our history. our purpose. our future. - washington gas€¦ · our history. our purpose. our...

WGL Holdings, Inc.

2012 Corporate Performance Report

EnErGy AnsWErs

Our History. Our Purpose. Our Future.Washington Gas was founded to improve the quality of life in our nation’s capital. Today, 164 years later, WGL Holdings, Inc.

(WGL) has more than 1,300 employees working with the same passion and commitment of our founders to improve quality of

life by delivering clean and efficient energy solutions to the Washington, D.C., region and the nation. Today—as it was in

1848—this commitment is in the best interest of our customers, shareholders and the communities we serve.

• Our vision is to be a leader in clean and efficient energy solutions in the United States.

• Our aspiration is to be recognized as clean energy experts and the source our customers and partners turn to for

information, answers and solutions.

• Our key contribution is making clean and efficient energy solutions more widely accessible and attainable for the benefit

of customers, communities and the environment.

DIVERSITY We create value through diversity in our business,

our people, our solutions and our markets.

InnoVaTIon We are committed to innovation in what we do and how we work

to drive performance, preference, service, safety and reliability.

SuSTaInabIlITY We are dedicated to the sustainability of our business,

the customers and communities we serve and the environment.

DElIVERY We deliver clean and efficient energy solutions, every day, in visible and valuable ways.

We are the clean energy experts, delivering solutions for a sustainable world.

WGL is the Energy Answers company.

WGL is…

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We are proud to present our 2012 Corporate Performance Report. In the following pages, we will describe how our diversity, innovation, sustainability and delivery drive the company’s results.

This was an extremely successful year for WGL, highlighted by outstanding earnings, continued customer growth, controlled operating costs and superior organizational performance.

We reported record consolidated non-GAAP net income of $138.4 million, or $2.68 per share—a $0.43 per share improvement over Fiscal Year 2011.

These results, which include strong contributions from multiple operating units, are testament to the company’s stability even in a challenging economy, the performance of both utility and non-utility business segments, and the value of a diversified clean energy portfolio.

In addition to record consolidated net income, other perfor-mance highlights include:

• Expansion of WGL’s footprint with activity in 21 states.

• Investment agreements of more than $100 million in high-growth, clean energy solutions in 15 states.

• Executed partnerships and strategic business relationships with nationally recognized companies such as: American Solar Direct, Skyline Innovations, Echo, Standard Solar and Bloom Energy.

• More than 100 percent growth of solar photovoltaic, solar water heating and other renewable energy systems, benefitting tens of thousands of residential and commercial customers.

• The addition of 11,250 natural gas utility customer meters, a 14 percent improvement over the prior fiscal year’s customer additions.

• A 36th consecutive year of dividend increases in our 161-year payment history.

• Improved overall customer satisfaction to 89.9 percent.

• Almost 10,000 volunteer hours delivered to charitable organizations.

• Nearly $950,000 in energy assistance raised for more than 7,500 residents through the Washington Area Fuel Fund (WAFF).

• Multiple awards recognizing our strength and achievement in supplier, workforce and board diversity; damage prevention; community service; philanthropy; and sustainability.

At WGL, there are many principles that contribute to our success: maintaining the highest quality in service, safety and reliability; making clean and efficient energy solutions—including natural gas, solar, wind, and other renewable

sources as well as energy efficiency systems—more widely accessible and attainable; ensuring the financial and environ-mental sustainability of our offerings and operations; earning competitive returns; and contributing to the commu nities we serve.

This is the WGL way.

These principles and our outstanding employees are the cor-nerstones of the company. From our safe and reliable natural gas service to our community outreach to our established and new non-utility energy businesses and investments, we are very proud of our overall success in Fiscal Year 2012.

We are dedicated to our vision as the preferred source of clean and efficient energy solutions that produce value for customers, investors and communities. We are recognized for the value we deliver today and for the answers we will provide tomorrow.

We thank you for your continued trust and confidence in WGL. With our solid foundation of diverse energy businesses and solutions, our demonstrated performance this year for all of our stakeholders, and our commitment and strategies to build on that performance in years ahead, we are well posi-tioned to deliver Energy Answers.

Terry D. McCallister Chairman and Chief Executive Officer

Adrian P. Chapman President and Chief Operating Officer

To our readers:

2012 CORPORATE PERFORMANCE REPORT

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A Diverse Portfolio of Energy Answers

Diverse Solutions

Diverse Approaches

WGL achieves success through diverse approaches that include

direct subsidiaries:

• Washington Gas Energy Systems manages a portfolio of

distributed generation, energy efficiency and solar solutions

across the United States.

• Capitol Energy Ventures invests in, and optimizes, natural

gas pipelines and storage facilities in the Midwest and

Eastern United States.

• Washington Gas Energy Services is one of the largest

natural gas and electricity retail marketing suppliers in

the Mid-Atlantic.

• Washington Gas is a regulated natural gas utility which

serves customers in Maryland, Virginia and Washington, D.C.

WGL also engages in a variety of partnerships and strategic

business relationships with nationally recognized companies

such as: American Solar Direct, Skyline Innovations, Echo,

Standard Solar and Bloom Energy.

WGL offers a variety of clean energy solutions including:

• A full spectrum of design/build commercial energy

efficiency systems;

• Ownership and operation of distributed generation from solar

photovoltaic, fuel cell, solar thermal and hybrid technologies;

• Combined heat and power and other natural gas-

fueled systems;

• Natural gas storage, including peak shaving facilities;

• Interstate pipeline capacity management;

• Retail energy marketing for natural gas and electricity,

including electricity from renewable wind sources;

• CNG systems for natural gas vehicle fleets;

• Community energy and sustainability planning; and

• Safe, reliable natural gas utility service.

WGL HOLdiNGs, iNC.

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Our diversity is our strength. While most widely recognized for our core business—Washington Gas—

WGL is far more than a local natural gas utility company. We are a leading source for clean and efficient energy solutions in the United States.

Our diverse energy solutions are creating new opportunities, customers and markets for the company in a managed, sustainable manner. We are pursuing these

opportunities with a deliberate and measured approach, investing in companies with attractive technologies, business models and geographic areas.

Diverse Customers

Diverse Markets

WGL serves a vast array of customers across the

country, including:

• Government and institutional customers through energy

efficiency solutions, including the United States federal

government, state and municipal governments, health care

institutions and universities;

• Tens of thousands of residential and commercial

cus tomers benefitting from solar photovoltaic, solar

water heating and other renewable energy alternatives;

• Wholesale energy suppliers, pipelines and financial

institutions through asset optimization;

• More than 350,000 residential, commercial and industrial

retail energy marketing customers for natural gas or

electricity; and

• Nearly 1.1 million residential, commercial and industrial

natural gas utility customers in the Washington, D.C., region.

DISTRICT Of COLUMBIA MARyLAND

VIRGINIA DELAWARE

PENNSyLVANIA WEST VIRGINIA

CALIfORNIA fLORIDA

HAWAII ILLINOIS

INDIANA LOUISIANA

MASSACHUSETTS MICHIGAN

MISSISSIPPI NEW JERSEy

NEW MExICO NEW yORk

OkLAHOMA TENNESSEE

TExAS

WGL is active in:

WGL HOLdiNGs, iNC. 2012 CORPORATE PERFORMANCE REPORT

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From the clean and efficient energy

solutions we offer to the internal processes we rely upon to maintain

safe and reliable operations, WGL

is committed to innovation in every-

thing we do.

By harnessing the collective skills,

expertise and effort of our employees

across multiple disciplines, we are able

to deliver better products, streamline

processes and achieve greater results.

From engineers, construction and

operations professionals to financial

and tax experts to regulatory and

business development specialists, our

team brings a wealth of knowledge and

experience to all company endeavors.

This synergistic approach uniquely

positions us among our peers to act

on new opportunities and support

innovation, such as our investments

in alternative energy businesses. For

example, our strategic business rela-

tionship with Echo enables greater

access for residential and commercial

customers to Echo’s advanced solar

technologies which provide dramati-

cally improved efficiency over traditional

solar photovoltaic systems.

WGL is also working with Skyline

Innovations to offer guaranteed energy

savings to commercial customers for

solar water heating without any initial

capital investment. These are but two

of many alternative energy opportuni-

ties in which WGL is actively engaged.

Not only are the products offered

unique in the energy market, so too are

our business structures and financing

arrangements with these organiza-

tions that provide for steady, growing

returns while mitigating risk.

As we continue to explore new energy

opportunities to expand our diverse

offerings, we are also focused on

innovation in our operations and tradi-

tional natural gas service. Washington

Gas recently adopted the use of

Radio Frequency Identification (RFID)

marker balls to enhance our ability to

accurately mark underground infra-

structure. Using computer chips to

enable extremely accurate markings,

this state-of-the-art damage preven-

tion technology will help us to con-

tinue to maintain our excellent record

of system reliability and safety.

Our innovative approach is most

evident in our newest facility—

Springfield Center. This new office

and operations campus is a model of

sustainable business practices. The

hallmark of Springfield Center is the

Our team brings a wealth of knowledge and experience to all company endeavors.

WGL HOLdiNGs, iNC.

InnoVaTIon Our innovations are diverse.

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With long-term contracts, such as with Kent County, Md., Washington Gas Energy Systems owns or manages more than 13 megawatts of installed solar capacity. Additional incremental capacity and ongoing projects will boost the company’s portfolio to 25 megawatts in 2013.

13 megawatts

Bloom Energy Server, a natural gas

fuel cell which is the first of its kind

on the East Coast.

The “Bloom Box” is a clean and effi-

cient energy source that reduces

greenhouse gas emissions by 40

percent compared with conventional

grid electricity, providing up to 35

percent of the center’s electricity

demand.

Springfield Center was designed to

use 30 percent less electricity than

the industry standard for energy-

efficient buildings. Springfield Center

also incorporates other innovative

energy saving features, such as

floor-to-ceiling windows that capture

natural light and heat to reduce

energy consumption and high solar

reflectance roofs to reduce “heat

island” effect.

This new home exemplifies both our

commitment to innovation and our

dedication to sustainability.


EVERY STEp CounTS Sustainable solutions at Springfield Center include responsible water usage. New water fountains with a digital display show how employees are reducing consumption. Since the facility opened, the fountains have helped eliminate use of nearly 60,000 plastic water bottles.

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naTuRal GaS FuEl CEll Springfield Center features a Bloom

Energy Server, a fuel cell that converts

natural gas to electricity through an

electro-chemical process, providing

up to 35 percent of the electricity

demand of the complex and a clean,

efficient and stable source of energy.

MoRE EFFICIEnCY More than 20 percent of Springfield

Center’s building materials were

harvested and manufactured locally,

and more than 30 percent of total

building materials were from recycled

content. The complex was designed

to use 30 percent less electricity and

water than the industry standard.

ClEan TECHnoloGY Springfield Center’s roofs have a high

Solar Reflectance Index, reducing the

“heat island” effect and lowering peak

energy demand, air conditioning costs,

air pollution and greenhouse

gas emissions.

Our new Springfield Center, opened in May 2012, is a model of energy efficiency and sustainability.

This state-of-the-art facility is reflective of our ongoing pursuit to reduce our carbon footprint

in our overall operations.

nEw SpRInGFIElD FaCIlITY

WGL HOLdiNGs, iNC.

REDuCED CaRbon FooTpRInT In overall operations, WGL has

announced that Washington Gas

is targeting a 70 percent reduction in

greenhouse gas emissions by 2020, and

an 18 percent reduction in greenhouse

gas emissions for every therm of gas

through the utility’s distribution

system by 2020.

naTuRal GaS VEHIClES Washington Gas continues to

expand its natural gas vehicle (NGV)

fleet, with a target of 200 NGVs,

one-third of the company’s fleet,

by 2016. Natural gas vehicles produce

93–95 percent less toxins compared

to gasoline or diesel, and reduce

emissions by 22–29 percent.

GREEn puRCHaSInGWashington Gas practices a green

procurement policy to consider recycled

and environmentally preferable products

as part of purchasing decisions for

items ranging from office products to

construction materials. Washington Gas

also considers the sustainability

practices of all vendors before any

purchasing decision.

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CleanSteps® WindPower from Washington Gas Energy Services is not only clean and renewable energy, but it is also local energy, supporting environmental health and green jobs in the communities we serve.

As diversity and innovation are critical

for value creation and sustaining

growth, WGL is continuously increas-

ing its assets and investments in

targeted clean energy sectors. This

strategy supports WGL’s core busi-

ness, as well as provides significant

opportunity for growth through stra-

tegic partnerships.

By this definition, our four main oper-

ating units are well positioned to

deliver stable and sustainable returns

for the future. Our record non-GAAP

operating earnings this year included

strong contributions from multiple

businesses. Our commercial energy

systems segment reported non-GAAP

net income of $2.4 million, or $0.05

per share, a $0.04 per share increase

over Fiscal Year 2011. Our retail

energy marketing segment reported

record non-GAAP net income of

$36.2 million, or $0.70 per share.

Our regulated utility, the company’s

core business, reported non-GAAP

net income of $104.4 million, or

$2.02 per share, a $0.34 per share

improvement over Fiscal Year 2011.

As we grow our business and deliver

competitive financial results, we are

investing in new technologies, making

clean and efficient energy solutions

more widely available and contribut-

ing to the communities in which

we operate.

Engaging in sustainable business

practices is an important aspect of

being a good corporate citizen.

Another is engaging with the

community. Throughout the year,

employees contributed nearly 10,000

volunteer hours to charitable organi-

zations in the areas of health, educa-

tion and the environment. For their

efforts, the Washington Business

Journal ranked Washington Gas 15th

in employee volunteerism among all

companies in the Washington, D.C.,

metropolitan region and 20th in

corporate philanthropy. In 2012, the

company and its employees donated

more than $1 million to various

charities in the region.

As environmental stewards, we are

ever conscious of sustainability as

seen in our investments in alternative

energy technologies, our renewable

energy options and energy efficiency

solutions, and our service to provide

the cleanest of all fossil fuels—

natural gas.

Nowhere is our commitment to

sustainability more evident than in

our own operations. In 2012, WGL

announced an ambitious goal: a

70 percent reduction in greenhouse

gas emissions from fleet and facility

operations by 2020. The company

also committed to an 18 percent

reduction in greenhouse gas emis-

sions by 2020 for every therm of gas

delivered through the Washington

Gas distribution system.

WGL HOLdiNGs, iNC.

SuSTaInabIlITY Our sustainability is innovative.

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9,929Employee volunteers gave nearly 10,000 hours of their time in 2012 to work on more than 50 projects with area charitable organizations. Employees also raised more than $250,000 to support charities working in health, education and the environment.


SuSTaInabIlITY Our sustainability is innovative.

WGL Holdings, Inc. was named one of Black Enterprise magazine’s 40 Best Companies for Diversity for the sixth consecutive year.

Washington Gas was named Best Utility Company of the Year by the Maryland/Washington Minority Contractors’ Association.

For outstanding achievement in preventing third-party damages to the natural gas distribution system, the Virginia State

Corporation Commission recognized Washington Gas with its Damage Prevention Leadership Award.

Washington Gas was ranked 15th in employee volunteerism and 20th in corporate philanthropy by the Washington Business Journal among all companies in the Washington, D.C., area.

Washington Gas was awarded the highest level of achievement in the CLEANFleet Certification program, recognizing the

company’s commitment to waste management and recycling; vehicle replacement and carbon footprint reduction;

and facility management.

Washington Gas Energy Services’ CleanSteps® WindPower program was Green-e Energy certified by the Center for Resource Solutions.

WGL is proud of our accomplishments across all areas of our business, and we are honored to be recognized for achievement in the following areas in 2012:

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HEalTH Washington Gas volunteers helped

weatherize the homes of 60 residents

in Virginia, helping them to stay warm

during the winter months. Employees

also donated more than 278 pints of

blood in 2012, and provided more than

700 knitted and crocheted items for

the neo-natal intensive care unit at

INOVA Fairfax Hospital.

EDuCaTIon Employees raised more than $40,000 to

help foster education programs for area

students through Junior Achievement.

Employees gave their time as well,

joining with Junior Achievement for

“JA-in-a-Day,” teaching students

financial literacy, economics and work

readiness, and demonstrating natural

gas safety tips.

EnVIRonMEnT Volunteering at the U.S. Department

of Energy’s Solar Decathlon, employees

assisted teams and judges in evaluating

solar-powered homes ready for

occupancy. Employees also volunteered

at the Washington, D.C., EnvironMentors

Science Fair, judging nine science

projects with a focus on improving

the environment.

ouT wITH THE olD Enhancements at the Harrison

Recreational Center included

environmentally beneficial measures

such as energy efficient lighting and

appliances, weatherization with caulking,

weather stripping and repainting with

zero VOC paint.

a bRIGHTER FuTuRE Washington Gas also resurfaced exterior

courts at the recreational center,

provided new playground equipment,

landscaped the exterior, and provided

educational materials for the children

about energy efficiency and safety.

VolunTEER EFFoRTS Overall, in 2012, more than

550 employees donated their time

and raised more than $250,000 to help

charitable organizations. Volunteer

teams worked on more than 50 projects

in the District of Columbia, Maryland

and Virginia, supporting health,

education and the environment.

The Washington Gas Executive Community Service Project at the Harrison Recreational

Center in Washington, D.C., helped bring safety, energy efficiency and aesthetic enhancements

to a District landmark that assists more than 400 area children each day.

CoMMunITY RECREaTIon CEnTER

WGL HOLdiNGs, iNC.

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Construction of the recently completed

Springfield Center was performed in

a sustainable manner with nearly 90

percent of waste diverted from land-

fills and reused, repurposed or recy-

cled; 31 percent of the total building

materials from recycled content; and

more than 21 percent of construction

supplies purchased and manufactured

regionally.

For our employees, we continue to

promote sustainable “Reduce the

Commute” practices, including tele-

working, ride-sharing, public transpor-

tation and more. For customers, our

“Energy of the City” program provides

valuable information to residents

on energy efficiency practices, the

benefits of natural gas, and alternative

energy solutions for homes and small

businesses.

Finally, we measure sustainability in

terms of service to customers. In

2012, we surpassed internal customer

satisfaction targets by nearly 2 percent,

with an overall satisfaction rate of

89.9 percent. This improvement is

due in part to our ongoing customer

experience improvement initiative,

which identifies process improve-

ments between the company and its

stakeholders across all key points

of contact.

In 2012, we surpassed internal customer satisfaction targets by nearly 2 percent, with an overall satisfaction rate of 89.9 percent.

WAFFOur signature philanthropic pro-gram, the Washington Area Fuel Fund, has been making a differ-ence since 1983 for families who can’t afford to heat their homes. Over its history, WAFF has dis-bursed more than $22 million to help more than 254,000 families.

WGL HOLdiNGs, iNC.

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From our newest business segments

to our core utility franchise, we are

delivering solutions that make a differ-

ence today and tomorrow.

Our commercial energy systems business, Washington Gas Energy

Systems (WGESystems) manages a

portfolio of distributed generation,

energy efficiency and solar solutions

across the United States. At the end

of Fiscal Year 2012, the company had

more than $65 million in awarded

design-build and distributed generation

contracts, which will provide steady,

consistent earnings in coming years.

WGESystems’ impressive array of

clients includes: the Department of

Homeland Security, FEMA, American

University, The Catholic University of

America and Cornell University. Going

forward, WGESystems will operate

and manage all of the company’s solar

projects, including long-term commer-

cial contracts with Perdue Farms in

Maryland and Delaware, Kent County

in Maryland, and Kit Carson Electric

Cooperative in New Mexico, as well

as all mass-market solar investments

across the United States.

The company also supports high-

demand energy market segments

through agreements with organizations

such as American Solar Direct, a pro-

vider of residential solar photovoltaic

(PV) systems; Skyline Innovations,

which provides guaranteed energy

savings through technologies such as

commercial solar water heating; and

Echo, a provider of residential hybrid

solar PV and thermal systems.

Our wholesale energy solutions unit,

Capitol Energy Ventures (CEV), is

WGL’s newest business. CEV invests

in and optimizes natural gas pipelines

and storage facilities in the Midwest

and Eastern United States. Its activity

portfolio provides the company incre-

mental return through commodity

transactions and other optimization

activities. This includes increasing effi-

cient access to natural gas supply for

wholesale customers. Even with the

advancement of new energy sources

and technologies, natural gas will

continue to be a critical component

of our nation’s energy portfolio—and

this increased demand provides CEV

a solid platform for growth.

Our retail energy marketing business,

Washington Gas Energy Services

(WGEServices), is one of the largest


30 YEaRS oF SERVICE

In the coming year, WAFF will cele-brate its 30th anniversary of provid-ing a safety net for those in need, particularly children who are most affected by unheated households. In every year since WAFF began, 100 percent of all donations to WAFF have gone directly to area families.

DElIVERY Our delivery is sustainable.

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DaMaGE pREVEnTIon Our damage prevention education and

outreach program continues to see

results, preventing over 550 potential

damages from unmarked lines. Overall,

our system reliability achieved excellent

results with approximately 99.7 percent

of our customers experiencing no

outages during the year.

EMploYEE SaFETY We are expanding on our Always Safe!

employee injury and accident prevention

program, adding training and education

videos, ergonomic assessment plans

for high-risk tasks, field investigation of

risks, and training our safety instructors

and auditors on root cause analysis.

ManaGInG CoSTS We are achieving success in safety and

reliability while managing our costs.

Our operating and maintenance costs

were $7 lower per customer than we

had targeted for the year, even as we

exceeded our benchmarks for system

reliability, damage prevention and

customer satisfaction.

SYSTEM InTEGRITY In 2012, Washington Gas completed

a nine-year Transmission Integrity

Management Program. Inspecting our

pipelines in high-consequence areas

gives us a detailed fingerprint of

and high confidence in the integrity

of our system.

SaFE anD SECuRE We also execute a Distribution Integrity

Management Program to identify pipe-

line risks and develop programs to miti-

gate those risks. Washington Gas

received a positive inspection from this

program by all three of our jurisdictions:

the District of Columbia, Maryland

and Virginia.

pIpElInE EnHanCEMEnT Through our accelerated pipeline

replacement programs, we enhanced

more than 45 miles of main lines

and more than 7,000 service lines.

Safety and reliability are the hallmarks of Washington Gas. Through ambitious damage

prevention, education, integrity management and other programs, we are fulfilling our promise

of safe and reliable service. Our employees work every day to deliver on that promise.

waSHInGTon GaS FIElD opERaTIonS

WGL HOLdiNGs, iNC.

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Emergency Response When powerful thunderstorms hit the Washington, D.C., region in the summer of 2012, employees responded in the wake of record destruction. Washington Gas’ system was not severely impacted by the storms, but our crews still braved heat, humidity and debris to provide emergency assistance. In Alexandria, Va., crews ensured natural gas safety for residents whose homes were severely flooded.

WGL HOLdiNGs, iNC.

WGL delivers superior value for investors. Highlights of our performance for our shareholders include:

$138.4 millionFor our Fiscal Year 2012, WGL reported record operating earnings

on a non-GAAP basis of $138.4 million, due to positive contributions from multiple business segments.

161 yearsWGL has a 161-year dividend payment history, one of the

longest records of any company on the New York Stock Exchange. In addition, our company has increased the dividend

payment for 36 consecutive years.

A+WGL and Washington Gas maintain an A+ credit rating

with Standard & Poors. Washington Gas also maintains an A2 rating with Moody’s. Fitch Ratings holds an A+ rating

for WGL and an AA- rating for Washington Gas.

11.3 percentIn Fiscal Year 2012, WGL reported a consolidated

non-GAAP return on equity of 11.3 percent, an increase of 1.4 percent over the prior fiscal year.

We will continue to achieve excellence by combining

DIVERSITY, InnoVaTIon, SuSTaInabIlITY and DElIVERY.

We are WGL, the Energy Answers company.

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natural gas and electricity retail

suppliers in the Mid-Atlantic with

more than 350,000 residential, com-

mercial and industrial customers.

WGEServices maintains its strong

position, in part, due to the clean

energy supply it offers, particularly

through its CleanSteps® WindPower

Solutions which provides customers

the option of purchasing all or part of

their electricity from environmentally

responsible wind power. Since its

inception in 2010, tens of thousands

of residential and commercial custom-

ers have enrolled in CleanSteps and

the number continues to increase every

year. In recognition of WGEServices’

environmental stewardship, the Center

for Resources Solutions affirmed

CleanSteps WindPower as Green-e

Energy certified in 2012.

WGL’s core business is Washington

Gas, a regulated natural gas utility

which serves nearly 1.1 million resi-

dential, commercial and industrial

customers across Maryland, Virginia

and Washington, D.C. In Fiscal Year

2012, the utility added 11,250 new

meters and continues to capture more

than 90 percent of new residential

single-family and townhome construc-

tion. The utility is also performing

strongly in the natural gas conversion

market, making it easier and more

affordable for customers to convert

to safe, clean-burning natural gas. In

addition, Washington Gas is aggres-

sively pursuing the multi-family market

in the National Capital Area, as 60

percent of new housing over the next

two decades is expected to be apart-

ments and condominiums.

With the implementation of new rates

in Maryland and Virginia to more

accurately reflect current costs,

Washington Gas significantly improved

operating earnings in 2012.

Our utility service territory is the fifth

largest regional economy in the

United States, with growth prospects

that outpace many other major metro-

politan areas across the country. We

are committed to delivering a reliable

supply of natural gas for our growing

region. As noted above, natural gas

is a critical component of our nation’s

energy future and we support safe

development of traditional and new

supplies of natural gas, including explo-

ration on the U.S. Outer Continental

Shelf and shale gas. We are working

with federal and state governments to

educate them about natural gas and

encourage their support in the devel-

opment and use of this clean and

abundant fuel.

Safety and reliability are the corner-

stones of the utility’s natural gas

service. Washington Gas continues

an accelerated pipe replacement

program to improve its infrastructure

and is proactively working with gov-

ernment agencies in the District of

Columbia, Maryland and Virginia to

ensure timely cost recovery.

Through ambitious safety and dam-

age prevention education efforts

throughout our service territory,

Washington Gas exceeded internal

benchmarks for system reliability.

The utility earned the Virginia State

Corporation Commission’s Damage

Prevention Leadership Award in 2012.


We will continue to achieve excellence by combining

DIVERSITY, InnoVaTIon, SuSTaInabIlITY and DElIVERY.

We are WGL, the Energy Answers company.

Safety and reliability have always been and will always remain the foundations of our utility. We will maintain these principles as we grow with new clean energy opportunities, as our employees

continue to demonstrate their dedication every day, and as we maintain and build sustainable businesses that will serve our communities long into the future.

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WGL HOLdiNGs, iNC.

Company Officers

At WGL, our high-performance employee culture is guided by a dynamic leadership team committed to Energy Answers. Our new Springfield Center campus includes innovative, eco-sensible and energy-efficient solutions that reflect our vision as a company.

Terry D. McCallister Chairman of the Board and Chief Executive Officer WGL Holdings, Inc. and Washington Gas

Adrian P. Chapman President and Chief Operating Officer WGL Holdings, Inc. and Washington Gas

Vincent L. Ammann, Jr. Vice President and Chief Financial Officer WGL Holdings, Inc. and Washington Gas

Gautam Chandra Vice President WGL Holdings, Inc. and Washington Gas

William R. Ford Controller WGL Holdings, Inc. and Washington Gas

Anthony M. Nee Treasurer WGL Holdings, Inc. and Washington Gas

Arden T. Phillips Corporate Secretary WGL Holdings, Inc. and Washington Gas

Leslie T. Thornton Vice President and General Counsel WGL Holdings, Inc. and Washington Gas

Marcellous P. Frye, Jr. Vice President Washington Gas

Eric C. Grant Vice President Washington Gas

Luanne S. Gutermuth Vice President Washington Gas

Roberta Willis Sims Vice President Washington Gas

Douglas A. Staebler Vice President Washington Gas

Harry A. Warren President Washington Gas Energy Services

Recycled wood is featured on the first floor and Terrace level, merging aesthetics with environmental responsibility.

The company’s 2012 Financial Report, published separately, provides a more specific discussion of our financial success, including our Annual Report on Form 10-K.

Annual Report Design by Curran & Connors, Inc. / www.curran-connors.com

2012 CORPORATE PERFORMANCE REPORT

Terry D. McCallister(1)

Chairman of the Board and Chief Executive OfficerWGL Holdings, Inc. and Washington Gas

Michael D. Barnes(1, 4)

Senior FellowCenter for International Policy

George P. Clancy, Jr.(1, 2, 3)

Retired Executive Vice PresidentChevy Chase Banks FSB (a division of Capital One)

James W. Dyke, Jr.(3, 4)

PartnerMcGuire Woods LLP

Melvyn J. Estrin(1, 2, 3)

Chairman of the Board and Chief Executive OfficerEstrin International

Nancy C. Floyd(4)

Managing DirectorNth Power

James F. Lafond(2)

Retired Area Managing PartnerPricewaterhouseCoopers LLP

Debra L. Lee(2)

Chairman and Chief Executive OfficerBET Networks

Committee Membership(1) Executive(2) Audit(3) Human Resources(4) Governance

Board of Directors

Energy-efficient lighting, high solar reflectance roofs and many other features help the facility use 30 percent less electricity than the industry standard.

Multi-purpose “smart boards,” collaborative platforms to enhance efficiency and information sharing, help reduce paper consumption and commuting miles.

Floor-to-ceiling windows on every level of the office building maximize natural light and heat to conserve energy.

ccuser

Cross-Out

10%

Cert no. SW-COC-002370

101 Constitution Avenue, NW Washington, DC 20080 www.wglholdings.com

Washington Gas Washington Gas Energy Services Washington Gas Energy Systems Hampshire Gas Capitol Energy Ventures

www.fsc.org

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