoption of new accounting guidance related to this balance sheet presentation. |

|         |                                     |
|---------|-------------------------------------|
| • | Economic conditions in our markets. |

|         |                                 |
|---------|---------------------------------|
| • | Wholesale price of natural gas. |

|         |                                                                                              |
|---------|----------------------------------------------------------------------------------------------|
| • | Availability of adequate interstate pipeline transportation capacity and natural gas supply. |

|         |                                                                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Regulatory actions at the state level that impact our ability to earn a reasonable rate of return and fully recover our operating costs on a timely basis. |

|         |                                                      |
|---------|------------------------------------------------------|
| • | Competition from other companies that supply energy. |

|         |                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------|
| • | Changes in the regional economies, politics, regulations and weather patterns of the three states in which our operations are concentrated. |

|         |                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------|
| • | Costs of complying or effect of noncompliance with state and federal laws and regulations that are applicable to us. |

|         |                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------|
| • | Effect of climate change, carbon neutral or energy efficiency legislation or regulations on costs and market opportunities. |

|         |                     |
|---------|---------------------|
| • | Weather conditions. |

|         |                                                                                |
|---------|--------------------------------------------------------------------------------|
| • | Operational interruptions to our gas distribution and transmission activities. |

|         |                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------|
| • | Inability to complete necessary or desirable pipeline expansion or infrastructure development projects. |

|         |                                          |
|---------|------------------------------------------|
| • | Elevated levels of capital expenditures. |

|         |                                |
|---------|--------------------------------|
| • | Changes to our credit ratings. |

|         |                                   |
|---------|-----------------------------------|
| • | Availability and cost of capital. |

|         |                                                      |
|---------|------------------------------------------------------|
| • | Federal and state fiscal, tax and monetary policies. |

|         |                                                                       |
|---------|-----------------------------------------------------------------------|
| • | Ability to generate sufficient cash flows to meet all our cash needs. |

|         |                                                             |
|---------|-------------------------------------------------------------|
| • | Ability to satisfy all of our outstanding debt obligations. |

|         |                                                            |
|---------|------------------------------------------------------------|
| • | Ability of counterparties to meet their obligations to us. |

|         |                                      |
|---------|--------------------------------------|
| • | Costs of providing pension benefits. |

|         |                                                                |
|---------|----------------------------------------------------------------|
| • | Earnings from the joint venture businesses in which we invest. |

|         |                                                                     |
|---------|---------------------------------------------------------------------|
| • | Ability to attract and retain professional and technical employees. |

|         |                                                          |
|---------|----------------------------------------------------------|
| • | Cybersecurity breaches or failure of technology systems. |

----

|         |                                                      |
|---------|------------------------------------------------------|
| • | Ability to obtain and maintain sufficient insurance. |

|         |                                         |
|---------|-----------------------------------------|
| • | Change in number of outstanding shares. |

|         |                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------|
| • | Certain risks and uncertainties associated with the Acquisition, including, without limitation: |

|         |                                                                                                                                                                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | the possibility that the Acquisition does not close due to the failure to satisfy the closing conditions, including, but not limited to, a failure of shareholders to approve the Acquisition or a failure to obtain the required regulatory approvals; |

|         |                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------|
| • | delays caused by the required regulatory approvals, which may delay the Acquisition or cause the companies to abandon the transaction; |

|         |                                                                                                                                                                                                                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | uncertainties and disruptions caused by the Acquisition that make it more difficult to maintain our business and operational relationships as well as maintain our relationships with employees, suppliers or customers, and the risk that unexpected costs will be incurred during this process; |

|         |                                                                      |
|---------|----------------------------------------------------------------------|
| • | the diversion of management time on Acquisition-related issues, and; |

|         |                                                                                                                                                      |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | pending or future shareholder suits could delay or prevent the closing of the Acquisition or otherwise adversely impact our business and operations. |

----

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Comprehensive Income Statements Components |
|                                       |   |   |   |   |   |   |   |   |
|                                       |   |   |   |   |   |   |   | Percent Change |
|                                       |   |   |   |   |   |   |   | 2015 vs. |   | 2014 vs. |
| In thousands, except per share amounts     |   | 2015 |   | 2014 |   | 2013 |   | 2014 |   | 2013 |
| Operating Revenues                         |   | $ | 1,371,718 |  |   | $ | 1,469,988 |  |   | $ | 1,278,229 |  |   | (6.7 | )% |   | 15.0 | % |
| Cost of Gas                                |   | 644,424 |  |   | 779,780 |  |   | 656,739 |  |   | (17.4 | )% |   | 18.7 | % |
| Margin                                     |   | 727,294 |  |   | 690,208 |  |   | 621,490 |  |   | 5.4 |  % |   | 11.1 | % |
| Operations and Maintenance                 |   | 294,517 |  |   | 270,877 |  |   | 253,120 |  |   | 8.7 |  % |   | 7.0 | % |
| Depreciation                               |   | 128,704 |  |   | 118,996 |  |   | 112,207 |  |   | 8.2 |  % |   | 6.1 | % |
| General Taxes                              |   | 42,110 |  |   | 37,294 |  |   | 34,635 |  |   | 12.9 |  % |   | 7.7 | % |
| Utility Income Taxes                       |   | 76,934 |  |   | 83,176 |  |   | 77,334 |  |   | (7.5 | )% |   | 7.6 | % |
| Total Operating Expenses                   |   | 542,265 |  |   | 510,343 |  |   | 477,296 |  |   | 6.3 |  % |   | 6.9 | % |
| Operating Income                           |   | 185,029 |  |   | 179,865 |  |   | 144,194 |  |   | 2.9 |  % |   | 24.7 | % |
| Other Income (Expense), net of tax         |   | 20,613 |  |   | 18,622 |  |   | 15,161 |  |   | 10.7 |  % |   | 22.8 | % |
| Utility Interest Charges                   |   | 68,631 |  |   | 54,686 |  |   | 24,938 |  |   | 25.5 |  % |   | 119.3 | % |
| Net Income                                 |   | $ | 137,011 |  |   | $ | 143,801 |  |   | $ | 134,417 |  |   | (4.7 | )% |   | 7.0 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Average Shares of Common Stock:            |   |   |   |   |   |   |   |   |   |   |
| Basic                                      |   | 78,942 |  |  | 77,883 |  |   | 74,884 |  |   | 1.4 |  % |   | 4.0 | % |
| Diluted                                    |   | 79,231 |  |  | 78,193 |  |   | 75,333 |  |   | 1.3 |  % |   | 3.8 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |
| Earnings per Share of Common Stock:        |   |   |   |   |   |   |   |   |   |   |
| Basic                                      |   | $ | 1.74 |  |  | $ | 1.85 |  |   | $ | 1.80 |  |   | (5.9 | )% |   | 2.8 | % |
| Diluted                                    |   | $ | 1.73 |  |  | $ | 1.84 |  |   | $ | 1.78 |  |   | (6.0 | )% |   | 3.4 | % |

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Margin by Customer Class  |
|                      |   |   |   |   |   |   |
| In thousands              |   | 2015 |   | 2014 |   | 2013 |
| Sales and Transportation: |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential               |   | $ | 376,568 |  |   | 52 | % |   | $ | 348,782 |  |   | 51 | % |   | $ | 331,920 |  |   | 54 | % |
| Commercial                |   | 181,555 |  |   | 25 | % |   | 169,442 |  |   | 25 | % |   | 155,065 |  |   | 25 | % |
| Industrial                |   | 49,877 |  |   | 7 | % |   | 50,889 |  |   | 7 | % |   | 52,268 |  |   | 8 | % |
| Power Generation          |   | 77,244 |  |   | 10 | % |   | 77,573 |  |   | 11 | % |   | 56,312 |  |   | 9 | % |
| For Resale                |   | 12,549 |  |   | 2 | % |   | 8,819 |  |   | 1 | % |   | 7,477 |  |   | 1 | % |
| Total                     |   | 697,793 |  |   | 96 | % |   | 655,505 |  |   | 95 | % |   | 603,042 |  |   | 97 | % |
| Secondary Market Sales    |   | 21,122 |  |   | 3 | % |   | 25,414 |  |   | 4 | % |   | 8,979 |  |   | 1 | % |
| Miscellaneous             |   | 8,379 |  |   | 1 | % |   | 9,289 |  |   | 1 | % |   | 9,469 |  |   | 2 | % |
| Total                     |   | $ | 727,294 |  |   | 100 | % |   | $ | 690,208 |  |   | 100 | % |   | $ | 621,490 |  |   | 100 | % |

----

|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Gas Deliveries, Customers, Weather Statistics and Number of Employees |
|                                                                  |   |   |   |   |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |   | Percent Change |
|                                                                  |   |   |   |   |   |   |   | 2015 vs. |   | 2014 vs. |
|                                                                  |   | 2015 |   | 2014 |   | 2013 |   | 2014 |   | 2013 |
| Deliveries in Dekatherms (in thousands):                              |   |   |   |   |   |   |   |   |   |   |
| Residential                                                           |   | 61,004 |  |   | 61,782 |  |   | 55,283 |  |   | (1.3 | )% |   | 11.8 |  % |
| Commercial                                                            |   | 44,616 |  |   | 44,259 |  |   | 39,602 |  |   | 0.8 |  % |   | 11.8 |  % |
| Industrial                                                            |   | 96,380 |  |   | 95,780 |  |   | 95,019 |  |   | 0.6 |  % |   | 0.8 |  % |
| Power Generation                                                      |   | 262,161 |  |   | 201,707 |  |   | 190,862 |  |   | 30.0 |  % |   | 5.7 |  % |
| For Resale                                                            |   | 7,362 |  |   | 7,174 |  |   | 6,834 |  |   | 2.6 |  % |   | 5.0 |  % |
| Throughput                                                            |   | 471,523 |  |  | 410,702 |  |   | 387,600 |  |   | 14.8 |  % |   | 6.0 |  % |
| Secondary Market Volumes                                              |   | 30,759 |  |   | 20,516 |  |   | 41,605 |  |   | 49.9 |  % |   | (50.7 | )% |
|                                                                  |   |   |   |   |   |   |   |   |   |   |
| Customers Billed (at period end)                                      |   | 1,011,959 |  |  | 992,551 |  |   | 979,909 |  |   | 2.0 |  % |   | 1.3 |  % |
| Gross Residential, Commercial and Industrial Customer Additions       |   | 17,017 |  |   | 16,251 |  |   | 14,293 |  |   | 4.7 |  % |   | 13.7 |  % |
| Degree Days                                                           |   |   |   |   |   |   |   |   |   |   |
| Actual                                                                |   | 3,449 |  |  | 3,543 |  |   | 3,336 |  |   | (2.7 | )% |   | 6.2 |  % |
| Normal                                                                |   | 3,257 |  |  | 3,265 |  |   | 3,276 |  |   | (0.2 | )% |   | (0.3 | )% |
| Percent colder than normal                                            |   | 5.9 | % |  | 8.5 | % |   | 1.8 | % |   | n/a |  |   | n/a |  |
| Number of Employees (at period end)                                   |   | 1,943 |  |   | 1,879 |  |   | 1,795 |  |   | 3.4 |  % |   | 4.7 |  % |

|         |                                                                                                                          |
|---------|--------------------------------------------------------------------------------------------------------------------------|
| • | In September 2015, we issued $150 million of ten-year, unsecured senior notes, receiving net proceeds of $148.9 million. |

----

|         |                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In October 2015, we issued 1.5 million shares under our ATM equity sales program under the forward sales agreements (FSAs), receiving proceeds of $54.1 million. |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                              |   |   |   |   |   |   |   | Percent Change |
|                              |   |   |   |   |   |   |   | 2015 vs. |   | 2014 vs. |
|                              |   | 2015 |   | 2014 |   | 2013 |   | 2014 |   | 2013 |
| Residential new home construction |   | 12,436 |  |   | 11,659 |  |   | 10,299 |  |   | 6.7 |  % |   | 13.2 |  % |
| Residential conversion            |   | 2,789 |  |   | 2,814 |  |   | 2,463 |  |   | (0.9 | )% |   | 14.3 |  % |
| Commercial                        |   | 1,780 |  |   | 1,763 |  |   | 1,512 |  |   | 1.0 |  % |   | 16.6 |  % |
| Industrial                        |   | 12 |  |   | 15 |  |   | 19 |  |   | (20.0 | )% |   | (21.1 | )% |
|   Total new customers   |   | 17,017 |  |   | 16,251 |  |   | 14,293 |  |   | 4.7 |  % |   | 13.7 |  % |

----

|                                                                                                                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                              |  |  |  |  |  |  |  |
| In millions                                                                                                                                                                                                                                  | North Carolina |   | Tennessee |
| Incremental annual margin revenue - 2014 IMR filing                                                                                                                                                                                          | $ | 1.0 |  | (1)  | $ | 13.1 |  |
| Incremental annual margin revenue - 2015 IMR filing                                                                                                                                                                                          | 24.4 |  | (1)  | 6.5 |  |
| Total cumulative incremental annual margin revenue in 2015 (2)                                                                                                                                                                               | $ | 25.4 |  | (1)  | $ | 19.6 |  |
|                                                                                                                                                                                                                                         |   |   |   |
| Amounts recorded as revenues during fiscal year 2015                                                                                                                                                                                         | $ | 17.1 |  |   | $ | 18.2 |  |
| (1) Amounts are adjusted to reflect the 2015 IMR settlement agreement approved by the NCUC in November. For further information on the IMR settlement agreement, see Note 3 to the consolidated financial statements in this Form 10-K. |
| (2) IMR recovery period in both jurisdictions does not align with our fiscal year. For further information on those periods, see Note 3 to the consolidated financial statements in this Form 10-K.                                     |

----

|         |                                      |
|---------|--------------------------------------|
| • | Promote the benefits of natural gas, |

|         |                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------|
| • | Expand our core natural gas and complementary energy-related businesses to enhance shareholder value, |

|         |                                           |
|---------|-------------------------------------------|
| • | Be the energy service provider of choice, |

|         |                                                    |
|---------|----------------------------------------------------|
| • | Achieve excellence in customer service every time, |

|         |                                              |
|---------|----------------------------------------------|
| • | Preserve financial strength and flexibility, |

|         |                                             |
|---------|---------------------------------------------|
| • | Execute sustainable business practices, and |

|         |                                                |
|---------|------------------------------------------------|
| • | Enhance our healthy, high performance culture. |

|                                                    |
|----------------------------------------------------|
|                                                    |  |  |  |  |  |  |  |  |
| Changes in Operating Revenue - Increase (Decrease) |
|                                          |   | 2015 vs. |   | 2014 vs. |
| In millions                                        |   | 2014 |   | 2013 |
| Residential and commercial customers               |   | $ | (85.2 | ) |   | $ | 201.5 |  |
| Industrial customers                               |   | (9.6 | ) |   | 1.4 |  |
| Power generation customers                         |   | (0.3 | ) |   | 21.8 |  |
| Secondary market                                   |   | (35.2 | ) |   | 5.4 |  |
| Margin decoupling mechanism                        |   | 6.4 |  |   | (39.4 | ) |
| WNA mechanisms                                     |   | 1.6 |  |   | (11.4 | ) |
| IMR mechanisms                                     |   | 24.6 |  |   | 10.7 |  |
| Other                                              |   | (0.6 | ) |   | 1.8 |  |
| Total                                              |   | $ | (98.3 | ) |   | $ | 191.8 |  |

|         |                                                                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Residential and commercial customers – the decrease is primarily due to lower wholesale gas costs passed through to customers and lower consumption from warmer weather, slightly offset by customer growth. |

|         |                                                                                                                                                                                                                       |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Industrial customers – the decrease is primarily due to lower wholesale gas costs passed through to customers and decreased transportation revenues, slightly offset by increased revenue on special contracts. |

|         |                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------|
| • | Power generation customers – the decrease is primarily due to certain annual contract rate adjustments. |

|         |                                                                                                                                                                                                                                                                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Secondary market – the decrease is due to lower margin sales prices. Secondary market transactions consist of off-system sales and capacity release and asset management arrangements that are part of our regulatory gas supply management program with regulatory-approved sharing mechanisms between our utility customers and our shareholders. |

----

|         |                                                                                                                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Margin decoupling mechanism – the increase is primarily related to warmer weather in North Carolina. As discussed in “Financial Condition and Liquidity,” the margin decoupling mechanism in North Carolina adjusts for variations in residential and commercial use per customer, including those due to weather and conservation. |

|         |                                                                                                                                                                                                                                                                                                                                               |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Weather normalization adjustment (WNA) mechanisms – the increase is due to warmer weather in South Carolina and Tennessee, as compared to the prior period. As discussed in “Financial Condition and Liquidity,” the WNA mechanisms partially offset the impact of colder- or warmer-than-normal weather on bills rendered. |

|         |                                                                                                                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | IMR mechanisms – the increase is due to incremental IMR rate adjustments in North Carolina and Tennessee. The North Carolina and Tennessee IMR mechanisms were effective February 1, 2014 and January 1, 2014, respectively. |

|         |                                                                                                                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Residential and commercial customers – the increase is primarily due to higher consumption from colder weather, higher wholesale gas costs passed through to customers and customer growth. |

|         |                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Industrial customers – the increase is primarily due to higher consumption from colder weather and higher wholesale gas costs passed through to customers, slightly offset by decreased transportation revenues. |

|         |                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------|
| • | Power generation customers – the increase is primarily due to increased transportation services. |

|         |                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Secondary market – the increase is due to higher margin sales related to sustained colder-than-normal weather and increased wholesale market volatility. |

|         |                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------|
| • | Margin decoupling mechanism – the decrease is primarily related to colder weather in North Carolina. |

|         |                                                                                               |
|---------|-----------------------------------------------------------------------------------------------|
| • | WNA mechanisms – the decrease is due to colder weather in South Carolina and Tennessee. |

|         |                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | IMR mechanisms – the increase is due to the IMR rate adjustments in Tennessee effective January 1, 2014 and North Carolina effective February 1, 2014. |

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |
| Changes in Cost of Gas - Increase (Decrease)          |
|                                                  |   | 2015 vs. |   | 2014 vs. |
| In millions                                           |   | 2014 |   | 2013 |
| Commodity gas costs passed through to sales customers |   | $ | (125.8 | ) |   | $ | 137.5 |  |
| Commodity gas costs in secondary market transactions  |   | (31.0 | ) |   | (11.0 | ) |
| Pipeline demand charges                               |   | (13.1 | ) |   | (7.1 | ) |
| Regulatory approved gas cost mechanisms               |   | 34.5 |  |   | 3.6 |  |
| Total                                                 |   | $ | (135.4 | ) |   | $ | 123.0 |  |

|         |                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commodity gas costs passed through to sales customers – the decrease is primarily due to lower wholesale gas costs passed through to sales customers, slightly offset by customer growth. |

|         |                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commodity gas costs in secondary market transactions – the decrease is primarily due to lower average wholesale gas costs, slightly offset by increased volumes. |

|         |                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Pipeline demand charges – the decrease is primarily due to increased capacity release revenues and decreased demand costs, slightly offset by decreased asset manager payments. |

|         |                                                                                                                                                                                      |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Regulatory approved gas cost mechanisms – the increase is primarily due to an increase in commodity cost and demand true-ups, partially offset by other regulatory mechanisms. |

|         |                                                                                                                                                                                                            |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commodity gas costs passed through to sales customers – the increase is primarily due to higher volumes sold due to colder weather and higher wholesale gas costs passed through to sales customers. |

|         |                                                                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Commodity gas costs in secondary market transactions – the decrease is primarily due to decreased activity, partially offset by higher average wholesale gas costs. |

|         |                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Pipeline demand charges – the decrease is due to decreased demand costs and increased capacity release revenues, slightly offset by decreased asset manager payments. |

----

|         |                                                                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Regulatory approved gas cost mechanisms – the increase is primarily due to demand cost true-ups, slightly offset by other regulatory mechanisms. |

|                                                                                                                                                                                                                                                                 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                 |  |  |  |  |  |  |
| Regulatory Mechanism                                                                                                                                                                                                                                            |   | North Carolina |   | South Carolina |   | Tennessee |
| WNA mechanism*                                                                                                                                                                                                                                                  |   |   |   | X |   | X |
| Margin decoupling mechanism *                                                                                                                                                                                                                                   |   | X |   |   |   |   |
| Natural gas rate stabilization mechanism                                                                                                                                                                                                                        |   |   |   | X |   |   |
| Secondary market programs **                                                                                                                                                                                                                                    |   | X |   | X |   | X |
| Incentive plan for gas supply **                                                                                                                                                                                                                                |   |   |   |   |   | X |
| IMR mechanism                                                                                                                                                                                                                                                   |   | X |   |   |   | X |
| Negotiated margin loss treatment                                                                                                                                                                                                                                |   | X |   | X |   |   |
| Uncollectible gas cost recovery                                                                                                                                                                                                                                 |   | X |   | X |   | X |
|                                                                                                                                                                                                                                                            |   |   |   |   |   |   |
|   * Residential and commercial customers only.                                                                                                                                                                                                        |
| ** In all jurisdictions, we retain 25% of secondary market margins generated through off-system sales and capacity release activity, with 75% credited to customers. Our share of net gains or losses in Tennessee is subject to an annual cap of $1.6 million. |

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |
| Changes in Margin - Increase (Decrease) |
|                                    |  | 2015 vs. |  | 2014 vs. |
| In millions                             |  | 2014 |  | 2013 |
| Residential and commercial customers    |  | $ | 39.9 |  |  | $ | 31.2 |  |
| Industrial customers                    |  | 2.7 |  |  | — |  |
| Power generation customers              |   | (0.3 | ) |   | 21.3 |  |
| Secondary market activity               |   | (4.3 | ) |   | 16.4 |  |
| Net gas cost adjustments                |   | (0.9 | ) |   | (0.2 | ) |
| Total                                   |   | $ | 37.1 |  |   | $ | 68.7 |  |

----

|         |                                                                                                                                                                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Residential and commercial customers – the increase is primarily due to incremental IMR rate adjustments discussed above, as well as the general rate increase in North Carolina effective January 1, 2014, and customer growth in all three states, partially offset by decreased volumes delivered in South Carolina and Tennessee due to warmer weather. |

|         |                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Industrial customers – the increase is due to incremental IMR rate adjustments discussed above, increased margin on special contracts and higher consumption in the industrial market. |

|         |                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------|
| • | Power generation customers – the decrease is primarily due to certain annual contract rate adjustments. |

|         |                                                                                        |
|---------|----------------------------------------------------------------------------------------|
| • | Secondary market activity – the decrease is primarily due to lower margin sales. |

|         |                                                                                                                                                                                                                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Residential and commercial customers – the increase is primarily due to the general rate increase in North Carolina effective January 1, 2014, the IMR rate adjustments discussed above, customer growth in all three states and increased volumes delivered in South Carolina and Tennessee due to colder weather. |

|         |                                                                                                        |
|---------|--------------------------------------------------------------------------------------------------------|
| • | Power generation customers – the increase is primarily due to increased transportation services. |

|         |                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Secondary market activity – the increase is primarily due to higher margin sales related to increased wholesale market volatility and sustained colder-than-normal weather. |

|                                                                      |
|----------------------------------------------------------------------|
|                                                                      |  |  |  |  |  |  |  |  |
| Changes in Operations and Maintenance Expenses - Increase (Decrease) |
|                                                                 |   | 2015 vs. |   | 2014 vs. |
| In millions                                                          |   | 2014 |   | 2013 |
| Contract labor                                                       |   | $ | 13.4 |  |   | $ | 1.9 |  |
| Payroll                                                              |   | 7.9 |  |   | 9.6 |  |
| Employee benefits                                                    |   | 2.5 |  |   | (0.3 | ) |
| Regulatory                                                           |   | 1.0 |  |   | 4.2 |  |
| Bad debt                                                             |   | (1.8 | ) |   | 2.1 |  |
| Other                                                                |   | 0.6 |  |   | 0.3 |  |
| Total                                                                |   | $ | 23.6 |  |   | $ | 17.8 |  |

|         |                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Contract labor – the increase is primarily due to $8.6 million of expenses related to the Acquisition, increased process improvement projects and pipeline integrity maintenance and safety programs. |

|         |                                                                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Payroll – the increase is primarily due to additional employees, higher incentive plan accruals of $7.2 million from a higher stock price at October 31 related to the announcement of the Acquisition and employee overtime. |

|         |                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Employee Benefits – the increase is primarily due to a lower regulatory pension deferral in Tennessee in the current period related to lower funding of the defined benefit plan in 2015 versus 2014. |

|         |                                                                                                                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Regulatory – the increase is primarily due increased amortization of regulatory assets with approved amortization amounts established in the North Carolina general rate proceeding, effective January 1, 2014. |

|         |                                                                                                   |
|---------|---------------------------------------------------------------------------------------------------|
| • | Bad debt – the decrease is primarily due lower projected charge-offs than the prior period. |

|         |                                                                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Contract labor – the increase is primarily due to increased call volume and collection efforts for customer receivables resulting from the colder winter, increased process improvement projects and pipeline integrity maintenance and safety programs. |

|         |                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Payroll – the increase is primarily due to additional employees, employee overtime because of colder-than-normal winter weather and incentive plan accruals. |

----

|         |                                                                                                                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Regulatory – the increase is primarily due to increased amortization of regulatory assets with approved amortization amounts established in the North Carolina general rate proceeding, effective January 1, 2014, and an increase in the North Carolina regulatory fee due to increased revenues. |

|         |                                                                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Bad debt – the increase is primarily due to a higher level of net charge-offs from customer receivables due to the colder weather experienced this past winter and increased accruals to reflect higher aging receivables. |

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |
| Changes in General Taxes - Increase (Decrease) |
|                                           |   | 2015 vs. |   | 2014 vs. |
| In millions                                    |   | 2014 |   | 2013 |
| Property taxes                                 |   | $ | 3.1 |  |   | $ | 1.5 |  |
| Franchise taxes                                |   | 1.3 |  |   | 0.9 |  |
| Other                                          |   | 0.4 |  |   | 0.3 |  |
|   Total                              |   | $ | 4.8 |  |   | $ | 2.7 |  |

|         |                                                                                |
|---------|--------------------------------------------------------------------------------|
| • | Property taxes – the increase is primarily due to increases in property. |

|         |                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------|
| • | Franchise taxes – the increase is primarily due to changes in North Carolina tax laws and increases in property. |

|         |                                                                                |
|---------|--------------------------------------------------------------------------------|
| • | Property taxes – the increase is primarily due to increases in property. |

|         |                                                                                 |
|---------|---------------------------------------------------------------------------------|
| • | Franchise taxes – the increase is primarily due to increases in property. |

----

|                                                                   |
|-------------------------------------------------------------------|
|                                                                   |  |  |  |  |  |  |  |  |
| Changes in Other Income (Expense) - Increase (Decrease) to Income |
|                                                              |   | 2015 vs. |   | 2014 vs. |
| In millions                                                       |   | 2014 |   | 2013 |
| Income from equity method investments:                            |   |   |   |   |
|   Constitution                                          |   | $ | 3.4 |  |   | $ | 1.7 |  |
|   SouthStar                                             |   | (1.0 | ) |   | 5.0 |  |
|   Other                                                 |   | (0.7 | ) |   | — |  |
|     Total                                     |   | 1.7 |  |   | 6.7 |  |
| Non-operating income                                              |   | 1.3 |  |   | (1.0 | ) |
| Non-operating expense                                             |   | 0.6 |  |   | 0.8 |  |
| Income Taxes                                                      |   | (1.6 | ) |   | (3.0 | ) |
|   Total                                                 |   | $ | 2.0 |  |   | $ | 3.5 |  |

|         |                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income from equity method investments from Constitution – the increase is primarily due to higher capitalized interest associated with increased capital expenditures on the project. |

|         |                                                                                                                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income from equity method investments from SouthStar – the decrease is primarily due to a lower value of hedged derivatives and less usage in Georgia and Illinois due to warmer weather, partially offset by favorable margins in Georgia, Illinois and Ohio. |

|         |                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Non-operating income – the increase is primarily due to the $2 million write-off in 2014 of an investment that was accounted for on the cost basis as discussed below. |

|         |                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income from equity method investments from Constitution – the increase is primarily due to higher capitalized interest associated with increased capital expenditures on the project. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income from equity method investments from SouthStar – the increase is primarily due to the expansion of the business into Illinois markets beginning in September 2013, and favorable weather and customer usage in Georgia, partially offset by higher general and administrative expenses. For further information on the contribution of the Illinois business to SouthStar and our cash contribution in our equity method investment, see Note 13 to the consolidated financial statements in this Form 10-K. |

|         |                                                                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Non-operating income – the decrease is primarily due to a $2 million write-off of an investment that we accounted for on the cost basis. This investment was presented in “Other noncurrent assets” in “Noncurrent Assets” in the Consolidated Balance Sheets. |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |
| Changes in Utility Interest Charges - Increase (Decrease) |
|                                                      |   | 2015 vs. |   | 2014 vs. |
| In millions                                               |   | 2014 |   | 2013 |
| Interest expense on long-term debt                        |   | $ | 9.1 |  |   | $ | 7.4 |  |
| Borrowed AFUDC                                            |   | 5.3 |  |   | 14.5 |  |
| Regulatory interest expense, net                          |   | (0.5 | ) |   | 8.1 |  |
| Other                                                     |   | — |  |   | (0.3 | ) |
| Total                                                     |   | $ | 13.9 |  |   | $ | 29.7 |  |

----

|         |                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------|
| • | Interest expense on long-term debt – the increase is primarily due to higher amounts of debt outstanding in the current period. |

|         |                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Borrowed allowance for funds used during construction (AFUDC) – the increase is due to a decrease in capitalized interest on a lower base of construction expenditures in the current period resulting from the timing of projects being placed into service. |

|         |                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------|
| • | Interest expense on long-term debt – the increase is primarily due to higher amounts of debt outstanding in the current period. |

|         |                                                                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Borrowed AFUDC – the increase is due to a decrease in capitalized interest on a lower base of construction expenditures in the current period resulting from the timing of projects being placed into service. |

|         |                                                                                                                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Regulatory interest expense, net – the increase is primarily due to the recording of interest expense on amounts due to customers compared with the recording of interest income in the prior year on amounts due from customers. |

----

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |
| In thousands                                                 |   | 2015 |
| End of period (October 31, 2015):                            |   |   |
| Amount outstanding                                           |   | $ | 340,000 |  |
| Weighted average interest rate                               |   | .22 | % |
|                                                         |   |   |
| During the period (August 1, 2015 – October 31, 2015): |   |   |
| Average amount outstanding                                   |   | $ | 372,600 |  |
| Minimum amount outstanding                                   |   | 290,000 |  |
| Maximum amount outstanding                                   |   | 445,000 |  |
| Minimum interest rate                                        |   | .16 | % |
| Maximum interest rate                                        |   | .25 | % |
| Weighted average interest rate                               |   | .22 | % |
|                                                         |   |   |
| Maximum amount outstanding during the month:                 |   |   |
| August 2015                                                  |   | $ | 430,000 |  |
| September 2015                                               |   | 445,000 |  |
| October 2015                                                 |   | 380,000 |  |
|                                                         |   |   |
| During the year ended October 31, 2015:                      |   |   |
| Average amount outstanding                                   |   | $ | 361,100 |  |
| Minimum amount outstanding                                   |   | 230,000 |  |
| Maximum amount outstanding                                   |   | 580,000 |  |
| Minimum interest rate                                        |   | .15 | % |
| Maximum interest rate                                        |   | .30 | % |
| Weighted average interest rate                               |   | .21 | % |

----

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |
| In thousands                                                 |  | 2014 |
| End of period (October 31, 2014):                            |  |  |
| Amount outstanding                                           |  | $ | 355,000 |  |
| Weighted average interest rate                               |  | .17 | % |
|                                                         |   |   |
| During the period (August 1, 2014 – October 31, 2014): |  |  |
| Average amount outstanding                                   |  | $ | 420,900 |  |
| Minimum amount outstanding                                   |  | 275,000 |  |
| Maximum amount outstanding                                   |  | 535,000 |  |
| Minimum interest rate                                        |  | .10 | % |
| Maximum interest rate                                        |  | .25 | % |
| Weighted average interest rate                               |  | .17 | % |
|                                                              |  |  |
| Maximum amount outstanding during the month:                 |  |  |
| August 2014                                                  |  | $ | 525,000 |  |
| September 2014                                               |  | 535,000 |  |
| October 2014                                                 |  | 355,000 |  |
|                                                         |   |   |
| During the year ended October 31, 2014:                      |  |  |
| Average amount outstanding                                   |  | $ | 441,500 |  |
| Minimum amount outstanding                                   |  | 275,000 |  |
| Maximum amount outstanding                                   |  | 625,000 |  |
| Minimum interest rate                                        |  | .10 | % |
| Maximum interest rate                                        |  | .43 | % |
| Weighted average interest rate                               |  | .19 | % |

----

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Trade accounts receivable and unbilled utility revenues decreased $10.2 million in the current period primarily due to the decrease in amounts billed to customers reflecting lower gas costs. Volumes sold to weather-sensitive residential and commercial customers decreased .4 million dekatherms as compared with the same prior period primarily due to 2.7% warmer weather during the current period. |

|         |                                                                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Net amounts due to customers decreased $16.8 million in the current period primarily due to a $45.5 million one-time bill credit to North Carolina customers and lower hedging costs, partially offset by deferred gas cost collections and refunds through rates, margin decoupling and WNA. |

|         |                                                                                                                                                                                                                        |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Gas in storage decreased $15.8 million in the current period primarily due to a decrease in the weighted average cost of gas purchased for injections, offset slightly by increased volumes of gas in storage. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Prepaid gas costs decreased $10.2 million in the current period primarily due to a decrease in the weighted average cost of gas purchased for injections. Under some gas supply asset management contracts, prepaid gas costs incurred during the summer months represent purchases of gas that are not available for sale, and therefore not recorded in inventory, until the start of the winter heating season. |

|         |                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Trade accounts payable increased $14.6 million in the current period primarily due to the timing of utility capital expenditures, partially offset by lower prices for natural gas purchases. |

----

|                                                                 |
|-----------------------------------------------------------------|
|                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
| In millions                                                     |   | 2016 |   | 2017 |   | 2018 |
| Customer growth and other                                       |   | $ | 290 |  |   | $ | 310 |  |   | $ | 385 |  |
| System integrity                                                |   | 270 |  |   | 255 |  |   | 210 |  |
| Total forecasted utility capital expenditures                   |   | 560 |  |   | $ | 565 |  |   | 595 |  |
| Forecasted funding of construction in equity method investments |   | 116 |  |   | 104 |  |   | 69 |  |
| Total                                                           |   | $ | 676 |  |   | $ | 669 |  |   | $ | 664 |  |

----

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |
|                                                   | Constitution |   | ACP |
| In millions                                            | (24% ownership interest) |   | (10% ownership interest) |
| Our anticipated contributions for total projects costs | $ | 200.2 |  |   | $                                    450 - 500 |  |
| Anticipated in-service date                            | fourth quarter of 2016 |  |   | late 2018 |  |
| Our contributions:                                     |   |   |   |
|   For the year ended October 31, 2015        | 19.1 |  |   | 10.6 |  |
|   Over life of project to date               | 72.7 |  |   | 10.6 |  |

----

|                                                                                                                                       |
|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                  |   |   |   | Per share |
| Equity Issuance Transaction                                                                                                           |   | Number of Shares |   | Settled |   | Net Proceeds Before Issuance Costs (1)               (In thousands) |   | Public Offering Price |   | Net Settlement Price |   |   | Underwriting Discount |
| Underwriting agreement, January 2013:                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| Issued                                                                                                                                |   | 3,000,000 |  |   | February 2013 |   | $ | 92,640 |  |   | $ | 32.00 |  |   | $ | 30.88 |  |   |   | $ | 1.12 |  |
| FSAs physically settled in shares                                                                                                     |   | 1,600,000 |  |   | December 2013 |   | 47,302 |  |   |   |   | 30.88 |  |   |   |   |
|                                                                                                                                  |   | 4,600,000 |  |   |   |   | $ | 139,942 |  |   |   |   |   |   |   |   |
|                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ATM program, physically settled in shares:                                                                                            |   |   |   |   |   |   |   |   |   |
| FSA - executed March 2015                                                                                                             |   | 612,000 |  |   | October 2015 |   | $ | 21,729 |  |   |   |   | 35.50 |  | (2)  |   |   |
| FSA - executed June 2015                                                                                                              |   | 795,529 |  |   | October 2015 |   | 28,230 |  |   |   |   | 35.49 |  | (2)  |   |   |
| FSA - executed September 2015                                                                                                         |   | 114,500 |  |   | October 2015 |   | 4,125 |  |   |   |   | 36.03 |  | (2)  |   |   |
|   Total ATM program                                                                                                         |   | 1,522,029 |  |  |  |  | $ | 54,084 |  |   |   |   |   |   |   |   |
| (1) Issuance costs incurred as follows: February 2013 shares - $370, December 2013 shares - $12, and October 2015 shares - $377. |
| (2) Net of 1.5% commission plus other adjustments.                                                                               |

----

|                                                                                                                                                                                                                                                         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                         |  |  |  |  |  |  |  |  |  |  |  |
| In millions                                                                                                                                                                                                                                             |   | Issued (Redeemed) |   | Date Issued/Redeemed |   | Cash Impact |
| Senior Notes:                                                                                                                                                                                                                                           |   |   |   |   |   |   |   |
|   4.65%, due August 1, 2043 (1)                                                                                                                                                                                                          |   | $ | 300 |  |   | August 2013 |   | $ | 299.9 |  | (3)  |
|   4.10%, due September 18, 2034 (2)                                                                                                                                                                                                           |   | 250 |  |   | September 2014 |   | 249.6 |  | (3)  |
|   3.60%, due August 15, 2025(2)                                                                                                                                                                                                               |   | 150 |  |   | September 2015 |   | 149.9 |  | (3)  |
| Medium-Term Notes:                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
|   5.00%, due December 19, 2013                                                                                                                                                                                                           |   | (100 | ) |   | December 2013 |   | (100.0 | ) |   |
|                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| (1) The net proceeds were used to finance capital expenditures, to repay the balance of $100 million of our 5% Medium-Term Notes listed below, to repay outstanding short-term notes under our unsecured CP program and for general corporate purposes. |
| (2) The net proceeds were used to finance capital expenditures, to repay outstanding short-term unsecured notes under our CP program and for general corporate purposes.                                                                           |
| (3) Net of debt discount.                                                                                                                                                                                                                          |

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                             |   | October 31 |   | October 31 |
| In thousands                                     |   | 2015 |   | Percentage |   | 2014 |   | Percentage |
| Short-term debt                                  |   | $ | 340,000 |  |   | 10 | % |   | $ | 355,000 |  |   | 12 | % |
| Current portion of long-term debt                |   | 40,000 |  |   | 1 | % |   | — |  |   | — | % |
| Long-term debt, principal                        |   | 1,535,000 |  |   | 46 | % |   | 1,425,000 |  |   | 46 | % |
| Total debt                                       |   | 1,915,000 |  |   | 57 | % |   | 1,780,000 |  |   | 58 | % |
| Common stockholders’ equity                |   | 1,426,312 |  |   | 43 | % |   | 1,308,602 |  |   | 42 | % |
| Total capitalization (including short-term debt) |   | $ | 3,341,312 |  |   | 100 | % |   | $ | 3,088,602 |  |   | 100 | % |

----

|                          |
|--------------------------|
|                          |  |  |  |
|                     | S&P |   | Moody's |
| Unsecured long-term debt | A |   | A2 |
| Commercial paper         | A1 |   | P1 |

|         |                                                 |
|---------|-------------------------------------------------|
| • | Failure to make principal or interest payments, |

|         |                                        |
|---------|----------------------------------------|
| • | Bankruptcy, liquidation or insolvency, |

|         |                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------|
| • | Final judgment against us in excess of $1 million that after 60 days is not discharged, satisfied or stayed pending appeal, |

|         |                                                                             |
|---------|-----------------------------------------------------------------------------|
| • | Specified events under the Employee Retirement Income Security Act of 1974, |

|         |                        |
|---------|------------------------|
| • | Change in control, and |

|         |                                                     |
|---------|-----------------------------------------------------|
| • | Failure to observe or perform covenants, including: |

|         |                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------|
| • | Interest coverage of at least 1.75 times. Interest coverage was 3.96 times as of October 31, 2015; |

|         |                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------|
| • | Funded debt cannot exceed 70% of total capitalization. Funded debt was 57% of total capitalization as of October 31, 2015; |

|         |                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Funded debt of all subsidiaries in the aggregate cannot exceed 15% of total capitalization. There is no funded debt of our subsidiaries as of October 31, 2015; |

|         |                                  |
|---------|----------------------------------|
| • | Restrictions on permitted liens; |

|         |                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------|
| • | Restrictions on paying dividends on or repurchasing our stock or making investments in subsidiaries; and |

|         |                                        |
|---------|----------------------------------------|
| • | Restrictions on burdensome agreements. |

----

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        |   | Payments Due by Period |
|                                        |   | Less than |   | 1-3 |   | 3-5 |   | More than |   |   |
| In thousands                                |   | 1 year |   | Years |   | Years |   | 5 Years |   | Total |
| Recorded contractual obligations:           |   |   |   |   |   |   |   |   |   |   |
|                                        |   |   |   |   |   |   |   |   |   |   |
| Long-term debt (1)                          |   | $ | 40,000 |  |   | $ | 35,000 |  |   | $ | 160,000 |  |   | $ | 1,340,000 |  |   | $ | 1,575,000 |  |
| Short-term debt (2)                         |   | 340,000 |  |   | — |  |   | — |  |   | — |  |   | 340,000 |  |
| Total recorded contractual obligations      |   | 380,000 |  |   | 35,000 |  |   | 160,000 |  |   | 1,340,000 |  |   | 1,915,000 |  |
|                                        |   |   |   |   |   |   |   |   |   |   |
| Unrecorded contractual obligations and      |   |   |   |   |   |   |   |   |   |   |
|  commitments: (3)                      |   |   |   |   |   |   |   |   |   |   |
|                                        |   |   |   |   |   |   |   |   |   |   |
| Pipeline and storage capacity (4)           |   | 178,594 |  |   | 439,793 |  |   | 228,134 |  |   | 402,599 |  |   | 1,249,120 |  |
| Gas supply reservation fees (5)             |   | 4,577 |  |   | 165 |  |   | — |  |   | — |  |   | 4,742 |  |
| Gas supply purchase commitments (6)         |   | 65,286 |  |   | 228,922 |  |   | 139,328 |  |   | 638,129 |  |   | 1,071,665 |  |
| Interest on long-term debt (7)              |   | 75,323 |  |   | 216,936 |  |   | 142,705 |  |   | 692,155 |  |   | 1,127,119 |  |
| Capital contributions to joint ventures (8) |   | 115,835 |  |   | 234,269 |  |   | 1,172 |  |   | — |  |   | 351,276 |  |
| Telecommunications and information          |   |   |   |   |   |   |   |   |   |   |
|   technology (9)             |   | 6,164 |  |   | 2,918 |  |   | — |  |   | — |  |   | 9,082 |  |
| Qualified and nonqualified pension plan     |   |   |   |   |   |   |   |   |   |   |
|   funding (10)               |   | 12,170 |  |   | 37,946 |  |   | 13,141 |  |   | — |  |   | 63,257 |  |
| Postretirement benefits plan funding (10)   |   | 1,300 |  |   | 3,600 |  |   | 1,200 |  |   | — |  |   | 6,100 |  |
| Operating leases (11)                       |   | 5,052 |  |   | 13,748 |  |   | 9,060 |  |   | 19,830 |  |   | 47,690 |  |
| Other purchase obligations (12)             |   | 45,577 |  |   | — |  |   | — |  |   | — |  |   | 45,577 |  |
| Surety bonds (11)                           |   | 5,465 |  |   | 1,170 |  |   | — |  |   | — |  |   | 6,635 |  |
| Letters of credit (2)                       |   | 1,641 |  |   | — |  |   | — |  |   | — |  |   | 1,641 |  |
| Total unrecorded contractual obligations    |   |   |   |   |   |   |   |   |   |   |
|   and commitments                 |   | 516,984 |  |   | 1,179,467 |  |   | 534,740 |  |   | 1,752,713 |  |   | 3,983,904 |  |
| Total contractual obligations and           |   |   |   |   |   |   |   |   |   |   |
|   commitments                     |   | $ | 896,984 |  |   | $ | 1,214,467 |  |   | $ | 694,740 |  |   | $ | 3,092,713 |  |   | $ | 5,898,904 |  |

|           |                                                                            |
|-----------|----------------------------------------------------------------------------|
| (1)  | See Note 5 to the consolidated financial statements in this Form 10-K. |

|           |                                                                            |
|-----------|----------------------------------------------------------------------------|
| (2)  | See Note 6 to the consolidated financial statements in this Form 10-K. |

|           |                                                                                                                                                              |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)  | In accordance with generally acceptable accounting principles in the United States (GAAP), these items are not reflected in the Consolidated Balance Sheets. |

|           |                                     |
|-----------|-------------------------------------|
| (4)  | Recoverable through PGA procedures. |

|           |                                                                                 |
|-----------|---------------------------------------------------------------------------------|
| (5)  | Reservation fees are fixed payments and are recoverable through PGA procedures. |

|           |                                                                                                                                                        |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| (6)  | Base load gas supply commitments at market index pricing. For purposes of this table, payments above are calculated at the December 2015 price levels. |

|           |                                                                         |
|-----------|-------------------------------------------------------------------------|
| (7)  | Includes accrued interest of $29.5 million as of October 31, 2015. |

|           |                                                                             |
|-----------|-----------------------------------------------------------------------------|
| (8)  | See Note 13 to the consolidated financial statements in this Form 10-K. |

|           |                                                                                                                                                                                  |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (9)  | Consists primarily of maintenance fees for hardware and software applications, usage fees, local and long-distance data costs, frame relay, and cell phone and pager usage fees. |

|            |                                                                                                                                   |
|------------|-----------------------------------------------------------------------------------------------------------------------------------|
| (10)  | Estimated funding beyond five years is not available. See Note 10 to the consolidated financial statements in this Form 10-K. |

|            |                                                                                                                                                                                    |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (11)  | See Note 9 to the consolidated financial statements in this Form 10-K. Operating lease payments do not include payment for common area maintenance, utilities or tax payments. |

|            |                                                                                 |
|------------|---------------------------------------------------------------------------------|
| (12)  | Consists primarily of pipeline products, vehicles, contractors and merchandise. |

----

----

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |
|                       |   | 2015 |   | 2014 |
| Qualified pension plan     |   | 4.34 | % |   | 4.13 | % |
| Nonqualified pension plans |   | 3.85 | % |   | 3.69 | % |
| Postretirement benefits    |   | 4.38 | % |   | 4.03 | % |

----

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |
|                             |   | Change in |   |   | Impact on 2015 |   |   | Impact on Projected |
| Actuarial Assumption             |   | Assumption |   |   | Benefit Cost |   |   | Benefit Obligation |
|                             |   |   |   |   | Increase (Decrease)In thousands |
| Discount rate                    |   | (0.25)% |   | $ | 674 |   | $ | 7,472 |
| Rate of return on plan assets    |   | (0.25)% |   |   | 787 |   |   | N/A       |
| Rate of increase in compensation |   | 0.25% |   |   | 791 |   |   | 3,740 |

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |
|                          |   |   |   |   | Impact on 2015 |   |   | Impact on Accumulated |
|                          |   | Change in |   |   | Postretirement |   |   | Postretirement Benefit |
| Actuarial Assumption          |   | Assumption |   |   | Benefit Cost |   |   | Obligation |
|                          |   |   |   |   | Increase (Decrease) |
|                          |   |   |   |   | In thousands |
| Discount rate                 |   | (0.25)% |   | $ | 122 |   | $ | 1,128 |
| Rate of return on plan assets |   | (0.25)% |   |   | 67 |   |   | N/A       |
| Health care cost trend rate   |   | 0.25% |   |   | 34 |   |   | N/A       |

----

|                                                                                                                 |
|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                            |   | Qualified |   | Nonqualified |   | Other |
|                                                                                                            |   | Pension |   | Pension |   | Benefits |
| Discount rates used to measure benefit costs in 2016:                                                           |   |   |   |   |   |   |
| Service cost                                                                                                    |   | 4.46 | % |   | N/A       |   | 4.67 | % |
| Interest cost                                                                                                   |   | 3.25 | % |   | 2.98 | % |   | 3.51 | % |
| Discount rate that would have been used to measure service and interest costs under prior actuarial methodology |   | 4.34 | % |   | 3.85 | % |   | 4.38 | % |
|                                                                                                            |   |   |   |   |   |   |
| Reduction in components of expected 2016 benefit costs using specific spot rates:                               |   | Impact in thousands |
| Service cost                                                                                                    |   | $ | 153 |  |   | N/A       |   | $ | 11 |  |
| Interest cost                                                                                                   |   | 3,280 |  |   | $ | 45 |  |   | 320 |  |

----

----

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Fair Value as |
|                      |   | Expected Maturity Date |   |   |   | of October 31, |
| In millions               |   | 2016 |   | 2017 |   | 2018 |   | 2019 |   | 2020 |   |   Thereafter   |   |   Total   |   | 2015 |
| Fixed Rate Long-term Debt |   | $ | 40 |  |   | $ | 35 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 1,500 |  |   | $ | 1,575 |  |   | $ | 1,720.6 |  |
| Average Interest Rate     |   | 2.92 | % |   | 8.51 | % |   | — | % |   | — | % |   | — | % |   | 4.75 | % |   | 4.79 | % |   |   |

----

----

|                                                                                                                |
|----------------------------------------------------------------------------------------------------------------|
|                                                                                                                |  |  |  |  |  |  |  |  |
| In thousands                                                                                                   |   | 2015 |   | 2014 |
| Utility Plant:                                                                                                 |   |   |   |   |
| Utility plant in service                                                                                       |   | $ | 5,426,584 |  |   | $ | 5,011,497 |  |
| Less accumulated depreciation                                                                                  |   | 1,251,940 |  |   | 1,166,922 |  |
| Utility plant in service, net                                                                                  |   | 4,174,644 |  |   | 3,844,575 |  |
| Construction work in progress                                                                                  |   | 170,250 |  |   | 141,693 |  |
| Plant held for future use                                                                                      |   | 3,155 |  |   | 3,155 |  |
| Total utility plant, net                                                                                       |   | 4,348,049 |  |   | 3,989,423 |  |
| Other Physical Property, at cost (net of accumulated depreciation of $926 in 2015 and $904 in 2014)            |   | 332 |  |   | 355 |  |
| Current Assets:                                                                                                |   |   |   |   |
| Cash and cash equivalents                                                                                      |   | 13,744 |  |   | 9,643 |  |
| Trade accounts receivable (1) (less allowance for doubtful accounts of $1,648 in 2015 and $2,152 in 2014) |   | 59,248 |  |   | 65,260 |  |
| Income taxes receivable                                                                                        |   | 11,447 |  |   | 36,100 |  |
| Other receivables                                                                                              |   | 10,667 |  |   | 3,361 |  |
| Unbilled utility revenues                                                                                      |   | 17,422 |  |   | 21,093 |  |
| Inventories:                                                                                                   |   |   |   |   |
| Gas in storage                                                                                                 |   | 68,240 |  |   | 84,081 |  |
| Materials, supplies and merchandise                                                                            |   | 1,251 |  |   | 1,652 |  |
| Gas purchase derivative assets, at fair value                                                                  |   | 1,343 |  |   | 4,898 |  |
| Regulatory assets                                                                                              |   | 10,936 |  |   | 27,837 |  |
| Prepayments                                                                                                    |   | 28,903 |  |   | 39,030 |  |
| Deferred income taxes                                                                                          |   | 32,392 |  |   | 53,418 |  |
| Other current assets                                                                                           |   | 344 |  |   | 326 |  |
| Total current assets                                                                                           |   | 255,937 |  |   | 346,699 |  |
| Noncurrent Assets:                                                                                             |   |   |   |   |
| Equity method investments in non-utility activities                                                            |   | 206,956 |  |   | 170,171 |  |
| Goodwill                                                                                                       |   | 48,852 |  |   | 48,852 |  |
| Regulatory assets                                                                                              |   | 196,726 |  |   | 174,281 |  |
| Income taxes receivable                                                                                        |   | 26,023 |  |   | — |  |
| Marketable securities, at fair value                                                                           |   | 4,666 |  |   | 3,727 |  |
| Overfunded postretirement asset                                                                                |   | 17,770 |  |   | 33,757 |  |
| Other noncurrent assets                                                                                        |   | 5,439 |  |   | 7,042 |  |
| Total noncurrent assets                                                                                        |   | 506,432 |  |   | 437,830 |  |
| Total                                                                                                          |   | $ | 5,110,750 |  |   | $ | 4,774,307 |  |
|                                                                                                           |   |   |   |   |
| (1) See Note 13 for amounts attributable to affiliates.                                                   |   |   |   |   |
|                                                                                                           |   |   |   |   |
| See notes to consolidated financial statements.                                                                |   |   |   |   |

----

|                                                                                                                             |
|-----------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                             |  |  |  |  |  |  |  |  |
| In thousands                                                                                                                |   | 2015 |   | 2014 |
| Capitalization:                                                                                                             |   |   |   |   |
| Stockholders’ equity:                                                                                                 |   |   |   |   |
| Cumulative preferred stock - no par value - 175 shares authorized                                                           |   | $ | — |  |   | $ | — |  |
| Common stock – no par value – shares authorized: 200,000; shares outstanding: 80,883 in 2015 and 78,531 in 2014 |   | 721,419 |  |   | 636,835 |  |
| Retained earnings                                                                                                           |   | 705,748 |  |   | 672,004 |  |
| Accumulated other comprehensive loss                                                                                        |   | (855 | ) |   | (237 | ) |
| Total stockholders’ equity                                                                                            |   | 1,426,312 |  |   | 1,308,602 |  |
| Long-term debt, net                                                                                                         |   | 1,523,677 |  |   | 1,414,484 |  |
| Total capitalization                                                                                                        |   | 2,949,989 |  |   | 2,723,086 |  |
| Current Liabilities:                                                                                                        |   |   |   |   |
| Current maturities of long-term debt                                                                                        |   | 40,000 |  |   | — |  |
| Short-term debt                                                                                                             |   | 340,000 |  |   | 355,000 |  |
| Trade accounts payable (1)                                                                                                  |   | 99,895 |  |   | 85,299 |  |
| Other accounts payable                                                                                                      |   | 52,149 |  |   | 54,349 |  |
| Accrued interest                                                                                                            |   | 29,488 |  |   | 27,982 |  |
| Customers’ deposits                                                                                                   |   | 20,896 |  |   | 19,994 |  |
| General taxes accrued                                                                                                       |   | 27,940 |  |   | 23,828 |  |
| Regulatory liabilities                                                                                                      |   | 13,367 |  |   | 46,231 |  |
| Other current liabilities                                                                                                   |   | 11,861 |  |   | 9,303 |  |
| Total current liabilities                                                                                                   |   | 635,596 |  |   | 621,986 |  |
| Noncurrent Liabilities:                                                                                                     |   |   |   |   |
| Deferred income taxes                                                                                                       |   | 861,615 |  |   | 809,467 |  |
| Unamortized federal investment tax credits                                                                                  |   | 1,027 |  |   | 1,193 |  |
| Accumulated provision for postretirement benefits                                                                           |   | 14,975 |  |   | 15,471 |  |
| Regulatory liabilities                                                                                                      |   | 590,301 |  |   | 558,598 |  |
| Conditional cost of removal obligations                                                                                     |   | 19,712 |  |   | 14,647 |  |
| Other noncurrent liabilities                                                                                                |   | 37,535 |  |   | 29,859 |  |
| Total noncurrent liabilities                                                                                                |   | 1,525,165 |  |   | 1,429,235 |  |
| Commitments and Contingencies (Note 9)                                                                                      |   |  |   |  |
| Total                                                                                                                       |   | $ | 5,110,750 |  |   | $ | 4,774,307 |  |
|                                                                                                                        |   |   |   |   |
| (1) See Note 13 for amounts attributable to affiliates.                                                                |   |   |   |   |
|                                                                                                                        |   |   |   |   |
| See notes to consolidated financial statements.                                                                             |   |   |   |   |

----

|                                                                                                                                                                                                                                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands, except per share amounts                                                                                                                                                                                                |   | 2015 |   | 2014 |   | 2013 |
| Operating Revenues (1)                                                                                                                                                                                                                |   | $ | 1,371,718 |  |   | $ | 1,469,988 |  |   | $ | 1,278,229 |  |
| Cost of Gas (1)                                                                                                                                                                                                                       |   | 644,424 |  |   | 779,780 |  |   | 656,739 |  |
| Margin                                                                                                                                                                                                                                |   | 727,294 |  |   | 690,208 |  |   | 621,490 |  |
| Operating Expenses:                                                                                                                                                                                                                   |   |   |   |   |   |   |
| Operations and maintenance                                                                                                                                                                                                            |   | 294,517 |  |   | 270,877 |  |   | 253,120 |  |
| Depreciation                                                                                                                                                                                                                          |   | 128,704 |  |   | 118,996 |  |   | 112,207 |  |
| General taxes                                                                                                                                                                                                                         |   | 42,110 |  |   | 37,294 |  |   | 34,635 |  |
| Utility income taxes                                                                                                                                                                                                                  |   | 76,934 |  |   | 83,176 |  |   | 77,334 |  |
| Total operating expenses                                                                                                                                                                                                              |   | 542,265 |  |   | 510,343 |  |   | 477,296 |  |
| Operating Income                                                                                                                                                                                                                      |   | 185,029 |  |   | 179,865 |  |   | 144,194 |  |
| Other Income (Expense):                                                                                                                                                                                                               |   |   |   |   |   |   |
| Income from equity method investments                                                                                                                                                                                                 |   | 34,461 |  |   | 32,753 |  |   | 26,056 |  |
| Non-operating income                                                                                                                                                                                                                  |   | 3,164 |  |   | 1,842 |  |   | 2,839 |  |
| Non-operating expense                                                                                                                                                                                                                 |   | (3,724 | ) |   | (4,331 | ) |   | (5,122 | ) |
| Income taxes                                                                                                                                                                                                                          |   | (13,288 | ) |   | (11,642 | ) |   | (8,612 | ) |
| Total other income (expense)                                                                                                                                                                                                          |   | 20,613 |  |   | 18,622 |  |   | 15,161 |  |
| Utility Interest Charges:                                                                                                                                                                                                             |   |   |   |   |   |   |
| Interest on long-term debt                                                                                                                                                                                                            |   | 70,619 |  |   | 61,562 |  |   | 54,158 |  |
| Allowance for borrowed funds used during construction                                                                                                                                                                                 |   | (11,106 | ) |   | (16,427 | ) |   | (30,975 | ) |
| Other                                                                                                                                                                                                                                 |   | 9,118 |  |   | 9,551 |  |   | 1,755 |  |
| Total utility interest charges                                                                                                                                                                                                        |   | 68,631 |  |   | 54,686 |  |   | 24,938 |  |
| Net Income                                                                                                                                                                                                                            |   | 137,011 |  |   | 143,801 |  |   | 134,417 |  |
| Other Comprehensive Income (Loss), net of tax:                                                                                                                                                                                        |   |   |   |   |   |   |
| Unrealized gain (loss) from hedging activities of equity method investments, net of tax of ($1,028), $225 and ($69) for the years ended October 31, 2015, 2014 and 2013, respectively                                                 |   | (1,601 | ) |   | 355 |  |   | (109 | ) |
| Reclassification adjustment of realized (gain) loss from hedging activities of equity method investments included in net income, net of tax of $652, ($177) and $85 for the years ended October 31, 2015, 2014 and 2013, respectively |   | 1,018 |  |   | (284 | ) |   | 130 |  |
| Net current period benefit activities of equity method investments, net of tax of ($23) and ($16) for the years ended October 31, 2015 and 2014, respectively                                                                         |   | (35 | ) |   | (24 | ) |   |   |
| Total other comprehensive income (loss)                                                                                                                                                                                               |   | (618 | ) |   | 47 |  |  | 21 |  |
| Comprehensive Income                                                                                                                                                                                                                  |   | $ | 136,393 |  |   | $ | 143,848 |  |  | $ | 134,438 |  |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |
| Average Shares of Common Stock:                                                                                                                                                                                                       |   |   |   |   |   |   |
| Basic                                                                                                                                                                                                                                 |   | 78,942 |  |   | 77,883 |  |   | 74,884 |  |
| Diluted                                                                                                                                                                                                                               |   | 79,231 |  |   | 78,193 |  |   | 75,333 |  |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |
| Earnings Per Share of Common Stock:                                                                                                                                                                                                   |   |   |   |   |   |   |
| Basic                                                                                                                                                                                                                                 |   | $ | 1.74 |  |   | $ | 1.85 |  |   | $ | 1.80 |  |
| Diluted                                                                                                                                                                                                                               |   | $ | 1.73 |  |   | $ | 1.84 |  |   | $ | 1.78 |  |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |
| (1) See Note 13 for amounts attributable to affiliates.                                                                                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                                                                                                                  |   |   |   |   |   |   |
| See notes to consolidated financial statements.                                                                                                                                                                                       |

----

|                                                                         |
|-------------------------------------------------------------------------|
|                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                                                            |   | 2015 |   | 2014 |   | 2013 |
| Cash Flows from Operating Activities:                                   |   |   |   |   |   |   |
| Net income                                                              |   | $ | 137,011 |  |   | $ | 143,801 |  |   | $ | 134,417 |  |
|   Adjustments to reconcile net income to net cash provided by |   |   |   |   |   |   |
|     operating activities:                                     |   |   |   |   |   |   |
| Depreciation and amortization                                           |   | 140,217 |  |   | 129,343 |  |   | 120,797 |  |
| Provision for doubtful accounts                                         |   | 5,095 |  |   | 6,959 |  |   | 5,314 |  |
| Impairment loss on investment                                           |   | — |  |   | 2,000 |  |   | — |  |
| Net gain on sale of property                                            |   | — |  |   | (817 | ) |   | (349 | ) |
| Income from equity method investments                                   |   | (34,461 | ) |   | (32,753 | ) |   | (26,056 | ) |
| Distributions of earnings from equity method investments                |   | 24,875 |  |   | 24,843 |  |   | 22,139 |  |
| Deferred income taxes, net                                              |   | 73,407 |  |   | 87,136 |  |   | 57,637 |  |
| Changes in assets and liabilities:                                      |   |   |   |   |   |   |
| Gas purchase derivatives, at fair value                                 |   | 3,555 |  |   | (3,064 | ) |   | 1,319 |  |
| Receivables, net                                                        |   | (2,637 | ) |   | 9,785 |  |   | (28,616 | ) |
| Inventories                                                             |   | 16,242 |  |   | (10,079 | ) |   | (2,059 | ) |
| Settlement of legal asset retirement obligations                        |   | (5,563 | ) |   | (3,575 | ) |   | (2,389 | ) |
| Regulatory assets                                                       |   | (14,917 | ) |   | 20,297 |  |   | 43,338 |  |
| Other assets                                                            |   | 16,220 |  |   | (2,829 | ) |   | 4,629 |  |
| Accounts payable                                                        |   | (7,626 | ) |   | 18 |  |   | 2,381 |  |
| Contributions to benefit plans                                          |   | (12,728 | ) |   | (22,516 | ) |   | (22,415 | ) |
| Accrued/deferred postretirement benefit costs                           |   | 28,219 |  |   | 20,446 |  |   | (31,100 | ) |
| Regulatory liabilities                                                  |   | (16,065 | ) |   | 49,468 |  |   | 23,429 |  |
| Other liabilities                                                       |   | 20,791 |  |   | 12,149 |  |   | 10,831 |  |
| Net cash provided by operating activities                               |   | 371,635 |  |   | 430,612 |  |   | 313,247 |  |
|                                                                    |   |   |   |   |   |   |
| Cash Flows from Investing Activities:                                   |   |   |   |   |   |   |
| Utility capital expenditures                                            |   | (443,654 | ) |   | (460,444 | ) |   | (599,999 | ) |
| Allowance for borrowed funds used during construction                   |   | (11,106 | ) |   | (16,427 | ) |   | (30,975 | ) |
| Contributions to equity method investments                              |   | (29,723 | ) |   | (37,642 | ) |   | (41,348 | ) |
| Distributions of capital from equity method investments                 |   | 1,505 |  |   | 3,929 |  |   | 4,700 |  |
| Proceeds from sale of property                                          |   | 717 |  |   | 1,883 |  |   | 1,951 |  |
| Investments in marketable securities                                    |   | (866 | ) |   | (454 | ) |   | (414 | ) |
| Other                                                                   |   | 4,707 |  |   | 4,708 |  |   | 2,609 |  |
| Net cash used in investing activities                                   |   | (478,420 | ) |   | (504,447 | ) |   | (663,476 | ) |

----

|                                                                                            |
|--------------------------------------------------------------------------------------------|
|                                                                                            |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                                                                               |   | 2015 |   | 2014 |   | 2013 |
| Cash Flows from Financing Activities:                                                      |   |   |   |   |   |   |
| Borrowings under credit facility                                                           |   | $ | — |  |   | $ | — |  |   | $ | 10,000 |  |
| Repayments under credit facility                                                           |   | — |  |   | — |  |   | (10,000 | ) |
| Net (repayments) borrowings - commercial paper                                             |   | (15,000 | ) |   | (45,000 | ) |   | 35,000 |  |
| Proceeds from issuance of long-term debt, net of discount                                  |   | 149,902 |  |   | 249,565 |  |   | 299,856 |  |
| Repayment of long-term debt                                                                |   | — |  |   | (100,000 | ) |   | — |  |
| Expenses related to issuance of debt                                                       |   | (1,330 | ) |   | (2,871 | ) |   | (3,250 | ) |
| Proceeds from issuance of common stock, net of expenses                                    |   | 53,707 |  |   | 47,290 |  |   | 92,271 |  |
| Issuance of common stock through dividend reinvestment and  employee stock plans |   | 26,992 |  |   | 25,556 |  |   | 24,610 |  |
| Dividends paid                                                                             |   | (103,390 | ) |   | (99,151 | ) |   | (92,146 | ) |
| Other                                                                                      |   | 5 |  |   | 26 |  |   | (8 | ) |
| Net cash provided by financing activities                                                  |   | 110,886 |  |   | 75,415 |  |   | 356,333 |  |
| Net Increase in Cash and Cash Equivalents                                                  |   | 4,101 |  |   | 1,580 |  |   | 6,104 |  |
| Cash and Cash Equivalents at Beginning of Year                                             |   | 9,643 |  |   | 8,063 |  |   | 1,959 |  |
| Cash and Cash Equivalents at End of Year                                                   |   | $ | 13,744 |  |   | $ | 9,643 |  |   | $ | 8,063 |  |
|                                                                                       |   |   |   |   |   |   |
| Cash Paid During the Year for:                                                             |   |   |   |   |   |   |
| Interest                                                                                   |   | $ | 71,519 |  |   | $ | 64,276 |  |   | $ | 50,275 |  |
|                                                                                       |   |   |   |   |   |   |
| Income Taxes:                                                                              |   |   |   |   |   |   |
| Income taxes paid                                                                          |   | $ | 3,680 |  |   | $ | 10,840 |  |   | $ | 5,760 |  |
| Income taxes refunded                                                                      |   | 530 |  |   | 30 |  |   | 169 |  |
| Income taxes, net                                                                          |   | $ | 3,150 |  |   | $ | 10,810 |  |   | $ | 5,591 |  |
|                                                                                       |   |   |   |   |   |   |
| Noncash Investing and Financing Activities:                                                |   |   |   |   |   |   |
| Accrued construction expenditures                                                          |   | $ | 58,868 |  |   | $ | 38,869 |  |   | $ | 39,389 |  |
|                                                                                       |   |   |   |   |   |   |
| See notes to consolidated financial statements.                                            |

----

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands, except per share amounts          |   | CommonStock |   | RetainedEarnings |   | AccumulatedOtherComprehensiveIncome (Loss) |   | Total |
| Balance, October 31, 2012                       |   | $ | 442,461 |  |   | $ | 584,848 |  |   | $ | (305 | ) |   | $ | 1,027,004 |  |
|                                            |   |   |   |   |   |   |   |   |
| Comprehensive Income:                           |   |   |   |   |   |   |   |   |
| Net income                                      |   |   |   | 134,417 |  |   |   |   | 134,417 |  |
| Other comprehensive income                      |   |   |   |   |   | 21 |  |   | 21 |  |
| Total comprehensive income                      |   |   |   |   |   |   |   | 134,438 |  |
| Common Stock Issued                             |   | 119,552 |  |   |   |   |   |   | 119,552 |  |
| Expenses from Issuance of Common Stock          |   | (369 | ) |   |   |   |   |   | (369 | ) |
| Tax Benefit from Dividends Paid on ESOP Shares  |   |   |   | 117 |  |   |   |   | 117 |  |
| Dividends Declared ($1.23 per share)            |   |   |   | (92,146 | ) |   |   |   | (92,146 | ) |
| Balance, October 31, 2013                       |   | 561,644 |  |   | 627,236 |  |   | (284 | ) |   | 1,188,596 |  |
|                                            |   |   |   |   |   |   |   |   |
| Comprehensive Income:                           |   |   |   |   |   |   |   |   |
| Net income                                      |   |   |   | 143,801 |  |   |   |   | 143,801 |  |
| Other comprehensive income                      |   |   |   |   |   | 47 |  |   | 47 |  |
| Total comprehensive income                      |   |   |   |   |   |   |   | 143,848 |  |
| Common Stock Issued                             |   | 75,203 |  |   |   |   |   |   | 75,203 |  |
| Expenses from Issuance of Common Stock          |   | (12 | ) |   |   |   |   |   | (12 | ) |
| Tax Benefit from Dividends Paid on ESOP Shares  |   |   |   | 118 |  |   |   |   | 118 |  |
| Dividends Declared ($1.27 per share)            |   |   |   | (99,151 | ) |   |   |   | (99,151 | ) |
| Balance, October 31, 2014                       |   | 636,835 |  |   | 672,004 |  |   | (237 | ) |   | 1,308,602 |  |
|                                            |   |   |   |   |   |   |   |   |
| Comprehensive Income:                           |   |   |   |   |   |   |   |   |
| Net income                                      |   |   |   | 137,011 |  |   |   |   | 137,011 |  |
| Other comprehensive loss                        |   |   |   |   |   | (618 | ) |   | (618 | ) |
| Total comprehensive income                      |   |   |   |   |   |   |   | 136,393 |  |
| Common Stock Issued                             |   | 84,966 |  |   |   |   |   |   | 84,966 |  |
| Expenses from Issuance of Common Stock          |   | (382 | ) |   |   |   |   |   | (382 | ) |
| Tax Benefit from Dividends Paid on ESOP Shares  |   |   |   | 123 |  |   |   |   | 123 |  |
| Dividends Declared ($1.31 per share)            |   |   |   | (103,390 | ) |   |   |   | (103,390 | ) |
| Balance, October 31, 2015                       |   | $ | 721,419 |  |   | $ | 705,748 |  |   | $ | (855 | ) |   | $ | 1,426,312 |  |
|                                            |   |   |   |   |   |   |   |   |
| See notes to consolidated financial statements. |

|                                                 |
|-------------------------------------------------|
|                                                 |  |  |  |  |  |  |  |  |
| In thousands                                    |   | 2015 |   | 2014 |
| Hedging activities of equity method investments |   | $ | (796 | ) |   | $ | (213 | ) |
| Benefit activities of equity method investments |   | (59 | ) |   | (24 | ) |

----

----

----

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |
| In thousands                         |   | 2015 |   | 2014 |
| Intangible plant                     |   | $ | 3,374 |  |   | $ | 3,374 |  |
| Other storage plant                  |   | 180,960 |  |   | 180,058 |  |
| Transmission plant                   |   | 2,024,264 |  |   | 1,787,990 |  |
| Distribution plant                   |   | 2,766,871 |  |   | 2,623,560 |  |
| General plant                        |   | 452,301 |  |   | 421,763 |  |
| Asset retirement cost                |   | 4,159 |  |   | 11 |  |
| Contributions in aid of construction |   | (5,345 | ) |   | (5,259 | ) |
| Total utility plant in service       |   | 5,426,584 |  |   | 5,011,497 |  |
| Less accumulated depreciation        |   | (1,251,940 | ) |   | (1,166,922 | ) |
| Total utility plant in service, net  |   | 4,174,644 |  |   | 3,844,575 |  |
| Construction work in progress        |   | 170,250 |  |   | 141,693 |  |
| Plant held for future use            |   | 3,155 |  |   | 3,155 |  |
| Total utility plant, net             |   | $ | 4,348,049 |  |   | $ | 3,989,423 |  |

|              |
|--------------|
|              |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands |  | 2015 |  | 2014 |  | 2013 |
| AFUDC        |  | $ | 11,106 |  |  | $ | 16,427 |  |  | $ | 30,975 |  |

----

|                                                        |
|--------------------------------------------------------|
|                                                        |  |  |  |  |  |  |  |  |
| In thousands                                           |   | 2015 |   | 2014 |
| Gas receivables                                        |   | $ | 57,759 |  |   | $ | 64,400 |  |
| Non-regulated merchandise and service work receivables |   | 3,137 |  |   | 3,012 |  |
| Allowance for doubtful accounts                        |   | (1,648 | ) |   | (2,152 | ) |
| Trade accounts receivable                              |   | $ | 59,248 |  |   | $ | 65,260 |  |

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                                |   | 2015 |   | 2014 |   | 2013 |
| Balance at beginning of year                |   | $ | 2,152 |  |   | $ | 1,604 |  |   | $ | 1,579 |  |
| Additions charged to uncollectibles expense |   | 5,095 |  |   | 6,959 |  |   | 5,314 |  |
| Accounts written off, net of recoveries     |   | (5,599 | ) |   | (6,411 | ) |   | (5,289 | ) |
| Balance at end of year                      |   | $ | 1,648 |  |   | $ | 2,152 |  |   | $ | 1,604 |  |

----

----

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                             |   | 2015 |   | 2014 |
| In thousands                                     |   | Cost |   | Fair Value |   | Cost |   | Fair Value |
| Current trading securities:                      |   |   |   |   |   |   |   |   |
| Money markets                                    |   | $ | 51 |  |   | $ | 51 |  |   | $ | 22 |  |   | $ | 22 |  |
| Mutual funds                                     |   | 114 |  |   | 185 |  |   | 106 |  |   | 192 |  |
|   Total current trading securities     |   | 165 |  |   | 236 |  |   | 128 |  |   | 214 |  |
| Noncurrent trading securities:                   |   |   |   |   |   |   |   |   |
| Money markets                                    |   | 465 |  |   | 465 |  |   | 447 |  |   | 447 |  |
| Mutual funds                                     |   | 3,625 |  |   | 4,201 |  |   | 2,598 |  |   | 3,280 |  |
|   Total noncurrent trading securities  |   | 4,090 |  |   | 4,666 |  |   | 3,045 |  |   | 3,727 |  |
|     Total trading securities |   | $ | 4,255 |  |   | $ | 4,902 |  |   | $ | 3,173 |  |   | $ | 3,941 |  |

----

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |  |  |
| In thousands                      |   | 2015 |   | 2014 |
| Regulatory non-legal AROs         |   | $ | 521,478 |  |   | $ | 506,574 |  |
| Conditional AROs                  |   | 19,712 |  |   | 14,647 |  |
| Total cost of removal obligations |   | $ | 541,190 |  |   | $ | 521,221 |  |

|                                        |
|----------------------------------------|
|                                        |  |  |  |  |  |  |  |  |
| In thousands                           |   | 2015 |   | 2014 |
| Beginning of period                    |   | $ | 14,647 |  |   | $ | 27,016 |  |
| Liabilities incurred during the period |   | 4,663 |  |   | 2,108 |  |
| Liabilities settled during the period  |   | (5,563 | ) |   | (3,576 | ) |
| Accretion                              |   | 924 |  |   | 1,548 |  |
| Adjustment to estimated cash flows     |   | 5,041 |  |   | (12,449 | ) |
| End of period                          |   | $ | 19,712 |  |   | $ | 14,647 |  |

----

----

----

|                                                                                                                                                                                                                                                                                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                       |  |  |  |
| Guidance                                                                                                                                                                                                                                                                              | Description | Effective date | Effect on the financial statements or other significant matters |
| ASU 2015-03, April 2015, Interest: Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30)                                                                                                                                                     | The guidance is part of the Financial Accounting Standards Board's (FASB) simplification initiative to reduce complexity in accounting standards. The amendment requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this amendment. | Annual periods beginning after December 15, 2015, and interim periods within those fiscal years, with early adoption permitted for financial statements that have not been previously issued. While the guidance would have been effective for us beginning November 1, 2016, we elected to adopt this guidance effective August 1, 2015. | The adoption of this guidance had no impact on our results of operations or cash flows. We retrospectively changed the presentation of the balance sheet line items current and noncurrent "Regulatory assets," "Other noncurrent assets" and "Long-term debt, net." |
| ASU 2015-15, August 2015, Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements - Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting | The guidance provides clarification to ASU 2015-03 for debt issuance costs for line-of-credit arrangements, specifically that the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. | Effective upon adoption of ASU 2015-03, as adopted August 1, 2015. | The adoption of this guidance had no impact on our results of operations or cash flows. |
| ASU 2015-07, May 2015, Fair Value Measurement: Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent) (Topic 820)                                                                                                               | The guidance amends the required disclosure of investments for which fair value is measured at NAV per share (or its equivalent). The amendments remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV per share practical expedient. | Annual periods beginning after December 15, 2015, and interim periods within those fiscal years, with retrospective application to all periods presented and early adoption permitted. While the guidance would have been effective for us beginning November 1, 2016, we elected to adopt this guidance effective August 1, 2015. | The adoption of this guidance had no impact on our financial position, results of operations or cash flows. We have disclosed certain benefit plan assets under the new guidance. |

----

|                                                                                                                                                                                          |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                          |  |  |  |
| Guidance                                                                                                                                                                                 | Description | Effective date | Effect on the financial statements or other significant matters |
| ASU 2015-12, July 2015, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962) and Health and Welfare Benefit Plans (Topic 965) | The FASB issued a three-part standard providing guidance on certain aspects of the accounting by employee benefit plans. The ASU: (1) requires a pension plan to use contract value as the only measure for fully benefit-responsive investment contracts; (2) simplifies and increases the effectiveness of the investment disclosure requirements for employee benefit plans by grouping investments by general type; and (3) provides benefit plans with a measurement-date practical expedient on a month-end date nearest to the employer's fiscal year end. | Annual periods beginning after December 15, 2015 with early adoption permitted. The amendments in parts (1) and (2) are retrospectively applied to all periods presented, while the amendment in part (3) is applied prospectively. While the guidance would have been effective for us beginning November 1, 2016, we elected to adopt this guidance effective August 1, 2015. | The adoption of this guidance had no impact on our financial position, results of operations or cash flows. We have disclosed certain benefit plan assets under the new guidance of part (2). Parts (1) and (2) are applicable to our future Form 11-K filing; part (3) is not applicable to us. |

|                                                                                                  |
|--------------------------------------------------------------------------------------------------|
|                                                                                                  |  |  |  |
| Guidance                                                                                         | Description | Effective date | Effect on the financial statements or other significant matters |
| ASU 2014-09, May 2014, Revenue from Contracts with Customers (Topic 606)                         | Under the new standard, entities will recognize revenue to depict the transfer of goods and services to customers in amounts that reflect the payment to which the entity expects to be entitled in exchange for those goods or services. The disclosure requirements will provide information about the nature, amount, timing and uncertainty of revenue and cash flows from an entity’s contracts with customers. An entity may choose to adopt the new standard on either a full retrospective basis (practical expedients available) or through a cumulative effect adjustment to retained earnings as of the start of the first period of adoption. | Annual periods beginning after December 15, 2017 (beginning November 1, 2018 for us) and interim periods within that period, with early adoption permitted for annual periods beginning after December 15, 2016. | We are currently evaluating the effect on our financial position, results of operations and cash flows, as well as the transition approach we will take. The evaluation includes identifying revenue streams by like contracts to allow for ease of implementation. In our evaluation, we are following the efforts of an accounting utility subgroup and its issuance of a revenue implementation guide. |
| ASU 2014-15, August 2014, Presentation of Financial Statements - Going Concern (Subtopic 205-40) | The amendment provides guidance on determining when and how reporting entities must disclose going concern uncertainties in their financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date of issuance of the entity's financial statements. An entity must provide certain disclosures if there is a "substantial doubt about the entity's ability to continue as a going concern." | Annual periods ending after December 15, 2016 (October 31, 2017 for us), and interim and annual periods thereafter; early adoption is permitted. | The adoption of this guidance will have no impact on our financial position, results of operations or cash flows. It will require establishing a going concern assessment process to meet the standard. |

----

|                                                                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                          |  |  |  |
| Guidance                                                                                                                                                                 | Description | Effective date | Effect on the financial statements or other significant matters |
| ASU 2015-05, April 2015, Intangibles -Goodwill and Other - Internal-Use Software: Customer's Accounting for Fees Paid in a Cloud Computing Arrangement (Subtopic 350-40) | The guidance amends ASC 350-40 to provide customers with guidance on determining whether a cloud computing arrangement contains a software license that should be accounted for as internal-use software. The guidance applies only to hosting arrangements if both of the following criteria are met: (a) the customer has the contractual right to take possession of the software at any time during the hosting period without significant penalty and (b) it is feasible for the customer to run the software on its own hardware or contract with another party to host the software. | Annual periods (and interim periods within those periods) beginning after December 15, 2015 (November 1, 2016 for us), with early adoption permitted. Entities may adopt the guidance retrospectively or prospectively to arrangements entered into, or materially modified, after the effective date. | We are currently evaluating the effect on our financial position, results of operations and cash flows. |
| ASU 2015-17, November 2015, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes                                                                     | The guidance eliminates the current requirement to present deferred tax assets and liabilities as current and noncurrent amounts in a classified balance sheet. The new standard requires deferred tax liabilities and assets be classified as noncurrent. The current requirement that deferred tax liabilities and assets be presented as a single amount remains unchanged. | Annual periods (and interim periods within those periods) beginning after December 15, 2016, early adoption is permitted. | The adoption of this guidance will have no impact on our results of operations or cash flows. The reclassification of amounts from current to noncurrent will affect presentation of our financial position. |

----

----

|                                                                                                                 |
|-----------------------------------------------------------------------------------------------------------------|
|                                                                                                                 |  |  |  |  |  |  |  |  |
| In thousands                                                                                                    |   | 2015 |   | 2014 |
| Regulatory Assets:                                                                                              |   |   |   |   |
| Current:                                                                                                        |   |   |   |   |
|   Unamortized debt expense on reacquired debt                                                         |   | $ | 238 |  |   | $ | 239 |  |
|   Amounts due from customers                                                                          |   | — |  |   | 16,108 |  |
|   Environmental costs                                                                                 |   | 1,513 |  |   | 1,568 |  |
|   Deferred operations and maintenance expenses                                                        |   | 847 |  |   | 916 |  |
|   Deferred pipeline integrity expenses                                                                |   | 3,470 |  |   | 3,470 |  |
|   Deferred pension and other retirement benefit costs                                                 |   | 2,757 |  |   | 2,769 |  |
|   Robeson LNG development costs                                                                       |   | 381 |  |   | 917 |  |
|   Other                                                                                               |   | 1,730 |  |   | 1,850 |  |
|   Total current                                                                                       |   | 10,936 |  |   | 27,837 |  |
|                                                                                                            |   |   |   |   |
|   Noncurrent:                                                                                         |   |   |   |   |
|     Unamortized debt expense on reacquired debt                                             |   | 4,666 |  |   | 4,904 |  |
|     Environmental costs                                                                     |   | 5,107 |  |   | 6,470 |  |
|     Deferred operations and maintenance expenses                                            |   | 3,997 |  |   | 4,721 |  |
|     Deferred pipeline integrity expenses                                                    |   | 29,824 |  |   | 24,694 |  |
|     Deferred pension and other retirement benefits costs                                    |   | 17,861 |  |   | 18,799 |  |
|     Amounts not yet recognized as a component of pension and other retirement benefit costs |   | 114,854 |  |   | 94,265 |  |
|     Regulatory cost of removal asset                                                        |   | 19,087 |  |   | 18,275 |  |
|     Robeson LNG development costs                                                           |   | 127 |  |   | 509 |  |
|     Other                                                                                   |   | 1,203 |  |   | 1,644 |  |
|   Total noncurrent                                                                                    |   | 196,726 |  |   | 174,281 |  |
|     Total                                                                                   |   | $ | 207,662 |  |   | $ | 202,118 |  |

|                                                                                                     |
|-----------------------------------------------------------------------------------------------------|
|                                                                                                     |  |  |  |  |  |  |  |  |
| Regulatory Liabilities:                                                                             |   |   |   |   |
| Current:                                                                                            |   |   |   |   |
|   Amounts due to customers                                                                |   | $ | 13,367 |  |   | $ | 46,231 |  |
|                                                                                                |   |   |   |   |
| Noncurrent:                                                                                         |   |   |   |   |
|   Regulatory cost of removal obligations                                                  |   | 521,478 |  |   | 506,574 |  |
|   Deferred income taxes                                                                   |   | 68,738 |  |   | 51,930 |  |
|   Amounts not yet recognized as a component of pension and other retirement benefit costs |   | 85 |  |   | 94 |  |
| Total noncurrent                                                                                    |   | 590,301 |  |   | 558,598 |  |
|   Total                                                                                   |   | $ | 603,668 |  |   | $ | 604,829 |  |

----

----

|         |                                                                                                                                                                                                                            |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Updated and increased rates and charges based on an overall rate base of $1.8 billion, an equity capital structure component of 50.7% and a return on common equity of 10% and an overall rate of return of 7.51%. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Increased total annual revenues of $30.7 million, a 3.58% increase in total revenues, or .7% annual increase, including $16.8 million related to gas utility margin and $13.8 million related to increased fixed gas costs, and annual pre-tax income of $24.2 million after taking into account revised depreciation rates and changes to regulatory asset amortizations. |

|         |                                                                                                                                                                                                                                        |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Implementation of a new IMR designed to separately track and recover annually outside of general rate cases the costs associated with capital expenditures incurred to comply with federal pipeline safety and integrity requirements. |

|         |                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Implementation of lower depreciation rates that provide increased annual pre-tax income of $10.9 million. These new lower rates reflect the most recent study conducted in 2009, as discussed in Note 1 to the consolidated financial statements. |

|         |                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Amortization and collection of $1.2 million of certain non-real estate costs associated with the initial development of the Robeson County LNG facility as discussed above. |

|         |                                                                                                                                                                                                                   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Amortization and collection of certain environmental expenses and pipeline safety and integrity compliance expenses through August 31, 2013 that had been deferred since our last general rate case in 2008. |

|         |                                                                                                      |
|---------|------------------------------------------------------------------------------------------------------|
| • | Provision for ongoing increased annual contributions to fund pipeline safety and integrity research. |

|         |                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Future adjustments to rates to recognize the lower state corporate income taxes from North Carolina legislation for fiscal years beginning November 1, 2014 and November 1, 2015. |

----

|         |                                                                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Semi-annual IMR rate adjustments each December 1 and June 1, starting December 1, 2015, based on eligible capital investments in integrity and safety projects closed to plant as of September 30 and March 31. |

|         |                                                                        |
|---------|------------------------------------------------------------------------|
| • | Extension of the IMR tariff from October 31, 2017 to October 31, 2019. |

|         |                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------|
| • | An established procedural process and time line for NCUC Public Staff’s annual review of our IMR filings. |

|         |                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Fixed percentages to quantify various classes of system integrity expenditures to be recovered through the IMR with the remaining to be recovered through a future rate case: |

|         |                                                          |
|---------|----------------------------------------------------------|
| • | Transmission integrity: 85% IMR / 15% rate case. |

|         |                                                          |
|---------|----------------------------------------------------------|
| • | Distribution integrity: 90% IMR / 10% rate case. |

|         |                                                                                |
|---------|--------------------------------------------------------------------------------|
| • | Right-of-way clearing for integrity projects: 15% IMR / 85% rate case. |

|         |                                                                    |
|---------|--------------------------------------------------------------------|
| • | Work and asset management system: 68% IMR / 32% rate case. |

|         |                          |
|---------|--------------------------|
| • | Tax-related adjustments. |

|         |                                                                                                |
|---------|------------------------------------------------------------------------------------------------|
| • | An immaterial reduction in IMR margin, which we recorded in the fourth fiscal quarter of 2015. |

----

----

----

|                                               |
|-----------------------------------------------|
|                                               |  |  |  |  |  |  |  |  |  |  |  |  |
| In millions                                   |   | 2015 |   | 2014 |   | 2013 |
| Allocated to customers as gas cost reductions |   | $ | 60.1 |  |   | $ | 72.2 |  |   | $ | 26.9 |  |
| Margin allocated to us                        |   | 21.1 |  |   | 25.4 |  |   | 9.0 |  |
| Margin from secondary market activity         |   | $ | 81.2 |  |   | $ | 97.6 |  |   | $ | 35.9 |  |

----

|                                                                         |
|-------------------------------------------------------------------------|
|                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands, except per share amounts                                  |   | 2015 |   | 2014 |   | 2013 |
| Net Income                                                              |   | $ | 137,011 |  |   | $ | 143,801 |  |   | $ | 134,417 |  |
|                                                                    |   |   |   |   |   |   |
| Average shares of common stock outstanding for basic earnings per share |   | 78,942 |  |   | 77,883 |  |   | 74,884 |  |
| Contingently issuable shares under incentive compensation plans         |   | 289 |  |   | 310 |  |   | 289 |  |
| Contingently issuable shares under forward sale agreements              |   | — |  |   | — |  |   | 160 |  |
| Average shares of dilutive stock                                        |   | 79,231 |  |   | 78,193 |  |   | 75,333 |  |
|                                                                    |   |   |   |   |   |   |
| Earnings Per Share of Common Stock:                                     |   |   |   |   |   |   |
| Basic                                                                   |   | $ | 1.74 |  |   | $ | 1.85 |  |   | $ | 1.80 |  |
| Diluted                                                                 |   | $ | 1.73 |  |   | $ | 1.84 |  |   | $ | 1.78 |  |

----

|                                          |
|------------------------------------------|
|                                          |  |  |  |  |  |  |  |  |  |  |  |  |
|                                     |   | Long-Term Debt as of October 31, 2015 |
| In thousands                             |   | Principal |   | Unamortized Debt Issuance Expenses and Discounts |   | Total |
| Senior Notes:                            |   |   |   |   |   |   |
| 2.92%, due June 6, 2016             |   | $ | 40,000 |  |   | $ | (40 | ) |   | $ | 39,960 |  |
| 8.51%, due September 30, 2017       |   | 35,000 |  |   | — |  |   | 35,000 |  |
| 4.24%, due June 6, 2021             |   | 160,000 |  |   | (752 | ) |   | 159,248 |  |
| 3.47%, due July 16, 2027            |   | 100,000 |  |   | (638 | ) |   | 99,362 |  |
| 3.57%, due July 16, 2027            |   | 200,000 |  |   | (1,307 | ) |   | 198,693 |  |
| 4.10%, due September 18, 2034            |   | 250,000 |  |   | (2,644 | ) |   | 247,356 |  |
| 4.65%, due August 1, 2043           |   | 300,000 |  |   | (3,040 | ) |   | 296,960 |  |
|   3.60%, due September 1, 2025 |   | 150,000 |  |   | (1,382 | ) |   | 148,618 |  |
| Medium-Term Notes:                       |   |   |   |   |   |  |  |
| 6.87%, due October 6, 2023          |   | 45,000 |  |   | (115 | ) |   | 44,885 |  |
| 8.45%, due September 19, 2024       |   | 40,000 |  |   | (115 | ) |   | 39,885 |  |
| 7.40%, due October 3, 2025          |   | 55,000 |  |   | (171 | ) |   | 54,829 |  |
| 7.50%, due October 9, 2026          |   | 40,000 |  |   | (126 | ) |   | 39,874 |  |
| 7.95%, due September 14, 2029       |   | 60,000 |  |   | (273 | ) |   | 59,727 |  |
| 6.00%, due December 19, 2033        |   | 100,000 |  |   | (720 | ) |   | 99,280 |  |
| Total                                    |   | 1,575,000 |  |   | (11,323 | ) |   | 1,563,677 |  |
| Less current maturities                  |   | 40,000 |  |   | — |  |   | 40,000 |  |
| Total                                    |   | $ | 1,535,000 |  |   | $ | (11,323 | ) |   | $ | 1,523,677 |  |

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |
|                               |   | Long-Term Debt as of October 31, 2014 |
| In thousands                       |   | Principal |   | Unamortized Debt Issuance Expenses and Discounts |   | Total |
| Senior Notes:                      |   |   |   |   |   |   |
| 2.92%, due June 6, 2016       |   | $ | 40,000 |  |   | $ | (107 | ) |   | $ | 39,893 |  |
| 8.51%, due September 30, 2017 |   | 35,000 |  |   | — |  |   | 35,000 |  |
| 4.24%, due June 6, 2021       |   | 160,000 |  |   | (887 | ) |   | 159,113 |  |
| 3.47%, due July 16, 2027      |   | 100,000 |  |   | (693 | ) |   | 99,307 |  |
| 3.57%, due July 16, 2027      |   | 200,000 |  |   | (1,418 | ) |   | 198,582 |  |
| 4.10%, due September 18, 2034      |   | 250,000 |  |   | (2,644 | ) |   | 247,356 |  |
| 4.65%, due August 1, 2043     |   | 300,000 |  |   | (3,132 | ) |   | 296,868 |  |
| Medium-Term Notes:                 |   |   |   |   |   |   |
| 6.87%, due October 6, 2023    |   | 45,000 |  |   | (129 | ) |   | 44,871 |  |
| 8.45%, due September 19, 2024 |   | 40,000 |  |   | (127 | ) |   | 39,873 |  |
| 7.40%, due October 3, 2025    |   | 55,000 |  |   | (189 | ) |   | 54,811 |  |
| 7.50%, due October 9, 2026    |   | 40,000 |  |   | (138 | ) |   | 39,862 |  |
| 7.95%, due September 14, 2029 |   | 60,000 |  |   | (292 | ) |   | 59,708 |  |
| 6.00%, due December 19, 2033  |   | 100,000 |  |   | (760 | ) |   | 99,240 |  |
| Total                              |   | 1,425,000 |  |   | (10,516 | ) |   | 1,414,484 |  |
| Less current maturities            |   | — |  |   | — |  |   | — |  |
| Total                              |   | $ | 1,425,000 |  |   | $ | (10,516 | ) |   | $ | 1,414,484 |  |

----

|              |
|--------------|
|              |  |  |  |
| In thousands |   |
| 2016         | $ | 40,000 |  |
| 2017         | 35,000 |  |
| 2018         | — |  |
| 2019         | — |  |
| 2020         | — |  |
| Thereafter   | 1,500,000 |  |
| Total        | $ | 1,575,000 |  |

----

|         |                                                 |
|---------|-------------------------------------------------|
| • | Failure to make principal or interest payments, |

|         |                                        |
|---------|----------------------------------------|
| • | Bankruptcy, liquidation or insolvency, |

|         |                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------|
| • | Final judgment against us in excess of $1 million that after 60 days is not discharged, satisfied or stayed pending appeal, |

|         |                                                                             |
|---------|-----------------------------------------------------------------------------|
| • | Specified events under the Employee Retirement Income Security Act of 1974, |

|         |                        |
|---------|------------------------|
| • | Change in control, and |

|         |                                                     |
|---------|-----------------------------------------------------|
| • | Failure to observe or perform covenants, including: |

|         |                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------|
| • | Interest coverage of at least 1.75 times. Interest coverage was 3.96 times as of October 31, 2015; |

|         |                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------|
| • | Funded debt cannot exceed 70% of total capitalization. Funded debt was 57% of total capitalization as of October 31, 2015; |

|         |                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Funded debt of all subsidiaries in the aggregate cannot exceed 15% of total capitalization. There is no funded debt of our subsidiaries as of October 31, 2015; |

|         |                                  |
|---------|----------------------------------|
| • | Restrictions on permitted liens; |

|         |                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------|
| • | Restrictions on paying dividends on or repurchasing our stock or making investments in subsidiaries; and |

|         |                                        |
|---------|----------------------------------------|
| • | Restrictions on burdensome agreements. |

----

|                                                                    |
|--------------------------------------------------------------------|
|                                                                    |  |  |  |
| In thousands                                                       |   |
|       Minimum amount outstanding     | $ | 230,000 |  |
|       Maximum amount outstanding     | $ | 580,000 |  |
|       Minimum interest rate          | .15 | % |
|       Maximum interest rate          | .30 | % |
|       Weighted average interest rate | .21 | % |

|                                                                                  |
|----------------------------------------------------------------------------------|
|                                                                                  |  |  |  |  |  |  |  |
| In thousands                                                                     |   |     Shares     |   |       Amount       |
| Balance, October 31, 2012                                                        |   | 72,250 |  |   | $ | 442,461 |  |
| Issued to participants in the Employee Stock Purchase Plan (ESPP)                |   | 33 |  |   | 1,056 |  |
| Issued to the Dividend Reinvestment and Stock Purchase Plan (DRIP)               |   | 720 |  |   | 22,791 |  |
| Issued to participants in the Incentive Compensation Plan (ICP)                  |   | 96 |  |   | 3,065 |  |
| Issuance of common stock through public share offering, net of underwriting fees |   | 3,000 |  |   | 92,640 |  |
|   Costs from issuance of common stock                                  |   | — |  |   | (369 | ) |
| Balance, October 31, 2013                                                        |   | 76,099 |  |   | 561,644 |  |
| Issued to ESPP                                                                   |   | 34 |  |   | 1,143 |  |
| Issued to DRIP                                                                   |   | 698 |  |   | 23,443 |  |
| Issued to ICP                                                                    |   | 100 |  |   | 3,315 |  |
| Issuance of common stock through forward sale agreements, net of expenses        |   | 1,600 |  |   | 47,290 |  |
| Balance, October 31, 2014                                                        |   | 78,531 |  |   | 636,835 |  |
| Issued to ESPP                                                                   |   | 31 |  |  | 1,239 |  |
| Issued to DRIP                                                                   |   | 669 |  |  | 24,679 |  |
| Issued to ICP                                                                    |   | 130 |  |  | 4,964 |  |
| Issuance of common stock through forward sale agreements, net of expenses        |   | 1,522 |  |  | 53,702 |  |
| Balance, October 31, 2015                                                        |   | 80,883 |  |   | $ | 721,419 |  |

----

----

|              |
|--------------|
|              |  |  |
| In thousands |   |
| ESPP         | 145 |  |
| DRIP         | 171 |  |
| ICP          | 820 |  |
| Total        | 1,136 |  |

|                                                                                                          |
|----------------------------------------------------------------------------------------------------------|
|                                                                                                          |  |  |  |  |  |  |  |  |
| Changes in Accumulated OCIL (1)                                                                          |
|                                                                                                     |   |   |   |   |
| In thousands                                                                                             |   | 2015 |   | 2014 |
| Accumulated OCIL beginning balance, net of tax                                                           |   | $ | (237 | ) |   | $ | (284 | ) |
| Hedging activities of equity method investments:                                                         |   |   |   |   |
|   OCIL before reclassifications, net of tax                                                    |   | (1,601 | ) |   | 355 |  |
|   Amounts reclassified from accumulated OCIL, net of tax                                       |   | 1,018 |  |   | (284 | ) |
|   Total current period activity of hedging activities of equity method investments, net of tax |   | (583 | ) |   | 71 |  |
| Net current period benefit activities of equity method investments, net of tax                           |   | (35 | ) |   | (24 | ) |
| Accumulated OCIL ending balance, net of tax                                                              |   | $ | (855 | ) |  | $ | (237 | ) |
| (1) Amounts in parentheses indicate debits to accumulated OCIL.                                     |

|                                                                      |
|----------------------------------------------------------------------|
|                                                                      |  |  |  |  |  |  |  |  |  |  |
|                                                                 |   | Reclassification Out ofAccumulated OCIL (1) |   |   |
|                                                                 |   |   |  |
|                                                                 |   | Years Ended |   |   |
|                                                                 |   | October 31 |   | Affected Line Items on Statement of Comprehensive Income |
| In thousands                                                         |   | 2015 |   | 2014 |   |
| Hedging activities of equity method investments                      |   | $ | 1,670 |  |   | $ | (461 | ) |   | Income from equity method investments |
| Income tax expense                                                   |   | (652 | ) |   | 177 |  |   | Income taxes |
|    Net hedging activities                             |   | 1,018 |  |   | $ | (284 | ) |   |   |
| Net benefit activities of equity method investments                  |   | (58 | ) |   | (40 | ) |   | Income from equity method investments |
| Income tax expense                                                   |   | 23 |  |   | 16 |  |   | Income taxes |
|    Net benefit activities                             |   | (35 | ) |   | (24 | ) |   |   |
| Total reclassification for the period, net of tax                    |   | $ | 983 |  |   | $ | (308 | ) |   |   |
| (1) Amounts in parentheses indicate debits to accumulated OCIL. |

----

|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Recurring Fair Value Measurements as of October 31, 2015 |
|                                                     |   |   |   |   |   |   |   |   |   |   |
|                                                     |   |   |   | Significant     |   |   |   | Effects of |   |   |
|                                                     |   | Quoted Prices     |   | Other     |   | Significant     |   | Netting and |   |   |
|                                                     |   | in Active     |   | Observable     |   | Unobservable     |   | Cash Collateral |   | Total     |
|                                                     |   | Markets     |   | Inputs     |   | Inputs     |   | Receivables/ |   | Carrying     |
| In thousands                                             |   |     (Level 1)     |   |     (Level 2)     |   |     (Level 3)     |   | Payables |   | Value     |
| Assets:                                                  |   |   |   |   |   |   |   |   |   |   |
| Derivatives held for distribution operations             |   | $ | 1,343 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 1,343 |  |
| Debt and equity securities held as trading securities:   |   |   |   |   |   |   |   |   |   |   |
| Money markets                                            |   | 516 |  |   | — |  |   | — |  |   | — |  |   | 516 |  |
| Mutual funds                                             |   | 4,386 |  |   | — |  |   | — |  |   | — |  |   | 4,386 |  |
|   Total fair value assets                      |   | $ | 6,245 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 6,245 |  |

----

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Recurring Fair Value Measurements as of  October 31, 2014 |
|                                                      |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |   |   | Significant     |   |   |   | Effects of |   |   |
|                                                      |   | Quoted Prices     |   | Other     |   | Significant     |   | Netting and |   |   |
|                                                      |   | in Active     |   | Observable     |   | Unobservable     |   | Cash Collateral |   | Total     |
|                                                      |   | Markets     |   | Inputs     |   | Inputs     |   | Receivables/ |   | Carrying     |
| In thousands                                              |   |     (Level 1)     |   |     (Level 2)     |   |     (Level 3)     |   | Payables |   | Value     |
| Assets:                                                   |   |   |   |   |   |   |   |   |   |   |
| Derivatives held for distribution operations              |   | $ | 4,898 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 4,898 |  |
| Debt and equity securities held as trading securities:    |   |   |   |   |   |  |   |   |   |   |
| Money markets                                             |   | 469 |  |   | — |  |   | — |  |   | — |  |   | 469 |  |
| Mutual funds                                              |   | 3,472 |  |   | — |  |   | — |  |   | — |  |   | 3,472 |  |
|   Total fair value assets                       |   | $ | 8,839 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 8,839 |  |

|                        |
|------------------------|
|                        |  |  |  |  |  |  |  |  |
| In thousands           |   | Principal |   | Fair Value |
| As of October 31, 2015 |   | $ | 1,575,000 |  |   | $ | 1,720,586 |  |
| As of October 31, 2014 |   | 1,425,000 |  |   | 1,617,453 |  |

----

|                                                                                          |
|------------------------------------------------------------------------------------------|
|                                                                                          |  |  |  |  |  |  |  |  |
| Fair Value of Derivative Instruments                                                     |
|                                                                                     |   |   |   |   |
| In thousands                                                                             |   | 2015 |   | 2014 |
| Derivatives Not Designated as Hedging Instruments under Derivative Accounting Standards: |
| Asset Financial Instruments:                                                             |   |   |   |   |
| Current Assets - Gas purchase derivative assets (December 2015 - October 2016)           |   | $ | 1,343 |  |   |   |
| Current Assets - Gas purchase derivative assets (December 2014 - November 2015)          |   |   |   | $ | 4,898 |  |

|                      |
|----------------------|
|                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                 |   | Amount of |   | Amount of |   | Location of Gain (Loss) |
|                 |   | Gain (Loss) Recognized |   | Gain (Loss) Deferred |   | Recognized through |
|                 |   | on Derivative Instruments |   | Under PGA Procedures |   | PGA Procedures |
|                 |   |   |   |   |   |   |
|                 |   | Twelve Months Ended     |   | Twelve Months Ended     |   |   |
|                 |   | October 31 |   |     October 31     |   |   |
| In thousands         |   | 2015 |   | 2014 |   | 2015 |   | 2014 |   |   |
| Gas purchase options |   | $ | (4,423 | ) |   | $ | 6,162 |  |   | $ | (4,423 | ) |   | $ | 6,162 |  |   | Cost of Gas  |

----

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                 |  | 2015 |   | 2014 |   | 2013 |
| Operating lease payments (1) |  | $ | 5,024 |  |   | $ | 4,701 |  |   | $ | 4,729 |  |

|              |
|--------------|
|              |  |  |  |
| In thousands |   |
| 2016         | $ | 5,052 |  |
| 2017         | 4,706 |  |
| 2018         | 4,609 |  |
| 2019         | 4,433 |  |
| 2020         | 4,477 |  |
| Thereafter   | 24,413 |  |
| Total        | $ | 47,690 |  |

----

|              |
|--------------|
|              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|         |   | Pipeline |   | Gas Supply |   | Gas Supply |   | Telecommunications |   |   |   |   |
|         |   | and Storage |   | Reservation |   | Purchase |   | and Information |   |   |   |   |
| In thousands |   | Capacity         |   | Fees |   | Commitments |   | Technology     |   | Other     |   | Total         |
| 2016         |   | $ | 178,594 |  |   | $ | 4,577 |  |   | $ | 65,286 |  |   | $ | 6,164 |  |   | $ | 45,577 |  |   | $ | 300,198 |  |
| 2017         |   | 163,806 |  |   | 165 |  |   | 89,784 |  |   | 1,639 |  |   | — |  |   | 255,394 |  |
| 2018         |   | 143,728 |  |   | — |  |   | 69,569 |  |   | 669 |  |   | — |  |   | 213,966 |  |
| 2019         |   | 132,259 |  |   | — |  |   | 69,569 |  |   | 610 |  |   | — |  |   | 202,438 |  |
| 2020         |   | 114,400 |  |   | — |  |   | 69,759 |  |   | — |  |   | — |  |   | 184,159 |  |
| Thereafter   |   | 516,333 |  |   | — |  |   | 707,698 |  |   | — |  |   | — |  |   | 1,224,031 |  |
| Total        |   | $ | 1,249,120 |  |   | $ | 4,742 |  |   | $ | 1,071,665 |  |   | $ | 9,082 |  |   | $ | 45,577 |  |   | $ | 2,380,186 |  |

----

----

|         |                                                |
|---------|------------------------------------------------|
| • | Achieve full funding over the longer term, and |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Fixed income securities: includes U.S. treasuries, corporate bonds, high yield debt (bank loans), asset-backed securities and derivatives. The derivatives in the fixed income portfolio are fully collateralized. The investment guidelines limit liabilities created with derivatives in the fixed income portfolio to cash equivalents plus 10% of the portfolio’s market value. The aggregate risk exposure of the plan can be no greater than that which could be achieved without using derivatives. |

|         |                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------|
| • | Equity securities: includes large cap growth, large cap value and small cap domestic equity securities, as well as  international equity. |

|         |                                                                               |
|---------|-------------------------------------------------------------------------------|
| • | Real estate: includes a diversified global real estate investment trust fund. |

|         |                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------|
| • | Other investments: includes commodities, hedge funds and private equity funds that follow several diversified strategies. |

----

|                           |
|---------------------------|
|                           |  |  |  |  |  |  |  |  |  |
|                      |   | Target |   | Assets at October 31 |
| Asset Allocations         |   | Allocation |   | 2015 |   | 2014 |
| Fixed income securities   |   | 45 | % |   | 46 | % |   | 45 | % |
| Equity securities         |   | 35 | % |   | 34 | % |   | 31 | % |
| Real estate               |   | 5 | % |   | 5 | % |   | 5 | % |
| Cash and cash equivalents |   | — | % |   | 1 | % |   | 8 | % |
| Other investments         |   | 15 | % |   | 14 | % |   | 11 | % |
| Total                     |   | 100 | % |   | 100 | % |   | 100 | % |

----

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |  |  |  |  |  |  |  |  |
|                                                          |   | Target |   |   | Assets at October 31 |
| Asset Allocations                                             |   | Allocation |   |   | 2015 |   | 2014 |
| Fixed income securities                                       |   | 45 | % | (1)  |   | 47 | % |   | 44 | % |
| Equity securities                                             |   | 47 | % |   |   | 44 | % |   | 42 | % |
| Real estate                                                   |   | 5 | % |   |   | 5 | % |   | 5 | % |
| Cash and cash equivalents                                     |   | 3 | % |   |   | 4 | % |   | 9 | % |
| Total                                                         |   | 100 | % |   |   | 100 | % |   | 100 | % |
| (1) Includes 5% target allocation to high yield fixed income. |

|              |
|--------------|
|              |  |  |  |  |  |  |  |  |
| In thousands |   | 2015 |   | 2014 |
| Funding      |   | $ | 548 |  |   | $ | 524 |  |
| Liability:   |   |   |   |   |
| Current      |   | 236 |  |   | 214 |  |
| Noncurrent   |   | 5,089 |  |   | 4,248 |  |

|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                                                                 |   | 2015 |   | 2014 |   | 2013 |
| Term life policies of certain officers at the vice president level and above |   | $ | 35 |  |   | $ | 30 |  |   | $ | 27 |  |
| Officers and director-level employees                                        |   | 30 |  |   | 32 |  |   | 28 |  |

----

|                                                         |
|---------------------------------------------------------|
|                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                    |   | Qualified Pension |   | Nonqualified Pension |   | Other Benefits |
| In thousands                                            |   | 2015 |   | 2014 |   | 2015 |   | 2014 |   | 2015 |   | 2014 |
| Accumulated benefit obligation at year end              |   | $ | 263,120 |  |   | $ | 252,706 |  |   | $ | 5,527 |  |   | $ | 5,925 |  |   | N/A     |  |   | N/A     |  |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in projected benefit obligation:                 |   |  |   |   |   |  |   |   |   |  |   |   |
| Obligation at beginning of year                         |   | $ | 302,686 |  |   | $ | 272,403 |  |   | $ | 5,925 |  |   | $ | 4,736 |  |   | $ | 37,817 |  |   | $ | 33,678 |  |
| Service cost                                            |   | 11,403 |  |   | 10,865 |  |   | — |  |   | — |  |   | 1,182 |  |   | 1,109 |  |
| Interest cost                                           |   | 12,018 |  |   | 11,781 |  |   | 209 |  |   | 200 |  |   | 1,475 |  |   | 1,448 |  |
| Plan amendments                                         |   | — |  |   | — |  |   | — |  |   | 485 |  |   | (1,877 | ) |   | — |  |
| Actuarial (gain) loss                                   |   | 3,524 |  |   | 23,646 |  |   | (100 | ) |   | 956 |  |   | 1,697 |  |   | 3,734 |  |
| Participant contributions                               |   | — |  |   | — |  |   | — |  |   | — |  |   | 611 |  |   | 805 |  |
| Administrative expenses                                 |   | (590 | ) |   | (465 | ) |   | — |  |   | — |  |   | — |  |   | — |  |
| Benefit payments                                        |   | (17,504 | ) |   | (15,544 | ) |   | (507 | ) |   | (452 | ) |   | (3,348 | ) |   | (2,957 | ) |
| Obligation at end of year                               |   | 311,537 |  |   | 302,686 |  |   | 5,527 |  |   | 5,925 |  |   | 37,557 |  |   | 37,817 |  |
| Change in fair value of plan assets:                    |   |  |   |   |   |  |   |   |   |  |   |   |
| Fair value at beginning of year                         |   | 336,443 |  |   | 300,661 |  |   | — |  |   | — |  |   | 27,747 |  |   | 25,961 |  |
| Actual return on plan assets                            |   | 958 |  |   | 31,791 |  |   | — |  |   | — |  |   | 315 |  |   | 1,874 |  |
| Employer contributions                                  |   | 10,000 |  |   | 20,000 |  |   | 507 |  |   | 452 |  |   | 2,221 |  |   | 2,064 |  |
| Participant contributions                               |   | — |  |   | — |  |   | — |  |   | — |  |   | 611 |  |   | 805 |  |
| Administrative expenses                                 |   | (590 | ) |   | (465 | ) |   | — |  |   | — |  |   | — |  |   | — |  |
| Benefit payments                                        |   | (17,504 | ) |   | (15,544 | ) |   | (507 | ) |   | (452 | ) |   | (3,348 | ) |   | (2,957 | ) |
| Fair value at end of year                               |   | 329,307 |  |   | 336,443 |  |   | — |  |   | — |  |   | 27,546 |  |   | 27,747 |  |
| Funded status at year end - over (under)                |   | $ | 17,770 |  |   | $ | 33,757 |  |   | $ | (5,527 | ) |   | $ | (5,925 | ) |   | $ | (10,011 | ) |   | $ | (10,070 | ) |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Noncurrent assets                                       |   | $ | 17,770 |  |   | $ | 33,757 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |
| Current liabilities                                     |   | — |  |   | — |  |   | (520 | ) |   | (521 | ) |   | — |  |   | — |  |
| Noncurrent liabilities                                  |   | — |  |   | — |  |   | (5,007 | ) |   | (5,404 | ) |   | (10,011 | ) |   | (10,070 | ) |
| Net amount recognized                                   |   | $ | 17,770 |  |   | $ | 33,757 |  |   | $ | (5,527 | ) |   | $ | (5,925 | ) |   | $ | (10,011 | ) |   | $ | (10,070 | ) |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Amounts Not Yet Recognized as a Component               |   |   |   |   |   |   |   |   |   |   |   |   |
| of Cost and Recognized in a Deferred                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Regulatory Account:                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrecognized prior service credit (cost)                |   | $ | 12,848 |  |   | $ | 15,046 |  |   | $ | (208 | ) |   | $ | (439 | ) |   | $ | 1,877 |  |   | $ | — |  |
| Unrecognized actuarial loss                             |   | (120,541 | ) |   | (103,038 | ) |   | (1,560 | ) |   | (1,745 | ) |   | (7,185 | ) |   | (3,995 | ) |
| Regulatory asset                                        |   | (107,693 | ) |   | (87,992 | ) |   | (1,768 | ) |   | (2,184 | ) |   | (5,308 | ) |   | (3,995 | ) |
| Cumulative employer contributions in                    |   |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   excess of cost                              |   | 125,463 |  |   | 121,749 |  |   | (3,759 | ) |   | (3,741 | ) |   | (4,703 | ) |   | (6,075 | ) |
| Net amount recognized                                   |   | $ | 17,770 |  |   | $ | 33,757 |  |   | $ | (5,527 | ) |   | $ | (5,925 | ) |   | $ | (10,011 | ) |   | $ | (10,070 | ) |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average assumptions used in the measurement of |   |   |   |   |   |   |   |   |   |   |   |   |
|    the benefit obligations:              |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount rate                                           |   | 4.34 | % |   | 4.13 | % |   | 3.85 | % |   | 3.69 | % |   | 4.38 | % |   | 4.03 | % |
| Rate of compensation increase                           |   | 4.07 | % |   | 3.68 | % |   | N/A |  |   | N/A |  |   | N/A |  |   | N/A |  |

----

|                                                                               |
|-------------------------------------------------------------------------------|
|                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                     |   | Qualified Pension |   | Nonqualified Pension |   | Other Benefits |
| In thousands                                                                  |   | 2015 |   | 2014 |   | 2013 |   | 2015 |   | 2014 |   | 2013 |   | 2015 |   | 2014 |   | 2013 |
| Service cost                                                                  |   | $ | 11,403 |  |   | $ | 10,865 |  |   | $ | 12,005 |  |   | $ | — |  |   | $ | — |  |   | $ | — |  |   | $ | 1,182 |  |   | $ | 1,109 |  |   | $ | 1,327 |  |
| Interest cost                                                                 |   | 12,018 |  |   | 11,781 |  |   | 9,946 |  |   | 209 |  |   | 200 |  |   | 157 |  |   | 1,475 |  |   | 1,448 |  |   | 1,130 |  |
| Expected return on plan assets                                                |   | (23,614 | ) |   | (22,530 | ) |   | (21,105 | ) |   | — |  |   | — |  |   | — |  |   | (1,837 | ) |   | (1,782 | ) |   | (1,663 | ) |
| Amortization of transition obligation                                         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | 667 |  |
| Amortization of prior service cost                                            |   |  |  |   |   |   |   |   |  |  |   |   |   |   |   |  |  |   |   |   |   |
|   (credit)                                                          |   | (2,198 | ) |   | (2,198 | ) |   | (2,198 | ) |   | 231 |  |   | 243 |  |   | 81 |  |   | — |  |   | — |  |   | — |  |
| Amortization of net loss                                                      |   | 8,676 |  |   | 7,685 |  |   | 11,202 |  |   | 85 |  |   | 31 |  |   | 161 |  |   | 29 |  |   | — |  |   | — |  |
| Net periodic benefit cost                                                     |   | 6,285 |  |   | 5,603 |  |   | 9,850 |  |   | 525 |  |   | 474 |  |   | 399 |  |   | 849 |  |   | 775 |  |   | 1,461 |  |
| Other changes in plan assets and benefit                                      |   |  |   |   |   |   |   |  |   |   |   |   |   |  |   |   |   |   |
|   obligation recognized through                                     |   |  |   |   |   |   |   |  |   |   |   |   |   |  |   |   |   |   |
|   regulatory asset or liability:                                    |   |  |   |   |   |   |   |  |   |   |   |   |   |  |   |   |   |   |
|   Prior service cost (credit)                                       |   | — |  |   | — |  |   | — |  |   | — |  |   | 485 |  |   | — |  |   | (1,877 | ) |   | — |  |   | — |  |
|   Net loss (gain)                                                   |   | 26,179 |  |   | 14,385 |  |   | (30,094 | ) |   | (100 | ) |   | 956 |  |   | (540 | ) |   | 3,219 |  |   | 3,641 |  |   | (2,278 | ) |
| Amounts recognized as a component of                                          |   |  |   |   |   |   |   |  |   |   |   |   |   |  |   |   |   |   |
|   net periodic benefit cost:                                        |   |  |   |   |   |   |   |  |   |   |   |   |   |  |   |   |   |   |
| Transition obligation                                                         |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | (667 | ) |
| Amortization of net loss                                                      |   | (8,676 | ) |   | (7,685 | ) |   | (11,202 | ) |   | (85 | ) |   | (31 | ) |   | (161 | ) |   | (29 | ) |   | — |  |   | — |  |
| Prior service (cost) credit                                                   |   | 2,198 |  |   | 2,198 |  |   | 2,198 |  |   | (231 | ) |   | (243 | ) |   | (81 | ) |   | — |  |   | — |  |   | — |  |
| Total recognized in regulatory asset                                          |   |  |  |   |   |   |   |   |  |  |   |   |   |   |   |  |  |   |   |   |   |
|   (liability)                                                       |   | 19,701 |  |   | 8,898 |  |   | (39,098 | ) |   | (416 | ) |   | 1,167 |  |   | (782 | ) |   | 1,313 |  |   | 3,641 |  |   | (2,945 | ) |
| Total recognized in net periodic benefit                                      |   |  |  |   |   |   |   |   |  |  |   |   |   |   |   |  |  |   |   |   |   |
|   and regulatory asset (liability)                                  |   | $ | 25,986 |  |   | $ | 14,501 |  |   | $ | (29,248 | ) |   | $ | 109 |  |   | $ | 1,641 |  |   | $ | (383 | ) |   | $ | 2,162 |  |   | $ | 4,416 |  |   | $ | (1,484 | ) |
|                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average assumptions used to determine the net periodic benefit cost: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Discount rate                                                                 |   | 4.13 | % |   | 4.55 | % |   | 3.51 | % |   | 3.69 | % |   | 3.98 | % |   | 2.95 | % |   | 4.03 | % |   | 4.44 | % |   | 3.34 | % |
| Expected long-term rate of return on plan assets                              |   | 7.50 | % |   | 7.75 | % |   | 8.00 | % |   | N/A |  |   | N/A |  |   | N/A |  |   | 7.50 | % |   | 7.75 | % |   | 8.00 | % |
| Rate of compensation increase                                                 |   | 3.68 | % |   | 3.72 | % |   | 3.76 | % |   | N/A |  |   | N/A |  |   | N/A |  |   | N/A |  |   | N/A |  |   | N/A |  |

|                                                          |
|----------------------------------------------------------|
|                                                          |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                     |   | Qualified |   | Nonqualified |   | Other |
| In thousands                                             |   | Pension |   | Pension |   | Benefits |
| Amortization of unrecognized prior service (credit) cost |   | $ | (2,198 | ) |   | $ | 208 |  |   | $ | (332 | ) |
| Amortization of unrecognized actuarial loss              |   | 8,164 |  |   | 81 |  |   | 459 |  |

|                        |
|------------------------|
|                        |  |  |
| Qualified pension plan | 4.34 | % |
| NCNG SERP              | 3.78 | % |
| Directors’ SERP  | 3.91 | % |
| Piedmont SERP          | 3.17 | % |
| OPEB                   | 4.38 | % |

----

|                            |
|----------------------------|
|                            |  |  |  |
| In thousands               |   |
| Qualified pension plan *   | $ | 10,000 |  |
| Nonqualified pension plans | 520 |  |
| MPP plan                   | 1,650 |  |
| OPEB plan                  | 1,300 |  |
|                       |   |
| * Funded in November 2015. |   |

|              |
|--------------|
|              |  |  |  |  |  |  |  |  |  |  |  |  |
|         |   | Qualified |   | Nonqualified |   | Other |
| In thousands |   | Pension |   | Pension |   | Benefits |
| 2016         |   | $ | 28,147 |  |   | $ | 520 |  |   | $ | 1,987 |  |
| 2017         |   | 19,911 |  |   | 504 |  |   | 2,145 |  |
| 2018         |   | 20,413 |  |   | 482 |  |   | 2,301 |  |
| 2019         |   | 21,348 |  |   | 510 |  |   | 2,421 |  |
| 2020         |   | 21,829 |  |   | 491 |  |   | 2,494 |  |
| 2021 -  2025 |   | 114,267 |  |   | 2,100 |  |   | 13,379 |  |

|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |  |  |  |
|                                                                         |   | 2014 |
| Health care cost trend rate assumed for next year                            |   | 7.40 | % |
| Rate to which the cost trend is assumed to decline (the ultimate trend rate) |   | 5.00 | % |
| Year that the rate reaches the ultimate trend rate                           |   | 2027 |  |

|                                                                                   |
|-----------------------------------------------------------------------------------|
|                                                                                   |  |  |  |  |  |  |  |  |
| In thousands                                                                      |   | 1% Increase |   | 1% Decrease |
| Effect on total of service and interest cost components of net periodic           |   |   |   |   |
|  postretirement health care benefit cost for the year ended October 31, 2015 |   | $ | 34 |  |   | $ | (35 | ) |

----

|         |                                                                                                                                                                                                                                                                               |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | U.S. treasuries – These are Level 2 assets whose values are based on observable market information including quotes from a quotation reporting system, established market makers or pricing services. This asset class includes long duration fixed income investments. |

|         |                                                                                                                                                                                                                                                                |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Corporate bonds, collateralized mortgage obligations, municipals – These are Level 2 assets valued based on primarily observable market information or broker quotes on a non-active market. This class includes long duration fixed income investments. |

|         |                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Derivatives – The Level 1 assets are valued using a compilation of observable market information on an active market. The Level 2 assets are valued using broker quotes on a non-active market. |

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |
|                                    |   |   |   |   |   | Redemptions |
|                               |    | Redemption |    |   |    | Notice |
| Investment                              |    | Frequency |    | Other Redemption Restrictions |    | Period |
| Common trust fund -International growth |    | Monthly |    | None |    | 30 days |
|                                    |   |   |   |
| Hedge fund of funds                     |    | Quarterly |    | Redeemed in whole or part but not less than the minimum redemption amount for each currency. Redemption within one year of purchase is subject to 1.5% redemption fee. Redeemed on “first in first out” basis. None of our investment is subject to the redemption fee. Fund’s Board of Directors may limit or suspend share redemptions until a further notification ending suspension. No such notification has been received as of October 31, 2015. |    | 65 days |
|                                    |   |   |   |
| Private equity fund of funds            |    | Limited |    | Investors have only very limited withdrawal rights for specific legal or regulatory reasons. Any transfer of interest will be subject to approval. |    | (1) |
|                                    |   |   |   |
| Commodities fund of funds               |    | Monthly |    | Redemption within one year of purchase is subject to 1% redemption fee. None of our investment is subject to the redemption fee. If 95% or more of the balance is requested, 95% of the balance will be paid within 30 days. Any outstanding balance or interest owed will be paid after the annual audit is complete. |    | 35 days |
|                                    |   |   |   |   |   |   |
| Bank loans                              |   | Daily |    | None |    | 30 days |

|                              |
|------------------------------|
|                              |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                    |   | Qualified Pension Plan as of October 31, 2015 |   |
| In thousands                 |   | Quoted Prices In Active Markets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total Carrying Value |   |
| Cash and cash equivalents    |   | $ | 2,782 |  |   | $ | 89 |  |   | $ | — |  |   | $ | 2,871 |  |   |
| Fixed income securities      |   | — |  |   | 84,135 |  |   | — |  |   | 84,135 |  |   |
| Equity securities            |   | 44,738 |  |   | — |  |   | — |  |   | 44,738 |  |   |
| Mutual funds                 |   | 78,853 |  |   | 42,890 |  |   | — |  |   | 121,743 |  |   |
| Common trust fund            |   | — |  |   | 23,571 |  |   | — |  |   | 23,571 |  |   |
| Private equity fund of funds |   | — |  |   | — |  |   | 8,344 |  |   | 8,344 |  |   |
| Other Investments:           |   |   |   |   |   |   |   |   |   |
| Hedge fund of funds          |   |   |   |   |   |   |   | 19,809 |  | (1)  |
| Commodities fund of funds    |   |   |   |   |   |   |   | 7,688 |  | (1)  |
| High yield debt (bank loans) |   |   |   |   |   |   |   | 16,408 |  | (1)  |
| Total assets at fair value   |   | $ | 126,373 |  |   | $ | 150,685 |  |   | $ | 8,344 |  |   | $ | 329,307 |  |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Qualified Pension Plan as of October 31, 2014 |   |
| In thousands                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | Quoted Prices In Active Markets (Level 1) |   | Significant Other Observable Inputs (Level 2) |   | Significant Unobservable Inputs (Level 3) |   | Total Carrying Value |   |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $ | 27,932 |  |   | $ | 435 |  |   | $ | — |  |   | $ | 28,367 |  |   |
| Fixed income securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 48 |  |   | 78,026 |  |   | — |  |   | 78,074 |  |   |
| Equity securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | 51,266 |  |   | — |  |   | — |  |   | 51,266 |  |   |
| Mutual funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | 54,502 |  |   | 48,049 |  |   | — |  |   | 102,551 |  |   |
| Common trust fund                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | — |  |   | 22,877 |  |   | — |  |   | 22,877 |  |   |
| Private equity fund of funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | — |  |   | — |  |   | 7,158 |  |   | 7,158 |  |   |
| Other Investments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |   |
| Hedge fund of funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   |   |   |   |   |   | 19,829 |  | (1)  |
| Commodities fund of funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   | 10,134 |  | (1)  |
| High yield debt (bank loans)                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   | 16,187 |  | (1)  |
| Total assets at fair value                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $ | 133,748 |  |   | $ | 149,387 |  |   | $ | 7,158 |  |   | $ | 336,443 |  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |   |
| (1) In accordance with accounting guidance, certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in these tables for these investments are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the reconciliation of changes in the plans’ benefit obligations and fair value of plan assets above. |

|                                                     |
|-----------------------------------------------------|
|                                                     |  |  |  |  |
|                                                |   | Private |
|                                                |   | Equity Fund |
| In thousands                                        |   | of Funds |
| Balance, October 31, 2013                           |   | $ | 4,659 |  |
| Actual return on plan assets:                       |   |   |
| Relating to assets still held at the reporting date |   | 1,031 |  |
| Relating to assets sold during the period           |   | 113 |  |
| Purchases, sales and settlements (net)              |   | 1,355 |  |
| Transfer in/out of Level 3                          |   | — |  |
| Balance, October 31, 2014                           |   | 7,158 |  |
| Actual return on plan assets:                       |   |   |
| Relating to assets still held at the reporting date |   | 413 |  |
| Relating to assets sold during the period           |   | 618 |  |
| Purchases, sales and settlements (net)              |   | 155 |  |
| Transfer in/out of Level 3                          |   | — |  |
| Balance, October 31, 2015                           |   | $ | 8,344 |  |

----

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                       |   | Other Benefits as of October 31, 2015 |
|                       |   |   |   |   |   |   |   |   |
| In thousands               |   | Quoted Prices In Active Markets (Level 1) |   | Significant Other Observable Inputs (Level 2) |   | Significant Unobservable Inputs (Level 3) |   | Total Carrying Value |
| Cash and cash equivalents  |   | $ | 1,164 |  |   | $ | — |  |   | $ | — |  |   | $ | 1,164 |  |
| Mutual funds               |   | 26,382 |  |   | — |  |   | — |  |   | 26,382 |  |
| Total assets at fair value |   | $ | 27,546 |  |   | $ | — |  |   | $ | — |  |   | $ | 27,546 |  |

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                       |   | Other Benefits as of October 31, 2014 |
|                  |   |   |   |   |   |   |   |   |
| In thousands               |   | Quoted Prices In Active Markets (Level 1) |   | Significant Other Observable Inputs (Level 2) |   | Significant Unobservable Inputs (Level 3) |   | Total Carrying Value |
| Cash and cash equivalents  |   | $ | 2,590 |  |   | $ | — |  |   | $ | — |  |   | $ | 2,590 |  |
| Mutual funds               |   | 25,157 |  |   | — |  |   | — |  |   | 25,157 |  |
| Total assets at fair value |   | $ | 27,747 |  |   | $ | — |  |   | $ | — |  |   | $ | 27,747 |  |

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                  |   | 2015 |   | 2014 |   | 2013 |
| 401(k) matching contributions |   | $ | 6,584 |  |   | $ | 6,134 |  |   | $ | 5,688 |  |

----

|         |                                                                      |
|---------|----------------------------------------------------------------------|
| • | a target annual compounded increase in basic EPS (37.5% weight), |

|         |                                                                                                                                                                                                                                                                                                                                                         |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | total shareholder returns compared to a group of peer companies that are domiciled in the United States, publicly traded in the U.S. energy industry with a primary focus on natural gas distribution and transmission businesses in multi-state territories and have similar annual revenues and market capitalization to ours (37.5% weight), and |

|         |                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------|
| • | an actual average return on equity compared to the weighted average return on equity allowed by our regulatory commissions (25% weight). |

----

|                      |
|----------------------|
|                      |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands         |   | 2015 |   | 2014 |   | 2013 |
| Compensation expense |   | $ | 14,173 |  |   | $ | 8,496 |  |   | $ | 4,526 |  |
| Tax benefit          |   | 3,966 |  |   | 2,476 |  |   | 1,538 |  |
| Liability            |   | 22,037 |  |   | 15,130 |  |   |   |

|                  |
|------------------|
|                  |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands     |  | 2016 |  | 2017 |  | 2018 |
| Amount of payout |  | $ | 10,866 |  |   | $ | 8,179 |  |   | $ | 2,992 |  |

----

|                                                                                                                                                                           |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                                                 |  | 2015 |  | 2014 |  | 2013 |
| In thousands                                                                                                                                                              |  | Federal |  | State |  | Federal |  | State |  | Federal |  | State |
| Charged (Credited) to operating                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|   income:                                                                                                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |
|   Current                                                                                                                                                       |  | $ | (10,449 | ) |   | $ | (289 | ) |   | $ | (1,653 | ) |   | $ | 950 |  |   | $ | (3,032 | ) |   | $ | 919 |  |
|   Deferred (1) (2)                                                                                                                                              |  | 75,644 |  |   | 12,195 |  |   | 70,654 |  |   | 13,434 |  |   | 67,885 |  |   | 11,829 |  |
|   Tax Credits:                                                                                                                                                  |  |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                                                                                                                                                              |  | (167 | ) |   | — |  |   | (209 | ) |   | — |  |   | (267 | ) |   | — |  |
| Total                                                                                                                                                                     |  | 65,028 |  |   | 11,906 |  |   | 68,792 |  |   | 14,384 |  |   | 64,586 |  |   | 12,748 |  |
|                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Charged (Credited) to other income                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|   (expense):                                                                                                                                                    |  |  |   |  |   |  |   |  |   |  |   |  |
|   Current                                                                                                                                                       |  | 9,709 |  |   | 1,449 |  |   | 4,233 |  |   | 870 |  |   | 6,049 |  |   | 984 |  |
|   Deferred (1) (2)                                                                                                                                              |  | 2,249 |  |   | (119 | ) |   | 5,811 |  |   | 728 |  |   | 2,225 |  |   | (646 | ) |
| Total                                                                                                                                                                     |  | 11,958 |  |   | 1,330 |  |   | 10,044 |  |   | 1,598 |  |   | 8,274 |  |   | 338 |  |
| Total                                                                                                                                                                     |  | $ | 76,986 |  |   | $ | 13,236 |  |   | $ | 78,836 |  |   | $ | 15,982 |  |   | $ | 72,860 |  |   | $ | 13,086 |  |
| (1) Includes benefits from net operating loss (NOL) and tax carryforwards of $64.3 million and $62.3 million for the years ended October 31, 2015 and 2013, respectively. |
| (2) Includes the utilization of NOL carryforwards of $19.8 million and $28.6 million for the years ended October 31, 2015 and 2014, respectively.                    |

|                                            |
|--------------------------------------------|
|                                            |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                               |  | 2015 |   | 2014 |   | 2013 |
| Federal taxes at 35%                       |  | $ | 79,532 |  |   | $ | 83,517 |  |   | $ | 77,127 |  |
| State income taxes, net of federal benefit |  | 8,604 |  |   | 10,389 |  |   | 8,506 |  |
| Amortization of investment tax credits     |  | (167 | ) |   | (209 | ) |   | (267 | ) |
| Other, net                                 |  | 2,253 |  |   | 1,121 |  |   | 580 |  |
| Total                                      |  | $ | 90,222 |  |   | $ | 94,818 |  |   | $ | 85,946 |  |

----

|                                     |
|-------------------------------------|
|                                     |  |  |  |  |  |  |  |  |
| In thousands                        |  | 2015 |  | 2014 |
| Deferred tax assets:                |  |  |   |  |
| Benefit of loss carryforwards       |  | $ | 84,025 |  |   | $ | 39,532 |  |
| Revenues and cost of gas            |   | 3,495 |  |   | 4,960 |  |
| Employee benefits and compensation  |  | 22,134 |  |   | 16,547 |  |
| Revenue requirement                 |  | 26,088 |  |   | 20,320 |  |
| Utility plant                       |  | 7,481 |  |   | 5,631 |  |
| Other                               |  | 10,461 |  |   | 12,869 |  |
| Total deferred tax assets           |  | 153,684 |  |   | 99,859 |  |
| Valuation allowance                 |  | (848 | ) |   | (505 | ) |
| Total deferred tax assets, net      |  | 152,836 |  |   | 99,354 |  |
| Deferred tax liabilities:           |  |   |   |   |
| Utility plant                       |  | 849,835 |  |   | 724,172 |  |
| Revenues and cost of gas            |  | — |  |   | 4,340 |  |
| Equity method investments           |  | 44,778 |  |   | 42,998 |  |
| Deferred costs                      |  | 73,903 |  |   | 65,828 |  |
| Other                               |  | 13,543 |  |   | 18,065 |  |
| Total deferred tax liabilities      |  | 982,059 |  |   | 855,403 |  |
| Net deferred income tax liabilities |  | $ | 829,223 |  |   | $ | 756,049 |  |

|                               |
|-------------------------------|
|                               |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                  |  | 2015 |   | 2014 |   | 2013 |
| Balance at beginning of year  |  | $ | 505 |  |   | $ | 505 |  |   | $ | 505 |  |
| Charged to income tax expense |  | 343 |  |   | — |  |   | — |  |
| Balance at end of year        |  | $ | 848 |  |   | $ | 505 |  |   | $ | 505 |  |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |
| Entity Name                                      |   | Interest |   | Activity |
| Cardinal Pipeline Company, LLC (Cardinal)        |   | 21.49% |   | Intrastate pipeline located in North Carolina; regulated by the NCUC |
| Pine Needle LNG Company, LLC (Pine Needle)       |   | 45% |   | Interstate LNG storage facility located in North Carolina; regulated by the FERC |
| SouthStar Energy Services, LLC (SouthStar)       |   | 15% |   | Energy services company primarily selling natural gas in the unregulated retail gas market to residential, commercial and industrial customers in the eastern United States, primarily Georgia and Illinois |
| Hardy Storage Company (Hardy Storage)            |   | 50% |   | Underground interstate storage facility located in Hardy and Hampshire Counties, West Virginia; regulated by the FERC |
| Constitution Pipeline Company LLC (Constitution) |   | 24% |   | To develop, construct, own and operate 124 miles of interstate natural gas pipeline and related facilities connecting shale natural gas supplies and gathering systems in Susquehanna County, Pennsylvania, to Iroquois Gas Transmission and Tennessee Gas Pipeline systems in New York; regulated by the FERC |
| Atlantic Coast Pipeline, LLC (ACP)               |   | 10% |   | To develop, construct, own and operate 564 miles of interstate natural gas pipeline with associated compression from West Virginia through Virginia into eastern North Carolina in order to provide interstate natural gas transportation services of Marcellus and Utica gas supplies into southeastern markets; regulated by the FERC |

----

|                                                             |
|-------------------------------------------------------------|
|                                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Related Party                                               |   | Type of Expense |   | Cost of Gas (1) |   | Trade accounts payable (2) |
| In thousands                                                |   |   |   | 2015 |   | 2014 |   | 2013 |   | 2015 |   | 2014 |
| Cardinal                                                    |   | Transportation costs |   | $ | 8,763 |  |   | $ | 8,825 |  |   | 8,775 |  |   | $ | 744 |  |   | $ | 747 |  |
| Pine Needle                                                 |   | Gas storage costs |   | 11,441 |  |   | 11,364 |  |   | 11,098 |  |   | 955 |  |   | 989 |  |
| Hardy Storage                                               |   | Gas storage costs |   | 9,290 |  |   | 9,461 |  |   | 9,702 |  |   | 774 |  |   | 774 |  |
|   Totals                                          |   |   |   | $ | 29,494 |  |   | $ | 29,650 |  |   | $ | 29,575 |  |   | $ | 2,473 |  |   | $ | 2,510 |  |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) In the Consolidated Statements of Comprehensive Income. |
| (2) In the Consolidated Balance Sheets.                |

|                                                                  |
|------------------------------------------------------------------|
|                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                             |   | Operating Revenues (1) |   | Trade accounts receivable (2) |
| In thousands                                                     |   | 2015 |   | 2014 |   | 2013 |   | 2015 |   | 2014 |
| Operating revenues                                               |   | $ | 1,568 |  |   | $ | 3,541 |  |   | $ | 3,291 |  |   | $ | 183 |  |   | $ | 460 |  |
| (1) In the Consolidated Statements of Comprehensive Income. |
| (2) In the Consolidated Balance Sheets.                          |

----

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands               |  | 2015 |   | 2014 |   | 2013 |
| Current assets             |  | $ | 9,451 |  |   | $ | 8,856 |  |   |   |
| Noncurrent assets          |  | 106,444 |  |   | 111,881 |  |   |   |
| Current liabilities        |  | 1,228 |  |   | 1,468 |  |   |   |
| Noncurrent liabilities     |  | 45,446 |  |   | 45,402 |  |   |   |
| Revenues                   |  | 16,629 |  |   | 16,705 |  |   | $ | 17,649 |  |
| Gross profit               |  | 16,629 |  |   | 16,705 |  |   | 17,649 |  |
| Income before income taxes |  | 7,742 |  |   | 8,042 |  |   | 9,361 |  |

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands               |  | 2015 |   | 2014 |   | 2013 |
| Current assets             |  | $ | 9,863 |  |   | $ | 8,812 |  |   |   |
| Noncurrent assets          |  | 71,586 |  |   | 70,837 |  |   |   |
| Current liabilities        |  | 5,377 |  |   | 38,029 |  |   |   |
| Noncurrent liabilities     |  | 35,112 |  |   | — |  |   |   |
| Revenues                   |  | 16,913 |  |   | 18,025 |  |   | $ | 16,810 |  |
| Gross profit               |  | 16,913 |  |   | 18,025 |  |   | 16,810 |  |
| Income before income taxes |  | 6,002 |  |   | 6,011 |  |   | 5,804 |  |

----

|                                                                                                                                             |
|---------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                             |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                                                                                                                                |  | 2015 |   | 2014* |   | 2013 |
| Current assets                                                                                                                              |  | $ | 204,237 |  |   | $ | 192,151 |  |   |   |
| Noncurrent assets                                                                                                                           |  | 132,315 |  |   | 143,958 |  |   |   |
| Current liabilities                                                                                                                         |  | 45,953 |  |   | 47,923 |  |   |   |
| Noncurrent liabilities                                                                                                                      |  | — |  |   | — |  |   |   |
| Revenues                                                                                                                                    |  | 769,295 |  |   | 845,695 |  |   | $ | 639,426 |  |
| Gross profit                                                                                                                                |  | 224,612 |  |   | 234,581 |  |   | 174,993 |  |
| Income before income taxes                                                                                                                  |  | 129,340 |  |   | 136,569 |  |   | 102,805 |  |
|                                                                                                                                        |   |   |   |   |   |   |
|   * Balance sheet amounts have been changed to reflect SouthStar's reclassification of cash collateral under accounting guidance. |

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands               |  | 2015 |   | 2014 |   | 2013 |
| Current assets             |  | $ | 11,658 |  |   | $ | 12,644 |  |   |   |
| Noncurrent assets          |  | 156,803 |  |   | 157,861 |  |   |   |
| Current liabilities        |  | 19,078 |  |   | 17,316 |  |   |   |
| Noncurrent liabilities     |  | 69,971 |  |   | 78,830 |  |   |   |
| Revenues                   |  | 23,350 |  |   | 23,804 |  |   | $ | 24,375 |  |
| Gross profit               |  | 23,350 |  |   | 23,804 |  |   | 24,375 |  |
| Income before income taxes |  | 10,403 |  |   | 10,497 |  |   | 10,582 |  |

----

|                            |
|----------------------------|
|                            |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands               |  | 2015 |   | 2014 |   | 2013 |
| Current assets             |  | $ | 6,163 |  |   | $ | 11,273 |  |   |  |
| Noncurrent assets          |  | 330,152 |  |   | 219,208 |  |   |  |
| Current liabilities        |  | 4,398 |  |   | 7,667 |  |   |  |
| Noncurrent liabilities     |  | — |  |   | — |  |   |  |
| Revenues                   |  | — |  |   | — |  |   | $ | — |  |
| Gross profit               |  | — |  |   | — |  |   | — |  |
| Income before income taxes |  | 24,604 |  |   | 10,091 |  |   | 3,459 |  |

----

|                            |
|----------------------------|
|                            |  |  |  |  |
| In thousands               |   | 2015 |
| Current assets             |   | $ | 23,422 |  |
| Noncurrent assets          |   | 86,109 |  |
| Current liabilities        |   | 9,105 |  |
| Noncurrent liabilities     |   | — |  |
| Revenues                   |   | — |  |
| Gross profit               |   | — |  |
| (Loss) before income taxes |   | (5,205 | ) |

|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |
|                                                                  |   | October 31, |   | October 31, |
| In thousands                                                          |   | 2015 |   | 2014 |
| Cardinal                                                              |   | $ | 15,083 |  |   | $ | 16,073 |  |
| Pine Needle                                                           |   | 18,396 |  |   | 18,689 |  |
| SouthStar                                                             |   | 41,325 |  |   | 40,965 |  |
| Hardy Storage                                                         |   | 39,706 |  |   | 37,179 |  |
| Constitution                                                          |   | 82,403 |  |   | 57,255 |  |
| ACP                                                                   |   | 10,043 |  |   | 10 |  |
|   Total equity method investments in non-utility activities |   | $ | 206,956 |  |   | $ | 170,171 |  |

----

----

|                                                                                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                                                                                                                                               |   |   |   | Regulated |  | Unregulated |   |   |
|                                                                                                                                                                                                                                                               |   | Regulated |   | Non-Utility |  | Non-Utility |   |   |
| In thousands                                                                                                                                                                                                                                                       |   | Utility |   | Activities |  | Activities |   | Total |
| 2015                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
| Revenues from external customers                                                                                                                                                                                                                                   |   | $ | 1,371,718 |  |  | $ | — |  |   | $ | — |  |  | $ | 1,371,718 |  |
| Margin                                                                                                                                                                                                                                                             |   | 727,294 |  |  | — |  |   | — |  |  | 727,294 |  |
| Operations and maintenance expenses                                                                                                                                                                                                                                |   | 294,517 |  |  | 81 |  |   | 105 |  |  | 294,703 |  |
| Depreciation                                                                                                                                                                                                                                                       |   | 128,704 |  |  | — |  |   | 18 |  |  | 128,722 |  |
| Operating income (loss) before income taxes                                                                                                                                                                                                                        |   | 261,963 |  |  | (152 | ) |   | (217 | ) |  | 261,594 |  |
| Income from equity method investments                                                                                                                                                                                                                              |   | — |  |  | 15,060 |  |   | 19,401 |  |  | 34,461 |  |
| Interest charges                                                                                                                                                                                                                                                   |   | 68,631 |  |  | — |  |   | — |  |  | 68,631 |  |
| Income before income taxes                                                                                                                                                                                                                                         |   | 193,140 |  |  | 14,909 |  |   | 19,184 |  |  | 227,233 |  |
| Total assets                                                                                                                                                                                                                                                       |   | 4,742,284 |  |  | 165,630 |  |   | 41,682 |  |  | 4,949,596 |  |
| Equity method investments in non-utility activities                                                                                                                                                                                                                |   | — |  |  | 165,630 |  |   | 41,326 |  |  | 206,956 |  |
| Construction expenditures                                                                                                                                                                                                                                          |   | 443,654 |  |  | — |  |   | — |  |  | 443,654 |  |
|                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                               |   |  |  | Regulated |  | Unregulated |   |   |
|                                                                                                                                                                                                                                                          |   | Regulated |  | Non-Utility |  | Non-Utility |   |   |
| In thousands                                                                                                                                                                                                                                                       |   | Utility |  | Activities |  | Activities |   | Total |
| 2014                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
| Revenues from external customers                                                                                                                                                                                                                                   |   | $ | 1,469,988 |  |   | $ | — |  |   | $ | — |  |   | $ | 1,469,988 |  |
| Margin                                                                                                                                                                                                                                                             |   | 690,208 |  |   | — |  |   | — |  |   | 690,208 |  |
| Operations and maintenance expenses                                                                                                                                                                                                                                |   | 270,877 |  |   | 132 |  |   | 92 |  |   | 271,101 |  |
| Depreciation                                                                                                                                                                                                                                                       |   | 118,996 |  |   | — |  |   | 18 |  |   | 119,014 |  |
| Operating income (loss) before income taxes                                                                                                                                                                                                                        |   | 263,041 |  |   | (183 | ) |   | (203 | ) |   | 262,655 |  |
| Income from equity method investments                                                                                                                                                                                                                              |   | — |  |   | 12,318 |  |   | 20,435 |  |   | 32,753 |  |
| Interest charges                                                                                                                                                                                                                                                   |   | 54,686 |  |   | — |  |   | — |  |   | 54,686 |  |
| Income before income taxes                                                                                                                                                                                                                                         |   | 206,253 |  |   | 12,135 |  |   | 20,231 |  |   | 238,619 |  |
| Total assets (1)                                                                                                                                                                                                                                                   |   | 4,432,239 |  |   | 129,206 |  |   | 41,309 |  |   | 4,602,754 |  |
| Equity method investments in non-utility activities                                                                                                                                                                                                                |   | — |  |   | 129,206 |  |   | 40,965 |  |   | 170,171 |  |
| Construction expenditures                                                                                                                                                                                                                                          |   | 460,444 |  |   | — |  |   | — |  |   | 460,444 |  |
|                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                               |   |   |   | Regulated |   | Unregulated |   |   |
|                                                                                                                                                                                                                                                          |   | Regulated |   | Non-Utility |   | Non-Utility |   |   |
| In thousands                                                                                                                                                                                                                                                       |   | Utility |   | Activities |   | Activities |   | Total |
| 2013                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
| Revenues from external customers                                                                                                                                                                                                                                   |   | $ | 1,278,229 |  |   | $ | — |  |   | $ | — |  |   | $ | 1,278,229 |  |
| Margin                                                                                                                                                                                                                                                             |   | 621,490 |  |   | — |  |   | — |  |   | 621,490 |  |
| Operations and maintenance expenses                                                                                                                                                                                                                                |   | 253,120 |  |   | 103 |  |   | 78 |  |   | 253,301 |  |
| Depreciation                                                                                                                                                                                                                                                       |   | 112,207 |  |   | — |  |   | 18 |  |   | 112,225 |  |
| Operating income (loss) before income taxes                                                                                                                                                                                                                        |   | 221,528 |  |   | (150 | ) |   | (202 | ) |   | 221,176 |  |
| Income from equity method investments                                                                                                                                                                                                                              |   | — |  |   | 10,584 |  |   | 15,472 |  |   | 26,056 |  |
| Interest charges                                                                                                                                                                                                                                                   |   | 24,938 |  |   | — |  |   | — |  |   | 24,938 |  |
| Income before income taxes                                                                                                                                                                                                                                         |   | 194,659 |  |   | 10,434 |  |   | 15,270 |  |   | 220,363 |  |
| Total assets (1)                                                                                                                                                                                                                                                   |   | 4,045,259 |  |   | 90,097 |  |   | 38,735 |  |   | 4,174,091 |  |
| Equity method investments in non-utility activities                                                                                                                                                                                                                |   | — |  |   | 90,097 |  |   | 38,372 |  |   | 128,469 |  |
| Construction expenditures                                                                                                                                                                                                                                          |   | 599,999 |  |   | — |  |   | — |  |   | 599,999 |  |
|                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
| (1) Regulated utility total assets have been adjusted in 2014 and 2013 to reflect the netting of debt issuance costs with its debt carrying value in accordance with the 2015 adoption of new accounting guidance related to this balance sheet presentation. |

----

|                                                                       |
|-----------------------------------------------------------------------|
|                                                                       |  |  |  |  |  |  |  |  |  |  |  |  |
| In thousands                                                          |   | 2015 |   | 2014 |   | 2013 |
| Operating Income:                                                     |   |  |   |   |   |   |
| Segment operating income before income taxes                          |   | $ | 261,594 |  |   | $ | 262,655 |  |   | $ | 221,176 |  |
| Utility income taxes                                                  |   | (76,934 | ) |   | (83,176 | ) |   | (77,334 | ) |
| Regulated non-utility activities operating loss before income taxes   |   | 152 |  |   | 183 |  |   | 150 |  |
| Unregulated non-utility activities operating loss before income taxes |   | 217 |  |   | 203 |  |   | 202 |  |
| Total                                                                 |   | $ | 185,029 |  |   | $ | 179,865 |  |   | $ | 144,194 |  |
|                                                                  |   |  |   |   |   |   |
| Net Income:                                                           |   |  |   |   |   |   |
| Income before income taxes for reportable segments                    |   | $ | 227,233 |  |   | $ | 238,619 |  |   | $ | 220,363 |  |
| Income taxes                                                          |   | (90,222 | ) |   | (94,818 | ) |   | (85,946 | ) |
| Total                                                                 |   | $ | 137,011 |  |   | $ | 143,801 |  |   | $ | 134,417 |  |

|                                      |
|--------------------------------------|
|                                      |  |  |  |  |  |  |  |  |  |  |
| In thousands                         |   | 2015 |   | 2014 |   |   |
| Consolidated Assets:                 |   |   |   |   |   |
| Total assets for reportable segments |   | $ | 4,949,596 |  |   | $ | 4,602,754 |  |   |
| Eliminations/Adjustments             |   | 161,154 |  |   | 171,553 |  |   |
| Total                                |   | $ | 5,110,750 |  |   | $ | 4,774,307 |  |   |

|                  |
|------------------|
|                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|             |   |   |   |   |   |   |   |   |   | Earnings (Loss) |
|             |   |   |   |   |   | Operating |   | Net |   | Per Share of |
|        |   | Operating |   |   |   | Income |   | Income |   | Common Stock |
|             |   | Revenues |   | Margin |   | (Loss) |   | (Loss) |   | Basic |   | Diluted |
| Fiscal Year 2015 |   |   |   |   |   |   |   |   |   |   |   |   |
| January 31       |   | $ | 607,271 |  |   | $ | 270,070 |  |   | $ | 105,758 |  |   | $ | 92,978 |  |   | $ | 1.18 |  |   | $ | 1.18 |  |
| April 30         |   | 424,924 |  |   | 225,621 |  |   | 75,123 |  |   | 66,402 |  |   | 0.84 |  |   | 0.84 |  |
| July 31          |   | 158,266 |  |   | 111,572 |  |   | 5,233 |  |   | (8,260 | ) |   | (0.10 | ) |   | (0.10 | ) |
| October 31       |   | 181,257 |  |   | 120,031 |  |   | (1,085 | ) |   | (14,109 | ) |   | (0.18 | ) |   | (0.18 | ) |
|             |   |   |   |   |   |   |   |   |   |   |   |   |
| Fiscal Year 2014 |   |   |   |   |   |   |   |   |   |   |   |   |
| January 31       |   | $ | 657,733 |  |   | $ | 261,512 |  |   | $ | 102,319 |  |   | $ | 97,572 |  |   | $ | 1.27 |  |   | $ | 1.26 |  |
| April 30         |   | 462,247 |  |   | 211,523 |  |   | 67,299 |  |   | 62,540 |  |   | 0.80 |  |   | 0.80 |  |
| July 31          |   | 164,187 |  |   | 104,847 |  |   | 3,254 |  |   | (7,344 | ) |   | (0.09 | ) |   | (0.09 | ) |
| October 31       |   | 185,821 |  |   | 112,326 |  |   | 6,993 |  |   | (8,967 | ) |   | (0.11 | ) |   | (0.11 | ) |

----

----

|        |
|--------|
|        |  |  |  |  |
|        |   |   | Piedmont Natural Gas Company, Inc. |
|   |   |   |   |   |
|   |   |   |   | /s/ Thomas E. Skains |
|   |   |   |   | Thomas E. SkainsChairman, President and Chief Executive Officer |
|   |   |
|   |   |   |   | /s/ Karl W. Newlin |
|   |   |   |   | Karl W. NewlinSenior Vice President and Chief Financial Officer |
|   |   |
|   |   |   |   | /s/ Jose M. Simon |
|   |   |   |   | Jose M. SimonVice President and Controller |

----

----

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |  |  |  |
| (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 1. |   | Financial Statements |
| The following consolidated financial statements for the year ended October 31, 2015, are included in Item 8 of this report as follows:                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Consolidated Balance Sheets – October 31, 2015 and 2014Consolidated Statements of Comprehensive Income – Years Ended October 31, 2015, 2014 and 2013Consolidated Statements of Cash Flows – Years Ended October 31, 2015, 2014 and 2013Consolidated Statements of Stockholders’ Equity – Years Ended October 31, 2015, 2014 and 2013Notes to Consolidated Financial StatementsReport of Independent Registered Public Accounting Firm |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 2. |   | Supplemental Consolidated Financial Statement Schedules |
| None Schedules and certain other information are omitted for the reason that they are not required or are not applicable, or the required information is shown in the consolidated financial statements or notes thereto.                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 3. |   | Exhibits |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   | Where an exhibit is filed by incorporation by reference to a previously filed registration statement or report, such registration statement or report is identified in parentheses. Upon written request of a shareholder, we will provide a copy of the exhibit at a nominal charge. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   | The exhibits numbered 10.1 through 10.17 are management contracts or compensatory plans or arrangements. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2.1 |   | Agreement and Plan of Merger, dated as of October 24, 2015, by and among Duke Energy Corporation, Forest Subsidiary, Inc. and Piedmont Natural Gas Company, Inc. (incorporated by reference to Exhibit 2.1, Form 8-K dated October 26, 2015). |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 3.1 |   | Restated Articles of Incorporation of Piedmont Natural Gas Company, Inc., dated as of March 2009 (incorporated by reference to Exhibit 3.1, Form 10-Q for the quarter ended July 31, 2009). |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 3.2 |   | Bylaws of Piedmont Natural Gas Company, Inc., as Amended and Restated Effective September 8, 2011 (incorporated by reference to Exhibit 3.1, Form 8-K dated September 13, 2011). |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 4.1 |   | Note Agreement, dated as of September 21, 1992, between Piedmont and Provident Life and Accident Insurance Company (incorporated by reference to Exhibit 4.30, Form 10-K for the fiscal year ended October 31, 1992). |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 4.2 |   | Amendment to September 1992 Note Agreement, dated as of September 16, 2005, by and between Piedmont and Provident Life and Accident Insurance Company (incorporated by reference to Exhibit 4.2, Form 10-K for the fiscal year ended October 31, 2007). |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 4.3 |   | Indenture, dated as of April 1, 1993, between Piedmont and The Bank of New York Mellon Trust Company, N.A. (as successor to Citibank, N.A.), Trustee (incorporated by reference to Exhibit 4.1, Form S-3 Registration Statement No. 33-59369). |

----

|        |
|--------|
|        |  |  |  |  |
|   |
|   |   | 4.4 |   | Medium-Term Note, Series A, dated as of October 6, 1993 (incorporated by reference to Exhibit 4.8, Form 10-K for the fiscal year ended October 31, 1993). |
|   |
|   |   | 4.5 |   | First Supplemental Indenture, dated as of February 25, 1994, between PNG Acquisition Company, Piedmont Natural Gas Company, Inc., and Citibank, N.A., Trustee (incorporated by reference to Exhibit 4.2, Form S-3 Registration Statement No. 33-59369). |
|   |
|   |   | 4.6 |   | Medium-Term Note, Series A, dated as of September 19, 1994 (incorporated by reference to Exhibit 4.9, Form 10-K for the fiscal year ended October 31, 1994). |
|   |
|   |   | 4.7 |   | Form of Master Global Note (incorporated by reference to Exhibit 4.4, Form S-3 Registration Statement No. 33-59369). |
|   |
|   |   | 4.8 |   | Pricing Supplement of Medium-Term Notes, Series B, dated October 3, 1995 (incorporated by reference to Exhibit 4.10, Form 10-K for the fiscal year ended October 31, 1995). |
|   |
|   |   | 4.9 |   | Pricing Supplement of Medium-Term Notes, Series B, dated October 4, 1996 (incorporated by reference to Exhibit 4.11, Form 10-K for the fiscal year ended October 31, 1996). |
|   |
|   |   | 4.10 |   | Form of Master Global Note (incorporated by reference to Exhibit 4.4, Form S-3 Registration Statement No. 333-26161). |
|   |
|   |   | 4.11 |   | Pricing Supplement of Medium-Term Notes, Series C, dated September 15, 1999 (incorporated by reference to Rule 424(b)(3) Pricing Supplement to Form S-3 Registration Statement Nos. 33-59369 and 333-26161). |
|   |
|   |   | 4.12 |   | Second Supplemental Indenture, dated as of June 15, 2003, between Piedmont and Citibank, N.A., Trustee (incorporated by reference to Exhibit 4.3, Form S-3 Registration Statement No. 333-106268). |
|   |
|   |   | 4.13 |   | Form of 6% Medium-Term Note, Series E, dated as of December 19, 2003 (incorporated by reference to Exhibit 99.2, Form 8-K, dated December 23, 2003). |
|   |
|   |   | 4.14 |   | Third Supplemental Indenture, dated as of June 20, 2006, between Piedmont Natural Gas Company, Inc. and Citibank, N.A., as trustee (incorporated by reference to Exhibit 4.1, Form 8-K dated June 20, 2006). |
|   |
|   |   | 4.15 |   | Agreement of Resignation, Appointment and Acceptance dated as of March 29, 2007, by and among Piedmont Natural Gas Company, Inc., Citibank, N.A., and The Bank of New York Trust Company, N.A. (incorporated by reference to Exhibit 4.1, Form 10-Q for quarter ended April 30, 2007). |
|   |
|   |   | 4.16 |   | Note Purchase Agreement, dated as of May 6, 2011, among Piedmont Natural Gas Company, Inc. and the Purchasers party thereto (incorporated by reference to Exhibit 10, Form 8-K, dated May 12, 2011). |
|   |
|   |   | 4.17 |   | Form of 2.92% Series A Senior Notes due June 6, 2016 (incorporated by reference to Exhibit 4.1, Form 8-K dated May 12, 2011). |
|   |
|   |   | 4.18 |   | Form of 4.24% Series B Senior Notes due June 6, 2021 (incorporated by reference to Exhibit 4.2, Form 8-K dated May 12, 2011). |
|   |

----

|        |
|--------|
|        |  |  |  |  |
|   |   | 4.19 |   | Fourth Supplemental Indenture, dated as of May 6, 2011, between Piedmont Natural Gas Company, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.2, Form S-3-ASR Registration Statement No. 333-175386). |
|   |
|   |   | 4.20 |   | Amendment to September 1992 Note Agreement dated as of April 15, 2011 by and between Piedmont Natural Gas Company, Inc., and Provident Life and Accident Insurance Company (incorporated by reference to Exhibit 10.3, Form 10-Q for the quarter ended April 30, 2011). |
|   |
|   |   | 4.21 |   | Note Purchase Agreement, dated as of March 27, 2012, among Piedmont Natural Gas Company, Inc. and the Purchasers party thereto (incorporated by reference to Exhibit 10.1, Form 8-K dated March 29, 2012). |
|   |
|   |   | 4.22 |   | Form of 3.47% Series A Senior Notes due July 16, 2027 (incorporated by reference to Exhibit 4.1, Form 8-K dated March 29, 2012). |
|   |
|   |   | 4.23 |   | Form of 3.57% Series B Senior Notes due July 16, 2027 (incorporated by reference to Exhibit 4.2, Form 8-K dated March 29, 2012). |
|   |
|   |   | 4.24 |   | Corporate Commercial Paper Master Note dated March 1, 2012 between U.S. Bank National Association as Paying Agent and Piedmont Natural Gas Company, Inc. as Issuer (incorporated by reference to Exhibit 4.1, Form 10-Q for the quarter ended April 30, 2012). |
|   |
|   |   | 4.25 |  | Fifth Supplemental Indenture, dated August 1, 2013, between the Company and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1, Form 8-K dated August 1, 2013). |
|   |
|        |  | 4.26 |  | Form of 4.65% Senior Notes due 2043 (incorporated by reference to Exhibit 4.2, Form 8-K dated August 1, 2013). |
|        |
|   |   | 4.27 |   | Sixth Supplemental Indenture, dated September 18, 2014, between the Company and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1, Form 8-K dated September 18, 2014). |
|   |   |   |   |   |
|   |   | 4.28 |   | Form of 4.10% Senior Notes due 2034 (incorporated by reference to Exhibit 4.2, Form 8-K dated September 18, 2014). |
|   |   |   |   |   |
|   |   | 4.29 |   | Third Amendment to September 1992 Note Agreement, dated as of October 15, 2014, between the Company and Provident Life and Accident Insurance Company (incorporated by reference to Exhibit 4.29, Form 10-K for the fiscal year ended October 31, 2014). |
|   |   |   |   |   |
|   |   | 4.30 |   | Seventh Supplemental Indenture, dated September 14, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A. (incorporated by reference to Exhibit 4.1, Form 8-K dated September 14, 2015). |
|   |   |   |   |   |
|   |   | 4.31 |   | Form of 3.60% Senior Notes due 2025 (incorporated by reference to Exhibit 4.2, Form 8-K dated September 14, 2015). |
|   |
|   |   |   |   | Compensatory Contracts: |
|   |
|   |   | 10.1 |   | Form of Director Retirement Benefits Agreement with outside directors, dated September 1, 1999 (incorporated by reference to Exhibit 10.54, Form 10-K for the fiscal year ended October 31, 1999). |
|   |

----

|        |
|--------|
|        |  |  |  |  |
|   |   | 10.2 |   | Severance Agreement with Thomas E. Skains, dated September 4, 2007 (substantially identical agreements have been entered into as of the same date with Franklin H. Yoho, Kevin M. O’Hara and Jane R. Lewis-Raymond) (incorporated by reference to Exhibit 10.2, Form 10-Q for the quarter ended July 31, 2007). |
|   |
|   |   | 10.3 |   | Schedule of Severance Agreements with Executives (incorporated by reference to Exhibit 10.2a, Form 10-Q for the quarter ended July 31, 2007). |
|   |
|   |   | 10.4 |   | Piedmont Natural Gas Company, Inc. Incentive Compensation Plan as Amended and Restated Effective December 15, 2010 (incorporated by reference to Appendix A, Form DEF14A dated January 14, 2011). |
|   |
|   |   | 10.5 |   | Form of Performance Unit Award Agreement. |
|   |
|   |   | 10.6 |   | Piedmont Natural Gas Company, Inc. Defined Contribution Restoration Plan, dated as of December 8, 2008, effective January 1, 2009 (incorporated by reference to Exhibit 10.2, Form 10-Q for the quarter ended January 31, 2009). |
|   |
|   |   | 10.7 |   | Amendment No. 1 to Director Retirement Benefits Agreements with outside directors, dated as of December 31, 2008 (incorporated by reference to Exhibit 10.1, Form 10-Q for the quarter ended July 31, 2009). |
|   |
|   |   | 10.8 |   | Severance Agreement between Piedmont Natural Gas Company, Inc. and Karl W. Newlin, dated as of June 4, 2010 (incorporated by reference to Exhibit 10.3, Form 10-Q for the quarter ended July 31, 2010). |
|   |
|   |   | 10.9 |   | Instrument of Amendment for Piedmont Natural Gas Company, Inc. Defined Contribution Restoration Plan, dated as of January 23, 2012, by Piedmont Natural Gas Company, Inc. (incorporated by reference to Exhibit 10.1, Form 10-Q for the quarter ended January 31, 2012). |
|   |
|   |   | 10.10 |   | 2011 Retention Award Agreement, dated December 15, 2011, between Piedmont Natural Gas Company, Inc. and Thomas E. Skains (incorporated by reference to Exhibit 10.2, Form 10-Q for the quarter ended January 31, 2012). |
|   |
|   |   | 10.11 |   | Severance Agreement, dated February 1, 2012, between Piedmont Natural Gas Company, Inc. and Victor M. Gaglio (incorporated by reference to Exhibit 10.2, Form 10-Q for the quarter ended April 30, 2012). |
|   |
|   |   | 10.12 |   | Amended and Restated Employment Agreement, dated May 25, 2012, between Piedmont Natural Gas Company, Inc. and Thomas E. Skains (substantially identical agreements have been entered into with Victor M. Gaglio, Jane R. Lewis-Raymond, Karl W. Newlin, Kevin M. O’Hara and Franklin H. Yoho) (incorporated by reference to Exhibit 10.1, Form 10-Q for the quarter ended July 31, 2012). |
|   |
|   |   | 10.13 |   | Schedule of Amended and Restated Employment Agreements with Executives (incorporated by reference to Exhibit 10.2, Form 10-Q for the quarter ended July 31, 2012). |
|   |
|   |   | 10.14 |   | Resolution of Board of Directors, June 6, 2014, establishing compensation for non-management directors (incorporated by reference to Exhibit 10.1, Form 10-Q for the quarter ended July 31, 2014). |
|   |
|   |   | 10.15 |   | Piedmont Natural Gas Company Employee Stock Purchase Plan Amended and Restated as of November 1, 2014, dated as of January 30, 2015 (incorporated by reference to Exhibit 10.1, Form 10-Q for the quarter ended January 31, 2015). |
|   |   |   |   |   |

----

|        |
|--------|
|        |  |  |  |  |
|   |   | 10.16 |   | Piedmont Natural Gas Company, Inc. Voluntary Deferral Plan, amended and restated effective March 31, 2015, dated May 1, 2015 (incorporated by reference to Exhibit 10.1, Form 10-Q for the quarter ended July 31, 2015). |
|   |
|   |   | 10.17 |   | Resolution of Board of Directors, June 5, 2015, establishing compensation for non-management directors (incorporated by reference to Exhibit 10.2, Form 10-Q for the quarter ended July 31, 2015). |
|   |
|   |   |   |   | Other Contracts: |
|   |
|   |   | 10.18 |   | Form of Commercial Paper Dealer Agreement between Piedmont Natural Gas Company, Inc. and Dealers party thereto (incorporated by reference to Exhibit 10.3, Form 10-Q for the quarter ended April 30, 2012). |
|   |
|   |   | 10.19 |   | Amended and Restated Credit Agreement dated as of October 1, 2012 among Piedmont Natural Gas Company, Inc., Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender, L/C Issuer and a Lender, and Branch Banking and Trust Company, Bank of America, N.A., JPMorgan Chase Bank, N.A., PNC Bank, National Association, U.S. Bank National Association and Royal Bank of Canada, each a Lender (incorporated by reference to Exhibit 10.34, Form 10-K for the fiscal year ended October 31, 2012). |
|   |
|   |   | 10.20 |   | Amended and Restated Limited Liability Company Agreement of Constitution Pipeline Company, LLC dated April 9, 2012, by and among Williams Partners Operating LLC and Cabot Pipeline Holdings LLC (incorporated by reference to Exhibit 10.1, Form 10-Q for the quarter ended January 31, 2013). |
|   |
|   |   | 10.21 |   | First Amendment to Amended and Restated Limited Liability Company Agreement of Constitution Pipeline Company, LLC, dated as of November 9, 2012, by and among Constitution Pipeline Company, LLC, Williams Partners Operating LLC, Cabot Pipeline Holdings LLC, and Piedmont Constitution Pipeline Company, LLC (incorporated by reference to Exhibit 10.2, Form 10-Q for the quarter ended January 31, 2013). |
|   |
|   |   | 10.22 |   | Second Amendment to Amended and Restated Limited Liability Company Agreement of Constitution Pipeline Company, LLC, dated as of May 29, 2013, by and among Constitution Pipeline Company, LLC, Williams Partners Operating LLC, Cabot Pipeline Holdings LLC, Piedmont Constitution Pipeline Company, LLC, and Capitol Energy Ventures Corp. (incorporated by reference to Exhibit 99.1, Form 8-K filed September 4, 2013). |
|   |
|   |   | 10.23 |   | Second Amended and Restated Limited Liability Company Agreement of SouthStar Energy Services LLC, dated as of September 1, 2013, by and between Georgia Natural Gas Company and Piedmont Energy Company (incorporated by reference to Exhibit 10.39, Form 10-K for the fiscal year ended October 31, 2013). |
|   |
|   |   | 10.24 |   | Increasing Lender Agreement dated as of November 1, 2013 among Wells Fargo Bank, National Association, Bank of America, N.A., Branch Banking and Trust Company, JPMorgan Chase Bank, N.A., PNC Bank, National Association, U.S. Bank National Association and Royal Bank of Canada, each as a Lender (incorporated by reference to Exhibit 10.1, Form 8-K dated November 4, 2013). |
|        |
|   |   | 10.25 * |   | Limited Liability Company Agreement of Atlantic Coast Pipeline, LLC, dated as of September 2, 2014, by and between Dominion Atlantic Coast Pipeline, LLC, Duke Energy ACP, LLC, Piedmont ACP Company, LLC, and Maple Enterprise Holdings, Inc. (incorporated by reference to Exhibit 10.35, Form 10-K for the fiscal year ended October 31, 2014). |
|   |
|   |   | 10.26 |   | ATM Equity Offering Sales Agreement dated January 7, 2015 between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated (incorporated by reference to Exhibit 1.1, Form 8-K dated January 7, 2015). |
|   |

----

|        |
|--------|
|        |  |  |  |  |
|   |   | 10.27 |   | ATM Equity Offering Sales Agreement dated January 7, 2015 between the Company and J.P. Morgan Securities LLC (incorporated by reference to Exhibit 1.2, Form 8-K dated January 7, 2015). |
|   |
|   |   | 12 |   | Computation of Ratio of Earnings to Fixed Charges. |
|        |
|   |   | 21 |   | List of Subsidiaries. |
|   |
|   |   | 23.1 |   | Consent of Independent Registered Public Accounting Firm. |
|   |
|   |   | 31.1 |   | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer. |
|   |
|   |   | 31.2 |   | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer. |
|   |
|   |   | 32.1 |   | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer. |
|        |
|   |   | 32.2 |   | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer. |
|   |
|   |   | 101.INS |   | XBRL Instance Document |
|   |   | 101.SCH |   | XBRL Taxonomy Extension Schema |
|   |   | 101.CAL |   | XBRL Taxonomy Calculation Linkbase |
|   |   | 101.DEF |   | XBRL Taxonomy Definition Linkbase |
|   |   | 101.LAB |   | XBRL Taxonomy Extension Label Linkbase |
|   |   | 101.PRE |   | XBRL Taxonomy Extension Presentation Linkbase |
|   |
|   |   | * |   | Certain portions of this Exhibit have been omitted pursuant to a request for confidential treatment. The non-public information has been filed separately with the SEC pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
|   |
|   |   | Attached as Exhibit 101 to this Annual Report are the following documents formatted in extensible business reporting language (XBRL): (1) Document and Entity Information; (2) Consolidated Balance Sheets as of October 31, 2015 and 2014; (3) Consolidated Statements of Comprehensive Income for the years ended October 31, 2015, 2014 and 2013; (4) Consolidated Statements of Cash Flows for the years ended October 31, 2015, 2014 and 2013; (5) Consolidated Statements of Stockholders’ Equity for the years ended October 31, 2015, 2014 and 2013; and Notes to Consolidated Financial Statements. |

----

|                                    |
|------------------------------------|
|                                    |  |  |
|                               |   |   |
| Piedmont Natural Gas Company, Inc. |
|                               |   | (Registrant) |
|                               |   |
| By:                                |   | /s/ Thomas E. Skains |
|                               |   | Thomas E. Skains |
|                               |   | Chairman of the Board, President |
|                               |   | and Chief Executive Officer |
|                               |   |
| Date:                              |   | December 23, 2015 |

|                                                           |
|-----------------------------------------------------------|
|                                                           |  |  |
|                                                      |   |   |
|         Signature |   |                 Title |
|                                                      |   |
| /s/ Thomas E. Skains                            |   | Chairman of the Board, President and |
| Thomas E. Skains                                          |   | Chief Executive Officer |
|                                                      |   | (Principal Executive Officer) |
|                                                      |   |
| Date: December 23, 2015                                   |   |   |
|                                                      |   |
| /s/ Karl W. Newlin                    |   | Senior Vice President and |
| Karl W. Newlin                                            |   | Chief Financial Officer |
|                                                      |   | (Principal Financial Officer) |
|                                                      |   |
| Date: December 23, 2015                                   |   |   |
|                                                      |   |
| /s/ Jose M. Simon                     |   | Vice President and Controller |
| Jose M. Simon                                             |   | (Principal Accounting Officer) |
|                                                      |   |
| Date: December 23, 2015                                   |   |   |

----

|                                               |
|-----------------------------------------------|
|                                               |  |  |
|                                          |   |   |
|       Signature |      | Title |
|                                          |   |
| /s/ E. James Burton                           |      | Director |
| E. James Burton                               |      |   |
|                                          |   |
| /s/ Malcolm E. Everett III                    |      | Director |
| Malcolm E. Everett III                        |      |   |
|                                          |   |
| /s/ Gary A. Garfield                          |      | Director |
| Gary A. Garfield                              |      |   |
|                                          |   |
| /s/ Frank B. Holding, Jr.                     |      | Director |
| Frank B. Holding, Jr.                         |      |   |
|                                          |   |
| /s/ Frankie T. Jones, Sr.                     |      | Director |
| Frankie T. Jones, Sr.                         |      |   |
|                                          |   |
| /s/ Vicki W. McElreath                        |      | Director |
| Vicki W. McElreath                            |      |   |
|                                          |   |   |
| /s/ Thomas M. Pashley                         |   | Director |
| Thomas M. Pashley                             |   |   |
|                                          |   |   |
| /s/ Minor M. Shaw                             |      | Director |
| Minor M. Shaw                                 |      |  |
|                                          |   |
| /s/ Jo Anne Sanford                           |      | Director |
| Jo Anne Sanford                               |      |   |
|                                          |   |
| /s/ David E. Shi                              |      | Director |
| David E. Shi                                  |      |   |
|                                          |   |
| /s/ Michael C. Tarwater                       |      | Director |
| Michael C. Tarwater                           |      |  |
|                                          |   |
| /s/ Phillip D. Wright                         |      | Director |
| Phillip D. Wright                             |      |   |

----

|        |
|--------|
|        |  |  |
|   |   | Piedmont Natural Gas Company, Inc. |
|   |   | Form 10-K |
|   |   | For the Fiscal Year Ended October 31, 2015 |
|   |   |   |
|   |   | Exhibits |
|   |   |   |
| 10.5   |   | Form of Performance Unit Award Agreement |
|   |   |   |
| 12     |    | Computation of Ratio of Earnings to Fixed Charges |
|   |   |
| 21     |    | List of Subsidiaries |
|   |   |
| 23.1   |    | Consent of Independent Registered Public Accounting Firm |
|   |   |
| 31.1   |    | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer |
|   |   |
| 31.2   |    | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer |
|   |   |
| 32.1   |    | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Executive Officer |
|   |   |
| 32.2   |    | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Chief Financial Officer |