WGES Reports Continued Customer Growth

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February 3, 2011  

Non-GAAP operating earnings at WGL Holdings' retail energy marketing segment were $6.7 million for the first quarter of fiscal 2011, versus $7.5 million a year ago

The non-GAAP earnings eliminate unrealized mark-to-market gains and losses attributable to certain wholesale energy supply and retail sales contracts.  GAAP earnings for the first quarter were $24.8 million for the retail marketing segment, versus $7.5 million a year ago.

WGL Holdings is holding an earnings call this morning.

The decrease in non-GAAP operating earnings primarily reflects lower realized natural gas margins and higher operating expenses partially offset by higher realized electricity margins.

Declines in natural gas sales margins were attributed to favorable spreads between retail prices and storage withdrawals in the prior year, partially offset by higher gas sales volumes driven by 11,300 additional natural gas retail customers, colder weather in the current year, and increased sales to wholesale customers.  Operating expenses were higher due to increased marketing initiatives (both mass market and large commercial) and higher labor costs.

Electric sales margins were higher due to higher electric sales associated with customer growth.  Total electric customers increased by 44,500, or 36%, over the same quarter of the prior year.  In addition, electricity unit margins were higher in the current quarter, generally reflecting a different pattern of quarterly unit margin recognition in the current fiscal year versus the prior year.

Washington Gas Energy Services' customer count stood at 337,700 as of December 31, 2010, versus 315,800 as of September 30, 2010, and 281,900 a year ago.

Customer count by commodity was:
As of        12/31/10      9/30/10      12/31/09
Gas          169,400      160,900      158,100
Electric     168,300      154,900      123,800

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