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WGL Holdings, Inc. Reports First Quarter Fiscal Year 2018 Financial Results

2/7/2018

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 December 31, 2017, of $138.0 million, or $2.68 per share, an improvement of $80.0 million, or $1.55 per share, over net income applicable to common stock of $58.0 million, or $1.13 per share, reported for the quarter ended December 31, 2016.

Our GAAP net income for the three months ended December 31, 2017 reflects an income tax benefit driven by the recently enacted Tax Cuts and Jobs Act, which, among other effects, reduced the corporate tax rate from 35% to 21%. As a result, we have remeasured our accumulated deferred income tax assets and liabilities, reducing the total net liability by $476.4 million. Of the total reduction, we recognized a $52.9 million income tax benefit (net) in GAAP net income primarily related to non-utility operations and recorded the remaining amount, $423.5 million to regulatory assets and liabilities. Non-GAAP operating earnings (as described below) for the quarter have been adjusted to eliminate the re-measurement impact of the legislation; however, both GAAP and non-GAAP earnings continue to benefit from the year-to-year reduction in the corporate tax rate. Amounts recorded as regulatory assets and liabilities will be amortized, which along with the prospective reduction in the provision for income tax expense, WGL estimates will result in a net reduction in annual costs to customers of approximately $39.5 million. Washington Gas plans to pass these annual tax savings on to customers through reduced rates beginning in the second quarter of WGL's 2018 fiscal year, subject to regulatory commission approvals.

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 December 31, 2017, operating earnings were $94.9 million, or $1.84 per share, an improvement of $35.5 million, or $0.69 per share, over operating earnings of $59.4 million, or $1.15 per share, for the same quarter of the prior fiscal year.

Results by Business Segment

Regulated Utility

Three Months Ended December 31,

Increase/
(In millions) 2017 2016 (Decrease)
EBIT $ 98.4 $ 102.7 $ (4.3 )
Adjusted EBIT $ 101.4 $ 91.4 $ 10.0

For the three months ended December 31, 2017, the decrease in EBIT primarily reflects lower unrealized margins associated with our asset optimization program. In addition, the comparisons of both EBIT and adjusted EBIT reflect: (i) higher customer growth; (ii) new base rates in Virginia and the District of Columbia; and (iii) lower operation and maintenance expenses. These favorable variances were partially offset by lower realized margins associated with our asset optimization program and higher depreciation and amortization expenses associated with the implementation of our new billing system in the second quarter of the prior year, as well as growth in our utility plant.

Retail Energy-Marketing

Three Months Ended December 31,

Increase/
(In millions) 2017 2016 (Decrease)
EBIT $ 3.7 $ 29.2 $ (25.5 )
Adjusted EBIT $ 6.5 $ 9.9 $ (3.4 )

For the three months ended December 31, 2017, the comparison in EBIT reflects lower unrealized mark-to-market valuations on energy-related derivatives. Additionally, for the three months ended December 31, 2017, the decrease in both EBIT and adjusted EBIT reflect: (i) lower realized electric margins due to lower average unit margins and lower sales volume; and (ii) higher operating expenses.

Commercial Energy Systems

Three Months Ended December 31,

Increase/
(In millions) 2017 2016 (Decrease)
EBIT $ 5.6 $ 4.7 $ 0.9
Adjusted EBIT $ 7.3 $ 6.1 $ 1.2

For the three months ended December 31, 2017, the increase in both EBIT and adjusted EBIT primarily reflect higher earnings from our investment distributed generation business, including investments in tax equity partnerships, partially offset by higher operating expenses in our commercial distributed generation business.

Midstream Energy Services

Three Months Ended December 31, Increase/
(In millions) 2017 2016 (Decrease)
EBIT $ 22.2 $ (28.5 ) $ 50.7
Adjusted EBIT $ 28.5 $ 2.7 $ 25.8

For the three months ended December 31, 2017, the increase in EBIT includes higher mark-to-market valuations and the increase in both EBIT and adjusted EBIT reflect higher margins on both our transportation and storage strategies as well as higher income related to our pipeline investments.

As of December 31, 2017, WGL Midstream held a $38.2 million equity method investment in Constitution Pipeline Company, LLC (Constitution). On April 22, 2016, the New York State Department of Environmental Conservation denied Constitution's application for a Section 401 Certification for the pipeline, which is necessary for the construction and operation of the pipeline. Constitution has pursued various actions to obtain approval for the pipeline, including filing a petition with the Federal Energy Regulatory Commission (FERC) that was denied in January 2018. While further actions may be successful in obtaining approval for construction, based on the FERC's ruling, we expect to record an impairment charge of up to $38.2 million in the second quarter. No impairment charge for this investment is included in our first quarter results.

Other Activities

Three Months Ended December 31, Increase/
(In millions) 2017 2016 (Decrease)
EBIT $ (4.2 ) $ (1.2 ) $ (3.0 )
Adjusted EBIT $ (3.5 ) $ (1.2 ) $ (2.3 )

For the three months ended December 31, 2017, the decrease in both EBIT and adjusted EBIT primarily relate to higher internal costs allocated to the planned merger with AltaGas Ltd. (AltaGas).

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 December 31, 2017, 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 Midstream and 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, the Constitution Pipeline, AltaGas Ltd.'s proposed acquisition of our company and other expectations. Forward-looking statements are typically identified by words such as, but not limited to, "estimates," "expects," "anticipates," "intends," "believes," "plans," and similar expressions, or future or conditional verbs such as "will," "should," "would," and "could." Although we believe such forward-looking statements are based on reasonable assumptions, we cannot give assurance that every objective will be achieved. Forward-looking statements speak only as of 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 other documents that we have filed with, or furnished to, the U.S. Securities and Exchange Commission.

WGL Holdings, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands) December 31, 2017 September 30, 2017
ASSETS
Property, Plant and Equipment
At original cost $ 6,217,878 $ 6,143,841
Accumulated depreciation and amortization (1,538,998 ) (1,513,790 )
Net property, plant and equipment 4,678,880 4,630,051
Current Assets
Cash and cash equivalents 64,110 8,524
Accounts receivable, net 783,448 553,312
Storage gas 206,978 243,984
Derivatives and other 191,731 180,069
Total current assets 1,246,267 985,889
Deferred Charges and Other Assets 1,137,427 1,010,069
Total Assets $ 7,062,574 $ 6,626,009
CAPITALIZATION AND LIABILITIES
Capitalization
WGL Holdings common shareholders' equity $ 1,609,607 $ 1,502,690
Non-controlling interest 3,210 6,851
Washington Gas Light Company preferred stock 28,173 28,173
Total equity 1,640,990 1,537,714
Long-term debt 1,679,893 1,430,861
Total capitalization 3,320,883 2,968,575
Current Liabilities
Notes payable and current maturities of long-term debt 858,700 809,844
Accounts payable and other accrued liabilities 431,327 423,824
Derivatives and other 299,467 255,320
Total current liabilities 1,589,494 1,488,988
Deferred Credits 2,152,197 2,168,446
Total Capitalization and Liabilities $ 7,062,574 $ 6,626,009

WGL Holdings, Inc.

Condensed Consolidated Statements of Income

(Unaudited)

Three Months Ended

December 31,

(In thousands, except per share data) 2017 2016
OPERATING REVENUES
Utility $ 374,990 $ 327,063
Non-utility 277,450 282,424
Total Operating Revenues 652,440 609,487
OPERATING EXPENSES
Utility cost of gas 122,273 75,500
Non-utility cost of energy-related sales 225,502 252,886
Operation and maintenance 102,226 100,717
Depreciation and amortization 40,985 35,283
General taxes and other assessments 44,887 40,388
Total Operating Expenses 535,873 504,774
OPERATING INCOME 116,567 104,713
Equity in earnings of unconsolidated affiliates 5,892 265
Other income (expenses) — net (780 ) 478
Interest expense 20,197 16,235
INCOME BEFORE TAXES 101,482 89,221
INCOME TAX EXPENSE (BENEFIT) (31,110 ) 33,454
NET INCOME $ 132,592 $ 55,767
Net loss attributable to non-controlling interest (5,778 ) (2,535 )
Dividends on Washington Gas Light Company preferred stock 330 330
NET INCOME APPLICABLE TO COMMON STOCK $ 138,040 $ 57,972
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 51,319 51,172
Diluted 51,549 51,445
EARNINGS PER AVERAGE COMMON SHARE
Basic $ 2.69 $ 1.13
Diluted $ 2.68 $ 1.13

The following table reconciles EBIT by operating segment to net income (loss) applicable to common stock.

Three Months Ended

December 31,

(In thousands) 2017 2016
EBIT:
Regulated utility $ 98,365 $ 102,717
Retail energy-marketing 3,742 29,185
Commercial energy systems 5,647 4,663
Midstream energy services 22,185 (28,484 )
Other activities (4,171 ) (1,198 )
Intersegment eliminations 1,689 1,108
Total $ 127,457 $ 107,991
Interest expense 20,197 16,235
Income tax expense (benefit) (31,110 ) 33,454
Dividends on Washington Gas preferred stock 330 330
Net income applicable to common stock $ 138,040 $ 57,972

WGL Holdings, Inc.

Consolidated Financial and Operating Statistics

(Unaudited)

FINANCIAL STATISTICS

Twelve Months Ended

December 31,

2017 2016
Closing Market Price — end of period $85.84 $76.28
52-Week Market Price Range $85.99 - $74.19 $79.79 - $58.69
Price Earnings Ratio 16.1 24.6
Annualized Dividends Per Share $2.04 $1.95
Dividend Yield 2.4% 2.6%
Return on Average Common Equity 17.9% 11.5%
Total Interest Coverage (times) 5.0 5.3
Book Value Per Share — end of period $31.34 $28.11
Common Shares Outstanding — end of period (thousands) 51,353 51,211

WGL Holdings, Inc.

Consolidated Financial and Operating Statistics

(Unaudited)

UTILITY GAS STATISTICS

Three Months Ended
December 31,
Twelve Months Ended
December 31,
(In thousands) 2017 2016 2017 2016
Operating Revenues
Gas Sold and Delivered
Residential — Firm $ 232,489 $ 204,521 $ 719,674 $ 651,790
Commercial and Industrial — Firm 50,056 45,347 160,797 145,321
Commercial and Industrial — Interruptible 478 554 2,163 2,216
283,023 250,422 882,634 799,327
Gas Delivered for Others
Firm 62,441 56,074 215,354 200,880
Interruptible 14,532 14,771 49,493 49,566
Electric Generation 404 375 1,360 1,878
77,377 71,220 266,207 252,324
360,400 321,642 1,148,841 1,051,651
Other 14,590 5,421 42,423 31,376
Total $ 374,990 $ 327,063 $ 1,191,264 $ 1,083,027
Three Months Ended
December 31,
Twelve Months Ended
December 31,
(In thousands of therms) 2017 2016 2017 2016
Gas Sales and Deliveries
Gas Sold and Delivered
Residential — Firm 223,769 207,482 616,566 645,183
Commercial and Industrial — Firm 58,888 57,721 175,604 180,661
Commercial and Industrial — Interruptible 566 814 2,307 2,865
283,223 266,017 794,477 828,709
Gas Delivered for Others
Firm 158,537 161,582 491,985 529,333
Interruptible 71,642 64,163 250,024 240,642
Electric Generation 32,074 23,599 96,085 271,627
262,253 249,344 838,094 1,041,602
Total 545,476 515,361 1,632,571 1,870,311
Utility Gas Purchase Expense (excluding asset optimization)

42.00

¢

35.14

¢

43.88

¢

35.15

¢

HEATING DEGREE DAYS
Actual 1,335 1,196 3,266 3,581
Normal 1,311 1,318 3,710 3,717
Percent Colder (Warmer) than Normal 1.8 % (9.3 )% (12.0 )% (3.7 )%
Average Active Customer Meters 1,166,709 1,148,917 1,159,712 1,145,572
WGL ENERGY SERVICES
Natural Gas Sales
Therm Sales (thousands of therms) 198,800 220,500 671,600 781,600
Number of Customers (end of period) 113,500 126,400 113,500 126,400
Electricity Sales
Electricity Sales (thousands of kWhs) 2,801,400 3,103,200 11,946,600 13,267,400
Number of Accounts (end of period) 108,900 122,600 108,900 122,600
WGL ENERGY SYSTEMS
Megawatts in service 222 176 222 176
Megawatt hours generated 61,679 44,274 303,330 220,280

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 $ 94,923
Non-GAAP adjustments(2) (14,351 ) (14,351 )
De-designated interest rate swaps(3) (354 ) (354 )
Income tax effect of non-GAAP adjustments(4) 4,956 4,956
Re-measurement impact of Tax Cuts and Jobs Act(5) 52,866 52,866
Net income (loss) applicable to common stock $ 138,040 $ $

$

$ 138,040
Diluted average common shares outstanding 51,549 51,549
Operating earnings (loss) per share $ 1.84 $ 1.84
Per share effect of non-GAAP adjustments 0.84 0.84
Diluted earnings (loss) per average common share $ 2.68 $ 2.68
Fiscal Year 2017(6)
Quarterly Period Ended(1)
(In thousands, except per share data) Dec. 31 Mar. 31 Jun. 30 Sept. 30 Fiscal Year
Operating earnings (loss) $ 59,362 $ 59,362
Non-GAAP adjustments(2) (2,324 ) (2,324 )
Income tax effect of non-GAAP adjustments(4) 934 934
Net income (loss) applicable to common stock $ 57,972 $ $ $ $ 57,972
Diluted average common shares outstanding 51,445 51,445
Operating earnings (loss) per share $ 1.15 $ 1.15
Per share effect of non-GAAP adjustments (0.02 ) (0.02 )
Diluted earnings (loss) per average common share $ 1.13 $ 1.13

(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.

(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. This adjustment only reflects the re-measurement impact and not the effect on ongoing earnings of the lower tax rate.

(6) Prior year non-GAAP measures have been recast to include $6.8 million of pre-tax 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 December 31, 2017
(In thousands) Regulated

Utility

Retail Energy-

Marketing

Commercial

Energy

Systems

Midstream

Energy

Services

Other

Activities

Eliminations

Total
Adjusted EBIT $ 101,350 $ 6,534 $ 7,314 $ 28,458 $ (3,515 ) $ 1,667 $ 141,808
Non-GAAP adjustments:
Unrealized mark-to-market valuations on energy-related derivatives(a) (1,446 ) (2,792 ) 121 22 (4,095 )
Storage optimization program(b) (461 ) (461 )
DC weather impact(c) (1,078 ) (1,078 )
Distributed generation asset related investment tax credits(d) (1,667 ) (1,667 )
Change in measured value of inventory(e) (6,394 ) (6,394 )
Merger related costs(f) (656 ) (656 )
Total non-GAAP adjustments $ (2,985 ) $ (2,792 ) $ (1,667 ) $ (6,273 ) $ (656 ) $ 22 $ (14,351 )
EBIT $ 98,365 $ 3,742 $ 5,647 $ 22,185 $ (4,171 ) $ 1,689 $ 127,457
Three Months Ended December 31, 2016
(In thousands) Regulated

Utility

Retail Energy-

Marketing

Commercial

Energy

Systems

Midstream

Energy

Services

Other

Activities

Eliminations

Total
Adjusted EBIT $ 91,380 $ 9,895 $ 6,072 $ 2,661 $ (1,198 ) $ 1,505 $ 110,315
Non-GAAP adjustments:
Unrealized mark-to-market valuations on energy-related derivatives(a) 15,436 19,290 (9,677 ) (397 ) 24,652
Storage optimization program (b) (664 ) (664 )
DC weather impact(c) (3,435 ) (3,435 )
Distributed generation asset related investment tax credits(d) (1,409 ) (1,409 )
Change in measured value of inventory(e) (21,468 ) (21,468 )
Total non-GAAP adjustments $ 11,337 $ 19,290 $ (1,409 ) $ (31,145 ) $ $ (397 ) $ (2,324 )
EBIT $ 102,717 $ 29,185 $ 4,663 $ (28,484 ) $ (1,198 ) $ 1,108 $ 107,991

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.

WGL Holdings, Inc.
News Media
Brian Edwards, 202-624-6620
or
Financial Community
Douglas Bonawitz, 202-624-6129