WASHINGTON, Aug 04, 2008 (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 a net loss determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP) for the quarter ended June 30, 2008, of $(492,000), or $(0.01) per share, compared to net income of $13.0 million, or $0.26 per share, reported for the comparative period of fiscal year 2007. For the nine months ended June 30, 2008, we reported net income determined in accordance with GAAP of $127.7 million, or $2.56 per share, an increase of $6.3 million, or $0.10 per share, over net income of $121.4 million, or $2.46 per share, reported for the first nine months of fiscal year 2007. Our operations are seasonal and, accordingly, our operating results for the three and nine months ended June 30, 2008, are not indicative of the results expected for the twelve months ending September 30, 2008.

"Our excellent year-to-date results continue to be driven by our progress in achieving key strategic objectives that support our outlook for sharply improved fiscal year results," said James H. DeGraffenreidt, Jr., chairman and chief executive officer of WGL Holdings. "A supportive regulatory framework that rewards shareholders and customers, customer growth, operational excellence initiatives that improve service and lower costs, and contributions from our unregulated business will continue to drive fiscal year 2008 and long-term earnings growth."

Financial performance is evaluated based on non-GAAP operating earnings (loss). Non-GAAP operating earnings (loss) excludes the effects of: (i) warmer-than-normal/colder-than-normal weather for our regulated utility segment; (ii) certain unusual transactions and (iii) unrealized mark-to-market gains (losses) on energy-related derivatives. Refer to "Use of Non-GAAP Operating Earnings (Loss)" and supporting reconciliations attached to this news release for a detailed discussion of management's use of this non-GAAP financial measure, as well as reconciliations of net income determined in accordance with GAAP to non-GAAP operating earnings (loss) for both our consolidated and segment results.

For the third quarter of fiscal year 2008, our non-GAAP operating earnings were $0.06 per share, compared to non-GAAP operating earnings of $0.14 per share for the same quarter of the prior fiscal year. For the nine months ended June 30, 2008, our non-GAAP operating earnings were $2.67 per share, an increase of $0.37 per share over non-GAAP operating earnings of $2.30 per share for the same period of the prior fiscal year.

Third Quarter and Year-to-Date Results by Business Segment

Regulated Utility Segment

Reporting a net loss for quarters ending June 30 is typical due to the seasonal nature of our utility operations and the corresponding reduced demand for natural gas during this period. For the quarter ended June 30, 2008, our regulated utility segment reported a seasonal net loss determined in accordance with GAAP of $(8.1) million, or $(0.16) per share, compared to a net loss of $(2.0) million, or $(0.04) per share, reported for the same quarter of the prior fiscal year. The Non-GAAP operating loss for the regulated utility segment was $(0.03) per share for the three months ended June 30, 2008, an improvement of $0.06 per share over a non-GAAP operating loss of $(0.09) for the same period of the prior fiscal year. This improvement in the non-GAAP operating loss primarily reflects: (i) the implementation of new rates in Maryland on November 27, 2007 and the District of Columbia on December 31, 2007; (ii) an increase in realized margins from our asset optimization program and (iii) the addition of over 8,000 active customer meters since June 30, 2007. The improvement in the non-GAAP operating loss is partially offset by higher uncollectible accounts expense due to an adjustment to the accumulated reserve made in the prior period to reflect better collections, coupled with the negative effects of the slow down in the economy on the current period. Also, partially offsetting the improvement is a reduction in interest income on lower short-term investment balances resulting from working capital needs in the current period.

Our regulated utility segment reported net income determined in accordance with GAAP of $114.1 million, or $2.29 per share, for the nine months ended June 30, 2008, an increase of $7.5 million, or $0.13 per share, over net income of $106.6 million, or $2.16 per share for the same period of the preceding fiscal year. For the nine months ended June 30, 2008, non-GAAP operating earnings for the regulated utility segment were $2.44 per share, an increase of $0.38 per share, over non-GAAP operating earnings of $2.06 for the same period of the prior fiscal year. The increase in non-GAAP operating earnings is primarily due to: (i) the implementation of new rates in Virginia on February 13, 2007, as well as the rate increases in Maryland and the District of Columbia; (ii) an increase in realized margins from our asset optimization program; (iii) the favorable effects of changes in natural gas consumption patterns due to shifts in weather patterns and other factors and (iv) the addition of over 8,000 active customer meters since June 30, 2007. The increase in non-GAAP operating earnings is partially offset by the effect of our Earnings Sharing Mechanism in Virginia as well as higher uncollectible accounts expense and property taxes.

Retail Energy-Marketing Segment

For the quarter ended June 30, 2008, the retail energy marketing segment reported net income determined in accordance with GAAP of $8.1 million, or $0.16 per share, compared to net income of $16.0 million, or $0.32 per share, reported for the comparative quarter of fiscal year 2007. Non-GAAP operating earnings for the retail energy-marketing segment were $0.10 per share for the quarter ended June 30, 2008, compared to non-GAAP operating earnings of $0.26 per share the same quarter of the prior fiscal year. This comparison in non-GAAP operating earnings primarily reflects lower margins from both electric and natural gas sales. For electric sales, lower margins reflect: (i) decreased sales volumes primarily due to a reduction in the number of commercial customers and (ii) lower margins per kilowatt sold primarily as a result of weather experienced during June 2008 and unfavorable electric supply prices. Weather in June 2008 was significantly warmer than normal for a few days early in the month followed by a brief period of significantly colder-than-normal weather. The resulting balancing of electric-supply occurred at market prices that were more unfavorable than historical experience. For natural gas sales, lower margins reflect: (i) decreased sales volumes primarily due to a reduction in the number of large commercial accounts and (ii) higher prices incurred for the purchase of natural gas during the current quarter compared to the same quarter last year. Period-to-period comparisons of quarterly margins for this segment can vary significantly and are not representative of expected annualized results. Comparisons of full year non-GAAP operating results are more indicative of performance trends.

The retail energy-marketing segment reported net income determined in accordance with GAAP of $15.0 million, or $0.30 per share, for the nine months ended June 30, 2008 compared to net income of $17.1 million, or $0.35 per share, reported for the same period of fiscal year 2007. Non-GAAP operating earnings for the retail energy segment were $0.26 for the nine months ended June 30, 2008, compared to $0.29 for the comparative period last year. This comparison of non-GAAP operating earnings reflects lower margins from electric sales and higher operating costs, partially offset by higher margins per therm sold for natural gas.

Earnings Outlook

We are updating our GAAP earnings estimate for the full fiscal year 2008 to a range of $2.20 to $2.30 per share. This estimate includes projected full fiscal year 2008 earnings from our regulated utility segment in a range of $1.97 per share to $2.03 per share and projected full fiscal year 2008 earnings from our unregulated business segments in a range of $0.23 per share to $0.27 per share.

We are also revising our consolidated earnings estimate for the full fiscal year 2008 based on non-GAAP operating earnings to a range of $2.31 per share to $2.41 per share. This estimate includes projected full fiscal year 2008 non-GAAP operating earnings from our regulated utility segment in a range of $2.07 per share to $2.13 per share, and projected full fiscal year 2008 non-GAAP operating earnings from our unregulated business segments in a range of $0.24 per share to $0.28 per share. Refer to the "Reconciliation of GAAP Earnings Guidance to Non-GAAP Earnings Guidance" attached to this press release for a reconciliation of our GAAP earnings per share estimate to our estimate based on non-GAAP operating earnings per share.

We assume no obligation to update this guidance. The absence of any statement by us in the future should not be presumed to represent an affirmation of this earnings guidance. For the assumptions underlying this guidance, please refer to the slides accompanying our Webcast that will be posted to the WGL Holdings Web site, www.wglholdings.com.

Other Information

We will hold a conference call at 10:30 a.m. Eastern time on August 5, 2008, to discuss our third 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 Webcast, click on the "Webcast" link located on the home page of the referenced site. The Webcast and related slides will be archived on the WGL Holdings Web site through September 1, 2008.

Headquartered in Washington, D.C., WGL Holdings has three operating segments: (i) the regulated utility segment which primarily consists of Washington Gas, a natural gas utility that serves over one million customers throughout metropolitan Washington, D.C., and the surrounding region; (ii) the retail-energy marketing segment which consists of Washington Gas Energy Services, Inc., a third-party marketer that competitively sells natural gas and electricity and (iii) the heating, ventilating and air conditioning (HVAC) segment, which consists of Washington Gas Energy Systems, Inc., a provider of design-build energy efficiency solutions to government and commercial clients. Additional information about WGL Holdings is available on our Web site, www.wglholdings.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 net income determined in accordance with GAAP to non-GAAP operating earnings (loss) for both our consolidated and segment results as well as reconciliations of our GAAP earnings guidance to our non-GAAP earnings guidance.

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 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 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 today, 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 and the factors discussed under the "Risk Factors" heading in our most recent annual report on Form 10-K and other documents we have filed with, or furnished to, the U.S. Securities and Exchange Commission.

 WGL Holdings, Inc. Consolidated Statements of Income For Periods
   Ended June 30, 2008 and 2007 (Unaudited) ---------------------------------------------------------------------- Three Months
   Ended Nine Months Ended June 30, June 30, ---------------------------------------------------------------------- (In thousands,
   except per share data) 2008 2007 2008 2007 ---------------------------------------------------------------------- OPERATING
   REVENUES Utility $241,486 $233,107 $1,374,827 $1,363,186 Non-utility 223,163 234,351 861,485 957,137 ----------------------------------------------------------------------
   Total Operating Revenues 464,649 467,458 2,236,312 2,320,323 ----------------------------------------------------------------------
   OPERATING EXPENSES Utility cost of gas 137,376 123,486 813,955 822,363 Non-utility cost of energy-related sales 200,473 200,624
   809,952 905,471 Operation and maintenance 72,669 65,112 212,354 205,090 Depreciation and amortization 23,610 23,758 71,210
   66,973 General taxes and other assessments 21,019 21,862 84,395 84,142 ----------------------------------------------------------------------
   Total Operating Expenses 455,147 434,842 1,991,866 2,084,039 ----------------------------------------------------------------------
   OPERATING INCOME 9,502 32,616 244,446 236,284 Other Income (Expenses)-- Net 446 2,152 1,594 2,697 Interest Expense Interest
   on long-term debt 9,975 9,997 29,931 30,047 Other - net 475 1,649 5,209 7,432 ----------------------------------------------------------------------
   Total Interest Expense 10,450 11,646 35,140 37,479 Dividends on Washington Gas preferred stock 330 330 990 990 ----------------------------------------------------------------------
   INCOME (LOSS) BEFORE INCOME TAXES (832) 22,792 209,910 200,512 INCOME TAX EXPENSE (BENEFIT) (340) 9,821 82,167 79,068 ----------------------------------------------------------------------
   NET INCOME (LOSS) APPLICABLE TO COMMON STOCK $ (492) $ 12,971 $ 127,743 $121,444 ----------------------------------------------------------------------
   AVERAGE COMMON SHARES OUTSTANDING Basic 49,638 49,259 49,515 49,131 Diluted 49,638 49,557 49,832 49,313 ----------------------------------------------------------------------
   EARNINGS (LOSS) PER AVERAGE COMMON SHARE Basic (0.01) 0.26 2.58 2.47 Diluted (0.01) 0.26 2.56 2.46 ----------------------------------------------------------------------
   Net Income (Loss) Applicable To Common Stock--By Segment ($000): Regulated utility $ (8,051) $ (1,981) $ 114,123 $106,639
   ---------------------------------------------------------------------- Non-utility operations: Retail energy-marketing 8,118
   16,022 14,955 17,109 HVAC 301 37 825 175 Other activities (860) (1,107) (2,160) (2,479) ----------------------------------------------------------------------
   Total non-utility 7,559 14,952 13,620 14,805 ---------------------------------------------------------------------- NET INCOME
   APPLICABLE TO COMMON STOCK $ (492) $ 12,971 $ 127,743 $121,444 ----------------------------------------------------------------------
   

 WGL Holdings, Inc. Consolidated Balance Sheets June 30, 2008 (Unaudited) ----------------------------------------------------------------------
   June 30, September 30, (In thousands) 2008 2007 ---------------------------------------------------------------------- ASSETS
   Property, Plant and Equipment At original cost $3,138,074 $3,072,935 Accumulated depreciation and amortization (957,452) (922,494)
   ---------------------------------------------------------------------- Net property, plant and equipment 2,180,622 2,150,441
   ---------------------------------------------------------------------- Current Assets Cash and cash equivalents 21,591 4,870
   Accounts receivable, net 349,457 192,021 Storage gas--at cost (first-in, first-out) 259,002 294,889 Other 90,287 81,945 ----------------------------------------------------------------------
   Total current assets 720,337 573,725 ---------------------------------------------------------------------- Deferred Charges
   and Other Assets 317,542 322,195 ---------------------------------------------------------------------- Total Assets $3,218,501
   $3,046,361 ---------------------------------------------------------------------- CAPITALIZATION AND LIABILITIES Capitalization
   Common shareholders' equity $1,074,556 $ 980,767 Washington Gas Light Company preferred stock 28,173 28,173 Long-term debt
   600,477 616,419 ---------------------------------------------------------------------- Total capitalization 1,703,206 1,625,359
   ---------------------------------------------------------------------- Current Liabilities Notes payable and current maturities
   of long-term debt 95,308 205,341 Accounts payable and other accrued liabilities 351,601 216,861 Other 177,806 134,854 ----------------------------------------------------------------------
   Total current liabilities 624,715 557,056 ---------------------------------------------------------------------- Deferred
   Credits 890,580 863,946 ---------------------------------------------------------------------- Total Capitalization and Liabilities
   $3,218,501 $3,046,361 ---------------------------------------------------------------------- 

 WGL Holdings, Inc.
   Consolidated Financial and Operating Statistics For Periods Ended June 30, 2008 and 2007 (Unaudited) FINANCIAL STATISTICS
   ---------------------------------------------------------------------- Twelve Months Ended June 30, ----------------------------------------------------------------------
   2008 2007 ---------------------------------------------------------------------- Closing Market Price--end of period $34.74
   $32.64 52-Week Market Price Range $36.22-$29.79 $35.91-$28.44 Price Earnings Ratio 15.0 14.6 Annualized Dividends Per Share
   $1.42 $1.37 Dividend Yield 4.1% 4.2% Return on Average Common Equity 11.0% 11.2% Total Interest Coverage (times) (1) 4.9 4.8
   Book Value Per Share--end of period $21.53 $20.46 Common Shares Outstanding--end of period (thousands) 49,912 49,310 ----------------------------------------------------------------------
   (1) Calculated using income from continuing operations. 

 UTILITY GAS STATISTICS ----------------------------------------------------------------------
   Three Months Ended Nine Months Ended June 30, June 30, ----------------------------------------------------------------------
   (In thousands) 2008 2007 2008 2007 ---------------------------------------------------------------------- Operating Revenues
   Gas Sold and Delivered Residential - Firm $ 147,099 $ 144,244 $ 919,750 $ 915,828 Commercial and Industrial - Firm 47,619
   43,621 257,101 255,225 Commercial and Industrial - Interruptible 2,233 1,431 7,391 5,538 Electric Generation 275 275 817 825
   ---------------------------------------------------------------------- 197,226 189,571 1,185,059 1,177,416 ----------------------------------------------------------------------
   Gas Delivered for Others Firm 25,931 24,611 122,354 122,191 Interruptible 9,581 10,391 38,402 41,492 Electric Generation 98
   67 260 199 ---------------------------------------------------------------------- 35,610 35,069 161,016 163,882 ----------------------------------------------------------------------
   232,836 224,640 1,346,075 1,341,298 Other 8,650 8,467 28,752 21,888 ----------------------------------------------------------------------
   Total $ 241,486 $ 233,107 $1,374,827 $1,363,186 ---------------------------------------------------------------------- ----------------------------------------------------------------------
   Three Months Ended Nine Months Ended June 30, June 30, ----------------------------------------------------------------------
   (In thousands of therms) 2008 2007 2008 2007 ---------------------------------------------------------------------- Gas Sales
   and Deliveries Gas Sold and Delivered Residential - Firm 76,796 91,267 590,135 611,497 Commercial and Industrial - Firm 28,380
   32,617 177,647 185,227 Commercial and Industrial - Interruptible 1,564 1,133 5,623 4,335 ----------------------------------------------------------------------
   106,740 125,017 773,405 801,059 ---------------------------------------------------------------------- Gas Delivered for Others
   Firm 70,856 75,854 389,671 391,993 Interruptible 51,177 54,471 211,841 221,865 Electric Generation 22,547 18,331 57,577 45,444
   ---------------------------------------------------------------------- 144,580 148,656 659,089 659,302 ----------------------------------------------------------------------
   Total 251,320 273,673 1,432,494 1,460,361 ---------------------------------------------------------------------- WASHINGTON
   GAS ENERGY SERVICES ---------------------------------------------------------------------- Natural Gas Sales Therm Sales (thousands
   of therms) 111,755 130,988 562,604 651,635 Number of Customers (end of period) 138,200 143,100 138,200 143,100 ----------------------------------------------------------------------
   Electricity Sales Electricity Sales (thousands of kWhs) 854,263 985,558 2,625,336 2,892,539 Number of Accounts (end of period)
   63,600 62,400 63,600 62,400 ---------------------------------------------------------------------- UTILITY GAS PURCHASED EXPENSE
   (excluding off system) 119.11 c 99.46c 104.52 c 103.63c ----------------------------------------------------------------------
   HEATING DEGREE DAYS ---------------------------------------------------------------------- Actual 271 406 3,456 3,945 Normal
   302 308 3,773 3,799 Percent Colder (Warmer) than Normal (10.3)% 31.8% (8.4)% 3.8% ----------------------------------------------------------------------
   Number of Active Customer Meters (end of period) 1,054,958 1,046,916 1,054,958 1,046,916 ----------------------------------------------------------------------
   UTILITY GAS STATISTICS ---------------------------------------------------------------------- Twelve Months Ended June 30,
   ---------------------------------------------------------------------- (In thousands) 2008 2007 ----------------------------------------------------------------------
   Operating Revenues Gas Sold and Delivered Residential - Firm $ 991,331 $ 987,415 Commercial and Industrial - Firm 280,825
   279,449 Commercial and Industrial - Interruptible 8,471 6,979 Electric Generation 1,100 1,100 ----------------------------------------------------------------------
   1,281,727 1,274,943 ---------------------------------------------------------------------- Gas Delivered for Others Firm 139,838
   139,109 Interruptible 46,434 49,061 Electric Generation 354 279 ----------------------------------------------------------------------
   186,626 188,449 ---------------------------------------------------------------------- 1,468,353 1,463,392 Other 40,562 31,716
   ---------------------------------------------------------------------- Total $1,508,915 $1,495,108 ----------------------------------------------------------------------
   ---------------------------------------------------------------------- Twelve Months Ended June 30, ----------------------------------------------------------------------
   (In thousands of therms) 2008 2007 ---------------------------------------------------------------------- Gas Sales and Deliveries
   Gas Sold and Delivered Residential - Firm 627,339 652,803 Commercial and Industrial - Firm 196,382 206,053 Commercial and
   Industrial - Interruptible 6,563 5,739 ---------------------------------------------------------------------- 830,284 864,595
   ---------------------------------------------------------------------- Gas Delivered for Others Firm 431,098 437,313 Interruptible
   257,281 265,804 Electric Generation 124,083 105,984 ----------------------------------------------------------------------
   812,462 809,101 ---------------------------------------------------------------------- Total 1,642,746 1,673,696 ----------------------------------------------------------------------
   WASHINGTON GAS ENERGY SERVICES ---------------------------------------------------------------------- Natural Gas Sales Therm
   Sales (thousands of therms) 636,434 732,791 Number of Customers (end of period) 138,200 143,100 ----------------------------------------------------------------------
   Electricity Sales Electricity Sales (thousands of kWhs) 3,676,641 3,914,786 Number of Accounts (end of period) 63,600 62,400
   ---------------------------------------------------------------------- UTILITY GAS PURCHASED EXPENSE (excluding off system)
   103.86 c 101.53c ---------------------------------------------------------------------- HEATING DEGREE DAYS ----------------------------------------------------------------------
   Actual 3,466 3,967 Normal 3,789 3,815 Percent Colder (Warmer) than Normal (8.5)% 4.0% ----------------------------------------------------------------------
   Number of Active Customer Meters (end of period) 1,054,958 1,046,916 ----------------------------------------------------------------------
   

WGL HOLDINGS, INC. USE OF NON-GAAP OPERATING EARNINGS (LOSS) (Unaudited)

The attached reconciliations are provided to clearly identify adjustments made to net income calculated in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP) to derive non-GAAP operating earnings (loss). Management believes non-GAAP operating earnings (loss) provides a more meaningful representation of our earnings from ongoing operations by excluding the effects of: (i) warmer-than-normal/colder-than-normal weather for our regulated utility segment; (ii) certain unusual transactions and (iii) unrealized mark-to-market gains and losses from energy-related derivatives. This presentation facilitates analysis by providing a consistent and comparable measure to help management, investors and analysts better understand and evaluate our operating results and performance trends. Additionally, we use this non-GAAP measure to report to the board of directors, evaluate management's performance and for incentive compensation purposes.

We exclude from non-GAAP operating earnings (loss) the effects of warmer-than-normal/colder-than-normal weather to "normalize" weather for our regulated utility segment. 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. Additionally, we exclude unrealized mark-to-market adjustments for our energy-related derivatives to provide a more transparent and accurate view of the ongoing financial results of our operations. When these derivatives settle, the economic impact is reflected in our non-GAAP operating results, as we are only removing the interim unrealized mark-to-market amounts which are ultimately reversed when the derivatives are settled. These non-GAAP adjustments also assist both management and investors in analyzing period-to-period comparisons.

There are limits in using non-GAAP operating earnings (loss) to analyze our results, as they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. In addition, using non-GAAP operating earnings (loss) per share to analyze our earnings may have limited value as it excludes 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 net income, the most directly comparable GAAP financial measure.

 WGL HOLDINGS, INC. (Consolidating by Segment)
   RECONCILIATION OF GAAP NET INCOME TO NON-GAAP OPERATING EARNINGS (LOSS) (Unaudited) ----------------------------------------------------------------------
   Quarter Ended June 30, 2008 ---------------------------------------------------------------------- (In thousands, Retail except
   per share Regulated Energy- Other data) Utility Marketing HVAC Activities* Consolidated ----------------------------------------------------------------------
   GAAP net income (loss) $ (8,051) $ 8,118 $ 301 $ (860) $ (492) Adjusted for (items shown after-tax): Unrealized mark- to-market
   (gain) loss on energy-related derivatives (a) 6,660 (3,020) - - 3,640 ----------------------------------------------------------------------
   Non-GAAP operating earnings (loss) $ (1,391) $ 5,098 $ 301 $ (860) $ 3,148 ----------------------------------------------------------------------
   GAAP diluted earnings (loss) per average common share (49,638 shares) $ (0.16) $ 0.16 $0.01 $ (0.02) $ (0.01) Per share effect
   of non-GAAP adjustments 0.13 (0.06) - - 0.07 ---------------------------------------------------------------------- Non-GAAP
   operating earnings (loss) per share $ (0.03) $ 0.10 $0.01 $ (0.02) $ 0.06 ----------------------------------------------------------------------
   Quarter Ended June 30, 2007 ---------------------------------------------------------------------- (In thousands, Retail except
   per share Regulated Energy- Other data) Utility Marketing HVAC Activities* Consolidated ----------------------------------------------------------------------
   GAAP net income (loss) $ (1,981) $16,022 $ 37 $(1,107) $ 12,971 Adjusted for (items shown after-tax): Colder-than- normal
   weather (b) (2,121) - - - (2,121) Unrealized mark- to-market gain on energy- related derivatives (a) (355) (3,316) - - (3,671)
   ---------------------------------------------------------------------- Non-GAAP operating earnings (loss) $ (4,457) $12,706
   $ 37 $(1,107) $ 7,179 ---------------------------------------------------------------------- GAAP diluted earnings (loss)
   per average common share (49,557 shares) $ (0.04) $ 0.32 $ - $ (0.02) $ 0.26 Per share effect of non-GAAP adjustments (0.05)
   (0.06) - (0.01) (0.12) ---------------------------------------------------------------------- Non-GAAP operating earnings
   (loss) per share $ (0.09) $ 0.26 $ - $ (0.03) $ 0.14 ----------------------------------------------------------------------
   ---------------------------------------------------------------------- Nine Months Ended June 30, 2008 ----------------------------------------------------------------------
   (In thousands, Retail except per share Regulated Energy- Other data) Utility Marketing HVAC Activities* Consolidated ----------------------------------------------------------------------
   GAAP net income (loss) $114,123 $14,955 $ 825 $(2,160) $127,743 Adjusted for (items shown after-tax): Reversal of costs related
   to business process outsourcing (c) (1,139) - - - (1,139) Unrealized mark- to-market (gain) loss on energy- related derivatives
   (a) 9,722 (1,974) - - 7,748 Other regulatory adjustments (d) (1,242) - - - (1,242) ----------------------------------------------------------------------
   Non-GAAP operating earnings (loss) $121,464 $12,981 $ 825 $(2,160) $133,110 ----------------------------------------------------------------------
   GAAP diluted earnings (loss) per average common share (49,832 shares) $ 2.29 $ 0.30 $0.02 $ (0.05) $ 2.56 Per share effect
   of non-GAAP adjustments 0.15 (0.04) - - 0.11 ---------------------------------------------------------------------- Non-GAAP
   operating earnings (loss) per share $ 2.44 $ 0.26 $0.02 $ (0.05) $ 2.67 ----------------------------------------------------------------------
   ---------------------------------------------------------------------- Nine Months Ended June 30, 2007 ----------------------------------------------------------------------
   (In thousands, Retail except per share Regulated Energy- Other data) Utility Marketing HVAC Activities* Consolidated ----------------------------------------------------------------------
   GAAP net income (loss) $106,639 $17,109 $ 175 $(2,479) $121,444 Adjusted for (items shown after-tax): Colder-than- normal
   weather (b) (3,294) - - - (3,294) Retroactive depreciation expense adjustment (e) (2,400) - - - (2,400) Unrealized mark- to-market
   (gain) loss on energy- related derivatives (a) 680 (2,882) - - (2,202) ----------------------------------------------------------------------
   Non-GAAP operating earnings (loss) $101,625 $14,227 $ 175 $(2,479) $113,548 ----------------------------------------------------------------------
   GAAP diluted earnings (loss) per average common share (49,313 shares) $ 2.16 $ 0.35 $ - $ (0.05) $ 2.46 Per share effect of
   non-GAAP adjustments (0.10) (0.06) - - (0.16) ---------------------------------------------------------------------- Non-GAAP
   operating earnings (loss) per share $ 2.06 $ 0.29 $ - $ (0.05) $ 2.30 ----------------------------------------------------------------------
   Footnotes ---------------------------------------------------------------------- * Per share amounts for "Other Activities"
   may include adjustments for rounding (Footnote references are described on the following page) 

 WGL HOLDINGS, INC.
   (Consolidated by Quarter) RECONCILIATION OF GAAP NET INCOME TO NON-GAAP OPERATING EARNINGS (LOSS) (Unaudited) ----------------------------------------------------------------------
   Fiscal Year 2008 ---------------------------------------------------------------------- Quarterly Period Ended (f) ----------------------------------------------------------------------
   (In thousands, except per Sept. Year-To- share data) Dec. 31 Mar. 31 Jun. 30 30 Date ----------------------------------------------------------------------
   GAAP net income (loss) $47,197 $81,038 $ (492) $127,743 Adjusted for (items shown after-tax): Reversal of costs related to
   business process outsourcing (c) (1,139) - - (1,139) Unrealized mark-to-market loss on energy-related derivatives (a) 2,613
   1,495 3,640 7,748 Other regulatory adjustments (d) (1,242) - - (1,242) ----------------------------------------------------------------------
   Non-GAAP operating earnings $47,429 $82,533 $ 3,148 $133,110 ----------------------------------------------------------------------
   Diluted average common shares outstanding 49,645 49,781 49,638 49,832 ----------------------------------------------------------------------
   GAAP diluted earnings (loss) per average common share $ 0.95 $ 1.63 $ (0.01) $ 2.56 Per share effect of non- GAAP adjustments
   0.01 0.03 0.07 0.11 ---------------------------------------------------------------------- Non-GAAP operating earnings per
   share $ 0.96 $ 1.66 $ 0.06 $ 2.67 ---------------------------------------------------------------------- ----------------------------------------------------------------------
   Fiscal Year 2007 ---------------------------------------------------------------------- Quarterly Period Ended (f) ----------------------------------------------------------------------
   (In thousands, except per Sept. Year-To- share data) Dec. 31 Mar. 31 Jun. 30 30 Date ----------------------------------------------------------------------
   GAAP net income $45,098 $63,375 $12,971 $121,444 Adjusted for (items shown after-tax): Colder-than-normal weather (b) - (1,173)
   (2,121) (3,294) Retroactive depreciation expense adjustment (e) (2,400) - - (2,400) Unrealized mark-to-market (gain) loss
   on energy- related derivatives (a) 1,359 110 (3,671) (2,202) ----------------------------------------------------------------------
   Non-GAAP operating earnings $44,057 $62,312 7,179 $113,548 ----------------------------------------------------------------------
   Diluted average common shares outstanding 49,130 49,267 49,557 49,313 ----------------------------------------------------------------------
   GAAP diluted earnings per average common share $ 0.92 $ 1.29 $ 0.26 $ 2.46 ----------------------------------------------------------------------
   Per share effect of non- GAAP adjustments (0.02) (0.03) (0.12) (0.16) ----------------------------------------------------------------------
   Non-GAAP operating earnings per share $ 0.90 $ 1.26 $ 0.14 $ 2.30 ----------------------------------------------------------------------
   

 Footnotes ---------------------------------------------------------------------- (a) Represents the change in
   the unrealized mark-to-market positions of our energy-related derivatives that were recorded to income during the period.
   For the regulated utility segment, to the extent that our unrealized mark-to-market gains and losses are not shared with customers,
   these amounts are recorded directly to income. All unrealized mark-to-market gains and losses for the retail-energy marketing
   segment are recorded directly to income. (b) This adjustment is for our regulated utility segment only. Weather was 4.9 percent
   and 31.8 percent colder than normal during the quarters ended March 31, 2007 and June 30, 2007, respectively. There were no
   adjustments related to weather during the quarter ended December 31, 2006. (c) Represents the reversal of expenses that were
   incurred in prior fiscal years for initial implementation costs allocable to the District of Columbia associated with our
   business process outsourcing plan. These costs were recorded to a regulatory asset in the first quarter of fiscal year 2008
   upon approval of 10-year amortization accounting by the District of Columbia Public Service Commission in a December 28, 2007
   Final Order. (d) Represents favorable regulatory adjustments made during the first quarter of fiscal year 2008 applicable
   to prior fiscal years due to revised treatment for hexane costs in Maryland and certain shared revenues in the District of
   Columbia. (e) Represents an adjustment that reduced depreciation expense applicable to the period from January 1, 2006, through
   September 30, 2006. This adjustment was recorded in the first quarter of fiscal year 2007 upon approval of new depreciation
   rates by the staff of the Virginia State Corporation Commission. (f) 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. 

 WGL HOLDINGS, INC. RECONCILIATION OF GAAP EARNINGS GUIDANCE TO NON-GAAP
   EARNINGS GUIDANCE FISCAL YEAR ENDING SEPTEMBER 30, 2008 Consolidated ----------------------------------------------------------------------
   Low High ---------------------------------------------------------------------- GAAP Earnings Guidance Range $ 2.20 $ 2.30
   Adjusted for: Reversal of costs related to business process outsourcing (a) (0.02) (0.02) Unrealized mark-to-market loss on
   energy-related derivatives (b) 0.16 0.16 Other regulatory adjustments (c) (0.02) (0.02) Other adjustment (d) (0.01) (0.01)
   ---------------------------------------------------------------------- Non-GAAP Earnings Guidance Range $ 2.31 $ 2.41 ----------------------------------------------------------------------
   Regulated Utility Segment ---------------------------------------------------------------------- Low High ----------------------------------------------------------------------
   GAAP Earnings Guidance Range $ 1.97 $ 2.03 Adjusted for: Reversal of costs related to business process outsourcing (a) (0.02)
   (0.02) Unrealized mark-to-market loss on energy-related derivatives (b) 0.15 0.15 Other regulatory adjustments (c) (0.02)
   (0.02) Other adjustment (d) (0.01) (0.01) ---------------------------------------------------------------------- Non-GAAP
   Earnings Guidance Range $ 2.07 $ 2.13 ---------------------------------------------------------------------- Unregulated Business
   Segments ---------------------------------------------------------------------- Low High ----------------------------------------------------------------------
   GAAP Earnings Guidance Range $ 0.23 $ 0.27 Adjusted for: Unrealized mark-to-market loss on energy-related derivatives (b)
   0.01 0.01 ---------------------------------------------------------------------- Non-GAAP Earnings Guidance Range $ 0.24 $
   0.28 ---------------------------------------------------------------------- 

 Footnotes: ----------------------------------------------------------------------
   (a) Represents the reversal of expenses that were incurred in prior fiscal years for initial implementation costs allocable
   to the District of Columbia associated with our business process outsourcing plan. These expenses were reversed in the first
   quarter of fiscal year 2008 due to the approval of 10-year amortization accounting by the District of Columbia Public Service
   Commission in a December 28, 2007 Final Order. (b) Represents the estimated reversal of certain of our existing unrealized
   mark-to-market positions related to our energy derivatives that will be recorded to income during fiscal year 2008. For the
   regulated utility segment, to the extent that our unrealized mark-to-market gains and losses are not shared with customers,
   these amounts are recorded directly to income. All unrealized mark-to-market gains and losses for the retail-energy marketing
   segment are recorded directly to income. (c) Represents favorable regulatory adjustments made during the first quarter of
   fiscal year 2008 applicable to prior fiscal years due to revised treatment for hexane costs in Maryland and certain shared
   revenues in the District of Columbia. (d) Adjustment due to rounding differences in per share amounts 

SOURCE: WGL Holdings, Inc.

WGL Holdings, Inc. News Media Eric Grant, 202-624-6091 or Financial Community Melissa E. Adams, 202-624-6410
   

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