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WGL Holdings, Inc. Reports Increased Second Quarter Earnings and Raises Fiscal Year 2005 Earnings Guidance

WASHINGTON, April 27, 2005 /PRNewswire-FirstCall via COMTEX/ -- WGL Holdings, Inc. (NYSE: WGL) (the Company), the parent company of Washington Gas Light Company (Washington Gas or the regulated utility) and other energy-related subsidiaries, today reported net income of $79.9 million, or $1.63 per share, for the three months ended March 31, 2005, the second quarter of its fiscal year 2005. This represents a $714,000, or $0.01 per share, increase over net income of $79.2 million, or $1.62 per share, for the three months ended March 31, 2004. For the first six months of fiscal year 2005, the Company reported net income of $123.1 million, or $2.51 per share, an increase of $4.3 million, or $0.08 per share, over the same period of the prior fiscal year. Unless otherwise noted, earnings per share amounts are presented in this news release on a diluted basis, and are based on weighted average common and common equivalent shares outstanding. The Company's operations are seasonal, and accordingly, the Company's operating results for the three and six months ended March 31, 2005 are not indicative of the results to be expected for the twelve months ended September 30, 2005.

Commenting on second quarter results and the outlook for the remainder of the year, WGL Holdings' Chairman and CEO James H. DeGraffenreidt, Jr. said, "Our strong second quarter results demonstrate our success in generating shareholder value from our non-utility businesses while continuing to grow our utility operations." DeGraffenreidt added, "Our energy-marketing and commercial HVAC businesses have improved sales and increased margins. We also profitably grew our utility customer base, adding nearly 27,500 active customer meters in the past year."

Net income presented for all periods ended March 31, 2004 has been restated to recognize the effect of a $1.2 million, or $0.02 per share, benefit associated with a Medicare prescription drug subsidy. This restatement was made in accordance with an accounting standard issued by the Financial Accounting Standards Board in 2004 and adopted by the Company during the third quarter of fiscal year 2004. This standard permitted recognition of this Medicare subsidy benefit on a retroactive basis effective January 1, 2004, the beginning of the Company's second quarter of fiscal year 2004. The effect of the restatement, which was reflected in the annual earnings reported for fiscal year 2004, is being presented for the first time in this earnings release as the Company presents detailed financial results for the quarter ended March 31, 2004. Accordingly, earnings for the second quarter of fiscal year 2004 were restated from $1.60 to $1.62 per share, and earnings for the six months ended March 31, 2004 were restated from $2.41 to $2.43 per share.

Results from Normal Operations

The Company reviews its financial results from normal operations (based on normal weather, and uninfluenced by unique transactions) to monitor its progress towards achieving its five-year financial objectives. Excluding the effects of colder-than-normal weather and unique transactions described below, the Company's consolidated earnings from normal operations for the second quarter of fiscal year 2005 were $1.53 per share, a $0.23 per share increase over earnings from normal operations of $1.30 per share for the same quarter of fiscal year 2004. For the first six months of fiscal year 2005, the Company's consolidated earnings from normal operations were $2.41 per share, a $0.26 per share increase over earnings from normal operations of $2.15 per share for the corresponding period of the prior fiscal year. The significant increase in earnings from normal operations for both the current quarter and year-to-date periods was due primarily to customer growth, reduced expenses including operation and maintenance, depreciation and amortization, and income taxes, as well as increased earnings from the Company's major non-utility operations.

As discussed above, earnings from normal operations exclude the impact of variations from normal weather and unique transactions. The Company's regulated utility operations are weather sensitive, with a significant portion of its revenue coming from deliveries of natural gas to residential and commercial heating customers. Weather, when measured by heating degree days, was seven percent colder and ten percent colder than normal for the three months ended March 31, 2005 and 2004, respectively, enhancing net income in relation to normal weather by an estimated $5 million, or $0.10 per share, for the current quarter, as compared to $10 million, or $0.20 per share, for the same quarter in fiscal year 2004. For the six months ended March 31, 2005 and 2004, weather was five percent colder and seven percent colder than normal, respectively, contributing an estimated $5 million to net income, or $0.10 per share, for the current six-month period, as compared to $10 million, or $0.20 per share, for the corresponding period of the prior fiscal year.

Earnings comparisons between the current and corresponding prior year periods presented also reflect unique transactions related to the Company's utility and non-utility segments. While there were no unique transactions in the current quarter and year-to-date periods, earnings from normal operations for the three and six months ended March 31, 2004 exclude the effect of an after-tax gain of $5.8 million, or $0.12 per share, realized in the second quarter of fiscal year 2004 from the sale of two buildings by a third party in a commercial development project in which the Company held a carried interest. Additionally, earnings from normal operations for the first six months of the prior fiscal year exclude the effect of additional depreciation expense unrelated to those periods of $3.5 million (pre-tax), or $0.04 per share, that was recorded in connection with a Virginia rate order.

Reconciliations of the Company's and regulated utility segment's earnings per share reported in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP) to earnings per share from normal operations are attached to this press release.

Three Months Ended March 31, 2005

Regulated Utility Operations

The operating results of the Company's regulated utility segment are the primary influence on consolidated operating results. For the three months ended March 31, 2005, the regulated utility segment reported net income of $74.6 million, or $1.52 per share, as compared to net income of $75.4 million, or $1.54 per share, for the same quarter of the prior fiscal year. This comparison reflects a decrease in total natural gas deliveries to firm customers of 22.6 million therms, or three percent, to 626.9 million therms delivered during the second quarter of fiscal year 2005. The decline in total natural gas deliveries reflects three percent warmer weather in the current quarter when compared to the same quarter in fiscal year 2004. Weather was seven percent colder than normal for the three months ended March 31, 2005, enhancing net income for the current quarter in relation to normal weather by an estimated $5 million, or $0.10 per share. Weather for the three months ended March 31, 2004 was ten percent colder than normal, contributing $10 million, or $0.20 per share, to earnings for that period.

Earnings for the regulated utility segment for the current quarter were favorably affected by the addition of nearly 27,500 active customer meters, an increase of 2.8 percent from the end of the same quarter of the prior fiscal year. The regulated utility segment also benefited during the current quarter from a $1.7 million (pre-tax), or three percent, decrease in operation and maintenance expenses, increasing net income by $0.02 per share when compared to the same quarter of fiscal year 2004. The lower expense primarily reflects fewer employees and lower employee severance costs, partially offset by higher labor rates and employee benefits expense.

Second quarter 2005 earnings for the regulated utility segment reflect a $1.5 million (pre-tax), or $0.02 per share, decrease in depreciation and amortization expense due primarily to a reversal in the current period of $1.0 million of depreciation expense that was previously recorded in fiscal year 2004 related to the performance of an earnings test required by a regulatory order in Virginia. Additionally, a $500,000 provision was recorded in the second quarter of fiscal year 2004 related to an earnings test that did not recur in the current quarter.

The regulated utility segment also benefited from reduced income taxes during the current three-month period due to a lower effective federal income tax rate (primarily attributable to a non-taxable benefit of a Medicare prescription drug subsidy) that contributed an additional $0.03 per share of increased earnings for this segment.

Non-Utility Operations

The Company's non-utility operations reported net income of $5.3 million, or $0.11 per share, for the three months ended March 31, 2005, as compared to net income of $3.9 million, or $0.08 per share, for the same three months of the prior fiscal year. The increased earnings from non-utility operations were attributable primarily to a $0.12 per share improvement in the operating results of the Company's retail energy-marketing segment. Results for the quarter ended March 31, 2004 included an after-tax gain of $5.8 million, or $0.12 per share, from the sale of a carried interest in real estate that did not recur in the current fiscal year.

The retail energy-marketing segment reported net income of $5.8 million, or $0.12 per share, for the current three-month period, compared to a net loss of $183,000 reported for the same three-month period of the prior fiscal year. The $6.0 million, or $0.12 per share, year-over-year improvement in earnings for this segment reflects higher gross margins from the sale of natural gas. Although natural gas sales volumes decreased slightly by one percent, gross margins per therm increased over three times. A significant portion of the higher gross margins from gas sales reflects the utilization of greater volumes of lower cost storage inventory, and the realization in the current quarter of market value gains associated with certain contracts used to hedge supply risks that occur due to the volatility in the price of natural gas. The retail energy-marketing segment also benefited during the current quarter from a relatively small improvement in gross margins from electric sales, reflecting a higher gross margin per kilowatt-hour sold that more than offset the affect of lower electric sales volumes caused by a reduced electric customer base.

The Company's commercial heating, ventilating and air conditioning (HVAC) segment reported a net loss of $256,000, or $0.01 per share, for the second quarter of fiscal year 2005, an improvement of $518,000, or $0.01 per share, over the net loss of $774,000, or $0.02 per share, reported for this segment for the same quarter of the prior fiscal year. This improvement primarily reflects increased sales and lower selling, general and administrative expenses during the period.

Six Months Ended March 31, 2005

Regulated Utility Operations

The regulated utility segment reported net income of $114.4 million, or $2.34 per share, for the first six months of fiscal year 2005, an increase of $4.4 million, or $0.09 per share, over net income of $110.0 million, or $2.25 per share, for the corresponding six-month period of the prior fiscal year.

Increased earnings for the regulated utility segment for the current six- month period reflect a 2.8 percent increase in active customer meters. The first six months of fiscal year 2005 also benefited $2.3 million, or $0.03 per share, from realizing the favorable effect of changes in rates charged to customers that were implemented in Maryland on November 6, 2003 and the District of Columbia on November 24, 2003. This benefit is net of the impact of a Virginia rate increase that went into effect on February 26, 2004, subject to refund, and included in this segment's operating results for the six months ended March 31, 2004, but that was not in effect during the six months ended March 31, 2005.

Total gas deliveries to firm customers fell 30.1 million therms, or three percent, to 1.021 billion therms delivered for the six months ended March 31, 2005, primarily due to warmer weather. Weather was two percent warmer in the current six-month period than in the comparable period of the prior fiscal year. Total gas deliveries to firm customers in the current six-month period also reflect declines experienced during the first three months of fiscal year 2005 that did not correlate with the change in heating degree days for that period. Weather was five percent colder than normal for the six months ended March 31, 2005, enhancing net income in relation to normal weather by an estimated $5 million, or $0.10 per share. Weather for the six-months ended March 31, 2004 was seven percent colder than normal, contributing $10 million, or $0.20 per share, to earnings for that period.

Current year-to-date earnings for the regulated utility segment benefited from a slight decline of $891,000 (pre-tax), or $0.01 per share, in operation and maintenance expense. The lower expense primarily reflects six percent fewer employees, and reduced employee severance costs, partially offset by the effect of higher labor rates and employee benefit costs.

Depreciation and amortization expense for the current six-month period declined by $4.6 million (pre-tax), or $0.06 per share. The current period reflects a reversal of $1.0 million (pre-tax), or $0.01 per share, of depreciation expense that was previously recorded in fiscal year 2004 related to the performance of an earnings test as required by a Virginia rate order. This reversal, combined with depreciation expense that was applicable to a prior period of $3.5 million, or $0.04 per share, recorded during the first six months of fiscal year 2004 in connection with a Virginia rate order, and depreciation expense of $500,000 recorded in connection with an earnings test in Virginia in the second quarter of fiscal year 2004, resulted in the favorable year-over-year expense comparison.

The regulated utility segment also benefited during the current year-to- date period from reduced income taxes due to a lower effective federal income tax rate (primarily attributable to a non-taxable benefit of a Medicare prescription drug subsidy) that contributed an additional $0.07 per share of increased earnings.

Non-Utility Operations

The Company's non-utility operations reported net income of $8.6 million, or $0.17 per share, for the six months ended March 31, 2005, relatively unchanged from the corresponding period of the prior fiscal year. The current six-month period reflects a $0.10 per share improvement in the earnings of the retail energy-marketing segment. The results for the same period of the prior fiscal year included a gain related to the sale of a carried interest in real estate that was almost equal to the earnings improvement of the retail energy- marketing segment for the current period.

The retail energy-marketing segment reported net income of $9.9 million, or $0.20 per share, for the six months ended March 31, 2005 as compared to net income of $4.6 million, or $0.10 per share, reported for the same period last fiscal year. The $5.3 million, or $0.10 per share, year-over-year improvement in earnings primarily reflects higher gross margins from the sale of natural gas, and a small increase in gross margins from electric sales despite significantly lower electric sales volumes.

The Company's commercial heating, ventilating and air conditioning (HVAC) segment reported a net loss of $688,000, or $0.02 per share, for the six months ended March 31, 2005, an improvement of $584,000, or $0.01 per share, over the same period last fiscal year. This improvement, driven primarily by this segment's operating results for the current second quarter, primarily reflects increased sales and lower selling, general and administrative expenses during the period.

Earnings Outlook

The earnings guidance shown below should be read in conjunction with a press release issued by WGL Holdings, Inc. on April 27, 2005 and entitled, "WGL Holdings, Inc. Subsidiary Updates Estimated Costs of System Rehabilitation Program in Prince George's County, Maryland."

The Company is raising its consolidated earnings estimate for the full fiscal year 2005 to a range of $1.94 to $2.04 per share from its previous guidance of $1.83 to $1.93 per share. This updated estimate includes an increase in projected full fiscal year 2005 earnings from its unregulated businesses to a range of $0.16 to $0.20 per share from the previous range of $0.09 to $0.13 per share. The annual guidance for the consolidated entity includes an estimate for the third quarter ending June 30, 2005 of a seasonal net loss in the range of $0.11 to $0.21 per share, which reflects projected earnings from the Company's unregulated businesses of $0.01 to $0.03 per share.

This guidance includes the estimated effect of actual weather through April 25, 2005, and assumes normal weather thereafter. These estimates also: (i) assume an anticipated level of costs and a rate of incurrence of such costs throughout the remainder of fiscal year 2005 in connection with a large project to be performed in Prince George's County, Maryland, and assume approval by the Public Service Commission of Maryland of Washington Gas' proposed accounting treatment for certain of these costs, (ii) assume no additional effect that may result from performing earnings tests pursuant to a December 18, 2003 rate order issued by the State Corporation Commission of Virginia, and (iii) exclude the effect of other unusual items that could arise in the future.

Other Information

The Company will hold a conference call at 10:30 a.m. Eastern time on April 28, 2005, to discuss its second quarter financial results. The live conference call will be available to the public via a link located on the WGL Holdings Web site, http://www.wglholdings.com. To hear the live Webcast, click on the Live Webcast link located on the home page of the referenced site. The Webcast will be archived for replay on the WGL Holdings Web site through May 27, 2005.

Headquartered in Washington, D.C., WGL Holdings is the parent company of Washington Gas Light Company, a natural gas utility that serves approximately one million customers throughout metropolitan Washington, D.C., and the surrounding region. In addition, it holds a group of energy-related retail businesses that focus primarily on retail energy-marketing and commercial heating, ventilating and air conditioning services.

Additional information about WGL Holdings is available on its Web site, http://www.wglholdings.com.

Note: This news release and other statements by the Company include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the outlook for earnings, revenues and other future financial business performance or strategies and expectations. Forward-looking statements are typically identified by words such as, but not limited to, "estimates," "expects," "anticipates," "intends," "believes," "plans," and similar expressions, or future or conditional verbs such as "will," "should," "would," and "could." Although the Company believes such forward-looking statements are based on reasonable assumptions, it cannot give assurance that every objective will be achieved. Forward-looking statements speak only as of today, and the Company assumes no duty to update them.

As previously disclosed in the Company's filings with the Securities and Exchange Commission, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the level and rate at which costs and expenses are incurred in connection with constructing, operating and maintaining the Company's natural gas distribution system; variations in weather conditions from normal levels; changes in economic, competitive, political and regulatory conditions and developments; changes in capital and energy commodity market conditions; changes in credit ratings of debt securities of WGL Holdings, Inc. or Washington Gas Light Company that may affect access to capital or the cost of debt; changes in credit market conditions and creditworthiness of customers and suppliers; changes in relevant laws and regulations, including tax, environmental and employment laws and regulations; legislative, regulatory and judicial mandates or decisions affecting business operations or the timing of recovery of costs and expenses; the timing and success of business and product development efforts and technological improvements; the pace of deregulation efforts and the availability of other competitive alternatives; terrorist activities; and other uncertainties. The outcome of negotiations and discussions the Company may hold with other parties from time to time regarding utility and energy-related investments and strategic transactions that are both recurring and non-recurring may also affect future performance. For a further discussion of the risks and uncertainties, see the Company's most recent reports on Form 10-K and 10-Q filed with the Securities and Exchange Commission.

Please see the following comparative statements for additional
information.  Also attached is a reconciliation of the Company's earnings per
share reported in accordance with GAAP to earnings per share from normal
operations.


                                WGL Holdings, Inc.
                        Consolidated Statements of Income
                    For Periods Ended March 31, 2005 and 2004
                                   (Unaudited)



                                                       Three Months Ended
                                                            March 31,
    (In thousands, except per share data)            2005              2004

    UTILITY OPERATIONS
    Operating Revenues                            $635,226          $588,648
     Less: Cost of gas                             384,559           336,986
           Revenue taxes                            23,779            20,510
       Utility Net Revenues                        226,888           231,152

    Other Operating Expenses
     Operation and maintenance                      59,537            61,218
     Depreciation and amortization                  21,418            22,961
     General taxes                                  12,197            10,782
     Income taxes                                   46,677            49,629
       Utility Other Operating Expenses            139,829           144,590
       Utility Operating Income                     87,059            86,562

    NON-UTILITY OPERATIONS
    Operating Revenues
     Retail energy-marketing                       285,918           265,680
     Heating, ventilating and air
      conditioning (HVAC)                           10,006             7,246
     Other non-utility activities                      319               678
       Total Non-Utility Operating Revenues        296,243           273,604

    Operating Expenses
     Non-utility operating expenses                287,508           275,821
     Income tax expense (benefit)                    3,384              (410)
       Total Non-Utility Operating Expenses        290,892           275,411
       Non-Utility Operating Income (Loss)           5,351            (1,807)

    TOTAL OPERATING INCOME                          92,410            84,755
    Other Income (Expenses) - Net                     (936)            5,553

    INCOME BEFORE INTEREST EXPENSE                  91,474            90,308
    Interest expense                                11,198            10,746
    Dividends on Washington Gas preferred stock        330               330
    NET INCOME                                     $79,946           $79,232

    AVERAGE COMMON SHARES OUTSTANDING
             Basic                                  48,688            48,643
             Diluted                                48,996            48,859

    EARNINGS PER AVERAGE COMMON SHARE
             Basic                                   $1.64             $1.63
             Diluted                                 $1.63             $1.62



                                                        Six Months Ended
                                                            March 31,
    (In thousands, except per share data)             2005              2004

    UTILITY OPERATIONS
    Operating Revenues                          $1,044,177          $963,962
     Less:  Cost of gas                            613,170           535,764
            Revenue taxes                           40,874            34,279
       Utility Net Revenues                        390,133           393,919

    Other Operating Expenses
     Operation and maintenance                     115,535           116,426
     Depreciation and amortization                  43,614            48,166
     General taxes                                  21,254            20,653
     Income taxes                                   70,714            74,387
       Utility Other Operating Expenses            251,117           259,632
       Utility Operating Income                    139,016           134,287

    NON-UTILITY OPERATIONS
     Operating Revenues
      Retail energy-marketing                      491,206           467,938
      Heating, ventilating and air conditioning
       (HVAC)                                       19,524            14,780
      Other non-utility activities                     613               861
        Total Non-Utility Operating Revenues       511,343           483,579

    Operating Expenses
     Non-utility operating expenses                496,834           478,613
     Income tax expense (benefit)                    5,623             2,114
       Total Non-Utility Operating Expenses        502,457           480,727
       Non-Utility Operating Income (Loss)           8,886             2,852

    TOTAL OPERATING INCOME                         147,902           137,139
    Other Income (Expenses) - Net                   (1,935)            4,633

    INCOME BEFORE INTEREST EXPENSE                 145,967           141,772
    Interest expense                                22,229            22,337
    Dividends on Washington Gas preferred stock        660               660
    NET INCOME                                    $123,078          $118,775

    AVERAGE COMMON SHARES OUTSTANDING
             Basic                                  48,679            48,634
             Diluted                                48,967            48,836

    EARNINGS PER AVERAGE COMMON SHARE
             Basic                                   $2.53             $2.44
             Diluted                                 $2.51             $2.43



                                                       Twelve Months Ended
                                                             March 31,
    (In thousands, except per share data)             2005              2004

    UTILITY OPERATIONS
     Operating Revenues                         $1,348,163        $1,269,819
      Less:  Cost of gas                           746,374           673,026
             Revenue taxes                          56,674            48,928
        Utility Net Revenues                       545,115           547,865

    Other Operating Expenses
     Operation and maintenance                     225,860           221,502
     Depreciation and amortization                  86,958            90,911
     General taxes                                  37,145            37,037
     Income taxes                                   54,790            60,677
        Utility Other Operating Expenses           404,753           410,127
        Utility Operating Income                   140,362           137,738

    NON-UTILITY OPERATIONS
     Operating Revenues
      Retail energy-marketing                      813,127           797,536
      Heating, ventilating and air
       conditioning (HVAC)                          34,867            32,161
      Other non-utility activities                   1,425             1,180
        Total Non-Utility Operating Revenues       849,419           830,877

    Operating Expenses
     Non-utility operating expenses                834,393           828,455
     Income tax expense (benefit)                    5,684              (125)
        Total Non-Utility Operating Expenses       840,077           828,330
        Non-Utility Operating Income (Loss)          9,342             2,547

    TOTAL OPERATING INCOME                         149,704           140,285
    Other Income (Expenses) - Net                   (3,407)            4,809

    INCOME BEFORE INTEREST EXPENSE                 146,297           145,094
    Interest expense                                44,037            45,242
    Dividends on Washington Gas preferred stock      1,320             1,320
    NET INCOME                                    $100,940           $98,532

    AVERAGE COMMON SHARES OUTSTANDING
             Basic                                  48,665            48,614
             Diluted                                48,914            48,810

    EARNINGS PER AVERAGE COMMON SHARE
             Basic                                   $2.07             $2.03
             Diluted                                 $2.06             $2.02



         Net Income (Loss) Applicable To Common Stock -- By Segment ($000):

                                                       Three Months Ended
                                                            March 31,
    (In thousands, except per share data)             2005              2004

    Regulated utility                              $74,640           $75,367

    Non-utility operations:
     Retail energy-marketing                         5,785              (183)
     Commercial HVAC                                  (256)             (774)
       Total major non-utility                       5,529              (957)
       Other, principally non-utility activities      (223)            4,822
         Total non-utility                           5,306             3,865
    NET INCOME                                     $79,946           $79,232


                                                        Six Months Ended
                                                            March 31,
    (In thousands, except per share data)             2005              2004

    Regulated utility                             $114,443          $110,046

    Non-utility operations:
     Retail energy-marketing                         9,893             4,627
     Commercial HVAC                                  (688)           (1,272)
       Total major non-utility                       9,205             3,355
       Other, principally non-utility activities      (570)            5,374
         Total non-utility                           8,635             8,729
    NET INCOME                                    $123,078          $118,775


                                                       Twelve Months Ended
                                                             March 31,
    (In thousands, except per share data)             2005              2004

    Regulated utility                              $93,348           $90,041

    Non-utility operations:
     Retail energy-marketing                        13,546             4,670
     Commercial HVAC                                (4,812)           (1,840)
       Total major non-utility                       8,734             2,830
       Other, principally non-utility activities    (1,142)            5,661
         Total non-utility                           7,592             8,491
    NET INCOME                                    $100,940           $98,532



                               WGL Holdings, Inc.
                           Consolidated Balance Sheets
                             March 31, 2005 and 2004
                                   (Unaudited)

                                                            March 31,
    (In thousands)                                    2005             2004

    ASSETS
    Property, Plant and Equipment
      At original cost                            $2,704,566       $2,609,621
      Accumulated depreciation and amortization     (780,638)        (722,881)
        Net property, plant and equipment          1,923,928        1,886,740

    Current Assets
      Cash and cash equivalents                       72,214            77,369
      Accounts receivable, net                       460,069           414,415
      Storage gas--at cost (first-in, first-out)      52,347            36,980
      Other                                           47,160            40,042
        Total current assets                         631,790           568,806
    Deferred Charges and Other Assets                160,136           156,458
        Total Assets                              $2,715,854        $2,612,004


    CAPITALIZATION AND LIABILITIES
    Capitalization
      Common shareholders' equity                   $945,490          $907,444
      Washington Gas Light Company preferred
       stock                                          28,173            28,173
      Long-term debt                                 523,692           617,903
        Total capitalization                       1,497,355         1,553,520

    Current Liabilities
      Notes payable and current maturities
       of long-term debt                             173,526           146,741
      Accounts payable                               207,954           163,189
      Other                                          190,686           156,772
        Total current liabilities                    572,166           466,702
    Deferred Credits                                 646,333           591,782
        Total Capitalization and Liabilities      $2,715,854        $2,612,004



                                WGL Holdings, Inc.
                 Consolidated Financial and Operating Statistics
                    For Periods Ended March 31, 2005 and 2004
                                   (Unaudited)

    COMMON STOCK DATA
                               March 31, 2005             52 Week
                               Closing Price             Price Range

                                   $30.96               $31.97-$26.66


                   Earnings Per Share                      Annualized
               Twelve Months Ended March 31,       P/E      Dividend     Yield
                    2005           2004

    Basic          $2.07          $2.03            15.0      $1.33        4.3%
    Diluted        $2.06          $2.02


    FINANCIAL STATISTICS
                                                 Twelve Months Ended
                                        March 31,                   March 31,
                                          2005                        2004

    Return on Average Common Equity        10.9 %                      11.1 %
    Total Interest Coverage  (times)        4.6                         4.5
    Book Value Per Share  (end of
     period)                             $19.42                      $18.65
    Common Shares Outstanding-end of
     period  (thousands)                 48,693                      48,648


    UTILITY GAS STATISTICS
                                                    Three Months Ended
                                                         March 31,
    (In thousands)                            2005                       2004

    Operating Revenues
     Gas Sold and Delivered
       Residential - Firm                 $430,886                   $385,975
       Commercial and Industrial - Firm    122,797                    113,946
       Commercial and Industrial -
        Interruptible                        2,744                      2,106
       Electric Generation                     275                        275
                                           556,702                    502,302
     Gas Delivered for Others
       Firm                                 59,196                     62,887
       Interruptible                        13,513                     10,952
       Electric Generation                      62                         71
                                            72,771                     73,910
                                           629,473                    576,212
      Other                                  5,753                     12,436
        Total                             $635,226                   $588,648


                                                      Six Months Ended
                                                          March 31,
    (In thousands)                            2005                       2004

    Operating Revenues
     Gas Sold and Delivered
       Residential - Firm                 $683,123                   $623,652
       Commercial and Industrial - Firm    213,431                    186,722
       Commercial and Industrial -
        Interruptible                        5,086                      4,899
       Electric Generation                     550                        417
                                           902,190                    815,690
     Gas Delivered for Others
       Firm                                102,553                    108,256
       Interruptible                        23,533                     21,291
       Electric Generation                     116                        150
                                           126,202                    129,697
                                         1,028,392                    945,387
      Other                                 15,785                     18,575
        Total                           $1,044,177                   $963,962


                                                    Twelve Months Ended
                                                          March 31,
    (In thousands)                            2005                       2004

    Operating Revenues
     Gas Sold and Delivered
       Residential - Firm                 $852,470                   $780,272
       Commercial and Industrial - Firm    271,951                    242,552
       Commercial and Industrial -
        Interruptible                        7,765                      9,296
       Electric Generation                   1,100                        967
                                         1,133,286                  1,033,087
     Gas Delivered for Others
       Firm                                144,845                    152,394
       Interruptible                        36,315                     33,114
       Electric Generation                     244                        358
                                           181,404                    185,866
                                         1,314,690                  1,218,953
      Other                                 33,473                     50,866
        Total                           $1,348,163                 $1,269,819



                                                    Three Months Ended
                                                         March 31,
    (In thousands of therms)                  2005                       2004

    Gas Sales and Deliveries
     Gas Sold and Delivered
       Residential - Firm                  332,727                    326,491
       Commercial and Industrial - Firm     99,531                    105,652
       Commercial and Industrial -
        Interruptible                        2,413                      1,952
                                           434,671                    434,095
     Gas Delivered for Others
       Firm                                194,666                    217,387
       Interruptible                        99,942                     85,390
       Electric Generation                   9,202                     11,149
                                           303,810                    313,926
        Total                              738,481                    748,021


                                                     Six Months Ended
                                                         March 31,
    (In thousands of therms)                  2005                       2004

    Gas Sales and Deliveries
     Gas Sold and Delivered
       Residential - Firm                  516,353                    523,878
       Commercial and Industrial - Firm    172,719                    174,908
       Commercial and Industrial -
        Interruptible                        4,569                      4,974
                                           693,641                    703,760
     Gas Delivered for Others
       Firm                                332,385                    352,811
       Interruptible                       177,440                    167,284
       Electric Generation                  18,509                     21,717
                                           528,334                    541,812
        Total                            1,221,975                  1,245,572


                                                    Twelve Months Ended
                                                          March 31,
    (In thousands of therms)                  2005                       2004

    Gas Sales and Deliveries
     Gas Sold and Delivered
       Residential - Firm                  622,203                    628,996
       Commercial and Industrial - Firm    224,218                    226,583
       Commercial and Industrial -
        Interruptible                        7,221                      9,801
                                           853,642                    865,380
     Gas Delivered for Others
       Firm                                434,123                    466,222
       Interruptible                       278,639                    261,987
       Electric Generation                  37,844                     51,745
                                           750,606                    779,954
        Total                            1,604,248                  1,645,334



    WASHINGTON GAS ENERGY SERVICES

                                                       Three Months Ended
                                                             March 31,
                                                    2005               2004
    Natural Gas Sales
      Therm Sales (thousands of therms)           297,201            300,262

      Number of Customers (end of period)         151,100            158,400

    Electricity Sales
      Electricity Sales (thousands of kWhs)       586,290          1,692,325

      Number of Accounts (end of period)           40,800             57,000



                                                        Six Months Ended
                                                             March 31,
                                                     2005               2004
    Natural Gas Sales
      Therm Sales (thousands of therms)           501,565            508,032

      Number of Customers (end of period)         151,100            158,400

    Electricity Sales
      Electricity Sales (thousands of kWhs)     1,363,118          3,406,440

      Number of Accounts (end of period)           40,800             57,000


                                                       Twelve Months Ended
                                                             March 31,
                                                     2005               2004
    Natural Gas Sales
      Therm Sales (thousands of therms)           710,110            734,177

      Number of Customers (end of period)         151,100            158,400

    Electricity Sales
      Electricity Sales (thousands of kWhs)     4,615,604          7,223,708

      Number of Accounts (end of period)           40,800             57,000



    UTILITY GAS PURCHASED EXPENSE
    (excluding off system)
                              Three Months      Six Months     Twelve Months
                                 Ended            Ended            Ended
                                March 31,        March 31,        March 31,
                              2005    2004     2005    2004     2005    2004

                             87.80c  75.41c   88.10c  74.42c   87.27c  74.76c



                                                        Three Months Ended
                                                             March 31,
                                                      2005             2004
    HEATING DEGREE DAYS
      Actual                                         2,264            2,328
      Normal                                         2,117            2,110
      Percent Colder than Normal                       6.9 %           10.3 %

      Number of Active Customer Meters (end
       of period)                                1,015,227          987,748



                                                         Six Months Ended
                                                             March 31,
                                                      2005             2004
    HEATING DEGREE DAYS
      Actual                                         3,653            3,716
      Normal                                         3,476            3,472
      Percent Colder than Normal                       5.1 %            7.0 %

      Number of Active Customer Meters (end
       of period)                                1,015,227          987,748



                                                       Twelve Months Ended
                                                             March 31,
                                                      2005             2004
    HEATING DEGREE DAYS
      Actual                                         3,961            4,160
      Normal                                         3,796            3,793
      Percent Colder than Normal                       4.3 %            9.7 %

      Number of Active Customer Meters (end
       of period)                                1,015,227          987,748




                      WGL HOLDINGS, INC. (CONSOLIDATED)
            RECONCILIATION OF REPORTED GAAP EARNINGS PER SHARE AND
                         ADJUSTED EARNINGS PER SHARE
                                 (Unaudited)

The reconciliation below is provided to demonstrate management's utilization of historical earnings per share, as derived in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), and adjusted earnings per share from normal operations, a non-GAAP measure. This reconciliation is provided to more clearly identify the results from normal operations for WGL Holdings, Inc. and its consolidated subsidiaries (the Company), and identify certain unique transactions that are not expected to repeat. This information should assist investors and analysts to track progress towards achieving the Company's five-year objectives, which are based on normal weather and uninfluenced by single, one-time, non- repeating transactions.

Utilization of normal weather is an industry standard, and it is Company practice to provide estimates and guidance on the basis of normal weather. Actual performance and results may vary from normal weather projections, and the Company consistently identifies and explains this variation to assist users in the analysis of actual results versus the guidance. There may be other uses for the data, and the Company does not imply that this is the only use or the best use of this data for purposes of this analysis.

WGL Holdings, Inc. (Consolidated)
            Reconciliation of Reported GAAP Earnings Per Share to
              Adjusted Earnings Per Share from Normal Operations
                       Fiscal Year 2005 By Quarter (1)


                                          Actual Fiscal Year 2005 Results
                                                   Quarter Ended
                                                                         Year-
                                    Dec. 31  Mar. 31  Jun. 30  Sept. 30   To-
                                                                         Date
    GAAP diluted earnings per share   $0.88    $1.63                    $2.51

    Adjustments for:                                                        -
    Colder-than-normal weather            -    (0.10)                   (0.10)
    Adjusted diluted earnings per
     share from normal operations     $0.88    $1.53                    $2.41



                      WGL Holdings, Inc. (Consolidated)
            Reconciliation of Reported GAAP Earnings Per Share to
              Adjusted Earnings Per Share from Normal Operations
                       Fiscal Year 2004 By Quarter (1)


                                          Actual Fiscal Year 2004 Results
                                                   Quarter Ended
                                                                         Year-
                                    Dec. 31  Mar. 31  Jun. 30  Sept. 30   To-
                                                                         Date
    GAAP diluted earnings per share   $0.81    $1.62                    $2.43

    Adjustments:
    Colder-than-normal weather            -    (0.20)                   (0.20)
    Retroactive depreciation related
     to the period from 1/02-11/02,
     per Virginia rate order           0.04        -                     0.04
    Net gain on the sale of real
     estate                                    (0.12)                   (0.12)
    Adjusted diluted earnings per
     share from  normal operations    $0.85    $1.30                    $2.15

    (1) Quarterly earnings per share may not sum to year-to-date or annual
        earnings per share as quarterly calculations are based on weighted
        average common shares outstanding which may vary for each of those
        periods.



                WGL HOLDINGS, INC. (REGULATED UTILITY SEGMENT)
            RECONCILIATION OF REPORTED GAAP EARNINGS PER SHARE AND
                         ADJUSTED EARNINGS PER SHARE
                                 (Unaudited)

The reconciliation below is provided to demonstrate management's utilization of historical earnings per share, as derived in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), and adjusted earnings per share from normal operations, a non-GAAP measure. This reconciliation is provided to more clearly identify the results from normal operations for the Company's regulated utility segment, and identify certain unique transactions that are not expected to repeat. This information should assist investors and analysts to track progress towards achieving the Company's five-year objectives, which are based on normal weather and uninfluenced by single, one-time, non-repeating transactions.

Utilization of normal weather is an industry standard, and it is the
practice of the Company to provide estimates and guidance on the basis of
normal weather.  Actual performance and results may vary from normal weather
projections, and the Company consistently identifies and explains this
variation to assist users in the analysis of actual results versus the
guidance. There may be other uses for the data, and the Company does not imply
that this is the only use or the best use of this data for purposes of this
analysis.


                WGL Holdings, Inc. (Regulated Utility Segment)
            Reconciliation of Reported GAAP Earnings Per Share to
              Adjusted Earnings Per Share from Normal Operations
                       Fiscal Year 2005 By Quarter (1)


                                          Actual Fiscal Year 2005 Results
                                                   Quarter Ended
                                                                         Year-
                                    Dec. 31  Mar. 31  Jun. 30  Sept. 30   To-
                                                                         Date
    GAAP diluted earnings per share   $0.81    $1.52                    $2.34
    Adjustments for:                                                        -
    Colder-than-normal weather            -    (0.10)                   (0.10)

    Adjusted diluted earnings per
     share from normal operations     $0.81    $1.42                    $2.24


                WGL Holdings, Inc. (Regulated Utility Segment)
            Reconciliation of Reported GAAP Earnings Per Share to
              Adjusted Earnings Per Share from Normal Operations
                       Fiscal Year 2004 By Quarter (1)


                                          Actual Fiscal Year 2004 Results
                                                   Quarter Ended
                                                                         Year-
                                    Dec. 31  Mar. 31  Jun. 30  Sept. 30   To-
                                                                         Date
    GAAP diluted earnings per share   $0.71    $1.54                    $2.25

    Adjustments:
    Colder-than-normal weather            -    (0.20)                   (0.20)
    Retroactive depreciation related
     to the period from 1/02-11/02,
     per Virginia rate order           0.04        -                     0.04
    Adjusted diluted earnings per
     share from normal operations     $0.75    $1.34                    $2.09

    (1) Quarterly earnings per share may not sum to year-to-date or annual
        earnings per share as quarterly calculations are based on weighted
        average common shares outstanding which may vary for each of those
        periods.

SOURCE WGL Holdings, Inc.

News Media: Tim Sargeant, +1-202-624-6043 (Office), +1-202-825-7051 (Pager), or Financial Community: Melissa E. Adams, +1-202-624-6410 (Office), both of WGL Holdings, Inc.

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