The consolidated financial statements include the accounts of wholly owned subsidiaries whose investments in joint venture, energy-related businesses are accounted for under the equity method. Our ownership interest in each entity is included in “Equity method investments in non-utility activities” in “Noncurrent Assets” in the Consolidated Balance Sheets. Earnings or losses from equity method investments are included in “Income from equity method investments” in “Other Income (Expense)” in the Consolidated Statements of Comprehensive Income.

As of October 31, 2013, there were no amounts that represented undistributed earnings of our 50% or less owned equity method investments in our retained earnings.

We own 21.49% of the membership interests in Cardinal Pipeline Company, L.L.C. (Cardinal), a North Carolina limited liability company. The other members are subsidiaries of The Williams Companies, Inc., and SCANA Corporation. Cardinal owns and operates an intrastate natural gas pipeline in North Carolina and is regulated by the NCUC. Cardinal has firm, long-term service agreements with local distribution companies for 100% of the firm transportation capacity on the pipeline, of which Piedmont subscribes to approximately 53%. Cardinal is dependent on the Williams – Transco pipeline system to deliver gas into its system for service to its customers.

To provide natural gas delivery service to Duke Energy Progress, Inc. (DEP), now a subsidiary of DEC, for a power generation facility at their Wayne County, North Carolina site, we executed an agreement with Cardinal, which was approved by the NCUC in May 2010, to expand our firm capacity requirement on Cardinal to serve DEP. Cardinal invested in a compressor station and expanded meter stations in order to increase the capacity of its system for us and another customer. We made capital contributions totaling $9.8 million related to this system expansion from January 2011 through June 2012. Cardinal's expansion service for the project and our natural gas delivery service for DEP's Wayne County site were placed into service on June 1, 2012.

The charges we incur as transportation costs from Cardinal are passed through to DEP under the terms of our natural gas delivery service agreement with DEP. Cardinal issued $45 million of long-term debt on June 22, 2012, and we received a distribution of $5.4 million in June 2012 as a partial return of our capital contributions.

Cardinal enters into interest-rate swap agreements to modify the interest expense characteristics of its unsecured long-term debt. Our share of movements in the market value of these agreements are recorded as a hedge in “Accumulated other comprehensive loss” in “Stockholders' equity” in the Consolidated Balance Sheets; the detail of our share of the market value of the swap agreements is combined with our other equity method investments and presented in “Other Comprehensive Income (Loss), net of tax” in the Consolidated Statements of Comprehensive Income. Cardinal's long-term debt is nonrecourse to the members.

We have related party transactions as a transportation customer of Cardinal, and we record the transportation costs charged by Cardinal in “Cost of Gas” in the Consolidated Statements of Comprehensive Income. For each of the years ended October 31, 2013, 2012 and 2011, these transportation costs and the amounts we owed Cardinal as of October 31, 2013 and 2012 are as follows.

In thousands	2013		2012		2011

Transportation costs	$	8,775	$	6,613	$	4,104
Trade accounts payable		755		855

Summarized financial information provided to us by Cardinal for 100% of Cardinal as of September 30, 2013 and 2012, and for the twelve months ended September 30, 2013, 2012 and 2011 is presented below.

In thousands	2013		2012		2011

Current assets	$	15,179	$	9,179
Noncurrent assets		116,414		120,437
Current liabilities		2,637		1,786
Noncurrent liabilities		45,273		45,702
Revenues		17,649		16,165	$	13,633
Gross profit		17,649		16,165		13,633
Income before income taxes		9,361		10,433		6,473

Pine Needle LNG Company, L.L.C. (Pine Needle), a North Carolina limited liability company, owns an interstate LNG storage facility in North Carolina and is regulated by the FERC. Pine Needle has firm, long-term service agreements for 100% of the storage capacity of the facility, of which Piedmont subscribes to approximately 64%. In June 2013, we entered into an agreement with Hess Corporation (Hess) to acquire their 5% membership interest in Pine Needle. Effective July 1, 2013, we acquired Hess' 5% membership interest for $2.9 million. With the purchase of this additional 5% membership interest, our membership interest in Pine Needle increased from 40% to 45%. As of October 31, 2013, the other members are the Municipal Gas Authority of Georgia and subsidiaries of The Williams Companies, Inc. and SCANA Corporation.

Pine Needle enters into interest-rate swap agreements to modify the interest expense characteristics of its long-term debt. Our share of movements in the market value of these agreements are recorded as a hedge in “Accumulated other comprehensive loss” in “Stockholders' equity” in the Consolidated Balance Sheets; the detail of our share of the market value of the swap agreements is combined with our other equity method investments and presented in “Other Comprehensive Income (Loss), net of tax” in the Consolidated Statements of Comprehensive Income. Pine Needle's long-term debt is nonrecourse to the members.

We have related party transactions as a customer of Pine Needle, and we record the storage costs charged by Pine Needle in “Cost of Gas” in the Consolidated Statements of Comprehensive Income. For the years ended October 31, 2013, 2012 and 2011, these gas storage costs and the amounts we owed Pine Needle as of October 31, 2013 and 2012 are as follows.

In thousands	2013		2012		2011

Gas storage costs	$	11,098	$	10,410	$	10,677
Trade accounts payable		940		914

Summarized financial information provided to us by Pine Needle for 100% of Pine Needle as of September 30, 2013 and 2012, and for the twelve months ended September 30, 2013, 2012 and 2011 is presented below.

In thousands	2013		2012		2011

Current assets	$	9,225	$	11,937
Noncurrent assets		74,710		77,463
Current liabilities		3,531		4,278
Noncurrent liabilities		35,391		35,851
Revenues		16,810		16,390	$	17,666
Gross profit		16,810		16,390		17,666
Income before income taxes		5,804		5,832		5,763

We own 15% of the membership interests in SouthStar Energy Services LLC (SouthStar), a Delaware limited liability company. The other member is Georgia Natural Gas Company (GNGC), a wholly-owned subsidiary of AGL Resources, Inc. (AGL). SouthStar primarily sells natural gas to residential, commercial and industrial customers in the southeastern United States, including Illinois, Ohio, New York, Maryland, North Carolina, South Carolina and Tennessee, with most of its business being conducted in the unregulated retail gas market in Georgia. We account for our investment in SouthStar using the equity method, as we have board representation with equal voting rights on significant governance matters and policy decisions, and thus, exercise significant influence over the operations of SouthStar.

In September 2013, GNGC contributed its retail natural gas marketing assets and customer accounts located in Illinois. AGL acquired these retail assets and customers from Nicor Inc. in December 2011 and additional retail natural gas assets and customer accounts in a separate transaction in June 2013. We made an additional $22.5 million capital contribution to SouthStar, maintaining our 15% equity ownership, related to this transaction.

SouthStar's business is seasonal in nature as variations in weather conditions generally result in greater revenue and earnings during the winter months when weather is colder and natural gas consumption is higher. Also, because SouthStar is not a rate-regulated company, the timing of its earnings can be affected by changes in the wholesale price of natural gas. While SouthStar uses financial contracts to moderate the effect of price and weather changes on the timing of its earnings, wholesale price and weather volatility can cause variations in the timing of the recognition of earnings.

These financial contracts, in the form of futures, options and swaps, are considered to be derivatives and fair value is based on selected market indices. Our share of movements in the market value of these contracts are recorded as a hedge in “Accumulated other comprehensive loss” in “Stockholders' equity” in the Consolidated Balance Sheets; the detail of our share of the market value of these contracts is combined with our other equity method investments and presented in “Other Comprehensive Income (Loss), net of tax” in the Consolidated Statements of Comprehensive Income.

We have related party transactions as we sell wholesale gas supplies to SouthStar, and we record the amounts billed to SouthStar in “Operating Revenues” in the Consolidated Statements of Comprehensive Income. For the years ended October 31, 2013, 2012 and 2011, our operating revenues from these sales and the amounts SouthStar owed us as of October 31, 2013 and 2012 are as follows.

In thousands	2013		2012		2011

Operating revenues	$	3,291	$	2,442	$	4,961
Trade accounts receivable		441		473

Summarized financial information provided to us by SouthStar for 100% of SouthStar as of September 30, 2013 and 2012, and for the twelve months ended September 30, 2013, 2012 and 2011 is presented below.

In thousands	2013		2012		2011

Current assets	$	194,793	$	152,422
Noncurrent assets		136,753		9,803
Current liabilities		76,304		42,197
Noncurrent liabilities		53		1
Revenues		639,426		585,291	$	733,987
Gross profit		174,993		161,122		176,010
Income before income taxes		103,146		94,631		103,704

We own 50% of the membership interests in Hardy Storage Company, LLC (Hardy Storage), a West Virginia limited liability company. The other owner is a subsidiary of Columbia Gas Transmission Corporation, a subsidiary of NiSource Inc. Hardy Storage owns and operates an underground interstate natural gas storage facility located in Hardy and Hampshire Counties, West Virginia, that is regulated by the FERC. Hardy Storage has firm, long-term service agreements for 100% of the storage capacity of the facility, of which Piedmont subscribes to approximately 40%.

We have related party transactions as a customer of Hardy Storage, and we record the storage costs charged by Hardy Storage in “Cost of Gas” in the Consolidated Statements of Comprehensive Income. For the years ended October 31, 2013, 2012 and 2011, these gas storage costs and the amounts we owed Hardy Storage as of October 31, 2013 and 2012 are as follows.

In thousands	2013		2012		2011

Gas storage costs	$	9,702	$	9,702	$	9,702
Trade accounts payable		808		808

Summarized financial information provided to us by Hardy Storage for 100% of Hardy Storage as of October 31, 2013 and 2012, and for the twelve months ended October 31, 2013, 2012 and 2011 is presented below.

In thousands	2013		2012		2011

Current assets	$	7,641	$	10,302
Noncurrent assets		161,282		164,374
Current liabilities		12,378		14,534
Noncurrent liabilities		87,184		95,061
Revenues		24,375		24,359	$	24,378
Gross profit		24,375		24,359		24,378
Income before income taxes		10,582		9,939		9,657

We own 24% of the membership interests of Constitution Pipeline Company, LLC (Constitution), a Delaware limited liability company. In May 2013, through one of its subsidiaries, WGL Holdings, Inc. became a member of the joint venture along with existing members The Williams Companies, Inc. and Cabot Oil & Gas Corporation. A subsidiary of The Williams Companies is the operator of the project. The purpose of the joint venture is to construct and operate approximately 120 miles of interstate natural gas pipeline and related facilities connecting shale natural gas supplies and gathering systems in Susquehanna County, Pennsylvania, to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in New York. We have committed to fund an amount in proportion to our ownership interest for the development and construction of the new pipeline, which is expected to cost approximately $680 million. As of October 31, 2013, our fiscal year contributions were $15.9 million, and we expect our total contributions will be an estimated $55 million and $92.1 million in our fiscal 2014 and 2015 years, respectively. The target in-service date of the project is March 2015. The capacity of the pipeline is 100% subscribed under fifteen year service agreements with two Marcellus producer-shippers with a negotiated rate structure.

Summarized financial information provided to us by Constitution for 100% of Constitution as of September 30, 2013, and for the twelve months ended September 30, 2013 is presented below.

In thousands	2013		⁽¹⁾

Current assets	$	10,944
Noncurrent assets		62,438
Current liabilities		7,960
Noncurrent liabilities		-
Revenues		-
Gross profit		-
Income before income taxes		3,459

(1) Presented is the period in which we have a membership interest in Constitution, and not prior periods when we had no membership interest in Constitution. Our membership in Constitution began in November 2012.