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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

(Mark One)

Or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

     Commission file number 1-6196

Piedmont Natural Gas Company, Inc.

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

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities and Exchange Act of 1934). Yes x No o

     State the aggregate market value of the voting stock held by nonaffiliates of the registrant as of April 30, 2003.

Common Stock, no par value - $1,233,063,624

     Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Annual Meeting of Shareholders on February 27, 2004, are incorporated by reference into Part III.

Piedmont Natural Gas Company, Inc.

2003 FORM 10-K ANNUAL REPORT

TABLE OF CONTENTS

PART I

Item 1. Business

     Piedmont Natural Gas Company, Inc. (Piedmont), was incorporated in New York in 1950 and began operations in 1951. In 1994, we merged into a newly formed North Carolina corporation with the same name for the purpose of changing our state of incorporation to North Carolina.

     Piedmont is an energy services company primarily engaged in the distribution of natural gas to 940,000 residential, commercial and industrial customers in North Carolina, South Carolina and Tennessee, including 60,000 customers served by municipalities who are our wholesale customers. Our subsidiaries are invested in joint venture, energy-related businesses, including unregulated retail natural gas and propane marketing, interstate natural gas storage, intrastate natural gas transportation and regulated natural gas distribution. We also sell residential and commercial gas appliances in Tennessee.

     In the Carolinas, our service area is comprised of numerous cities, towns and communities, including Anderson, Greenville and Spartanburg in South Carolina and Charlotte, Salisbury, Greensboro, Winston-Salem, High Point, Burlington, Hickory, Spruce Pine, Reidsville, Fayetteville, New Bern, Wilmington, Tarboro, Elizabeth City, Rockingham and Goldsboro in North Carolina. In North Carolina, we also provide wholesale natural gas service to Greenville, Monroe, Rocky Mount and Wilson. In Tennessee, our service area is the metropolitan area of Nashville, including wholesale natural gas service to Gallatin and Smyrna.

     Effective at the close of business on September 30, 2003, we purchased for $417.5 million in cash 100% of the common stock of North Carolina Natural Gas Corporation (NCNG) from Progress Energy, Inc. (Progress). NCNG, a natural gas distributor, served approximately 176,000 customers in eastern North Carolina, including 57,000 customers served by four municipalities who were wholesale customers of NCNG. The purchase price for the NCNG common stock was increased by the amount of NCNG’s working capital on the closing date. Based on a preliminary working capital schedule, the closing date working capital was $32.4 million. The preliminary working capital amount will be adjusted in 2004 to actual under the terms of the purchase agreement. NCNG was merged into Piedmont immediately following the closing. We also purchased for $7.5 million in cash Progress’ equity interest in Eastern North Carolina Natural Gas Company (EasternNC). Progress’ equity interest in EasternNC consisted of 50% of EasternNC’s outstanding common stock and 100% of EasternNC’s outstanding preferred stock. EasternNC is a regulated utility that has a certificate of public convenience and necessity to provide natural gas service to 14 counties in eastern North Carolina that previously were not served with natural gas.

     We have two reportable business segments, regulated utility and non-utility activities. Operations of our regulated utility segment are conducted by Piedmont, the parent company, and by EasternNC and are conducted within the United States of America. Operations of our non-utility activities segment comprise all of our other ventures. These operations are primarily conducted by Piedmont Intrastate Pipeline Company (Piedmont Intrastate), Piedmont Interstate Pipeline Company (Piedmont Interstate), Piedmont Energy Company (Piedmont Energy), Piedmont Propane Company (Piedmont Propane) and Piedmont Greenbrier Pipeline Company,

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LLC (Piedmont Greenbrier), through their investments in ventures accounted for under the equity method. All of these companies, except for Piedmont Greenbrier, are wholly owned subsidiaries of Piedmont Energy Partners, a holding company which is a wholly owned subsidiary of the parent company. Piedmont Greenbrier is a wholly owned subsidiary of the parent company.

     Piedmont Intrastate owns 21.48% of the membership interests in Cardinal Pipeline Company, L.L.C. (Cardinal), a North Carolina limited liability company. Cardinal owns and operates a 104-mile intrastate natural gas pipeline in North Carolina. Piedmont Interstate owns 40.0587% of the membership interests in Pine Needle LNG Company, L.L.C. (Pine Needle), a North Carolina limited liability company. Pine Needle owns an interstate liquefied natural gas (LNG) storage facility in North Carolina. Piedmont Greenbrier owns 33% of the membership interest in Greenbrier Pipeline Company, LLC (Greenbrier). Greenbrier proposed to build a 280-mile interstate gas pipeline. Piedmont Energy owns 30% of the membership interests in SouthStar Energy Services LLC (SouthStar), a Delaware limited liability company. SouthStar sells natural gas to residential, commercial and industrial customers in the southeastern United States; however, SouthStar conducts most of its business in the unregulated retail gas market in Georgia. Piedmont Propane Company owns 20.69% of the membership interest in US Propane, L.P., which owns all of the general partnership interest and approximately 26% of the limited partnership interest in Heritage Propane Partners, L.P. (Heritage). Heritage is a marketer of propane through a nationwide retail distribution network.

     On November 6, 2003, Piedmont Greenbrier sold its interest in Greenbrier to Dominion Resources Inc., the other member in the venture, for its book value of $9.2 million. On November 7, 2003, we, along with the other members of US Propane, entered into an agreement to sell the general and limited partnership interests in Heritage to a third party for $130 million. Our share of the sale proceeds is expected to be $26.9 million. In connection with the sale, US Propane retained approximately 180,000 common units of Heritage for ultimate distribution to US Propane’s members. This transaction closed on January 20, 2004.

     Operations by segment for the years ended October 31, 2003, 2002 and 2001, are presented below.

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     Operating revenues shown in the consolidated statements of income represent revenues from the regulated utility segment. The cost of purchased gas is a component of operating revenues. Increases or decreases in purchased gas costs from suppliers are passed on to customers through purchased gas adjustment procedures. Therefore, our operating revenues are impacted by changes in gas costs as well as by changes in volumes of gas sold and transported. For the year ended October 31, 2003, 43% of our operating revenues were from residential customers, 25% from commercial customers, 9% from industrial and power generation customers, 22% from secondary market activity and 1% from various other sources. Revenues, less related costs, from the non-utility activities segment and earnings from equity investments are shown in “Other Income (Expense)” in the consolidated statements of income in “Non-operating income” or “Non-utility activities, at equity,” respectively. For further information on equity investments and segments, see Notes 10 and 11 to the consolidated financial statements in Item 8 of this Form 10-K.

     Our utility operations are subject to regulation by the North Carolina Utilities Commission (NCUC), the Public Service Commission of South Carolina (PSCSC) and the Tennessee Regulatory Authority (TRA) as to rates, service area, adequacy of service, safety standards, extensions and abandonment of facilities, accounting and depreciation. We are also subject to regulation by the NCUC as to the issuance of securities. The utility operations of EasternNC are subject to regulation by the NCUC. We are also subject to or affected by various federal regulations. These federal regulations include regulations that are particular to the natural gas industry, such as regulations of the FERC that affect the availability of and the prices paid for the interstate transportation of natural gas, regulations of the Department of Transportation that affect the construction, operation and maintenance of natural gas distribution systems and

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regulations of the Environmental Protection Agency relating to the use and release into the environment of hazardous wastes. In addition, we are subject to numerous regulations, such as those relating to employment practices, that are generally applicable to companies doing business in the United States.

     We hold non-exclusive franchises for natural gas service in the communities we serve, with expiration dates from 2004 to 2053. The franchises are adequate for the operation of our gas distribution business and do not contain restrictions which are of a materially burdensome nature. As of October 31, 2003, three franchises have expired; however, we continue to operate in those areas with no significant impact on our business as we have operated normally within the provisions of the expired franchise. The likelihood of cessation of service under an expired franchise is remote. We believe that these franchises will be renewed with no material adverse impact on us as most government entities do not want to prevent their citizens from having access to gas service or to interfere with our required system maintenance. We have never failed to obtain the renewal of a franchise; however, this is not necessarily indicative of future action.

     The natural gas distribution business is seasonal in nature as variations in weather conditions generally result in greater revenues and earnings during the winter months when temperatures are colder. For further information on weather sensitivity and the impact of seasonality on working capital, see “Financial Condition and Liquidity” in Item 7 of this Form 10-K. As is prevalent in the industry, we inject natural gas into storage during the summer months (principally April through October) for withdrawal from storage during the winter months (principally November through March) when customer demand is higher. During the year ended October 31, 2003, the amount of natural gas in storage varied from 3.1 million dekatherms (one dekatherm equals 1,000,000 BTUs) to 22.3 million dekatherms, and the aggregate commodity cost of this gas in storage varied from $14.1 million to $113.4 million.

     During the year ended October 31, 2003, 62.4 million dekatherms of gas were sold to or transported for large industrial and power generation customers, compared with 60.1 million dekatherms in 2002. Deliveries to temperature-sensitive residential and commercial customers, whose consumption varies with the weather, totaled 86 million dekatherms in 2003, compared with 65.9 million dekatherms in 2002. Weather, as measured by degree days, was 3% colder than normal in 2003 and 15% warmer than normal in 2002.

     The following is a five-year comparison of operating statistics for the years ended October 31, 1999 through 2003:

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     As of October 31, 2003, we had contracts for the following pipeline firm transportation capacity in dekatherms of daily deliverability:

     In addition, we had the following contracts for local peaking facilities and storage for seasonal or peaking capacity in dekatherms of daily deliverability to meet the firm demands of our markets. This availability varies from five days to one year:

     We own or have under contract 30 million dekatherms of storage capacity, either in the form of underground storage or LNG