ALTAGAS REPORTS STRONG FIRST QUARTER 2023 RESULTS

AltaGas Delivers Solid First Quarter Results, Advances Global Export Strategy Through New Joint Venture with Vopak, and Announces a New Seven-year Time Charter Agreement

CALGARY, AB, April 26, 2023 /CNW/ - AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) today reported first quarter 2023 financial results and provided an update on the Company's operations and other corporate developments.

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

• Normalized EPS¹ was $0.98 in the first quarter of 2023 compared to $1.02 in the first quarter of 2022, while GAAP EPS² was $1.58 in the first quarter of 2023 compared $1.27 in the first quarter of 2022.
• Normalized EBITDA¹ was $582 million in the first quarter of 2023 compared to $574 million in the first quarter of 2022, while income before income taxes was $619 million in the first quarter of 2023 compared to $504 million in the first quarter of 2022.
• Normalized FFO per share¹ was $1.63 in the first quarter of 2023 compared to $1.65 in the first quarter of 2022, while Cash from Operations per share³ was $2.10 in the first quarter of 2023 compared to $2.44 in the first quarter of 2022. Higher normalized EBITDA and lower normalized current income tax expense¹ was offset by higher interest expense.
• The Utilities segment reported normalized EBITDA of $401 million in the first quarter of 2023 compared to $408 million in the first quarter of 2022, while income before taxes was $590 million in the first quarter of 2023 compared to $426 million in the first quarter of 2022. The quarter included AltaGas making strong ongoing asset investments on behalf of its customers across the network, favorable foreign exchange rates, offset by warmer weather impacts in Michigan and the District of Columbia (D.C.), and weaker year-over-year performance at the Retail gas business, which was principally driven by the timing of swaps.
• The Midstream segment reported normalized EBITDA of $183 million in the first quarter of 2023 compared to $174 million in the first quarter of 2022, while income before taxes in the segment was $138 million in the first quarter of 2023 compared to income before taxes of $159 million in the first quarter of 2022. There were several positive and negative contributors underpinning the modest year-over-year variance. The quarter included strong operations and year-over-year volume growth across global exports, higher fractionation volumes and realized pricing, and the favourable resolution of contingencies, offset by higher rail and ocean freight costs, modestly lower gas processing volumes due to the lost contribution of the Aitken Creek gas processing facility that was divested in the second quarter of 2022, and lower realized Asian-to-North American butane spreads in the global exports business. On a forward-looking basis, Asian-to-North American butane spreads are more constructive for 2023 and 2024 forward strip pricing.
• In February 2023, AltaGas reached an agreement with Southern California Edison for the purchase of resource adequacy attributes from the Blythe facility from January 1, 2024, through December 31, 2027. AltaGas believes that the agreement reiterates the long-term demand for Blythe to provide stable and affordable power supply, and support California's longer-term energy needs.
• In February 2023, AltaGas reached an agreement with an investment grade counterparty to extend the existing throughput and marketing agreement at the Ferndale liquefied petroleum gases (LPG) Export Terminal by five years through 2033. The extension is aligned with AltaGas' long-term focus of de-risking the global exports business and operating in strong partnership with its customers to drive the best collective outcomes for all parties.
• On March 1, 2023, AltaGas closed the divestiture of its Alaskan Utilities to TriSummit Utilities Inc. for US$800 million (approximately CAD$1.1 billion), prior to closing adjustments. Sale proceeds were used to reduce debt while providing AltaGas with the financial flexibility to advance its strong growth opportunities across the Midstream and Utilities platforms over the coming years.
• On April 4, 2023, AltaGas and Royal Vopak (Vopak) executed definitive agreements for a new 50/50 joint venture to further evaluate development of the Ridley Island Energy Export Facility (REEF), a large-scale LPG and bulk liquids terminal and marine infrastructure on Ridley Island. Development of REEF would further bolster AltaGas' first mover advantage and differentiated LPG value proposition through continuing to connect domestic customers to premium global downstream markets and add export capacity for Western Canada's growing LPG volumes. Should REEF reach a positive final investment decision (FID), the facility is planned to be developed and brought online in phases and have the capability to export LPGs, methanol, and other bulk liquids that are vital for everyday life. Vopak, AltaGas, and the Prince Rupert Port Authority have been working closely with First Nations rights holders and key stakeholders, including the local communities in Northwestern British Columbia and the Federal and Provincial regulators, to deliver a project that will operate with industry-leading environmental stewardship and has been granted the key federal and provincial permits to construct the first phase of the project.
• Subsequent to quarter end, AltaGas reached an agreement for a seven-year time charter with two one-year optional extensions for a new 86,700 cubic meter dual-fuel Very Large Gas Carrier (VLGC) with delivery expected in the first half of 2026. The agreement extends AltaGas' value chain reach into Asia, will reduce maritime shipping costs by approximately 25 percent relative to current Baltic freight forward pricing, and lowers pricing volatility on a long-term basis. The incremental time charter builds on the two new dual-fuel VLGCs that AltaGas will be taking delivery of in late 2023 and early 2024, which will reduce AltaGas' maritime shipping costs and provides long-term pricing visibility.
• As announced on November 21, 2022, Randy Crawford, AltaGas' President and CEO, will retire from the Company in the first half of 2023 as part of a planned leadership succession process with a successor to be announced before the end of second quarter of 2023. The succession process remains on track with AltaGas expecting to announce a new President and CEO prior to June 30, 2023.
• Following a solid first quarter, AltaGas is reiterating its 2023 full year guidance ranges for normalized EBITDA of $1.5 billion to $1.6 billion, and normalized EPS guidance of $1.85 - $2.05, compared to actual normalized EBITDA of $1.54 billion, normalized EPS ¹ of $1.89 and GAAP EPS ² of $1.42 in 2022. AltaGas continues to target delivering regular, sustainable, and annual dividend increases that compound in the years ahead with an anticipated five to seven percent compounded annual growth rate through 2026. Annual dividend increases will be a function of financial performance and determined by the Board on an annual basis.

__________________________

(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, 2023, which is available on www.sedar.com. (2) GAAP EPS is equivalent to Net income applicable to common shares divided by shares outstanding.  (3) Cash from Operations per share is equivalent to cash from operations divided by shares outstanding.

CEO MESSAGE

"I am pleased with our strong first quarter results as we continue to execute our strategic priorities and position the platform to achieve the Company's 2023 and longer-term growth plans" said Randy Crawford, President and Chief Executive Officer. "We are well-positioned to meet our 2023 guidance ranges, including normalized EPS guidance of $1.85 - $2.05 and normalized EBITDA guidance of $1.5 billion - $1.6 billion.

"Through ongoing investment and associated cost reductions, our regulated Utilities were able to overcome the impact of warmer weather and the lost contribution from the Alaska Utilities in March, to deliver solid first quarter earnings results. We continue to make investments in our network on behalf of our customers and execute our regulatory strategy to update our rates on a timely basis to reflect the current operating cost environment, including cost of capital.

"Our Midstream business delivered strong results which included the export of approximately 99,444 Bbls/d of LPGs to Asia, delivered across 16 VLGCs. As we look forward, with the new annual LPG supply contracting completed at pricing levels reflecting logistics inflationary impacts, a lower risk profile from increased tolling levels and a significant hedge portfolio, we are well positioned to achieve our forecasted profitability. We are excited to reach an agreement with our joint venture partner for the potential expansion of our export platform to provide increased LPG export capacity to meet long-term export demand, while providing cost synergies opportunities, product optionality and access to a new dedicated dock.

"The closing of the Alaska Utilities sale at the beginning of March has allowed us to pay down debt and move towards our medium-term 5x net debt-to-Normalized EBITDA target. These strong balance sheet improvements position AltaGas with the flexibility to opportunistically invest in both organic and inorganic growth opportunities, such as the REEF expansion project upon favorable FID."

RESULTS BY SEGMENT

Normalized EBITDA ^(1)	Three Months Ended March 31
($ millions)	2023	2022
Utilities	$                   401	$                   408
Midstream	183	174
Corporate/Other	(2)	(8)
Normalized EBITDA ^(1)	$                   582	$                   574

(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)	2023	2022
Utilities	$                  590	$                  426
Midstream	138	159
Corporate/Other	(109)	(81)
Income Before Income Taxes	$                  619	$                  504

BUSINESS PERFORMANCE

Utilities

The Utilities segment reported normalized EBITDA of $401 million in the first quarter of 2023 compared to $408 million in the first quarter of 2022, while income before taxes was $590 million in the first quarter of 2023 compared to $426 million in the first quarter of 2022. First quarter normalized Utilities EBITDA was in line with AltaGas' expectations and included select positive and negative factors which largely offset each other relative to the first quarter of 2022. The largest positive factors impacting results on a year-over-year basis included ongoing asset investments on behalf of its customers across the network, favorable foreign exchange rates, interim rates being in place in Virginia due to the current rate case, and lower operating and administrative expenses. These positive factors were offset by warmer weather in Michigan and the D.C. which do not have weather normalization, weaker year-over-year performance at the Retail gas business which was principally driven by the timing of swaps, and a decrease in asset optimization at Washington Gas in the quarter.

AltaGas continued to upgrade critical infrastructure and make ongoing investments on behalf of its customers during the first quarter of 2023 with the deployment of $151 million of invested capital¹, including $66 million deployed on the Company's various Accelerated Replacement Programs (ARPs). These investments continue to be directed towards improving the safety and reliability of the system and connecting new customers to the critical energy they require to carry out everyday life. These investments should also bring long-term operating cost benefits to our customers. AltaGas will continue to make these ongoing critical network upgrades on behalf of our customers, while balancing ongoing customer affordability. This latter focus is particularly important during the current economic environment of higher interest rates and inflation across the broader economy. AltaGas remains acutely focused on judicious cost management across the Utilities platform and driving the best outcomes for its customers and stakeholders.

Midstream

The Midstream segment reported normalized EBITDA of $183 million in the first quarter of 2023 compared to $174 million in the same quarter of 2022, while income before income taxes was $138 million in the first quarter of 2023 compared to $159 million in the same quarter of 2022. There were several positive and negative contributors underpinning the modest year-over-year variance. This included strong operations and year-over-year volume growth across global exports, higher fractionation volumes and realized pricing and the favourable resolution of certain contingencies, offset by higher rail and ocean freight costs, modestly lower gas processing volumes due to the lost contribution of the Aitken Creek gas processing facility that was divested in the second quarter of 2022, and continued lower Asian-to-North American butane spreads in the global exports business.

AltaGas exported 99,444 Bbls/d of LPGs to Asia during the first quarter of 2023, including nine VLGCs at RIPET and seven VLGCs at Ferndale. Higher export volumes were driven by strong ongoing customer demand in Asia, higher available LPG supply, and a lack of logistical challenges that were partially present in the first quarter of 2022. AltaGas' gas processing volumes were in line with the Company's expectations in the first quarter of 2023 with the year-over-year decrease primarily due to the impact of the Aitken Creek divestiture in the second quarter of 2022, which was partially offset by higher throughput volumes at Townsend and Younger. Fractionation volumes for the first quarter of 2023 increased by approximately 25 percent on a year-over-year basis due to higher North Pine, Harmattan, and Younger throughput. AltaGas remains focused on partnering with Western Canadian producers and aggregators to increase direct global market access through long-term tolling arrangements that can drive the best collective outcomes for all parties, while also having an active hedging program to proactively lock in structural margins and de-risk cashflows for merchant exports.

AltaGas is encouraged by the B.C. Government and Blueberry River First Nations historic agreement that was announced in January 2023 that will provide a pathway for a partnership approach on land, water, and resource stewardship with the Treaty 8 First Nations. Well licensing activity in the area is the highest in five years and is supported by the Montney being one of the most prolific resource plays in North America and has the potential to provide decades of steady natural gas and NGLs to support Canada's domestic demand and play a larger role in meeting global energy needs. AltaGas looks forward to continuing to work in Northeastern B.C. with First Nations right holders and stakeholders on sustainable resource development in partnership with local communities and delivering on the growing global demand for responsibly developed energy supplies.

AltaGas' realized frac spread averaged $27/Bbl, after transportation costs, as most of AltaGas' frac exposed volumes were hedged at approximately $35/Bbl in the first quarter of 2023, prior to transportation costs. AltaGas is well hedged for 2023 with approximately 84 percent of its remaining 2023 expected frac exposed volumes hedged at approximately US$27/Bbl, prior to transportation costs. In addition, approximately 68 percent of AltaGas' remaining 2023 expected global export volumes are either tolled or financially hedged with an average Far East Index (FEI) to North American financial hedge price of approximately US$12/Bbl for non-tolled propane and butane volumes.

2023 Midstream Hedge Program

	Q2 2023	Q3 2023	Q4 2023		Remainder 2023
Global Exports volume hedged (%)^(1)	75	90		31	68
Average propane/butane FEI to North America Average hedge (US$/Bbl)^(2)	11.50	11.57		19.08	12.06
Fractionation volume hedged (%)^(3)	82	96		72	84
Frac spread hedge rate - (US$/Bbl)^(3)	26.83	26.83		26.83	26.83

1)	Approximate expected volumes hedged. Includes contracted tolling volumes and financial hedges. Based on AltaGas' internally assumed export volumes. AltaGas is hedged at a higher percentage for firmly committed volumes.
2)	Approximate average for the period. Does not include physical differential to FSK for C3 volumes. Butane is hedged as a percentage of WTI.
3)	Approximate average for the period.

Corporate/Other

The Corporate/Other segment reported a normalized EBITDA loss of $2 million in the first quarter of 2023 compared to a loss of $8 million in the same quarter of 2022 while income loss before taxes was a loss of $109 million in the first quarter of 2023 compared to a loss of $81 million in the first quarter of 2022. The year-over-year increase in normalized EBITDA was mainly due to lower operating and administrative expenses.

VOPAK AND ALTAGAS FORM A NEW JOINT VENTURE FOR LARGE-SCALE LPG AND BULK LIQUIDS EXPORT TERMINAL IN PRINCE RUPERT

Vopak and AltaGas announced the execution of definitive agreements for a new 50/50 joint venture to further evaluate development of REEF, a large-scale LPG and bulk liquids terminal with marine infrastructure on Ridley Island, British Columbia, Canada. Development of REEF would further bolster AltaGas' first mover advantage and differentiated LPG value proposition in connecting the company's domestic customers to premium global downstream markets for the growing Western Canadian LPG volumes. REEF will have the capability to facilitate the export of LPGs, methanol, and other bulk liquids that are vital for everyday life and will provide long-term optionality to product exports for AltaGas. REEF has been granted the key Federal and Provincial permits to construct storage tanks, a new dedicated jetty, and rail and other ancillary infrastructure required to operate a state-of-the-art and highly efficient facility.

Should REEF reach a positive FID, it is planned to be developed and brought online in phases. This approach will provide the most capital efficient build out of the project, match energy export supply with throughput capacity, mitigate the challenges that large development projects can have on local communities, and provide local construction and employment opportunities that would extend over longer time horizons. AltaGas has executed a long-term commercial agreement with the joint venture for 100% of the capacity for the first phase of LPG volumes, subject to a positive FID. AltaGas will also be responsible for the construction and operational stewardship of the facility. Future phases of the project will be developed as additional long-term commercial agreements and critical milestones are achieved to deliver the maximum value for all stakeholders.

Vopak, AltaGas, and the Prince Rupert Port Authority have been working closely with First Nations rights holders and key stakeholders, including the local communities in Northwestern British Columbia and the Federal and Provincial regulators, to deliver a project that will operate with industry-leading environmental stewardship and bring the strongest benefits to all parties involved. Key determinations and permits have been received from the Federal Government and an Environmental Assessment Certificate has been received from the British Columbia Provincial Government.

AltaGas is currently working through front end engineering design (FEED) activities, where deliverables will include a refined capital cost estimate, a project execution plan, a construction schedule, and a projected in-service date, among numerous other items. FEED and other development activities are expected to be completed by late 2023, followed by an FID by the joint venture. Solidifying long-term economic rail agreements in partnership with the rail operator will also be key for the joint venture to be able to reach a positive FID and ensure the project advances, and, in turn, delivers strong benefits to the joint venture partners, First Nations rights holders, the Prince Rupert Port Authority, local communities, upstream and downstream customers, and other key stakeholders.

Vopak and AltaGas are excited to further evaluate the development of REEF and build on the strong partnership between the two companies, under this new joint venture agreement. Vopak and AltaGas thank all stakeholders for the continued embracement and ongoing partnerships as part of this project. Working with stakeholders and seeking strong partnerships is part of both organization's individual and collective DNA and is engrained in how Vopak and AltaGas approach their businesses every day.

CONSOLIDATED FINANCIAL RESULTS

	Three Months Ended March 31
($ millions)	2023	2022
Normalized EBITDA ^(1)	$                   582	$                   574
Add (deduct):
Depreciation and amortization	(111)	(112)
Interest expense	(105)	(71)
Normalized income tax expense	(75)	(76)
Preferred share dividends	(6)	(13)
Other ^(2)	(8)	(17)
Normalized net income ^(1)	$                   277	$                   285
Net income applicable to common shares	$                   445	$                   357
Normalized funds from operations ^(1)(2)	$                   460	$                   462
($ per share, except shares outstanding)
Shares outstanding - basic (millions)
During the period ^(3)	282	280
End of period	282	281
Normalized net income - basic ^(1)	0.98	1.02
Normalized net income - diluted ^(1)	0.98	1.01
Net income per common share - basic	1.58	1.27
Net income per common share - diluted	1.57	1.26

(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 losses, and NCI portion of non-GAAP adjustments. The portion of non-GAAP adjustments applicable to non-controlling interests are excluded in the computation of normalized net income to ensure consistency of normalizations applied to controlling and non-controlling interests. These amounts are included in the "net income applicable to non-controlling interests" line item on the Consolidated Statements of Income.
(3)	Weighted average.

Normalized EBITDA for the first quarter of 2023 was $582 million compared to $574 million for the same quarter in 2022. The largest factors leading to the variance are described in the Business Performance sections above.

For the first quarter of 2023, the average Canadian/U.S. dollar exchange rate increased to 1.35 from an average of 1.27 in the same period of 2022.

Income before income taxes was $619 million for the first quarter of 2023 compared to $504 million for the same quarter in 2022. Net income applicable to common shares was $445 million or $1.58 per share for the first quarter of 2023, compared to net income applicable to common shares of $357 million or $1.27 per share for the same quarter in 2022. Please refer to the Three Months Ended March 31 Section of the MD&A for further details on the variance in income before income taxes and net income applicable to common shareholders.

Normalized net income was $277 million ($0.98 per share) for the first quarter of 2023, compared to $285 million ($1.02 per share) for the same quarter of 2022. The decrease was mainly due to higher interest expense, partially offset by lower net income applicable to non-controlling interests, the same previously referenced factors impacting normalized EBITDA, and lower preferred share dividends.

Normalized funds from operations for the first quarter of 2023 was $460 million or $1.63 per share, compared to $462 million or $1.65 per share for the same quarter in 2022. The slight decrease was mainly due to higher interest expense, partially offset lower normalized current income tax expense and the same previously referenced factors impacting normalized EBITDA.

Depreciation and amortization expense for the first quarter of 2023 was $111 million, compared to $112 million for the same quarter in 2022. Factors impacting depreciation and amortization expense in the first quarter of 2023 included the impact of the Alaska Utilities disposition, partially offset by the impact of new assets placed in-service.

Interest expense for the first quarter of 2023 was $105 million, compared to $71 million for the same quarter in 2022. The increase was mainly due to $9 million of interest relating to the subordinated hybrid notes, higher average interest rates, higher average debt balances, and a higher average Canadian/U.S. dollar exchange rate.

Income tax expense was $163 million for the first quarter of 2023, compared to an income tax expense of $107 million for the same quarter of 2022. The increase was mainly due to the tax impact of the Alaska Utilities Disposition. Current tax expense of $53 million was recorded in the first quarter of 2023, compared to current tax expense of $45 million recorded in the same quarter of 2022. The increase in current tax expense was mainly due to the impact of the Alaska Utilities disposition in the first quarter of 2023.

FORWARD FOCUS, GUIDANCE AND FUNDING

AltaGas continues to focus on executing on its long-term corporate strategy of building a diversified platform that operates long-life energy infrastructure assets that connect customers and markets and are positioned to provide resilient and durable value for the Company's stakeholders.

Following the first quarter results, AltaGas expects to achieve guidance ranges that were previously disclosed in December 2022, including:

• 2023 Normalized EPS guidance of $1.85 - $2.05 per share, compared to actual normalized EPS of $1.89 and GAAP EPS of $1.42 in 2022; and
• 2023 Normalized EBITDA guidance of $1.5 billion - $1.6 billion, compared to actual normalized EBITDA of $1.54 billion and income before taxes of $716 million in 2022.

AltaGas continues to focus on delivering durable and growing normalized EPS and FFO per share while targeting lowering leverage ratios. This strategy should support steady dividend growth and provide the opportunity for ongoing capital appreciation for its long-term shareholders. This includes AltaGas having announced plans to deliver regular, sustainable, and annual dividend increases that compound in the years ahead with an anticipated five to seven percent compounded annual growth rate through 2026. Annual dividend increases will be a function of financial performance and determined by the Board on an annual basis.

AltaGas is maintaining a disciplined, self-funded capital program of approximately $930 million in 2023, excluding asset retirement obligations. The Company also expects approximately $90 million of capital investments that were approved in 2022 to rollover and be deployed in early 2023. The 2023 capital program includes continued strong investments in the Utilities and Midstream businesses that are focused on ensuring long-term safety and reliability of the asset base and position AltaGas to meet its customers long-term needs and drive the best collective outcomes for all stakeholders.

QUARTERLY COMMON SHARE DIVIDEND AND PREFERRED SHARE DIVIDENDS

The Board of Directors approved the following schedule of Dividends:

Type	Dividend (per share)	Period	Payment Date	Record
Common Shares^1	$0.28	n.a.	30-Jun-23	16-Jun-23
Series A Preferred Shares	$0.19125	31-Mar-23 to 29-Jun-23	30-Jun-23	16-Jun-23
Series B Preferred Shares	$0.45026	31-Mar-23 to 29-Jun-23	30-Jun-23	16-Jun-23
Series E Preferred Shares	$0.337063	31-Mar-23 to 29-Jun-23	30-Jun-23	16-Jun-23
Series G Preferred Shares	$0.265125	31-Mar-23 to 29-Jun-23	30-Jun-23	16-Jun-23
Series H Preferred Shares	$0.47519	31-Mar-23 to 29-Jun-23	30-Jun-23	16-Jun-23

1.	Dividends on common shares and preferred shares are eligible dividends for Canadian income tax purposes.

CONFERENCE CALL AND WEBCAST DETAILS

AltaGas will hold a conference call today, April 26, at 9:00 a.m. MT (11:00 a.m. ET) to discuss first quarter 2023 results and other corporate developments.

• Date/Time: April 26, 2023, 9:00 a.m. MT (11:00 a.m. ET)
• Dial-in: 1-416-764-8659 or toll free at 1-888-664-6392 or Click to Join
• Webcast: https://www.altagas.ca/invest/events-and-presentations

Shortly after the conclusion of the call, a replay will be available commencing at 12:00 p.m. MT (2:00 p.m. ET) on April 26, 2023, by dialing 416-764-8677 or toll free 1-888-390-0541. The passcode is 346734#. The replay will expire at 11:59 p.m. MT (1:59 p.m. ET) on May 3, 2023.

AltaGas' Consolidated Financial Statements and accompanying notes for the first quarter 2023, as well as its related Management's Discussion and Analysis, are now available online at www.altagas.ca. All documents will be filed with the Canadian securities regulatory authorities and will be posted under AltaGas' SEDAR profile at www.sedar.com.

NON-GAAP MEASURES

This news release contains references to certain financial measures that do not have a standardized meaning prescribed by US GAAP and may not be comparable to similar measures presented by other entities. The non-GAAP measures and their reconciliation to US GAAP financial measures are shown below and within AltaGas' Management's Discussion and Analysis (MD&A) as at and for the period ended March 31, 2023. These non-GAAP measures provide additional information that management believes is meaningful regarding AltaGas' operational performance, liquidity and capacity to fund dividends, capital expenditures, and other investing activities. Readers are cautioned that these non-GAAP measures should not be construed as alternatives to other measures of financial performance calculated in accordance with US GAAP.

Normalized EBITDA

	Three Months Ended March 31
($ millions)	2023	2022
Income before income taxes (GAAP financial measure)	$            619	$            504
Add:
Depreciation and amortization	111	112
Interest expense	105	71
EBITDA	$            835	$            687
Add (deduct):
Transaction costs related to acquisitions and dispositions ^(1)	15	1
Unrealized losses (gains) on risk management contracts ^(2)	36	(110)
Gains on sale of assets ^(3)	(307)	(7)
Accretion expenses	3	2
Foreign exchange losses	—	1
Normalized EBITDA	$            582	$            574

(1)	Comprised of transaction costs related to acquisitions and dispositions of assets and/or equity investments in the period. These costs are included in the "cost of sales" and "operating and administrative" line items on the Consolidated Statements of Income. Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. Please refer to Note 3 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 for further details regarding AltaGas' disposition of assets in the period.
(2)	Included in the "revenue" and "cost of sales" line items on the Consolidated Statements of Income. Please refer to Note 13 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 for further details regarding AltaGas' risk management activities.
(3)	Included in the "other income" line item on the Consolidated Statements of Income. Please refer to Note 3 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 for further details regarding AltaGas' disposition of assets in the period.

EBITDA is a measure of AltaGas' operating profitability prior to how business activities are financed, assets are amortized, or earnings are taxed. EBITDA is calculated from the Consolidated Statements of Income using income before income taxes adjusted for pre–tax depreciation and amortization, interest expense.

AltaGas presents normalized EBITDA as a supplemental measure. Normalized EBITDA is used by Management to enhance the understanding of AltaGas' earnings over periods, as well as for budgeting and compensation related purposes. The metric is frequently used by analysts and investors in the evaluation of entities within the industry as it excludes items that can vary substantially between entities depending on the accounting policies chosen, the book value of assets, and the capital structure.

Normalized Net Income

	Three Months Ended March 31
($ millions)	2023	2022
Net income applicable to common shares (GAAP financial measure)	$            445	$            357
Add (deduct) after-tax:
Transaction costs related to acquisitions and dispositions ^(1)	11	—
Unrealized losses (gains) on risk management contracts ^(2)	28	(81)
Non-controlling interest portion of non-GAAP adjustments ^(3)	—	4
Gains on sale of assets ^(4)	(207)	(5)
Loss on redemption of preferred shares ^(5)	—	10
Normalized net income	$            277	$            285

(1)	Comprised of transaction costs related to acquisitions and dispositions of assets and/or equity investments in the period. The pre-tax costs are included in the "cost of sales" and "operating and administrative" line items on the Consolidated Statements of Income. Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. Please refer to Note 3 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 for further details regarding AltaGas' disposition of assets in the period.
(2)	The pre-tax amounts are included in the "revenue" and "cost of sales" line items on the Consolidated Statements of Income. Please refer to Note 13 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 for further details regarding AltaGas' risk management activities.
(3)	The portion of non-GAAP adjustments applicable to non-controlling interests are excluded in the computation of normalized net income to ensure consistency of normalizations applied to controlling and non-controlling interests. These amounts are included in the "net income applicable to non-controlling interests" line item on the Consolidated Statements of Income.
(4)	The pre-tax amounts are included in the "other income" line item on the Consolidated Statements of Income. Please refer to Note 3 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 for further details regarding AltaGas' disposition of assets in the period.
(5)	Comprised of the loss on the redemption of Series K Preferred Shares on March 31, 2022. The loss on redemption of preferred shares is recorded on the "loss of redemption of preferred shares" line on the Consolidated Statements of Income.

Normalized net income and normalized net income per share are used by Management to enhance the comparability of AltaGas' earnings, as these metrics reflect the underlying performance of AltaGas' business activities. 

Normalized Funds From Operations

	Three Months Ended March 31
($ millions)	2023	2022
Cash from operations (GAAP financial measure)	$             591	$             682
Add (deduct):
Net change in operating assets and liabilities	(190)	(225)
Asset retirement obligations settled	2	2
Funds from operations	$             403	$             459
Add (deduct):
Transaction costs related to acquisitions and dispositions ^(1)	15	1
Current tax expense on asset sales ^(2)	42	2
Normalized funds from operations	$             460	$             462

(1)

Comprised of costs related to acquisitions and dispositions of assets and/or equity investments in the period. These costs exclude any non-cash amounts and are included in the "cost of sales" and "operating and administrative" line items on the Consolidated Statements of Income. Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. Please refer to Note 3 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 for further details regarding AltaGas' disposition of assets in the period.

(2)

Included in the "current income tax expense" line item on the Consolidated Statements of Income.

Normalized funds from operations and funds from operations are used to assist Management and investors in analyzing the liquidity of the Corporation. Management uses these measures to understand the ability to generate funds for capital investments, debt repayment, dividend payments, and other investing activities.

Funds from operations and normalized funds from operations as presented should not be viewed as an alternative to cash from operations or other cash flow measures calculated in accordance with GAAP. 

Invested Capital

	Three Months Ended March 31
($ millions)	2023	2022 ^(3)
Cash used in (from) investing activities (GAAP financial measure)	$           (869)	$             159
Add (deduct):
Net change in non-cash capital expenditures ^(1)	(28)	(37)
Asset dispositions	1,072	20
Invested capital	$             175	$             142

(1)

Comprised of non-cash capital expenditures included in the "accounts payable and accrued liabilities" line item on the Consolidated Balance Sheets. Please refer to Note 19 of the unaudited condensed interim Consolidated Financial Statements as at and for the three months ended March 31, 2023 for further details.

Invested capital is a measure of AltaGas' use of funds for capital expenditure activities. It includes expenditures relating to property, plant, and equipment and intangible assets, capital contributed to long term investments, and contributions from non-controlling interests. Invested capital is used by Management, investors, and analysts to enhance the understanding of AltaGas' capital expenditures from period to period and provide additional detail on the Company's use of capital. 

CONSOLIDATED FINANCIAL REVIEW

	Three Months Ended March 31
($ millions, except effective income tax rates)	2023	2022
Revenue	4,048	3,892
Normalized EBITDA ^(1)	582	574
Income before income taxes	619	504
Net income applicable to common shares	445	357
Normalized net income ^(1)	277	285
Total assets	21,989	21,766
Total long-term liabilities	11,233	11,386
Invested capital^(1)	175	142
Cash from (used by) investing activities	869	(159)
Dividends declared ^(2)	79	74
Cash from operations	591	682
Normalized funds from operations ^(1)	460	462
Normalized effective income tax rate (%)^(1)	20.7	19.6
Effective income tax rate (%)	26.4	21.2
	Three Months Ended March 31
($ per share, except shares outstanding)	2023	2022
Net income per common share - basic	1.58	1.27
Net income per common share - diluted	1.57	1.26
Normalized net income - basic ^(1)	0.98	1.02
Normalized net income - diluted ^(1)	0.98	1.01
Dividends declared ^(2)	0.28	0.27
Cash from operations	2.10	2.44
Normalized funds from operations ^(1)	1.63	1.65
Shares outstanding - basic (millions)
During the period ^(3)	282	280
End of period	282	281

1)	Non–GAAP financial measure or non-GAAP financial ratio; see discussion in Non-GAAP Financial Measures section of this MD&A.
2)	Dividend declared per common share per quarter: $0.265 per share beginning March 2022, increased to $0.28 per share effective March 31, 2023.
3)	Weighted average.

ABOUT ALTAGAS

AltaGas is a leading North American infrastructure company that connects customers and markets to affordable and reliable sources of energy. The Company operates a diversified, lower-risk, high-growth Utilities and Midstream business that is focused on delivering resilient and durable value for its stakeholders.

For more information visit www.altagas.ca or reach out to one of the following:

Jon Morrison
Senior Vice President, Corporate Development and Investor Relations
[email protected]

Adam McKnight
Director, Investor Relations
[email protected]

Investor Inquiries
1-877-691-7199
[email protected]

Media Inquiries
1-403-206-2841
[email protected]

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information (forward-looking statements). Words such as "may", "can", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "aim", "seek", "propose", "contemplate", "estimate", "focus", "strive", "forecast", "expect", "project", "target", "potential", "objective", "continue", "outlook", "vision", "opportunity" and similar expressions suggesting future events or future performance, as they relate to the Corporation or any affiliate of the Corporation, are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. Specifically, such forward-looking statements included in this document include, but are not limited to, statements with respect to the following: AltaGas' belief in the role and importance of the Blythe facility in meeting California's long-term energy needs; AltaGas' ability to de-risk its global export business and operate in strong partnership with its customers; AltaGas' belief that REEF will bolster AltaGas' first mover advantage and differentiated LPG value proposition; potential development of AltaGas' REEF project and ability to operate with industry-leading environmental stewardship; anticipated construction, impacts and in-service date of three new VLGCs; 2023 normalized EBITDA guidance of $1.5 to $1.6 billion; 2023 normalized EPS guidance of $1.85 to $2.05; expectation for ongoing dividend growth, including 5 to 7 percent compounded annual growth rate through 2026; AltaGas' ability to execute its strategic priorities and achieve its 2023 and longer-term growth plans; AltaGas' Utilities' ability to execute its regulatory strategy and achieve favourable rates commensurate with cost of capital; AltaGas' ability to achieve its forecasted profitability; expectation that REEF will provide increased LPG export capacity to meet long-term energy demand, cost synergies, product optionality and dedicated dock access; expectation of more constructive Asian-to-North American butane spreads for 2023 and 2024 forward strip pricing; AltaGas' ability to achieve its medium-term 5x net debt-to-normalized EBITDA target; AltaGas' ability to achieve its forecasted profitability; expectation that REEF will provide increased LPG export capacity to meet long-term energy demand, cost synergies, product optionality and dedicated dock access; AltaGas' ability to achieve its medium-term 5x net debt-to-normalized EBITDA target; the impact of AltaGas' network upgrades on long-term operating costs, the environment, and customer affordability; AltaGas' ability to increase long-term tolling arrangements and maintaining an active hedging program and the expected results therefrom; AltaGas' belief in the long-term demand and growth opportunities in the Montney region and the expected impacts therefrom; AltaGas' ability to collaborate with First Nations and stakeholders on sustainable resource development and its belief and role in the growing global demand for responsibly developed energy sources; expectation for an active hedging program in 2023 and the expected outcomes therefrom; the percentage of AltaGas' expected 2023 frac exposed volumes that are hedged; the percentage of AltaGas' expected 2023 export volumes that are tolled or financially hedged; expectation that AltaGas' development approach of REEF will provide the most capital efficient build, match energy export supply with throughput capacity, mitigate challenges and provide longer-term local employment opportunities; anticipation of successful collaboration with First Nations and other key stakeholders for REEF; the potential development of REEF and expected project activities, deliverables and timing thereof; AltaGas' ability to execute its long-term corporate strategy and achieve the expected outcomes therefrom; AltaGas' long-term objectives for managing capital; expected self-funded capital program of $930 million in 2023 including rollover of $90 million capital investments from 2022, excluding asset retirement obligations; and expected dividend payments and dates of payment.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events, and achievements to differ materially from those expressed or implied by such statements. Such statements reflect AltaGas' current expectations, estimates, and projections based on certain material factors and assumptions at the time the statement was made. Material assumptions include: anticipated timing of asset sale closings, effective tax rates, financing initiatives, degree day variance from normal, pension discount rate, the performance of the businesses underlying each sector, impacts of the hedging program, expected commodity supply, demand and pricing, volumes and rates, exchange rates, inflation, interest rates, credit ratings, regulatory approvals and policies, future operating and capital costs, capacity expectations, weather, frac spread, access to capital, planned and unplanned plant outages, timing of in-service dates of new projects and acquisition and divestiture activities, returns on investments, and dividend levels. 

 AltaGas' forward-looking statements are subject to certain risks and uncertainties which could cause results or events to differ from current expectations, including, without limitation: risks related to conflict in Eastern Europe; health and safety risks; operating risks; infrastructure; natural gas supply risks; volume throughput; service interruptions; transportation of petroleum products; market risk; inflation; general economic conditions; cyber security, information, and control systems; climate-related risks; environmental regulation risks; regulatory risks; litigation; changes in law; Indigenous and treaty rights; dependence on certain partners; political uncertainty and civil unrest; decommissioning, abandonment and reclamation costs; reputation risk; weather data; capital market and liquidity risks; interest rates; internal credit risk; foreign exchange risk; debt financing, refinancing, and debt service risk; counterparty and supplier risk; technical systems and processes incidents; growth strategy risk; construction and development; underinsured and uninsured losses; impact of competition in AltaGas' businesses; counterparty credit risk; composition risk; collateral; rep agreements; market value of common shares and other securities; variability of dividends; potential sales of additional shares; labor relations; key personnel; risk management costs and limitations; commitments associated with regulatory approvals for the acquisition of WGL; cost of providing retirement plan benefits; failure of service providers; risks related to pandemics, epidemics or disease outbreaks, including COVID-19; and the other factors discussed under the heading "Risk Factors" in the Corporation's Annual Information Form for the year ended December 31, 2022 and set out in AltaGas' other continuous disclosure documents. 

Many factors could cause AltaGas' or any particular business segment's actual results, performance or achievements to vary from those described in this press release, including, without limitation, those listed above and the assumptions upon which they are based proving incorrect. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this news release as intended, planned, anticipated, believed, sought, proposed, estimated, forecasted, expected, projected or targeted and such forward-looking statements included in this news release, should not be unduly relied upon. The impact of any one assumption, risk, uncertainty, or other factor on a particular forward-looking statement cannot be determined with certainty because they are interdependent and AltaGas' future decisions and actions will depend on management's assessment of all information at the relevant time. Such statements speak only as of the date of this news release. AltaGas does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law. The forward-looking statements contained in this news release are expressly qualified by these cautionary statements.

Financial outlook information contained in this news release about prospective financial performance, financial position, or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on AltaGas management's (Management) assessment of the relevant information currently available. Readers are cautioned that such financial outlook information contained in this news release should not be used for purposes other than for which it is disclosed herein.

Additional information relating to AltaGas, including its quarterly and annual MD&A and Consolidated Financial Statements, AIF, and press releases are available through AltaGas' website at www.altagas.ca or through SEDAR at www.sedar.com

SOURCE AltaGas Ltd.