<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
-----------------------------------------------
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------------------- ----------------------
Commission file number 1-1483
--------------------------------------------------------
WASHINGTON GAS LIGHT COMPANY
------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
District of Columbia and Virginia 53-0162882
- ------------------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 H Street, N. W., Washington, D. C. 20080
- --------------------------------------- -------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 750-4440
----------------------------
NONE
- -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock $1.00 par value 43,412,096 April 30, 1996
- ---------------------------- -------------------- ------------------
Class Number of Shares Date
<PAGE> 2
WASHINGTON GAS LIGHT COMPANY
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet -
March 31, 1996 and September 30, 1995.................... 2
Consolidated Statement of Income -
Three Months Ended March 31, 1996 and 1995............... 3
Consolidated Statement of Income -
Six Months Ended March 31, 1996 and 1995................. 4
Consolidated Statement of Cash Flows -
Six Months Ended March 31, 1996 and 1995................. 5
Notes to Consolidated Financial Statements................. 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 7-10
PART II. Other Information:
Item 4. Submission of Matters to a Vote of Security Holders. 11
Item 5. Other Information................................... 12-13
Item 6. Exhibits and Reports on Form 8-K.................... 14
Signature.................................................... 14
</TABLE>
1
<PAGE> 3
WASHINGTON GAS LIGHT COMPANY
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
Mar. 31, Sept. 30,
1996 1995
------------ ------------
(Thousands)
<S> <C> <C>
ASSETS
PROPERTY, PLANT AND EQUIPMENT
At original cost.............................. $ 1,651,964 $ 1,608,518
Accumulated depreciation and amortization..... (572,682) (552,460)
----------- ------------
1,079,282 1,056,058
----------- -----------
CURRENT ASSETS
Cash and cash equivalents..................... 6,534 13,911
Accounts receivable, less reserve............. 227,904 49,963
Inventories and storage gas purchased......... 18,634 67,657
Deferred income taxes......................... 17,207 19,710
Other prepayments, principally taxes.......... 7,308 7,799
----------- -----------
277,587 159,040
----------- ------------
DEFERRED CHARGES AND OTHER ASSETS............... 118,616 145,040
----------- -----------
TOTAL....................................... $ 1,475,485 $ 1,360,138
=========== ============
CAPITALIZATION AND LIABILITIES
CAPITALIZATION
Common shareholders' equity................... $ 601,266 $ 513,044
Preferred stock............................... 28,467 28,471
Long-term debt................................ 353,860 329,051
----------- ------------
983,593 870,566
----------- ------------
CURRENT LIABILITIES
Current maturities of long-term debt.......... 8,006 52,505
Notes payable................................. 23,794 -
Accounts and wages payable.................... 127,145 80,523
Customer deposits and advance payments........ 6,435 15,408
Accrued taxes and interest.................... 47,498 11,830
Other current liabilities..................... 29,320 62,090
----------- ------------
242,198 222,356
----------- ------------
DEFERRED CREDITS................................ 249,694 267,216
----------- ------------
TOTAL....................................... $ 1,475,485 $ 1,360,138
=========== ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
2
<PAGE> 4
WASHINGTON GAS LIGHT COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------
Mar. 31, 1996 Mar. 31, 1995
------------- -------------
(Thousands, Except Per Share Data)
<S> <C> <C>
OPERATING REVENUES............................. $ 431,826 $ 353,650
Cost of Gas.................................... 225,748 173,875
----------- ------------
NET REVENUES................................... 206,078 179,775
----------- ------------
OTHER OPERATING EXPENSES
Operation.................................... 47,402 42,556
Maintenance.................................. 7,287 7,520
Depreciation and amortization................ 11,964 11,469
General taxes................................ 24,403 25,134
Income taxes................................. 39,564 31,519
----------- ------------
130,620 118,198
----------- -----------
OPERATING INCOME............................... 75,458 61,577
Other Income (Loss) - Net...................... (714) 91
----------- ------------
INCOME BEFORE INTEREST EXPENSE................. 74,744 61,668
Interest Expense............................... 7,835 8,230
----------- ------------
NET INCOME..................................... 66,909 53,438
Dividends on Preferred Stock................... 333 334
----------- ------------
NET INCOME APPLICABLE TO COMMON STOCK.......... $ 66,576 $ 53,104
=========== ============
AVERAGE COMMON SHARES OUTSTANDING
(See Note B to the Consolidated Financial
Statements)................................ 43,317 42,495
EARNINGS PER AVERAGE SHARE OF COMMON STOCK
(See Exhibit 11 for computation of fully
diluted earnings per average share and Note
B to the Consolidated Financial Statements).. $ 1.54 $ 1.25
=========== ============
DIVIDENDS DECLARED PER COMMON SHARE
(See Note B to the Consolidated Financial
Statements)................................ $ .285 $ .28
=========== ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE> 5
WASHINGTON GAS LIGHT COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
---------------------------------
Mar. 31, 1996 Mar. 31, 1995
------------- -------------
(Thousands, Except Per Share Data)
<S> <C> <C>
OPERATING REVENUES............................. $ 706,152 $ 596,565
Cost of Gas.................................... 348,652 289,993
----------- ------------
NET REVENUES................................... 357,500 306,572
----------- ------------
OTHER OPERATING EXPENSES
Operation.................................... 92,348 84,165
Maintenance.................................. 15,104 15,369
Depreciation and amortization................ 23,837 22,875
General taxes................................ 40,876 42,280
Income taxes................................. 62,856 46,917
----------- ------------
235,021 211,606
----------- ------------
OPERATING INCOME............................... 122,479 94,966
Other Income (Loss) - Net...................... (1,565) 2,552
----------- ------------
INCOME BEFORE INTEREST EXPENSE................. 120,914 97,518
Interest Expense............................... 15,665 16,354
----------- ------------
NET INCOME..................................... 105,249 81,164
Dividends on Preferred Stock................... 666 667
----------- ------------
NET INCOME APPLICABLE TO COMMON STOCK.......... $ 104,583 $ 80,497
=========== ============
AVERAGE COMMON SHARES OUTSTANDING
(See Note B to the Consolidated Financial
Statements)................................ 43,175 42,390
EARNINGS PER AVERAGE SHARE OF COMMON STOCK
(See Exhibit 11 for computation of fully
diluted earnings per average share and Note
B to the Consolidated Financial Statements).. $ 2.42 $ 1.90
=========== ============
DIVIDENDS DECLARED PER COMMON SHARE
(See Note B to the Consolidated Financial
Statements)................................ $ .565 $ .5575
=========== ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE> 6
WASHINGTON GAS LIGHT COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------
Mar. 31, 1996 Mar. 31, 1995
------------- -------------
(Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net Income........................................ $ 105,249 $ 81,164
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization (a)............. 27,152 25,708
Deferred income taxes--net.................... 5,422 (9,693)
Amortization of investment tax credits........ (488) (499)
Allowance for funds used during construction.. (293) (329)
Other noncash charges and credits--net........ 5,190 1,303
----------- ------------
142,232 97,654
Changes in assets and liabilities:
Accounts receivable and accrued utility
revenues.................................. (173,801) (91,240)
Gas costs due from/to customers - net......... (29,638) 8,961
Storage gas purchased......................... 48,100 49,026
Other prepayments, principally taxes.......... 491 580
Accounts and wages payable.................... 45,445 315
Customer deposits and advance payments........ (8,973) (8,996)
Accrued taxes................................. 36,495 46,012
Pipeline refunds due customers................ 1,687 (3,638)
Rate refund due customers..................... (9,306) 7,833
Deferred purchased gas costs.................. (29) 33,960
Other-net..................................... 2,477 4,813
---------- -----------
Net Cash Provided by Operating Activities. 55,180 145,280
----------- -----------
FINANCING ACTIVITIES
Common stock issued............................... 6,295 6,962
Long-term debt issued............................. 50,000 20,000
Long-term debt retired............................ (69,830) (9,322)
Notes payable - net............................... 23,794 (52,912)
Dividends on common and preferred stock........... (24,811) (24,152)
----------- -----------
Net Cash Used in Financing Activities..... (14,552) (59,424)
----------- -----------
INVESTING ACTIVITIES
Proceeds from sale of non-utility subsidiary...... - 2,000
Capital Expenditures.............................. (48,005) (54,495)
----------- -----------
Net Cash Used in Investing Activities..... (48,005) (52,495)
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.. (7,377) 33,361
Cash and Cash Equivalents at Beginning of Period.. 13,911 3,522
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD........ $ 6,534 $ 36,883
=========== ===========
(a) Includes amounts charged to other accounts.
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Income taxes paid............................... $ 28,111 $ 19,270
Interest paid................................... $ 16,326 $ 15,792
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE> 7
WASHINGTON GAS LIGHT COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
A. In the opinion of the Company, the accompanying consolidated financial
statements reflect all adjustments (which include only normal recurring
adjustments) necessary to present fairly the results for such periods.
Reference is hereby made to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1995.
B. On May 1, 1995, additional shares of common stock were distributed to
shareholders of record on April 20, 1995, in connection with a two-for-one
stock split. All share disclosures and per share calculations included in
this report are on a post-split basis.
C. Due to the seasonal nature of the Company's business, the results of
operations shown are not indicative of the results to be expected for the
fiscal year ended September 30, 1996.
D. At December 31, 1995, the Company had outstanding $50 million of 7-7/8%
Series First Mortgage Bonds due September 1, 2016 and $17.325 million of
9-1/4% Series First Mortgage Bonds due April 15, 2018. Each of these
series has a 30-year nominal life, and each allows the holder to elect
early maturity of the bonds, at par, on the tenth anniversary of the
issuance date. Additionally, the Company may redeem the bonds at par at
any time on or after the tenth anniversary date of their issuance up until
the end of the 30-year nominal life.
On January 25, 1996, the Company issued $50 million of unsecured
Medium-Term Notes (MTNs) at a coupon rate of 6.15% and $21.6 million of
short-term commercial paper. The new MTNs carry the same terms as the
First Mortgage Bonds discussed in the prior paragraph. The proceeds of
these issuances were used to purchase approximately $71.6 million of U.S.
Treasury Securities. These securities were deposited in an irrevocable
trust and the principal and interest on these securities will be used to
pay the interest and principal payments on the outstanding 7-7/8% and
9-1/4% Series First Mortgage Bonds up to and including their first call
dates on September 1, 1996 and April 15, 1998, respectively. The First
Mortgage Bonds will be legally retired on their first call dates with the
proceeds from the treasury securities included in the trust. This
transaction was recorded as an in-substance defeasance in January 1996;
therefore, as of March 31, 1996, the First Mortgage Bonds mentioned above
were extinguished for financial reporting purposes. A premium of
approximately $2.3 million was recorded as a regulatory asset in connection
with acquiring the treasury securities and this amount will be amortized
over future periods in accordance with prior regulatory practice.
6
<PAGE> 8
WASHINGTON GAS LIGHT COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three months ended March 31, 1996 vs. March 31, 1995
For the three months ended March 31, 1996, net income applicable
to common stock amounted to $66.6 million, which represented an increase of
$13.5 million from the same period in the prior year. Earnings per average
common share were $1.54, or $.29 per average common share higher than the
quarter ended March 31, 1995. Average common shares outstanding increased by
1.9% over the prior year. The increase in net income applicable to common
stock was primarily due to significantly colder weather during the current
quarter. This factor was partially offset by higher other operating expenses
and lower other income (loss)-net.
Net revenues for the period rose $26.3 million (14.6%) from the
same period last year to $206.1 million. Therm sales to firm customers, as
shown in the table below, rose by 95.2 million therms (19.8%), due to weather
that was 16.3% colder than the prior year and the effect of increased customer
meters, which were 3.0% higher at the end of the most recent period as compared
to last year. Weather for the quarters ended March 31, 1996 and March 31, 1995
was 14.4% colder than normal and 1.4% warmer than normal, respectively.
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 31, March 31,
1996 1995
-------- --------
<S> <C> <C>
Gas Delivered (thousands of therms)
Firm...................................... 575,951 480,718
Interruptible............................. 49,712 87,991
Electric Generation-Interruptible......... 593 17,531
Transportation Service.................... 17,921 15,896
Gas Sold Off System (thousands of therms)... 36,056 -
-------- --------
Total................................... 680,233 602,136
======== ========
Number of Customer Meters (end of period)... 774,266 751,543
======== ========
Degree Days................................. 2,466 2,120
======== ========
</TABLE>
Excluding deliveries for electric generation, therms delivered to
interruptible and transportation service customers declined by 36.3 million
therms (34.9%) resulting in a drop in net revenues. This reflects the effect
of significantly longer interruptions in service to these customers in the
current quarter due to the colder weather. Margin sharing arrangements in each
of the Company's major jurisdictions minimize the effect on net income of
increases or decreases in sales and deliveries to the interruptible class.
Under these arrangements, a majority of the margins earned on sales and
deliveries to these classes are returned to firm customers after a certain
gross margin threshold is reached or in exchange for the shift of a portion of
the fixed costs from the interruptible to the firm class.
Volumes delivered to Potomac Electric Power Company (Pepco) for
electric generation declined by 16.9 million therms from the same period in the
prior year. The decline was primarily due to the unavailability of pipeline
capacity in the current quarter. A significant majority of margins earned on
deliveries to Pepco are shared with firm customers and changes in volumes
delivered between periods therefore had an immaterial effect on net income.
7
<PAGE> 9
WASHINGTON GAS LIGHT COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONT'D)
During the quarter ended March 31, 1996, the Company recorded
off-system sales of 36.1 million therms. Off-system sales represent sales made
outside of the Company's service territory. The majority of the margins earned
on these sales are being shared with firm customers in the Company's three
major jurisdictions and therefore there is an immaterial effect on net income.
Operation and maintenance expenses rose by $4.6 million (9.2%) from
the same period last year due primarily to higher labor expenses, a provision
recorded to cover potential injuries and damages, and higher uncollectible
accounts expense due to the colder weather.
Depreciation and amortization increased by $495,000 (4.3%) due
primarily to depreciation on the Company's rising investment in depreciable
plant.
General taxes declined by $731,000 (2.9%) due to a drop in the fuel
tax rate for service to customers in Montgomery County, Maryland that was
partially offset by higher other gross receipts taxes due to the colder
weather. All such taxes are included in revenues and therefore fluctuations in
these amounts have no effect on net income.
Other income (loss) - net declined by $805,000 due primarily to the
effect of valuation reserves recorded in the current period related to various
non-utility activities.
Interest expense decreased by $395,000 (4.8%). Reflected in this
change is the effect of lower interest on short-term debt reflecting lower
levels outstanding and the effects of lower interest rates resulting from the
in-substance defeasance recorded in January 1996. Partially offsetting these
factors is the effect of a higher level of long-term debt outstanding.
Six months ended March 31, 1996 vs. March 31, 1995
For the six months ended March 31, 1996, net income applicable to
common stock amounted to $104.6 million, which represented an increase of $24.1
million from the same period in the prior year. Earnings per average common
share were $2.42, or $.52 per average common share higher than the six month
period ended March 31, 1995. Average common shares outstanding increased by
1.9% over the prior year. The increase in net income applicable to common
stock was primarily due to the effect of significantly colder weather in the
current period and increased customer meters. Factors which partially offset
the impact of the weather were higher other operating expenses and lower other
income (loss) - net.
Net revenues for the period rose $50.9 million (16.6%) from the same
period last year to $357.5 million. Therm sales to firm customers, as shown in
the following table, increased by 182.5 million therms (23.6%) which resulted
from weather that was 26.2% colder than the prior year and the impact of a 3.0%
increase in the number of customer meters. Weather for the six months ended
March 31, 1996 and March 31, 1995 was 18.0% colder than normal and 6.5% warmer
than normal, respectively.
8
<PAGE> 10
WASHINGTON GAS LIGHT COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONT'D)
<TABLE>
<CAPTION>
Six Months Ended
----------------
March 31, March 31,
1996 1995
-------- --------
<S> <C> <C>
Gas Delivered (thousands of therms)
Firm...................................... 956,921 774,391
Interruptible............................. 108,217 161,472
Electric Generation-Interruptible......... 7,167 27,194
Transportation Service.................... 39,827 32,231
Gas Sold Off System (thousands of therms)... 36,056 -
--------- --------
Total................................... 1,148,188 995,288
========= ========
Number of Customer Meters (end of period)... 774,266 751,543
========= ========
Degree Days................................. 4,162 3,297
========= ========
</TABLE>
Excluding deliveries for electric generation, therms delivered to
interruptible and transportation service customers declined by 45.7 million
therms (23.6%). The decrease resulted primarily from significantly longer
interruptions in service to these customers during the most recent six month
period because of the colder weather. Margins earned on such sales and
deliveries are being shared with firm customers as described previously in this
report.
Volumes delivered for electric generation declined by 20.0 million
therms from the same period last year due primarily to reduced deliveries
during the quarter ended March 31, 1996 as explained previously.
Operation and maintenance expenses increased by $7.9 million (8.0%)
from the same period last year due primarily to higher labor expenses, a
provision recorded to cover injuries and damages, higher uncollectible accounts
expense resulting from the colder weather and a non-recurring accrual for a
contingency.
Depreciation and amortization increased by $962,000 (4.2%) due
primarily to depreciation on the Company's rising investment in depreciable
plant.
General taxes declined by $1.4 million (3.3%) due to a drop in the
fuel tax rate for service to customers in Montgomery County, Maryland that was
partially offset by higher other gross receipts taxes due to the colder
weather. As discussed previously, all such taxes are included in revenues and
therefore fluctuations in these amounts have no effect on net income.
Other income (loss) - net declined by $4.1 million due to a $1.9
million gain on the sale of American Environmental Products, Inc., a
non-utility subsidiary, recorded in the same period in the prior year and the
effect of valuation reserves recorded related to various non-utility activities
in the current period.
Interest expense decreased by $689,000 (4.2%). Reflected in this
change is the effect of lower interest on short-term debt reflecting lower
levels outstanding and the effects of lower interest rates resulting from the
in-substance defeasance recorded in January 1996. Partially offsetting these
factors is the effect of a higher level of long-term debt outstanding.
9
<PAGE> 11
WASHINGTON GAS LIGHT COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Short-Term Cash Requirements and Related Financing
The Company's business is highly weather sensitive and seasonal.
Approximately 75% of the Company's therm sales (excluding sales made for
electric generation) are normally generated in the first and second fiscal
quarters. This seasonality causes short-term cash requirements to vary
significantly during the year. Cash requirements peak in the winter months
when accounts receivable, accrued utility revenues and storage gas costs are at
or near their highest levels. After the winter heating season, these assets
are converted into cash and are used to liquidate short-term debt and acquire
storage gas for the subsequent heating season.
The Company uses short-term debt in the form of commercial paper and
short-term bank loans to fund seasonal cash requirements. Alternative seasonal
sources include unsecured lines of credit, some of which are seasonal, and $130
million in a revolving credit agreement maintained with a group of banks.
These financing options may be activated to support or replace the Company's
commercial paper. Excluding current maturities, the Company had $23.8 million
of short-term debt outstanding at March 31, 1996. These borrowings were
composed of $15.0 million and $8.8 million of bank loans and commercial paper,
respectively, and represent an increase of $23.8 million from the balance at
September 30, 1995. Excluding current maturities, the Company had no
short-term debt outstanding at March 31, 1995.
Long-Term Cash Requirements and Related Financing
Capital expenditures for the first six months of fiscal year 1996 were
$48.0 million and are budgeted to be $130.3 million for the year. To fund
construction expenditures and other capital requirements, the Company draws
upon both internal and external sources of cash. The Company's ability to
generate adequate cash internally depends upon a number of factors, including
the timing and amount of rate increases received and the level of therm sales.
The level of therm sales is almost exclusively dependent upon the number of
customer meters and the variability of the weather.
Net cash provided by operating activities was $55.2 million during the
first six months of fiscal year 1996 and compares to $145.3 million for the
same period in fiscal year 1995. The decrease in net cash provided by
operating activities is primarily attributable to: (i) higher funds used to
support accounts receivable and accrued utility revenues resulting from higher
sales and increased cost of gas; (ii) the effect of a shift from an
overcollection of current gas costs from customers in the prior year to an
undercollection of current gas costs in the current year; (iii) refunds made to
customers for amounts overcollected from the implementation of interim rates
and the return of prior year's overcollection of gas costs; and (iv) increased
income tax payments in 1996 resulting from increased taxable income primarily
due to colder weather and lower current deductions for gas costs. These
factors were partially offset by: (i) an increased accounts payable balance
resulting from greater amounts owed for gas purchases as a result of colder
weather and higher gas prices and (ii) the effect of additional net income.
In connection with the January 1996 in-substance defeasance discussed
in Note D to the consolidated financial statements, the Company issued $50.0
million of unsecured MTNs at a coupon rate of 6.15% having 30-year terms with
10 year put and call options and $21.6 million of short-term debt. The $69.8
million of long-term debt retired represents $67.3 million of First Mortgage
Bonds extinguished for financial reporting purposes that were the subject of
the in-substance defeasance and a $2.5 million MTN retirement.
During the six months ended March 31, 1996, the Company sold with
recourse, $17.3 million of non-utility accounts receivable. This compares to
$29.0 million sold in the six months ended March 31, 1995.
10
<PAGE> 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The annual meeting of stockholders was held on February 21, 1996.
(c) Matters voted upon at the meeting:
The following individuals were elected to the Board of Directors at the
annual meeting on February 21, 1996:
<TABLE>
<CAPTION>
Director Votes in Favor Votes Withheld
-------- --------------- --------------
<S> <C> <C>
Michael D. Barnes 36,682,838 803,022
Fred J. Brinkman 36,719,536 729,626
Daniel J. Callahan, III 36,858,711 451,456
Orlando W. Darden 36,716,084 739,344
James H. DeGraffenreidt, Jr. 36,706,103 756,458
Melvyn J. Estrin 36,861,742 445,152
Patrick J. Maher 36,766,066 636,584
Karen Hastie Williams 36,599,846 968,944
Stephen G. Yeonas 36,806,286 556,064
</TABLE>
Sheldon W. Fantle retired from the Board of Directors effective
February 21, 1996.
The following other matters were introduced and voted upon at the
annual meeting:
The Board of Directors recommended that the stockholders ratify the
appointment of Arthur Andersen LLP, independent public accountants, to
audit the books, records and accounts of the Company for fiscal year
1996. This proposal was approved by a vote of 36,619,654 in favor of the
proposal and 304,633 against. There were 327,425 abstentions.
The Board of Directors proposed that the shareholders approve a Directors'
Stock Compensation Plan. This is a new plan that provides that
non-employee directors receive part of their retainer fees in the form of
common stock rather than in cash. This proposal was approved by a combined
vote of the common and preferred classes of 34,288,888 in favor of the
proposal and 2,072,780 against. There were 893,874 abstentions.
A stockholder proposed that the Board of Directors take steps to provide
for cumulative voting in the election of Directors. This proposal was
defeated by a vote of 4,708,992 in favor of the proposal and 22,638,491
against. There were 1,802,228 abstentions and 8,112,032 broker non-votes.
11
<PAGE> 13
Item 5. Other Information
A. As previously reported on Form 10-Q for the quarter ended December 31,
1995, the Regional Office of the National Labor Relations Board (NLRB) on
February 6, 1996, dismissed a second round of unfair labor practice charges
filed by the International Union of Gas Workers (IUGW) in October 1995.
The IUGW alleged that the Company's installation of new employment terms
was illegal because there had been insufficient bargaining and no true
impasse. The IUGW further alleged that the Company's various offers and
communications with its employees amounted to bypassing the union's
authority as bargaining agent. The Regional Office found no merit to the
IUGW's charges, upholding the Company's conduct entirely.
The IUGW subsequently appealed the Regional Office's decision to the
Office of Appeals of the NLRB. On April 29, 1996, the Office of Appeals
dismissed the IUGW's appeal, without any further right of appeal.
The Company continues its willingness to meet with the IUGW in order
to achieve a ratified contract. Meanwhile, the bargaining unit is working
successfully under the terms and conditions of the Company's last offer, as
amended.
B. As previously reported on Form 10-K for the year ended September 30,
1995, on July 7, 1995, the Company's distribution subsidiary, Shenandoah
Gas Company (Shenandoah) filed an application with the State Corporation
Commission (SCC) of Virginia under expedited rate case rules for an
increase in annual revenues of approximately $1.2 million. The request
included an overall rate of return of 9.88% and a return on equity (ROE) of
11.5%. The SCC's Staff recommended an increase of approximately $762,000
in annual revenues. In addition, the SCC's Staff recommended an ROE
between 10% and 11% with the return set at the midpoint of 10.5%.
Shenandoah's 11.5% ROE request was consistent with the ROE granted the
parent company in its last Virginia rate case. Shenandoah filed rebuttal
testimony and a hearing was held in January 1996.
On May 3, 1996, a Hearing Examiner issued a report recommending an
increase of approximately $883,000 in annual revenues. In addition, the
Hearing Examiner recommended an ROE between 10.5% and 11.5% with the return
set at the midpoint of 11.0%. A final order from the SCC of Virginia is
currently expected in the fourth fiscal quarter of 1996.
New rates based on the full revenue request of $1.2 million were put
in place in August 1995, subject to refund.
C. On March 27, 1996, the Board of Directors declared a dividend on common
stock of $.285 per share. This compares to a $.28 dividend declared in the
quarter ended March 31, 1995 on a post-split basis. The higher dividend
rate, if declared for the next three quarters, would represent an annual
increase of $.02 per share on a post-split basis.
D. As an initial step toward unbundling services in Virginia, the Company
filed a proposed tariff on January 23, 1996 with the SCC of Virginia to
provide balancing service options to interruptible customers who elect to
purchase gas from third parties. Under the proposed Comprehensive Balancing
Service option, the Company would provide daily balancing of customer usage
with the deliveries of customer-owned gas at a fixed charge for every therm
delivered during the month. Under the proposed Self-Balancing Service
option, the Company would require a delivery service customer to maintain a
daily balance between deliveries and usage. A charge per therm would be
assessed on imbalance amounts over 3% on a daily basis, with the charge
increasing as the magnitude of the imbalance increased.
The SCC's Staff issued a report on April 22, 1996, which agreed with
the Company's proposed tariff concepts. On May 10, 1996, the SCC of
Virginia issued its Final Order approving the Staff's report.
Implementation of the proposed tariff will begin for service rendered on
and after May 16, 1996.
E. As part of an ongoing series of steps toward unbundling services in the
District of Columbia, the Company filed two proposed tariffs on April 1,
1996 with
12
<PAGE> 14
Other Information (CONT'D)
the Public Service Commission of the District of Columbia. Under the first
proposal, a pilot program would be offered to approximately 3,000
residential customers featuring a transportation option which gives
customers the opportunity to acquire their gas supplies from a third party
supplier. Under the pilot program, residential customers will be
aggregated by each participating supplier in groups of at least 300
customers, and each aggregated group will have the option to be assigned
1,000 dekatherms per day of the Company's firm interstate pipeline
capacity, at cost, to transport the supplies.
In the second proposal, the Company would offer, at the customer's
election, a new Service on Customer's Premises charge for non-safety or
non-diagnostic work. The Company is also requesting that charges be tiered
for pilot lighting, pilot turn-off, and service reconnection based on when
the service is performed.
F. The Company plans to file by July 1, 1996, a proposed tariff in
Maryland providing unbundled service options to residential customers.
Under the proposed tariff, a pilot program will be offered to
approximately 6,000 residential customers featuring a transportation option
which gives customers the opportunity to acquire their gas supplies from a
third party supplier. Under the pilot program, residential customers will
be aggregated by each participating supplier in groups of at least 300
customers, and each aggregated group will have the option to be assigned
2,000 dekatherms per day of the Company's firm interstate pipeline
capacity, at cost, to transport the supplies.
Implementation of the pilot program to residential customers is expected
to begin November 1, 1996.
G. On April 24, 1996, the Federal Energy Regulatory Commission (FERC)
issued two orders that are intended to increase competition within the
electric utility industry and result in lower costs of electricity for
consumers.
FERC Order No. 888 addresses open access and stranded cost issues. It
opens wholesale electric power sales to competition by requiring public
utilities that own, control or operate transmission lines to file
non-discriminatory tariffs that offer others the same transmission services
they provide themselves, under comparable terms and conditions. These
utilities must also use these tariffs for their own wholesale energy sales
and purchases. The order also provides that stranded costs are eligible
for recovery, under certain terms and conditions, from customers who use
open access to move to another electricity supplier.
The second order, FERC Order No. 889, requires that utilities establish
electronic systems to share information related to available transmission
capacity. The intent of the order is to ensure that transmission owners
have no unfair competitive advantage in using transmission systems to sell
power. The order also requires that utilities separate their wholesale
power marketing and transmission functions.
As mentioned above, the implementation of these orders is expected to
result in reduced electricity costs for consumers which should bring about
increased competition between providers of electric power and natural gas
distributors, such as the Company.
13
<PAGE> 15
PART II. OTHER INFORMATION (CONT'D)
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Filed Herewith:
Page in
Description 10-Q
----------- -------
3. Articles of Incorporation and Bylaws - See
Bylaws of the Company as amended effective separate
February 21, 1996 volume
11. Computation of Earnings per Average Share of Common 15
Stock Assuming Full Dilution from Conversion of the
$4.60 and $4.36 Convertible Preferred Series
27. Financial Data Schedule See
separate
volume
Additional Exhibits -
99.0 Computation of Ratio of Earnings to Fixed Charges 16
99.1 Computation of Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends 17
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the
three months ended March 31, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WASHINGTON GAS LIGHT COMPANY
--------------------------------
(Registrant)
Date May 15, 1996 /s/ Frederic M. Kline
------------------- --------------------------------
Vice President and Treasurer
(Principal Accounting Officer)
14
<PAGE> 1
WASHINGTON GAS LIGHT COMPANY AS AMENDED ON
2/21/96
BYLAWS
ARTICLE I
Stockholders.
SECTION 1. Annual Meeting. The annual meeting of stockholders of
Washington Gas Light Company (the Company) shall be held on the third Wednesday
in the month of February in each year, at 10:00 a.m., at the Capital Hilton
Hotel, 16th and K Streets, N.W., Washington, D.C., for the purpose of electing
directors and for the transaction of such other business as properly may come
before such meeting. If the day fixed for the annual meeting shall be a legal
holiday in the District of Columbia, such meeting shall be held on the next
succeeding business day.
SECTION 2. Special Meetings. Special meetings of stockholders may be
held upon call by the Chairman of the Board, the President, the Secretary, a
majority of the Board of Directors, or a majority of the Executive Committee,
and shall be called by the Chairman of the Board, the President or Secretary
upon the request in writing of the holders of record of not less than one-tenth
of all the outstanding shares of stock entitled by its terms to vote at such
meeting, at such time and at such place within the District of Columbia as may
be fixed in the call and stated in the notice setting forth such call. Such
request by the stockholders and such notice shall state the purpose of the
proposed meeting.
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SECTION 3. Notice of Meetings. Notice of the time, place and purpose
of every meeting of the stockholders, shall, except as otherwise required by
law, be delivered personally or mailed at least ten (10) but not more than one
hundred (100) days prior to the date of such meeting to each stockholder of
record entitled to vote at the meeting at his address as it appears on the
records of the Company. Any meeting may be held without notice if all of the
stockholders entitled to vote thereat are present in person or by proxy at the
meeting, or if notice is waived by those not so present in person or by proxy.
SECTION 4. Quorum. At every meeting of the stockholders, the holders
of record of a majority of the shares entitled to vote at the meeting,
represented in person or by proxy, shall constitute a quorum. The vote of the
majority of such quorum shall be necessary for the transaction of any business,
unless otherwise provided by law or the articles of incorporation. If the
meeting cannot be organized because a quorum has not attended, those present in
person or by proxy may adjourn the meeting from time to time until a quorum is
present when any business may be transacted that might have been transacted at
the meeting as originally called.
SECTION 5. Voting. Unless otherwise provided by law or the articles
of incorporation, every stockholder of record entitled to vote at any meeting
of stockholders shall be entitled to one vote for every share of stock standing
in his name on the records of the
<PAGE> 3
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Company on the record date fixed as provided in these Bylaws. In the election
of directors, all votes shall be cast by ballot and the persons having the
greatest number of votes shall be the directors. On matters other than
election of directors, votes may be cast in such manner as the Chairman of the
meeting may designate.
SECTION 6. Inspectors. The Board of Directors shall annually appoint
two or more persons to act as inspectors or judges at any election of directors
or vote conducted by ballot at any meeting of stockholders. Such inspectors or
judges of election shall take charge of the polls and after the balloting shall
make a certificate of the result of the vote taken. In case of a failure to
appoint inspectors, or in case an inspector shall fail to attend, or refuse or
be unable to serve, the Chairman of the meeting may appoint, or the
stockholders may elect, an inspector or inspectors to act at such meeting.
Such inspector or inspectors shall make a certificate of the result of the vote
taken.
SECTION 7. Conduct of Stockholders' Meeting. The following persons,
in the order named, shall be entitled to call each stockholders' meeting to
order: (1) the Chairman of the Board, (2) the President of the Company, (3) a
Vice President, or (4) any person elected by the stockholders. The
stockholders shall have the right to elect a Chairman of the meeting.
<PAGE> 4
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The Secretary of the Company, or in his absence any person appointed
by the Chairman, shall act as Secretary of the meeting for organization
purposes. The stockholders shall have the right to elect a secretary of the
meeting.
SECTION 8. Record Date. In lieu of closing the stock transfer books,
the Board of Directors, in order to make a determination of stockholders
entitled to notice of or to vote at any meeting, or to receive payment of any
dividends or for any other proper purpose, may fix in advance a date, but not
more than fifty days in advance, as a record date for such determination, and
in such case only stockholders of record on the date so fixed shall be entitled
to notice of, and to vote at, such meeting, or to receive payment of such
dividend, or to exercise such other rights, as the case may be, notwithstanding
any transfer of stock on the books of the Company after such date. If the
Board of Directors does not fix a record date as aforesaid, such date shall be
as provided by law.
SECTION 9. Notice of Business. At any meeting of the stockholders,
only such business shall be conducted as shall have been brought before the
meeting (1) by or at the direction of the Board of Directors or (2) by any
stockholder of the Company who is a stockholder of record at the time of giving
of the notice as provided for in this Section 9, who shall be entitled to vote
at such meeting and who complies with the following procedures:
<PAGE> 5
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Requirement of Timely Notice. For business to be properly
brought before a meeting of stockholders by a stockholder, the
business shall be a proper subject of stockholder action and the
stockholder shall have given timely notice thereof in writing to the
Secretary. To be timely, a stockholder's notice shall be delivered to
or mailed and received by the Secretary at the principal executive
office of the Company not less than sixty (60) days prior to the
scheduled date of the meeting (regardless of any postponements,
deferrals or adjournments of the meeting to a later date); provided,
however, if no notice is given and no public announcement is made to
the stockholders regarding the date of the meeting at least 75 days
prior to the meeting, the stockholder's notice shall be valid if
delivered to or mailed and received by the Secretary at the principal
executive office of the Company not less than fifteen (15) days
following the day on which the notice or public announcement of the
date of the meeting was given or made.
Contents of Notice. Such stockholder's notice to the
Secretary shall set forth as to each item of business the stockholder
proposes to bring before the meeting (1) a brief description of the
business desired to be brought before the meeting, the reasons for
conducting such business at the meeting and, in the event that such
business includes a proposal to amend either the Charter or these
Bylaws, the
<PAGE> 6
- 6 - 2/21/96
language of the proposed amendment, (2) the name and address, as they
appear on the Company's books, of the stockholder proposing such
business, (3) the class and number of shares of capital stock of the
Company that are beneficially owned by such stockholder, and (4) any
material interest (financial or other) of such stockholder in such
business.
Compliance with Bylaws. Notwithstanding anything in these
Bylaws to the contrary, no business shall be conducted at a
stockholders' meeting except in accordance with the procedures set
forth in this Section 9. The chairman of the meeting shall, if the
facts warrant, determine and declare to the meeting that the business
was not properly brought before the meeting and in accordance with the
provisions of these Bylaws, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought
before the meeting shall not be transacted at the meeting.
Notwithstanding the foregoing provisions of this Section 9, a
stockholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder with respect to the matters set forth in this
Section 9.
Effective Date of Stockholder Business. Notwithstanding
anything in these Bylaws to the contrary, no business brought before a
meeting of the stockholders by a stockholder shall become effective
until the final termination of any proceeding
<PAGE> 7
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which may have been commenced in any court of competent jurisdiction
for an adjudication of any legal issues incident to determining the
validity of such business and the procedure pursuant to which it was
brought before the stockholders, unless and until such court shall
have determined that such proceedings are not being pursued
expeditiously and in good faith.
ARTICLE II
Board of Directors.
SECTION 1. Number, Powers, Term of Office, Quorum. The Board of
Directors of the Company shall consist of nine persons. The Board of Directors
may exercise all the powers of the Company and do all acts and things which are
proper to be done by the Company which are not by law or by these Bylaws
directed or required to be exercised or done by the stockholders. The members
of the Board of Directors shall be elected at the annual meeting of
stockholders and shall hold office until the next succeeding annual meeting, or
until their successors shall be elected and shall qualify. A majority of the
number of directors fixed by the Bylaws shall constitute a quorum for the
transaction of business. The action of a majority of the directors present at
any lawful meeting at which there is a quorum shall, except as otherwise
provided by law or by these Bylaws, be the action of the Board.
<PAGE> 8
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SECTION 2. Election. Except as provided in Section 3 hereof,
directors shall be elected by the stockholders of the Company pursuant to the
procedures enumerated below:
Eligible Persons. Only persons who are nominated in
accordance with the following procedures shall be eligible for
election by the stockholders as directors of the Company.
Nominations. Nominations of persons for election as directors
of the Company may be made at a meeting of stockholders (1) by or at
the direction of the Board of Directors, (2) by any nominating
committee or person appointed by the Board of Directors or (3) by any
stockholder of the Company entitled to vote for the election of
directors at the meeting who complies with the notice procedures set
forth in this Section 2.
Nomination by Directors or Nominating Committee. Nominations
made by or at the direction of the Board of Directors or the
nominating committee or person appointed by the Board of Directors may
be made at any time prior to the stockholders' meeting. The Board of
Directors must send notice of nominations to the stockholders together
with the notice of the meeting of the stockholders; provided, however,
if the nominations are made after the notice of the meeting has been
mailed, the Board of Directors must send notice of its nominations to
the stockholders as soon as practicable.
<PAGE> 9
- 9 - 2/21/96
Nomination by Stockholders. Nominations, other than those
made by or at the direction of the Board of Directors or the
nominating committee or person appointed by the Board of Directors,
shall be made pursuant to timely notice in writing to the Secretary.
To be timely, a stockholder's notice shall be delivered to or mailed
and received by the Secretary at the principal executive office of the
Company not less than sixty (60) days prior to the scheduled date of
the meeting (regardless of any postponements, deferrals or
adjournments of the meeting to a later date); provided, however, if no
notice is given and no public announcement is made to the stockholders
regarding the date of the meeting at least 75 days prior to the
meeting, the stockholder's notice shall be valid if delivered to or
mailed and received by the Secretary at the principal executive office
of the Company not less than fifteen (15) days following the day on
which the notice or public announcement of the date of the meeting was
given or made.
Contents of Notice. Nominations, other than those made by or
at the direction of the Board of Directors or the nominating committee
or person appointed by the Board of Directors, shall set forth:
(1) as to each person whom the stockholder proposes
to nominate for election or reelection as a director, (a) the
name, age, business address and residential address
<PAGE> 10
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of the person, (b) the principal occupation or employment of
the person (c) the class and number of shares of capital stock
of the Company that are beneficially owned by the person, (d)
written consent by the person, agreeing to serve as director
if elected, (e) a description of all arrangements or
understandings between the person and the stockholder
regarding the nomination, (f) a description of all
arrangements or understandings between the person and any
other person or persons (naming such persons) regarding the
nomination, (g) all information relating to the person that is
required to be disclosed in solicitations for proxies for
election of directors pursuant to Rule 14a under the
Securities Exchange Act of 1934, as amended, and (h) such
other information as the Company may reasonably request to
determine the eligibility of such proposed nominee to serve as
director of the Company; and
(2) as to the stockholder giving the notice, (a) the
name, business address and residential address of the
stockholder giving the notice, (b) the class and number of
shares of capital stock of the Company that are beneficially
owned by such stockholder, (c) a description of all
arrangements or understandings between the stockholder
and the nominee regarding the nomination, and
<PAGE> 11
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(d) a description of all arrangements or understandings
between the stockholder and any other person or persons
(naming such persons) regarding the nomination.
Compliance with Bylaws. No person shall be eligible for
election by the stockholders as a director of the Company unless
nominated in accordance with the procedures set forth in this section
of the Bylaws. The Chairman of the Board of Directors shall, if the
facts warrant, determine and declare prior to the meeting of
stockholders that the nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so inform
the nominee and the stockholder who nominated the nominee as soon as
practicable and the defective nomination shall be disregarded.
Effective Date of Election of Director. Notwithstanding
anything in these Bylaws to the contrary, no election of a director
nominated by a stockholder shall become effective until the final
termination of any proceeding which may have been commenced in any
court of competent jurisdiction for an adjudication of any legal
issues incident to determining the procedure pursuant to which the
nomination of such director was brought before the stockholders,
unless and until such court shall have determined that such
proceedings are not being pursued expeditiously and in good faith.
<PAGE> 12
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SECTION 3. Vacancies. Whenever any vacancy shall occur in the Board
of Directors by any cause other than by reason of an increase in the number of
directors, a majority of the remaining directors, by an affirmative vote at any
lawful meeting may elect a director to fill the vacancy and to hold office
until the next annual election, or until his successor is duly elected and
qualified.
SECTION 4. Meetings. Regular meetings of the Board shall be held at
the office of the Company in the District of Columbia at times fixed by
resolution of the Board of Directors. Notice of such meetings need not be
given.
Special meetings of the Board may be called by the Chairman of the
Board, the President of the Company, or by any two directors. At least two
days' notice of all special meetings of the Board shall be given to each
director personally by telegraphic or written notice. Any meeting may be held
without notice if all of the directors are present, or if those not present
waive notice of the meeting by telegram or in writing. Special meetings of the
Board of Directors may be held within or without the District of Columbia.
SECTION 5. Committees. The Board of Directors shall, by resolution
or resolutions passed by a majority of the whole Board, designate an Executive
Committee, to consist of the Chief Executive Officer of the Company who may be
the Chairman of the Board, or the President and three additional members, and
three alternates to
<PAGE> 13
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serve at the call of the Chief Executive Officer in case of the unavoidable
absence of one of the regular members, to be elected from the Board of
Directors. The Executive Committee shall, when the Board is not in session,
have and may exercise all of the authority of the Board of Directors in the
management of the business and affairs of the Company.
The Board of Directors may appoint other committees, standing or
special, from time to time, from among their own number, or otherwise, and
confer powers on such committees, and revoke such powers and terminate the
existence of such committees at its pleasure.
A majority of the members of any such committee shall constitute a
quorum for the purpose of fixing the time and place of its meetings, unless the
Board shall otherwise provide. All action taken by any such committee shall be
reported to the Board at its meeting next succeeding such action.
SECTION 6. Compensation of Directors. The Board of Directors shall
fix the fee to be paid to each director for attendance at any meeting of the
Board or of any committee thereof, and may, in its discretion, authorize
payment to directors of traveling expenses incurred in attending any such
meeting.
SECTION 7. Removal. Any directors may be removed from office at any
time, with or without cause, and another be elected in his place, by the vote
of the holders of record of a majority of the outstanding shares of stock of
the Company (of the class or classes
<PAGE> 14
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by which such director was elected) entitled to vote thereon, at a special
meeting of stockholders called for such purpose.
ARTICLE III
Officers.
SECTION 1. Officers. The officers of the Company shall be elected by
the Board of Directors and shall consist of a Chairman of the Board, a
President, a Secretary, a Treasurer, and one or more Vice Presidents, and such
other officers as the Board from time to time shall elect, with such duties as
the Board shall deem necessary to conduct the business of the Company. Any
officer may hold two or more offices (including those of the Chairman of the
Board and President) except that the offices of President and Secretary may not
be held by the same person. The Chairman of the Board shall be a director;
other officers, including any Vice Chairman and the President, may be, but are
not required to be, Directors.
SECTION 2. Term of Office. Removal. In the absence of a special
contract, all officers shall hold their respective offices for one year or
until their successors shall have been duly elected and qualified, but they or
any of them may be removed from their respective offices on a vote by a
majority of the Board.
SECTION 3. Powers and Duties. The officers of the Company shall have
such powers and duties as generally pertain to their offices, respectively, as
well as such powers and duties as from time to time shall be conferred by the
Board of Directors and/or by
<PAGE> 15
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the Executive Committee. In the absence of the Chairman of the Board, if any,
the President shall preside at the meetings of the Board of Directors. In the
absence of both the Chairman of the Board and the President, and provided a
quorum is present, the senior member of the Board present, in terms of service
on the Board, shall serve as Chairman pro tem of the meeting.
SECTION 4. Salaries. The salaries of all executive officers of the
Company shall be determined and fixed by the Board of Directors, or pursuant to
such authority as the Board may from time to time prescribe.
ARTICLE III-A
Indemnification of Directors and Officers.
SECTION 1. With respect to a Company officer, director, or employee,
the Company shall indemnify, and with respect to any other individual the
Company may indemnify, any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
(an "Action"), whether civil, criminal, administrative, arbitrative or
investigative (including an action by or in the right of the Company) by reason
of the fact the person is or was a director, officer, employee, or agent of the
Company, or is or was serving at the request of the Company as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
<PAGE> 16
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reasonably incurred by that person in connection with such Action; except in
relation to matters as to which the person shall be finally adjudged in such
Action to have knowingly violated the criminal law or be liable for willful
misconduct in the performance of the person's duty to the Company. The
termination of any Action by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not of itself create a
presumption that the person was guilty of willful misconduct.
Any indemnification (unless ordered by a court) shall be made by the Company
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstance because the person has met the applicable standard of conduct set
forth above. In the case of any director, such determination shall be made:
(1) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such Action; or (2) if such a quorum is not
obtainable, by majority vote of a committee duly designated by the Board of
Directors (in which designation directors who are parties may participate)
consisting solely of two or more directors not at the time parties to the
proceeding; or (3) by special legal counsel selected by the Board of Directors
or its committee in the manner prescribed by clause (1) or (2) of this
paragraph, or if such a quorum is not obtainable and such a committee cannot be
designated, by majority vote of the Board of Directors, in which selection
directors who are parties may
<PAGE> 17
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participate; or (4) by vote of the shareholders, in which vote shares owned by
or voted under the control of directors, officers and employees who are at the
time parties to the Action may not be voted. In the case of any officer,
employee, or agent other than a director, such determination may be made (i) by
the Board of Directors or a committee thereof; (ii) by the Chairman of the
Board of the Company or, if the Chairman is a party to such Action, the
President of the Company, or (iii) such other officer of the Company, not a
party to such Action, as such person specified in clause (i) or (ii) of this
paragraph may designate. Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses shall be made
by those entitled hereunder to select such legal counsel.
Expenses incurred in defending an Action for which indemnification may
be available hereunder shall be paid by the Company in advance of the final
disposition of such Action as authorized in the manner provided in the
preceding paragraph, subject to execution by the person being indemnified of a
written undertaking to repay such amount if and to the extent that it shall
ultimately be determined by a court that such indemnification by the Company is
not permitted under applicable law.
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It is the intention of the Company that the indemnification set forth
in this Section of Article III-A, shall be applied to no less extent than the
maximum indemnification permitted by law. In the event that any right to
indemnification or other right hereunder may be deemed to be unenforceable or
invalid, in whole or in part, such unenforceability or invalidity shall not
affect any other right hereunder, or any right to the extent that is not deemed
to be unenforceable. The indemnification provided herein shall be in addition
to, and not exclusive of, any other rights to which those indemnified may be
entitled under any Bylaw, agreement, vote of stockholders, or otherwise, and
shall continue as to a person who has ceased to be a director, officer,
employee, or agent and inure to the benefit of such person's heirs, executors,
and administrators.
SECTION 2. In any proceeding brought by a stockholder in the right of
the Company or brought by or on behalf of the stockholders of the Company, no
monetary damages shall be assessed against an officer or director. The
liability of an officer or director shall not be limited as provided in this
section if the officer or director engaged in willful misconduct or a knowing
violation of the criminal law or of any federal or state securities law.
<PAGE> 19
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ARTICLE IV
Checks, Notes, Etc.
SECTION 1. All checks and drafts on the Company's bank accounts and
all bills of exchange and promissory notes, and all acceptances, obligations
and other instruments for the payment of money, shall be signed by such officer
or officers, agent or agents, as shall be thereunto authorized from time to
time by the Board of Directors.
SECTION 2. Shares of stock and other interests in other corporations
or associations shall be voted by such officer or officers as the Board of
Directors may designate.
SECTION 3. Except as the Board of Directors shall otherwise provide,
all contracts expressly approved by the Board shall be signed on behalf of the
Company by the Chairman of the Board, the President, or a Vice President.
ARTICLE V
Capital Stock.
SECTION 1. Certificate for shares. The interest of each stockholder
of the Company shall be evidenced by a certificate or certificates for shares
of stock in such form as required by law and as the Board of Directors may from
time to time prescribe. The certificates of stock shall be signed by the
President or a Vice President and the Secretary or an Assistant Secretary and
sealed with the seal of the Company. Such seal may be a facsimile.
<PAGE> 20
- 20 - 2/21/96
Where any such certificate is countersigned by a transfer agent other
than the Company, or an employee of the Company, or is countersigned by a
transfer clerk and is registered by a registrar, the signatures of the
President or Vice President and the Secretary or Assistant Secretary may be
facsimiles.
In case any officer who has signed, or whose facsimile signature has
been placed upon such certificate, shall have ceased to be such officer before
such certificate is issued, it may nevertheless be issued by the Company with
the same effect as if such officer had not ceased to hold such office at the
date of its issue.
SECTION 2. Transfer of Shares. The shares of stock of the Company
shall be transferable on the books of the Company by the holders thereof in
person or by duly authorized attorney, upon surrender and cancellation of
certificates for a like number of shares, with duly executed assignment and
power of transfer endorsed thereon or attached thereto, and with such proof of
the authenticity of the signatures as the Company or its agents may reasonably
require.
SECTION 3. Lost, Stolen or Destroyed Certificates. No certificate of
stock claimed to have been lost, destroyed or stolen shall be replaced by the
Company with a new certificate of stock until the holder thereof has produced
evidence of such loss,
<PAGE> 21
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destruction or theft, and has furnished indemnification to the Company and its
agents to such extent and in such manner as the proper officers or the Board of
Directors may from time to time prescribe.
ARTICLE VI
Corporate Records.
SECTION 1. Where Kept. The books, records and papers belonging to
the business of the Company, and the corporate seal, shall be kept at the
office of the Company in the District of Columbia.
SECTION 2. Inspection. Any stockholder or stockholders, who shall
have been such for at least six months, or who shall be the holder or holders
of record of at least five percent of all the outstanding shares of stock of
the Company, desiring to inspect the books or records of the Company, shall
present to the Board of Directors or the Executive Committee an application for
such inspection, specifying the particular books or records to be inspected and
the purpose for which such inspection is desired. If, upon such application,
the Board of Directors or Executive Committee deems such inspection is sought
for a legitimate purpose connected with the interest of the applicant as a
stockholder of the Company, such application shall be granted and a time and
place for the inspection shall be specified. The stock and transfer books of
the Company shall at all times, during business hours, be open to the
inspection of stockholders. The Board of Directors
<PAGE> 22
- 22 - 2/21/96
shall have the power from time to time to establish general regulations
conferring upon stockholders such further rights with respect to inspection of
books and records of the Company as the Board shall deem proper.
ARTICLE VII
Fiscal Year.
The fiscal year of the Company shall begin on the 1st day of October
in each year and shall end on the 30th day of September following.
ARTICLE VIII
Corporate Seal.
The seal of the Company shall be circular in form and there shall be
inscribed thereon -- Washington Gas Light Company -- a Corporation of the
District of Columbia and Virginia -- Originally Chartered by Congress in 1848.
ARTICLE IX
Amendments.
The Board of Directors shall have power to make and alter (unless the
stockholders shall in any particular instance have otherwise prescribed) any
Bylaws of the Company. Such action may be taken at any meeting of the Board by
the affirmative vote of a majority of the total number of directors, provided
that notice of the proposed change shall have been given to all directors prior
to
<PAGE> 23
- 23 - 2/21/96
the meeting, or that all of the directors shall be present at the meeting. Any
Bylaws made or altered by the Board of Directors may be altered or repealed at
any time by the stockholders.
<PAGE> 1
EXHIBIT 11
WASHINGTON GAS LIGHT COMPANY AND SUBSIDIARIES
Computation of Earnings per Average Share of Common Stock
Assuming Full Dilution from Conversion of the $4.60 and $4.36
Convertible Preferred Stock
---------------------------------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
-------------------------------- ----------------------------
Mar. 31, 1996 Mar. 31, 1995 Mar. 31, 1996 Mar. 31, 1995
-------------- -------------- ------------- -------------
(Thousands, except per share data)
<S> <C> <C> <C> <C>
Net Income $ 66,909 $ 53,438 $ 105,249 $ 81,164
Dividends on preferred
stock (excluding
dividends on convertible
preferred stock) 330 330 660 660
------------ ---------- ----------- -----------
Net income applicable
to common stock (1) $ 66,579 $ 53,108 $ 104,589 $ 80,504
============ ========== =========== ===========
Average common shares
outstanding on a fully
diluted basis assuming
conversion of the
$4.60 and $4.36
convertible preferred
stock on October 1
of each year based
on the applicable
conversion price (2) 43,349 42,530 43,207 42,425
============ ========== =========== ===========
Earnings per average
share of common
stock assuming
full dilution (1 )/(2) $ 1.54 $ 1.25 $ 2.42 $ 1.90
============ ========== =========== ===========
</TABLE>
- ------------------------------------------------------
Note:
These calculations are submitted in accordance with Securities Exchange Act
of 1934 Release No. 9083 although not required by footnote 2 to paragraph 14
of Accounting Principles Board Opinion No. 15 because no dilution results.
15
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE INCOME
STATEMENT, BALANCE SHEET AND STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,076,506
<OTHER-PROPERTY-AND-INVEST> 2,776
<TOTAL-CURRENT-ASSETS> 277,587
<TOTAL-DEFERRED-CHARGES> 118,616
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,475,485
<COMMON> 43,409
<CAPITAL-SURPLUS-PAID-IN> 295,032
<RETAINED-EARNINGS> 262,825
<TOTAL-COMMON-STOCKHOLDERS-EQ> 601,266
0
28,467
<LONG-TERM-DEBT-NET> 353,860<F1>
<SHORT-TERM-NOTES> 15,000
<LONG-TERM-NOTES-PAYABLE> 269,390<F2>
<COMMERCIAL-PAPER-OBLIGATIONS> 8,794
<LONG-TERM-DEBT-CURRENT-PORT> 8,006
0
<CAPITAL-LEASE-OBLIGATIONS> 568
<LEASES-CURRENT> 568
<OTHER-ITEMS-CAPITAL-AND-LIAB> 459,524
<TOT-CAPITALIZATION-AND-LIAB> 1,475,485
<GROSS-OPERATING-REVENUE> 706,152
<INCOME-TAX-EXPENSE> 62,856
<OTHER-OPERATING-EXPENSES> 520,817
<TOTAL-OPERATING-EXPENSES> 583,673
<OPERATING-INCOME-LOSS> 122,479
<OTHER-INCOME-NET> (1,565)
<INCOME-BEFORE-INTEREST-EXPEN> 120,914
<TOTAL-INTEREST-EXPENSE> 15,665
<NET-INCOME> 105,249
666
<EARNINGS-AVAILABLE-FOR-COMM> 104,583
<COMMON-STOCK-DIVIDENDS> 24,491
<TOTAL-INTEREST-ON-BONDS> 15,665<F3>
<CASH-FLOW-OPERATIONS> 55,180
<EPS-PRIMARY> 2.42
<EPS-DILUTED> 2.42
<FN>
<F1>Represents total long-term debt including $85,500 in First Mortgage Bonds,
$269,200 in unsecured medium-term notes, $190 in other long-term debt and
$(1,030) in unamortized premium and discount-net.
<F2>Includes $269,200 in unsecured medium-term notes and other notes of $190.
<F3>Represents total interest expense, per the Statement of Income.
</FN>
</TABLE>
<PAGE> 1
EXHIBIT 99.0
WASHINGTON GAS LIGHT COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
TWELVE MONTHS ENDED MARCH 31, 1996
(Unaudited)
(Dollars in Thousands)
<TABLE>
<S> <C>
FIXED CHARGES:
Interest Expense................................................ $ 30,329
Amortization of Debt Premium, Discount and Expense.............. 261
Interest Component of Rentals................................... 64
------------
Total Fixed Charges........................................ $ 30,654
============
EARNINGS:
Net Income...................................................... $ 86,994
Add:
Income Taxes Applicable to Operating Income............... 53,454
Income Taxes Applicable to Other Income (Loss) - Net...... (1,294)
Total Fixed Charges....................................... 30,654
-----------
Total Earnings.................................................. $ 169,808
===========
Ratio of Earnings to Fixed Charges.............................. 5.5
===========
</TABLE>
16
<PAGE> 1
EXHIBIT 99.1
WASHINGTON GAS LIGHT COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
TWELVE MONTHS ENDED MARCH 31, 1996
(Unaudited)
(Dollars in Thousands)
<TABLE>
<S> <C>
FIXED CHARGES AND PRE-TAX PREFERRED STOCK DIVIDENDS:
Interest Expense................................................ $ 30,329
Amortization of Debt Premium, Discount and Expense.............. 261
Interest Component of Rentals................................... 64
-----------
Total Fixed Charges........................................ 30,654
Pre-tax Preferred Dividends..................................... 2,132
-----------
Total...................................................... $ 32,786
===========
Preferred Dividends............................................. $ 1,333
Effective Income Tax Rate....................................... .3748
Complement of Effective Income Tax Rate (1 - Tax Rate).......... .6252
Pre-Tax Preferred Dividends..................................... $ 2,132
===========
EARNINGS:
Net Income...................................................... $ 86,994
Add:
Income Taxes Applicable to Operating Income................ 53,454
Income Taxes Applicable to Other Income (Loss) - Net....... (1,294)
Total Fixed Charges........................................ 30,654
-----------
Total Earnings.................................................. $ 169,808
===========
Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends.................................. 5.2
===========
</TABLE>
17
