AltaGas Ltd. press release

ALTAGAS REPORTS RECORD THIRD QUARTER RESULTS

2026-10-29

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

Canada NewsWire

Global Export Performance Drives Enterprise Growth and Canadian Trade Diversification

CALGARY, AB, Oct. 29, 2026/CNW/ -- AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) reported third quarter 2026 financial results and provided an update on its operations, growth initiatives and corporate developments.

Third Quarter Highlights

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

Financial Highlights

Normalized EBITDA1was $389 million in the third quarter of 2026, compared to $268 million in the third quarter of 2025. Loss before income taxes was $30 million in the third quarter of 2026, compared to $20 million in the third quarter of 2025. Normalized EBITDA growth was principally driven by stronger global export volumes and margins, contributions from Pipestone II, and stronger fractionation and liquids handling performance. Normalized EPS1 was $0.29 in the third quarter of 2026, compared to $0.04 in the third quarter of 2025. GAAP EPS2was a loss of $0.07 in the third quarter of 2026 compared to a loss of $0.08 in the third quarter of 2025. AltaGas is positioned to finish the year with momentum and expects to deliver financial results towards the high-end of its recently increased 2026 guidance 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 September 30, 2026, which is available onwww.sedarplus.ca.

(2) GAAP EPS is equivalent to net income (loss) applicable to common shares divided by shares outstanding. |

Operational Highlights

AltaGas exported a record 147,176 Bbl/d of liquid petroleum gases ("LPG") to Asia across 24 Very Large Gas Carriers ("VLGCs") in the third quarter of 2026, an 11 percent year-over-year increase. In October, the Company took delivery of its fourth contracted VLGC, with two additional time charters scheduled for 2027 and 2029, which will continue to support export growth and maritime risk management. The Company continued to invest in the modernization of its Utilities system with roughly $120 million of modernization spending during the quarter, bringing year-to-date pipeline replaced to over 40 miles.

Business Development and Growth

Construction of Phase I of the Ridley Island Energy Export Facility ("REEF") continues to progress in line with the revised project plan and remains on track for first quarter 2027 completion. With Phase I approximately 90 percent complete, focus is shifting toward commissioning activities. Construction on Phase I and Phase II of the Dimsdale gas storage expansion projects remain on time and budget. Phase I facility is over 80 percent complete and is on track to enter service by 2026 year-end. The RIPET Methanol Removal project is expected to achieve mechanical completion in the coming weeks, with start-up on track for its 2026 year-end in-service date. SEMCO executed an agreement to acquire Xcel Energy's Michigan natural gas operations that will add roughly US$20 million of rate base and 5,800 customers while expanding its Upper Peninsula service territory.

Regulatory Updates

In Virginia, Washington Gas received approval for a US$74 million revenue increase, including US$39 million of modernization rider roll-in, and a mid-point allowed ROE increase to 9.80 percent from 9.65 percent. In Michigan, SEMCO received approval for a US$33 million revenue increase effective January 1, 2027. Modernization programs were extended through 2031, supporting US$271 million of additional investment.

Balance Sheet

Trailing adjusted net debt to normalized EBITDA1exited the quarter at 4.3x, including 50 percent debt treatment on hybrids and preferred shares. This is below AltaGas' 4.5x - 5.0x target leverage range.

CEO Message

"AltaGas delivered another strong quarter, with normalized EBITDA increasing 45 percent year-over-year, driven by exceptional performance across our Midstream business," said Vern Yu, President and Chief Executive Officer of AltaGas. "We are carrying strong momentum into the fourth quarter and now expect to deliver full year financial results towards the high-end of our 2026 guidance ranges.

"In our Utilities, recent regulatory outcomes in Virginia and Michigan support our continued investment in the safety, reliability and resilience of our natural gas systems, which provide customers with the lowest cost home heating option. The extension of SEMCO's asset modernization programs through 2031, together with our agreement to acquire Xcel Energy's Michigan natural gas operations, reinforces our long-term commitment to grow in Michigan.

"The outlook for Canadian energy remains exceptionally strong. Growing natural gas and crude oil egress, including the recent FID on LNG Canada Phase 2, is expected to support continued production growth across Western Canada. This growth will drive incremental LPG supply, creating additional export demand that AltaGas is uniquely positioned to capture through its integrated Midstream platform, connecting Canadian LPGs to premium global markets. This quarter we exported over 147,000 barrels per day of LPGs to Asia, a quarterly record and an 11 percent increase over last year.

"Our open access export platform ensures that our tolling customers receive the benefit of global connectivity while driving material trade diversification for Canada. With REEF now 90 percent complete, our focus has shifted to commissioning and operational readiness ahead of start-up in the first quarter of 2027.

"With a strong balance sheet and clear strategic priorities, we remain focused on executing safely, delivering durable earnings growth and creating long-term value for shareholders."

Forward Focus, Guidance and Funding

Following a strong third quarter of 2026, AltaGas is expecting to deliver financial results towards the high-end of the recently increased guidance range, including:

2026 Normalized EBITDA guidance of $2.0 billion–$2.1 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 $2.35–$2.60, compared to actual normalized EPS of $2.23 and GAAP EPS of $2.48 in 2025.

AltaGas is focused on delivering stable 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.

AltaGas is maintaining a disciplined, self-funded 2026 capital program of approximately $1.8 billion, excluding asset retirement obligations ("ARO"). The Company is allocating approximately 61 percent of its consolidated 2026 capital to its Utilities business, approximately 36 percent to the Midstream business, and the balance to the Corporate/Other segment.

Results by Segment

| Normalized EBITDA (1) | Three Months Ended

September 30 | | | ($ millions) | 2026 | 2025 | | Utilities | $ 66 | $ 68 | | Midstream | 337 | 204 | | Corporate/Other | (14) | (4) | | Normalized EBITDA (1) | $ 389 | $ 268 |

| (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

September 30 | | | ($ millions) | 2026 | 2025 | | Utilities | $ (28) | $ (20) | | Midstream | 174 | 128 | | Corporate/Other | (176) | (128) | | Income Before Income Taxes | $ (30) | $ (20) |

Business Performance

Midstream

The Midstream segment reported normalized EBITDA of $337 million in the third quarter of 2026 compared to $204 million in the third quarter of 2025, while income before income taxes was $174 million in the third quarter of 2026 compared to $128 million in the third quarter of 2025. The 65 percent year-over-year increase in normalized Midstream EBITDA was driven by strong global export volumes and margins, contributions from Pipestone II and higher fractionation and liquids handling contributions.

AltaGas exported a record 147,176 Bbl/d of LPGs to Asia in the third quarter of 2026 across 24 VLGCs, reflecting strong global demand for Canadian LPG. Consolidated export volumes included approximately 89,134 Bbl/d at RIPET and approximately 58,042 Bbl/d at Ferndale. AltaGas continues to see strong interest from a diverse range of counterparties across Asia, with ongoing discussions around long-term contracting opportunities to diversify the region's supply and enhance long-term energy security.

The Company's Montney infrastructure continued to deliver strong growth with third quarter gathering and processing ("G&P") volumes increasing 20 percent year-over-year, driven by the addition of Pipestone II late in 2025 and higher utilization at Townsend. AltaGas' larger Pipestone complex averaged 94 percent utilization in the third quarter reflecting continued growth from Alberta Montney volumes.

Since October 2, 2026, AltaGas has been managing through a labour strike at Trigon Pacific Terminals. There has been no material impact on RIPET operations to date. AltaGas expects there will be some impact in the coming weeks and is actively implementing mitigation measures. Inclusive of this impact, AltaGas continues to expect full year 2026 results towards the upper end of its recently increased guidance ranges.

Growth Projects

REEF Phase I

Phase I construction of REEF is advancing in line with the revised plan with commercial operations expected in the first quarter of 2027. Onshore execution continues to progress with major equipment installation complete and the railroad utility corridor entering its final phase.

Construction of the 1.2-kilometer jetty, which had previously experienced construction delays due to severe weather, is complete. The Company recently installed the main loading platform, marine loading arms, and fire monitor towers. Focus has shifted to execution of the suction anchor and mooring system installation.

REEF Optimizations

The Company's REEF Optimization I project remains on time and on budget for a second half of 2027 in-service date, and will add approximately 30,000 Bbl/d of propane export capacity.

AltaGas continues to advance REEF's Optimization II project, which will add 60,000 Bbl/d of incremental LPG capacity. Key regulatory permits are secured and final cost estimates are nearing completion. REEF's capital-efficient expansions will further strengthen AltaGas' ability to meet growing Asian demand for North American LPGs.

RIPET

The RIPET Methanol Removal project is expected to achieve mechanical completion and enter the commissioning phase in the coming weeks, with start up on track for its 2026 year-end in-service date. The approximately $55 million project remains on budget and will ensure RIPET propane export volumes have the product specifications to reach all Asian markets.

Dimsdale Storage Expansion

Construction of the Dimsdale Phase I and II storage expansions remain on time and on budget. Phase I, which is expected to add six Bcf of storage capacity by 2026 year-end, is nearing completion, with the pipeline flowing gas and the remaining facility work over 80 percent complete. Phase II is expected to provide an additional 30 Bcf of gas storage by mid-2027. The Phase II facility is approximately 40 percent complete while the wells are approximately 50 percent complete.

NEBC Liquids Expansion

Construction of the NEBC Liquids Expansion project is planned to commence in early 2027 and has an expected in-service-date of mid-2028. Once complete, the project will provide an additional 6,000 Bbl/d of fractionation capacity in NEBC and improved liquids handling to serve production growth in the region.

Mountain Valley Pipeline Growth Projects

MVP Southgate construction continues to advance, with more than 70% of the pipeline complete and project completion expected by year-end 2026. AltaGas expects to incur approximately US$19 million of capital commitment for MVP Southgate in 2026.

MVP Boost also continues to advance, with efforts focused on resolving the remaining regulatory approvals, and remains on track for completion by mid-2028. AltaGas believes the long-term outlook for the MVP Mainline, Boost and Southgate remains compelling as the assets will compound long-term value for the Company's shareholders.

AltaGas continues to advance a substantial portfolio of high-return growth opportunities across its Midstream platform, including REEF Optimization II, Pipestone III, additional LPG export capacity, potential ethane exports, and related liquids infrastructure investments. The Company remains focused on advancing regulatory, engineering, commercial, and contracting activities to support future capital allocation decisions and long-term growth.

Risk Management

AltaGas' Midstream operations are well-hedged for the remainder of 2026 with approximately 91 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$23.20/Bbl while tolling volumes remain in-line with previously disclosed levels of approximately 60 percent of export volumes.

Approximately 86 percent of the Company's remaining 2026 expected frac exposed volumes are hedged at US$23.50/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 materially all of its expected Baltic freight exposure through time charters, financial hedges, and tolled volumes.

| Midstream Hedge Program | Remainder of 2026 | | Global Exports volumes hedged (%) (1) | 91 | | Average propane/butane FEI to North America hedge (US$/Bbl) (2) (3) | 23.20 | | Fractionation volume hedged (%) (3) | 86 | | Frac spread hedge rate - (US$/Bbl) (3) | 23.50 |

| (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 $66 million in the third quarter of 2026 compared to $68 million in the third quarter of 2025, while loss before income taxes was $28 million in the third quarter of 2026 compared to $20 million in the third quarter of 2025. The decrease in normalized EBITDA was primarily driven by higher operating and administrative costs, partially offset by revenue growth from system modernization investments and favourable asset optimization activity.

Regulatory Updates

AltaGas received final orders on its two outstanding rate cases in Michigan and Virginia, which marks the completion of four rate cases in the last 12 months and continued advancement of our Utilities' strategic priority of making timely regulatory filings. Together, these outcomes reduce regulatory uncertainty and provide greater visibility into future earnings and cash flow growth. They also support further investment in our regulated asset base and ensure the Company is positioned to continue to deliver safe, reliable and affordable natural gas to fuel everyday life.

In Virginia, the State Corporation Commission ("SCC of VA") provided Washington Gas approval for a total annual rate increase of US$74 million, including approximately US$35 million in incremental revenue and US$39 million in revenue previously recovered through pipeline modernization riders that will now be incorporated into base rates. It also authorized an allowed ROE range of 9.30 percent to 10.30 percent, with a midpoint of 9.80 percent, an increase from 9.65 percent previously. This outcome builds on Virginia's November 2025 approval of an extension to the three-year pipeline modernization program, which authorizes approximately US$700 million of investment over 2026–2028.

In Michigan, the Michigan Public Service Commission ("MPSC") provided SEMCO approval for a US$33 million annual revenue increase and an authorized ROE of 9.85 percent on a 50 percent equity / 50 percent debt capital structure. New rates take effect January 1, 2027, allowing for full first quarter of winter revenue contribution. The approval also secured extensions of SEMCO's Accelerated Mains Replacement Program ("MRP") and Infrastructure Reliability Improvement Program ("IRIP") through 2031, supporting total approved spending of US$271 million. The extension of these programs supports SEMCO's continued investment in the safety, reliability and resilience of the natural gas system, which delivers the lowest cost home heating to customers.

Michigan Acquisition

AltaGas executed an agreement to acquire approximately 5,800 customers in Michigan's Upper Peninsula from Xcel Energy that will add approximately US$20 million of rate base.

SEMCO looks forward to supporting these customers in their transition to a new service provider and continuing to invest in these assets to ensure long-term safe, reliable and affordable energy service following the anticipated close in the second half of 2027, pending regulatory approvals.

Growth Projects

Construction of the Keweenaw Connector Pipeline continued to progress during the quarter and is now approximately 85 percent complete. Major construction milestones include completion of mainline grading, pipe stringing, bending, welding, coating and ditching, with backfill activities nearing completion. The project remains on schedule for its planned year-end 2026 in-service date and is expected to enhance system reliability and support the long-term energy needs of customers throughout Michigan's Upper Peninsula.

AltaGas continues to make progress on its data center growth strategy, with two projects under agreement and advancing in Maryland and Virginia. The Company is leveraging its regulated utility platform to support growing power demand through investments in pipeline interconnections and related infrastructure, while maintaining a disciplined capital allocation approach.

AltaGas invested $372 million in Utilities capital during the quarter, including investing approximately $120 million towards the Company's various asset modernization programs and $30 million towards new customer growth. These investments improve the safety and reliability of the network while helping maintain affordability through lowering long-term operating costs.

Corporate/Other

The Corporate/Other segment reported a normalized EBITDA loss of $14 million for the third quarter of 2026, compared to a $4 million loss reported in the same quarter of 2025. Loss before income taxes in the Corporate/Other segment was $176 million in the third quarter of 2026, compared to a loss of $128 million in the same quarter of 2025. The decrease in normalized EBITDA was mainly driven by higher expenses related to employee incentive plans and increased spend on digital projects.

Consolidated Financial Results

| | Three Months Ended

September 30 | | | ($ millions) | 2026 | 2025 | | Normalized EBITDA (1) | $ 389 | $ 268 | | Add (deduct): | | | | Depreciation and amortization | (145) | (125) | | Interest expense | (118) | (116) | | Income tax expense, net of normalizing items | (20) | (3) | | Preferred share dividends | (3) | (4) | | Other (2) | (12) | (9) | | Normalized net income (1) | $ 91 | $ 11 | | | | | | Loss before income taxes | $ (30) | $ (20) | | Net loss applicable to common shares | $ (21) | $ (25) | | Normalized funds from operations (1) | $ 249 | $ 148 | | Cash from operations | $ 122 | $ 34 | | | | | | ($ per share, except shares outstanding) | | | | Shares outstanding - basic (millions) | | | | During the period (3) | 312 | 299 | | End of period | 312 | 299 | | | | | | Normalized net income - basic (1) | 0.29 | 0.04 | | Normalized net income - diluted (1) | 0.29 | 0.04 | | | | | | Net loss per common share - basic | (0.07) | (0.08) | | Net loss per common share - diluted | (0.07) | (0.08) |