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May 3, 2018 at 6:59 PM EDT
WGL Holdings, Inc. Reports Second Quarter Fiscal Year 2018 Financial Results
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Second quarter consolidated GAAP earnings per share up — $2.63 per
share vs. $2.39 per share; GAAP earnings of $135.6 million
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Second quarter non-GAAP operating earnings per share up — $2.12 per
share vs. $1.87 per share; Operating earnings of $109.5 million
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 applicable to common stock determined in
accordance with generally accepted accounting principles in the United
States of America (GAAP) for the quarter ended March 31, 2018, of $135.6
million, or $2.63 per share, an improvement of $12.5 million, or $0.24
per share, over net income applicable to common stock of $123.1 million,
or $2.39 per share, reported for the quarter ended March 31, 2017. For
the six months ended March 31, 2018, net income applicable to common
stock was $273.6 million, or $5.31 per share, an improvement of $92.6
million, or $1.79 per share, over net income applicable to common stock
of $181.0 million, or $3.52 per share for the same period of the prior
fiscal year.
During the six months ended March 31, 2018, we are reflecting a decrease
in current year tax expense from the year-over-year reduction in the
corporate tax rate from 35% to 21% included in the Tax Cuts and Jobs Act
("Tax Act") enacted in December 2017. As a result, Washington Gas began
passing on to customers approximately $39.5 million, on an annual basis,
through reduced rates beginning in the second fiscal quarter. We have
also remeasured our accumulated deferred income tax assets and
liabilities, which resulted in recording a $60.3 million income tax
benefit (net) in GAAP net income. Non-GAAP operating earnings (described
below) have been adjusted to eliminate the re-measurement impact on
deferred income taxes of the legislation.
On a consolidated basis, WGL uses non-GAAP operating earnings (loss) to
evaluate overall financial performance, and evaluates segment financial
performance based on earnings before interest and taxes (EBIT) and
adjusted EBIT. Operating earnings (loss) and adjusted EBIT are non-GAAP
financial measures, which are not recognized in accordance with GAAP and
should not be viewed as alternatives to GAAP measures of performance.
Both non-GAAP operating earnings (loss) and adjusted EBIT adjust for the
accounting recognition of certain transactions that we believe are not
representative of the ongoing earnings of the company. Additionally, we
believe that adjusted EBIT enhances the ability to evaluate segment
performance because it excludes interest and income tax expense, which
are affected by corporate-wide strategies such as capital financing and
tax sharing allocations. Refer to "Reconciliation of Non-GAAP Financial
Measures," attached to this news release, for a more detailed discussion
of management's use of these measures and for reconciliations to GAAP
financial measures.
For the quarter ended March 31, 2018, operating earnings were $109.5
million, or $2.12 per share, an improvement of $13.4 million, or $0.25
per share, over operating earnings of $96.1 million, or $1.87 per share,
for the same quarter of the prior fiscal year. For the six months ended
March 31, 2018, operating earnings were $204.4 million, or $3.96 per
share, an improvement of $49.0 million, or $0.94 per share, over
operating earnings of $155.4 million, or $3.02 per share, for the same
period of the prior fiscal year.
Results by Business Segment
Regulated Utility
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Three Months Ended
March 31,
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Increase/
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Six Months Ended
March 31,
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Increase/
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(In millions)
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2018
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2017
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(Decrease)
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2018
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2017
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(Decrease)
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EBIT
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$
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151.1
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$
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165.2
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$
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(14.1
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)
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$
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249.4
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$
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267.9
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$
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(18.5
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)
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Adjusted EBIT
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$
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143.6
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$
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150.2
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$
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(6.6
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)
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$
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245.0
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$
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241.6
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$
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3.4
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For the three and six months ended March 31, 2018, EBIT reflects lower
unrealized margins associated with our asset optimization program,
partially offset by the effects of colder-than-normal weather in the
District of Columbia.
The comparisons of both EBIT and adjusted EBIT for the three and six
months ended March 31, 2018 reflect increases related to higher customer
growth and new base rates in Virginia and the District of
Columbia. These comparisons reflect decreases related to: (i)
lower billed and estimated utility rates associated with the
pass-through of tax savings from the Tax Act*; (ii) higher
operation and maintenance expenses primarily related to uncollectible
accounts; and (iii) higher depreciation and amortization expense.
* This decrease is offset in income tax expense.
Retail Energy-Marketing
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Three Months Ended
March 31,
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Increase/
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Six Months Ended
March 31,
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Increase/
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(In millions)
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2018
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2017
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(Decrease)
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2018
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2017
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(Decrease)
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EBIT
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$
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15.1
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$
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9.3
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$
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5.8
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$
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18.8
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$
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38.4
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$
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(19.6
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)
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Adjusted EBIT
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$
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20.0
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$
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13.1
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$
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6.9
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$
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26.5
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$
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23.0
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$
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3.5
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For the three months ended March 31, 2018, the increase in both EBIT and
adjusted EBIT reflects higher realized gas margins due to increased
portfolio optimization margins, partially offset by lower realized
electric margins due to lower average selling prices and lower sales
volume along with higher operating expenses.
For the six months ended March 31, 2018, EBIT was reduced by unrealized
commodity margin losses in the current year compared to gains in the
prior year. The comparisons of both EBIT and adjusted EBIT reflects
higher realized gas margins due to higher portfolio optimization
margins, offset by lower realized electric margins due to lower average
selling prices and lower sales volume, along with higher operating
expenses.
Commercial Energy Systems
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Three Months Ended
March 31,
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Increase/
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Six Months Ended
March 31,
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Increase/
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(In millions)
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2018
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2017
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(Decrease)
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2018
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2017
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(Decrease)
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EBIT
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$
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3.6
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$
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8.5
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$
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(4.9
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)
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$
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9.2
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$
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13.2
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$
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(4.0
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)
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Adjusted EBIT
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$
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5.2
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$
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10.3
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$
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(5.1
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$
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12.5
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$
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16.4
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$
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(3.9
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For the three and six months ended March 31, 2018, the decrease in both
EBIT and adjusted EBIT reflects lower earnings due to a decline in
active projects in our energy efficiency business and higher operating
expenses in our commercial distributed generation business. For the
three months ended March 31, 2018, the decrease in both EBIT and
adjusted EBIT also reflects lower earnings from our investment
distributed generation business, including investments in tax equity
partnerships.
Midstream Energy Services
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Three Months Ended
March 31,
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Increase/
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Six Months Ended
March 31,
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Increase/
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(In millions)
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2018
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2017
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(Decrease)
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2018
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2017
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(Decrease)
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EBIT
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$
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7.3
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$
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42.0
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$
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(34.7
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)
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$
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29.5
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$
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13.5
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$
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16.0
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Adjusted EBIT
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$
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(2.2
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$
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(1.3
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$
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(0.9
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$
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26.2
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$
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1.4
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$
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24.8
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The EBIT comparisons for both periods reflect lower mark-to-market
valuations associated with long-term transportation strategies.
Additionally, both the EBIT and adjusted EBIT comparisons for the three
and six months ended March 31, 2018 include a $34.0 million impairment
related to our investment in Constitution Pipeline Company, LLC
(Constitution).
The three months ended March 31, 2018 EBIT comparison also reflects
lower realized margins related to storage inventory and economic hedging
transactions, which along with the lower mark-to-market valuations
described above are mostly offset by higher transportation margins. The
three months ended March 31, 2018 adjusted EBIT comparison reflects
higher margins on both our transportation and storage strategies that
mostly offset the impairment of Constitution.
For the six months ended March 31, 2018 EBIT and adjusted EBIT
comparisons, higher margins on our transportation and storage strategies
more than offset the impairment of Constitution.
Other Activities
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Three Months Ended
March 31,
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Increase/
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Six Months Ended
March 31,
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Increase/
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(In millions)
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2018
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2017
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(Decrease)
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2018
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|
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2017
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(Decrease)
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EBIT
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$
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(2.2
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)
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$
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(15.1
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)
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$
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12.9
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$
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(6.4
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$
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(16.3
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)
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$
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9.9
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Adjusted EBIT
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$
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(2.0
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)
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$
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(1.1
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$
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(0.9
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)
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$
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(5.6
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)
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$
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(2.3
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)
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$
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(3.3
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)
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For the three and six months ended March 31, 2018, the increase in EBIT
relates to lower costs related to the planned merger with AltaGas Ltd.
(AltaGas). For the three and six months ended March 31, 2018, the
decrease in adjusted EBIT reflects higher internal costs related to the
planned merger with AltaGas.
Intersegment Eliminations
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Three Months Ended
March 31,
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Increase/
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Six Months Ended
March 31,
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Increase/
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(In millions)
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2018
|
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2017
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(Decrease)
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2018
|
|
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2017
|
|
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(Decrease)
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EBIT
|
|
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$
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(4.1
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)
|
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$
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(1.5
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)
|
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$
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(2.6
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)
|
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$
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(2.4
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)
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$
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(0.4
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)
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$
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(2.0
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)
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Adjusted EBIT
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$
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(4.1
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)
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$
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(1.4
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$
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(2.7
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)
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$
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(2.4
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$
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0.1
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$
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(2.5
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For the three and six months ended March 31, 2018, the variance in
intersegment eliminations relates primarily to timing differences
between the revenue and expense recognition of renewable energy credits
by Commercial Energy Systems and Retail Energy-Marketing.
Other Information
During the pendency period of the proposed merger between WGL and
AltaGas, WGL will not conduct earnings calls and will not give forward
year guidance. Additional information regarding financial results and
recent regulatory events can be found in WGL's and Washington Gas'
combined Form 10-Q for the fiscal quarter ended March 31, 2018, to be
filed with the Securities and Exchange Commission, and which will also
be available at www.wglholdings.com.
WGL, headquartered in Washington, D.C., is a leading source for clean,
efficient and diverse energy solutions. With activities and assets
across the U.S., WGL consists of Washington Gas, WGL Energy, WGL
Midstreamand Hampshire Gas. WGL provides natural gas, electricity,
green power and energy services, including generation, storage,
transportation, distribution, supply and efficiency. Our calling as a
company is to make energy surprisingly easy for our employees, our
community and all our customers. Whether you are a homeowner or renter,
small business or multinational corporation, state and local or federal
agency, WGL is here to provide Energy Answers. Ask Us. For more
information, visit us at www.wgl.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 non-GAAP financial measures.
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,
dividends and other future financial business performance, strategies,
financing plans, legal developments relating to Antero Resources
Corporation (Antero), our investment in Constitution, AltaGas's proposed
acquisition of our company and other expectations. Forward-looking
statements are typically identified by words such as, but are 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 the date of this
release, 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, the
possibility that the closing of the proposed merger with AltaGas may not
occur or may be delayed; litigation related to the proposed AltaGas
transaction or limitations or restrictions imposed by regulatory
authorities that may delay or negatively impact the proposed
transaction; the potential loss of customers, employees or business
partners as a result of the transaction and the factors discussed under
the "Risk Factors" heading in our most recent annual report on Form 10-K
and quarterly reports on Form 10-Q and other documents that we have
filed with, or furnished to, the U.S. Securities and Exchange Commission.
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WGL Holdings, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
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(In thousands)
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March 31, 2018
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September 30, 2017 |
|
ASSETS
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Property, Plant and Equipment
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At original cost
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$
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6,199,912
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$
|
6,143,841
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Accumulated depreciation and amortization
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(1,552,274
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)
|
|
|
|
(1,513,790
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)
|
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Net property, plant and equipment
|
|
|
|
4,647,638
|
|
|
|
|
4,630,051
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Current Assets
|
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|
|
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|
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Cash and cash equivalents
|
|
|
|
46,319
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|
|
|
|
8,524
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|
Accounts receivable, net
|
|
|
|
730,563
|
|
|
|
|
553,312
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|
Storage gas
|
|
|
|
76,199
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|
|
|
|
243,984
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Derivatives and other
|
|
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|
167,943
|
|
|
|
|
180,069
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Total current assets
|
|
|
|
1,021,024
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|
|
|
|
985,889
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Deferred Charges and Other Assets
|
|
|
|
1,178,164
|
|
|
|
|
1,010,069
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Total Assets
|
|
|
$
|
6,846,826
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|
$
|
6,626,009
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CAPITALIZATION AND LIABILITIES
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Capitalization
|
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WGL Holdings common shareholders' equity
|
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|
$
|
1,721,772
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$
|
1,502,690
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Non-controlling interest
|
|
|
|
6,868
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|
|
|
|
6,851
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|
Washington Gas Light Company preferred stock
|
|
|
|
28,173
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|
|
|
|
28,173
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Total equity
|
|
|
|
1,756,813
|
|
|
|
|
1,537,714
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Long-term debt
|
|
|
|
1,879,304
|
|
|
|
|
1,430,861
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|
|
Total capitalization
|
|
|
|
3,636,117
|
|
|
|
|
2,968,575
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|
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Current Liabilities
|
|
|
|
|
|
|
|
|
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Notes payable and current maturities of long-term debt
|
|
|
|
524,833
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|
|
|
|
809,844
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|
|
Accounts payable and other accrued liabilities
|
|
|
|
358,046
|
|
|
|
|
423,824
|
|
|
Derivatives and other
|
|
|
|
270,918
|
|
|
|
|
255,320
|
|
|
Total current liabilities
|
|
|
|
1,153,797
|
|
|
|
|
1,488,988
|
|
|
Deferred Credits
|
|
|
|
2,056,912
|
|
|
|
|
2,168,446
|
|
|
Total Capitalization and Liabilities
|
|
|
$
|
6,846,826
|
|
|
|
$
|
6,626,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WGL Holdings, Inc.
Condensed Consolidated Statements of Income
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Six Months Ended
March 31,
|
|
(In thousands, except per share data)
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
OPERATING REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility
|
|
|
$
|
523,480
|
|
|
|
$
|
466,270
|
|
|
|
$
|
898,470
|
|
|
|
$
|
793,333
|
|
|
Non-utility
|
|
|
|
362,971
|
|
|
|
|
375,480
|
|
|
|
|
640,421
|
|
|
|
|
657,904
|
|
|
Total Operating Revenues
|
|
|
|
886,451
|
|
|
|
|
841,750
|
|
|
|
|
1,538,891
|
|
|
|
|
1,451,237
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility cost of gas
|
|
|
|
196,757
|
|
|
|
|
134,458
|
|
|
|
|
319,030
|
|
|
|
|
209,958
|
|
|
Non-utility cost of energy-related sales
|
|
|
|
287,204
|
|
|
|
|
301,780
|
|
|
|
|
512,706
|
|
|
|
|
554,666
|
|
|
Operation and maintenance
|
|
|
|
112,556
|
|
|
|
|
118,261
|
|
|
|
|
214,782
|
|
|
|
|
218,978
|
|
|
Depreciation and amortization
|
|
|
|
40,722
|
|
|
|
|
39,110
|
|
|
|
|
81,707
|
|
|
|
|
74,393
|
|
|
General taxes and other assessments
|
|
|
|
55,039
|
|
|
|
|
50,544
|
|
|
|
|
99,926
|
|
|
|
|
90,932
|
|
|
Total Operating Expenses
|
|
|
|
692,278
|
|
|
|
|
644,153
|
|
|
|
|
1,228,151
|
|
|
|
|
1,148,927
|
|
|
OPERATING INCOME
|
|
|
|
194,173
|
|
|
|
|
197,597
|
|
|
|
|
310,740
|
|
|
|
|
302,310
|
|
|
Equity in earnings of unconsolidated affiliates
|
|
|
|
(27,414
|
)
|
|
|
|
7,344
|
|
|
|
|
(21,522
|
)
|
|
|
|
7,609
|
|
|
Other expenses — net
|
|
|
|
(391
|
)
|
|
|
|
(1,953
|
)
|
|
|
|
(1,171
|
)
|
|
|
|
(1,475
|
)
|
|
Interest expense
|
|
|
|
7,637
|
|
|
|
|
14,255
|
|
|
|
|
27,834
|
|
|
|
|
30,490
|
|
|
INCOME BEFORE TAXES
|
|
|
|
158,731
|
|
|
|
|
188,733
|
|
|
|
|
260,213
|
|
|
|
|
277,954
|
|
|
INCOME TAX EXPENSE (BENEFIT)
|
|
|
|
27,223
|
|
|
|
|
70,778
|
|
|
|
|
(3,887
|
)
|
|
|
|
104,232
|
|
|
NET INCOME
|
|
|
$
|
131,508
|
|
|
|
$
|
117,955
|
|
|
|
$
|
264,100
|
|
|
|
$
|
173,722
|
|
|
Net loss attributable to non-controlling interest
|
|
|
|
(4,372
|
)
|
|
|
|
(5,439
|
)
|
|
|
|
(10,150
|
)
|
|
|
|
(7,974
|
)
|
|
Dividends on Washington Gas Light Company preferred stock
|
|
|
|
330
|
|
|
|
|
330
|
|
|
|
|
660
|
|
|
|
|
660
|
|
|
NET INCOME APPLICABLE TO COMMON STOCK
|
|
|
$
|
135,550
|
|
|
|
$
|
123,064
|
|
|
|
$
|
273,590
|
|
|
|
$
|
181,036
|
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
51,358
|
|
|
|
|
51,217
|
|
|
|
|
51,336
|
|
|
|
|
51,192
|
|
|
Diluted
|
|
|
|
51,577
|
|
|
|
|
51,476
|
|
|
|
|
51,561
|
|
|
|
|
51,458
|
|
|
EARNINGS PER AVERAGE COMMON SHARE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
2.64
|
|
|
|
$
|
2.40
|
|
|
|
$
|
5.33
|
|
|
|
$
|
3.54
|
|
|
Diluted
|
|
|
$
|
2.63
|
|
|
|
$
|
2.39
|
|
|
|
$
|
5.31
|
|
|
|
$
|
3.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table reconciles EBIT by operating segment to net
income (loss) applicable to common stock.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Six Months Ended
March 31,
|
|
(In thousands)
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
EBIT:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulated utility
|
|
|
|
151,069
|
|
|
|
|
165,171
|
|
|
|
|
249,434
|
|
|
|
|
267,888
|
|
|
Retail energy-marketing
|
|
|
|
15,104
|
|
|
|
|
9,255
|
|
|
|
|
18,846
|
|
|
|
|
38,440
|
|
|
Commercial energy systems
|
|
|
|
3,562
|
|
|
|
|
8,547
|
|
|
|
|
9,209
|
|
|
|
|
13,210
|
|
|
Midstream energy services
|
|
|
|
7,306
|
|
|
|
|
41,993
|
|
|
|
|
29,491
|
|
|
|
|
13,509
|
|
|
Other activities
|
|
|
|
(2,185
|
)
|
|
|
|
(15,067
|
)
|
|
|
|
(6,356
|
)
|
|
|
|
(16,265
|
)
|
|
Intersegment eliminations
|
|
|
|
(4,116
|
)
|
|
|
|
(1,472
|
)
|
|
|
|
(2,427
|
)
|
|
|
|
(364
|
)
|
|
Total
|
|
|
|
170,740
|
|
|
|
|
208,427
|
|
|
|
|
298,197
|
|
|
|
|
316,418
|
|
|
Interest expense
|
|
|
|
7,637
|
|
|
|
|
14,255
|
|
|
|
|
27,834
|
|
|
|
|
30,490
|
|
|
Income tax expense (benefit)
|
|
|
|
27,223
|
|
|
|
|
70,778
|
|
|
|
|
(3,887
|
)
|
|
|
|
104,232
|
|
|
Dividends on Washington Gas preferred stock
|
|
|
|
330
|
|
|
|
|
330
|
|
|
|
|
660
|
|
|
|
|
660
|
|
|
Net income applicable to common stock
|
|
|
|
135,550
|
|
|
|
|
123,064
|
|
|
|
|
273,590
|
|
|
|
|
181,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WGL Holdings, Inc.
Consolidated Financial and Operating Statistics
(Unaudited)
|
|
|
|
|
|
|
FINANCIAL STATISTICS
|
|
|
|
|
|
|
|
Twelve Months Ended
March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
Closing Market Price — end of period
|
|
|
$83.65
|
|
|
$82.53 |
|
52-Week Market Price Range
|
|
|
$86.45 - $81.22
|
|
|
$83.58 - $58.69 |
|
Price Earnings Ratio
|
|
|
15.0
|
|
|
24.1
|
|
Annualized Dividends Per Share
|
|
|
$2.06
|
|
|
$2.04 |
|
Dividend Yield
|
|
|
2.5%
|
|
|
2.5%
|
|
Return on Average Common Equity
|
|
|
17.5%
|
|
|
11.9%
|
|
Total Interest Coverage (times)
|
|
|
4.9
|
|
|
5.7
|
|
Book Value Per Share — end of period
|
|
|
$33.52
|
|
|
$30.03 |
|
Common Shares Outstanding — end of period (thousands)
|
|
|
51,359
|
|
|
51,219
|
|
|
|
|
|
|
|
|
|
|
|
WGL Holdings, Inc.
Consolidated Financial and Operating Statistics
(Unaudited)
|
|
|
|
|
|
UTILITY GAS STATISTICS
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Six Months Ended
March 31,
|
|
|
Twelve Months Ended
March 31,
|
|
(In thousands)
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Operating Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Sold and Delivered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential — Firm
|
|
|
$
|
338,074
|
|
|
|
$
|
297,406
|
|
|
|
$
|
570,563
|
|
|
|
$
|
495,427
|
|
|
|
$
|
760,342
|
|
|
|
$
|
663,189
|
|
|
Commercial and Industrial — Firm
|
|
|
|
76,152
|
|
|
|
|
60,624
|
|
|
|
|
126,208
|
|
|
|
|
105,971
|
|
|
|
|
176,325
|
|
|
|
|
146,422
|
|
|
Commercial and Industrial — Interruptible
|
|
|
|
1,390
|
|
|
|
|
1,099
|
|
|
|
|
1,868
|
|
|
|
|
1,653
|
|
|
|
|
2,454
|
|
|
|
|
2,228
|
|
|
|
|
|
|
415,616
|
|
|
|
|
359,129
|
|
|
|
|
698,639
|
|
|
|
|
603,051
|
|
|
|
|
939,121
|
|
|
|
|
811,839
|
|
|
Gas Delivered for Others
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Firm
|
|
|
|
78,287
|
|
|
|
|
86,024
|
|
|
|
|
140,729
|
|
|
|
|
142,099
|
|
|
|
|
207,618
|
|
|
|
|
206,413
|
|
|
Interruptible
|
|
|
|
20,578
|
|
|
|
|
14,369
|
|
|
|
|
35,110
|
|
|
|
|
29,139
|
|
|
|
|
55,702
|
|
|
|
|
46,879
|
|
|
Electric Generation
|
|
|
|
378
|
|
|
|
|
201
|
|
|
|
|
781
|
|
|
|
|
576
|
|
|
|
|
1,536
|
|
|
|
|
1,599
|
|
|
|
|
|
|
99,243
|
|
|
|
|
100,594
|
|
|
|
|
176,620
|
|
|
|
|
171,814
|
|
|
|
|
264,856
|
|
|
|
|
254,891
|
|
|
|
|
|
|
514,859
|
|
|
|
|
459,723
|
|
|
|
|
875,259
|
|
|
|
|
774,865
|
|
|
|
|
1,203,977
|
|
|
|
|
1,066,730
|
|
|
Other
|
|
|
|
8,621
|
|
|
|
|
6,547
|
|
|
|
|
23,211
|
|
|
|
|
18,468
|
|
|
|
|
44,497
|
|
|
|
|
39,416
|
|
|
Total
|
|
|
$
|
523,480
|
|
|
|
$
|
466,270
|
|
|
|
$
|
898,470
|
|
|
|
$
|
793,333
|
|
|
|
$
|
1,248,474
|
|
|
|
$
|
1,106,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Six Months Ended
March 31,
|
|
|
Twelve Months Ended
March 31,
|
|
(In thousands of therms)
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
Gas Sales and Deliveries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas Sold and Delivered
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential — Firm
|
|
|
|
361,209
|
|
|
|
|
286,159
|
|
|
|
|
584,977
|
|
|
|
|
493,641
|
|
|
|
|
691,616
|
|
|
|
|
609,576
|
|
|
Commercial and Industrial — Firm
|
|
|
|
91,490
|
|
|
|
|
66,898
|
|
|
|
|
150,378
|
|
|
|
|
124,619
|
|
|
|
|
200,196
|
|
|
|
|
167,742
|
|
|
Commercial and Industrial — Interruptible
|
|
|
|
1,470
|
|
|
|
|
1,465
|
|
|
|
|
2,036
|
|
|
|
|
2,279
|
|
|
|
|
2,312
|
|
|
|
|
2,999
|
|
|
|
|
|
|
454,169
|
|
|
|
|
354,522
|
|
|
|
|
737,391
|
|
|
|
|
620,539
|
|
|
|
|
894,124
|
|
|
|
|
780,317
|
|
|
Gas Delivered for Others
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Firm
|
|
|
|
222,909
|
|
|
|
|
182,743
|
|
|
|
|
381,446
|
|
|
|
|
344,325
|
|
|
|
|
532,151
|
|
|
|
|
493,385
|
|
|
Interruptible
|
|
|
|
77,191
|
|
|
|
|
75,572
|
|
|
|
|
148,833
|
|
|
|
|
139,735
|
|
|
|
|
251,643
|
|
|
|
|
233,214
|
|
|
Electric Generation
|
|
|
|
19,771
|
|
|
|
|
13,229
|
|
|
|
|
51,845
|
|
|
|
|
36,828
|
|
|
|
|
102,628
|
|
|
|
|
225,701
|
|
|
|
|
|
|
319,871
|
|
|
|
|
271,544
|
|
|
|
|
582,124
|
|
|
|
|
520,888
|
|
|
|
|
886,422
|
|
|
|
|
952,300
|
|
|
Total
|
|
|
|
774,040
|
|
|
|
|
626,066
|
|
|
|
|
1,319,515
|
|
|
|
|
1,141,427
|
|
|
|
|
1,780,546
|
|
|
|
|
1,732,617
|
|
|
Utility Gas Purchase Expense (excluding asset optimization)
|
|
|
|
45.67
|
¢
|
|
|
|
43.94
|
¢
|
|
|
|
44.26
|
¢
|
|
|
|
40.17
|
¢
|
|
|
|
39.04
|
¢
|
|
|
|
35.15
|
¢
|
|
HEATING DEGREE DAYS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
|
|
|
|
2,106
|
|
|
|
|
1,727
|
|
|
|
|
3,441
|
|
|
|
|
2,923
|
|
|
|
|
3,645
|
|
|
|
|
4,651
|
|
|
Normal
|
|
|
|
2,099
|
|
|
|
|
2,098
|
|
|
|
|
3,410
|
|
|
|
|
3,416
|
|
|
|
|
3,711
|
|
|
|
|
5,525
|
|
|
Percent Colder (Warmer) than Normal
|
|
|
|
0.3
|
%
|
|
|
|
(17.7
|
)%
|
|
|
|
0.9
|
%
|
|
|
|
(14.4
|
)%
|
|
|
|
(1.8
|
)%
|
|
|
|
(15.8
|
)%
|
|
Average Active Customer Meters
|
|
|
|
1,172,365
|
|
|
|
|
1,154,427
|
|
|
|
|
1,169,572
|
|
|
|
|
1,151,289
|
|
|
|
|
1,164,162
|
|
|
|
|
1,148,092
|
|
|
WGL ENERGY SERVICES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Therm Sales (thousands of therms)
|
|
|
|
247,400
|
|
|
|
|
269,100
|
|
|
|
|
446,300
|
|
|
|
|
489,600
|
|
|
|
|
649,900
|
|
|
|
|
734,800
|
|
|
Number of Customers (end of period)
|
|
|
|
112,500
|
|
|
|
|
122,800
|
|
|
|
|
112,500
|
|
|
|
|
122,800
|
|
|
|
|
112,500
|
|
|
|
|
122,800
|
|
|
Electricity Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electricity Sales (thousands of kWhs)
|
|
|
|
2,875,600
|
|
|
|
|
3,048,300
|
|
|
|
|
5,677,000
|
|
|
|
|
6,151,500
|
|
|
|
|
11,773,800
|
|
|
|
|
13,123,000
|
|
|
Number of Accounts (end of period)
|
|
|
|
106,200
|
|
|
|
|
121,200
|
|
|
|
|
106,200
|
|
|
|
|
121,200
|
|
|
|
|
106,200
|
|
|
|
|
121,200
|
|
|
WGL ENERGY SYSTEMS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Megawatts in service
|
|
|
|
238
|
|
|
|
|
200
|
|
|
|
|
238
|
|
|
|
|
200
|
|
|
|
|
238
|
|
|
|
|
200
|
|
|
Megawatt hours generated
|
|
|
|
66,071
|
|
|
|
|
57,695
|
|
|
|
|
128,129
|
|
|
|
|
106,449
|
|
|
|
|
311,391
|
|
|
|
|
240,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WGL Holdings, Inc.
Reconciliation of Non-GAAP Financial
Measures
(Unaudited)
The tables below reconcile operating earnings (loss) on a consolidated
basis to GAAP net income (loss) applicable to common stock and adjusted
EBIT on a segment basis to EBIT. Management believes that operating
earnings (loss) and adjusted EBIT provide a meaningful representation of
our earnings from ongoing operations on a consolidated and segment
basis, respectively. These measures facilitate analysis by providing
consistent and comparable measures 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 these non-GAAP measures to report to
the board of directors and to evaluate management's performance.
To derive our non-GAAP measures, we adjust for the accounting
recognition of certain transactions (non-GAAP adjustments) based on at
least one of the following criteria:
-
To better match the accounting recognition of transactions with their
economics;
-
To better align with regulatory view/recognition;
-
To eliminate the effects of:
i. Significant out of period adjustments;
ii. Other significant items that may obscure historical earnings
comparisons and are not indicative of performance trends; and
iii. For adjusted EBIT, other items which may obscure segment
comparisons.
There are limits in using operating earnings (loss) and adjusted EBIT to
analyze our consolidated and segment results, respectively, as they are
not prepared in accordance with GAAP and may be different than non-GAAP
financial measures used by other companies. In addition, using operating
earnings (loss) and adjusted EBIT to analyze our results may have
limited value as they exclude 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
the most directly comparable GAAP financial measures.
The following tables present the unaudited reconciliation of non-GAAP
operating earnings to GAAP net income (loss) applicable to common stock
(consolidated by quarter):
|
|
|
WGL Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
|
|
|
|
|
|
Fiscal Year 2018
|
|
|
|
|
Quarterly Period Ended(1) |
|
(In thousands, except per share data)
|
|
|
Dec. 31 |
|
|
Mar. 31 |
|
|
Jun. 30 |
|
|
Sept. 30 |
|
|
Fiscal Year
|
|
Operating earnings (loss)
|
|
|
$
|
94,923
|
|
|
|
$
|
109,485
|
|
|
|
|
|
|
|
|
|
|
|
$
|
204,408
|
|
|
Non-GAAP adjustments(2) |
|
|
|
(14,351
|
)
|
|
|
|
10,287
|
|
|
|
|
|
|
|
|
|
|
|
|
(4,064
|
)
|
|
De-designated interest rate swaps(3) |
|
|
|
(354
|
)
|
|
|
|
13,183
|
|
|
|
|
|
|
|
|
|
|
|
|
12,829
|
|
|
Income tax effect of non-GAAP adjustments(4) |
|
|
|
4,956
|
|
|
|
|
(4,839
|
)
|
|
|
|
|
|
|
|
|
|
|
|
117
|
|
|
Re-measurement impact of Tax Cuts and Jobs Act(5) |
|
|
|
52,866
|
|
|
|
|
7,434
|
|
|
|
|
|
|
|
|
|
|
|
|
60,300
|
|
|
Net income (loss) applicable to common stock
|
|
|
$
|
138,040
|
|
|
|
$
|
135,550
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
273,590
|
|
|
Diluted average common shares outstanding
|
|
|
|
51,549
|
|
|
|
|
51,577
|
|
|
|
|
|
|
|
|
|
|
|
|
51,561
|
|
|
Operating earnings (loss) per share
|
|
|
$
|
1.84
|
|
|
|
$
|
2.12
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.96
|
|
|
Per share effect of non-GAAP adjustments
|
|
|
|
0.84
|
|
|
|
|
0.51
|
|
|
|
|
|
|
|
|
|
|
|
|
1.35
|
|
|
Diluted earnings (loss) per average common share
|
|
|
$
|
2.68
|
|
|
|
$
|
2.63
|
|
|
|
|
|
|
|
|
|
|
|
$
|
5.31
|
|
|
Fiscal Year 2017
|
|
|
|
|
Quarterly Period Ended(1) |
|
(In thousands, except per share data)
|
|
|
Dec. 31(6) |
|
|
Mar. 31 |
|
|
Jun. 30 |
|
|
Sept. 30 |
|
|
Fiscal Year
|
|
Operating earnings (loss)
|
|
|
$
|
59,362
|
|
|
|
$
|
96,087
|
|
|
|
|
|
|
|
|
|
|
|
$
|
155,449
|
|
|
Non-GAAP adjustments(2) |
|
|
|
(2,324
|
)
|
|
|
|
38,468
|
|
|
|
|
|
|
|
|
|
|
|
|
36,144
|
|
|
De-designated interest rate swaps(3) |
|
|
|
—
|
|
|
|
|
2,516
|
|
|
|
|
|
|
|
|
|
|
|
|
2,516
|
|
|
Income tax effect of non-GAAP adjustments(4) |
|
|
|
934
|
|
|
|
|
(14,007
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(13,073
|
)
|
|
Net income (loss) applicable to common stock
|
|
|
$
|
57,972
|
|
|
|
$
|
123,064
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
181,036
|
|
|
Diluted average common shares outstanding
|
|
|
|
51,445
|
|
|
|
|
51,476
|
|
|
|
|
|
|
|
|
|
|
|
|
51,458
|
|
|
Operating earnings (loss) per share
|
|
|
$
|
1.15
|
|
|
|
$
|
1.87
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.02
|
|
|
Per share effect of non-GAAP adjustments
|
|
|
|
(0.02
|
)
|
|
|
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
0.50
|
|
|
Diluted earnings (loss) per average common share
|
|
|
$
|
1.13
|
|
|
|
$
|
2.39
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Quarterly earnings per share may not sum
to year-to-date or annual earnings per share as quarterly calculations
are based on weighted average common and common equivalent shares
outstanding, which may vary for each of those periods.
(2) Refer to the reconciliations of adjusted EBIT
to EBIT below for further details on our non-GAAP adjustments. Note that
non-GAAP adjustments associated with interest expense or income taxes
are shown separately and are not included in the reconciliation from
adjusted EBIT to EBIT.
(3) Non-GAAP adjustment related to mark-to-market
valuations on forward starting interest rate swaps associated with
anticipated future financing. Due to certain covenants in our merger
agreement with AltaGas, it is no longer probable that the 30-year debt
issuance that the swaps were originally intended to hedge will occur.
However, we believe that some form of financing will continue to be
required. The hedges were de-designated in January 2017 and settled in
January 2018 for $13.8 million.
(4) Non-GAAP adjustments are presented on a gross
basis and the income tax effects of those adjustments are presented
separately. The income tax effects of non-GAAP adjustments, both current
and deferred, are calculated at the individual company level based on
the applicable composite tax rate for each period presented, with the
exception of transactions not subject to income taxes. Additionally, the
income tax effect of non-GAAP adjustments includes investment tax
credits related to distributed generation assets.
(5) In December 2017, the Tax Cuts and Jobs Act was
signed into law, resulting in, among other effects, a reduction in the
corporate tax rate from 35% to 21%. This resulted in a net
deferred tax benefit of $52.9 million. An additional true up provision
of $7.4 million was recorded in March 2018. This adjustment only
reflects the re-measurement impact and not the effect on ongoing
earnings of the lower tax rate.
(6) Non-GAAP measures for the quarter ended
December 31, 2016 have been recast to include $6.8 million of losses
associated with the index price used in certain gas purchases from
Antero. The index price used to invoice these purchases had been
the subject of an arbitration proceeding; however, in February 2017, the
arbitral tribunal ruled in favor of Antero.
WGL Holdings, Inc.
Reconciliation of Non-GAAP Financial
Measures
(Unaudited)
The following tables summarize non-GAAP adjustments by operating segment
and present reconciliations of adjusted EBIT to EBIT. EBIT is defined as
earnings before interest and taxes, less amounts attributable to
non-controlling interest. Items we do not include in EBIT are interest
expense, inter-company financing activity, dividends on Washington Gas
preferred stock, and income taxes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
|
(In thousands)
|
|
|
Regulated
Utility
|
|
|
Retail Energy-
Marketing
|
|
|
Commercial
Energy
Systems
|
|
|
Midstream
Energy
Services
|
|
|
Other
Activities
|
|
|
Eliminations
|
|
|
Total
|
|
Adjusted EBIT
|
|
|
|
143,604
|
|
|
|
|
20,000
|
|
|
|
|
5,232
|
|
|
|
|
(2,231
|
)
|
|
|
|
(2,049
|
)
|
|
|
|
(4,103
|
)
|
|
|
$
|
160,453
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market valuations on energy-related derivatives(a)
|
|
|
|
12,292
|
|
|
|
|
(4,896
|
)
|
|
|
|
—
|
|
|
|
|
2,122
|
|
|
|
|
—
|
|
|
|
|
(13
|
)
|
|
|
|
9,505
|
|
|
Storage optimization program(b)
|
|
|
|
(2,968
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2,968
|
)
|
|
DC weather impact(c)
|
|
|
|
(1,859
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,859
|
)
|
|
Distributed generation asset related investment tax credits(d)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,670
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,670
|
)
|
|
Change in measured value of inventory(e)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
7,415
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
7,415
|
|
|
Merger related costs(f)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(136
|
)
|
|
|
|
—
|
|
|
|
|
(136
|
)
|
|
Total non-GAAP adjustments
|
|
|
$
|
7,465
|
|
|
|
$
|
(4,896
|
)
|
|
|
$
|
(1,670
|
)
|
|
|
$
|
9,537
|
|
|
|
$
|
(136
|
)
|
|
|
$
|
(13
|
)
|
|
|
$
|
10,287
|
|
|
EBIT
|
|
|
$
|
151,069
|
|
|
|
$
|
15,104
|
|
|
|
$
|
3,562
|
|
|
|
$
|
7,306
|
|
|
|
$
|
(2,185
|
)
|
|
|
$
|
(4,116
|
)
|
|
|
$
|
170,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017 |
|
(In thousands)
|
|
|
Regulated
Utility
|
|
|
Retail Energy-
Marketing
|
|
|
Commercial
Energy
Systems
|
|
|
Midstream
Energy
Services
|
|
|
Other
Activities
|
|
|
Eliminations
|
|
|
Total
|
|
Adjusted EBIT
|
|
|
$
|
150,223
|
|
|
|
$
|
13,149
|
|
|
|
$
|
10,312
|
|
|
|
$
|
(1,252
|
)
|
|
|
$
|
(1,061
|
)
|
|
|
$
|
(1,412
|
)
|
|
|
$
|
169,959
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market valuations on energy-related derivatives(a)
|
|
|
|
21,050
|
|
|
|
|
(3,894
|
)
|
|
|
|
—
|
|
|
|
|
23,658
|
|
|
|
|
—
|
|
|
|
|
(60
|
)
|
|
|
|
40,754
|
|
|
Storage optimization program (b)
|
|
|
|
866
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
866
|
|
|
DC weather impact(c)
|
|
|
|
(6,968
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(6,968
|
)
|
|
Distributed generation asset related investment tax credits(d)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,765
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,765
|
)
|
|
Change in measured value of inventory(e)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
19,587
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
19,587
|
|
|
Merger related costs (f)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(11,905
|
)
|
|
|
|
—
|
|
|
|
|
(11,905
|
)
|
|
Third-party guarantee (g)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2,101
|
)
|
|
|
|
—
|
|
|
|
|
(2,101
|
)
|
|
Total non-GAAP adjustments
|
|
|
$
|
14,948
|
|
|
|
$
|
(3,894
|
)
|
|
|
$
|
(1,765
|
)
|
|
|
$
|
43,245
|
|
|
|
$
|
(14,006
|
)
|
|
|
$
|
(60
|
)
|
|
|
$
|
38,468
|
|
|
EBIT
|
|
|
$
|
165,171
|
|
|
|
$
|
9,255
|
|
|
|
$
|
8,547
|
|
|
|
$
|
41,993
|
|
|
|
$
|
(15,067
|
)
|
|
|
$
|
(1,472
|
)
|
|
|
$
|
208,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WGL Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
|
|
|
|
|
|
Six Months Ended March 31, 2018
|
|
(In thousands)
|
|
|
Regulated
Utility
|
|
|
Retail Energy-
Marketing
|
|
|
Commercial
Energy
Systems
|
|
|
Midstream
Energy
Services
|
|
|
Other
Activities
|
|
|
Eliminations
|
|
|
Total
|
|
Adjusted EBIT
|
|
|
$
|
244,954
|
|
|
|
$
|
26,534
|
|
|
|
$
|
12,546
|
|
|
|
$
|
26,226
|
|
|
|
$
|
(5,563
|
)
|
|
|
$
|
(2,436
|
)
|
|
|
$
|
302,261
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market valuations on energy-related derivatives(a)
|
|
|
|
10,846
|
|
|
|
|
(7,688
|
)
|
|
|
|
—
|
|
|
|
|
2,243
|
|
|
|
|
—
|
|
|
|
|
9
|
|
|
|
|
5,410
|
|
|
Storage optimization program(b)
|
|
|
|
(3,429
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(3,429
|
)
|
|
DC weather impact(c)
|
|
|
|
(2,937
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2,937
|
)
|
|
Distributed generation asset related investment tax credits(d)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(3,337
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(3,337
|
)
|
|
Change in measured value of inventory(e)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,022
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
1,022
|
|
|
Merger related costs(f)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(793
|
)
|
|
|
|
—
|
|
|
|
|
(793
|
)
|
|
Total non-GAAP adjustments
|
|
|
$
|
4,480
|
|
|
|
$
|
(7,688
|
)
|
|
|
$
|
(3,337
|
)
|
|
|
$
|
3,265
|
|
|
|
$
|
(793
|
)
|
|
|
$
|
9
|
|
|
|
$
|
(4,064
|
)
|
|
EBIT
|
|
|
$
|
249,434
|
|
|
|
$
|
18,846
|
|
|
|
$
|
9,209
|
|
|
|
$
|
29,491
|
|
|
|
$
|
(6,356
|
)
|
|
|
$
|
(2,427
|
)
|
|
|
$
|
298,197
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended March 31, 2017 |
|
(In thousands)
|
|
|
Regulated
Utility
|
|
|
Retail Energy-
Marketing
|
|
|
Commercial
Energy
Systems
|
|
|
Midstream
Energy
Services
|
|
|
Other
Activities
|
|
|
Eliminations
|
|
|
Total
|
|
Adjusted EBIT
|
|
|
$
|
241,603
|
|
|
|
$
|
23,044
|
|
|
|
$
|
16,384
|
|
|
|
$
|
1,409
|
|
|
|
$
|
(2,259
|
)
|
|
|
$
|
93
|
|
|
|
$
|
280,274
|
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized mark-to-market valuations on energy-related derivatives(a)
|
|
|
|
36,486
|
|
|
|
|
15,396
|
|
|
|
|
—
|
|
|
|
|
13,981
|
|
|
|
|
—
|
|
|
|
|
(457
|
)
|
|
|
|
65,406
|
|
|
Storage optimization program (b)
|
|
|
|
202
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
202
|
|
|
DC weather impact(c)
|
|
|
|
(10,403
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(10,403
|
)
|
|
Distributed generation asset related investment tax credits(d)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(3,174
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(3,174
|
)
|
|
Change in measured value of inventory(e)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,881
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(1,881
|
)
|
|
Merger related costs (f)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(11,905
|
)
|
|
|
|
—
|
|
|
|
|
(11,905
|
)
|
|
Third-party guarantee (g)
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(2,101
|
)
|
|
|
|
—
|
|
|
|
|
(2,101
|
)
|
|
Total non-GAAP adjustments
|
|
|
$
|
26,285
|
|
|
|
$
|
15,396
|
|
|
|
$
|
(3,174
|
)
|
|
|
$
|
12,100
|
|
|
|
$
|
(14,006
|
)
|
|
|
$
|
(457
|
)
|
|
|
$
|
36,144
|
|
|
EBIT
|
|
|
$
|
267,888
|
|
|
|
$
|
38,440
|
|
|
|
$
|
13,210
|
|
|
|
$
|
13,509
|
|
|
|
$
|
(16,265
|
)
|
|
|
$
|
(364
|
)
|
|
|
$
|
316,418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes:
|
|
(a)
|
|
Adjustments to eliminate unrealized mark-to-market gains
(losses) for our energy-related derivatives for our regulated
utility and retail energy-marketing operations as well as certain
derivatives related to the optimization of transportation capacity
for the midstream energy services segment. With the exception of
certain transactions related to the optimization of system
capacity assets as discussed in footnote (b) below, when these
derivatives settle, the realized economic impact is reflected in
our non-GAAP results, as we are only removing interim unrealized
mark-to-market amounts.
|
|
(b)
|
|
Adjustments to shift the timing of storage optimization margins
for the regulated utility segment 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 because the
margins will be recognized for regulatory purposes when the
withdrawals are made at the unadjusted historical cost of storage
inventory.
|
|
(c)
|
|
Eliminates the estimated financial effects of warm or cold
weather in the District of Columbia, as measured consistent with
our regulatory tariff. Washington Gas has regulatory weather
protection mechanisms in Maryland and Virginia designed to
neutralize the estimated financial effects of weather. 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.
|
|
(d)
|
|
To reclassify the amortization of deferred investment tax
credits from income taxes to operating income for the commercial
energy systems segment. These credits are a key component of the
operating success of this segment and therefore are included
within adjusted EBIT to help management and investors better
assess the segment's performance.
|
|
(e)
|
|
For our midstream energy services segment, 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. Adjusting our storage
optimization inventory in this fashion better aligns 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. Additionally, this
adjustment also includes the net effect of certain sharing
mechanisms on the difference between the changes in our non-GAAP
storage inventory valuations and the unrealized gains and losses
on derivatives not subject to non-GAAP adjustments.
|
|
(f)
|
|
Adjustment to eliminate external costs associated with the
proposed merger with AltaGas.
|
|
(g)
|
|
Guarantee on behalf of a third party associated with a solar
investment.
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180503006815/en/
WGL Holdings, Inc.
News Media
Brian
Edwards, 202-624-6620
or
Financial
Community
Douglas Bonawitz, 202-624-6129
Source: WGL Holdings, Inc.
News Provided by Acquire Media
|
