Exhibit 99.1
| | | | |
FOR IMMEDIATE RELEASE | | CONTACTS: | |
April 28, 2004 | | | |
| | 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 SECOND QUARTER RESULTS AND REAFFIRMS
FISCAL YEAR 2004 GUIDANCE
WGL Holdings, Inc. (NYSE: WGL) (the Company), the parent company of Washington Gas Light Company and other energy-related subsidiaries, today reported net income of $78.1 million, or $1.60 per share, for the three months ended March 31, 2004, the second quarter of its fiscal year 2004. This compares to net income of $81.0 million, or $1.66 per share, for the same quarter of fiscal year 2003. Unless otherwise noted, earnings per share amounts are presented in this news release on a diluted basis, and are based on weighted average common and common equivalent shares outstanding.
Excluding the effects of colder-than-normal weather, gains from the sale of real estate in both periods and other unique transactions, the Company’s earnings per share from normal operations for the second quarter of fiscal year 2004 were $1.28 per share as compared to $1.32 per share for the same quarter of fiscal year 2003. Earnings from normal operations for the current quarter reflect increased utility operation and maintenance expenses. These higher expenses include certain items, such as severance expenses, that are unlikely to continue at the same level. The higher expenses were partially offset by the favorable impacts of customer growth and positive regulatory decisions. The Company reviews its financial results from normal operations (based on normal weather and uninfluenced by unique, non-repeating transactions) to monitor its progress towards achieving its five-year financial goals and guidance. A reconciliation of the Company’s earnings per share reported in accordance with Generally Accepted Accounting Principles of the United States of America (GAAP) to earnings per share from normal operations is attached to this press release.
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Commenting on second quarter results and the outlook for the remainder of the year, WGL Holdings’ Chairman and CEO James H. DeGraffenreidt, Jr. said, “Our strong second quarter earnings reflect the benefits of colder-than-normal weather and our success in generating shareholder value from unregulated opportunities. Normal operating results were enhanced by a continued focus on customer growth that was reflected by the addition of nearly 25,000 new customers and our success in securing timely, compensatory rates that more accurately reflect the cost of providing service to customers.” DeGraffenreidt added, “Despite the increase in operation and maintenance expenses this quarter, we believe that the benefits of continued process improvements will help us manage our operating costs going forward and result in strong fiscal year 2004 earnings.”
Summary of Results
The Company’s utility operations are weather sensitive, with a significant portion of its revenue coming from deliveries of natural gas to residential and commercial heating customers. Weather, when measured by heating degree days, was ten percent colder than normal for the second fiscal quarter ended March 31, 2004, enhancing earnings per share by $0.20. Weather was 16 percent colder than normal for the same quarter last fiscal year, contributing an additional $0.29 per share to earnings for that quarter. Also contributing to earnings for the current quarter was a 2.6 percent increase in active customers, coupled with favorable rate decisions in the Washington, D.C., Maryland and Virginia service areas.
During the second quarter of the current fiscal year, the Company also realized an after-tax gain of $5.8 million, or $0.12 per share, from the sale of an affiliated interest in two buildings that are part of a commercial development project. In the same period last year, the Company realized an after-tax gain of $2.5 million, or $0.05 per share, from the sale of its former headquarters property.
For the first six months of fiscal year 2004, the Company’s net income was $117.6 million, or $2.41 per share, as compared to net income of $132.6 million, or $2.72 per share, reported for the same period in fiscal year 2003. Weather was seven percent colder than normal for the current six-month period, improving net income by $0.20 per share. The 18 percent colder-than-normal weather for the same six months of the prior fiscal year contributed an additional $0.46 per share to net income for that period. The after-tax gain of $5.8 million, or $0.12 per share, realized during the current six-month period from the sale of real estate, as
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discussed above, was more than offset by amounts recorded in the corresponding period of the prior year, including(i)an after-tax gain of $2.5 million, or $0.05 per share, from the sale of the Company’s former headquarters property,(ii)an after-tax gain of $926,000, or $0.02 per share, from the sale of its interest in a land development venture, and(iii)a favorable income tax adjustment of $2.7 million, or $0.06 per share. The current six-month period also reflects additional depreciation expense of $3.5 million (pre-tax), or $0.04 per share, recorded in connection with a Virginia rate order. Excluding the effects of colder-than-normal weather, gains from the sale of real estate, a tax adjustment and the recording of additional depreciation expense, the Company’s earnings per share from normal operations for the first six months of fiscal year 2004 were $2.13 per share, unchanged from the same period of fiscal year 2003.
Commenting on the Company’s year-to-date performance, DeGraffenreidt remarked, “Our solid financial results position us well to advance towards our five-year financial objectives. These objectives include delivering five percent annual average earnings growth from normal operations over the next five years, maintaining free cash flow in excess of capital expenditures, and maintaining a strong balance sheet and credit ratings. Together these objectives enable us to accomplish the fourth objective which is to reward our shareholders by supporting sustainable dividend growth and building on our record of 28 consecutive years of increases backed by 153 consecutive years of payouts.”
Three Months Ended March 31, 2004
Regulated Utility Operations
The regulated utility segment’s net income was $74.2 million, or $1.52 per share, for the three months ended March 31, 2004, compared to net income of $82.1 million, or $1.68 per share, for the same three-month period of the prior fiscal year. The change in net income primarily reflects a decrease in total gas deliveries to firm customers that fell 19 million therms, or three percent, to 650 million therms delivered during the current quarter. Weather was five percent warmer in the current quarter as compared to the same period last year. Weather for the second quarter of fiscal year 2004 was ten percent colder than normal, compared to 16 percent colder-than-normal weather for the same quarter last fiscal year.
In addition to the increase in active customer meters from the end of the same quarter of the prior fiscal year, earnings for the current quarter benefited from the impact of rate changes that went into effect in Maryland on November 6, 2003, the District of Columbia on November 24, 2003, and Virginia on February 26, 2004. The Virginia rate increase went into effect
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pursuant to the regulations of the State Corporation Commission of Virginia (SCC of VA), and is subject to refund pending the SCC of VA’s final decision on the expedited rate case that Washington Gas filed on January 27, 2004. The Company’s financial results reflect a provision for rate refunds to customers, representing management’s judgment of the rate case outcome.
The regulated utility’s operation and maintenance expenses increased during the current quarter when compared to the corresponding quarter of the prior fiscal year, reflecting higher labor and benefit costs due primarily to employee severance costs in the current period and increased group insurance costs. The current period also reflects increased outside services costs associated with implementing the provisions of the Sarbanes-Oxley Act, as well as higher uncollectible accounts expense. In addition to higher operation and maintenance expenses for the second quarter of fiscal year 2004, earnings comparisons for the regulated utility’s results were affected by the inclusion in the second quarter of fiscal year 2003 of an after-tax gain of $2.5 million, or $0.05 per share, from the sale of the Company’s former headquarters property.
Non-Utility Operations
The Company’s non-utility operations reported net income of $3.9 million, or $0.08 per share, for the three months ended March 31, 2004, as compared to a net loss of $1.2 million, or $0.02 per share, reported for the same quarter of the prior year. Current period earnings for the Company’s non-utility operations were favorably affected by the inclusion in the second quarter of fiscal year 2004 of an after-tax gain of $5.8 million, or $0.12 per share, from the Company’s sale of an affiliated interest in two buildings at Maritime Plaza, a commercial development project in which the Company had a carried interest.
The retail energy-marketing segment reported a net loss of $183,000 for the current three-month period, an improvement over a reported net loss of $598,000 for the corresponding quarter of the prior year. The Company’s commercial heating, ventilating and air conditioning (HVAC) business reported a net loss of $774,000 for the second quarter of fiscal year 2004, as compared to a net loss of $231,000 for the same quarter of the prior year.
Six Months Ended March 31, 2004
Regulated Utility Operations
The regulated utility segment’s net income was $108.9 million, or $2.23 per share, for the first six months of fiscal year 2004, compared to net income of $129.0 million, or $2.65 per share, for the corresponding six-month period of the prior fiscal year. Weather was ten percent
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warmer in the current six-month period than in the comparable period of the prior fiscal year. Firm gas deliveries of 1.05 billion therms for the six months ended March 31, 2004 were six percent lower than firm deliveries for the same six months of the prior fiscal year. Favorably contributing to earnings for the current six-month period was a 2.6 percent increase in active customer meters, and the impact of rate decisions put into effect in all three jurisdictions, as discussed previously.
Current year-to-date earnings for the regulated utility segment also reflect higher operation and maintenance expenses due primarily to higher labor and benefit costs that were partially offset by lower expenses associated with uncollectible accounts. The regulated utility segment also incurred higher depreciation and amortization expense attributable to plant investment, as well as the effect of the December 18, 2003 final order issued by the SCC of VA that required the Company to implement higher depreciation rates effective for an earlier period, which resulted in the Company recording additional depreciation expense in the first quarter of 2004 of $3.5 million (pre-tax), or $0.04 per share, applicable to the period from January 1, 2002 through November 12, 2002. The inclusion in the first six months of fiscal year 2003 of an after-tax gain of $2.5 million, or $0.05 per share, from the sale of the Company’s former headquarters property, as well as an adjustment to income taxes of $2.7 million, or $0.06 per share, contributed to the earnings comparison for the first six months of fiscal year 2004.
Non-Utility Operations
Net income for the Company’s non-utility operations of $8.7 million, or $0.18 per share, for the first six months of fiscal year 2004 improved by $5.2 million, or $0.11 per share, over the same period of the prior fiscal year. Earnings for the current six-month period were favorably affected by the inclusion in the second quarter of fiscal year 2004 of an after-tax gain of $5.8 million, or $0.12 per share, from the Company’s sale of an affiliated interest in two buildings at Maritime Plaza, a commercial development project in which the Company had a carried interest. In the same period last year, the Company realized an after-tax gain of $926,000, or $0.02 per share, from the sale of its interest in a land development venture.
Net income for the retail energy-marketing segment of $4.6 million, or $0.10 per share, contributed $925,000, or $0.02 per share, to the year-over-year improvement due to higher gross margins from the sale of natural gas, partially offset by lower gross margins on the sale of electricity. The Company’s HVAC business reported a net loss of $1.3 million, or $0.03 per share, for the six months ended March 31, 2004, as compared to a net loss of $616,000, or
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$0.01 per share, for the corresponding period of the prior fiscal year, due to reduced revenues and lower gross margins.
Earnings Outlook
DeGraffenreidt said, “Looking to the future, we continue to estimate our earnings for the full fiscal year 2004 to be in the range of $1.87 to $1.97 per share. This includes projected full fiscal year 2004 earnings for our unregulated businesses to be in the range of $0.13 to $0.17 per share. The annual guidance includes an estimate for the third quarter ending June 30, 2004 to be a seasonal net loss in the range of $0.12 to $0.22 per share. This guidance includes the effect of actual weather through April 25, 2004, and an expectation of normal weather thereafter.” DeGraffenreidt added, “These projections include an estimate of the outcome of the pending rate case in Virginia for which higher rates went into effect subject to refund on February 26, 2004, and exclude the effect of any other unusual items that could arise in the future.”
Other Information
The Company will hold a conference call at 10:30 a.m. Eastern time on April 29, 2004 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 June 1, 2004.
Headquartered in Washington, D.C., WGL Holdings is the parent company of Washington Gas Light Company, a natural gas utility that serves almost 990,000 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 heating, ventilating and air conditioning services.
Additional information about WGL Holdings is available on its Web site,www.wglholdings.com.
Note: This news release and other statements by the Company may include forward-looking statements within the meaning of thePrivate Securities Litigation Reform Actwith respect to the outlook for earnings, revenues and other future financial business performance or strategies
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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 achieved. Forward-looking statements speak only as of today, and the Company assumes no duty to update them.
As 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 credit market conditions and creditworthiness of customers and suppliers; 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; terrorist activities; and other uncertainties. For a further discussion of the risks and uncertainties, see the Company’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission.
(Please see the following comparative statements for additional information. Also attached is a reconciliation of the Company’s earnings per share reported in accordance with GAAP to earnings per share from normal operations.)
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WGL Holdings, Inc.
Consolidated Statements of Income
(Unaudited)
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| | | Three Months Ended | | Six Months Ended | | Twelve Months Ended |
| | | March 31, | | March 31, | | March 31, |
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| (In thousands, except per share data) | | 2004 | | 2003 | | 2004 | | 2003 | | 2004 | | 2003 |
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UTILITY OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Revenues | | $ | 588,648 | | | $ | 620,208 | | | $ | 963,962 | | | $ | 995,200 | | | $ | 1,269,819 | | | $ | 1,274,281 | |
| Less: Cost of gas | | | 336,986 | | | | 366,763 | | | | 535,764 | | | | 559,299 | | | | 673,026 | | | | 702,715 | |
| Revenue taxes | | | 20,510 | | | | 16,029 | | | | 34,279 | | | | 25,816 | | | | 48,928 | | | | 33,721 | |
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Utility Net Revenues | | | 231,152 | | | | 237,416 | | | | 393,919 | | | | 410,085 | | | | 547,865 | | | | 537,845 | |
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Other Operating Expenses | | | | | | | | | | | | | | | | | | | | | | | | |
| Operation and maintenance | | | 62,395 | | | | 56,046 | | | | 117,603 | | | | 111,179 | | | | 222,679 | | | | 216,922 | |
| Depreciation and amortization | | | 22,961 | | | | 21,189 | | | | 48,166 | | | | 40,804 | | | | 90,911 | | | | 78,026 | |
| General taxes | | | 10,782 | | | | 11,849 | | | | 20,653 | | | | 21,457 | | | | 37,037 | | | | 37,714 | |
| Income tax expense | | | 49,629 | | | | 54,443 | | | | 74,387 | | | | 82,343 | | | | 60,677 | | | | 57,559 | |
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Utility Other Operating Expenses | | | 145,767 | | | | 143,527 | | | | 260,809 | | | | 255,783 | | | | 411,304 | | | | 390,221 | |
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Utility Operating Income | | | 85,385 | | | | 93,889 | | | | 133,110 | | | | 154,302 | | | | 136,561 | | | | 147,624 | |
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NON-UTILITY OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | | |
Operating Revenues | | | | | | | | | | | | | | | | | | | | | | | | |
| Retail energy-marketing | | | 265,680 | | | | 222,692 | | | | 467,938 | | | | 396,633 | | | | 797,536 | | | | 690,490 | |
| Heating, ventilating and air conditioning (HVAC) | | | 7,246 | | | | 7,551 | | | | 14,780 | | | | 18,140 | | | | 32,161 | | | | 47,255 | |
| Other non-utility activities | | | 678 | | | | 622 | | | | 861 | | | | 1,120 | | | | 1,180 | | | | 1,954 | |
Operating Expenses | | | | | | | | | | | | | | | | | | | | | | | | |
| Non-utility operating expenses | | | (275,821 | ) | | | (232,584 | ) | | | (478,613 | ) | | | (411,698 | ) | | | (828,455 | ) | | | (736,556 | ) |
| Equity loss in 50%-owned residential HVAC investment (pre-tax) | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2,580 | ) |
| Residential HVAC impairment | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2,131 | ) |
| Income tax (expense) benefit | | | 410 | | | | 785 | | | | (2,114 | ) | | | (2,407 | ) | | | 125 | | | | (1,923 | ) |
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Non-Utility Operating Income (Loss) | | | (1,807 | ) | | | (934 | ) | | | 2,852 | | | | 1,788 | | | | 2,547 | | | | (3,491 | ) |
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TOTAL OPERATING INCOME | | | 83,578 | | | | 92,955 | | | | 135,962 | | | | 156,090 | | | | 139,108 | | | | 144,133 | |
| Other Income (Expenses) — Net | | | 5,553 | | | | (85 | ) | | | 4,633 | | | | 631 | | | | 4,809 | | | | (992 | ) |
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INCOME BEFORE INTEREST EXPENSE | | | 89,131 | | | | 92,870 | | | | 140,595 | | | | 156,721 | | | | 143,917 | | | | 143,141 | |
| Interest expense | | | 10,746 | | | | 11,577 | | | | 22,337 | | | | 23,476 | | | | 45,242 | | | | 46,112 | |
| Dividends on Washington Gas preferred stock | | | 330 | | | | 330 | | | | 660 | | | | 660 | | | | 1,320 | | | | 1,320 | |
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NET INCOME | | $ | 78,055 | | | $ | 80,963 | | | $ | 117,598 | | | $ | 132,585 | | | $ | 97,355 | | | $ | 95,709 | |
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AVERAGE COMMON SHARES OUTSTANDING | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | | 48,643 | | | | 48,582 | | | | 48,634 | | | | 48,578 | | | | 48,614 | | | | 48,572 | |
| Diluted | | | 48,859 | | | | 48,738 | | | | 48,836 | | | | 48,725 | | | | 48,810 | | | | 48,679 | |
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EARNINGS PER AVERAGE COMMON SHARE | | | | | | | | | | | | | | | | | | | | | | | | |
| Basic | | $ | 1.60 | | | $ | 1.67 | | | $ | 2.42 | | | $ | 2.73 | | | $ | 2.00 | | | $ | 1.97 | |
| Diluted | | $ | 1.60 | | | $ | 1.66 | | | $ | 2.41 | | | $ | 2.72 | | | $ | 1.99 | | | $ | 1.97 | |
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Net Income (Loss) Applicable To Common Stock—By Segment ($000): |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Regulated utility | | $ | 74,190 | | | $ | 82,130 | | | $ | 108,869 | | | $ | 129,041 | | | $ | 88,864 | | | $ | 97,914 | |
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| Non-utility operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Retail energy-marketing | | | (183 | ) | | | (598 | ) | | | 4,627 | | | | 3,702 | | | | 4,670 | | | | 6,412 | |
| HVAC: | | | | | | | | | | | | | | | | | | | | | | | | |
| Commercial | | | (774 | ) | | | (231 | ) | | | (1,272 | ) | | | (616 | ) | | | (1,840 | ) | | | 2,128 | |
| Residential — operating loss | | | — | | | | — | | | | — | | | | — | | | | — | | | | (559 | ) |
| Residential — impairment | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2,131 | ) |
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| Total major non-utility | | | (957 | ) | | | (829 | ) | | | 3,355 | | | | 3,086 | | | | 2,830 | | | | 5,850 | |
| Other, principally non-utility activities | | | 4,822 | | | | (338 | ) | | | 5,374 | | | | 458 | | | | 5,661 | | | | (8,055 | ) |
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| Total non-utility | | | 3,865 | | | | (1,167 | ) | | | 8,729 | | | | 3,544 | | | | 8,491 | | | | (2,205 | ) |
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NET INCOME | | $ | 78,055 | | | $ | 80,963 | | | $ | 117,598 | | | $ | 132,585 | | | $ | 97,355 | | | $ | 95,709 | |
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WGL Holdings, Inc.
Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | |
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| | | March 31, |
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| (In thousands) | | 2004 | | 2003 |
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ASSETS | | | | | | | | |
Property, Plant and Equipment | | | | | | | | |
| At original cost | | $ | 2,609,621 | | | $ | 2,503,651 | |
| Accumulated depreciation and amortization | | | (722,881 | ) | | | (657,666 | ) |
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| Net property, plant and equipment | | | 1,886,740 | | | | 1,845,985 | |
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Current Assets | | | | | | | | |
| Cash and cash equivalents | | | 77,369 | | | | 18,432 | |
| Accounts receivable, net | | | 414,415 | | | | 503,256 | |
| Storage gas—at cost (first-in, first-out) | | | 36,980 | | | | 25,386 | |
| Other | | | 40,042 | | | | 61,570 | |
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| Total current assets | | | 568,806 | | | | 608,644 | |
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Deferred Charges and Other Assets | | | 156,770 | | | | 151,195 | |
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Total Assets | | $ | 2,612,316 | | | $ | 2,605,824 | |
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CAPITALIZATION AND LIABILITIES | | | | | | | | |
Capitalization | | | | | | | | |
| Washington Gas Light Company preferred stock | | $ | 28,173 | | | $ | 28,173 | |
| Common shareholders’ equity | | | 906,267 | | | | 868,225 | |
| Long-term debt | | | 617,903 | | | | 623,257 | |
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| Total capitalization | | | 1,552,343 | | | | 1,519,655 | |
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Current Liabilities | | | | | | | | |
| Notes payable and current maturities of long-term debt | | | 146,741 | | | | 138,949 | |
| Accounts payable | | | 163,189 | | | | 235,713 | |
| Other | | | 156,772 | | | | 164,927 | |
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| Total current liabilities | | | 466,702 | | | | 539,589 | |
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Deferred Credits | | | 593,271 | | | | 546,580 | |
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Total Capitalization and Liabilities | | $ | 2,612,316 | | | $ | 2,605,824 | |
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WGL Holdings, Inc.
Consolidated Financial and Operating Statistics
(Unaudited)
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| COMMON STOCK DATA | | |
|
March 31, 2004 | | 52 Week | |
Closing Price | | Price Range | |
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$30.10 | | $ | 30.18-$25.21 | |
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| | | Earnings Per Share | | | | | | Annualized | | |
| | | Twelve Months Ended March 31, | | P/E | | Dividend | | Yield |
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| | | 2004 | | 2003 | | | | | | | | | | | | |
| |
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Basic | | $ | 2.00 | | | $ | 1.97 | | | | 15.1 | | | $ | 1.30 | | | | 4.3 | % |
Diluted | | $ | 1.99 | | | $ | 1.97 | | | | | | | | | | | | | |
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| FINANCIAL STATISTICS | | |
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| | | Twelve Months Ended |
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| | | March 31, | | March 31, |
| | | 2004 | | 2003 |
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| Return on Average Common Equity | | | 11.0 | % | | | 11.2 | % |
Total Interest Coverage(times) | | | 4.5 | | | | 4.4 | |
Book Value Per Share(end of period) | | $ | 18.63 | | | $ | 17.87 | |
Common Shares Outstanding—end of period(thousands) | | | 48,648 | | | | 48,583 | |
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| UTILITY GAS STATISTICS | | | | | | |
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| | | Three Months Ended | | Six Months Ended | | Twelve Months Ended |
| | | March 31, | | March 31, | | March 31, |
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| (In thousands) | | 2004 | | 2003 | | 2004 | | 2003 | | 2004 | | 2003 |
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Operating Revenues | | | | | | | | | | | | | | | | | | | | | | | | |
| Gas Sold and Delivered | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential — Firm | | $ | 385,975 | | | $ | 364,258 | | | $ | 623,652 | | | $ | 580,644 | | | $ | 780,272 | | | $ | 715,731 | |
| Commercial and Industrial — Firm | | | 113,946 | | | | 117,874 | | | | 186,722 | | | | 184,077 | | | | 242,552 | | | | 231,042 | |
| Commercial and Industrial — Interruptible | | | 2,106 | | | | 2,490 | | | | 4,899 | | | | 5,929 | | | | 9,296 | | | | 8,453 | |
| Electric Generation | | | 275 | | | | 275 | | | | 417 | | | | 550 | | | | 967 | | | | 1,100 | |
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| | | | 502,302 | | | | 484,897 | | | | 815,690 | | | | 771,200 | | | | 1,033,087 | | | | 956,326 | |
|
| Gas Delivered for Others | | | | | | | | | | | | | | | | | | | | | | | | |
| Firm | | | 62,887 | | | | 67,567 | | | | 108,256 | | | | 117,833 | | | | 152,394 | | | | 149,439 | |
| Interruptible | | | 10,952 | | | | 9,432 | | | | 21,291 | | | | 18,924 | | | | 33,114 | | | | 30,412 | |
| Electric Generation | | | 71 | | | | 55 | | | | 150 | | | | 204 | | | | 358 | | | | 727 | |
|
| | | | 73,910 | | | | 77,054 | | | | 129,697 | | | | 136,961 | | | | 185,866 | | | | 180,578 | |
|
| | | | 576,212 | | | | 561,951 | | | | 945,387 | | | | 908,161 | | | | 1,218,953 | | | | 1,136,904 | |
| Other | | | 12,436 | | | | 58,257 | | | | 18,575 | | | | 87,039 | | | | 50,866 | | | | 137,377 | |
|
Total | | $ | 588,648 | | | $ | 620,208 | | | $ | 963,962 | | | $ | 995,200 | | | $ | 1,269,819 | | | $ | 1,274,281 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | | Three Months Ended | | Six Months Ended | | Twelve Months Ended |
| | | March 31, | | March 31, | | March 31, |
|
| (In thousands of therms) | | 2004 | | 2003 | | 2004 | | 2003 | | 2004 | | 2003 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Gas Sales and Deliveries | | | | | | | | | | | | | | | | | | | | | | | | |
| Gas Sold and Delivered | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential — Firm | | | 326,491 | | | | 328,201 | | | | 523,878 | | | | 543,691 | | | | 628,996 | | | | 651,317 | |
| Commercial and Industrial — Firm | | | 105,652 | | | | 112,769 | | | | 174,908 | | | | 187,953 | | | | 226,583 | | | | 239,376 | |
| Commercial and Industrial — Interruptible | | | 1,952 | | | | 2,849 | | | | 4,974 | | | | 7,336 | | | | 9,801 | | | | 11,217 | |
|
| | | | 434,095 | | | | 443,819 | | | | 703,760 | | | | 738,980 | | | | 865,380 | | | | 901,910 | |
|
| Gas Delivered for Others | | | | | | | | | | | | | | | | | | | | | | | | |
| Firm | | | 217,387 | | | | 227,663 | | | | 352,811 | | | | 383,478 | | | | 466,222 | | | | 459,849 | |
| Interruptible | | | 85,390 | | | | 80,072 | | | | 167,284 | | | | 163,096 | | | | 261,987 | | | | 268,747 | |
| Electric Generation | | | 11,149 | | | | 14,794 | | | | 21,717 | | | | 37,217 | | | | 51,745 | | | | 170,059 | |
|
| | | | 313,926 | | | | 322,529 | | | | 541,812 | | | | 583,791 | | | | 779,954 | | | | 898,655 | |
|
Total | | | 748,021 | | | | 766,348 | | | | 1,245,572 | | | | 1,322,771 | | | | 1,645,334 | | | | 1,800,565 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
WASHINGTON GAS ENERGY SERVICES | | | | | | | | | | | | | | | | | | | | | | | | |
|
Natural Gas Sales | | | | | | | | | | | | | | | | | | | | | | | | |
Therm Sales(thousands of therms) | | | 300,262 | | | | 276,850 | | | | 508,032 | | | | 484,748 | | | | 734,177 | | | | 684,739 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Number of Customers(end of period) | | | 158,400 | | | | 162,000 | | | | 158,400 | | | | 162,000 | | | | 158,400 | | | | 162,000 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Electricity Sales | | | | | | | | | | | | | | | | | | | | | | | | |
Electricity Sales(thousands of kWhs) | | | 1,692,325 | | | | 1,808,211 | | | | 3,406,440 | | | | 3,731,086 | | | | 7,223,708 | | | | 7,701,077 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Number of Accounts(end of period) | | | 57,000 | | | | 77,000 | | | | 57,000 | | | | 77,000 | | | | 57,000 | | | | 77,000 | |
|
UTILITY GAS PURCHASED EXPENSE | | | | | | | | | | | | | | | | | | | | | | | | |
(excluding off system) | | | 75.41 ¢ | | | | 72.52¢ | | | | 74.42 ¢ | | | | 66.33 ¢ | | | | 74.76 ¢ | | | | 65.78 ¢ | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
HEATING DEGREE DAYS | | | | | | | | | | | | | | | | | | | | | | | | |
| Actual | | | 2,328 | | | | 2,463 | | | | 3,716 | | | | 4,106 | | | | 4,160 | | | | 4,433 | |
| Normal | | | 2,110 | | | | 2,120 | | | | 3,472 | | | | 3,478 | | | | 3,793 | | | | 3,801 | |
| Percent Colder than Normal | | | 10.3 | % | | | 16.2 | % | | | 7.0 | % | | | 18.1 | % | | | 9.7 | % | | | 16.6 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
Number of Active Customer Meters(end of period) | | | 987,748 | | | | 962,954 | | | | 987,748 | | | | 962,954 | | | | 987,748 | | | | 962,954 | |
|
RECONCILIATION OF REPORTED GAAP EARNINGS PER SHARE AND ADJUSTED
EARNINGS PER SHARE
(Unaudited)
April 28, 2004
The reconciliation below is provided to demonstrate management’s utilization of historical earnings per share, as derived in accordance with Generally Accepted Accounting Principles (GAAP) of the United States of America, and adjusted earnings per share from normal operations, a non-GAAP measure. This reconciliation is provided to more clearly identify the Company’s results from normal operations and identify certain unique transactions that will not repeat, for example, the first quarter’s one-time depreciation charge mandated by its Virginia regulators. This information should enable investors and analysts to track progress towards achieving the Company’s five-year goals and guidance, which are based on normal weather and uninfluenced by single, one-time, non-repeating transactions.
Utilization of normal weather is an industry standard and it is Company practice to provide estimates and guidance on the basis of normal weather. Among other factors, the Company utilizes a 100-year history to average and trend normal weather patterns useful in forecasting customer usage for revenue and expense projections.
Actual performance and results may vary from normal weather projections and the Company consistently identifies and explains this variation to assist users in the analysis of actual results versus the guidance. There may be other uses for the data and the Company does not imply that this is the only use or the best use of this data for purposes of this analysis.
Reconciliation of Reported GAAP Earnings Per Share to
Adjusted Earnings Per Share from Normal Operations
Fiscal Year 2004 By Quarter
| | | | | | | | | | | | | | | | | | | | | |
|
| | | Actual Fiscal Year 2004 Results |
| | | Quarter Ended |
|
| | | | | | | | | | | | | | | | | | | Year-To- |
| | | Dec. 31 | | Mar. 31 | | Jun. 30 | | Sept. 30 | | Date |
|
GAAP diluted earnings per share | | $ | 0.81 | | | $ | 1.60 | | | | | | | | | | | $ | 2.41 | |
| Adjustments for: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Colder than normal weather | | | — | | | | (0.20 | ) | | | | | | | | | | | (0.20 | ) |
| Retroactive depreciation (1/02-11/02) per Virginia rate order | | | 0.04 | | | | — | | | | | | | | | | | | 0.04 | |
| Net gain on the sale of real estate | | | — | | | | (0.12 | ) | | | | | | | | | | | (0.12 | ) |
|
Adjusted diluted earnings per share from normal operations | | $ | 0.85 | | | $ | 1.28 | | | | | | | | | | | $ | 2.13 | |
|
Quarterly earnings per share may not sum to annual earnings per share as quarterly calculations are based on weighted average number of common shares outstanding during each of those periods.
Reconciliation of Reported GAAP Earnings Per Share to
Adjusted Earnings Per Share from Normal Operations
Fiscal Year 2003 By Quarter
| | | | | | | | | | | | | | | | | | | | | |
|
| | | Actual Fiscal Year 2003 Results |
| | | Quarter Ended |
|
| | | | | | | | | | | | | | | | | | | Year-To |
| | | Dec. 31 | | Mar. 31 | | Jun. 30 | | Sept. 30 | | Date |
|
GAAP diluted earnings per share | | $ | 1.06 | | | $ | 1.66 | | | | | | | | | | | $ | 2.72 | |
| Adjustments for: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Colder than normal weather | | | (0.17 | ) | | | (0.29 | ) | | | | | | | | | | | (0.46 | ) |
| Income tax adjustment related to depreciation | | | (0.06 | ) | | | | | | | | | | | | | | | (0.06 | ) |
| Net gain on the sale of a real estate partnership interest | | | (0.02 | ) | | | | | | | | | | | | | | | (0.02 | ) |
| Net gain on the sale of corporate headquarters | | | | | | | (0.05 | ) | | | | | | | | | | | (0.05 | ) |
|
Adjusted diluted earnings per share from normal operations | | $ | 0.81 | | | $ | 1.32 | | | | | | | | | | | $ | 2.13 | |
|
Quarterly earnings per share may not sum to annual earnings per share as quarterly calculations are based on weighted average number of common shares outstanding during each of those periods.
