AltaGas Ltd. press release

ALTAGAS REPORTS RECORD FIRST QUARTER RESULTS

2026-04-30

TSX - Toronto Stock Exchange · Natural Gas · Natural Gas Liquids · Oil · Sulfur · Canada · Corporate Finance

Canada NewsWire

On Track to Deliver 2026 Results at Top End of 2026 Guidance; Potential Upside with Continued LPG Market Strength

CALGARY, AB, April 30, 2026/CNW/ - AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) reported first quarter 2026 financial results and provided an update on its operations, growth initiatives and corporate developments.

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First Quarter Highlights

(all financial figures are unaudited and in Canadian dollars unless otherwise noted)

Financial Results

Normalized EBITDA1was a record $818 million in the first quarter of 2026 compared to $689 million in the first quarter of 2025. Income before income taxes was $207 million in the first quarter of 2026, a decrease from $513 million in the first quarter of 2025, primarily due to unrealized hedging impacts. Normalized EBITDA growth was driven by higher global export volumes and margins, stronger processing and liquids handling margins, new Utilities rates in D.C. and Virginia, strong asset optimization, and partial settlement of a pension liability. Normalized EPS1 was $1.33 compared to $1.15 in the first quarter of 2025, while GAAP EPS2was $0.47 in the first quarter of 2026 compared to $1.31 in the first quarter of 2025.

Operational Highlights

AltaGas exported 124,917 Bbl/d of liquid petroleum gases ("LPG") to Asia, a 5 percent year-over-year increase. In the first quarter, the Company delivered 20 Very Large Gas Carriers ("VLGCs") to a diversified customer base across Asia. In mid-April, the Company took delivery of a new VLGC time charter, the Aurora Guardian. This brings AltaGas' long-term contracted fleet to three vessels, with a fourth scheduled to be delivered later in 2026.

Business Development and Growth

Construction of the 56,000 Bbl/d Ridley Island Energy Export Facility ("REEF") remains on time and on budget with the project approximately 75 percent complete. REEF Optimization I remains on schedule and is expected to add 30,000 Bbl/d of propane export capacity in the second half of 2027. Dimsdale Phase I and II storage expansions are on budget and more than 40 percent complete. Expansions will add six Bcf of natural gas storage capacity by 2026 year-end and an additional 30 Bcf by mid‑2027. Keweenaw Connector Pipeline advanced as planned in the quarter, achieving key pre‑construction milestones. Construction mobilization is expected in May 2026 with completion now targeted for 2026 year‑end. The Company executed a second behind‑the‑meter agreement for data center development in its Utilities segment. The Company will provide back‑up gas‑fired power generation for a 15 MW operational data center in Virginia. Additional opportunities are progressing across AltaGas' jurisdictions.

Financial Outlook and Balance Sheet

AltaGas is expecting to deliver 2026 results towards the top end of its guidance for both normalized EBITDA and normalized EPS, with upside potential from continued LPG market strength. Additionally, AltaGas is increasing its 2026 capital program to $1.7 billion to capture planned spending for Dimsdale II through 2026. Adjusted net debt to normalized EBITDA1exited the quarter at 4.4x on a trailing twelve-month basis, including 50 percent debt treatment for its subordinated hybrid notes and preferred shares. This is below the low end of AltaGas' 4.5x - 5.0x targeted range.

| _ | | (1) Non-GAAP measure; see discussion and reconciliation to US GAAP financial measures in the advisories of this news release or in AltaGas' Management's Discussion and Analysis (MD&A) as at and for the period ended March 31, 2026, which is available on www.sedarplus.ca. (2) GAAP EPS is equivalent to Net income applicable to common shares divided by shares outstanding. |

CEO Message

"AltaGas' first quarter results were above our expectations and reflect strong operational performance across the enterprise and supportive energy fundamentals," said Vern Yu, President and Chief Executive Officer of AltaGas.

"The conflict in the Middle East has dramatically altered global energy flows. LPG supply disruptions and on-going global trade tensions have heightened demand for Canadian LPG exports, and illustrate the growing importance of Canada as a secure and reliable supplier of energy.

"AltaGas continued to grow its export platform during the first quarter, serving a diverse and expanding customer base across Asia. We look forward to bringing REEF online, which will further expand our open‑access export infrastructure, enable greater volumes of Canadian LPGs to reach premium Asian markets, and further enhance Canada's global trade relationships.

"Our Utilities delivered safe, reliable and affordable service through the coldest Mid‑Atlantic winter in over two decades, demonstrating the resilience of our network and the value of our modernization investments. By leveraging natural gas storage and disciplined inventory management during Winter Storm Fern, we helped shield customer bills from extreme price volatility – reinforcing the cost and reliability advantages of natural gas as affordability remains a priority for customers and policymakers across the U.S.

"With strong momentum continuing through 2026 and a highly visible growth outlook, we remain focused on executing our strategy, advancing key projects, and delivering predictable, long‑term value for our stakeholders."

Forward Focus, Guidance and Funding

Following a strong first quarter of 2026, AltaGas is positioned to deliver results near the top end of its previously disclosed 2026 guidance. Should the global LPG market strength continue, AltaGas has the potential to exceed current guidance of:

2026 Normalized EBITDA guidance of $1.925 billion–$2.025 billion, compared to actual normalized EBITDA of $1.86 billion and income before taxes of $1.03 billion in 2025; and 2026 Normalized EPS guidance of $2.20–$2.45, compared to normalized EPS of $2.23 and GAAP EPS of $2.48 in 2025.

AltaGas is focused on delivering resilient and growing normalized EPS and normalized FFO per share while operating with strong financial flexibility. This strategy is designed to support steady dividend growth and provide the opportunity for continued capital appreciation for long-term shareholders.

Reflecting the advancement of key Midstream growth projects, specifically, Dimsdale Phase II and the now more visible project milestone payments in 2026, AltaGas has increased its 2026 capital program guidance from approximately $1.6 billion to approximately $1.7 billion, excluding ARO. The Company is allocating approximately 65 percent of its consolidated 2026 capital to its Utilities business, approximately 31 percent to the Midstream business, and the balance to the Corporate/Other segment.

Results by Segment

| Normalized EBITDA (1) | Three Months Ended

March 31 | | | ($ millions) | 2026 | 2025 | | Utilities | $ 555 | $ 501 | | Midstream | 273 | 197 | | Corporate/Other | (10) | (9) | | Normalized EBITDA (1) | $ 818 | $ 689 |

| (1) Non‑GAAP financial measure; see discussion in Non‑GAAP Financial Measures section of this news release. |

| Income (Loss) Before Income Taxes | Three Months Ended

March 31 | | | ($ millions) | 2026 | 2025 | | Utilities | $ 458 | $ 446 | | Midstream | (111) | 204 | | Corporate/Other | (140) | (137) | | Income Before Income Taxes | $ 207 | $ 513 |

Business Performance

Midstream

The Midstream segment reported normalized EBITDA of $273 million in the first quarter of 2026 compared to $197 million in the first quarter of 2025, while loss before income taxes was $111 million in the first quarter of 2026 compared to income before income taxes of $204 million in the first quarter of 2025. The 2026 first quarter loss in income before taxes was primarily due to the mark-to-market impacts of unrealized hedging positions. The 39 percent year-over-year increase in normalized Midstream EBITDA was driven by strong global export merchant margins and volumes, contributions from Pipestone II, which came online in December 2025, and increased throughput at the Company's Townsend and North Pine processing facilities. These results were partially offset by lower earnings at the extraction facilities due to lower realized frac spreads.

AltaGas exported 124,917 Bbl/d of LPGs to Asia through its open access terminals in the first quarter of 2026, across a total of 20 VLGCs. This included a record of over 88,600 Bbl/d from 14 ships at RIPET, and over 36,200 Bbl/d from 6 ships at Ferndale. The quarter included strong operational execution and logistics management with volumes five percent above 2025 first quarter levels.

Performance across the balance of the Midstream platform was robust with gas processing volumes up eight percent year-over-year, driven by the Pipestone Complex, as Pipestone II entered service in December 2025. AltaGas' Montney exposed infrastructure continues to demonstrate steady growth, with fractionation volumes up 11 percent year-over-year and gathering and processing volumes up 15 percent over the same period, led by Townsend.

Construction progress at REEF continues with the project now approximately 75 percent complete and nearly 90 percent of total project costs either incurred or committed. Recent milestones include final installation of the LPG accumulators, commencement of the second phase of the railroad utility corridor, and recent completion of piers 9, 10 and 12 on the jetty, which faced additional weather related challenges during the quarter.

Dimsdale Phase I and II construction continued to advance with the overall project more than 40 percent complete. Construction of the pipeline system is mechanically complete with Phase I and Phase II facility construction underway. The drilling program for the injection wells is set to commence in the third quarter. Phase I will add six Bcf of storage capacity by 2026 year-end, while Phase II will add an incremental 30 Bcf by mid-2027.

AltaGas is also progressing regulatory, engineering, and commercial work on other organic Midstream growth projects, including REEF Optimization II, Townsend de-propanizer, North Pine expansion, Pipestone III and additional export and liquids infrastructure opportunities.

Risk Management

Consistent with the Company's de-risking focus, AltaGas' Midstream operations are well-hedged for the remainder of 2026 with approximately 82 percent of the remaining 2026 expected global export volumes tolled or financially hedged. Merchant volumes are hedged at an average Far East Index ("FEI") to North American financial hedge price of US$20.30/Bbl while tolling volumes are in line with previously disclosed levels.

Approximately 83 percent of the Company's remaining 2026 expected frac exposed volumes are hedged at US$21.60/Bbl, prior to transportation costs. AltaGas continues to actively manage risk across the Midstream platform through commercial contracting and a systematic hedging program to manage its commodity price exposure.

For the remainder of 2026, AltaGas has hedged all of its expected Baltic freight exposure through time charters, financial hedges, and tolled volumes.

| Midstream Hedge Program | Q2 2026 | Q3 2026 | Q4 2026 | Remainder of 2026 | | Global Exports volumes hedged (%) (1) | 95 | 76 | 73 | 82 | | Average propane/butane FEI to North America hedge (US$/Bbl) (2) (3) | 18.16 | 19.08 | 28.60 | 20.30 | | Fractionation volume hedged (%) (3) | 84 | 88 | 78 | 83 | | Frac spread hedge rate - (US$/Bbl) (3) | 21.02 | 20.64 | 23.14 | 21.60 |

| (1) | Approximate expected volumes hedged based on AltaGas' internally assumed export volumes. Hedged amounts include contracted tolling volumes and financial hedges. | | (2) | Does not include physical differential to FSK for C3 volumes. Butane is hedged as a percentage of WTI. | | (3) | Approximate average for the period. |

Utilities

Utilities reported normalized EBITDA of $555 million in the first quarter of 2026 compared to $501 million in the first quarter of 2025, while income before income taxes was $458 million in the first quarter of 2026 compared to $446 million in the first quarter of 2025. The 11 percent year-over-year increase in normalized EBITDA was driven by positive rate case outcomes in D.C. and interim rates in Virginia, strong asset optimization activities, and a partial settlement of Washington Gas' post-retirement benefit pension plan. Growth was partially offset by lower margins in the Retail business and higher O&M costs, where the extreme cold weather experienced in the early part of the year drove increased overtime costs.

AltaGas continues to remain active in regulatory proceedings with rate cases underway in three of the Company's four jurisdictions. AltaGas anticipates new rates to be implemented in Virginia and Maryland by 2026 year‑end, with Michigan rates anticipated by early 2027. In Maryland, AltaGas has requested rates designed to generate approximately US$67 million of incremental annual revenue, net of a US$15 million ARP surcharge. In Virginia, interim rates subject to refund are currently in effect, with AltaGas seeking approximately US$65 million of incremental annual revenue, net of a US$39 million SAVE surcharge.

On February 26, 2026, SEMCO filed a rate application with the Michigan Public Service Commission ("MPSC") requesting approximately US$61 million of additional annual revenue and an allowed return on equity of 10.75 percent. The filing reflects capital investments made since January 2020 and includes recovery of pre‑approved capital associated with the Keweenaw Connector Pipeline. The application also proposes a US$284 million extension of Michigan's modernization programs, extending the programs from 2027 through 2031.

AltaGas is also advancing a portfolio of growth projects across its Utilities. The Keweenaw Connector Pipeline continued to progress as planned in the first quarter of 2026, achieving several key pre‑construction milestones, including receipt of major state permitting approvals, completion of clearing activities, and full right‑of‑way acquisition. The project remains on schedule, with construction mobilization expected in May 2026 and completion now targeted for 2026 year-end.

AltaGas' Utilities continue to progress the Company's data center development opportunities with two agreements now executed, multiple FEED studies completed, and a backlog of additional projects at various stages of advancement. The second agreement is for back-up power generation to an existing 15 MW data center that carries further expansion potential. The Company will continue to pursue these opportunities on a de-risked basis by constructing pipeline interconnects to onsite power generation through de-risked and rate regulated investments.

AltaGas invested $146 million in the Utilities segment during the quarter, which was slightly behind plan due to extreme cold weather conditions. This included investing approximately $56 million towards the Company's various asset modernization programs and $23 million towards new customer growth. These investments improve the safety and reliability of the network while helping maintain affordability through operating cost management.

Corporate/Other

The Corporate/Other segment reported a normalized EBITDA loss of $10 million for the first quarter of 2026, which was slightly larger than the $9 million loss reported in the same quarter of 2025. Loss before income taxes in the Corporate/Other segment was $140 million in the first quarter of 2026, compared to a loss before income taxes of $137 million in the same quarter of 2025. Higher general and administrative ("G&A") expenses related to employee incentive costs were the main driver of the increased loss.

Consolidated Financial Results

| | Three Months Ended

March 31 | | | ($ millions) | 2026 | 2025 | | Normalized EBITDA (1) | $ 818 | $ 689 | | Add (deduct): | | | | Depreciation and amortization | (135) | (128) | | Interest expense | (119) | (115) | | Income tax expense, net of normalizing items | (138) | (98) | | Preferred share dividends | (3) | (5) | | Other (2) | (8) | (1) | | Normalized net income (1) | $ 415 | $ 342 | | | | | | Net income applicable to common shares | $ 147 | $ 392 | | Normalized funds from operations (1) | $ 651 | $ 551 | | Cash from operations | $ 574 | $ 627 | | | | | | ($ per share, except shares outstanding) | | | | Shares outstanding - basic (millions) | | | | During the period (3) | 311 | 298 | | End of period | 311 | 299 | | | | | | Normalized net income - basic (1) | 1.33 | 1.15 | | Normalized net income - diluted (1) | 1.33 | 1.14 | | | | | | Net income per common share - basic | 0.47 | 1.31 | | Net income per common share - diluted | 0.47 | 1.31 |

| (1) | Non‑GAAP financial measure; see discussion in Non-GAAP Financial Measures section at the end of this news release. | | (2) | "Other" includes accretion expense, net income applicable to non-controlling interests, foreign exchange gains (losses), and unrealized foreign exchange losses (gains) on intercompany accounts payable and accounts receivables balances. | | (3) | Weighted average. |

Normalized EBITDA for the first quarter of 2026 was $818 million compared to $689 million for the same quarter in 2025. The largest factors contributing to the year-over-year increase are described in the Business Performance sections above.

Income before income taxes was $207 million for the first quarter of 2026 compared to $513 million for the same quarter in 2025. Performance for the first quarter of 2026 was mainly due to higher unrealized losses on risk management contracts, higher depreciation and amortization expense, and higher interest expense, partially offset by the same previously referenced factors impacting normalized EBITDA and lower transition and restructuring costs. Please refer to the "Three Months Ended March 31" section of the Q1 2026 Management's Discussion and Analysis ("MD&A") for further details on the variance in income before income taxes and net income applicable to common shareholders.

Normalized net income was $415 million or $1.33 per share for the first quarter of 2026, compared to $342 million or $1.15 per share reported for the same quarter of 2025.

Normalized FFO was $651 million or $2.09 per share for the first quarter of 2026, compared to $551 million or $1.85 per share for the same quarter in 2025. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA and lower current income tax expense net of normalization adjustments, partially offset by higher non-cash items included in normalized EBITDA, lower distributions from equity investments, and higher interest expense.

Cash from operations in the first quarter of 2026 was $574 million ($1.84 per share), compared to $627 million ($2.10 per share) for the same quarter of 2025. The decrease was mainly due to unfavourable variances in the net change in operating assets and liabilities, primarily as a result of fluctuations in commodity prices and sales volumes, as well as lower distributions from equity investments, partially offset by higher net income after taxes (after adjusting for non-cash items).

Interest expense for the first quarter of 2026 was $119 million, compared to $115 million for the same quarter in 2025. The increase was mainly due to the issuance of additional subordinated hybrid notes in the third quarter of 2025 and lower capitalized interest, partially offset by the impact of a lower average U.S./Canadian dollar exchange rate. Interest expense recorded on the subordinated hybrid notes in the first quarter of 2026 was $37 million, compared to $34 million for the same quarter of 2025.

Income tax expense was $55 million for the first quarter of 2026, compared to $113 million for the same quarter of 2025. The decrease was mainly due to lower income before income taxes compared to the same quarter of 2025.

Quarterly Common Share Dividend and Preferred Share Dividend

The Board of Directors approved the following schedule of Dividends: