ALTAGAS REPORTS STRONG THIRD QUARTER 2023 RESULTS

Continued Execution of AltaGas' Strategic Plan Strongly Positions the Company to Deliver on 2023 Guidance and Drive Shareholder Value Creation

CALGARY, AB, Nov. 3, 2023 /CNW/ - AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) today reported third 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 $0.10 in the third quarter of 2023 compared to $0.10 in the third quarter of 2022, while GAAP EPS² was a $0.18 loss in the third quarter of 2023 compared a $0.17 loss in the third quarter of 2022. Normalized EPS was ahead of AltaGas' expectations and strongly positions the Company to deliver on its 2023 guidance, including current expectations of achieving results in the upper half of the guidance range.
• Normalized EBITDA¹ was $252 million in the third quarter of 2023 compared to $233 million in the third quarter of 2022, while loss before income taxes was $51 million in the third quarter of 2023 compared to income before income taxes of $48 million in the same quarter of 2022. Third quarter results included robust performance from the Midstream segment while the Utilities segment was in line with AltaGas' expectations and reflective of the typical seasonal low for natural gas usage during the shoulder season.
• Normalized FFO per share¹ was $0.50 in the third quarter of 2023 compared to $0.60 in the third quarter of 2022, while Cash from Operations per share³ was $0.01 in the third quarter of 2023 compared to cash used by operations of $1.37 per share in the third quarter of 2022. The decrease in normalized FFO per share was principally driven by higher interest expense, including hybrid debt which replaced preferred shares, and lower current normalized income tax recovery in the quarter. The increase in Cash from Operations per share was principally driven by changes in working capital.
• The Midstream segment reported strong operating results with normalized EBITDA of $185 million in the third quarter of 2023 compared to $108 million in the third quarter of 2022, while income before taxes in the segment was $61 million in the third quarter of 2023 compared to income before taxes of $71 million in the third quarter of 2022. The largest drivers of the strong year-over-year results were meaningfully stronger performance from global exports business due to solid operational execution, strong volumes and pricing, and benefit of Allowance for Funds Used During Construction ("AFUDC") on the Mountain Valley Pipeline ("MVP") as the project progresses to final completion in early 2024.
• The Utilities segment reported normalized EBITDA of $71 million in the third quarter of 2023 compared to $115 million in the third quarter of 2022, while loss before taxes was $16 million in the third quarter of 2023 compared to income before taxes of $54 million in the same quarter of 2022. The largest driver of the year-over-year decrease in financial contribution was the lack of the larger-then-normal asset optimization that was present in last year's results, and is shared with our customers, and the lost contribution of the Alaskan Utilities, which were divested on March 1, 2023, and had contributed $13 million in normalized EBITDA in the third quarter of 2022.
• On August 31, 2023, AltaGas announced that it has entered into a definitive agreement to acquire the Pipestone natural gas processing and storage infrastructure assets located in the Alberta Montney for total consideration of $650 million from Tidewater Midstream and Infrastructure Ltd. ("Tidewater"). Subsequent to the announcement, AltaGas has received all material regulatory approvals, including Competition Act approval, and is currently working on other condition precedents to close the transaction, which continues to be anticipated prior to 2023 year-end.
• On October 20, 2023, AltaGas entered a five-year transportation agreement with Canadian National Railway Company ("CN"). The agreement provides AltaGas and its customers with cost and service predictability to support AltaGas' growing LPG exports to Asia, which support ongoing resource development across Western Canada, and provides energy security to the Company's downstream customers in Asia.
• Commissioning on two of AltaGas' new very large gas carriers ("VLGCs") progressed well over the third quarter of 2023 with the Boreal Pioneer expected to have its maiden voyage in December of 2023 with the Boreal Voyager expected to follow in March of 2024. These two seven-year time charters with optional extensions will reduce total shipping costs to Asia by approximately 25 percent compared to a standard VLGC. The vessels' deployment will also remove pricing volatility and de-risk maritime shipping costs on a long-term basis and is part of the Company's plan to commercially de-risk its Midstream business. In total, AltaGas will have three Time Charters operating in 2024 with a fourth under construction, which is set to be commissioned in the first half of 2026.
• On October 20, 2023, Washington Gas executed a definitive agreement with Opal Fuels Inc. ("Opal Fuels") to support a renewable natural gas ("RNG") project at the Prince William County Landfill in Virginia. As part of the agreement, Washington Gas will become an offtake customer for RNG production and purchase key interconnect infrastructure for approximately US$25 million. The interconnect infrastructure is anticipated to become part of Washington Gas' rate base and will be eligible to earn a 100-bps premium to its allowed ROE in the jurisdiction as part of the Virginia Energy Innovation Act, subject to regulatory approval.
• AltaGas is pleased with the construction progress on MVP. The pipeline is expected to be placed into service during the first quarter of 2024 and will provide critical energy security to customers in the Eastern U.S. The updated aggregate capital cost of the pipeline is US$7.2 billion with AltaGas' cash contribution contractually capped at its original US$352 million investment for a ten percent equity interest in a non-dilutive ownership stake. As previously disclosed, AltaGas does not consider its equity stake as core and will consider a monetization as part of the Company's plan to reach its 4.5x net debt to normalized EBITDA target.
• On August 29, 2023, the Commonwealth of Virginia State Corporation Commission ("SCC of VA") adopted the Hearing Examiner's report for the Virginia rate case, approving approximately US$41 million of incremental base rates plus approximately US$32 million of SAVE surcharges for a total rate increase of approximately US$73 million.
• Effective September 1, 2023, AltaGas appointed a new independent Director, Angela Lekatsas, to AltaGas' Board of Directors. Ms. Lekatsas has over two decades of broad industry and corporate finance experience and will also serve as a member of AltaGas' Audit Committee.
• On October 19, 2023, Washington Gas issued US$200 million in private placement notes, which includes US$150 million at 6.06 percent maturing on October 14, 2033, and US$50 million at 6.43 percent maturing on October 15, 2053. The proceeds will be used for general corporate purposes.
• On December 5, 2023, AltaGas will be hosting its 2023 Investor Day, where management will provide an update on the Company's corporate strategy and outlook, share its near- and- long-term corporate priorities, and provide 2024 financial guidance.

____________________________

(1) Non-GAAP measure; see discussion and reconciliation to US GAAP financial measures in the advisories of this news release or in AltaGas' Management's Discussion and Analysis (MD&A) as at and for the period ended September 30, 2023, which is available on www.sedarplus.ca. (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

"We are pleased with the third quarter operating and financial results and where we sit on a year-to-date basis" said Vern Yu, President and Chief Executive Officer of AltaGas. "This performance strongly positions the company to deliver on our 2023 guidance, including our current expectation to deliver results in the upper half of our guidance range, and continue to drive value creation for our stakeholders.

"Performance in the Midstream segment was robust and reflected record export volumes and the west coast advantage for Canadian LPGs. The Company has been actively working on de-risking Midstream while using strong risk management practices for residual commodity exposure. The Canadian upstream industry will deliver robust natural gas and NGL production growth in the coming years and we believe that AltaGas is positioned to provide the best value for LPG customers in North America and Asia.

"The Utilities segment performed relatively in line with our expectations and was reflective of the typical seasonal low for natural gas usage during the shoulder season. Our Utilities have a bright future with natural gas remaining the largest home energy source across all our jurisdictions where, on average, electrical substitution costs are more than three times the cost of natural gas on a delivered basis¹.

"In the years ahead, we will be acutely focused on balancing the critical needs of energy affordability and reliability with regional climate goals. Subsequent to quarter-end, we were pleased to sign an agreement to support a major RNG project at the Prince William County Landfill in Virginia. Through this agreement Washington Gas will become an offtake customer and purchase key interconnect infrastructure that will transport RNG through our network and lower the carbon-intensity of our energy supply.

"AltaGas has made tremendous progress on restructuring the platform over the past four years, including streamlining operations, refocusing the business, and de-risking the balance sheet. This includes significant leverage reduction, a shift in the debt portfolio with approximately 90 percent of the Company's debt being fixed under a properly staggered maturity ladder, and having built in optionality for additional debt repayments. These moves have strongly positioned AltaGas for the current operating environment and protected the Company from the material increases in interest rates over the past 18 months.

"We will continue this focus in the coming period as we look to complete our portfolio optimization, drive improved return on invested capital from our existing asset base, commercially and financially de-risk operations, and close our deleveraging journey to reach our 4.5x net debt to EBITDA target. AltaGas has a robust investment proposition that is supported by strong macro fundamentals and has a strong growth trajectory. We look forward to closing out a strong year in the fourth quarter and discussing the road ahead with our stakeholders at our Investor Day on December 5, 2023."

RESULTS BY SEGMENT

Normalized EBITDA ^(2)	Three Months Ended September 30
($ millions)	2023	2022
Utilities	$                     71	$                   115
Midstream	185	108
Corporate/Other	(4)	10
Normalized EBITDA ^(2)	$                   252	$                   233

(1)     Energy Analysis, AGA

(2)     Non‑GAAP financial measure; see discussion in Non‑GAAP Financial Measures section of this new release.

Income (Loss) Before Income Taxes	Three Months Ended September 30
($ millions)	2023	2022
Utilities	$                   (16)	$                    54
Midstream	61	71
Corporate/Other	(96)	(77)
Income (Loss) Before Income Taxes	$                   (51)	$                    48

BUSINESS PERFORMANCE

Midstream

The Midstream segment reported normalized EBITDA of $185 million in the third quarter of 2023 compared to $108 million in the third quarter of 2022. Income before income taxes in the Midstream segment was $61 million in the third quarter of 2023, compared to $71 million in the same quarter of 2022. Third quarter 2023 results included strong operations across the platform, including a significant improvement in the profitability of the global exports business due to robust export volumes, strong logistical performance, and high Asian-to-North American LPG margins. The quarter also benefitted from AFUDC being booked on MVP due to the resumption of construction activities in June of 2023, lower power costs at AltaGas' extraction facilities, and higher crude and NGL marketing margins.

AltaGas exported a record 118,213 Bbls/d of LPGs to Asia during the third quarter of 2023, including eleven full and one partially loaded VLGC at RIPET, and eight full and one partially loaded VLGC at Ferndale. The partially loaded vessels are a function of revenue recognition taking place at the point of ship loading and select loadings taking place over quarter ends. Higher export volumes were driven by continued improvement in AltaGas' operating and logistical capabilities, strong ongoing customer demand in Asia, and higher available LPG supply. AltaGas remains focused on partnering with North American producers, aggregators, and Asian downstream customers to increase direct market access through long-term LPG tolling arrangements. The Company made continued progress on tolling initiatives during the quarter and believes there is a path to push towards 60 percent or higher tolling over a multi-year time horizon. AltaGas also continued to actively hedge merchant export volumes to proactively lock-in structural margins and de-risk cashflows.

Performance across the balance of the Midstream platform was strong and in line with AltaGas' expectations. Although gas processing volumes were down modestly year-over-year during the third quarter of 2023 due to the turnaround at the Edmonton Ethane Extraction Plant ("EEEP") and lower processing volumes at the Harmattan Co-stream due to a pipeline tie-in, volumes have since recovered and continue to reflect the improved industry activity levels and strong macro fundamentals. Volumes across the balance of the platform were strong and included nine percent year-over-year growth in the Montney during the third quarter with a strong resumption of development activity. Fractionation volumes were up 12 percent year-over-year during the third quarter of 2023, including strong increases across Harmattan, Younger, and North Pine. AltaGas' realized frac spread averaged $23.75/Bbl, after transportation costs, as most of AltaGas' frac exposed volumes were hedged at approximately US$27.33/Bbl in the third quarter of 2023, prior to transportation costs.

AltaGas is well hedged for the remainder of 2023 with 87 percent of AltaGas' fourth quarter 2023 expected global export volumes tolled or financially hedged with merchant volumes hedged at an average Far East Index (FEI) to North American financial hedge price of approximately US$18.13/Bbl. The Company has also have been actively hedging its 2024 exposure, with 76 percent of AltaGas' first quarter 2024 expected global export volumes tolled or financially hedged with merchant volumes hedged at an average FEI to North American financial hedge price of approximately US$17.17/Bbl. AltaGas is also more than 50 percent tolled or financially hedged for second and third quarter of 2024 expected global export volumes. In addition, approximately 77 percent of the Company's fourth quarter 2023 expected frac exposed volumes are hedged at approximately US$26.83/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.

On October 20, 2023, AltaGas entered a five-year transportation agreement with CN. The agreement provides AltaGas and its customers with cost and service predictability to support AltaGas' growing LPG exports to Asia, which support ongoing resource development across Western Canada, and provides energy security to the Company's downstream customers in Asia.

Midstream Hedge Program

	Q4 2023	Q1 2024
Global Exports volume hedged (%)^(1)	87		76
Average propane/butane FEI to North America Average hedge (US$/Bbl)^(2)	18.13		17.17
Fractionation volume hedged (%)^(3)	77		76
Frac spread hedge rate - (US$/Bbl)^(3)	26.83		28.05

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.

Utilities

Normalized EBITDA in the Utilities segment was $71 million in the third quarter of 2023, compared to $115 million in the same quarter of 2022 with a loss before income taxes of $16 million in the third quarter of 2023 compared to income before income taxes of $54 million in the same quarter of 2022. The largest driver of the year-over-year decrease in Utilities financial performance was the larger-than-normal third quarter 2022 asset optimization contribution at Washington Gas, which is shared with customers, and the lost contribution of the Alaskan Utilities, which were divested in March of 2023, and had contributed $13 million of normalized EBITDA in the third quarter of 2022. Other factors impacting third quarter results on a year-over-year basis included higher operating and administrative expenses during the third quarter of 2023 and modestly lower contribution from the WGL Retail Energy business. These factors were partially offset by contributions from ongoing asset investments across the network through various Accelerated Replacement Programs ("ARPs") and a favorable foreign exchange rate.

AltaGas continued to upgrade critical infrastructure and make ongoing investments on behalf of its customers during the third quarter of 2023 with the deployment of $204 million of invested capital, including $130 million deployed across the Company's various ARP modernization programs. 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. The modernization investments should also bring long-term operating cost benefits to our customers. AltaGas will continue to make these critical investments on behalf of our customers in the years ahead, while balancing the need for 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 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.

On August 29, 2023, the SCC of VA adopted the Hearing Examiner's report for the Virginia rate case, approving approximately US$41 million of incremental base rates plus approximately US$32 million of SAVE surcharges for a total rate increase of approximately US$73 million and ROE of 9.65 percent.

On October 20, 2023, Washington Gas executed a definitive agreement with Opal Fuels to support a RNG project at the Prince William County Landfill in Virginia. As part of the agreement, Washington Gas will become an offtake customer for RNG production volumes and purchase key interconnect infrastructure for approximately US$25 million, which is anticipated to become part of the Washington Gas' rate base and will be eligible to earn a 100-bps premium to its allowed ROE in the jurisdiction as part of the Virginia Energy Innovation Act, subject to regulatory approval.

On October 25, 2023, Washington Gas received a proposed system modernization extension in Maryland which will run through to 2028. The Public Law Judge has recommended that the commission approve approximately US$330 million of capital to modernize our system and improve safety and reliability. This builds on our ARP program in Virginia that was recently extended to the end of 2027.

Washington Gas' D.C. and Maryland rate cases remain ongoing, and the Company expects a decision prior to 2023 year-end in Maryland and during the first quarter of 2024 in D.C.

Corporate/Other

The Corporate/Other segment realized a $4 million normalized EBITDA loss in for the third quarter of 2023, compared to income of $10 million in the same quarter of 2022.  Loss before income taxes in the Corporate/Other segment was $96 million in the third quarter of 2023, compared to a loss of $77 million in the same quarter of 2022. The decrease in normalized EBITDA was mainly due to a lower contribution from Blythe, higher expenses related to employee incentive plans due to the increase in AltaGas' share price during the third quarter of 2023, as well as higher operating and administrative expenses.

Pipestone Asset Acquisition

On August 31, 2023, AltaGas announced that it has entered into a definitive agreement with Tidewater to acquire: 1) the Pipestone Natural Gas Processing Plant Phase I and Phase II expansion project; 2) the adjacent Dimsdale Natural Gas Storage Facility; 3) the Pipestone condensate truck-in/truck-out terminal; and 4) the associated gathering pipeline systems required to operate these assets for total consideration of $650 million. This equated to approximately 7.2x estimated run-rate normalized EBITDA, inclusive of synergies and the incremental capital that AltaGas will deploy to complete the Pipestone Phase II development project.

The Pipestone transaction strengthens AltaGas' midstream value chain through an expanded footprint in the Alberta Montney and provides meaningful long-term LPG supply for our global exports' platform. The transaction is expected to be five percent EPS accretive in 2025 forward while being 0.1x net debt to normalized EBITDA credit accretive in 2025 forward. The acquisition is contingent on Tidewater and AltaGas making a positive final investment decision on the Pipestone Phase II project.

Subsequent to the announcement AltaGas has received all material regulatory approvals, including Competition Act approval, and is currently working on other condition precedents to close the transaction, which continues to be anticipated prior to 2023 year-end.

AltaGas 2023 Investor Day

AltaGas will host a 2023 Investor Day, where the Company will provide an update on its corporate strategy and outlook, share its near- and- long-term priorities, and provide 2024 financial guidance.  To register select the link below or go to AltaGas' Events and Presentations webpage.

Date:                            Tuesday, December 5th, 2023

Time:                            9:00 a.m. ET – 12:00pm ET

Registration:                 Click Here to Register

CONSOLIDATED FINANCIAL RESULTS

	Three Months Ended September 30
($ millions)	2023	2022
Normalized EBITDA ^(1)	$                   252	$                   233
Add (deduct):
Depreciation and amortization	(109)	(106)
Interest expense	(95)	(85)
Normalized income tax expense	(12)	(6)
Preferred share dividends	(7)	(10)
Other ^(2)	(1)	1
Normalized net income ^(1)	$                     28	$                     27
Net income (loss) applicable to common shares	$                    (50)	$                    (48)
Normalized funds from operations ^(1)	$                   142	$                   170
($ per share, except shares outstanding)
Shares outstanding - basic (millions)
During the period ^(3)	282	281
End of period	282	282
Normalized net income - basic ^(1)	0.10	0.10
Normalized net income - diluted ^(1)	0.10	0.10
Net income (loss) per common share - basic	(0.18)	(0.17)
Net income (loss) per common share - diluted	(0.18)	(0.17)

(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, 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 third quarter of 2023 was $252 million, compared to $233 million for the same quarter in 2022. There were several positive and negative contributors underpinning the year-over-year variance. The largest factors leading to the variance are described in the Business Performance sections above.

For the third quarter of 2023, the average Canadian/U.S. dollar exchange rate increased to 1.34 from an average of 1.31 in the same period of 2022, resulting in an increase in normalized EBITDA of approximately $4 million.

Loss before income taxes for the third quarter of 2023 was $51 million, compared to income before income taxes of $48 million for the same quarter in 2022. Net loss applicable to common shares for the third quarter of 2023 was $50 million ($0.18 per share), compared to $48 million ($0.17 per share) for the same quarter in 2022. Please refer to the "Three Months Ended September 30" section of the Q3 2023 MD&A for further details on the variance in income before income taxes and net income applicable to common shareholders.

Normalized net income was $28 million ($0.10 per share) for the third quarter of 2023, compared to $27 million ($0.10 per share) for the same quarter of 2022. The slight increase was mainly due to the same factors impacting normalized EBITDA and lower preferred share dividends, partially offset by higher interest expense, higher normalized income tax expense, and higher depreciation expense. Please refer to the "Non-GAAP Financial Measures" section of the Q3 2023 MD&A for further details on normalization adjustments.

Normalized funds from operations for the third quarter of 2023 was $142 million ($0.50 per share), compared to $170 million ($0.60 per share) for the same quarter in 2022. The decrease was mainly due to lower net income after taxes after adjusting for non-cash items, higher interest expense and lower normalized current income tax recovery, partially offset by the same factors impacting normalized EBITDA.

Interest expense for the third quarter of 2023 was $95 million, compared to $85 million for the same quarter in 2022. The increase was driven by higher average interest rates, a higher average Canadian/U.S. dollar exchange rate, $2 million of incremental hybrid interest costs due to hybrid notes replacing preferred shares, which was partially offset by lower average debt balances. For the three months ended September 30, 2023, AltaGas recorded total interest expense of $9 million on the subordinated hybrid notes.

AltaGas recorded an income tax recovery of $12 million for the third quarter of 2023, compared to income tax expense of $7 million for the same quarter of 2022. The decrease in income tax expense was mainly due to lower income before income taxes. Current tax recovery of $7 million was recorded in the third quarter of 2023, compared to current tax recovery of $13 million recorded in the same quarter of 2022. The decrease in current tax recovery was mainly due to the composition of loss before income taxes.

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 growing value for the Company's stakeholders.

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

• 2023 Normalized EPS guidance of $1.85 - $2.05, compared to 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 normalized EBITDA of $1.54 billion and income before taxes of $716 million in 2022.

AltaGas continues to focus on delivering resilient 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. 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 $1 billion in 2023, excluding asset retirement obligations. The capital spend includes approximately $90 million of capital investments that were approved in 2022 to rollover and be deployed in 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.	29-Dec-23	15-Dec-23
Series A Preferred Shares	$0.19125	30-Sept-23 to 30-Dec-23	29-Dec-23	15-Dec-23
Series B Preferred Shares	$0.49258	30-Sept-23 to 30-Dec-23	29-Dec-23	15-Dec-23
Series E Preferred Shares	$0.337063	30-Sept-23 to 30-Dec-23	29-Dec-23	15-Dec-23
Series G Preferred Shares	$0.265125	30-Sept-23 to 30-Dec-23	29-Dec-23	15-Dec-23
Series H Preferred Shares	$0.51778	30-Sept-23 to 30-Dec-23	29-Dec-23	15-Dec-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, November 3, at 9:00 a.m. MT (11:00 a.m. ET) to discuss third quarter 2023 results and other corporate developments.

Date:                            Friday, November 3, 2023

Time:                            9:00 a.m. MT (11:00 a.m. ET)

Webcast:                      https://events.q4inc.com/attendee/502093728

Dial-in (Audio only):     1-646-307-1591 or toll free at 1-800-599-5188

Shortly after the conclusion of the call a replay will be available on the Company's website or by dialing 647-362-9199 or toll free 1-800-770-2030, Conference ID 9053242#.

AltaGas' Consolidated Financial Statements and accompanying notes for the third 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.sedarplus.ca.

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 September 30, 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 September 30		Nine Months Ended September 30
($ millions)	2023	2022	2023	2022
Income (loss) before income taxes (GAAP financial measure)	$            (51)	$              48	$            751	$            638
Add:
Depreciation and amortization	109	106	331	327
Interest expense	95	85	293	231
EBITDA	$            153	$            239	$         1,375	$         1,196
Add (deduct):
Transaction costs related to acquisitions and dispositions ^(1)	10	2	31	4
Unrealized losses (gains) on risk management contracts ^(2)	91	(3)	(24)	(107)
Losses (gains) on sale of assets ^(3)	—	3	(319)	(3)
CEO transition ^(4)	1	—	6	—
Settlement of pension plan ^(5)	—	—	2	—
Reversal of provisions on investments accounted for by the equity method ^(6)	—	(3)	—	(3)
Accretion expenses	3	2	8	5
Foreign exchange gains	(6)	(7)	(6)	(9)
Normalized EBITDA	$            252	$            233	$         1,073	$         1,083

(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 (Loss). 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 and nine months ended September 30, 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 (Loss). Please refer to Note 13 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 2023 for further details regarding AltaGas' risk management activities.
(3)	Included in the "other income" line item on the Consolidated Statements of Income (Loss). Please refer to Note 3 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 2023 for further details regarding AltaGas' disposition of assets in the period.
(4)	Comprised of costs related to the transition of AltaGas' CEO. These costs are included in the "operating and administrative" line items on the Consolidated Statements of Income (Loss).
(5)	Relates to the completion of the wind-up of the Canadian defined benefit pension plan in the second quarter of 2023. The settlement charge is included in the "other income" line on the Consolidated Statements of Income (Loss). Please refer to Note 18 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 2023 for further details regarding the wind-up of the pension plan.
(6)	Relates to the return of certain costs associated with the Constitution pipeline project as a result of its cancellation in February 2020. These costs are included in the "income from equity investments" line item on the Consolidated Statements of Income (Loss).

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 (Loss) using income (loss) 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 September 30		Nine Months Ended September 30
($ millions)	2023	2022	2023	2022
Net income (loss) applicable to common shares (GAAP financial measure)	$           (50)	$           (48)	$           528	$           345
Add (deduct) after-tax:
Transaction costs related to acquisitions and dispositions ^(1)	7	1	22	2
Unrealized losses (gains) on risk management contracts ^(2)	70	(1)	(19)	(78)
Non-controlling interest portion of non-GAAP adjustments ^(3)	—	—	—	5
Losses (gains) on sale of assets ^(4)	—	3	(217)	(4)
CEO transition ^(5)	1	—	5	—
Loss on redemption of preferred shares, including foreign exchange impact ^(6)	—	74	—	84
Settlement of pension plan^(7)	—	—	2	—
Reversal of provisions on investments accounted for by the equity method ^(8)	—	(2)	—	(2)
Normalized net income	$             28	$             27	$           321	$           352

(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 (Loss). 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 and nine months ended September 30, 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 (Loss). Please refer to Note 13 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 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 (Loss).
(4)	The pre-tax amounts are included in the "other income" line item on the Consolidated Statements of Income (Loss). Please refer to Note 3 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 2023 for further details regarding AltaGas' disposition of assets in the period.
(5)	Comprised of costs related to the transition of AltaGas' CEO. The pre-tax costs are included in the "operating and administrative" line items on the Consolidated Statements of Income (Loss).
(6)	Comprised of the loss on the redemption of Series K Preferred Shares on March 31, 2022 and the redemption of U.S. dollar denominated Series C Preferred Shares on September 30, 2022, including an associated foreign exchange loss of approximately $69 million. The loss on redemption of preferred shares is recorded on the "loss of redemption of preferred shares" line on the Consolidated Statements of Income (Loss).
(7)	Relates to the completion of the wind-up of the Canadian defined benefit pension plan in the second quarter of 2023. The settlement charge is included in the "other income" line on the Consolidated Statements of Income (Loss). Please refer to Note 18 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 2023 for further details regarding the wind-up of the pension plan.
(8)	Relates to the return of certain costs associated with the Constitution pipeline project as a result of its cancellation in February 2020. These costs are included in the "income from equity investments" line item on the Consolidated Statements of Income (Loss).

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 September 30		Nine Months Ended September 30
($ millions)	2023	2022	2023	2022
Cash from (used by) operations (GAAP financial measure)	$                 3	$           (384)	$             967	$             827
Add (deduct):
Net change in operating assets and liabilities	124	550	(298)	(3)
Asset retirement obligations settled	7	2	12	5
Funds from operations	$             134	$             168	$             681	$             829
Add (deduct):
Transaction costs related to acquisitions and dispositions ^(1)	10	2	31	4
CEO transition ^(2)	1	—	6	—
Current tax expense (recovery) on asset sales ^(3)	(3)	—	34	(1)
Normalized funds from operations	$             142	$             170	$             752	$             832

(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 (Loss). 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 and nine months ended September 30, 2023 for further details regarding AltaGas' disposition of assets in the period.

(2)     Comprised of costs related to the transition of AltaGas' CEO. These costs are included in the "operating and administrative" line items on the Consolidated Statements of Income (Loss).

(3)     Included in the "current income tax expense (recovery)" line item on the Consolidated Statements of Income (Loss).

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 and Net Invested Capital

	Three Months Ended September 30		Nine Months Ended September 30
($ millions)	2023	2022	2023	2022
Cash used in (from) investing activities (GAAP financial measure)	$             243	$             534	$           (395)	$             661
Add (deduct):
Net change in non-cash capital expenditures ^(1)	12	(2)	(23)	1
Net invested capital	$             255	$             532	$           (418)	$             662
Asset dispositions	1	—	1,073	245
Disposals of equity investments ^(2)	1	—	1	—
Invested capital	$             257	$             532	$             656	$             907

(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 and nine months ended September 30, 2023 for further details.
(2)	Relates to escrow account proceeds received from AltaGas' previous investment in Meade Pipeline Co. LLC (Meade). Upon close of the sale in 2019, various escrow accounts were established to provide the purchaser a form of recourse for the settlement of indemnification obligations.

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 September 30		Nine Months Ended September 30
($ millions, except effective income tax rates)	2023	2022	2023	2022
Revenue	3,030	3,056	9,709	10,190
Normalized EBITDA ^(1)	252	233	1,073	1,083
Income (loss) before income taxes	(51)	48	751	638
Net income (loss) applicable to common shares	(50)	(48)	528	345
Normalized net income ^(1)	28	27	321	352
Total assets	22,183	23,504	22,183	23,504
Total long-term liabilities	11,073	11,991	11,073	11,991
Invested capital^(1)	257	532	656	907
Cash from (used in) investing activities	(243)	(534)	395	(661)
Dividends declared ^(2)	79	74	237	223
Cash from (used by) operations	3	(384)	967	827
Normalized funds from operations ^(1)	142	170	752	832
Normalized effective income tax rate (%)^(1)	23.5	12.5	20.6	19.7
Effective income tax rate (%)	23.2	14.3	25.3	20.5

	Three Months Ended September 30		Nine Months Ended September 30
($ per share, except shares outstanding)	2023	2022	2023	2022
Net income (loss) per common share - basic	(0.18)	(0.17)	1.87	1.23
Net income (loss) per common share - diluted	(0.18)	(0.17)	1.86	1.22
Normalized net income - basic ^(1)	0.10	0.10	1.14	1.25
Normalized net income - diluted ^(1)	0.10	0.10	1.13	1.24
Dividends declared ^(2)	0.28	0.27	0.84	0.80
Cash from (used by) operations	0.01	(1.37)	3.43	2.94
Normalized funds from operations ^(1)	0.50	0.60	2.67	2.96
Shares outstanding - basic (millions)
During the period ^(3)	282	281	282	281
End of period	282	282	282	282

1)      Non‑GAAP financial measure or non-GAAP financial ratio; see discussion in Non-GAAP Financial Measures section of the 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", "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 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: the Company's ability to deliver on its 2023 guidance and the expectation that its results will be in the upper half of the guidance range; the expected project costs, progress and completion of the MVP project and the timing thereof; anticipated benefits of the MVP project for customers; the Company considering a monetization of its equity stake in the MVP project as part of its plan to reach its net debt to normalized EBITDA target; the anticipated benefits of the transaction with Tidewater and the expected closing date thereof; the expectation that AltaGas will deploy incremental capital to complete the Pipestone Phase II development project; the expectation that the Pipestone transaction will be EPS accretive, net debt to normalized EBITDA credit accretive and the timing thereof; the expectation that Tidewater and AltaGas will make a positive final investment decision on the Pipestone Phase II project; anticipated benefits of the five-year transportation agreement with CN for AltaGas, its customers, resource development in Western Canada and customers in Asia; expected timing of the maiden voyages for each of the Boreal Pioneer and the Boreal Voyager; anticipated benefits of AltaGas' two new VLGCs including reduction in shipping costs to Asia, removing pricing volatility and de-risking maritime shipping costs on a long-term basis; the impact of the Company's two new VLGCs on its plan to commercially de-risk its Midstream business; the expectation that AltaGas will have three Time Charters operating in 2024; anticipated construction of a fourth time charter and the timing thereof; the expectation that Washington Gas will become an offtake customer for RNG production, that it will purchase key interconnect infrastructure and the expected cost thereof in connection with the agreement entered into with Opal Fuels; anticipated benefits of the agreement Washington Gas entered into with Opal Fuels including the interconnect infrastructure becoming part of its rate base, the expected premium to Washington Gas' allowed ROE, subject to regulatory approvals, and the expectation that transportation of RNG through the network will lower the carbon-intensity of energy supply; the expected use of proceeds from Washington Gas' US$200 million private placement; topics to be discussed at AltaGas' 2023 Investor Day and the timing thereof; AltaGas' continued commitment to driving value creation for its stakeholders and de-risking the Midstream business; the belief that Canada's upstream industry will deliver robust natural gas and NGL production growth and the expected impacts therefrom; AltaGas' ability to provide the best value for LPG customers in North America and Asia; the Company's focus on energy affordability and reliability with regional climate goals; AltaGas' ability to execute its strategic priorities; the Company's focus on portfolio optimization, improving return on invested capital, commercially and financially de-risking operations and deleveraging to reach AltaGas' net debt to EBITDA target; the growth trajectory of AltaGas' investment proposition; AltaGas' ability to increase direct market access through long-term LPG tolling agreements, the progress of its tolling initiatives and the belief that AltaGas can increase tolling; expectations for AltaGas' active hedging program and expected outcomes therefrom; AltaGas' continued commitment to upgrading critical infrastructure and making ongoing investments through the Company's ARP modernization programs and the anticipated benefits therefrom; the Company's focus on cost management across the Utilities platform, managing capital investments and best outcomes for its customers and stakeholders; the expectation that the extension for Washington Gas' proposed modernization extension in Maryland will run through to 2028; anticipated timing, results and impacts of applications, hearings, and decisions of rate cases before Utilities regulators; AltaGas' ability to execute its long-term corporate strategy; AltaGas' focus on growing normalized EPS and FFO 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' long-term objectives for managing capital; and expected self-funded capital program of $930 million in 2023 including rollover of $90 million capital investments from 2022, excluding asset retirement obligations.

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 and acquisition 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; 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 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 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, Annual Information Form, and press releases are available through AltaGas' website at www.altagas.ca or through SEDAR+ at www.sedarplus.ca. 

SOURCE AltaGas Ltd.