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WGL Holdings, Inc., Reports Third Quarter Fiscal Year 2008 Earnings; Revises Earnings Guidance

-- New rates and customer growth sharply improve year-to-date
utility earnings

-- June weather lowered gross margins and reduced retail-energy
marketing earnings

-- Fiscal year 2008 GAAP earnings guidance revised to $2.20 to
$2.30 per share

-- Non-GAAP operating earnings guidance of $2.31 to $2.41 per
share reflects a significant improvement over fiscal year 2007
non-GAAP earnings of $1.99 per share

WASHINGTON, Aug 04, 2008 (BUSINESS WIRE) -- WGL Holdings, Inc. (NYSE: WGL):

Consolidated Results

WGL Holdings, Inc. (NYSE: WGL), the parent company of Washington Gas Light Company (Washington Gas) and other energy-related subsidiaries, today reported a net loss determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP) for the quarter ended June 30, 2008, of $(492,000), or $(0.01) per share, compared to net income of $13.0 million, or $0.26 per share, reported for the comparative period of fiscal year 2007. For the nine months ended June 30, 2008, we reported net income determined in accordance with GAAP of $127.7 million, or $2.56 per share, an increase of $6.3 million, or $0.10 per share, over net income of $121.4 million, or $2.46 per share, reported for the first nine months of fiscal year 2007. Our operations are seasonal and, accordingly, our operating results for the three and nine months ended June 30, 2008, are not indicative of the results expected for the twelve months ending September 30, 2008.

"Our excellent year-to-date results continue to be driven by our progress in achieving key strategic objectives that support our outlook for sharply improved fiscal year results," said James H. DeGraffenreidt, Jr., chairman and chief executive officer of WGL Holdings. "A supportive regulatory framework that rewards shareholders and customers, customer growth, operational excellence initiatives that improve service and lower costs, and contributions from our unregulated business will continue to drive fiscal year 2008 and long-term earnings growth."

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 third quarter of fiscal year 2008, our non-GAAP operating earnings were $0.06 per share, compared to non-GAAP operating earnings of $0.14 per share for the same quarter of the prior fiscal year. For the nine months ended June 30, 2008, our non-GAAP operating earnings were $2.67 per share, an increase of $0.37 per share over non-GAAP operating earnings of $2.30 per share for the same period of the prior fiscal year.

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

Regulated Utility Segment

Reporting a net loss for quarters ending June 30 is typical due to the seasonal nature of our utility operations and the corresponding reduced demand for natural gas during this period. For the quarter ended June 30, 2008, our regulated utility segment reported a seasonal net loss determined in accordance with GAAP of $(8.1) million, or $(0.16) per share, compared to a net loss of $(2.0) million, or $(0.04) per share, reported for the same quarter of the prior fiscal year. The Non-GAAP operating loss for the regulated utility segment was $(0.03) per share for the three months ended June 30, 2008, an improvement of $0.06 per share over a non-GAAP operating loss of $(0.09) for the same period of the prior fiscal year. This improvement in the non-GAAP operating loss primarily reflects: (i) the implementation of new rates in Maryland on November 27, 2007 and the District of Columbia on December 31, 2007; (ii) an increase in realized margins from our asset optimization program and (iii) the addition of over 8,000 active customer meters since June 30, 2007. The improvement in the non-GAAP operating loss is partially offset by higher uncollectible accounts expense due to an adjustment to the accumulated reserve made in the prior period to reflect better collections, coupled with the negative effects of the slow down in the economy on the current period. Also, partially offsetting the improvement is a reduction in interest income on lower short-term investment balances resulting from working capital needs in the current period.

Our regulated utility segment reported net income determined in accordance with GAAP of $114.1 million, or $2.29 per share, for the nine months ended June 30, 2008, an increase of $7.5 million, or $0.13 per share, over net income of $106.6 million, or $2.16 per share for the same period of the preceding fiscal year. For the nine months ended June 30, 2008, non-GAAP operating earnings for the regulated utility segment were $2.44 per share, an increase of $0.38 per share, over non-GAAP operating earnings of $2.06 for the same period of the prior fiscal year. The increase in non-GAAP operating earnings is primarily due to: (i) the implementation of new rates in Virginia on February 13, 2007, as well as the rate increases in Maryland and the District of Columbia; (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 8,000 active customer meters since June 30, 2007. The increase in non-GAAP operating earnings is partially offset by the effect of our Earnings Sharing Mechanism in Virginia as well as higher uncollectible accounts expense and property taxes.

Retail Energy-Marketing Segment

For the quarter ended June 30, 2008, the retail energy marketing segment reported net income determined in accordance with GAAP of $8.1 million, or $0.16 per share, compared to net income of $16.0 million, or $0.32 per share, reported for the comparative quarter of fiscal year 2007. Non-GAAP operating earnings for the retail energy-marketing segment were $0.10 per share for the quarter ended June 30, 2008, compared to non-GAAP operating earnings of $0.26 per share the same quarter of the prior fiscal year. This comparison in non-GAAP operating earnings primarily reflects lower margins from both electric and natural gas sales. For electric sales, lower margins reflect: (i) decreased sales volumes primarily due to a reduction in the number of commercial customers and (ii) lower margins per kilowatt sold primarily as a result of weather experienced during June 2008 and unfavorable electric supply prices. Weather in June 2008 was significantly warmer than normal for a few days early in the month followed by a brief period of significantly colder-than-normal weather. The resulting balancing of electric-supply occurred at market prices that were more unfavorable than historical experience. For natural gas sales, lower margins reflect: (i) decreased sales volumes primarily due to a reduction in the number of large commercial accounts and (ii) higher prices incurred for the purchase of natural gas during the current quarter compared to the same quarter last year. Period-to-period comparisons of quarterly margins for this segment can vary significantly and are not representative of expected annualized results. Comparisons of full year non-GAAP operating results are more indicative of performance trends.

The retail energy-marketing segment reported net income determined in accordance with GAAP of $15.0 million, or $0.30 per share, for the nine months ended June 30, 2008 compared to net income of $17.1 million, or $0.35 per share, reported for the same period of fiscal year 2007. Non-GAAP operating earnings for the retail energy segment were $0.26 for the nine months ended June 30, 2008, compared to $0.29 for the comparative period last year. This comparison of non-GAAP operating earnings reflects lower margins from electric sales and higher operating costs, partially offset by higher margins per therm sold for natural gas.

Earnings Outlook

We are updating our GAAP earnings estimate for the full fiscal year 2008 to a range of $2.20 to $2.30 per share. This estimate includes projected full fiscal year 2008 earnings from our regulated utility segment in a range of $1.97 per share to $2.03 per share and projected full fiscal year 2008 earnings from our unregulated business segments in a range of $0.23 per share to $0.27 per share.

We are also revising our consolidated earnings estimate for the full fiscal year 2008 based on non-GAAP operating earnings to a range of $2.31 per share to $2.41 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 $0.24 per share to $0.28 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 August 5, 2008, to discuss our third 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 September 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, www.wglholdings.com.

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 we have filed with, or furnished to, the U.S. Securities and Exchange Commission.

                          WGL Holdings, Inc.
                  Consolidated Statements of Income
               For Periods Ended June 30, 2008 and 2007
                             (Unaudited)

----------------------------------------------------------------------
                           Three Months Ended     Nine Months Ended
                                June 30,              June 30,
----------------------------------------------------------------------
(In thousands, except per
 share data)                 2008      2007       2008        2007
----------------------------------------------------------------------

OPERATING REVENUES
  Utility                  $241,486  $233,107  $1,374,827  $1,363,186
  Non-utility               223,163   234,351     861,485     957,137
----------------------------------------------------------------------
      Total Operating
       Revenues             464,649   467,458   2,236,312   2,320,323
----------------------------------------------------------------------

OPERATING EXPENSES
  Utility cost of gas       137,376   123,486     813,955     822,363
  Non-utility cost of
   energy-related sales     200,473   200,624     809,952     905,471
  Operation and
   maintenance               72,669    65,112     212,354     205,090
  Depreciation and
   amortization              23,610    23,758      71,210      66,973
  General taxes and other
   assessments               21,019    21,862      84,395      84,142
----------------------------------------------------------------------
       Total Operating
        Expenses            455,147   434,842   1,991,866   2,084,039
----------------------------------------------------------------------

OPERATING INCOME              9,502    32,616     244,446     236,284
Other Income (Expenses)--
 Net                            446     2,152       1,594       2,697
Interest Expense
  Interest on long-term
   debt                       9,975     9,997      29,931      30,047
  Other - net                   475     1,649       5,209       7,432
----------------------------------------------------------------------
Total Interest Expense       10,450    11,646      35,140      37,479
Dividends on Washington
 Gas preferred stock            330       330         990         990
----------------------------------------------------------------------
INCOME (LOSS) BEFORE
 INCOME TAXES                  (832)   22,792     209,910     200,512
INCOME TAX EXPENSE
 (BENEFIT)                     (340)    9,821      82,167      79,068
----------------------------------------------------------------------

NET INCOME (LOSS)
 APPLICABLE TO COMMON
 STOCK                     $   (492) $ 12,971  $  127,743    $121,444
----------------------------------------------------------------------

AVERAGE COMMON SHARES
 OUTSTANDING
  Basic                      49,638    49,259      49,515      49,131
  Diluted                    49,638    49,557      49,832      49,313
----------------------------------------------------------------------

EARNINGS (LOSS) PER
 AVERAGE COMMON SHARE
  Basic                       (0.01)     0.26        2.58        2.47
  Diluted                     (0.01)     0.26        2.56        2.46
----------------------------------------------------------------------


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

Regulated utility          $ (8,051) $ (1,981) $  114,123    $106,639
----------------------------------------------------------------------
Non-utility operations:
  Retail energy-marketing     8,118    16,022      14,955      17,109
  HVAC                          301        37         825         175
  Other activities             (860)   (1,107)     (2,160)     (2,479)
----------------------------------------------------------------------
       Total non-utility      7,559    14,952      13,620      14,805
----------------------------------------------------------------------
NET INCOME APPLICABLE TO
 COMMON STOCK              $   (492) $ 12,971  $  127,743    $121,444
----------------------------------------------------------------------


                          WGL Holdings, Inc.
                     Consolidated Balance Sheets
                            June 30, 2008
                             (Unaudited)

----------------------------------------------------------------------
                                              June 30,   September 30,
(In thousands)                                  2008         2007
----------------------------------------------------------------------

ASSETS
Property, Plant and Equipment
  At original cost                           $3,138,074    $3,072,935
  Accumulated depreciation and amortization    (957,452)     (922,494)
----------------------------------------------------------------------
     Net property, plant and equipment        2,180,622     2,150,441
----------------------------------------------------------------------

Current Assets
  Cash and cash equivalents                      21,591         4,870
  Accounts receivable, net                      349,457       192,021
  Storage gas--at cost (first-in, first-out)    259,002       294,889
  Other                                          90,287        81,945
----------------------------------------------------------------------
     Total current assets                       720,337       573,725
----------------------------------------------------------------------
Deferred Charges and Other Assets               317,542       322,195
----------------------------------------------------------------------
     Total Assets                            $3,218,501    $3,046,361
----------------------------------------------------------------------

CAPITALIZATION AND LIABILITIES
Capitalization
  Common shareholders' equity                $1,074,556    $  980,767
  Washington Gas Light Company preferred
   stock                                         28,173        28,173
  Long-term debt                                600,477       616,419
----------------------------------------------------------------------
     Total capitalization                     1,703,206     1,625,359
----------------------------------------------------------------------

Current Liabilities
  Notes payable and current maturities of
   long-term debt                                95,308       205,341
  Accounts payable and other accrued
   liabilities                                  351,601       216,861
  Other                                         177,806       134,854
----------------------------------------------------------------------
     Total current liabilities                  624,715       557,056
----------------------------------------------------------------------
Deferred Credits                                890,580       863,946
----------------------------------------------------------------------
     Total Capitalization and Liabilities    $3,218,501    $3,046,361
----------------------------------------------------------------------

                          WGL Holdings, Inc.
           Consolidated Financial and Operating Statistics
               For Periods Ended June 30, 2008 and 2007
                             (Unaudited)

FINANCIAL STATISTICS
----------------------------------------------------------------------
                                             Twelve Months Ended
                                                   June 30,
----------------------------------------------------------------------
                                             2008            2007
----------------------------------------------------------------------

Closing Market Price--end of period            $34.74          $32.64
52-Week Market Price Range              $36.22-$29.79   $35.91-$28.44
Price Earnings Ratio                             15.0            14.6
Annualized Dividends Per Share                  $1.42           $1.37
Dividend Yield                                    4.1%            4.2%
Return on Average Common Equity                  11.0%           11.2%
Total Interest Coverage (times) (1)               4.9             4.8
Book Value Per Share--end of period            $21.53          $20.46
Common Shares Outstanding--end of
 period (thousands)                            49,912          49,310
----------------------------------------------------------------------
(1) Calculated using income from continuing operations.

UTILITY GAS STATISTICS
----------------------------------------------------------------------
                      Three Months Ended       Nine Months Ended
                           June 30,                 June 30,
----------------------------------------------------------------------
(In thousands)         2008        2007         2008        2007
----------------------------------------------------------------------

 Operating
  Revenues
  Gas Sold and
   Delivered
    Residential -
     Firm          $  147,099   $  144,244  $  919,750   $  915,828
    Commercial and
     Industrial -
     Firm              47,619       43,621     257,101      255,225
    Commercial and
     Industrial -
     Interruptible      2,233        1,431       7,391        5,538
    Electric
     Generation           275          275         817          825
----------------------------------------------------------------------
                      197,226      189,571   1,185,059    1,177,416
----------------------------------------------------------------------
  Gas Delivered
   for Others
    Firm               25,931       24,611     122,354      122,191
    Interruptible       9,581       10,391      38,402       41,492
    Electric
     Generation            98           67         260          199
----------------------------------------------------------------------
                       35,610       35,069     161,016      163,882
----------------------------------------------------------------------
                      232,836      224,640   1,346,075    1,341,298
    Other               8,650        8,467      28,752       21,888
----------------------------------------------------------------------
       Total       $  241,486   $  233,107  $1,374,827   $1,363,186
----------------------------------------------------------------------

----------------------------------------------------------------------
                      Three Months Ended       Nine Months Ended
                           June 30,                 June 30,
----------------------------------------------------------------------
(In thousands of
 therms)               2008        2007         2008        2007
----------------------------------------------------------------------

 Gas Sales and
  Deliveries
  Gas Sold and
   Delivered
    Residential -
     Firm              76,796       91,267     590,135      611,497
    Commercial and
     Industrial -
     Firm              28,380       32,617     177,647      185,227
    Commercial and
     Industrial -
     Interruptible      1,564        1,133       5,623        4,335
----------------------------------------------------------------------
                      106,740      125,017     773,405      801,059
----------------------------------------------------------------------
  Gas Delivered
   for Others
    Firm               70,856       75,854     389,671      391,993
    Interruptible      51,177       54,471     211,841      221,865
    Electric
     Generation        22,547       18,331      57,577       45,444
----------------------------------------------------------------------
                      144,580      148,656     659,089      659,302
----------------------------------------------------------------------
       Total          251,320      273,673   1,432,494    1,460,361
----------------------------------------------------------------------

WASHINGTON GAS
 ENERGY SERVICES
----------------------------------------------------------------------
 Natural Gas Sales
   Therm Sales
    (thousands of
    therms)           111,755      130,988     562,604      651,635

   Number of
    Customers (end
    of period)        138,200      143,100     138,200      143,100
----------------------------------------------------------------------

 Electricity Sales
   Electricity
    Sales
    (thousands of
    kWhs)             854,263      985,558   2,625,336    2,892,539

   Number of
    Accounts (end
    of period)         63,600       62,400      63,600       62,400
----------------------------------------------------------------------

UTILITY GAS
 PURCHASED EXPENSE
(excluding off
 system)               119.11 c      99.46c     104.52 c     103.63c
----------------------------------------------------------------------

HEATING DEGREE
 DAYS
----------------------------------------------------------------------
  Actual                  271          406       3,456        3,945
  Normal                  302          308       3,773        3,799
  Percent Colder
   (Warmer) than
   Normal               (10.3)%       31.8%       (8.4)%        3.8%
----------------------------------------------------------------------

  Number of Active
   Customer Meters
   (end of period)  1,054,958    1,046,916   1,054,958    1,046,916
----------------------------------------------------------------------

UTILITY GAS STATISTICS
----------------------------------------------------------------------
                                                Twelve Months Ended
                                                      June 30,
----------------------------------------------------------------------
(In thousands)                                    2008        2007
----------------------------------------------------------------------

 Operating Revenues
  Gas Sold and Delivered
    Residential - Firm                        $  991,331   $  987,415
    Commercial and Industrial - Firm             280,825      279,449
    Commercial and Industrial - Interruptible      8,471        6,979
    Electric Generation                            1,100        1,100
----------------------------------------------------------------------
                                               1,281,727    1,274,943
----------------------------------------------------------------------
  Gas Delivered for Others
    Firm                                         139,838      139,109
    Interruptible                                 46,434       49,061
    Electric Generation                              354          279
----------------------------------------------------------------------
                                                 186,626      188,449
----------------------------------------------------------------------
                                               1,468,353    1,463,392
    Other                                         40,562       31,716
----------------------------------------------------------------------
       Total                                  $1,508,915   $1,495,108
----------------------------------------------------------------------

----------------------------------------------------------------------
                                                Twelve Months Ended
                                                      June 30,
----------------------------------------------------------------------
(In thousands of therms)                          2008        2007
----------------------------------------------------------------------

 Gas Sales and Deliveries
  Gas Sold and Delivered
    Residential - Firm                           627,339      652,803
    Commercial and Industrial - Firm             196,382      206,053
    Commercial and Industrial - Interruptible      6,563        5,739
----------------------------------------------------------------------
                                                 830,284      864,595
----------------------------------------------------------------------
  Gas Delivered for Others
    Firm                                         431,098      437,313
    Interruptible                                257,281      265,804
    Electric Generation                          124,083      105,984
----------------------------------------------------------------------
                                                 812,462      809,101
----------------------------------------------------------------------
       Total                                   1,642,746    1,673,696
----------------------------------------------------------------------

WASHINGTON GAS ENERGY SERVICES
----------------------------------------------------------------------
 Natural Gas Sales
   Therm Sales (thousands of therms)             636,434      732,791

   Number of Customers (end of period)           138,200      143,100
----------------------------------------------------------------------

 Electricity Sales
   Electricity Sales (thousands of kWhs)       3,676,641    3,914,786

   Number of Accounts (end of period)             63,600       62,400
----------------------------------------------------------------------

UTILITY GAS PURCHASED EXPENSE
(excluding off system)                            103.86 c     101.53c
----------------------------------------------------------------------

HEATING DEGREE DAYS
----------------------------------------------------------------------
  Actual                                           3,466        3,967
  Normal                                           3,789        3,815
  Percent Colder (Warmer) than Normal               (8.5)%        4.0%
----------------------------------------------------------------------

  Number of Active Customer Meters (end of
   period)                                     1,054,958    1,046,916
----------------------------------------------------------------------

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)

----------------------------------------------------------------------
                     Quarter Ended June 30, 2008
----------------------------------------------------------------------
(In thousands,               Retail
 except per share Regulated   Energy-           Other
 data)             Utility   Marketing HVAC   Activities* Consolidated
----------------------------------------------------------------------
 GAAP net income
  (loss)          $ (8,051)   $ 8,118  $ 301     $  (860)    $   (492)
 Adjusted for
  (items shown
  after-tax):
 Unrealized mark-
  to-market
  (gain) loss on
  energy-related
  derivatives (a)    6,660     (3,020)     -           -        3,640
----------------------------------------------------------------------
 Non-GAAP
  operating
  earnings (loss) $ (1,391)   $ 5,098  $ 301     $  (860)    $  3,148
----------------------------------------------------------------------
 GAAP diluted
  earnings (loss)
  per average
  common share
  (49,638 shares) $  (0.16)   $  0.16  $0.01     $ (0.02)    $  (0.01)
 Per share effect
  of non-GAAP
  adjustments         0.13      (0.06)     -           -         0.07
----------------------------------------------------------------------
 Non-GAAP
  operating
  earnings (loss)
  per share       $  (0.03)   $  0.10  $0.01     $ (0.02)    $   0.06
----------------------------------------------------------------------

                     Quarter Ended June 30, 2007
----------------------------------------------------------------------
(In thousands,               Retail
 except per share Regulated   Energy-           Other
 data)             Utility   Marketing HVAC   Activities* Consolidated
----------------------------------------------------------------------
GAAP net income
 (loss)           $ (1,981)   $16,022  $  37     $(1,107)    $ 12,971
Adjusted for
 (items shown
 after-tax):
Colder-than-
 normal weather
 (b)                (2,121)         -      -           -       (2,121)
Unrealized mark-
 to-market gain
 on energy-
 related
 derivatives (a)      (355)    (3,316)     -           -       (3,671)
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)  $ (4,457)   $12,706  $  37     $(1,107)    $  7,179
----------------------------------------------------------------------
GAAP diluted
 earnings (loss)
 per average
 common share
 (49,557 shares)  $  (0.04)   $  0.32  $   -     $ (0.02)    $   0.26
Per share effect
 of non-GAAP
 adjustments         (0.05)     (0.06)     -       (0.01)       (0.12)
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)
 per share        $  (0.09)   $  0.26  $   -     $ (0.03)    $   0.14
----------------------------------------------------------------------

----------------------------------------------------------------------
                   Nine Months Ended June 30, 2008
----------------------------------------------------------------------
(In thousands,               Retail
 except per share Regulated   Energy-           Other
 data)             Utility   Marketing HVAC   Activities* Consolidated
----------------------------------------------------------------------
GAAP net income
 (loss)           $114,123    $14,955  $ 825     $(2,160)    $127,743
Adjusted for
 (items shown
 after-tax):
Reversal of costs
 related to
 business process
 outsourcing (c)    (1,139)         -      -           -       (1,139)
Unrealized mark-
 to-market (gain)
 loss on energy-
 related
 derivatives (a)     9,722     (1,974)     -           -        7,748
Other regulatory
 adjustments (d)    (1,242)         -      -           -       (1,242)
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)  $121,464    $12,981  $ 825     $(2,160)    $133,110
----------------------------------------------------------------------
GAAP diluted
 earnings (loss)
 per average
 common share
 (49,832 shares)  $   2.29    $  0.30  $0.02     $ (0.05)    $   2.56
Per share effect
 of non-GAAP
 adjustments          0.15      (0.04)     -           -         0.11
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)
 per share        $   2.44    $  0.26  $0.02     $ (0.05)    $   2.67
----------------------------------------------------------------------

----------------------------------------------------------------------
                   Nine Months Ended June 30, 2007
----------------------------------------------------------------------
(In thousands,               Retail
 except per share Regulated   Energy-           Other
 data)             Utility   Marketing HVAC   Activities* Consolidated
----------------------------------------------------------------------
GAAP net income
 (loss)           $106,639    $17,109  $ 175     $(2,479)    $121,444
Adjusted for
 (items shown
 after-tax):
Colder-than-
 normal weather
 (b)                (3,294)         -      -           -       (3,294)
Retroactive
 depreciation
 expense
 adjustment (e)     (2,400)         -      -           -       (2,400)
Unrealized mark-
 to-market (gain)
 loss on energy-
 related
 derivatives (a)       680     (2,882)     -           -       (2,202)
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)  $101,625    $14,227  $ 175     $(2,479)    $113,548
----------------------------------------------------------------------
GAAP diluted
 earnings (loss)
 per average
 common share
 (49,313 shares)  $   2.16    $  0.35  $   -     $ (0.05)    $   2.46
Per share effect
 of non-GAAP
 adjustments         (0.10)     (0.06)     -           -        (0.16)
----------------------------------------------------------------------
Non-GAAP
 operating
 earnings (loss)
 per share        $   2.06    $  0.29  $   -     $ (0.05)    $   2.30
----------------------------------------------------------------------

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

             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 per                              Sept. Year-To-
 share data)                Dec. 31  Mar. 31  Jun. 30    30     Date
----------------------------------------------------------------------
GAAP net income (loss)      $47,197  $81,038  $  (492)       $127,743
Adjusted for (items shown
 after-tax):
Reversal of costs related
 to business process
 outsourcing (c)             (1,139)       -        -          (1,139)
Unrealized mark-to-market
 loss on energy-related
 derivatives (a)              2,613    1,495    3,640           7,748
Other regulatory
 adjustments (d)             (1,242)       -        -          (1,242)
----------------------------------------------------------------------
Non-GAAP operating earnings $47,429  $82,533  $ 3,148        $133,110
----------------------------------------------------------------------
Diluted average common
 shares outstanding          49,645   49,781   49,638          49,832
----------------------------------------------------------------------
GAAP diluted earnings
 (loss) per average common
 share                      $  0.95  $  1.63  $ (0.01)       $   2.56
Per share effect of non-
 GAAP adjustments              0.01     0.03     0.07            0.11
----------------------------------------------------------------------
Non-GAAP operating earnings
 per share                  $  0.96  $  1.66  $  0.06        $   2.67
----------------------------------------------------------------------

----------------------------------------------------------------------
                           Fiscal Year 2007
----------------------------------------------------------------------
                                    Quarterly Period Ended (f)
----------------------------------------------------------------------
(In thousands, except per                              Sept. Year-To-
 share data)                Dec. 31  Mar. 31  Jun. 30    30     Date
----------------------------------------------------------------------
GAAP net income             $45,098  $63,375  $12,971        $121,444
Adjusted for (items shown
 after-tax):
Colder-than-normal weather
 (b)                              -   (1,173)  (2,121)         (3,294)
Retroactive depreciation
 expense adjustment (e)      (2,400)       -        -          (2,400)
Unrealized mark-to-market
 (gain) loss on energy-
 related derivatives (a)      1,359      110   (3,671)         (2,202)
----------------------------------------------------------------------
Non-GAAP operating earnings $44,057  $62,312    7,179        $113,548
----------------------------------------------------------------------
Diluted average common
 shares outstanding          49,130   49,267   49,557          49,313
----------------------------------------------------------------------
GAAP diluted earnings per
 average common share       $  0.92  $  1.29  $  0.26        $   2.46
----------------------------------------------------------------------
Per share effect of non-
 GAAP adjustments             (0.02)   (0.03)   (0.12)          (0.16)
----------------------------------------------------------------------
Non-GAAP operating earnings
 per share                  $  0.90  $  1.26  $  0.14        $   2.30
----------------------------------------------------------------------

Footnotes
----------------------------------------------------------------------

(a) 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.

(b) This adjustment is for our regulated utility segment only. Weather
     was 4.9 percent and 31.8 percent colder than normal during the
     quarters ended March 31, 2007 and June 30, 2007, respectively.
     There were no adjustments related to weather during the quarter
     ended December 31, 2006.

(c) 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.

(d) 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.

(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                           $ 2.20  $ 2.30
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)                                         0.16    0.16
Other regulatory adjustments (c)                        (0.02)  (0.02)
Other adjustment (d)                                    (0.01)  (0.01)
----------------------------------------------------------------------
Non-GAAP Earnings Guidance Range                       $ 2.31  $ 2.41
----------------------------------------------------------------------

                      Regulated Utility Segment
----------------------------------------------------------------------
                                                         Low    High
----------------------------------------------------------------------
GAAP Earnings Guidance Range                           $ 1.97  $ 2.03
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)                                         0.15    0.15
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                           $ 0.23  $ 0.27
Adjusted for:
Unrealized mark-to-market loss on energy-related
 derivatives (b)                                         0.01    0.01
----------------------------------------------------------------------
Non-GAAP Earnings Guidance Range                       $ 0.24  $ 0.28
----------------------------------------------------------------------

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

Copyright Business Wire 2008

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