Financial
Highlights


Reconciliation of Non-GAAP Financial Measures (Unaudited)

The following table summarizes the reconciliation of adjusted EBIT to income before income taxes:

  Fiscal Year Ended September 30,
(In thousands) 2015 2014
ADJUSTED EBIT
Washington Gas and Hampshire $235,713 $244,359
Retail energy-marketing 68,459 10,653
Commercial energy systems 16,803 12,258
Midstream energy services (3,571) 5,144
Other activities(1) (4,042) (7,951)
Eliminations (1,013) (167)
TOTAL $312,349 $264,296
Non-GAAP adjustments(2) (45,455) (62,044)
Interest expense 50,511 37,738
INCOME BEFORE INCOME TAXES $216,383 $164,514
Income tax expense 83,804 57,254
Dividends on Washington Gas preferred stock 1,320 1,320
NET INCOME APPLICABLE TO COMMON STOCK $131,259 $105,940

The following table represents the reconciliation of operating earnings to net income applicable to common stock:

  Fiscal Year Ended September 30,
(In thousands, except per share data) 2015 2014
Operating earnings $158,247 $138,952
Non-GAAP adjustments(2) (45,455) (62,044)
Income tax expense on non-GAAP adjustments 18,467 25,411
Regulatory asset—tax effect Medicare Part D 3,621
NET INCOME APPLICABLE TO COMMON STOCK $131,259 $105,940
DILUTED AVERAGE COMMON SHARES OUTSTANDING 50,060 51,770
Operating earnings per share $3.16 $2.68
Per share effect of non-GAAP adjustments (0.54) (0.63)
DILUTED EARNINGS PER AVERAGE COMMON SHARE $2.62 $2.05
  • (1)Activities and transactions that are not significant enough on a stand-alone basis to warrant treatment as an operating segment and that do not fit into one of our four operating segments.
  • (2)Fiscal year 2015 includes adjustments related to: (i) unrealized mark-to-market valuations on energy-related derivatives of $(32.9) million (of which $(20.7) million related to retail energy-marketing); a $(4.1) million reclassification of distributed generation asset-related investment tax credits and $(3.0) million of unrecovered government contracting costs related to commercial energy systems; an investment impairment of $(5.6) million; and other adjustments of $0.1 million. Fiscal year 2014 primarily includes adjustments related to unrealized mark-to-market valuations of $(61.4) million ($(66.2) million of which related to Washington Gas and $3.4 million of which related to retail energy-marketing) and $(0.6) of net other adjustments (including $(5.4) million of aggregate adjustments relating to commercial energy systems).