May 1, 2013 at 6:02 PM EDT
WGL Holdings, Inc. Reports Second Quarter Fiscal Year 2013 Financial Results; Raised Fiscal Year 2013 Non-GAAP Guidance
-
Consolidated earnings per share up —— $1.73 per share vs. $1.44 per
share for the same quarter of the prior year
-
Consolidated non-GAAP operating earnings per share up —— $1.75 per
share vs. $1.58 per share for the same quarter of prior year
-
Earnings Guidance for fiscal year 2013 —— raised to a range from
$2.42 to $2.54 per share for non-GAAP operating earnings and updating
GAAP earnings to a range of $2.30 to $2.42 per share
WASHINGTON--(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 net income determined in accordance with generally
accepted accounting principles in the United States of America (GAAP)
for the quarter ended March 31, 2013 of $89.5 million, or $1.73 per
share, compared to net income of $74.2 million, or $1.44 per share,
reported for the quarter ended March 31, 2012.
For the first six months of fiscal year 2013, we reported net income
determined in accordance with GAAP of $141.9 million, or $2.74 per
share, compared to net income of $124.6 million, or $2.42 per share,
reported for the comparative period of fiscal year 2012. Our operations
are seasonal and, accordingly, our operating results for the three and
six months ended March 31, 2013, are not indicative of the results
expected for the 12 months ending September 30, 2013.
Financial performance is also evaluated based on non-GAAP operating
earnings (loss). Non-GAAP operating earnings (loss) excludes the effects
of: (i) unrealized mark-to-market gains (losses) on
energy-related derivatives for our regulated utility and retail energy
marketing segments; (ii) certain gains and losses associated with
optimizing the utility segment's system capacity assets; (iii)
changes in the measured value of our inventory for our wholesale energy
solutions segment; (iv) the financial effects of warm or cold
weather that exceeds weather protection for our regulated utility
segment and (v) certain unusual transactions. 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 non-GAAP operating earnings, 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 quarter ended March 31, 2013, non-GAAP operating earnings were
$90.7 million, or $1.75 per share, an increase of $9.4 million, or $0.17
per share, over non-GAAP operating earnings of $81.3 million, or $1.58
per share, for the same quarter of the prior fiscal year. For the six
months ended March 31, 2013, non-GAAP operating earnings were $149.6
million, or $2.89 per share, an increase of $10.2 million, or $0.19 per
share, over non-GAAP operating earnings of $139.4 million, or $2.70 per
share, for the same period of the prior fiscal year.
"I am happy to announce second quarter non-GAAP earnings per share of
$1.75, an increase of 11% over the prior year," said Terry McCallister,
Chairman and Chief Executive Officer of WGL Holdings. "Earnings improved
in both our utility and non-utility businesses for the quarter,
reflecting our continued effective execution against our long range
goals. For the full year we are increasing our guidance for non-GAAP
earnings, primarily driven by lower O&M spending in our utility
operations. Another significant event occurred on April 26, as we filed
a rate case with the Maryland Public Service Commission requesting a
revenue increase of $30.7 million. This request reflects recent
increases in our pipeline replacement spending in Maryland as well as
higher O&M costs. This action supports our plans to maintain a strong
earnings contribution from our utility business as we increase
replacement spending to ensure a safe and reliable distribution system."
Second Quarter Results by Business Segment
Regulated Utility
For the quarter ended March 31, 2013, our regulated utility segment
reported net income of $77.1 million, or $1.49 per share, an increase of
$4.7 million, or $0.09 per share, compared to a net income of $72.4
million, or $1.40 per share, reported for the same quarter of the prior
fiscal year. After adjustments, non-GAAP operating earnings for the
regulated utility segment were $81.1 million, or $1.57 per share, for
the quarter ended March 31, 2013, compared to non-GAAP operating
earnings of $77.0 million, or $1.49 per share, for the same quarter of
the prior fiscal year.
For the six months ended March 31, 2013, our regulated utility segment
reported net income of $115.8 million, or $2.24 per share, compared to
net income of $116.8 million, or $2.27 per share, reported for the six
months ended March 31, 2012. After adjustments, non-GAAP operating
earnings for the regulated utility segment were $125.1 million, or $2.42
per share, for the six months ended March 31, 2013, compared to non-GAAP
operating earnings of $121.1 million, or $2.35 per share, for the same
period of the prior fiscal year.
For both the three and six months ended March 31, 2013, higher non-GAAP
operating earnings reflect: (i) higher revenues due to an
increase in average active customer meters; (ii) higher margins
associated with our asset optimization program; (iii) favorable
effects of changes in natural gas consumption patterns due to shifts in
weather patterns; (iv) lower bad debt expense due to a reduction
in customer delinquencies and charge-offs and (v) lower income
tax expense due to a lower effective tax rate. Partially offsetting
these favorable variances were decreases in the recovery of carrying
costs on lower average storage gas inventory balances and higher
depreciation expense due to the growth in our investment in utility
plant. For the six-month period only, non-GAAP earnings were also higher
due to higher revenues related to the timing of rate relief in Maryland.
Retail Energy-Marketing
For the quarter ended March 31, 2013, the retail energy-marketing
segment reported net income of $21.7 million, or $0.42 per share, an
increase of $17.2 million, or $0.33 per share, over net income of $4.5
million, or $0.09 per share, reported for the same quarter of the prior
fiscal year. Non-GAAP operating earnings for the retail energy-marketing
segment were $11.6 million, or $0.22 per share, for the quarter ended
March 31, 2013, an increase of $6.3 million, or $0.12 per share, over
non-GAAP operating earnings of $5.3 million, or $0.10 per share, for the
same quarter of the prior fiscal year. Non-GAAP operating earnings
reflect higher realized electric margins due to increased sales volumes
associated with colder winter weather and favorable timing of margin
recognition in the current period versus the same quarter of the prior
year, partially offset by higher electricity supply charges from the
regional power grid operator, PJM. The increase in natural gas sales
margins for the quarter was primarily attributable to a more favorable
pattern of margin recognition in the current quarter due to higher
levels of storage withdrawals at favorable spreads. In addition, gas
margins increased due to higher retail sales volumes resulting from
colder weather and higher margins on portfolio optimization activities.
Operating expenses declined primarily due to lower customer acquisition
expenses and lower charges from Maryland and Pennsylvania utilities
related to Purchase of Receivables (POR) programs.
For the six months ended March 31, 2013, the retail energy-marketing
segment reported net income of $34.7 million, or $0.67 per share, an
increase of $29.4 million, or $0.57 per share, over net income of $5.3
million, or $0.10 per share, reported for the same period of the prior
fiscal year. Non-GAAP operating earnings for the retail energy-marketing
segment were $23.6 million, or $0.46 per share, for the six months ended
March 31, 2013, an increase of $5.2 million, or $0.10 per share, over
non-GAAP operating earnings of $18.4 million, or $0.36 per share, for
the same period of the prior fiscal year. The increase in non-GAAP
operating earnings reflects higher realized gas margins attributable to
higher sales volumes due to colder weather, higher unit margins on
portfolio optimization activity and favorable price and timing
conditions in the current period versus the same quarter of the prior
year. Realized electric margins were lower on a different pattern of
annual margin recognition in the current year vs. the prior year and
higher electricity supply charges from PJM, partially offset by higher
sales volumes in the current year. Operating expenses in the six-month
period declined primarily due to lower customer acquisition expenses and
lower charges from Maryland and Pennsylvania utilities related to POR
programs.
The pattern of margin recognition that the retail energy-marketing
segment realizes in a given quarter varies from year to year.
Commercial Energy Systems
For the quarter ended March 31, 2013, the commercial energy systems
segment reported net income of $0.6 million compared to net income of
$0.4 million for the same quarter last year. For the six months ended
March 31, 2013, the commercial energy systems segment reported net
income of $1.7 million, or $0.03 per share, compared to net income of
$0.7 million, or $0.01 per share, for the same period last year. Net
income was higher primarily due to higher revenue from commercial solar
projects and higher returns on investments from our alternative energy
assets partially offset by lower project work for government agency
customers. There were no non-GAAP adjustments for this segment for any
of the periods presented.
Wholesale Energy Solutions
For the quarter ended March 31, 2013, the wholesale energy solutions
segment reported a net loss of $(9.4) million, or $(0.18) per share,
compared to a net loss of $(2.7) million, or $(0.05) per share, for the
same quarter of the prior fiscal year. Non-GAAP net losses for the
wholesale energy solutions segment were $(2.1) million, or $(0.04) per
share, compared to a loss of $(1.1) million, or $(0.02) per share, for
the same period of the prior fiscal year. Non-GAAP operating earnings
were lower than prior year primarily due to compressed transportation
and storage spreads.
For the six months ended March 31, 2013, the wholesale energy solutions
segment reported a net loss of $(8.1) million, or $(0.16) per share,
compared to net income of $2.5 million, or $0.05 per share, for the same
period of the prior fiscal year. Wholesale energy solutions reported
non-GAAP operating earnings of $1.4 million, or $0.03 per share,
compared to a non-GAAP operating loss of $(0.1) million for the same
period of the prior fiscal year. Non-GAAP operating earnings were higher
than in the prior year principally due to an increase in storage margins
driven by the segment's ongoing investments in low-cost storage capacity.
Earnings Outlook
We are updating our GAAP earnings estimate for fiscal year 2013 to a
range of $2.30 per share to $2.42 per share. This estimate includes
projected fiscal year 2013 earnings from our regulated utility segment
in a range of $1.65 per share to $1.71 per share and projected fiscal
year 2013 earnings from our non-utility business segments in a range of
$0.65 per share to $0.71 per share.
We are raising our non-GAAP consolidated earnings estimate for fiscal
year 2013 to a range of $2.42 per share to $2.54 per share. This
estimate includes projected fiscal year 2013 non-GAAP operating earnings
from our regulated utility segment in a range of $1.79 per share to
$1.85 per share, and projected fiscal year 2013 non-GAAP operating
earnings from our non-utility business segments in a range of $0.63 per
share to $0.69 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 website, www.wglholdings.com.
Other Information
We will hold a conference call at 10:30 a.m. Eastern Time on May 2,
2013, to discuss our second quarter fiscal year 2013 financial results.
The live conference call will be available to the public via a link
located on the WGL Holdings website, 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 website through June 2, 2013.
Headquartered in Washington, D.C., WGL Holdings, Inc. has four 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; (iii)
the commercial energy systems segment which consists of Washington Gas
Energy Systems, Inc., a provider of design-build energy efficiency
solutions to government and commercial clients, commercial solar
projects, and the operations of WGSW, a holding company formed to invest
in alternative energy assets and (iv) the wholesale energy
solutions segment which consists of Capitol Energy Ventures Corp., an
asset optimization business that acquires, manages and optimizes natural
gas storage and transportation assets. Additional information about WGL
Holdings, Inc. is available on our website, 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 Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
September 30,
|
(In thousands)
|
|
|
2013
|
|
|
2012
|
ASSETS
|
|
|
|
|
|
|
Property, Plant and Equipment
|
|
|
|
|
|
|
At original cost
|
|
$
|
3,900,042
|
|
|
$
|
3,807,036
|
|
Accumulated depreciation and amortization
|
|
|
(1,174,763
|
)
|
|
|
(1,139,623
|
)
|
Net property, plant and equipment
|
|
|
2,725,279
|
|
|
|
2,667,413
|
|
Current Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
9,664
|
|
|
|
10,263
|
|
Accounts receivable, net
|
|
|
616,744
|
|
|
|
369,907
|
|
Storage gas
|
|
|
164,871
|
|
|
|
283,008
|
|
Other
|
|
|
114,442
|
|
|
|
169,583
|
|
Total current assets
|
|
|
905,721
|
|
|
|
832,761
|
|
Deferred Charges and Other Assets
|
|
|
600,817
|
|
|
|
610,773
|
|
Total Assets
|
|
$
|
4,231,817
|
|
|
$
|
4,110,947
|
|
CAPITALIZATION AND LIABILITIES
|
|
|
|
|
|
|
Capitalization
|
|
|
|
|
|
|
Common shareholders' equity
|
|
$
|
1,374,033
|
|
|
$
|
1,269,556
|
|
Washington Gas Light Company preferred stock
|
|
|
28,173
|
|
|
|
28,173
|
|
Long-term debt
|
|
|
554,740
|
|
|
|
589,202
|
|
Total capitalization
|
|
|
1,956,946
|
|
|
|
1,886,931
|
|
Current Liabilities
|
|
|
|
|
|
|
Notes payable and current maturities of long-term debt
|
|
|
219,100
|
|
|
|
247,718
|
|
Accounts payable and other accrued liabilities
|
|
|
298,662
|
|
|
|
270,387
|
|
Other
|
|
|
276,233
|
|
|
|
238,910
|
|
Total current liabilities
|
|
|
793,995
|
|
|
|
757,015
|
|
Deferred Credits
|
|
|
1,480,876
|
|
|
|
1,467,001
|
|
Total Capitalization and Liabilities
|
|
$
|
4,231,817
|
|
|
$
|
4,110,947
|
|
|
|
|
|
|
|
|
|
|
|
WGL Holdings, Inc.
|
Consolidated Statements of Income
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
(In thousands, except per share data)
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
OPERATING REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility
|
|
$
|
527,174
|
|
|
$
|
460,700
|
|
|
$
|
875,107
|
|
|
$
|
824,847
|
|
Non-utility
|
|
|
364,209
|
|
|
|
378,744
|
|
|
|
703,012
|
|
|
|
742,354
|
|
Total Operating Revenues
|
|
|
891,383
|
|
|
|
839,444
|
|
|
|
1,578,119
|
|
|
|
1,567,201
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility cost of gas
|
|
|
244,201
|
|
|
|
188,475
|
|
|
|
387,171
|
|
|
|
343,784
|
|
Non-utility cost of energy-related sales
|
|
|
323,740
|
|
|
|
356,114
|
|
|
|
622,889
|
|
|
|
691,976
|
|
Operation and maintenance
|
|
|
88,001
|
|
|
|
85,057
|
|
|
|
171,503
|
|
|
|
166,681
|
|
Depreciation and amortization
|
|
|
25,544
|
|
|
|
24,106
|
|
|
|
52,848
|
|
|
|
48,346
|
|
General taxes and other assessments
|
|
|
54,182
|
|
|
|
47,281
|
|
|
|
93,248
|
|
|
|
84,078
|
|
Total Operating Expenses
|
|
|
735,668
|
|
|
|
701,033
|
|
|
|
1,327,659
|
|
|
|
1,334,865
|
|
OPERATING INCOME
|
|
|
155,715
|
|
|
|
138,411
|
|
|
|
250,460
|
|
|
|
232,336
|
|
Other Income — Net
|
|
|
951
|
|
|
|
1,953
|
|
|
|
1,496
|
|
|
|
2,994
|
|
Interest Expense
|
|
|
8,951
|
|
|
|
9,521
|
|
|
|
18,144
|
|
|
|
19,343
|
|
INCOME BEFORE INCOME TAXES
|
|
|
147,715
|
|
|
|
130,843
|
|
|
|
233,812
|
|
|
|
215,987
|
|
INCOME TAX EXPENSE
|
|
|
57,880
|
|
|
|
56,334
|
|
|
|
91,259
|
|
|
|
90,710
|
|
NET INCOME
|
|
|
89,835
|
|
|
|
74,509
|
|
|
|
142,553
|
|
|
|
125,277
|
|
Dividends on Washington Gas Light Company preferred stock
|
|
|
330
|
|
|
|
330
|
|
|
|
660
|
|
|
|
660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME APPLICABLE TO COMMON STOCK
|
|
$
|
89,505
|
|
|
$
|
74,179
|
|
|
$
|
141,893
|
|
|
$
|
124,617
|
|
AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
51,681
|
|
|
|
51,511
|
|
|
|
51,657
|
|
|
|
51,473
|
|
Diluted
|
|
|
51,828
|
|
|
|
51,561
|
|
|
|
51,759
|
|
|
|
51,546
|
|
EARNINGS PER AVERAGE COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.73
|
|
|
$
|
1.44
|
|
|
$
|
2.75
|
|
|
$
|
2.42
|
|
Diluted
|
|
$
|
1.73
|
|
|
$
|
1.44
|
|
|
$
|
2.74
|
|
|
$
|
2.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) Applicable To Common Stock — By Segment ($000):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated utility
|
|
$
|
77,140
|
|
|
$
|
72,351
|
|
|
$
|
115,806
|
|
|
$
|
116,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-utility operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail energy-marketing
|
|
|
21,680
|
|
|
|
4,464
|
|
|
|
34,701
|
|
|
|
5,310
|
|
Commercial energy systems
|
|
|
649
|
|
|
|
431
|
|
|
|
1,687
|
|
|
|
729
|
|
Wholesale energy solutions
|
|
|
(9,401
|
)
|
|
|
(2,722
|
)
|
|
|
(8,125
|
)
|
|
|
2,515
|
|
Other activities
|
|
|
(563
|
)
|
|
|
(345
|
)
|
|
|
(2,176
|
)
|
|
|
(694
|
)
|
Total non-utility
|
|
|
12,365
|
|
|
|
1,828
|
|
|
|
26,087
|
|
|
|
7,860
|
|
NET INCOME APPLICABLE TO COMMON STOCK
|
|
$
|
89,505
|
|
|
$
|
74,179
|
|
|
$
|
141,893
|
|
|
$
|
124,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WGL Holdings, Inc.
|
Consolidated Financial and Operating Statistics
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended March 31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Market Price — end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
44.10
|
|
|
$
|
40.70
|
|
|
52-Week Market Price Range
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
44.30-$35.96
|
$44.99-$34.71 |
|
|
Price Earnings Ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14.5
|
|
|
|
21.5
|
|
|
Annualized Dividends Per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1.68
|
|
|
$
|
1.60
|
|
|
Dividend Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.8
|
%
|
|
|
3.9
|
%
|
|
Return on Average Common Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.8
|
%
|
|
|
7.6
|
%
|
|
Total Interest Coverage (times)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.9
|
|
|
|
5.3
|
|
|
Book Value Per Share — end of period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
26.58
|
|
|
$
|
25.08
|
|
|
Common Shares Outstanding — end of period (thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,703
|
|
|
|
51,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UTILITY GAS STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
|
March 31,
|
|
(In thousands)
|
|
|
2013
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Sold and Delivered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential — Firm
|
|
$
|
357,800
|
|
$
|
306,586
|
|
|
$
|
579,211
|
|
|
$
|
537,736
|
|
|
|
|
|
$
|
739,150
|
$
|
|
|
698,545
|
|
|
Commercial and Industrial — Firm
|
|
|
81,184
|
|
|
64,670
|
|
|
|
132,311
|
|
|
|
116,762
|
|
|
|
|
|
171,079
|
|
|
|
160,855
|
|
|
Commercial and Industrial — Interruptible
|
|
|
1,320
|
|
|
650
|
|
|
|
1,809
|
|
|
|
1,199
|
|
|
|
|
|
2,195
|
|
|
|
2,075
|
|
|
Electric Generation
|
|
|
275
|
|
|
367
|
|
|
|
550
|
|
|
|
550
|
|
|
|
|
|
1,100
|
|
|
|
1,100
|
|
|
|
|
|
440,579
|
|
|
372,273
|
|
|
|
713,881
|
|
|
|
656,247
|
|
|
|
|
|
913,524
|
|
|
|
862,575
|
|
|
Gas Delivered for Others
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Firm
|
|
|
64,654
|
|
|
66,806
|
|
|
|
118,969
|
|
|
|
124,313
|
|
|
|
|
|
168,266
|
|
|
|
177,687
|
|
|
Interruptible
|
|
|
19,059
|
|
|
15,706
|
|
|
|
33,144
|
|
|
|
28,650
|
|
|
|
|
|
50,618
|
|
|
|
46,369
|
|
|
Electric Generation
|
|
|
101
|
|
|
6
|
|
|
|
182
|
|
|
|
144
|
|
|
|
|
|
764
|
|
|
|
484
|
|
|
|
|
|
83,814
|
|
|
82,518
|
|
|
|
152,295
|
|
|
|
153,107
|
|
|
|
|
|
219,648
|
|
|
|
224,540
|
|
|
|
|
|
524,393
|
|
|
454,791
|
|
|
|
866,176
|
|
|
|
809,354
|
|
|
|
|
|
1,133,172
|
|
|
|
1,087,115
|
|
|
Other
|
|
|
2,781
|
|
|
5,909
|
|
|
|
8,931
|
|
|
|
15,493
|
|
|
|
|
|
26,442
|
|
|
|
31,721
|
|
|
Total
|
|
$
|
527,174
|
|
$
|
460,700
|
|
|
$
|
875,107
|
|
|
$
|
824,847
|
|
|
|
|
|
$
|
1,159,614
|
$
|
|
|
1,118,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
Twelve Months Ended
|
|
|
|
March 31,
|
|
|
March 31,
|
|
|
|
|
March 31,
|
|
(In thousands of therms)
|
|
|
2013
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Sales and Deliveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Sold and Delivered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential — Firm
|
|
|
343,558
|
|
|
259,647
|
|
|
|
553,050
|
|
|
|
442,847
|
|
|
|
|
|
650,408
|
|
|
|
543,476
|
|
|
Commercial and Industrial — Firm
|
|
|
85,461
|
|
|
64,146
|
|
|
|
140,875
|
|
|
|
113,643
|
|
|
|
|
|
176,747
|
|
|
|
150,398
|
|
|
Commercial and Industrial — Interruptible
|
|
|
1,367
|
|
|
777
|
|
|
|
2,071
|
|
|
|
1,482
|
|
|
|
|
|
2,632
|
|
|
|
2,462
|
|
|
|
|
|
430,386
|
|
|
324,570
|
|
|
|
695,996
|
|
|
|
557,972
|
|
|
|
|
|
829,787
|
|
|
|
696,336
|
|
|
Gas Delivered for Others
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Firm
|
|
|
212,630
|
|
|
172,168
|
|
|
|
363,090
|
|
|
|
312,829
|
|
|
|
|
|
486,959
|
|
|
|
434,676
|
|
|
Interruptible
|
|
|
101,024
|
|
|
78,393
|
|
|
|
177,061
|
|
|
|
150,340
|
|
|
|
|
|
269,752
|
|
|
|
241,896
|
|
|
Electric Generation
|
|
|
14,355
|
|
|
35,186
|
|
|
|
65,572
|
|
|
|
43,013
|
|
|
|
|
|
365,875
|
|
|
|
160,208
|
|
|
|
|
|
328,009
|
|
|
285,747
|
|
|
|
605,723
|
|
|
|
506,182
|
|
|
|
|
|
1,122,586
|
|
|
|
836,780
|
|
|
Total
|
|
|
758,395
|
|
|
610,317
|
|
|
|
1,301,719
|
|
|
|
1,064,154
|
|
|
|
|
|
1,952,373
|
|
|
|
1,533,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WASHINGTON GAS ENERGY SERVICES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Therm Sales (thousands of therms)
|
|
|
320,129
|
|
|
249,627
|
|
|
|
531,019
|
|
|
|
432,360
|
|
|
|
|
|
709,079
|
|
|
|
591,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Customers (end of period)
|
|
|
171,000
|
|
|
179,000
|
|
|
|
171,000
|
|
|
|
179,000
|
|
|
|
|
|
171,000
|
|
|
|
179,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electricity Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electricity Sales (thousands of kWhs)
|
|
|
3,044,866
|
|
|
2,896,382
|
|
|
|
5,848,583
|
|
|
|
5,408,962
|
|
|
|
|
|
12,234,493
|
|
|
|
11,144,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Accounts (end of period)
|
|
|
183,000
|
|
|
197,000
|
|
|
|
183,000
|
|
|
|
197,000
|
|
|
|
|
|
183,000
|
|
|
|
197,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UTILITY GAS PURCHASED EXPENSE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(excluding asset optimization)
|
|
|
55.43
|
¢
|
|
59.06
|
¢
|
|
|
53.83
|
¢
|
|
|
62.52
|
¢
|
|
|
|
|
53.12
|
¢
|
|
|
63.75
|
¢
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HEATING DEGREE DAYS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
|
2,151
|
|
|
1,613
|
|
|
|
3,460
|
|
|
|
2,807
|
|
|
|
|
|
3,689
|
|
|
|
3,094
|
|
|
Normal
|
|
|
2,115
|
|
|
2,112
|
|
|
|
3,463
|
|
|
|
3,462
|
|
|
|
|
|
3,778
|
|
|
|
3,777
|
|
|
Percent Colder (Warmer) than Normal
|
|
|
1.7
|
%
|
|
(23.6
|
)
|
%
|
|
(0.1
|
)
|
%
|
|
(18.9
|
)
|
%
|
|
|
|
|
(2.4
|
)
|
%
|
|
(18.1
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Active Customer Meters
|
|
|
1,107,004
|
|
|
1,096,571
|
|
|
|
1,102,917
|
|
|
|
1,092,337
|
|
|
|
|
|
1,099,352
|
|
|
|
1,089,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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 adjusting for the effects of: (i)
unrealized mark-to-market gains and losses from energy-related
derivatives for our regulated utility and retail marketing operations; (ii)
certain gains and losses associated with optimizing the utility
segment's capacity assets; (iii) changes in the measured value of
our inventory for our wholesale energy solutions segment; (iv)
the financial effects of warmer-than-normal/colder-than-normal weather
that exceeds weather protection for our regulated utility segment and (v)
certain unusual transactions. 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, and assist in analyzing period-to-period
comparisons. Additionally, we use this non-GAAP measure to report to the
board of directors and to evaluate management's performance. The
economic substance underlying our adjustments to calculate non-GAAP
operating earnings (loss) is as follows:
-
We exclude unrealized mark-to-market adjustments for our
energy-related derivatives for our regulated utility and retail
energy-marketing operations to provide a more transparent and accurate
view of the ongoing financial results of our operations and to be
consistent with regulatory sharing requirements. For our regulated
utility segment, we use derivatives to substantially lock in a future
profit. This profit does not change even though the unrealized fair
value of the underlying derivatives may change period-to-period, until
settlement. Additionally, for the regulated utility segment, sharing
with customers is based on realized profit, and does not factor in
unrealized gains and losses. For our retail energy-marketing segment,
we use derivatives to lock in a price for energy supplies to match
future retail sales commitments. These derivatives are subject to
mark-to-market treatment, while most of the corresponding retail sales
contracts are not. With the exception of certain transactions related
to the optimization of system capacity assets as discussed below, when
these derivatives settle, the realized economic impact is reflected in
our non-GAAP operating results, as we are only removing interim
unrealized mark-to-market amounts.
-
We adjust for certain gains and losses associated with the
optimization of the regulated utility segment's capacity assets.
Transactions to optimize our system storage capacity assets are
structured to lock in a profit that is recognized, for regulatory
purposes, as the natural gas is delivered to end-use customers. These
transactions may result in gains and losses that consist of: (i)
the settlement of physical and financial derivatives related to the
management of our storage inventory and (ii) lower-of-cost or
market adjustments from the difference between the cost of physical
inventory compared to the amount realized through rates when the
inventory is ultimately delivered to customers. In our GAAP results,
due to timing differences between when the physical and financial
transactions settle, and when the natural gas is sold to the end-use
customer, gains and losses associated with our storage optimization
strategy may be spread across different reporting periods. For
purposes of calculating non-GAAP operating earnings (loss), gains and
losses associated with these transactions are included in the
reporting period when the gas is delivered to the end-use customer and
the ultimate profit is realized for regulatory purposes. These
adjustments reflect a better matching between the economic costs and
benefits of the overall optimization strategy.
We also
exclude valuation adjustments to the carrying value of non-system
natural gas storage inventory in our regulated utility segment. This
inventory is held solely to support asset optimization transactions.
Valuation adjustments to reflect lower-of-cost or market under current
accounting standards may not be representative of the margins that
will be realized and shared with our utility ratepayers. Non-GAAP
earnings reflect actual margins realized based on the unadjusted
historical cost in storage when inventory is withdrawn and sold.
-
Our non-utility wholesale energy solutions segment owns natural gas
storage inventory in connection with its asset optimization
strategies. Certain storage inventory is economically hedged with
physical sales contracts. We adjust the value of that inventory using
the same forward price that is used to calculate the fair value of the
related physical sales contracts under derivative accounting
requirements. The remaining storage optimization inventory is valued
using delivered market prices for the month following the end of the
reporting period. This adjustment also includes the estimated effects
of certain sharing mechanisms on all of our non-GAAP unrealized gains
and losses. Adjusting our storage optimization inventory in this
fashion allows our reported non-GAAP earnings to better align with the
settlement of both our physical and financial transactions and allows
investors and management to better analyze the results of our
non-utility asset optimization strategies.
-
Washington Gas has a weather protection strategy designed to
neutralize the estimated financial effects of weather. To the extent,
however, the financial effects of warm or cold weather exceed our
weather protection, we will exclude these effects from non-GAAP
operating earnings (loss). 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.
-
We exclude certain unusual transactions that may be the result of
regulatory or legal decisions, or items that we may deem outside of
the ordinary course of business.
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 (LOSS) TO
|
NON-GAAP OPERATING EARNINGS (LOSS)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2013
|
(In thousands, except per share data)
|
|
Regulated Utility
|
|
Retail Energy- Marketing
|
|
Commercial Energy Systems
|
|
Wholesale Energy Solutions
|
|
Other Activities
|
|
Consolidated
|
GAAP net income (loss)
|
|
$
|
77,140
|
|
|
$
|
21,680
|
|
|
$
|
649
|
|
$
|
(9,401
|
)
|
|
$
|
(563
|
)
|
|
$
|
89,505
|
|
Adjusted for (items shown after-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market loss (gain) on energy-related derivatives
(a)
|
|
|
3,646
|
|
|
|
(10,407
|
)
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,761
|
)
|
Storage optimization program (b)
|
|
|
1,152
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
1,152
|
|
Weather derivative products (c)
|
|
|
(425
|
)
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
(425
|
)
|
Change in measured value of inventory (d)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
7,272
|
|
|
|
-
|
|
|
|
7,272
|
|
Competitive service provider imbalance cash settlement (e)
|
|
|
(370
|
)
|
|
|
369
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
Non-GAAP operating earnings (loss)
|
|
$
|
81,143
|
|
|
$
|
11,642
|
|
|
$
|
649
|
|
$
|
(2,129
|
)
|
|
$
|
(563
|
)
|
|
$
|
90,742
|
|
GAAP diluted earnings (loss) per average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common share (51,828 shares)
|
|
$
|
1.49
|
|
|
$
|
0.42
|
|
|
$
|
0.01
|
|
$
|
(0.18
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
1.73
|
|
Per share effect of non-GAAP adjustments
|
|
|
0.08
|
|
|
|
(0.20
|
)
|
|
|
-
|
|
|
0.14
|
|
|
|
-
|
|
|
|
0.02
|
|
Non-GAAP operating earnings (loss) per share
|
|
$
|
1.57
|
|
|
$
|
0.22
|
|
|
$
|
0.01
|
|
$
|
(0.04
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2012
|
(In thousands, except per share data)
|
|
Regulated Utility
|
|
Retail Energy- Marketing
|
|
Commercial Energy Systems
|
|
Wholesale Energy Solutions
|
|
Other Activities*
|
|
Consolidated
|
GAAP net income (loss)
|
|
$
|
72,351
|
|
|
$
|
4,464
|
|
|
$
|
431
|
|
$
|
(2,722
|
)
|
|
$
|
(345
|
)
|
|
$
|
74,179
|
|
Adjusted for (items shown after-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market loss (gain) on energy-related derivatives
(a)
|
|
|
(673
|
)
|
|
|
870
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
197
|
|
Storage optimization program (b)
|
|
|
841
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
841
|
|
Weather derivative products (c)
|
|
|
(186
|
)
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
(186
|
)
|
Change in measured value of inventory (d)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
1,604
|
|
|
|
-
|
|
|
|
1,604
|
|
DC weather impact(f)
|
|
|
1,857
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
1,857
|
|
Regulatory asset write off - tax effect of Medicare Part D(g)
|
|
|
2,827
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
2,827
|
|
Non-GAAP operating earnings (loss)
|
|
$
|
77,017
|
|
|
$
|
5,334
|
|
|
$
|
431
|
|
$
|
(1,118
|
)
|
|
$
|
(345
|
)
|
|
$
|
81,319
|
|
GAAP diluted earnings (loss) per average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common share (51,561 shares)
|
|
$
|
1.40
|
|
|
$
|
0.09
|
|
|
$
|
0.01
|
|
$
|
(0.05
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
1.44
|
|
Per share effect of non-GAAP adjustments
|
|
|
0.09
|
|
|
|
0.01
|
|
|
|
-
|
|
|
0.03
|
|
|
|
0.01
|
|
|
|
0.14
|
|
Non-GAAP operating earnings (loss) per share
|
|
$
|
1.49
|
|
|
$
|
0.10
|
|
|
$
|
0.01
|
|
$
|
(0.02
|
)
|
|
$
|
-
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended March 31, 2013
|
(In thousands, except per share data)
|
|
Regulated Utility
|
|
Retail Energy- Marketing
|
|
Commercial Energy Systems
|
|
Wholesale Energy Solutions
|
|
Other Activities*
|
|
Consolidated
|
GAAP net income (loss)
|
|
$
|
115,806
|
|
|
$
|
34,701
|
|
|
$
|
1,687
|
|
$
|
(8,125
|
)
|
|
$
|
(2,176
|
)
|
|
$
|
141,893
|
|
Adjusted for (items shown after-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market loss (gain) on energy-related derivatives
(a)
|
|
|
8,851
|
|
|
|
(11,462
|
)
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,611
|
)
|
Storage optimization program (b)
|
|
|
1,062
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
1,062
|
|
Weather derivative products (c)
|
|
|
(282
|
)
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
(282
|
)
|
Change in measured value of inventory (d)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
9,543
|
|
|
|
-
|
|
|
|
9,543
|
|
Competitive service provider imbalance cash settlement(e)
|
|
|
(370
|
)
|
|
|
369
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
Non-GAAP operating earnings (loss)
|
|
$
|
125,067
|
|
|
$
|
23,608
|
|
|
$
|
1,687
|
|
$
|
1,418
|
|
|
$
|
(2,176
|
)
|
|
$
|
149,604
|
|
GAAP diluted earnings (loss) per average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common share (51,759 shares)
|
|
$
|
2.24
|
|
|
$
|
0.67
|
|
|
$
|
0.03
|
|
$
|
(0.16
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
2.74
|
|
Per share effect of non-GAAP adjustments
|
|
|
0.18
|
|
|
|
(0.21
|
)
|
|
|
-
|
|
|
0.19
|
|
|
|
(0.01
|
)
|
|
|
0.15
|
|
Non-GAAP operating earnings (loss) per share
|
|
$
|
2.42
|
|
|
$
|
0.46
|
|
|
$
|
0.03
|
|
$
|
0.03
|
|
|
$
|
(0.05
|
)
|
|
$
|
2.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended March 31, 2012
|
(In thousands, except per share data)
|
|
Regulated Utility
|
|
Retail Energy- Marketing
|
|
Commercial Energy Systems
|
|
Wholesale Energy Solutions
|
|
Other Activities*
|
|
Consolidated
|
GAAP net income (loss)
|
|
$
|
116,757
|
|
|
$
|
5,310
|
|
|
$
|
729
|
|
$
|
2,515
|
|
|
$
|
(694
|
)
|
|
$
|
124,617
|
|
Adjusted for (items shown after-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market loss (gain) on energy-related derivatives
(a)
|
|
|
(885
|
)
|
|
|
13,079
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
12,194
|
|
Storage optimization program (b)
|
|
|
979
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
979
|
|
Weather derivative products (c)
|
|
|
(414
|
)
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
(414
|
)
|
Change in measured value of inventory (d)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(2,634
|
)
|
|
|
-
|
|
|
|
(2,634
|
)
|
DC weather impact (f)
|
|
|
1,857
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
1,857
|
|
Regulatory asset write off - tax effect of Medicare Part D(g)
|
|
|
2,827
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
2,827
|
|
Non-GAAP operating earnings (loss)
|
|
$
|
121,121
|
|
|
$
|
18,389
|
|
|
$
|
729
|
|
$
|
(119
|
)
|
|
$
|
(694
|
)
|
|
$
|
139,426
|
|
GAAP diluted earnings (loss) per average
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common share (51,546 shares)
|
|
$
|
2.27
|
|
|
$
|
0.10
|
|
|
$
|
0.01
|
|
$
|
0.05
|
|
|
$
|
(0.01
|
)
|
|
$
|
2.42
|
|
Per share effect of non-GAAP adjustments
|
|
|
0.08
|
|
|
|
0.26
|
|
|
|
-
|
|
|
(0.05
|
)
|
|
|
(0.01
|
)
|
|
|
0.28
|
|
Non-GAAP operating earnings (loss) per share
|
|
$
|
2.35
|
|
|
$
|
0.36
|
|
|
$
|
0.01
|
|
$
|
-
|
|
|
$
|
(0.02
|
)
|
|
$
|
2.70
|
|
* Per share amounts may include adjustments for rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
(Footnote references are described on the following page.)
|
|
|
WGL HOLDINGS, INC. (Consolidated by Quarter)
|
RECONCILIATION OF GAAP NET INCOME (LOSS) TO
|
NON-GAAP OPERATING EARNINGS (LOSS)
|
(Unaudited)
|
Fiscal Year 2013
|
|
|
|
Quarterly Period Ended (h)
|
(In thousands, except per share data)
|
|
Dec. 31 |
|
Mar. 31 |
|
Jun. 30 |
|
Sept. 30 |
|
Fiscal Year
|
GAAP net income
|
|
$
|
52,388
|
|
|
$
|
89,505
|
|
|
|
|
|
|
|
|
$
|
141,893
|
|
Adjusted for (items shown after-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market loss (gain) on energy-related derivatives
(a)
|
|
|
4,150
|
|
|
|
(6,761
|
)
|
|
|
|
|
|
|
|
|
(2,611
|
)
|
Storage optimization program (b)
|
|
|
(90
|
)
|
|
|
1,152
|
|
|
|
|
|
|
|
|
|
1,062
|
|
Weather derivative products (c)
|
|
|
143
|
|
|
|
(425
|
)
|
|
|
|
|
|
|
|
|
(282
|
)
|
Change in the measured value of inventory (d)
|
|
|
2,271
|
|
|
|
7,272
|
|
|
|
|
|
|
|
|
|
9,543
|
|
Competitive service provider imbalance cash settlement (e)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
(1
|
)
|
Non-GAAP operating earnings
|
|
$
|
58,862
|
|
|
$
|
90,742
|
|
|
|
|
|
|
|
|
$
|
149,604
|
|
Diluted average common shares outstanding
|
|
|
51,688
|
|
|
|
51,828
|
|
|
|
|
|
|
|
|
|
51,759
|
|
GAAP diluted earnings per average common share
|
|
$
|
1.01
|
|
|
$
|
1.73
|
|
|
|
|
|
|
|
|
$
|
2.74
|
|
Per share effect of non-GAAP adjustments
|
|
|
0.13
|
|
|
|
0.02
|
|
|
|
|
|
|
|
|
|
0.15
|
|
Non-GAAP operating earnings per share
|
|
$
|
1.14
|
|
|
$
|
1.75
|
|
|
|
|
|
|
|
|
$
|
2.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2012
|
|
|
|
Quarterly Period Ended (h)
|
(In thousands, except per share data)
|
|
Dec. 31 |
|
Mar. 31 |
|
Jun. 30 |
|
Sept. 30 |
|
Fiscal Year
|
GAAP net income
|
|
$
|
50,438
|
|
|
$
|
74,179
|
|
|
|
|
|
|
|
|
$
|
124,617
|
|
Adjusted for (items shown after-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market loss on energy-related derivatives (a)
|
|
|
11,997
|
|
|
|
197
|
|
|
|
|
|
|
|
|
|
12,194
|
|
Storage optimization program (b)
|
|
|
138
|
|
|
|
841
|
|
|
|
|
|
|
|
|
|
979
|
|
Weather derivative products (c)
|
|
|
(228
|
)
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
(414
|
)
|
Change in the measured value of inventory (d)
|
|
|
(4,238
|
)
|
|
|
1,604
|
|
|
|
|
|
|
|
|
|
(2,634
|
)
|
DC weather impact (f)
|
|
|
-
|
|
|
|
1,857
|
|
|
|
|
|
|
|
|
|
1,857
|
|
Regulatory asset write-off-- tax effect Medicare Part D(g)
|
|
|
-
|
|
|
|
2,827
|
|
|
|
|
|
|
|
|
|
2,827
|
|
Non-GAAP operating earnings
|
|
$
|
58,107
|
|
|
$
|
81,319
|
|
|
|
|
|
|
|
|
$
|
139,426
|
|
Diluted average common shares outstanding
|
|
|
51,533
|
|
|
|
51,561
|
|
|
|
|
|
|
|
|
|
51,546
|
|
GAAP diluted earnings per average common share
|
|
$
|
0.98
|
|
|
$
|
1.44
|
|
|
|
|
|
|
|
|
$
|
2.42
|
|
Per share effect of non-GAAP adjustments
|
|
|
0.15
|
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
0.28
|
|
Non-GAAP operating earnings per share
|
|
$
|
1.13
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
|
$
|
2.70
|
|
Footnotes:
(a)
|
|
Adjustments to eliminate the change in the unrealized
mark-to-market positions of our energy-related derivatives for
regulated utility and retail energy-marketing that were recorded
to income during the period. For the regulated utility segment,
the portion of our unrealized mark-to-market gains and losses that
are not recognized as being shared with customers are recorded
directly to income for GAAP purposes. All unrealized
mark-to-market gains and losses for the retail energy-marketing
segment are recorded directly to income.
|
(b)
|
|
Adjustments to shift the timing of storage optimization margins
from the periods recognized for GAAP purposes to the periods in
which such margins are recognized for regulatory sharing purposes.
In addition, lower-of-cost or market adjustments related to system
and non-system storage optimization are eliminated for non-GAAP
reporting, since the margins will be recognized for regulatory
purposes when the withdrawals are made at the unadjusted
historical cost of storage inventory.
|
(c)
|
|
Represents weather derivatives that are recorded at fair value
rather than being valued based on actual variations from normal
weather. Thus, any portion of recorded fair value that is not
directly offset by an increase/decrease in revenue due to weather
is excluded for non-GAAP purposes.
|
(d)
|
|
Adjustments to reflect storage inventory at market or at a
value based on the price used to value the physical forward sales
contract that is economically hedging the storage inventory. This
adjustment also includes the estimated effects of certain sharing
mechanisms on all of our non-GAAP unrealized gains and losses.
|
(e)
|
|
Represents a refund to customers ordered by the Public Service
Commission of Maryland (PSC of MD) in September 2011 associated
with a cash settlement of gas imbalances with competitive service
providers. The order remanded the matter to a hearing examiner to
determine the amount of the refund as the difference between
charges made to customers and the charges that would have been
incurred had the imbalances been made up through volumetric
adjustments.
|
(f)
|
|
Represents the financial effects of warm or cold weather that
exceeds weather protection for our regulated utility segment.
|
(g)
|
|
In March 2010, the Patient Protection and Affordable Care Act
(PPACA) eliminated future Medicare Part D tax benefits for
Washington Gas' tax years beginning after September 30, 2013. The
deferred tax asset related to this benefit was reversed and a
regulatory asset was established to reflect the probable recovery
of higher future tax expense from customers. Based on positions
taken by the Maryland Public Service Commission (PSC of MD) in
Washington Gas' rate case, the PSC of MD would not permit recovery
of this asset.
|
(h)
|
|
Quarterly earnings per share may not sum to year-to-date or
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, 2013
|
Consolidated
|
|
|
|
Low
|
|
High
|
GAAP Earnings Per Share Guidance Range
|
|
$
|
2.30
|
|
|
2.42
|
|
Adjusted for:
|
|
|
|
|
|
Unrealized mark-to-market gain on energy-related derivatives (a)
|
|
|
(0.06
|
)
|
|
(0.06
|
)
|
Storage optimization program (b)
|
|
|
0.01
|
|
|
0.01
|
|
Change in measured value of inventory (c)
|
|
|
0.18
|
|
|
0.18
|
|
Weather derivative products(d)
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
Non-GAAP Operating Earnings Per Share Guidance Range
|
|
$
|
2.42
|
|
$
|
2.54
|
|
|
|
|
|
|
|
Regulated Utility Segment
|
|
|
|
Low
|
|
High
|
GAAP Earnings Per Share Guidance Range
|
|
$
|
1.65
|
|
$
|
1.71
|
|
Adjusted for:
|
|
|
|
|
|
Unrealized mark-to-market loss on energy-related derivatives (a)
|
|
|
0.15
|
|
|
0.15
|
|
Storage optimization program (b)
|
|
|
0.01
|
|
|
0.01
|
|
Weather derivative products(d)
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
Competitive service provider imbalance cash settlement- Maryland(e)
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
Non-GAAP Operating Earnings Per Share Guidance Range
|
|
$
|
1.79
|
|
$
|
1.85
|
|
|
|
|
|
|
|
Non-Utility Business Segments
|
|
|
|
Low
|
|
High
|
GAAP Earnings Per Share Guidance Range
|
|
$
|
0.65
|
|
$
|
0.71
|
|
Adjusted for:
|
|
|
|
|
|
Unrealized mark-to-market gain on energy-related derivatives (a)
|
|
|
(0.21
|
)
|
|
(0.21
|
)
|
Change in measured value of inventory (c)
|
|
|
0.18
|
|
|
0.18
|
|
Competitive service provider imbalance cash settlement- Maryland(e)
|
|
|
0.01
|
|
|
0.01
|
|
Non-GAAP Operating Earnings Per Share Guidance Range
|
|
$
|
0.63
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
Footnotes:
(a)
|
|
Represents the estimated reversal of certain of our existing
unrealized mark-to-market positions related to our energy
derivatives for regulated utility and retail energy-marketing that
will be recorded to income during fiscal year 2013. For the
regulated utility segment, the portion of our unrealized
mark-to-market gains and losses that are not recognized as being
shared with customers are recorded directly to income for GAAP
purposes. All unrealized mark-to-market gains and losses for the
retail-energy marketing segment are recorded directly to income.
|
(b)
|
|
Adjustments to shift the timing of storage optimization margins
from the periods recognized for GAAP purposes to the periods in
which such margins are recognized for regulatory sharing purposes.
In addition, lower-of-cost or market adjustments related to system
and non-system storage optimization are eliminated for non-GAAP
reporting, since the margins will be recognized for regulatory
purposes when the withdrawals are made at the unadjusted
historical cost of storage inventory.
|
(c)
|
|
Adjustments to reflect storage inventory at market or at a
value based on the price used to value the physical forward sales
contract that is economically hedging the storage inventory. This
adjustment also includes the estimated effects of certain sharing
mechanisms on all of our non-GAAP unrealized gains and losses.
|
(d)
|
|
Represents weather derivatives that are recorded at fair value
rather than being valued based on actual variations from normal
weather. Thus, any portion of recorded fair value that is not
directly offset by an increase/decrease in revenue due to weather
is excluded for non-GAAP purposes.
|
(e)
|
|
Represents a refund to customers ordered by the Public Service
Commission of Maryland (PSC of MD) in September 2011 associated
with a cash settlement of gas imbalances with competitive service
providers. The order remanded the matter to a hearing examiner to
determine the amount of the refund as the difference between
charges made to customers and the charges that would have been
incurred had the imbalances been made up through volumetric
adjustments.
|

WGL Holdings, Inc. News Media Ruben
Rodriguez, 202-624-6620 or Financial
Community Douglas Bonawitz, 202-624-6129
Source: WGL Holdings, Inc.
News Provided by Acquire Media
|