Washington Gas Light (WGLCP) 8-K WGL Holdings, Inc. Reports Sharply Higher Second Quarter Results for Fiscal Year 2003

FOR IMMEDIATE RELEASE	CONTACTS:
April 30, 2003
	News Media
	Timothy Sargeant	(202) 624-6043 (Office)
		(202) 825-7051 (Pager)
	Financial Community
	Melissa E. Adams	(202) 624-6410 (Office)

WGL HOLDINGS, INC. REPORTS SHARPLY HIGHER
SECOND QUARTER RESULTS FOR FISCAL YEAR 2003

     WGL Holdings, Inc. (NYSE: WGL) (the Company), the parent company of Washington Gas Light Company and other energy-related subsidiaries, today reported higher net income of $81.0 million, or $1.66 per share, for the three months ended March 31, 2003, an increase of $35.2 million, or $0.72 per share over the same period last year. Unless otherwise noted, earnings per share amounts are reported on a diluted basis and are based on average common shares outstanding. Basic earnings per share were $0.01 higher than earnings on a diluted per share basis in the quarter ended March 31, 2003, and there was no difference between basic and diluted earnings per share for the prior fiscal year period.

     “We are pleased to report significantly improved results compared to the same period last year,” said WGL Chairman and CEO James H. DeGraffenreidt, Jr. “Beyond the benefits of colder weather, our strategic focus on improving the core utility business and our disciplined approach to managing our energy-related unregulated businesses position us for sustained success,” noted DeGraffenreidt.

Summary Results

     The Company’s utility operations are weather sensitive, with a significant portion of revenue coming from deliveries of natural gas to residential and small commercial heating customers. The utility segment’s net income for the second quarter of fiscal year 2003 was $82.1 million, or $1.68 per share, an increase of 53 percent over the same period last year due primarily to significantly colder weather. Weather for the second quarter of fiscal year 2003, as measured by heating degree days, was nearly 32 percent colder than the same period last year. The current quarter was 16 percent colder than normal, while the same period last year was 12 percent warmer than normal. Results for the quarter ended March 31, 2003, reflect a gain of $0.05 per share related to the sale of the Company’s headquarters property located in downtown Washington, D.C. Results for the quarter and six months ended March 31, 2003, also reflect Company estimates for potential refunds to customers based on the final outcome of regulatory decisions related to this gain as well as other pending regulatory matters in Virginia. Actual results related to these regulatory contingencies are difficult to predict and could differ significantly from the estimates included in the reported earnings. The Company’s non-utility operations reported a net loss of $1.2 million for the quarter ended March 31, 2003. In the same quarter last year the non-utility operations had a net loss of $7.8 million due largely to an impairment provision of $7.3 million for the Company’s former investment in a residential heating, ventilating and air conditioning (HVAC) business. Also in the second quarter of fiscal year 2002, the former residential HVAC segment had a net loss from operations of $2.2 million. In the second quarter of fiscal year 2003, the retail energy-marketing

WGL Holdings, Inc. • 1100 H Street, N.W. • Washington, D.C. 20080 • www.wglholdings.com

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and commercial HVAC segments reported net losses of $598,000 and $231,000, respectively, compared to net income of $1.3 million and $385,000, respectively, in the same quarter of fiscal year 2002.

     For the first six months of fiscal year 2003, the Company’s net income was $132.6 million, or $2.72 per share, a 74 percent improvement over net income of $76.0 million, or $1.56 per share, for the same period in fiscal year 2002. The utility segment reported net income of $129.0 million, or $2.65 per share, for the six months ended March 31, 2003, an increase of $46.2 million, or $0.95 per share, over the results for the first half of fiscal year 2002. This improvement primarily reflects the effect of 38 percent colder weather in the first six months of fiscal year 2003. The current six-month period was 18 percent colder than normal, while the same period in fiscal year 2002 was almost 15 percent warmer than normal.

     The Company reported net income of $3.5 million for its non-utility operations for the six months ended March 31, 2003. This compares to a net loss of $6.9 million in the year earlier period, which includes the $7.3 million residential HVAC impairment provision mentioned above and a net loss from operations of $3.0 million from the residential HVAC business. Net income of $3.7 million from the retail energy-marketing segment increased $1.4 million over the same period last year while results from the commercial HVAC segment reflected a net loss of $616,000 compared to net income of $1.2 million in the same period of fiscal year 2002.

     DeGraffenreidt said, “The significantly colder weather clearly played a major role in achieving this quarter’s impressive results and led to a new record for daily deliveries. On January 23, 2003, we delivered 1.4 billion cubic feet of natural gas, surpassing a previous record set in 1994. Our results also continue to benefit from new rates put in place over the past year. In addition, we are capitalizing on operational enhancements that improve efficiencies and provide for dependable and safe service to meet these high-demand periods.” DeGraffenreidt added, “We continue to seek timely recovery of increased operating costs in our various jurisdictions. In the second quarter of fiscal year 2003, we filed for new rates in the District of Columbia and Maryland. We are committed to pursuing regulatory remedies that will preserve our Company’s financial and operational strength.”

Utility Results for the Quarter Ended March 31, 2003

     The utility segment’s net income of $82.1 million, or $1.68 per share, for the second quarter of fiscal year 2003 was an increase of $28.6 million, or $0.58 per share, over the same period last year. Total gas deliveries of 669 million therms to firm customers in the current quarter, increased 172 million therms, or approximately 35 percent, over the second quarter of fiscal year 2002 due to significantly colder weather and a 3.2 percent increase in the number of customer meters. The colder weather contributed an estimated $0.29 per share, to current quarter results compared to normal weather. Also improving current period results were new rates that went into effect in Virginia on November 12, 2002, subject to refund, and new rates in Maryland that went into effect on September 30, 2002. Tempering these year-over-year improvements were higher labor and benefit costs, higher depreciation levels, and increased expenses for uncollectible accounts and liability insurance. Earnings in the second quarter of fiscal year 2002 were reduced $0.26 per share by warmer-than-normal weather, which was mitigated by a $0.10 per share benefit from weather insurance.

     As mentioned above, the sale of the Company’s current Washington, D.C. headquarters property resulted in a current quarter gain of $0.05 per share.

Non-Utility Results for the Quarter Ended March 31, 2003

     The Company’s non-utility operations reported a net loss of $1.2 million for the current quarter, or $0.02 per share, compared to a net loss of $7.8 million, or $0.16 per share, in the second quarter of fiscal year 2002. The retail energy-marketing segment had a net loss of $598,000 in the current quarter compared to net income of $1.3 million in the same period last year. The retail energy-marketing segment’s seasonal storage flexibility, combined with other risk mitigation strategies, provided significant protection from the effects of the sustained colder-than- normal weather and high gas prices that occurred in the second quarter. However, the actual conditions experienced in late February and early March were more extreme than the planning parameters prescribed in the Company’s risk management policy. Accordingly, the colder-than-normal weather in the quarter ended March 31, 2003, caused the retail energy-marketing segment

WGL Holdings, Inc. • 1100 H Street, N.W. • Washington, D.C. 20080 • www.wglholdings.com

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to make some additional purchases of natural gas in the spot market at a cost above its retail selling price to meet its commitments to customers. At the end of the quarter, the retail energy-marketing segment supplied natural gas to 162,000 customers, a 10 percent increase over the same period last year. Electricity accounts totaled 79,000 at the end of the current quarter, an increase of 36 percent over the second quarter of fiscal year 2002.

     The Company’s commercial HVAC segment had a net loss of $231,000 in the current quarter, compared to net income of $385,000 in the same quarter of the prior year, reflecting reduced business activity and lower gross margins. The commercial HVAC segment is working to rebuild the backlog of orders for its services.

     For the three months ended March 31, 2002, the Company reported an impairment provision of $7.3 million and a net loss from operations of $2.2 million for its former investment in a residential HVAC business. During the last quarter of fiscal year 2002, the Company finalized a restructuring agreement and no longer has an equity investment in the residential HVAC business. There was no effect on net income from the residential HVAC business in the quarter ended March 31, 2003.

Utility Results for the Six Months Ended March 31, 2003

     Net income for the utility segment was $129.0 million, or $2.65 per share, for the first six months of fiscal year 2003, an increase of $46.2 million, or $0.95 per share, over the six months ended March 31, 2002, due primarily to 38 percent colder weather in the current period. The 18 percent colder-than-normal weather in the current six-month period contributed $0.46 per share to current fiscal year results, whereas the warmer-than-normal weather last year reduced earnings in that period by approximately $0.55 per share before the mitigating effect of $0.18 per share associated with the Company’s weather insurance policy. Firm gas deliveries of 1,115 million therms for the six months ended March 31, 2003, increased 300 million therms over the same period last year. New rates put into effect since the end of the second quarter last year in Maryland and Virginia also improved results. The utility segment results also benefited from an adjustment to income taxes that added $0.06 per share to net income in the first quarter of fiscal year 2003. The first six months of fiscal year 2002 included a $0.04 per share charge attributable to business activities the Company had with a bankrupt energy trader.

     As mentioned previously, the sale of the Company’s Washington, D.C. headquarters property resulted in an after-tax gain of $0.05 per share in the first six months of fiscal year 2003.

Non-Utility Results for the Six Months Ended March 31, 2003

     The non-utility operations reported net income of $3.5 million for the first six months of fiscal year 2003, or $0.07 per share, compared to a net loss of $6.9 million, or $0.14 per share, in the same period in fiscal year 2002. The retail energy-marketing segment’s net income of $3.7 million in the current period was $1.4 million higher than the same period last year. The improved current period net income for the retail energy-marketing segment reflects higher gas and electricity volumes sold and higher net margins per therm and per kilowatt-hour that were sold in the first quarter of fiscal year 2003.

     The Company’s commercial HVAC segment had a net loss of $616,000 in the first half of the current fiscal year and net income of $1.2 million in the same period last year due to reduced business activity and lower gross margins. The Company’s former investment in a residential HVAC business had a net loss from operations of $3.0 million in the first six months of fiscal year 2002 in addition to the $7.3 million impairment provision, mentioned previously.

     In the first quarter of fiscal year 2003, a subsidiary of the Company sold a significant portion of its remaining interest in a land development venture, which resulted in a gain of $0.02 per share.

Earnings Outlook

     Commenting on the remainder of fiscal year 2003, DeGraffenreidt said, “Based on the financial results for the six months ended March 31, 2003, and looking forward, we are estimating our reported earnings per average common share, determined in accordance with generally accepted accounting principles, in a range of $2.07 to $2.17 for our fiscal year ending September 30, 2003. This range includes the $0.02 per share and the $0.05 per share gains from the sale of land and the headquarters property in the first and second quarters of fiscal year 2003,

WGL Holdings, Inc. • 1100 H Street, N.W. • Washington, D.C. 20080 • www.wglholdings.com

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respectively. For the third quarter of fiscal year 2003 ending June 30, 2003, we estimate a seasonal net loss per average common share to range from $0.14 to $0.18. Both of these ranges reflect assumptions about the ultimate resolution of the pending rate case in Virginia, no effects from the recently filed District of Columbia and Maryland rate applications, actual weather through April 28, 2003, and normal weather for the remainder of the current fiscal year, assumptions about natural gas prices that will be incurred by our retail energy-marketing segment for the balance of the fiscal year, and no unusual items. The range for fiscal year 2003 includes projected earnings on a reported basis for our unregulated businesses of $0.03 to $0.05 per average common share.”

Other Information

     The Company will hold a conference call at 10:30 a.m. Eastern time on May 1, 2003, to discuss its second quarter financial results. The live conference call will be available to the public via a link located on the WGL Holdings Web site,www.wglholdings.com. To hear the live broadcast, click on the “Live Webcast” icon located on the home page of the referenced site. The Webcast will be archived for replay on the WGL Holdings Web site through May 30, 2003.

     Headquartered in Washington, D.C., WGL Holdings is the parent company of Washington Gas Light Company, a natural gas utility that serves approximately 963,000 customers throughout metropolitan Washington, D.C., and the surrounding region. In addition, it holds a group of energy-related retail businesses that focus primarily on retail energy-marketing and commercial HVAC services.

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

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

     In addition to the factors previously disclosed in the Company’s filings with the Securities and Exchange Commission, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance:variations in weather conditions from normal levels; changes in economic, competitive, political and regulatory conditions and developments; changes in capital and energy commodity market conditions; changes in relevant laws and regulations, including tax, environmental and employment laws and regulations; legislative, regulatory and judicial mandates and decisions; timing and success of business and product development efforts; technological improvements; the pace of deregulation efforts and the availability of other competitive alternatives; and other uncertainties. For a further discussion of the risks and uncertainties, see the Company’s most recent quarterly report on Form 10-Q and annual report on Form 10-K filed with the Securities and Exchange Commission.

(Your attention is called to the following comparative statements for additional information.)

WGL Holdings, Inc. • 1100 H Street, N.W. • Washington, D.C. 20080 • www.wglholdings.com

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WGL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

					Three Months Ended						Year To Date						Twelve Months Ended
					March 31,						March 31,						March 31,
(Thousands, except per share data)					2003			2002			2003			2002			2003			2002
UTILITY OPERATIONS
	Operating Revenues				$	620,208		$	379,394		$	995,200		$	646,050		$	1,274,282		$	946,994
		Less: Cost of gas				366,763			189,200			559,299			315,733			702,716			475,609
				Revenue taxes		16,029			11,779			25,816			19,644			35,310			27,111
	Net Revenues					237,416			178,415			410,085			310,673			536,256			444,274
	Other Operating Expenses
		Operation and maintenance				56,046			52,339			111,179			99,318			216,924			195,281
		Depreciation and amortization				21,189			18,048			40,804			35,699			78,025			70,560
		General taxes				11,849			10,769			21,457			18,071			36,124			36,866
		Income tax expense				54,443			34,139			82,343			53,486			57,550			38,845
	Total Other Operating Expenses					143,527			115,295			255,783			206,574			388,623			341,552
			Utility Operating Income			93,889			63,120			154,302			104,099			147,633			102,722
NON-UTILITY OPERATING INCOME (EXPENSES)
	Operating Revenues
			Retail energy-marketing			222,692			172,897			396,633			302,009			690,490			488,509
			Commercial HVAC			7,551			12,016			18,140			32,772			47,390			60,814
			Other non-utility activities			622			512			1,120			1,084			975			2,632
	Operating Expenses
			Non-utility operating expenses			(232,584	)		(182,318	)		(411,698	)		(329,715	)		(738,488	)		(543,469	)
			Equity loss in 50%-owned residential HVAC investment (pre-tax)			—			(2,115	)		—			(2,822	)		(2,580	)		(4,499	)
			Residential HVAC impairment			—			(7,300	)		—			(7,300	)		(2,131	)		(11,200	)
			Income tax expense			785			(1,173	)		(2,407	)		(2,209	)		(4,097	)		(1,972	)
			Non-Utility Operating Income (Loss)			(934	)		(7,481	)		1,788			(6,181	)		(8,441	)		(9,185	)
		Other Income (expenses)				(85	)		1,782			631			1,980			3,948			312
INCOME BEFORE INTEREST EXPENSE						92,870			57,421			156,721			99,898			143,140			93,849
		Interest expense				11,577			11,331			23,476			23,241			46,111			46,515
		Dividends on Washington Gas preferred stock				330			330			660			660			1,320			1,320
NET INCOME					$	80,963		$	45,760		$	132,585		$	75,997		$	95,709		$	46,014
AVERAGE COMMON SHARES OUTSTANDING						48,582			48,565			48,578			48,561			48,572			48,082
BASIC EARNINGS PER AVG COMMON SHARE					$	1.67		$	0.94		$	2.73		$	1.56		$	1.97		$	0.96
DILUTED EARNINGS PER AVG COMMON SHARE					$	1.66		$	0.94		$	2.72		$	1.56		$	1.97		$	0.96
NET INCOME (LOSS) APPLICABLE TO COMMON STOCK —BY SEGMENT ($000):
		Regulated utility			$	82,130		$	53,555		$	129,041		$	82,848		$	101,192		$	56,759
		Major non-utility operations:
			Retail energy-marketing			(598	)		1,327			3,702			2,257			6,798			3,054
			HVAC:
				Commercial — operating gain (loss)		(231	)		385			(616	)		1,240			2,416			2,473
				Residential — operating (loss)		—			(2,173	)		—			(2,951	)		(2,580	)		(4,245	)
				Residential — impairment		—			(7,300	)		—			(7,300	)		(2,131	)		(11,200	)
				Total major non-utility		(829	)		(7,761	)		3,086			(6,754	)		4,503			(9,918	)
		Other, principally non-utility activities				(338	)		(34	)		458			(97	)		(9,986	)		(827	)
NET INCOME					$	80,963		$	45,760		$	132,585		$	75,997		$	95,709		$	46,014

WGL HOLDINGS, INC.
OTHER INFORMATION
Consolidated Financial and Operating Statistics

COMMON STOCK DATA

March 31, 2003	52 Week
Price	Price Range
$26.49	$	27.95 - $19.25

	Earnings Per Share
	Twelve Months Ended March 31,
							Annualized
	2003		2002		P/E		Dividend		Yield
Basic	$	1.97	$	0.96		13.4	$	1.28		4.8	%
Diluted	$	1.97	$	0.96

FINANCIAL STATISTICS

	Twelve Months Ended
	March 31,			March 31,
	2003			2002
Return on Average Common Equity		11.2	%		5.6	%
Total Interest Coverage(times)		4.4			2.9
Book Value Per Share(end of period)	$	17.87		$	17.17
Common Shares Outstanding—end of period(thousands)		48,583			48,566

UTILITY GAS STATISTICS

				Three Months Ended				Six Months Ended				Twelve Months Ended
				March 31,				March 31,				March 31,
				2003		2002		2003		2002		2003		2002
Operating Revenues(thousands )
	Gas Sold and Delivered
		Residential — firm		$	364,258	$	232,355	$	580,644	$	382,710	$	715,731	$	507,543
		Commercial and Industrial — firm			117,874		67,603		184,077		116,271		231,042		169,923
		Commercial and Industrial — interruptible			2,490		2,138		5,929		4,420		8,453		8,142
		Electric Generation			275		258		550		533		1,100		1,083
					484,897		302,354		771,200		503,934		956,326		686,691
	Gas Delivered for Others
		Firm			67,567		45,808		117,833		82,056		149,439		114,815
		Interruptible			9,432		10,640		18,924		19,717		30,412		30,466
		Electric Generation			55		94		204		170		727		502
					77,054		56,542		136,961		101,943		180,578		145,783
					561,951		358,896		908,161		605,877		1,136,904		832,474
		Other			58,257		20,498		87,039		40,173		137,378		114,520
			Total	$	620,208	$	379,394	$	995,200	$	646,050	$	1,274,282	$	946,994

					Three Months Ended						Six Months Ended						Twelve Months Ended
					March 31,						March 31,						March 31,
					2003			2002			2003			2002			2003			2002
		Gas Sales and Deliveries(thousands of therms)
			Gas Sold and Delivered
				Residential — firm		328,201			251,124			543,691			401,618			651,317			491,218
				Commercial and Industrial — firm		112,769			84,611			187,953			142,495			239,376			197,141
				Commercial and Industrial — interruptible		2,849			3,248			7,336			6,765			11,217			12,095
						443,819			338,983			738,980			550,878			901,910			700,454
			Gas Delivered for Others
				Firm*		227,663			161,331			383,478			270,539			459,849			359,078
				Interruptible		80,072			93,880			163,096			171,715			268,747			268,229
				Electric Generation		14,794			14,099			37,217			36,368			170,059			129,527
						322,529			269,310			583,791			478,622			898,655			756,834
				Total		766,348			608,293			1,322,771			1,029,500			1,800,565			1,457,288
WASHINGTON GAS ENERGY SERVICES
		Natural Gas Sales
			Therm Sales(thousands of therms)			276,850			239,735			484,748			409,725			684,739			575,633
			Number of Customers(end of period)			162,000			146,800			162,000			146,800			162,000			146,800
		Electricity Sales
			Electricity Sales(thousands of kWhs)			1,808,211			1,388,758			3,731,086			2,518,146			7,701,077			4,270,991
			Number of Accounts(end of period)			79,000			58,000			79,000			58,000			79,000			58,000
UTILITY GAS PURCHASED EXPENSE
	(excluding off system)					72.52	¢		51.06	¢		66.33	¢		51.65	¢		65.78	¢		54.55	¢
HEATING DEGREE DAYS
		Actual				2,463			1,870			4,106			2,977			4,433			3,321
		Normal				2,120			2,121			3,478			3,491			3,801			3,814
		Number of Customer Meters(end of period)				962,954			932,817			962,954			932,817			962,954			932,817

*Excludes wholesale therm deliveries to unaffiliated company.

WGL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)

			March 31,
(Thousands)			2003			2002
ASSETS
Property, Plant and Equipment
	At original cost		$	2,503,651		$	2,402,539
	Accumulated depreciation and amortization			(884,250	)		(851,026	)
				1,619,401			1,551,513
Current Assets
	Cash and cash equivalents			18,432			14,406
	Accounts receivable			503,256			341,524
	Other			86,956			67,108
				608,644			423,038
Deferred Charges and Other Assets				151,195			190,945
		Total Assets	$	2,379,240		$	2,165,496
CAPITALIZATION AND LIABILITIES
Capitalization
	Washington Gas preferred stock		$	28,173		$	28,173
	Common shareholders’ equity			868,225			833,983
	Long-term debt			623,257			642,603
				1,519,655			1,504,759
Current Liabilities
	Notes payable and current maturities of long-term debt			138,949			113,122
	Accounts payable			250,964			125,175
	Other			149,676			95,367
				539,589			333,664
Deferred Credits				319,996			327,073
		Total Capitalization and Liabilities	$	2,379,240		$	2,165,496