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WGL Holdings, Inc., Reports Significant Increase in Second Quarter Fiscal Year 2008 Earnings and Raises Earnings Guidance

-- Consolidated GAAP earnings up 26%--$1.63 per share vs. $1.29
per share for the comparative quarter reflecting improved
regulated and non-regulated results

-- Consolidated non-GAAP operating earnings up 32%--$1.66 per
share vs. $1.26 per share for the comparative quarter

-- Increased fiscal year 2008 non-GAAP operating earnings
guidance range--$2.38 to $2.48 per share

-- Results reinforce 5-year average earnings per share growth
target of 6-8% per year

WASHINGTON, Apr 30, 2008 (BUSINESS WIRE) -- Consolidated Results

WGL Holdings, Inc. (NYSE: WGL), the parent company of Washington Gas Light Company (Washington Gas) and other energy-related subsidiaries, today reported net income determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP) for the quarter ended March 31, 2008, of $81.0 million, or $1.63 per share, an increase of $17.6 million, or $0.34 per share, over net income of $63.4 million, or $1.29 per share, reported for the second quarter of fiscal year 2007.

"This second consecutive fiscal quarter of sharply improved results further demonstrates our progress in achieving our strategic objectives and reinforces our outlook for an excellent year," said James H. DeGraffenreidt, Jr., chairman and chief executive officer of WGL Holdings. "A supportive regulatory framework that rewards shareholders and customers, the expansion of our asset optimization program, customer growth and strong unregulated margins will continue to drive fiscal year 2008 and long-term earnings growth."

For the first six months of fiscal year 2008, we reported net income determined in accordance with GAAP of $128.2 million, or $2.58 per share, an increase of $19.7 million, or 0.37 per share, over net income of $108.5 million, or $2.21 per share, reported for the comparative period of fiscal year 2007. Our operations are seasonal and, accordingly, our operating results for the three and six months ended March 31, 2008, are not indicative of the results expected for the twelve months ending September 30, 2008.

Financial performance is evaluated based on non-GAAP operating earnings (loss). Non-GAAP operating earnings (loss) excludes the effects of: (i) warmer-than-normal/colder-than-normal weather for our regulated utility segment; (ii) certain unusual transactions and (iii) unrealized mark-to-market gains (losses) on energy-related derivatives. Refer to "Use of Non-GAAP Operating Earnings (Loss)" and supporting reconciliations attached to this news release for a detailed discussion of management's use of this non-GAAP financial measure, as well as reconciliations of net income determined in accordance with GAAP to non-GAAP operating earnings (loss) for both our consolidated and segment results.

For the second quarter of fiscal year 2008, our non-GAAP operating earnings were $1.66 per share, an increase of $0.40 per share over non-GAAP operating earnings of $1.26 per share for the same quarter of the prior fiscal year. For the six months ended March 31, 2008, our non-GAAP operating earnings were $2.61 per share, an increase of $0.45 per share over non-GAAP operating earnings of $2.16 per share for the same period of the prior fiscal year.

Second Quarter and Year-to-Date Results by Business Segment

Regulated Utility Segment

Our regulated utility segment reported net income determined in accordance with GAAP of $78.0 million, or $1.57 per share, for the second quarter of fiscal year 2008, an increase of $12.4 million, or $0.24 per share, over net income of $65.6 million, or $1.33 per share for the same quarter of the preceding fiscal year. For the six months ended March 31, 2008, our regulated utility segment reported net income determined in accordance with GAAP of $122.2 million, or $2.46 per share, an increase of $13.6 million, or $0.25 per share, over net income of $108.6 million, or $2.21 per share, reported for the same period of the prior fiscal year.

For the second quarter of fiscal year 2008, non-GAAP operating earnings for the regulated utility segment were $1.59 per share, an increase of $0.26 per share, over non-GAAP operating earnings of $1.33 for the same period of the prior fiscal year. Non-GAAP operating earnings for the regulated utility segment were $2.47 per share for the first six months of fiscal year 2008, a $0.31 per share increase over non-GAAP operating earnings of $2.16 per share for the same period last year.

For both the three and six months comparisons, the increase in non-GAAP operating earnings is primarily due to: (i) the implementation of new rates in Virginia on February 13, 2007, in Maryland on November 27, 2007, and in the District of Columbia on December 31, 2007; (ii) an increase in realized margins from our asset optimization program; (iii) the favorable effects of changes in natural gas consumption patterns due to shifts in weather patterns and other factors and (iv) the addition of over 8,700 active customer meters since March 31, 2007. The increase in non-GAAP operating earnings for both periods in fiscal year 2008 is partially offset by the effect of our Earnings Sharing Mechanism in Virginia. The six month comparison also includes partial offsets related to higher uncollectible accounts expense primarily due to an adjustment to the accumulated reserve made in the prior period as well as higher property taxes in Virginia in the current period.

Retail Energy-Marketing Segment

The retail energy-marketing segment reported net income determined in accordance with GAAP of $3.6 million, or $0.07 per share, for the quarter ended March 31, 2008, an increase of $5.2 million, or $0.10 per share, over a net loss of $(1.6) million, or $(0.03) per share, reported for the same quarter of fiscal year 2007. For the first six months of fiscal year 2008, the retail energy marketing segment reported net income determined in accordance with GAAP of $6.8 million, or $0.14 per share, an increase of $5.7 million, or $0.12 per share, over net income of $1.1 million, or $0.02 per share, reported for the first six months of fiscal year 2007.

Non-GAAP operating earnings for the retail energy-marketing segment were $0.07 per share for the second quarter ended March 31, 2008, a $0.12 per share improvement over a non-GAAP operating loss of $(0.05) per share for the same quarter of the prior fiscal year. For the first six months of fiscal year 2008, non-GAAP operating earnings were $0.16 per share, a $0.13 per share improvement over non-GAAP operating earnings of $0.03 per share for the same period of the prior year. Both the quarter and year-to-date improvements in non-GAAP operating earnings reflect higher margins per therm sold for natural gas, partially offset by lower margins from electric sales.

Earnings Outlook

We are updating our GAAP earnings estimate for the full fiscal year 2008 to a range of $2.34 to $2.44 per share. This estimate includes projected full fiscal year 2008 earnings from our regulated utility segment in a range of $2.07 per share to $2.13 per share and projected full fiscal year 2008 earnings from our unregulated business segments in a range of $0.27 per share to $0.31 per share.

We are also raising our consolidated earnings estimate for the full fiscal year 2008 based on non-GAAP operating earnings to a range of $2.38 per share to $2.48 per share. This estimate includes projected full fiscal year 2008 non-GAAP operating earnings from our regulated utility segment in a range of $2.07 per share to $2.13 per share, and projected full fiscal year 2008 non-GAAP operating earnings from our unregulated business segments in a range of $0.31 per share to $0.35 per share. Refer to the "Reconciliation of GAAP Earnings Guidance to Non-GAAP Earnings Guidance" attached to this press release for a reconciliation of our GAAP earnings per share estimate to our estimate based on non-GAAP operating earnings per share.

We assume no obligation to update this guidance. The absence of any statement by us in the future should not be presumed to represent an affirmation of this earnings guidance. For the assumptions underlying this guidance, please refer to the slides accompanying our Webcast that will be posted to the WGL Holdings Web site, www.wglholdings.com.

Other Information

We will hold a conference call at 10:30 a.m. Eastern time on May 1, 2008, to discuss our second quarter financial results. The live conference call will be available to the public via a link located on the WGL Holdings Web site, www.wglholdings.com. To hear the live Webcast, click on the "Webcast" link located on the home page of the referenced site. The Webcast and related slides will be archived on the WGL Holdings Web site through June 1, 2008.

Headquartered in Washington, D.C., WGL Holdings has three operating segments: (i) the regulated utility segment which primarily consists of Washington Gas, a natural gas utility that serves over one million customers throughout metropolitan Washington, D.C., and the surrounding region; (ii) the retail-energy marketing segment which consists of Washington Gas Energy Services, Inc., a third-party marketer that competitively sells natural gas and electricity and (iii) the heating, ventilating and air conditioning (HVAC) segment, which consists of Washington Gas Energy Systems, Inc., a provider of design-build energy efficiency solutions to government and commercial clients. Additional information about WGL Holdings is available on our Web site.

Unless otherwise noted, earnings per share amounts are presented on a diluted basis, and are based on weighted average common and common equivalent shares outstanding.

Please see the attached comparative statements for additional information on our operating results. Also attached to this news release are reconciliations of net income determined in accordance with GAAP to non-GAAP operating earnings (loss) for both our consolidated and segment results as well as reconciliations of our GAAP earnings guidance to our non-GAAP earnings guidance.

Forward-Looking Statements

This news release and other statements by us 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 we believe such forward-looking statements are based on reasonable assumptions, we cannot give assurance that every objective will be achieved. Forward-looking statements speak only as of today, and we assume no duty to update them. Factors that could cause actual results to differ materially from those expressed or implied include, but are not limited to, general economic conditions and the factors discussed under the "Risk Factors" heading in our most recent annual report on Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission.

                          WGL Holdings, Inc.
                  Consolidated Statements of Income
              For Periods Ended March 31, 2008 and 2007
                             (Unaudited)

----------------------------------------------------------------------
                         Three Months Ended       Six Months Ended
                              March 31,               March 31,
----------------------------------------------------------------------
(In thousands, except
 per share data)          2008        2007        2008        2007
----------------------------------------------------------------------

OPERATING REVENUES
   Utility             $  671,391  $  699,058  $1,133,341  $1,130,079
   Non-utility            348,646     420,845     638,322     722,786
----------------------------------------------------------------------
     Total Operating
      Revenues          1,020,037   1,119,903   1,771,663   1,852,865
----------------------------------------------------------------------

OPERATING EXPENSES
   Utility cost of gas    410,778     450,201     676,579     698,877
   Non-utility cost of
    energy-related
    sales                 333,936     415,004     609,479     704,847
   Operation and
    maintenance            70,836      77,373     139,685     139,978
   Depreciation and
    amortization           23,345      24,575      47,600      43,215
   General taxes and
    other assessments      36,133      36,834      63,376      62,280
----------------------------------------------------------------------
     Total Operating
      Expenses            875,028   1,003,987   1,536,719   1,649,197
----------------------------------------------------------------------

OPERATING INCOME          145,009     115,916     234,944     203,668
Other Income
 (Expenses)--Net              560         717       1,148         545
Interest Expense
   Interest on long-
    term debt               9,976      10,042      19,956      20,050
   Other - net              1,977       2,579       4,734       5,783
----------------------------------------------------------------------
     Total Interest
      Expense              11,953      12,621      24,690      25,833
Dividends on
 Washington Gas
 preferred stock              330         330         660         660
----------------------------------------------------------------------
INCOME BEFORE INCOME
 TAXES                    133,286     103,682     210,742     177,720
INCOME TAX EXPENSE         52,248      40,307      82,507      69,247
----------------------------------------------------------------------

NET INCOME APPLICABLE
 TO COMMON STOCK       $   81,038  $   63,375  $  128,235  $  108,473
======================================================================

AVERAGE COMMON SHARES
 OUTSTANDING
   Basic                   49,462      49,163      49,437      49,066
   Diluted                 49,781      49,267      49,711      49,190
======================================================================

EARNINGS PER AVERAGE
 COMMON SHARE
   Basic                     1.64        1.29        2.59        2.21
   Diluted                   1.63        1.29        2.58        2.21
======================================================================


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

Regulated utility      $   77,972  $   65,625  $  122,174  $  108,620
----------------------------------------------------------------------
Non-utility
 operations:
   Retail energy-
    marketing               3,556      (1,589)      6,837       1,087
   HVAC                       251          41         524         138
----------------------------------------------------------------------
     Total major non-
      utility               3,807      (1,548)      7,361       1,225
   Other activities          (741)       (702)     (1,300)     (1,372)
----------------------------------------------------------------------
     Total non-utility      3,066      (2,250)      6,061        (147)
----------------------------------------------------------------------
NET INCOME APPLICABLE
 TO COMMON STOCK       $   81,038  $   63,375  $  128,235  $  108,473
======================================================================


                          WGL Holdings, Inc.
                     Consolidated Balance Sheets
                            March 31, 2008
                             (Unaudited)

----------------------------------------------------------------------
                                              March 31,  September 30,
(In thousands)                                  2008         2007
----------------------------------------------------------------------

ASSETS
Property, Plant and Equipment
   At original cost                          $3,109,430  $  3,072,935
   Accumulated depreciation and amortization   (940,704)     (922,494)
----------------------------------------------------------------------
     Net property, plant and equipment        2,168,726     2,150,441
----------------------------------------------------------------------

Current Assets
   Cash and cash equivalents                     18,495         4,870
   Accounts receivable, net                     553,922       192,021
   Storage gas--at cost (first-in, first-
    out)                                         84,646       294,889
   Other                                         64,848        81,945
----------------------------------------------------------------------
     Total current assets                       721,911       573,725
----------------------------------------------------------------------
Deferred Charges and Other Assets               334,136       322,195
----------------------------------------------------------------------
     Total Assets                            $3,224,773  $  3,046,361
======================================================================

CAPITALIZATION AND LIABILITIES
Capitalization
   Common shareholders' equity               $1,078,372  $    980,767
   Washington Gas Light Company preferred
    stock                                        28,173        28,173
   Long-term debt                               597,432       616,419
----------------------------------------------------------------------
     Total capitalization                     1,703,977     1,625,359
----------------------------------------------------------------------

Current Liabilities
   Notes payable and current maturities of
    long-term debt                              144,963       205,341
   Accounts payable and other accrued
    liabilities                                 291,446       216,861
   Other                                        192,576       134,854
----------------------------------------------------------------------
     Total current liabilities                  628,985       557,056
----------------------------------------------------------------------
Deferred Credits                                891,811       863,946
----------------------------------------------------------------------
     Total Capitalization and Liabilities    $3,224,773  $  3,046,361
======================================================================


                          WGL Holdings, Inc.
           Consolidated Financial and Operating Statistics
              For Periods Ended March 31, 2008 and 2007
                             (Unaudited)

FINANCIAL STATISTICS
----------------------------------------------------------------------
                                              Twelve Months Ended
                                                  March 31,
----------------------------------------------------------------------
                                             2008           2007
----------------------------------------------------------------------

Closing Market Price--end of period             $32.06         $31.98
52-Week Market Price Range               $35.91-$29.79  $33.55-$27.04
Price Earnings Ratio                              12.4           16.5
Annualized Dividends Per Share                   $1.42          $1.37
Dividend Yield                                     4.4%           4.3%
Return on Average Common Equity                   12.2%           9.6%
Total Interest Coverage (times) (1)                5.3            4.3
Book Value Per Share--end of period             $21.80         $20.49
Common Shares Outstanding--end of period
 (thousands)                                    49,467         49,191
======================================================================
(1) Calculated using income from continuing operations.

UTILITY GAS STATISTICS
----------------------------------------------------------------------
                          Three Months Ended     Six Months Ended
                               March 31,             March 31,
----------------------------------------------------------------------
(In thousands)              2008       2007       2008       2007
----------------------------------------------------------------------

 Operating Revenues
  Gas Sold and Delivered
   Residential - Firm    $  468,251 $  490,098 $  772,651 $  771,584
   Commercial and
    Industrial - Firm       121,813    131,384    209,482    211,604
   Commercial and
    Industrial -
    Interruptible             2,860      1,859      5,158      4,107
   Electric Generation          275        275        542        550
----------------------------------------------------------------------
                            593,199    623,616    987,833    987,845
----------------------------------------------------------------------
  Gas Delivered for
   Others
   Firm                      56,028     53,515     96,423     97,580
   Interruptible             15,982     17,811     28,821     31,101
   Electric Generation           72         75        162        132
----------------------------------------------------------------------
                             72,082     71,401    125,406    128,813
----------------------------------------------------------------------
                            665,281    695,017  1,113,239  1,116,658
Other                         6,110      4,041     20,102     13,421
----------------------------------------------------------------------
Total                    $  671,391 $  699,058 $1,133,341 $1,130,079
======================================================================

----------------------------------------------------------------------
                          Three Months Ended     Six Months Ended
                               March 31,             March 31,
----------------------------------------------------------------------
(In thousands of therms)    2008       2007       2008       2007
----------------------------------------------------------------------

 Gas Sales and
  Deliveries
  Gas Sold and Delivered
     Residential - Firm     314,357    337,446    513,339    520,230
     Commercial and
      Industrial - Firm      86,634     94,881    149,267    152,610
     Commercial and
      Industrial -
      Interruptible           2,212      1,334      4,059      3,202
----------------------------------------------------------------------
                            403,203    433,661    666,665    676,042
----------------------------------------------------------------------
  Gas Delivered for
   Others
     Firm                   184,707    192,046    318,815    316,139
     Interruptible           86,323     90,601    160,664    167,394
     Electric Generation     14,761     17,002     35,030     27,113
----------------------------------------------------------------------
                            285,791    299,649    514,509    510,646
----------------------------------------------------------------------
Total                       688,994    733,310  1,181,174  1,186,688
======================================================================

WASHINGTON GAS ENERGY SERVICES
----------------------------------------------------------------------
 Natural Gas Sales
  Therm Sales (thousands
   of therms)               254,375    316,035    450,849    520,647

  Number of Customers
   (end of period)          140,700    140,700    140,700    140,700
----------------------------------------------------------------------

 Electricity Sales
  Electricity Sales
   (thousands of kWhs)      871,604  1,007,252  1,771,073  1,906,981

  Number of Accounts
   (end of period)           68,300     69,600     68,300     69,600
======================================================================

UTILITY GAS PURCHASED EXPENSE
 (excluding off system)     103.03     104.54     102.19     104.40
                            (cents)    (cents)    (cents)    (cents)
======================================================================

HEATING DEGREE DAYS
----------------------------------------------------------------------
 Actual                       1,944      2,231      3,185      3,539
 Normal                       2,115      2,127      3,471      3,491
 Percent Colder (Warmer)
  than Normal                 (8.1)%       4.9%     (8.2)%       1.4%
======================================================================

 Number of Active
  Customer Meters (end
  of period)              1,061,484  1,052,774  1,061,484  1,052,774
======================================================================

UTILITY GAS STATISTICS
--------------------------------------------------
                             Twelve Months Ended
                                  March 31,
--------------------------------------------------
(In thousands)                 2008       2007
--------------------------------------------------

 Operating Revenues
  Gas Sold and Delivered
   Residential - Firm       $  988,476 $  946,124
   Commercial and
    Industrial - Firm          276,827    270,691
   Commercial and
    Industrial -
    Interruptible                7,669      7,356
   Electric Generation           1,100      1,099
--------------------------------------------------
                             1,274,072  1,225,270
--------------------------------------------------
  Gas Delivered for Others
   Firm                        138,518    137,470
   Interruptible                47,244     47,325
   Electric Generation             323        271
--------------------------------------------------
                               186,085    185,066
--------------------------------------------------
                             1,460,157  1,410,336
Other                           40,379     35,260
--------------------------------------------------
Total                       $1,500,536 $1,445,596
==================================================

--------------------------------------------------
                             Twelve Months Ended
                                  March 31,
--------------------------------------------------
(In thousands of therms)       2008       2007
--------------------------------------------------

 Gas Sales and Deliveries
  Gas Sold and Delivered
     Residential - Firm        641,810    621,865
     Commercial and
      Industrial - Firm        200,619    199,767
     Commercial and
      Industrial -
      Interruptible              6,132      6,117
--------------------------------------------------
                               848,561    827,749
--------------------------------------------------
  Gas Delivered for Others
     Firm                      436,096    420,917
     Interruptible             260,575    260,245
     Electric Generation       119,867    109,569
--------------------------------------------------
                               816,538    790,731
--------------------------------------------------
Total                        1,665,099  1,618,480
==================================================

WASHINGTON GAS ENERGY SERVICES
--------------------------------------------------
 Natural Gas Sales
  Therm Sales (thousands
   of therms)                  655,667    716,553

  Number of Customers (end
   of period)                  140,700    140,700
--------------------------------------------------

 Electricity Sales
  Electricity Sales
   (thousands of kWhs)       3,807,936  3,400,483

  Number of Accounts (end
   of period)                   68,300     69,600
==================================================

UTILITY GAS PURCHASED EXPENSE
 (excluding off system)        101.30     101.29
                               (cents)    (cents)
==================================================

HEATING DEGREE DAYS
--------------------------------------------------
 Actual                          3,601      3,816
 Normal                          3,795      3,813
 Percent Colder (Warmer)
  than Normal                    (5.1)%       0.1%
==================================================

 Number of Active Customer
  Meters (end of period)     1,061,484  1,052,774
==================================================

            WGL Holdings, Inc. (Regulated Utility Segment)
              For Periods Ended March 31, 2008 and 2007
                             (Unaudited)


                         Statements of Income

----------------------------------------------------------------------
                             Three Months Ended    Six Months Ended
                                  March 31,            March 31,
----------------------------------------------------------------------
(In thousands)                  2008      2007      2008       2007
----------------------------------------------------------------------

Operating Revenues           $  677,749 $707,662 $1,142,177 $1,141,012
----------------------------------------------------------------------
Operating Expenses:
  Cost of gas                   417,136  458,805    685,415    709,810
  Operation                      51,560   60,015    102,427    106,603
  Maintenance                    11,431   10,054     21,941     19,519
  Depreciation and
   amortization                  23,134   24,339     47,180     42,890
  General taxes and other
   assessments:
    Revenue taxes                21,593   22,833     37,046     38,110
    Other                        13,514   12,995     24,396     22,270
--------------------------------------- ------------------------------
     Total operating
      expenses                  538,368  589,041    918,405    939,202
----------------------------------------------------------------------

Operating income                139,381  118,621    223,772    201,810
Other income (expenses) -
 net                                428      311        964        180
Interest expense                 11,362   11,171     23,513     23,145
Dividends on Washington Gas
 preferred stock                    330      330        660        660
Income taxes                     50,145   41,806     78,389     69,565
----------------------------------------------------------------------
         Net income          $   77,972 $ 65,625 $  122,174 $  108,620
======================================================================




                   Utility Net Revenues ($000) (1)

Operating revenues           $  677,749 $707,662 $1,142,177 $1,141,012
Less: Cost of gas               417,136  458,805    685,415    709,810
         Revenue taxes           21,593   22,833     37,046     38,110
----------------------------------------------------------------------
   Utility net revenues      $  239,020 $226,024 $  419,716 $  393,092
======================================================================

(1) We analyze the operating results of our regulated utility segment
     based on utility net revenues. Washington Gas Light Company
     includes the cost of the natural gas commodity and revenue taxes
     (comprised principally of gross receipts taxes) in its rates
     charged to customers as reflected in operating revenues.
     Accordingly, changes in the cost of gas and revenue taxes
     associated with sales made to customers have no direct effect on
     the net revenues or net income of the regulated utility segment.

                          WGL HOLDINGS, INC.
              USE OF NON-GAAP OPERATING EARNINGS (LOSS)
                             (Unaudited)



The attached reconciliations are provided to clearly identify
 adjustments made to net income calculated in accordance with
 Generally Accepted Accounting Principles in the United States of
 America (GAAP) to derive non-GAAP operating earnings (loss).
 Management believes non-GAAP operating earnings (loss) provides a
 more meaningful representation of our earnings from ongoing
 operations by excluding the effects of: (i) warmer-than-
 normal/colder-than-normal weather for our regulated utility segment;
 (ii) certain unusual transactions and (iii) unrealized mark-to-market
 gains and losses from energy-related derivatives. This presentation
 facilitates analysis by providing a consistent and comparable measure
 to help management, investors and analysts better understand and
 evaluate our operating results and performance trends. Additionally,
 we use this non-GAAP measure to report to the board of directors,
 evaluate management's performance and for incentive compensation
 purposes.

We exclude from non-GAAP operating earnings (loss) the effects of
 warmer-than-normal/colder-than-normal weather to "normalize" weather
 for our regulated utility segment. Utilization of normal weather is
 an industry standard, and it is our practice to evaluate our rate-
 regulated revenues by utilizing normal weather and to provide
 estimates and guidance on the basis of normal weather. Additionally,
 we exclude unrealized mark-to-market adjustments for our energy-
 related derivatives to provide a more transparent and accurate view
 of the ongoing financial results of our operations. When these
 derivatives settle, the economic impact is reflected in our non-GAAP
 operating results, as we are only removing the interim unrealized
 mark-to-market amounts which are ultimately reversed when the
 derivatives are settled. These non-GAAP adjustments also assist both
 management and investors in analyzing period-to-period comparisons.

There are limits in using non-GAAP operating earnings (loss) to
 analyze our results, as they are not prepared in accordance with GAAP
 and may be different from non-GAAP financial measures used by other
 companies. In addition, using non-GAAP operating earnings (loss) per
 share to analyze our earnings may have limited value as it excludes
 certain items that may have a material impact on our reported
 financial results. We compensate for these limitations by providing
 investors with the attached reconciliations to net income, the most
 directly comparable GAAP financial measure.

            WGL HOLDINGS, INC. (Consolidating by Segment)
                 RECONCILIATION OF GAAP NET INCOME TO
                  NON-GAAP OPERATING EARNINGS (LOSS)
                             (Unaudited)

----------------------------------------------------------------------
                   Six Months Ended March 31, 2008
----------------------------------------------------------------------
(In thousands,               Retail
 except per share Regulated   Energy-           Other
 data)             Utility   Marketing HVAC   Activities* Consolidated
----------------------------------------------------------------------
GAAP net income   $122,174  $   6,837  $ 524 $    (1,300) $   128,235

Adjusted for
 (items shown
 after-tax):
Reversal of costs
 related to
 business process
 outsourcing (a)    (1,139)         -      -           -       (1,139)
Unrealized mark-
 to-market loss
 on energy-
 related
 derivatives (b)     3,062      1,046      -           -        4,108
Other regulatory
 adjustments (c)    (1,242)         -      -           -       (1,242)
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)  $122,855  $   7,883  $ 524 $    (1,300) $   129,962
======================================================================
GAAP diluted
 earnings (loss)
 per average
 common share
 (49,711 shares)  $   2.46  $    0.14  $0.01 $     (0.03) $      2.58
Per share effect
 of non-GAAP
 adjustments          0.01       0.02      -           -         0.03
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)
 per share        $   2.47  $    0.16  $0.01 $     (0.03) $      2.61
======================================================================

                   Six Months Ended March 31, 2007
----------------------------------------------------------------------
(In thousands,               Retail
 except per share Regulated   Energy-           Other
 data)             Utility   Marketing HVAC   Activities* Consolidated
----------------------------------------------------------------------
GAAP net income   $108,620  $   1,087  $ 138 $    (1,372) $   108,473

Adjusted for
 (items shown
 after-tax):
Colder-than-
 normal weather
 (d)                (1,173)         -      -           -       (1,173)
Retroactive
 depreciation
 expense
 adjustment (e)     (2,400)         -      -           -       (2,400)
Unrealized mark-
 to-market loss
 on energy-
 related
 derivatives (b)     1,035        434      -           -        1,469
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)  $106,082  $   1,521  $ 138 $    (1,372) $   106,369
======================================================================
GAAP diluted
 earnings (loss)
 per average
 common share
 (49,190 shares)  $   2.21  $    0.02  $   - $     (0.02) $      2.21
Per share effect
 of non-GAAP
 adjustments         (0.05)      0.01      -       (0.01)       (0.05)
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)
 per share        $   2.16  $    0.03  $   - $     (0.03) $      2.16
======================================================================

                     Quarter Ended March 31, 2008
----------------------------------------------------------------------
(In thousands,               Retail
 except per share Regulated   Energy-           Other
 data)             Utility   Marketing HVAC   Activities* Consolidated
----------------------------------------------------------------------
GAAP net income   $ 77,972  $   3,556  $ 251 $      (741) $    81,038

Adjusted for
 (items shown
 after-tax):
Unrealized mark-
 to-market loss
 on energy-
 related
 derivatives (b)     1,419         76      -           -        1,495
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)  $ 79,391  $   3,632  $ 251 $      (741) $    82,533
======================================================================
GAAP diluted
 earnings (loss)
 per average
 common share
 (49,781 shares)  $   1.57  $    0.07  $0.01 $     (0.02) $      1.63
Per share effect
 of non-GAAP
 adjustments          0.02          -      -        0.01         0.03
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)
 per share        $   1.59  $    0.07  $0.01 $     (0.01) $      1.66
======================================================================

                     Quarter Ended March 31, 2007
----------------------------------------------------------------------
(In thousands,               Retail
 except per share Regulated   Energy-           Other
 data)             Utility   Marketing HVAC   Activities* Consolidated
----------------------------------------------------------------------
GAAP net income   $ 65,625  $  (1,589) $  41 $      (702) $    63,375

Adjusted for
 (items shown
 after-tax):
Colder-than-
 normal weather
 (d)                (1,173)         -      -           -       (1,173)
Unrealized mark-
 to-market loss
 (gain) on
 energy-related
 derivatives (b)     1,104       (994)     -           -          110
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)  $ 65,556  $  (2,583) $  41 $      (702) $    62,312
======================================================================
GAAP diluted
 earnings (loss)
 per average
 common share
 (49,267 shares)  $   1.33  $   (0.03) $   - $     (0.01) $      1.29
Per share effect
 of non-GAAP
 adjustments             -      (0.02)     -       (0.01)       (0.03)
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)
 per share        $   1.33  $   (0.05) $   - $     (0.02) $      1.26
======================================================================

Footnotes
----------------------------------------------------------------------
* Per share amounts for "Other Activities" may include adjustments for
 rounding
(Footnote references are described below)

             WGL HOLDINGS, INC. (Consolidated by Quarter)
                 RECONCILIATION OF GAAP NET INCOME TO
                  NON-GAAP OPERATING EARNINGS (LOSS)
                             (Unaudited)


----------------------------------------------------------------------
                           Fiscal Year 2008
----------------------------------------------------------------------
                                 Quarterly Period Ended (f)
----------------------------------------------------------------------
(In thousands, except                                       Year-To-
 per share data)       Dec. 31  Mar. 31  Jun. 30 Sept. 30      Date
----------------------------------------------------------------------
GAAP net income        $47,197  $81,038                    $  128,235

Adjusted for (items
 shown after-tax):
Reversal of costs
 related to business
 process outsourcing
 (a)                    (1,139)       -                        (1,139)
Unrealized mark-to-
 market loss on
 energy-related
 derivatives (b)         2,613    1,495                         4,108
Other regulatory
 adjustments (c)        (1,242)       -                        (1,242)
----------------------------------------------------------------------
Non-GAAP operating
 earnings              $47,429  $82,533                    $  129,962
======================================================================
Diluted average common
 shares outstanding     49,645   49,781                        49,711
======================================================================
GAAP diluted earnings
 per average common
 share                 $  0.95  $  1.63                    $     2.58
Per share effect of
 non-GAAP adjustments     0.01     0.03                          0.03
----------------------------------------------------------------------
Non-GAAP operating
 earnings per share    $  0.96  $  1.66                    $     2.61
======================================================================

                           Fiscal Year 2007
----------------------------------------------------------------------
                                 Quarterly Period Ended (f)
----------------------------------------------------------------------
(In thousands, except                                       Year-To-
 per share data)       Dec. 31  Mar. 31  Jun. 30 Sept. 30      Date
----------------------------------------------------------------------
GAAP net income        $45,098  $63,375                    $  108,473

Adjusted for (items
 shown after-tax):
Colder-than-normal
 weather (d)                 -   (1,173)                       (1,173)
Retroactive
 depreciation expense
 adjustment (e)         (2,400)       -                        (2,400)
Unrealized mark-to-
 market loss on
 energy-related
 derivatives (b)         1,359      110                         1,469
----------------------------------------------------------------------
Non-GAAP operating
 earnings              $44,057  $62,312                    $  106,369
======================================================================
Diluted average common
 shares outstanding     49,130   49,267                        49,190
======================================================================
GAAP diluted earnings
 per average common
 share                 $  0.92  $  1.29                    $     2.21
----------------------------------------------------------------------
Per share effect of
 non-GAAP adjustments    (0.02)   (0.03)                        (0.05)
----------------------------------------------------------------------
Non-GAAP operating
 earnings per share    $  0.90  $  1.26                    $     2.16
======================================================================

Footnotes:
----------------------------------------------------------------------

(a) Represents the reversal of expenses that were incurred in prior
     fiscal years for initial implementation costs allocable to the
     District of Columbia associated with our business process
     outsourcing plan. These costs were recorded to a regulatory asset
     in the first quarter of fiscal year 2008 upon approval of 10-year
     amortization accounting by the District of Columbia Public
     Service Commission in a December 28, 2007 Final Order.

(b) Represents the change in the unrealized mark-to-market positions
     of our energy-related derivatives that were recorded to income
     during the period. For the regulated utility segment, to the
     extent that our unrealized mark-to-market gains and losses are
     not shared with customers, these amounts are recorded directly to
     income. All unrealized mark-to-market gains and losses for the
     retail-energy marketing segment are recorded directly to income.

(c) Represents favorable regulatory adjustments made during the first
     quarter of fiscal year 2008 applicable to prior fiscal years due
     to revised treatment for hexane costs in Maryland and certain
     shared revenues in the District of Columbia.

(d) This adjustment is for our regulated utility segment only. Weather
     was 8.1 percent colder than normal during the quarter ended March
     31, 2007. There were no adjustments for weather in the first
     quarter of fiscal year 2007.

(e) Represents an adjustment that reduced depreciation expense
     applicable to the period from January 1, 2006, through September
     30, 2006. This adjustment was recorded in the first quarter of
     fiscal year 2007 upon approval of new depreciation rates by the
     staff of the Virginia State Corporation Commission.

(f) 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 and common equivalent shares outstanding,
     which may vary for each of those periods.

                          WGL HOLDINGS, INC.
             RECONCILIATION OF GAAP EARNINGS GUIDANCE TO
                      NON-GAAP EARNINGS GUIDANCE
                FISCAL YEAR ENDING SEPTEMBER 30, 2008

                             Consolidated
----------------------------------------------------------------------
                                                       Low      High
----------------------------------------------------------------------
GAAP Earnings Guidance Range                         $  2.34  $  2.44
Adjusted for:
Reversal of costs related to business process
 outsourcing (a)                                       (0.02)   (0.02)
Unrealized mark-to-market loss on energy-related
 derivatives (b)                                        0.09     0.09
Other regulatory adjustments (c)                       (0.02)   (0.02)
Other adjustment (d)                                   (0.01)   (0.01)
----------------------------------------------------------------------
Non-GAAP Earnings Guidance Range                     $  2.38  $  2.48
======================================================================

                      Regulated Utility Segment
----------------------------------------------------------------------
                                                       Low      High
----------------------------------------------------------------------
GAAP Earnings Guidance Range                         $  2.07  $  2.13
Adjusted for:
Reversal of costs related to business process
 outsourcing (a)                                       (0.02)   (0.02)
Unrealized mark-to-market loss on energy-related
 derivatives (b)                                        0.05     0.05
Other regulatory adjustments (c)                       (0.02)   (0.02)
Other adjustment (d)                                   (0.01)   (0.01)
----------------------------------------------------------------------
Non-GAAP Earnings Guidance Range                     $  2.07  $  2.13
======================================================================

                    Unregulated Business Segments
----------------------------------------------------------------------
                                                       Low      High
----------------------------------------------------------------------
GAAP Earnings Guidance Range                         $  0.27  $  0.31
Adjusted for:
Unrealized mark-to-market loss on energy-related
 derivatives (b)                                        0.04     0.04
----------------------------------------------------------------------
Non-GAAP Earnings Guidance Range                     $  0.31  $  0.35
======================================================================

Footnotes:
----------------------------------------------------------------------

(a) Represents the reversal of expenses that were incurred in prior
     fiscal years for initial implementation costs allocable to the
     District of Columbia associated with our business process
     outsourcing plan. These expenses were reversed in the first
     quarter of fiscal year 2008 due to the approval of 10-year
     amortization accounting by the District of Columbia Public
     Service Commission in a December 28, 2007 Final Order.

(b) Represents the estimated reversal of certain of our existing
     unrealized mark-to-market positions related to our energy
     derivatives that will be recorded to income during fiscal year
     2008. For the regulated utility segment, to the extent that our
     unrealized mark-to-market gains and losses are not shared with
     customers, these amounts are recorded directly to income. All
     unrealized mark-to-market gains and losses for the retail-energy
     marketing segment are recorded directly to income.

(c) Represents favorable regulatory adjustments made during the first
     quarter of fiscal year 2008 applicable to prior fiscal years due
     to revised treatment for hexane costs in Maryland and certain
     shared revenues in the District of Columbia.

(d) Adjustment due to rounding differences in per share amounts.

SOURCE: WGL Holdings, Inc.

WGL Holdings, Inc.
News Media
Eric Grant, 202-624-6091
or
Financial Community
Melissa E. Adams, 202-624-6410

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