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

     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 þ No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) 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. þ

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

     State the aggregate market value of the voting stock held by nonaffiliates of the registrant as of April 30, 2004.

Common Stock, no par value - $1,530,797,879

     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 March 4, 2005, are incorporated by reference into Part III.

Piedmont Natural Gas Company, Inc.

2004 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 960,000 residential, commercial and industrial customers in portions of 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 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 100% of the common stock of North Carolina Natural Gas Corporation (NCNG) from Progress Energy, Inc. (Progress), for $417.5 million in cash plus $32.4 million for estimated working capital. We paid an additional $.3 million for actual working capital in our second quarter ended April 30, 2004. NCNG, a regulated natural gas distribution company, served 176,000 customers in eastern North Carolina, including 57,000 customers served by four municipalities who were wholesale customers of NCNG. 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), a regulated utility. EasternNC 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. Progress’ equity interest in EasternNC consisted of 50% of EasternNC’s outstanding common stock and 100% of EasternNC’s outstanding preferred stock. We are obligated to purchase additional authorized but unissued shares of such preferred stock for $14.4 million.

     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 are comprised of our equity method investments in joint ventures. As of October 31, 2004, these operations were primarily conducted by Piedmont Intrastate Pipeline Company (Piedmont Intrastate), Piedmont Interstate Pipeline Company (Piedmont Interstate) and Piedmont Energy Company (Piedmont Energy). All of these companies are wholly owned subsidiaries of Piedmont Energy Partners, a holding company that is a wholly owned subsidiary

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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 an 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 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.

     As of October 31, 2003, Piedmont Greenbrier Pipeline Company, LLC, owned 33% of the membership interests in Greenbrier Pipeline Company, LLC (Greenbrier). Greenbrier was formed to build a proposed interstate gas pipeline from West Virginia to North Carolina. On November 6, 2003, we sold our interest to the other member in the venture for our book value of $9.2 million.

     Prior to January 20, 2004, Piedmont Propane Company, a wholly owned subsidiary of Piedmont Energy Partners, owned 20.69% of the membership interests in US Propane, L.P., which owned all of the general partnership interest and approximately 26% of the limited partnership interest in Heritage Propane Partners, L.P. (Heritage Propane), a marketer of propane through a nationwide retail distribution network. On January 20, we, along with the other members, completed the sale of US Propane’s general and limited partnership interests in Heritage Propane for $130 million. Our share of the proceeds was $26.9 million. We recorded a gain on the sale of $4.7 million in our first quarter ended January 31, 2004. In connection with the sale, the former members of US Propane formed TAAP, LP, a limited partnership, to receive the approximately 180,000 common units of Heritage Propane retained in the sale. On May 21, 2004, TAAP distributed to us 37,244 common units of Energy Transfer Partners, LP (formerly Heritage Propane), as our share of the retained units.

     On November 12, 2004, our subsidiary, Piedmont Hardy Storage Company, LLC, and Columbia Hardy Corporation, a subsidiary of Columbia Gas Transmission Corporation (Columbia Gas), a subsidiary of NiSource Inc., announced an agreement to form Hardy Storage Company LLC (Hardy Storage), with each having a 50% equity interest in the project. Hardy Storage will seek approval from the FERC to construct, own and operate an underground natural gas storage facility located in Hardy and Hampshire Counties, West Virginia. Subject to obtaining all necessary approvals, construction is expected to begin in October 2005 with storage service commencing with initial injections in April 2007. Our portion of the project capital expenditures is estimated at $50 to $55 million. Columbia Gas will serve as operator of the facilities.

     Operations by segment for the years ended October 31, 2004, 2003 and 2002, 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, 2004, 41% of our operating revenues were from residential customers, 23% from commercial customers, 13% from industrial and power generation customers, 20% from secondary market activity and 3% from various other sources. Operations of the non-utility activities segment are included in “Other Income (Expense)” in the consolidated statements of income in “Income from equity method investments” and “Non-operating income.” For further information on equity method investments and business 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 Federal Energy Regulatory Commission (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, maintenance, integrity and safety of natural gas distribution systems and regulations of the Environmental Protection Agency relating to the use and release into the environment of

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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 of America.

     We hold non-exclusive franchises for natural gas service in the communities we serve, with expiration dates from 2005 to 2054. The franchises are adequate for the operation of our gas distribution business and do not contain restrictions which are of a materially burdensome nature. Two franchises have expired as of October 31, 2004, and four will expire within the next fiscal year. We continue to operate in those areas with expired franchises 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, 2004, the amount of natural gas in storage varied from 7.5 million dekatherms (one dekatherm equals 1,000,000 BTUs) to 27 million dekatherms, and the aggregate commodity cost of this gas in storage varied from $37 million to $138.7 million.

     During the year ended October 31, 2004, which reflects a full year of the operations of NCNG and EasternNC compared with only one month in 2003, 102.5 million dekatherms of gas were sold to or transported for large industrial and power generation customers, compared with 62.5 million dekatherms in 2003. Deliveries to temperature-sensitive residential and commercial customers, whose consumption varies with the weather, totaled 89.9 million dekatherms in 2004, compared with 86.3 million dekatherms in 2003. Weather, as measured by degree days, was 6% warmer than normal in 2004 and 3% colder than normal in 2003.

     The following is a five-year comparison of operating statistics for the years ended October 31, 2000 through 2004:

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     As of October 31, 2004, 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 29.9 million dekatherms of storage capacity, either in the

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form of underground storage or LNG. This capability is used to supplement regular pipeline supplies on colder winter days when demand increases.

     The gas delivered to meet our design day requirements for firm customers is purchased under firm contractual commitments. These contracts provide that we pay a reservation fee to the supplier to reserve or guarantee the availability of gas supplies for delivery. Under these provisions, absent force majeure conditions, any disruption of supply deliverability is subject to penalty and damage assessment against the supplier. We ensure the delivery of the gas supplies to our distribution system to meet the peak day, seasonal and annual needs of our customers by using a variety of firm transportation and storage capacity arrangements. The pipeline capacity contracts require the payment of fixed demand charges to reserve firm transportation or storage entitlements. We align the contractual agreements for supply with the firm capacity agreements in terms of volumes, receipt and delivery locations and demand fluctuations. We may supplement firm contractual commitments with other supply arrangements to serve our interruptible market, or as an alternate supply for inventory withdrawals or injections. The source of the gas we distribute is primarily from the on-shore and off-shore Gulf Coast production region and is purchased primarily from major producers and marketers. For further information on gas supply and regulation, see “Gas Supply and Regulatory Proceedings” in Item 7 of this Form 10-K.

     During the year ended October 31, 2004, 8% of our margin (operating revenues less cost of gas) was generated from deliveries to industrial or large commercial customers that have the capability to burn a fuel other than natural gas. The alternative fuels are primarily fuel oil and propane and, to a much lesser extent, coal or wood. Our ability to maintain or increase deliveries of gas to these customers depends on a number of factors, including weather conditions, governmental regulations, the price of gas from suppliers and the price of alternate fuels. Under regulations of the FERC, certain large-volume customers located in proximity to the interstate pipelines delivering gas to us could attempt to bypass us and take delivery of gas directly from the pipeline or from a third party connecting with the pipeline. Through October 31, 2004, only minimal bypass activity has been experienced, in part because of our ability to negotiate competitive rates and service terms. The future level of bypass activity cannot be predicted.

     The regulated utility faces competition in the residential and commercial customer markets based on customer preferences for natural gas compared with other energy products and the relative prices of those products. The most significant product competition occurs between natural gas and electricity for space heating, water heating and cooking. There are four major electric company competitors within our service areas. We continue to attract the majority of the new residential construction market, and we believe that the consumer’s preference is for natural gas based on such factors as reliability, comfort and convenience compared with electricity to meet their needs. In addition to its many advantages, natural gas has historically maintained a price advantage over electricity in our service areas; however, with the increasing customer demand for natural gas, flat to declining production levels and other public policy issues primarily associated with access to public lands for drilling, natural gas prices and price volatility have increased. Increases in the price of natural gas can negatively impact our competitive position by decreasing the price benefits of natural gas to the consumer.

     In the industrial market, many of our customers are capable of burning a fuel other than

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natural gas, fuel oil being the most significant competing energy alternative. Our ability to maintain industrial market share is largely dependent on price. The relationship between natural gas supply and demand has the greatest impact on the price of our product. With the imbalance between domestic supply and demand, the cost of natural gas from non-domestic sources may play a greater role in establishing the future market price of natural gas. The price of oil depends upon a number of factors beyond our control, including the relationship between supply and demand and policies of foreign and domestic governments.

     During the year ended October 31, 2004, our largest customer contributed $14.1 million, or 1%, to total operating revenues.

     We spend an immaterial amount for research and development costs, primarily limited to gas industry-sponsored research projects.

     Compliance with federal, state and local environmental protection laws have had no material effect on construction expenditures, earnings or competitive position. For further information on environmental issues, see “Environmental Matters” in Item 7 of this Form 10-K.

     During our fourth quarter ended October 31, 2004, we established and committed to funding the Piedmont Natural Gas Foundation. The charitable foundation was funded with $7 million in cash in November 2005.

     As of October 31, 2004, we had 2,120 employees, compared with 2,155 as of October 31, 2003.

     Our filings on Form 10-K, Form 10-Q and Form 8-K are available at no cost on our web site at www.piedmontng.com on the same day the report is filed with the Securities and Exchange Commission.

Item 2. Properties

     All property shown in the consolidated balance sheets in “Utility Plant” is owned by the parent company or EasternNC and is used in our regulated utility segment. This property consists of intangible plant, production plant, storage plant, transmission plant, distribution plant and general plant as categorized by natural gas utilities, with 93% of the total invested in distribution and transmission plant to serve our customers. We have approximately 2,350 miles of lateral pipelines up to 30 inches in diameter that connect our distribution systems with the transmission systems of our pipeline suppliers. We distribute natural gas through approximately 21,150 miles (three-inch equivalent) of distribution mains. The lateral pipelines and distribution mains are located on or under public streets and highways, or property owned by others, for which we have obtained the necessary legal rights to place and operate our facilities on private property. All of these properties are located within our service areas in North Carolina, South Carolina and Tennessee. Utility Plant includes “Construction work in progress” which represents projects, primarily distribution, transmission and general plant, that have not been placed into service pending completion.

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     None of our property is encumbered and all property is in use.

     We own our corporate headquarters building located in Charlotte, North Carolina, and we own or lease for varying periods district and regional offices in the locations shown below. Lease payments for these various offices totaled $1.6 million for the year ended October 31, 2004.

     We are in the process of selling our corporate headquarters building. We have negotiated a preliminary ten-year lease with renewable options for space in a building that is currently under construction and anticipated to be ready for occupancy in late 2005. The lease payments for the ten-year term are estimated to range from $3 million to $3.4 million annually. We expect to lease back our current office building prior to occupancy of the new office space.

     All property shown in the consolidated balance sheets “Other Physical Property” is owned by the parent company and is primarily comprised of residential and commercial water heaters leased to natural gas customers. None of our subsidiaries directly own property as their operations consist solely of participating in joint ventures as an equity member.

Item 3. Legal Proceedings

     We have only routine litigation in the normal course of business and do not expect the outcomes to have any material impact on our financial position or results of operations.

Item 4. Submission of Matters to a Vote of Security Holders

     No matters were submitted to a vote of security holders during our fourth quarter ended October 31, 2004.

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PART II

     Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

     (a) Our Common Stock (symbol PNY) is traded on the New York Stock Exchange (NYSE). The following table provides information with respect to the high and low sales prices on the NYSE for each quarterly period for the years ended October 31, 2004 and 2003. All amounts reflect a two-for-one stock split effective October 11, 2004.

     (b) As of January 7, 2005, our Common Stock was owned by 16,409 shareholders of record.

     (c) The following table provides information with respect to quarterly dividends paid on Common Stock for the years ended October 31, 2004 and 2003. All amounts reflect a two-for-one stock split effective October 11, 2004. We expect that comparable cash dividends will continue to be paid in the future.

     The amount of cash dividends that may be paid on Common Stock is restricted by provisions contained in certain note agreements under which long-term debt was issued, with those for the senior notes being the most restrictive. We cannot pay or declare any dividends or make any other distribution on any class of stock or make any investments in subsidiaries or permit any subsidiary to do any of the above (all of the foregoing being “restricted payments”) except out of net earnings available for restricted payments. As of October 31, 2004, net earnings available for restricted payments were greater than retained earnings; therefore, none of our retained earnings were restricted.

     On June 4, 2004, the Board of Directors approved a Common Stock Open Market Purchase Program that authorizes the repurchase of up to three million shares of currently outstanding shares of Common Stock. We utilize a broker to repurchase the shares on the open market and such shares are then cancelled and become authorized but unissued shares available for issuance under the Dividend Reinvestment and Stock Purchase Plan, the Employee Stock Purchase Plan and the Executive Long-Term Incentive Plan. We implemented the program on September 1, 2004, and during September and October repurchased .2 million shares of Common Stock at a total cost of $4.5 million.

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     The following table provides information with respect to repurchases of our Common Stock during the fourth quarter ended October 31, 2004. All amounts except the number of shares authorized reflect a two-for-one stock split effective October 11, 2004.

Item 6. Selected Financial Data

     The following table provides selected financial data for the years ended October 31, 2000 through 2004 . The information presented is not comparable due to the acquisitions of North Carolina Natural Gas Corporation (NCNG) and an equity interest in Eastern North Carolina Natural Gas Company (EasternNC) effective September 30, 2003.