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<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 1 - us-gaap:OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock-->
<div align="left" style="margin-left: 0%"><!-- XBRL,NS -->
<!-- xbrl,nx -->
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: 'Times New Roman', Times">
</font></b><font style="font-family: 'Times New Roman', Times">
<i></i>
</font>
</div>
<div style="margin-top: 0pt; font-size: 1pt"></div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 13pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">
</font></b>
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 13pt; font-family: Arial, Helvetica; color: #000000; background: transparent; text-align: left">
<tr>
<td width="10%"></td>
<td width="90%"></td>
</tr>
<tr valign="top">
<td>
<b><font style="font-family: Arial, Helvetica">NOTE 1. </font></b>
</td>
<td>
<b><font style="font-family: Arial, Helvetica">ACCOUNTING
POLICIES</font></b>
</td>
</tr>
</table>
<div style="font-size: 3pt; margin-left: 0%; width: 99%; align: left; border-bottom: 1pt solid #000000">
</div>
<div style="margin-top: 8pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     GENERAL</font></b>
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
WGL Holdings, Inc. (WGL Holdings) is a holding company that owns
all of the shares of common stock of Washington Gas Light
Company (Washington Gas), a regulated natural gas utility, and
all of the shares of common stock of Washington Gas Resources
Corporation (Washington Gas Resources), Hampshire Gas Company
(Hampshire) and Crab Run Gas Company. Washington Gas Resources
owns all of the shares of common stock of four unregulated
subsidiaries that include Washington Gas Energy Services, Inc.
(WGEServices), Washington Gas Energy Systems, Inc. (WGESystems),
Capitol Energy Ventures Corp. (CEV) and WGSW, Inc. Except where
the content clearly indicates otherwise, “WGL
Holdings,” “we,” “us” or
“our” refers to the holding company or the
consolidated entity of WGL Holdings and all of its subsidiaries.
Unless otherwise noted, these notes apply equally to WGL
Holdings and Washington Gas.
</div>
<div style="margin-top: 8pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     NATURE
OF OPERATIONS</font></b>
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Our core business is the delivery and sale of natural gas
through Washington Gas. We also offer retail energy-related
products and services that are closely related to our core
business. The majority of these energy-related activities are
performed by wholly owned unregulated subsidiaries of Washington
Gas Resources.
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Washington Gas is a regulated public utility that sells and
delivers natural gas to approximately one million customers
primarily in the District of Columbia, and the surrounding
metropolitan areas in Maryland and Virginia. Deliveries to firm
residential and commercial customers accounted for 74.8% of the
total therms delivered to customers by Washington Gas in fiscal
year 2010. Deliveries to interruptible customers accounted for
15.4% and deliveries to customers who use natural gas to
generate electricity accounted for 9.8%. These amounts do not
include deliveries related to Washington Gas’s asset
optimization program discussed further below. Hampshire operates
an underground natural gas storage facility that provides
services exclusively to Washington Gas. Hampshire is regulated
under a cost of service tariff by the Federal Energy Regulatory
Commission (FERC). Both Washington Gas and Hampshire comprise
our regulated utility segment.
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The retail energy-marketing segment consists of the operations
of WGEServices which competes with regulated utilities and other
unregulated third party marketers to sell natural gas and
electricity directly to residential, commercial and industrial
customers with the objective of earning a profit through
competitive pricing. The commodities that WGEServices sells are
delivered to retail customers through assets owned by regulated
utilities. Washington Gas delivers the majority of natural gas
sold by WGEServices, and unaffiliated electric utilities deliver
all of the electricity sold. During the fiscal year ended
September 30, 2010, WGEServices contracted for and
completed the construction of two Solar PV facilities, which
include ownership of the operational assets. Other than these
facilities, WGEServices does not own or operate any natural gas
or electric generation, production, transmission or distribution
assets. At September 30, 2010, WGEServices served
approximately 161,000 residential, commercial and industrial
natural gas customers and approximately 155,000 residential,
commercial and industrial electricity customers located in
Maryland, Virginia, Delaware, Pennsylvania and the District of
Columbia.
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The design-build energy systems segment comprises WGESystems,
which provides design-build energy efficient and sustainable
solutions to government and commercial clients under
construction contracts. Refer to Note 15 —
<i>Operating Segment Reporting</i> for further discussion of our
segments.
</div>
<div style="margin-top: 8pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     CONSOLIDATION
OF FINANCIAL STATEMENTS</font></b>
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The consolidated financial statements include the accounts of
WGL Holdings and its subsidiaries during the fiscal years
reported. Inter-company transactions have been eliminated.
</div>
<div style="margin-top: 8pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     USE
OF ESTIMATES IN THE PREPARATION OF FINANCIAL
STATEMENTS</font></b>
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In accordance with generally accepted accounting principles in
the United States of America (GAAP), we make certain estimates
and assumptions regarding: <i>(i) </i>reported amounts of
assets and liabilities; <i>(ii) </i>disclosure of
contingent assets and liabilities at the date of the financial
statements and <i>(iii) </i>reported amounts of revenues,
revenues subject to refund, and expenses during the reporting
period. Actual results could differ from those estimates.
</div>
<!-- XBRL Pagebreak Begin -->
</div>
<!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<div style="margin-left: 0%">
<!-- BEGIN PAGE WIDTH -->
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
<font style="font-family: 'Times New Roman', Times">
<i>
</i>
</font>
</div>
<!-- XBRL Pagebreak End -->
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     PROPERTY,
PLANT AND EQUIPMENT</font></b>
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Property, plant and equipment (comprised principally of utility
plant) is stated at original cost, including labor, materials,
taxes and overhead costs incurred during the construction
period. The cost of utility and other plant of Washington Gas
includes an allowance for funds used during construction (AFUDC)
that is calculated under a formula prescribed by our regulators.
Washington Gas capitalizes AFUDC as a component of construction
overhead. The before-tax rates for AFUDC for fiscal years 2010,
2009 and 2008 were 0.32%, 0.35% and 5.46%, respectively. As a
result of decreased construction balances and significant
decreases in short-term debt interest rates, Washington Gas made
an adjustment of $275,000 and $383,000 to reduce the amount of
capitalized AFUDC for the fiscal years ended September 30,
2010 and 2009, respectively. Washington Gas capitalized AFUDC of
$999,000 during the fiscal year ended September 30, 2008.
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As approved by our regulators, Washington Gas accrues an annual
amount of asset removal costs through depreciation expense with
a corresponding credit to “Regulatory
liabilities—Accrued asset removal costs.” When
Washington Gas retires depreciable utility plant and equipment,
it charges the associated original costs to “Accumulated
depreciation and amortization” and any related removal
costs incurred are charged to “Regulatory
liabilities—Accrued asset removal costs.”
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Washington Gas charges maintenance and repairs to operating
expenses, except those charges applicable to transportation and
power-operated equipment, which it allocates to operating
expenses, construction and other accounts based on the use of
the equipment. Washington Gas capitalizes betterments and
renewal costs, and calculates depreciation applicable to its
utility gas plant in service primarily using a straight-line
method over the estimated remaining life of the plant. The
composite depreciation and amortization rate of the regulated
utility segment was 3.00% during fiscal year 2010, and 3.12% and
3.23% during fiscal years 2009 and 2008, respectively. In
accordance with regulatory requirements, such rates include a
component related to asset removal costs for Washington Gas.
Washington Gas periodically reviews the adequacy of its
depreciation rates by considering estimated remaining lives and
other factors. Refer to Note 13—<i>Commitments and
Contingencies </i>for a discussion of depreciation-related
contingencies.
</div>
<div style="margin-top: 4pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
At both September 30, 2010 and 2009, 99.7% of WGL
Holdings’ consolidated original cost of property, plant and
equipment was related to the regulated utility segment as shown
below.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="72%"> </td><!-- colindex=01 type=maindata -->
<td width="1%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="2%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="2%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="2%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="4%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
<td width="2%"> </td><!-- colindex=05 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=05 type=lead -->
<td width="2%" align="right"> </td><!-- colindex=05 type=body -->
<td width="1%" align="left"> </td><!-- colindex=05 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 10pt" valign="bottom" align="center">
<td colspan="16" align="center" valign="bottom">
<b>Property, Plant and Equipment at Original Cost</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="16" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 10pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
At September 30,
</td>
<td>
 
</td>
<td colspan="6" align="center" valign="bottom">
<b>2010</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="6" align="center" valign="bottom">
2009
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="16" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
<i><font style="font-size: 10pt">(In millions)</font></i>
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b><font style="font-size: 10pt">Dollars</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b><font style="font-size: 10pt">%</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<font style="font-size: 10pt">Dollars
</font>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<font style="font-size: 10pt">%
</font>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="16" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 10pt">
<b>Regulated utility segment</b>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Distribution, transmission and storage
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>2,995.2</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>88.5</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,890.6
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
89.2
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
General, miscellaneous and intangibles
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>312.1</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>9.2</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
293.1
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
9.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Construction work in progress (CWIP)
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>64.9</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>2.0</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
49.4
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1.5
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="17" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 10pt">
<b>Total regulated utility segment</b>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>3,372.2</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>99.7</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,233.1
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
99.7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 10pt">
<b>Unregulated segments</b>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>11.1</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>0.3</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
9.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="17" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 10pt">
<b>Total</b>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>3,383.3</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>100.0</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,242.4
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
100.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="17" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
<div style="font-size: 1pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     OPERATING
LEASES</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We have classified the lease of our corporate headquarters as an
operating lease. We amortize to rent expense the total of all
scheduled lease payments (including lease payment escalations)
and tenant allowances on a straight-line basis over the term of
the lease. For this purpose, the lease term began on the date
when the lessor commenced constructing the leasehold
improvements which allowed us to occupy our corporate
headquarters. Leasehold improvement costs are classified as
“Property, Plant and Equipment” on the Balance Sheets,
and are being amortized to depreciation and amortization expense
on a straight-line basis over the
<font style="white-space: nowrap">15-year</font>
non-cancelable period of the lease. Refer to
Note 13—<i>Commitments and Contingencies </i>for
financial data for all of our operating leases.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     REGULATED
OPERATIONS</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Washington Gas accounts for its regulated operations in
accordance with Financial Accounting Standards Board Accounting
Standards Codification (ASC) Topic 980, <i>Regulated
Operations</i> (ASC Topic 980). This standard includes
accounting principles for companies whose rates are determined
by independent third party regulators. When setting rates,
regulators may require us to record costs as expense in
different periods than may be appropriate for unregulated
enterprises. When this occurs, Washington Gas defers
the associated costs as assets (regulatory assets) on its
balance sheet and records them as expenses on its income
statement as it collects the revenues designed to recover these
costs through customers’ rates. Further, regulators can
also impose liabilities upon a company for amounts previously
collected from customers and for recovery of costs that are
expected to be incurred in the future (regulatory liabilities).
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In fiscal year 2009, Washington Gas adopted a revised practice
associated with the capitalization of incentive compensation
costs related to its construction activities for fixed assets.
This accounting is in accordance with the regulatory rules
applicable to fixed asset accounting and is common place within
the public utility industry. The result of this treatment for
the fiscal years ended September 30, 2010 and 2009 was to
capitalize (pre-tax) costs of $877,000 and $1.4 million,
respectively.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
At September 30, 2010 and 2009, we recorded the following
regulatory assets and liabilities on our balance sheets. These
assets and liabilities will be recognized as expenses or
revenues in future periods as they are reflected in
customers’ rates.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="65%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="4%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="3%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="3%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="4%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
<td width="3%"> </td><!-- colindex=05 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=05 type=lead -->
<td width="3%" align="right"> </td><!-- colindex=05 type=body -->
<td width="1%" align="left"> </td><!-- colindex=05 type=hang1 -->
<td width="1%"> </td><!-- colindex=06 type=gutter -->
<td width="1%"> </td><!-- colindex=06 type=maindata -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 10pt" valign="bottom" align="center">
<td colspan="16" nowrap="nowrap" align="center" valign="bottom">
<b>Regulatory Assets and Liabilities</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="19" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<tr style="font-size: 10pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
Regulatory<br />
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
Regulatory<br />
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 10pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
<i>(In millions)</i>
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
Assets
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
Liabilities
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="19" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
<font style="font-size: 10pt">At September 30,
</font>
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b><font style="font-size: 10pt">2010</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<font style="font-size: 10pt">2009
</font>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b><font style="font-size: 10pt">2010</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<font style="font-size: 10pt">2009
</font>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="19" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 8pt">
<b>Current:</b>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Gas costs due from/to customers
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>13.9</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
71.7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>6.6</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
7.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Interruptible sharing
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>3.8</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3.8
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>3.3</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
4.1
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Earnings Sharing Mechanism
(ESM)<i><sup style="font-size: 85%; vertical-align: top">(a)(b)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Conservation And Rate-making Efficiency adjustment (CARE)
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>0.5</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Capacity Allocation Charge
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>0.5</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1.7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Revenues Normalization Adjustment (RNA) billing
mechanism<i><sup style="font-size: 85%; vertical-align: top">(c)
</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.4
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="19" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 34pt">
<b>Total current</b>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>18.7</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
77.2
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>9.9</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
14.8
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="19" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
<div style="font-size: 1pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 8pt">
<b>Deferred:</b>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Accrued asset removal costs
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>323.1</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
319.2
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Deferred gas costs
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>6.0</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
14.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Pension and other post-retirement benefits
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Other post-retirement benefit
costs—trackers<i><sup style="font-size: 85%; vertical-align: top">(d)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>4.3</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
6.1
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Deferred pension
costs/income—trackers<i><sup style="font-size: 85%; vertical-align: top">(d)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>28.6</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
20.2
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
ASC Topic 715 unrecognized
costs/income<i><sup style="font-size: 85%; vertical-align: top">(e)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 34pt">
Pensions
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>249.1</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
173.5
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 34pt">
Other post-retirement benefits
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>168.6</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
106.7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Other curtailment costs for pensions & other<br />
post-retirement
benefits<i><sup style="font-size: 85%; vertical-align: top">(f)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>1.4</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="19" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 34pt">
Total pension and other post-retirement benefits
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>452.0</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
308.5
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 17pt">
Other
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Income tax-related amounts due from/to
customers<i><sup style="font-size: 85%; vertical-align: top">(g)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>21.6</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
22.8
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>8.8</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
9.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Losses/gains on issuance and extinguishments of debt and
interest-rate derivative
instruments<i><sup style="font-size: 85%; vertical-align: top">(h)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>20.3</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
8.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>1.4</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1.7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Deferred gain on sale of assets
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>2.7</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Environmental response costs
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>2.9</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2.8
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
<font style="white-space: nowrap">Rights-of-way</font>
fees
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>0.8</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.5
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Other costs—Business Process Outsourcing (BPO)
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>10.0</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
13.2
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Sabbatical leave and other similar benefits
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>3.1</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3.1
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Nonretirement postemployment
benefits<i><sup style="font-size: 85%; vertical-align: top">(i)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>11.6</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>–</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
–
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 25pt">
Other regulatory expenses
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>3.1</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3.2
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>0.5</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="19" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -9pt; margin-left: 34pt">
Total other
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>73.4</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
53.9
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>13.4</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
14.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="19" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -8pt; margin-left: 42pt">
<b>Total deferred</b>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>531.4</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
376.4
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>336.5</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
333.5
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="19" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
<div style="font-size: 1pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="2%"></td>
<td width="98%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(a)</sup></font><font style="font-size: 8pt">  </font></i>
</td>
<td align="left"> <i><font style="font-size: 8pt">Refer to the section entitled
“Performance-Based Rate Plans” under
Note 13—Commitments and Contingencies for a further
discussion of these amounts.</font></i>
</td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(b)</sup></font><font style="font-size: 8pt">  </font></i>
</td>
<td align="left"> <i><font style="font-size: 8pt">Relates to the Virginia
jurisdiction.</font></i>
</td>
</tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="2%"></td>
<td width="98%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(c)</sup></font><font style="font-size: 8pt">  </font></i></td>
<td align="left">
<i><font style="font-size: 8pt">Relates to the Maryland
jurisdiction.</font></i>
</td>
</tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="2%"></td>
<td width="98%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(d)</sup></font><font style="font-size: 8pt">  </font></i></td>
<td align="left">
<i><font style="font-size: 8pt">Relates to the District of
Columbia jurisdiction.</font></i>
</td>
</tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="2%"></td>
<td width="98%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(e)</sup></font><font style="font-size: 8pt">  </font></i></td>
<td align="left">
<i><font style="font-size: 8pt">Refer to
Note 10—Pension and Other Post-Retirement Benefit
Plans for a further discussion of these amounts.</font></i>
</td>
</tr>
</table>
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<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
<font style="font-family: 'Times New Roman', Times">
<i>
</i>
</font>
</div>
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<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="2%"></td>
<td width="98%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(f)</sup></font><font style="font-size: 8pt">  </font></i>
</td>
<td align="left"> <i><font style="font-size: 8pt">Represents curtailment costs
related to Virginia and Maryland associated with our BPO plan.
Curtailment costs related to the District of Columbia are
included in “Other post-retirement
benefits—trackers” and “Deferred pension
costs/income—trackers”.</font></i>
</td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(g)</sup></font><font style="font-size: 8pt">  </font></i>
</td>
<td align="left"> <i><font style="font-size: 8pt">This balance represents amounts
due from customers for deferred tax liabilities related to tax
benefits on deduction flowed directly to customers prior to the
adoption of income tax normalization for ratemaking
purposes.</font></i>
</td>
</tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="2%"></td>
<td width="98%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(h)</sup></font><font style="font-size: 8pt">  </font></i></td>
<td align="left">
<i><font style="font-size: 8pt">The losses or gains on the
issuance and extinguishment of debt and interest-rate derivative
instruments include unamortized balances from transactions
executed in prior fiscal years. These transactions create gains
and losses that are amortized over the remaining life of the
debt as prescribed by regulatory accounting
requirements.</font></i>
</td>
</tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="2%"></td>
<td width="98%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(i)</sup></font><font style="font-size: 8pt">  </font></i></td>
<td align="left">
<i><font style="font-size: 8pt">Represents the timing difference
between the recognition of workers compensation and short term
disability costs in accordance with generally accepted
accounting principles and the way these costs are recovered
through rates.</font></i>
</td>
</tr>
</table>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
With the exception of gas costs due from customers and deferred
gas costs, there are no material regulatory assets that reflect
an outlay of cash by Washington Gas for which Washington Gas
does not earn its overall rate of return. Washington Gas is
allowed to recover and is required to pay, using short-term
interest rates, the carrying costs related to gas costs due from
and to its customers in the District of Columbia and Virginia
jurisdictions.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As required by ASC Topic 980, Washington Gas monitors its
regulatory and competitive environment to determine whether the
recovery of its regulatory assets continues to be probable. If
Washington Gas were to determine that recovery of these assets
is no longer probable, it would write off the assets against
earnings. We have determined that ASC Topic 980 continues to
apply to our regulated operations, and the recovery of our
regulatory assets is probable.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     CASH
AND CASH EQUIVALENTS</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We consider all investments with original maturities of three
months or less to be cash equivalents. We did not have any
restrictions on our cash balances that would impact the payment
of dividends by WGL Holdings or our subsidiaries as of
September 30, 2010 and 2009.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     REVENUE
AND COST RECOGNITION</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: Arial, Helvetica">     Regulated
Utility Operations</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Revenues.</i></b>  For regulated deliveries of
natural gas, Washington Gas reads meters and bills customers on
a monthly cycle basis. The billing cycles for customers do not
coincide with the accounting periods used for financial
reporting purposes; therefore, Washington Gas accrues unbilled
revenues for gas delivered, but not yet billed, at the end of
each accounting period.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Cost of Gas.</i></b>  Washington Gas’s
jurisdictional tariffs contain mechanisms that provide for the
recovery of the cost of gas incurred on behalf of firm
customers, including related pipeline transportation and storage
capacity charges. Under these mechanisms, Washington Gas
periodically adjusts its firm customers’ rates to reflect
increases and decreases in these costs. Under or
over-collections of gas costs in the current cycle are charged
or credited to deferred charges or credits on the balance sheet
as non-current regulatory assets or liabilities. Amounts
deferred at the end of the cycle, August 31 of each year, are
fully reconciled and transferred to current assets or
liabilities under the balance sheet captions “Gas costs and
other regulatory assets” and “Gas costs and other
regulatory liabilities.” These balances are recovered or
refunded to customers over the subsequent 12 month period.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Revenue Taxes.</i></b>  Revenue taxes such as
gross receipts taxes, Public Service Commission (PSC) fees,
franchise fees and energy taxes are reported gross in operating
revenues. Refer to Note 15—<i>Operating Segment
Reporting </i>for amounts recorded related to revenue taxes.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Transportation Gas
Imbalance.</i></b>  Interruptible shippers and third
party marketer shippers transport gas on Washington Gas’s
distribution system as part of the unbundled services that it
offers. The delivered volumes of gas from third party shippers
into Washington Gas’s distribution system do not equal the
volumes delivered to those customers, resulting in
transportation gas imbalances. These imbalances are usually
short-term in duration, and Washington Gas monitors the activity
and regularly notifies the shippers when their accounts have an
imbalance. In accordance with regulatory treatment, Washington
Gas does not record a receivable from or liability to third
party marketers associated with gas volumes related to these
transportation imbalances but, rather, reflects the financial
impact as a regulatory asset or liability related to its gas
cost adjustment mechanism, thereby eliminating any profit or
loss that would occur as a result of the imbalance. The
regulatory treatment combines the imbalance for all marketers,
including WGEServices, into a single “net” adjustment
to the regulatory asset or liability. Refer to
Note 16—<i>Related Party Transactions </i>for a
further discussion of the accounting for these imbalance
transactions.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Asset Optimization Program.</i></b>  Washington
Gas optimizes the value of its long-term natural gas
transportation and storage capacity resources by entering into
physical and financial transactions in the form of forwards,
swaps and option contracts for periods
when these resources are not being used to physically serve
utility customers. Refer to <i>“Derivative Activities”
</i>below for a further discussion of the accounting for
derivative transactions entered into under this program.
Regulatory sharing mechanisms in all three jurisdictions allow
the profit from these transactions to be shared between
Washington Gas’s customers and shareholders. The customer
portion does not affect earnings.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Prior to May 1, 2008, Washington Gas contracted for the
management of a portion of Washington Gas’s asset
optimization program with non-affiliated asset managers. These
asset managers paid Washington Gas a fee to utilize the related
capacity resources for their own account when they were not
required to meet customer supply needs. On April 30, 2008,
the last of these asset management contracts expired, and
Washington Gas retained the use of all of its capacity resources
to manage the asset optimization program internally with the
assistance of external consultants.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
All unrealized fair value gains and losses and margins generated
from the physical and financial settlement of these asset
optimization contracts are recorded in utility cost of gas or,
in the case of amounts to be shared with rate payers, regulatory
liabilities. In conjunction with optimizing Washington
Gas’s storage capacity, storage gas inventory may be
subject to lower of cost or market adjustments. Washington Gas
recorded a lower of cost or market adjustment after the effects
of regulatory sharing of $0.8 million, $8.4 million,
and $2.5 million during the fiscal years ended
September 30, 2010, 2009 and 2008, respectively, related to
its storage gas inventory, which was recorded to “Utility
cost of gas.”
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: Arial, Helvetica">     Non-Utility
Operations</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Retail Energy-Marketing
Segment.</i></b>  WGEServices sells natural gas and
electricity on an unregulated basis to residential, commercial
and industrial customers both inside and outside the Washington
Gas service territory.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
WGEServices enters into indexed or fixed-rate contracts with
residential, commercial and industrial customers, for sales of
natural gas and electricity. Customer contracts, which typically
have terms less than 24 months, but may extend up to five
years, allow WGEServices to bill customers based upon metered
gas and electricity usage, measured on a cycle basis, at
customer premises or based on quantities delivered to the local
utility, either of which may vary by month. The billing cycles
for customers do not coincide with the accounting periods used
for financial reporting purposes; therefore, WGEServices accrues
unbilled revenues for gas and electricity delivered, but not yet
billed, at the end of each accounting period. Revenues are
reflected in “Operating Revenues—Non utility.”
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
WGEServices procures natural gas and electricity supply under
contract structures in which it assembles the various components
of supply from multiple suppliers to match its customer
requirements. The cost of natural gas and electricity for these
purchases is recorded using the contracted volumes and prices in
“Non-Utility cost of energy-related sales.”
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Design-Build Energy Systems
Segment.</i></b>  WGESystems recognizes income and
expenses for all construction contracts using the
<font style="white-space: nowrap">percentage-of-completion</font>
method in “Operating Revenues—Non-utility” and
“Non-Utility cost of energy-related sales.”
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Other Activities.</i></b>  CEV reports its
trading margins in non-utility revenue on a net basis.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     RATE
REFUNDS DUE TO CUSTOMERS</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
When Washington Gas files a request with certain regulatory
commissions to modify customers’ rates, it is permitted to
charge customers new rates, subject to refund, until the
regulatory commission renders a final decision on the amount of
the authorized change in rates. During this interim period,
Washington Gas records a provision for a rate refund regulatory
liability based on the difference between the amount it collects
in rates and the amount it expects to recover from a final
regulatory decision. Similarly, Washington Gas periodically
records provisions for rate refunds related to other
transactions. Actual results for these regulatory contingencies
are often difficult to predict and could differ significantly
from the estimates reflected in the financial statements. When
necessary, Washington Gas establishes a liability for an
estimated refund to customers. Refer to
Note 13—<i>Commitments and Contingencies </i>for a
further discussion of regulatory matters and related
contingencies.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     REACQUISITION
OF LONG-TERM DEBT</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Washington Gas defers gains or losses resulting from the
reacquisition of long-term debt as regulatory liabilities or
assets for financial reporting purposes, and amortizes them over
future periods as adjustments to interest expense in accordance
with established regulatory practice. For income tax purposes,
Washington Gas recognizes these gains and losses when they are
incurred.
</div>
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<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
<font style="font-family: 'Times New Roman', Times">
<i>
</i>
</font>
</div>
<!-- XBRL Pagebreak End -->
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     WEATHER-RELATED
INSTRUMENTS</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Periodically, we purchase certain weather-related instruments,
such as weather insurance policies, heating degree day (HDD)
derivatives and cooling degree day (CDD) derivatives. We
account for these weather related instruments in accordance with
ASC Subtopic
<font style="white-space: nowrap">815-45,</font>
<i>Derivatives and Hedging</i>—<i>Weather Derivatives</i>.
For weather insurance policies and HDD derivatives, benefits or
costs are ultimately recognized to the extent actual HDDs fall
above or below the contractual HDDs for each instrument.
Benefits or costs are recognized for CDD derivatives when the
average temperature exceeds a contractually stated level during
the contract period. Premiums for weather-related instruments
are amortized based on the pattern of normal temperature days
over the coverage period. Weather-related instruments for which
we collect a premium are carried at fair value. Washington
Gas’s weather related instrument premium expense or benefit
is not considered in establishing retail rates. Washington Gas
does not purchase such instruments for jurisdictions in which it
has received rate mechanisms that compensate it on a normal
weather basis. Refer to Note 5—<i>Derivative and
Weather-Related Instruments </i>for a further discussion of our
weather-related instruments.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     CONCENTRATION
OF CREDIT RISK</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: Arial, Helvetica">     Regulated
Utility Segment</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Washington Gas has a relatively low concentration of customer
credit risk due to its large number of customers, none of which
is singularly large as a percentage of Washington Gas’s
total customer base. Although Washington Gas has credit
monitoring policies and procedures which are designed to limit
its exposure, it has credit risk to the extent the
implementation of such controls are not effective in mitigating
all of its risk. Certain wholesale suppliers that sell natural
gas to Washington Gas either have relatively low credit ratings
or are not rated by major credit rating agencies. In the event
of a supplier’s failure to deliver contracted volumes of
gas, Washington Gas may need to replace those volumes at
prevailing market prices, which may be higher than the original
transaction prices, and pass these costs through to its sales
customers under the purchased gas cost adjustment mechanisms.
Additionally, Washington Gas enters into contracts with
wholesale counterparties to buy and sell natural gas for the
purpose of optimizing the value of its long-term capacity and
storage assets, as well as for hedging natural gas costs and
interest costs. In the event of a default by these
counterparties, Washington Gas may be at risk for financial loss
to the extent these costs are not passed through to its
customers.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: Arial, Helvetica">     Retail
Energy-Marketing Segment</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
WGEServices has credit monitoring policies and procedures which
are designed to limit its credit risk exposure; however, it has
credit risk to the extent the implementation of such controls
are not effective in mitigating all of its risk. Certain
suppliers that sell natural gas or electricity to WGEServices
have either relatively low credit ratings or are not rated by
major credit rating agencies. Depending on the ability of these
suppliers to deliver natural gas or electricity under existing
contracts, WGEServices could be financially exposed for the
difference between the price at which WGEServices has contracted
to buy these commodities and their replacement cost from another
supplier. Additionally, WGEServices enters into contracts with
third parties to hedge the costs of natural gas and electricity.
Depending on the ability of the third parties to fulfill their
commitments, WGEServices could be at risk for financial loss.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
WGEServices is also exposed to the risk of non-payment of
invoiced sales by its retail customers. WGEServices manages this
risk by evaluating the credit quality of new customers as well
as by monitoring collections from existing customers. To the
extent necessary, WGEServices can obtain collateral from, or
terminate service to, its customers.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     DERIVATIVE
ACTIVITIES</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
WGEServices enters into both physical and financial contracts
for the purchase and sale of natural gas and electricity. We
designate a portion of these physical contracts related to the
purchase of natural gas and electricity to serve our customers
as “normal purchases and normal sales;” therefore,
they are not subject to the
<font style="white-space: nowrap">mark-to-market</font>
accounting requirements of ASC Topic 815, <i>Derivatives and
Hedging</i>. The financial contracts and the portion of the
physical contracts that qualify as derivative instruments and
are subject to the
<font style="white-space: nowrap">mark-to-market</font>
accounting requirements are recorded on the balance sheet at
fair value and are reflected in earnings. Washington Gas enters
into both physical and financial derivative contracts for the
purchase and sale of natural gas, which are subject to
<font style="white-space: nowrap">mark-to-market</font>
accounting. Changes in the fair value of derivative instruments
recoverable or refundable to customers and therefore subject to
ASC Topic 980, are recorded as regulatory assets or liabilities
while changes in the fair value of derivative instruments not
affected by rate regulation are reflected in earnings.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As part of its asset optimization program, Washington Gas enters
into derivative contracts related to the sale and purchase of
natural gas at a future price to substantially lock-in operating
margins that Washington Gas will ultimately realize. The
derivatives
used under this program may cause significant
<font style="white-space: nowrap">period-to-period</font>
volatility in earnings for the portion of net profits retained
for shareholders; however, this volatility will not change the
margins that Washington Gas will ultimately realize from these
transactions. In accordance with ASC Topic 815, all financially
and physically settled contracts under our asset optimization
program are reported on a net basis in the statements of income
in “Utility cost of gas”.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
From time to time Washington Gas also utilizes derivative
instruments that are designed to minimize the risk of
interest-rate volatility associated with planned issuances of
Medium-Term Notes (MTNs). Gains or losses associated with these
derivative transactions are deferred as regulatory assets or
liabilities and amortized to interest expense in accordance with
regulatory accounting requirements. Refer to
Note 5—<i>Derivative and Weather-Related Instruments
</i>for a further discussion of our derivative activities.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     INCOME
TAXES</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We recognize deferred income tax assets and liabilities for all
temporary differences between the financial statement basis and
the tax basis of assets and liabilities, including those where
regulators prohibit deferred income tax treatment for ratemaking
purposes of Washington Gas. Regulatory assets or liabilities,
corresponding to such additional deferred income tax assets or
liabilities, may be recorded to the extent recoverable from or
payable to customers through the ratemaking process. Refer to
the table under “Regulated Operations” above that
depicts Washington Gas’s regulatory assets and liabilities
associated with income taxes due from and to customers at
September 30, 2010 and 2009. Amounts applicable to income
taxes due from and due to customers primarily represent
differences between the book and tax basis of net utility plant
in service. We amortize investment tax credits as reductions to
income tax expense over the estimated service lives of the
related properties. Refer to Note 9—<i>Income Taxes
</i>which provides detailed financial information related to our
income taxes.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     STOCK-BASED
COMPENSATION</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We account for stock-based compensation expense in accordance
with ASC Topic 718, <i>Compensation—Stock Compensation
</i>(ASC Topic 718) which requires us to measure and
recognize stock-based compensation expense in our financial
statements based on the fair value at the date of grant for our
share-based awards, which include performance shares,
performance units, stock options granted to certain employees
and shares issued to directors. In addition, we estimate
forfeitures over the requisite service period when recognizing
compensation expense; these estimates are periodically adjusted
to the extent to which actual forfeitures differ from such
estimates. Refer to Note 11—<i>Stock-Based
Compensation </i>for a further discussion of the accounting for
our stock-based compensation plans.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     ASSET
RETIREMENT OBLIGATIONS</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Washington Gas accounts for its asset retirement obligations
(AROs) in accordance with ASC Subtopic
<font style="white-space: nowrap">410-20,</font>
<i>Asset Retirement and Environmental Obligations—Asset
Retirement Obligations.</i> Our asset retirement obligations
include the costs to cut, purge and cap our natural gas
distribution system, remove asbestos and plug storage wells upon
their retirement. These standards require recording the
estimated retirement cost over the life of the related asset by
depreciating the present value of the retirement obligation,
measured at the time of the asset’s acquisition, and
accreting the liability until it is settled. There are timing
differences between the ARO-related accretion and depreciation
amounts being recorded pursuant to GAAP and the recognition of
depreciation expense for legal asset removal costs that we are
currently recovering in rates. These timing differences are
recorded as a reduction to “Regulatory
liabilities—Accrued asset removal costs” in accordance
with ASC Topic 980. We do not have any assets that are legally
restricted related to the settlement of asset retirement
obligations. The following tables present the changes in asset
retirement obligations as of September 30, 2010 and 2009.
</div>
<div style="margin-top: 9pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="73%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="8%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="8%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="1%"> </td><!-- colindex=04 type=gutter -->
<td width="1%"> </td><!-- colindex=04 type=maindata -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 10pt" valign="bottom" align="center">
<td colspan="11" nowrap="nowrap" align="center" valign="bottom">
<b>WGL Holdings, Inc.<br />
</b>
</td>
</tr>
<tr style="font-size: 10pt" valign="bottom" align="center">
<td colspan="11" nowrap="nowrap" align="center" valign="bottom">
<b>Changes in Asset Retirement Obligations </b>
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="11" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<tr style="font-size: 10pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
September 30,
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="11" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
<i><font style="font-size: 10pt">(In millions)</font></i>
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b><font style="font-size: 10pt">2010</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<font style="font-size: 10pt">2009
</font>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="11" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 10pt">
Asset retirement obligations at beginning of period
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>33,982.3</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
31,388.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Liabilities incurred in the period
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>174.5</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
766.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Liabilities settled in the period
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>(1,238.8</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>)</b>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(1,086.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Accretion expense
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>1,922.1</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,737.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Revisions in estimated cash
flows<i><sup style="font-size: 85%; vertical-align: top">(a)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>30,353.1</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,176.7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="11" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 10pt">
Asset retirement obligations at end of
period<i><sup style="font-size: 85%; vertical-align: top">(b)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>65,193.2</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
33,982.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="11" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
<div style="font-size: 1pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
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<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
<font style="font-family: 'Times New Roman', Times">
<i>
</i>
</font>
</div>
<!-- XBRL Pagebreak End -->
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="73%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="8%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
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<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="1%"> </td><!-- colindex=04 type=gutter -->
<td width="1%"> </td><!-- colindex=04 type=maindata -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 10pt" valign="bottom" align="center">
<td colspan="8" nowrap="nowrap" align="center" valign="bottom">
<b>Washington Gas Light Company<br />
</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 10pt" valign="bottom" align="center">
<td colspan="8" nowrap="nowrap" align="center" valign="bottom">
<b>Changes in Asset Retirement Obligations</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="11" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<tr style="font-size: 10pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
September 30,
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="11" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="left" valign="bottom">
<i><font style="font-size: 10pt">(In millions)</font></i>
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b><font style="font-size: 10pt">2010</font></b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<font style="font-size: 10pt">2009
</font>
</td>
<td>
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
</tr>
<tr style="font-size: 1pt" valign="bottom" align="center">
<td colspan="11" nowrap="nowrap" align="center" valign="bottom" style="font-size: 1pt; border-bottom: 1px solid #000000">
 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 10pt">
Asset retirement obligations at beginning of period
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>32,967.9</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
30,469.8
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Liabilities incurred in the period
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>174.5</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
716.1
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Liabilities settled in the period
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>(1,238.8</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>)</b>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(1,086.0
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Accretion expense
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>1,858.9</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,691.3
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 20pt">
Revisions in estimated cash
flows<i><sup style="font-size: 85%; vertical-align: top">(a)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>30,215.2</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,176.7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="11" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="top">
<div style="text-indent: -10pt; margin-left: 10pt">
Asset retirement obligations at end of
period<i><sup style="font-size: 85%; vertical-align: top">(c)</sup></i>
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
<b>$</b>
</td>
<td nowrap="nowrap" align="right" valign="bottom">
<b>63,977.7</b>
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
32,967.9
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="top">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 2pt">
<td colspan="11" valign="top">
<div style="font-size: 0pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
<div style="font-size: 1pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000">
</div>
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="2%"></td>
<td width="98%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(a)</sup></font></i><font style="font-size: 8pt"> 
</font>
</td>
<td align="left"> <font style="font-size: 8pt">WGL revised its assumptions
regarding the timing and amounts related to its obligation to
cut, cap and purge pipeline.
</font>
</td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(b)</sup></font></i><font style="font-size: 8pt"> 
</font>
</td>
<td align="left"> <font style="font-size: 8pt">Includes short-term asset
retirement obligations of $1,176.6 and $1,341.3 for fiscal year
2010 and 2009, respectively.
</font>
</td>
</tr>
</table>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="1%"></td>
<td width="99%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> <i><font style="font-size: 8pt"><sup style="font-size: 85%; vertical-align: top">(c)</sup></font></i><font style="font-size: 8pt"> 
</font></td>
<td align="left">
<font style="font-size: 8pt">Includes short-term asset
retirement obligations of $1,176.6 and $1,340.5 for fiscal year
2010 and 2009, respectively.
</font>
</td>
</tr>
</table>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     ACCOUNTING
STANDARDS ADOPTED IN FISCAL YEAR 2010</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Fair Value.</i></b>  In August 2009, the
Financial Accounting Standards Board (FASB) issued Accounting
Standards Update (ASU)
<font style="white-space: nowrap">2009-05,</font>
<i>Fair Value Measurements and Disclosures—Measuring
Liabilities at Fair Value </i>(ASU
<font style="white-space: nowrap">2009-05).</font>
This ASU provides amendments to Accounting Standards
Codification (ASC) Subtopic
<font style="white-space: nowrap">820-10,</font>
<i>Fair Value Measurements and Disclosures—Overall</i>, for
the fair value measurement of liabilities. ASU
<font style="white-space: nowrap">2009-05</font>
provides clarification that in circumstances in which a quoted
price in an active market for the identical liability is not
available, a reporting entity is required to measure fair value
using; <i>(i) </i>a valuation technique that uses the
quoted price of the identical liability when traded as an asset,
or quoted prices for similar liabilities or similar liabilities
when traded as assets or <i>(ii) </i>another valuation
technique that is consistent with the principles of Topic 820.
ASU <font style="white-space: nowrap">2009-05</font>
was effective for us on October 1, 2009. The adoption of
this guidance did not have a material effect on our consolidated
financial statements.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Noncontrolling Interests.</i></b>  Effective
October 1, 2009, we adopted revised guidance under ASC
Topic 810 relating to noncontrolling interests in consolidated
financial statements. This guidance establishes accounting and
reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. The
adoption of this standard resulted in reclassifying Washington
Gas’s preferred stock dividends on the Statement of Income
to present consolidated net income attributable to both the
shareholders of WGL Holdings Inc. and to the noncontrolling
interest of Washington Gas’s preferred shareholders as net
income. In addition, the Statements of Cash Flows were changed
to include net income attributable to all equity holders as a
source of cash in Operating Activities and to reflect the
distribution of preferred stock dividends as a use of cash in
Financing Activities. The adoption of this standard had no other
effect on our consolidated financial statements.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Subsequent Events.</i></b>  In February 2010,
the FASB issued ASU
<font style="white-space: nowrap">2010-09,</font>
<i>Subsequent Events—Amendments to Certain Recognition and
Disclosure Requirements </i>(ASU
<font style="white-space: nowrap">2010-09).</font>
This ASU provides amendments to Subtopic
<font style="white-space: nowrap">855-10,</font>
<i>Subsequent Events—Overall</i>, which establishes general
standards of accounting for and disclosure of events that occur
after the balance sheet date but before financial statements are
issued or are available to be issued. Subtopic
<font style="white-space: nowrap">855-10</font> does
not apply to the accounting for and disclosure of subsequent
events addressed in other generally accepted accounting
principles. ASU
<font style="white-space: nowrap">2010-09</font>
eliminates the requirement to disclose the date through which a
Securities and Exchange Commission (SEC) registrant has
evaluated subsequent events. Effective March 31, 2010, we
adopted ASU
<font style="white-space: nowrap">2010-09</font> for
disclosures of events or transactions not within the scope of
other applicable GAAP.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Post Retirement Benefits.</i></b>  In December
2008, the FASB issued FSP FAS 132(R)-1, <i>Employers’
Disclosures about Postretirement Benefit Plan Assets </i>(FSP
FAS 132(R)-1), now part of ASC Topic
<font style="white-space: nowrap">715-20-65.</font>
FSP FAS 132(R)-1 contains amendments to ASC Topic 715 that are
intended to improve disclosures of postretirement benefit plan
assets. This ASU requires: <i>(i) </i>increased disclosure
on how investment allocation decisions are made, including the
factors that are pertinent to an understanding of investment
policies and strategies; <i>(ii) </i>the major categories
of plan assets; <i>(iii) </i>the inputs and valuation
techniques used to measure the fair value of plan assets;
<i>(iv) </i>the effect of fair value measurements using
significant unobservable inputs on changes in plan assets for
the period and <i>(v) </i> significant concentrations of
risk within plan assets. Refer to Note 10<i>—Pension
and Other Post-Retirement Benefit Plans </i>of the Notes to
Consolidated Financial Statements for the required disclosures
related to this standard.
</div>
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<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
<font style="font-family: 'Times New Roman', Times">
<i>
</i>
</font>
</div>
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<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 12pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><font style="font-family: Arial, Helvetica">     OTHER
NEWLY ISSUED ACCOUNTING STANDARDS</font></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Fair Value.</i></b>  In January 2010, the FASB
issued ASU
<font style="white-space: nowrap">2010-06,</font>
<i>Improving Disclosures about Fair Value Measurements</i>. ASU
<font style="white-space: nowrap">2010-06</font>
amends ASC Topic 820 to require the following additional
disclosures regarding fair value measurements:
<i>(i) </i>the amounts of transfers between Level 1
and Level 2 of the fair value hierarchy;
<i>(ii) </i>reasons for any transfers in or out of
Level 3 of the fair value hierarchy and
<i>(iii) </i>the inclusion of information about purchases,
sales, issuances and settlements in the reconciliation of
recurring Level 3 measurements. ASU
<font style="white-space: nowrap">2010-06</font> also
amends ASC Topic 820 to clarify existing disclosure
requirements, requiring fair value disclosures by class of
assets and liabilities rather than by major category and the
disclosure of valuation techniques and inputs used to determine
the fair value of Level 2 and Level 3 assets and
liabilities. With the exception of disclosures relating to
purchases, sales issuances and settlements of recurring
Level 3 measurements, ASU
<font style="white-space: nowrap">2010-06</font> was
effective for us on January 1, 2010. Refer to
Note 14—<i>Fair Value Measurements </i>for the
required disclosure under this standard. The disclosure
requirements related to purchases, sales, issuances and
settlements of recurring Level 3 measurements will be
effective for us on October 1, 2011. We are currently
evaluating the possible effect of this standard on our
consolidated financial statements.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<b><i>Receivables.</i></b>  In July 2010, the FASB
issued ASU
<font style="white-space: nowrap">2010-20,</font>
<i>Disclosures about the Credit Quality of Financing Receivables
and the Allowance for Credit Losses </i>(ASU
<font style="white-space: nowrap">2010-20).</font>
ASU <font style="white-space: nowrap">2010-20</font>
requires companies to provide more information in their
disclosures about the credit quality of their financing
receivables such as aging information and credit quality
indicators, and the credit reserves held against them. Both new
and existing disclosures must be disaggregated by portfolio
segment or class. The disaggregation of information is based on
how a company develops its allowance for credit losses and how
it manages its credit exposure. ASU
<font style="white-space: nowrap">2010-20</font> is
effective for us on January 1, 2011. We are currently
evaluating the possible effect of this standard on our
consolidated financial statements.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
</div>
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Description containing the entire organization, consolidation and basis of presentation of financial statements disclosure. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-Paragraph 8, C1, C7
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-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
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-Name Statement of Position (SOP)
-Number 94-6
-Paragraph 10
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