ALTAGAS REPORTS STRONG FIRST QUARTER 2024 RESULTS

Performance Due to Strong Midstream Execution, Record First Quarter Global Export Volumes, and Continued Advancement of Major Strategic Priorities

CALGARY, AB, May 2, 2024 /CNW/ - AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) today reported first quarter 2024 financial results and provided an update on its operations and other corporate developments.

HIGHLIGHTS

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

• Normalized EPS¹ was $1.14 in the first quarter of 2024 compared to $0.99 in the first quarter of 2023, representing a 15 percent year-over-year increase, while GAAP EPS² was $1.38 in the first quarter of 2024 compared to $1.58 in the first quarter of 2023. Normalized EPS was ahead of AltaGas' expectations due to strong Midstream performance, including robust global exports volumes partially due to favorable timing of ships at the end of the first quarter, and continued cost management.  
• Normalized EBITDA¹ was $660 million in the first quarter of 2024 compared to $582 million in the first quarter of 2023, while income before income taxes was $541 million in the first quarter of 2024 compared to $619 million in the first quarter of 2023. The quarter included strong Midstream performance while Utilities results were in line with expectations. 
• Normalized FFO per share¹ was $1.73 in the first quarter of 2024 compared to $1.63 in the first quarter of 2023, while cash from operations per share³ was $1.89 in the first quarter of 2024 compared to $2.10 in the first quarter of 2023.
• The Utilities segment reported normalized EBITDA of $437 million in the first quarter of 2024 compared to $401 million in the first quarter of 2023, while income before income taxes was $384 million in the first quarter of 2024 compared to $590 million in the first quarter of 2023. The largest drivers of the year-over-year growth in Utilities normalized EBITDA included strong performance from WGL's Retail business, contribution from AltaGas' continued investment in rate base, customer additions, and the positive impact of the District of Columbia ("D.C.") rate case. These positive factors were partially offset by the lost contribution of the Alaska Utilities due to its divestiture on March 1, 2023 and associated gain on debt defeasance.
• The Midstream segment reported normalized EBITDA of $247 million in the first quarter of 2024 compared to $183 million in the first quarter of 2023, while income before income taxes was $297 million in the first quarter of 2024 compared to $138 million in the first quarter of 2023. The largest drivers of the year-over-year increase in Midstream normalized EBITDA included strong performance in the global exports business, including record first quarter volumes, the benefit from Allowance for Funds Used During Construction ("AFUDC") associated with the construction of the Mountain Valley Pipeline ("MVP"), strong marketing performance, and the addition of the newly acquired Pipestone assets. 
• AltaGas exported a first quarter record of 115,108 Bbl/d of liquified petroleum gases ("LPGs") to Asia in the quarter, which represented a 16 percent year-over-year increase. Growth was underpinned by strong execution at the Ridley Island Propane Export Terminal ("RIPET") and Ferndale Terminal ("Ferndale"), continued strong demand in Asia, and increased LPG supply in Western Canada.
• AltaGas continued to advance key Midstream growth projects in the quarter. This included the Company drilling the first acid gas injection well for the Pipestone II expansion project and continuing to advance key activities on the Ridley Island Energy Export Facility ("REEF"). Site clearing work at REEF has progressed as expected, while key commercial agreements are progressing. AltaGas continues to expect a positive final investment decision ("FID") during the second quarter of 2024.
• AltaGas is pleased with the construction progress on MVP. The pipeline is more than 99 percent complete and is expected to be placed into service in June of 2024, where it will provide critical energy security to customers in the Eastern U.S. As previously disclosed, AltaGas does not consider its equity stake in MVP as core and will consider value maximizing opportunities once the pipeline is fully operational.
• In the first quarter of 2024, AltaGas commissioned one new very large gas carrier ("VLGC"), the Boreal Voyager, under a seven-year contract with optional extensions, and extended an existing contract for one VLGC time charter with Astomos, with whom AltaGas has had a long-standing partnership since RIPET was commissioned. This follows the commissioning of the Boreal Pioneer in December 2023, which is also operating under a seven-year agreement. These three time charters will reduce and de-risk shipping costs with materially all of AltaGas' expected Baltic freight exposure protected through time charters, financial hedges, and tolled volumes in 2024.
• AltaGas had two financings in the first quarter of 2024, including:
  • On January 8, 2024, AltaGas issued $400 million of senior unsecured medium-term notes with a 4.67 percent coupon, due on January 8, 2029. The net proceeds were used to pay down existing indebtedness under AltaGas' credit facilities (part of which was incurred to fund the debt portion of the Pipestone Acquisition), to fund working capital, and for general corporate purposes.
  • On March 14, 2024, AltaGas issued $350 million of senior unsecured medium-term notes with a 5.14 percent coupon, due on March 14, 2034 and $250 million of senior unsecured medium-term notes with a 5.60 percent coupon, due on March 14, 2054. The net proceeds were used to refinance AltaGas' March 2024 medium-term note maturities, pay down other existing indebtedness, fund working capital, and for general corporate purposes.
• Following a strong first quarter, AltaGas is reiterating the Company's 2024 full year guidance, including normalized EPS¹ of $2.05 to $2.25, and normalized EBITDA¹ of $1,675 million to $1,775 million.

(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, 2024, which is available on www.sedarplus.ca. (2) GAAP EPS is equivalent to Net income applicable to common shares divided by shares outstanding. (3) GAAP FFO per share is equivalent to cash from operations divided by shares outstanding.

CEO MESSAGE

"We're pleased with our first quarter performance and continued execution of our long-term strategic plan" said Vern Yu, President and Chief Executive Officer of AltaGas. "Performance in the quarter was ahead of our expectations and reflected the purposeful actions we have taken to leverage our growth opportunities, optimize our assets, de-risk the business commercially and financially, and deliver long-term value for our stakeholders.

"Performance in our Utilities was in line with our expectations and continued to deliver stable and growing earnings for the enterprise, despite warmer-than-normal weather throughout much of the quarter. In addition to the strong Retail performance, the quarter included the benefit of continued modernization investments, customer growth, and the D.C. rate case. We continued to make strong investments in our Utilities during the quarter to meet the needs of our expanding customer base and support long-term safety and reliability needs through ongoing asset modernization programs. Our natural gas Utilities have a bright future as the lowest cost and most reliable form of residential and commercial heating across our jurisdictions.

"Performance in our Midstream segment was robust, including strong execution in global exports and the addition of the Pipestone assets. We also benefited from AFUDC on MVP as the pipeline completes the final stage of construction and should be brought into service in June. Long-term fundamentals for the sector remain strong, despite soft natural gas prices during the quarter, as the industry prepares for large increases in globally-connected egress for Western Canadian natural gas. We completed a successful natural gas liquids ("NGL") re-contracting season on April 1, 2024, with a high level of LPG supply contracted for the coming year we have made solid progress toward our medium-term target, with 56 percent of expected global exports volumes now tolled, starting in the second quarter of 2024. We continue to see attractive brownfield and greenfield growth opportunities across the Midstream value chain and look forward to leveraging these opportunities in the years ahead.

"We remain focused on executing our strategic priorities that will drive long-term value for our stakeholders. This includes operating with an equity self-funding model, commercially de-risking the business through increasing our tolling, take-or-pay and fee-for-service contracts, continued balance sheet deleveraging, optimizing our assets for the best risk-adjusted returns, and executing with a high degree of capital discipline. In the near-term, we are also focused on executing the construction of the Pipestone Phase II expansion project, which we reached a positive FID in December 2023, and look forward to completing the final milestones to reach a positive FID on REEF during the second quarter of 2024."

RESULTS BY SEGMENT

Normalized EBITDA ^(1)	Three Months Ended March 31
($ millions)	2024	2023
Utilities	$             437	$              401
Midstream	247	183
Corporate/Other	(24)	(2)
Normalized EBITDA ^(1)	$             660	$             582

(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)	2024	2023
Utilities	$             384	$             590
Midstream	297	138
Corporate/Other	(140)	(109)
Income Before Income Taxes	$             541	$              619

BUSINESS PERFORMANCE

Utilities

The Utilities segment reported normalized EBITDA of $437 million in the first quarter of 2024 compared to $401 million in the first quarter of 2023, while income before income taxes was $384 million in the first quarter of 2024 compared to $590 million in the first quarter of 2023. The largest drivers of the year-over-year growth in Utilities normalized EBITDA included strong Retail performance, contributions from AltaGas' continued investment in rate base on behalf of its customers through the Company's various Accelerated Replacement Programs ("ARPs"), new customer additions, and the positive impact of the D.C. rate case. These positive factors were partially offset by the lost contribution of the Alaska Utilities due to its divestiture on March 1, 2023, which had contributed $16 million during the first quarter of 2023, and the absence of the gain from the debt defeasance associated with the Alaska Utilities sale.

AltaGas continues to make investments across its Utilities network to improve the safety and reliability of the system on behalf of its customers. During the first quarter of 2024 AltaGas invested $179 million across the Utilities network, including approximately $85 million within the Company's various asset modernization programs. These investments continue to be directed towards improving the safety and reliability of the system and connecting customers to the critical energy they require to carry out everyday life. These investments should also reduce leak rates and bring long-term operating cost benefits to our customers. AltaGas will continue to make these critical investments, while balancing the need for ongoing customer affordability, which is particularly important during the current economic environment of higher interest rates and affordability challenges. AltaGas continues to be acutely focused on cost management across the Utilities platform, managing capital investments, and driving the best outcomes for its customers and stakeholders.

During the quarter, the Public Service Commission of Maryland ("PSC of MD") issued an order to amend Washington Gas' most recent Maryland rate case order that was issued on December 14, 2023. The amendment resulted in an increase in rates of approximately US$13MM, instead of the US$10.0 million increase that was named in the December 14, 2023 rate order.

On April 1, 2024, SEMCO Energy submitted its MRP and IRIP amendment application, seeking approval from the MPSC to extend these modernization programs for approximately US$46 million and US$68 million, respectively, for the period from 2025 to 2027. This will allow AltaGas to make critical long-term investments in Michigan to reinforce our network and deliver safe and reliable operations.

Midstream

The Midstream segment reported normalized EBITDA of $247 million in the first quarter of 2024 compared to $183 million in the first quarter of 2023, while income before income taxes was $297 million in the first quarter of 2024 compared to $138 million in the first quarter of 2023. The largest drivers of the year-over-year increase in Midstream normalized EBITDA was strong performance in the global exports business, including record first quarter volumes, the benefit from AFUDC associated with the construction of MVP, strong marketing performance, and contribution from the Pipestone Assets that were acquired in the fourth quarter of 2023. These factors were partially offset by the absence of the favourable resolution of certain acquisition related commercial disputes and contingencies in the first quarter of 2023, and lower earnings at the extraction facilities due to the impact of higher re-injection of volumes and lower realized frac spreads.

AltaGas has continued to add longer-term contracts in recent months as part of the Company's strategic focus on increasing tolling within the global exports business and providing customers the benefit of direct market access in Asia.

AltaGas exported 115,108 Bbls/d of LPGs to Asia in the first quarter of 2024, including 12 VLGCs at RIPET, and 7 VLGCs at Ferndale. This represented a 16 percent year-over-year increase from the first quarter of 2024 and was underpinned by strong execution at both terminals, continued strong demand in Asia, increased LPG supply in Western Canada, and favorable ship timing. On the latter, this included AltaGas benefiting from one delayed ship in the fourth quarter of 2023 that was loaded at the beginning of the first quarter of 2024, and one ship loaded at the end of the first quarter of 2024 that was previously expected to be loaded at the beginning of the second quarter of 2024. This latter ship loading had the net impact of shifting certain profits that were previously expected in the second quarter of 2024 to the first quarter of 2024 with no net impact on the full-year volumes or expected profits.

Subsequent to quarter-end, AltaGas completed a successful NGL re-contracting season on April 1, 2024 with strong LPG supply contracted for the coming year, while also making considerable tolling progress within our global exports business in recent months. This includes 56 percent of expected global exports now tolled, starting in the second quarter of 2024. These tolling contracts will provide AltaGas' customers with direct access to Asian markets, which traditionally trade at strong premiums to the domestic Canadian market, while providing AltaGas the benefit of stable and predictable contracted cash flows. As part of this tolling success, AltaGas crystallized certain financial hedges to avoid an imbalance of financial and physical merchant barrels in the coming quarters. This resulted in a positive gain on settlements in the first quarter of 2024, which had the effect of shifting profits associated with merchant barrels that would have been realized in the future quarters into the first quarter of 2024.

Over the longer-term, AltaGas continues to see growing demand for LPG exports driven by the Company's structural shipping advantage to Asia and access to low-cost Canadian supply. This structural advantage was amplified in recent quarters due to the restricted vessel traffic through the Panama Canal, which has resulted in additional demand for reliable and ratably-sourced Canadian LPGs. Although shipping volumes through the Panama Canal have now normalized, the risk of future reduced throughput traffic remains. This highlights the mutual benefits of a growing Canadian-Pacific energy partnership and the critical role Canada can play in providing long-term energy security.

Performance across the balance of the Midstream platform was strong but included partially curtailed gas processing volumes due to cold weather and maintenance related outages at certain facilities. The Pipestone assets have been integrated and AltaGas welcomed its new employees who joined the Company as part of the transaction. AltaGas is now focused on leveraging the long-term growth opportunities and delivering on the returns that can be generated with the Pipestone assets, which are now part of AltaGas' value chain. The Company is pleased with the transition of operatorship and progress realized to date.

AltaGas continued to advance key Midstream growth projects during and subsequent to the quarter. This included AltaGas having drilled the first acid gas injection well for the Pipestone II expansion project during the quarter, having spud the second acid gas injection well subsequent to the quarter-end, and the Company continuing to advance key activities on REEF during and subsequent to the first quarter of 2024. Logging, clearing, and drainage work at REEF has progressed as expected, while key commercial agreements also progress. As such, AltaGas continues to expect a positive FID during the second quarter of 2024.

AltaGas is pleased with the construction progress on MVP. The pipeline is more than 99 percent complete and expected to be placed into service in June of 2024, where it will provide critical energy security to customers in the Eastern U.S. As previously disclosed, AltaGas does not consider its equity stake in MVP as core and will consider value maximizing opportunities once the pipeline is fully operational.

AltaGas is well-hedged for 2024 with approximately 90 percent of the remaining 2024 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 approximately US$16.82/Bbl. This includes AltaGas entering the year with approximately 40 percent of forward global export volumes tolled with the expectation of reaching 50 percent or higher tolling by the end of 2024. Based on AltaGas' signed deals, the Company expects to exceed these tolling levels with 56 percent of 2024 expected annual global exports now tolled, starting in the second quarter of 2024. Approximately 83 percent of the Company's 2024 expected frac exposed volumes are hedged at approximately $25.84/Bbl, prior to transportation costs. AltaGas continues to actively manage risk across the Midstream platform through commercial constructs and a systematic hedging program that covers key revenue and operating costs.

Midstream Hedge Program	Q2 2024	Q3 2024	Q4 2024	Remainder of 2024
Global Exports volumes hedged (%) ^(1)	92	96	82	90
Average propane/butane FEI to North America hedge (US$/Bbl) ^(2)	18.24	15.79	16.82	16.82
Fractionation volume hedged (%) ^(3)	90	91	71	83
Frac spread hedge rate - (CAD$/Bbl) ^(3)	26.66	26.66	24.21	25.84

(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

In the Corporate/Other segment, normalized EBITDA was a loss of $24 million in the first quarter of 2024 compared to a $2 million loss in the same quarter of 2023, while loss before income taxes was $140 million in the first quarter of 2024 compared to a loss of $109 million in the first quarter of 2023. Normalized EBITDA in the quarter was impacted by lower contribution from Blythe primarily due to a planned turnaround that was extended by 22 days due to AltaGas electing to undertake additional preventative maintenance during the outage. Blythe was brought online near the end of the first quarter of 2024 and is expected to have normal contribution for the balance of the year. Corporate/Other Normalized EBITDA was also impacted by higher Corporate expenses related to employee incentive plans due to AltaGas' share price appreciation.

CONSOLIDATED FINANCIAL RESULTS

	Three Months Ended March 31
($ millions)	2024	2023
Normalized EBITDA ^(1)	$             660	$              582
Add (deduct):
Depreciation and amortization	(116)	(111)
Interest expense	(107)	(105)
Normalized income tax expense	(100)	(76)
Preferred share dividends	(4)	(6)
Other ^(2)	5	(5)
Normalized net income ^(1)(3)	$             338	$              279
Net income applicable to common shares	$             408	$              445
Normalized funds from operations ^(1)	$             510	$              460
($ per share, except shares outstanding)
Shares outstanding - basic (millions)
During the period ^(4)	295	282
End of period	296	282
Normalized net income - basic ^(1)(3)	1.14	0.99
Normalized net income - diluted ^(1)(3)	1.14	0.99
Net income per common share - basic	1.38	1.58
Net income per common share - diluted	1.37	1.57

(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), unrealized foreign exchange losses on intercompany balances 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)	In the fourth quarter of 2023, AltaGas changed its non-GAAP policy to exclude the impact of unrealized foreign exchange losses (gains) on intercompany balances between Canadian and U.S. entities. Prior periods have been restated to reflect this change. Please refer to the Q1 2024 MD&A for additional details.
(4)	Weighted average.

Normalized EBITDA for the first quarter of 2024 was $660 million compared to $582 million for the same quarter in 2023. The largest factors contributing to the year-over-year increase are described in the Business Performance sections above.

Income before income taxes was $541 million for the first quarter of 2024 compared to $619 million for the same quarter in 2023. The decrease was mainly due to the absence of the gain on the Alaska Utilities Disposition as well as additional proceeds received in the first quarter of 2023 for the favourable settlement of contract contingencies related to the sale of the Goleta energy storage development in Goleta, California in 2022, higher transition and other restructuring costs, and higher depreciation and amortization expense, partially offset by higher unrealized gains on risk management contracts, the same previously referenced factors impacting normalized EBITDA, lower transaction costs related to acquisitions and dispositions, and higher foreign exchange gains. Please refer to the "Three Months Ended March 31" Section of the Q1 2024 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 $338 million or $1.14 per share for the first quarter of 2024, compared to $279 million or $0.99 per share reported for the same quarter of 2023.

Normalized FFO was $510 million or $1.73 per share for the first quarter of 2024, compared to $460 million or $1.63 per share for the same quarter in 2023. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA and higher foreign exchange gains, partially offset by the impact of non-cash items included in normalized EBITDA and higher normalized current income tax expense.

Depreciation and amortization expense was $116 million for the first quarter of 2024, compared to $111 million for the same quarter in 2023. The increase was mainly due to depreciation expense on the Pipestone assets and the impact of new assets placed in-service.

Interest expense for the first quarter of 2024 was $107 million, compared to $105 million for the same quarter in 2023. The increase was mainly due to higher average interest rates and incremental hybrid interest costs due to the issuance of additional hybrid notes in the third quarter of 2023 replacing preferred shares, partially offset by lower average debt balances. Interest expense recorded on the subordinated hybrid notes in the first quarter of 2024 was $13 million compared to $9 million in the first quarter of 2023.

Income tax expense was $125 million for the first quarter of 2024, compared to an income tax expense of $163 million for the same quarter of 2023. The decrease in income tax expense was mainly due to the tax impact of the Alaska Utilities disposition in the first quarter of 2023.

FORWARD FOCUS, GUIDANCE AND FUNDING

AltaGas continues to execute 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 growing value for the Company's stakeholders.

AltaGas expects to achieve its previously disclosed 2024 guidance, including:

• 2024 normalized EPS guidance of $2.05 - $2.25, compared to normalized EPS of $1.90 and GAAP EPS of $2.27 in 2023; and
• 2024 normalized EBITDA guidance of $1,675 million - $1,775 million, compared to normalized EBITDA of $1,575 million and income before taxes of $912 million in 2023.

AltaGas is focused on delivering resilient and growing normalized EPS and FFO per share while targeting lower leverage ratios. This strategy is designed to support steady dividend growth and provide the opportunity for ongoing capital appreciation for long-term shareholders.

AltaGas is maintaining a disciplined, self-funded capital program of approximately $1.2 billion, excluding asset retirement obligations ("ARO"). The Company is allocating approximately 58 percent of AltaGas' consolidated 2024 capital to its Utilities business, approximately 36 percent to the Midstream business and the balance to the Corporate/Other segment.

The Company expects to maintain an equity self-funding model in 2024, for the fifth consecutive year, and will fund capital requirements through a combination of internally generated cash flows and investment capacity associated with rising EBITDA levels, with no expectation to issue equity. Asset sales will be considered on an opportunistic basis, with any potential proceeds to be used to de-lever and strengthen the balance sheet and continue to increase the financial flexibility of AltaGas.

QUARTERLY COMMON SHARE DIVIDEND AND PREFERRED SHARE DIVIDENDS

The Board of Directors approved the following schedule of Dividends:

Type ^(1)	Dividend (per share)	Period	Payment Date	Record
Common Shares	$0.2975	n.a.	28-Jun-24	14-Jun-24
Series A Preferred Shares	$0.19125	31-Mar-24 to 29-Jun-24	28-Jun-24	14-Jun-24
Series B Preferred Shares	$0.47495	31-Mar-24 to 29-Jun-24	28-Jun-24	14-Jun-24
Series G Preferred Shares	$0.265125	31-Mar-24 to 29-Jun-24	28-Jun-24	14-Jun-24
Series H Preferred Shares	$0.49982	31-Mar-24 to 29-Jun-24	28-Jun-24	14-Jun-24

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

CONFERENCE CALL AND WEBCAST

AltaGas will hold a conference call today, May 2, 2024, at 9:00 a.m. MT (11:00 a.m. ET) to discuss first quarter of 2024 results and other corporate developments.

Date:	Thursday, May 2, 2024
Time:	9:00 a.m. MT (11:00 a.m. ET)
Webcast:	https://app.webinar.net/g1rv70vJnad
Dial-in (Audio only):	1-416-764-8659 or toll free at 1-888-664-6392

Shortly after the conclusion of the call a replay will be available on the Company's website or by dialing 416-764-8677 or toll free 1-888-390-0541. Passcode 598981#.

AltaGas' Consolidated Financial Statements and accompanying notes for the first quarter of 2024, as well as its related MD&A, 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.sedarplus.ca.

NON-GAAP MEASURES

This news release contains references to certain financial measures that do not have a standardized meaning prescribed by U.S. GAAP and may not be comparable to similar measures presented by other entities. The non-GAAP measures and their reconciliation to U.S. 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, 2024. 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 U.S. GAAP.

Change in Composition of Non-GAAP Measures

In the fourth quarter of 2023, Management has changed the composition of certain of AltaGas' non-GAAP measures such that normalized net income now excludes the impact of unrealized intercompany foreign exchange gains (losses) resulting from intercompany balances between a U.S. subsidiary and a Canadian entity, where the foreign exchange impact in the U.S. subsidiary is recorded through gain (loss) on foreign currency translation in the Consolidated Statements of Comprehensive Income and the Canadian entity revaluation is recorded through the foreign exchange gain (loss) line item on the Consolidated Statements of Income. This change was made as a result of Management's assessment that excluding these intercompany foreign exchange impacts from normalized net income is more representative of the Company's ongoing financial performance. Prior period calculations of the relevant non-GAAP measures have been restated to reflect this change. The following table summarizes the impact of this change on the periods presented in this news release:

Increase as result of change	Three Months Ended March 31
($ millions, except where noted)	2024	2023
Normalized net income ^(1)	$            —	$              2
Normalized income tax expense	$            —	$               1
Normalized effective tax rate (%)	— %	0.1 %

(1)    Corresponding per share amounts have also been adjusted.

Normalized EBITDA

	Three Months Ended March 31
($ millions)	2024	2023
Income before income taxes (GAAP financial measure)	$        541	$         619
Add:
Depreciation and amortization	116	111
Interest expense	107	105
EBITDA	$        764	$        835
Add (deduct):
Transaction costs related to acquisitions and dispositions ^(1)	5	15
Unrealized losses (gains) on risk management contracts ^(2)	(117)	36
Gains on sale of assets ^(3)	(1)	(307)
Transition and restructuring costs ^(4)	13	—
Accretion expenses	1	3
Foreign exchange gains	(5)	—
Normalized EBITDA	$        660	$        582

(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, that are directly attributable to the acquisition or disposition.
(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, 2024 for further details regarding AltaGas' risk management activities.
(3)	Included in the "other income" line item on the Consolidated Statements of Income.
(4)	Comprised of transition and restructuring costs (including CEO transition). These costs are included in the "operating and administrative" line items on the Consolidated Statements of Income.

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 and 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)	2024	2023
Net income applicable to common shares (GAAP financial measure)	$       408	$        445
Add (deduct) after-tax:
Transaction costs related to acquisitions and dispositions ^(1)	4	11
Unrealized losses (gains) on risk management contracts ^(2)	(89)	28
Losses (gains) on sale of assets ^(3)	2	(207)
Transition and restructuring costs ^(4)	9	—
Unrealized foreign exchange losses on intercompany balances^(5)	4	2
Normalized net income	$       338	$        279

(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.
(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, 2024 for further details regarding AltaGas' risk management activities.
(3)	The pre-tax amounts are included in the "other income" line item on the Consolidated Statements of Income.
(4)	Comprised of transition and restructuring costs (including CEO transition). The pre-tax costs are included in the "operating and administrative" line item on the Consolidated Statements of Income.
(5)	Relates to unrealized foreign exchange losses on intercompany accounts receivable and accounts payable balances between a U.S. subsidiary and a Canadian entity, where the impact to the U.S. subsidiary is recorded through accumulated other comprehensive income as a loss on foreign currency translation, and the impact to the Canadian entity is recorded through the "foreign exchange gains" line item on the Consolidated Statements of Income. In the fourth quarter of 2023, AltaGas changed its non-GAAP policy to exclude the impact of unrealized foreign exchange losses (gains) on intercompany balances between Canadian and U.S. entities. The amounts presented in this table reflect the restated figures to align with the revised policy. Please refer to the Q1 2024 MD&A for further details.

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)	2024	2023
Cash from operations (GAAP financial measure)	$        557	$          591
Add (deduct):
Net change in operating assets and liabilities	(71)	(190)
Asset retirement obligations settled	—	2
Funds from operations	$        486	$         403
Add (deduct):
Transaction costs related to acquisitions and dispositions ^(1)	5	15
Transition and restructuring costs ^(2)	13	—
Current tax expense on asset sales ^(3)	6	42
Normalized funds from operations	$         510	$         460

(1)	Comprised of transaction costs related to acquisitions and dispositions of assets and/or equity investments in the period. These costs exclude 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.
(2)	Comprised of transition and restructuring costs (including CEO transition). The pre-tax costs are included in the "operating and administrative" line item on the Consolidated Statements of Income.
(3)	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.

Invested Capital and Net Invested Capital

	Three Months Ended March 31
($ millions)	2024	2023
Cash used in (from) investing activities (GAAP financial measure)	$         269	$        (869)
Add (deduct):
Net change in non-cash capital expenditures ^(1)	(14)	(28)
Capitalized interest and AFUDC ^(2)	1	—
Net Invested Capital	$         256	$        (897)
Asset dispositions	1	1,072
Invested capital	$         257	$          175

(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, 2024 for further details.
(2)	AFUDC is the amount that a rate-regulated enterprise is allowed to recover for its cost of financing assets under construction, and excludes any AFUDC within investments accounted for by the equity method. Capitalized interest and AFUDC are included in the "property, plant and equipment" line item on the Consolidated Balance Sheets.

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. Net invested capital is invested capital presented net of proceeds from disposals of assets in the period. Net invested capital is calculated based on the investing activities section in the Consolidated Statements of Cash Flows, adjusted for items including the net change in non-cash capital expenditures and capitalized interest and AFUDC. Invested capital and net invested capital are 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)	2024	2023
Revenue	3,655	4,048
Normalized EBITDA ^(1)	660	582
Income before income taxes	541	619
Net income applicable to common shares	408	445
Normalized net income ^(1) (2)	338	279
Total assets	23,901	21,989
Total long-term liabilities	12,666	11,233
Invested capital^(1)	257	175
Cash from (used in) investing activities	(269)	869
Dividends declared ^(3)	88	79
Cash from operations	557	591
Normalized funds from operations ^(1)	510	460
Normalized effective income tax rate (%)^(1) (2)	22.4	20.8
Effective income tax rate (%)	23.1	26.4

	Three Months Ended March 31
($ per share, except shares outstanding)	2024	2023
Net income per common share - basic	1.38	1.58
Net income per common share - diluted	1.37	1.57
Normalized net income - basic ^(1) (2)	1.14	0.99
Normalized net income - diluted ^(1) (2)	1.14	0.99
Dividends declared ^(3)	0.30	0.28
Cash from operations	1.89	2.10
Normalized funds from operations ^(1)	1.73	1.63
Shares outstanding - basic (millions)
During the period ^(4)	295	282
End of period	296	282

(1)	Non‑GAAP financial measure or non-GAAP financial ratio; see discussion in Non-GAAP Financial Measures section of the MD&A.
(2)	In the fourth quarter of 2023, AltaGas changed its non-GAAP policy to exclude the impact of unrealized foreign exchange losses (gains) on intercompany balances between Canadian and U.S. entities. Prior periods have been restated to reflect this change. Please refer to the Q1 2024 MD&A for additional details.
(3)	Dividends declared per common share per quarter: $0.28 per share beginning March 2023, increased to $0.2975 per share effective March 2024.
(4)	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]

Aaron Swanson
Vice President, 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", "likely", "will", "intend", "plan", "anticipate", "believe", "aim", "seek", "future", "commit", "propose", "contemplate", "estimate", "focus", "strive", "forecast", "expect", "project", "potential", "target", "guarantee", "potential", "objective", "continue", "outlook", "guidance", "growth", "long-term", "vision", "opportunity" and similar expressions suggesting future events or future performance, as they relate to the Company or any affiliate of the Company, 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: the Company's 2024 guidance including normalized earnings per share of $2.05 to $2.25 and normalized EBITDA of $1,675 to $1,775 million; the Company's ability to deliver on its 2024 guidance; REEF reaching a positive FID and the timing thereof; anticipated in-service date of MVP and the benefits thereof; AltaGas' intention to consider value maximizing opportunities once MVP is fully operational; anticipated benefits of AltaGas' VLGC time charters; the expected tolling levels; AltaGas' ability to leverage growth opportunities; AltaGas' ability to execute its strategic priorities and drive long-term value for stakeholders; the Company's focus on and ability to execute the Pipestone Phase II expansion project; anticipated benefits of AltaGas' investment in the Utilities network and the Company's intention to continue making these investments while balancing the need for customer affordability; the Company's focus on cost management across the Utilities platform, managing capital investments and driving the best outcomes for its customers and stakeholders; anticipated benefits of SEMCO Energy's MRP and IRIP amendment application; AltaGas' long-term focus on increasing tolling within the global exports business and providing the benefit of direct market access in Asia; the expectation that 56% of 2024 forward global export volumes will be tolled starting in the second quarter of 2024 and the anticipated benefits of such tolling contracts; AltaGas' focus on leveraging long-term growth opportunities and delivering on returns that can be generated with the Pipestone assets; the Company actively managing risk across the Midstream platform through commercial constructs and a systematic hedging program; the expectation that Blythe will have normal contribution for the balance of 2024; AltaGas' ability to execute its long-term corporate strategy; AltaGas' focus on growing normalized EPS and FFO per share while targeting lower leverage ratios; the expectation that AltaGas' long-term strategy will support steady dividend growth and ongoing capital appreciation for its long-term shareholders; AltaGas' commitment to maintaining an equity self-funded model in 2024 and will fund capital requirements through internally generated cash flows and investment capacity with no expectation to issue equity; opportunistic consideration of asset sales and the anticipated use of proceeds therefrom; and AltaGas' dividend policy.

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: effective tax rates; U.S./Canadian dollar exchange rates; inflation; interest rates, credit ratings, regulatory approvals and policies; expected commodity supply, demand and pricing; volumes and rates; propane price differentials; degree day variance from normal; pension discount rate; financing initiatives; the performance of the businesses underlying each sector; impacts of the hedging program; weather; frac spread; access to capital; future operating and capital costs; timing and receipt of regulatory approvals; seasonality; planned and unplanned plant outages; timing of in-service dates of new projects and acquisition and divestiture activities; taxes; operational expenses; returns on investments; dividend levels; and transaction costs.

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: 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; cybersecurity, 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; risks related to conflict, including the conflicts in Eastern Europe and the Middle East; 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; cost of providing retirement plan benefits; failure of service providers; risks related to pandemics, epidemics or disease outbreaks; and the other factors discussed under the heading "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2023 ("AIF") 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 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.sedarplus.ca.

SOURCE AltaGas Ltd.