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CEO MESSAGE

"We are looking forward to 2025 and continuing to deliver on our strategic plan, which will bring strong value for AltaGas' shareholders" said Vern Yu, AltaGas' President and Chief Executive Officer. "We are wrapping up 2024 on strong footing after delivering on our strategic priorities and we expect 2025 will be another year of growth.

"The growth opportunities in front of us are tremendous. Our Utilities have low-risk growth opportunities from continued customer additions, asset modernization investments and system expansions. The potential of AI and datacenter demand for natural gas in Northern Virginia adds to this already robust outlook and reiterates the long-term need for safe, reliable, and affordable natural gas to keep society moving forward.

"Our growth outlook in Midstream is equally robust. After a decade of being structurally challenged by a lack of take-away capacity, Canada is positioned to deliver significant natural gas and NGL production growth in the years ahead. As liquified natural gas ("LNG") projects on the Canadian West Coast come online, we will continue to benefit from increased demand for additional gas processing, liquids handling, fractionation, and export capacity which are driving investment opportunities across our value chain.

"Our 2025 capital plan reflects these opportunities and our desire to balance this outlook against other strategic priorities, including de-risking the platform and completing our de-leveraging journey. The past year was another period of delivering industry-leading total shareholder returns, including the fifth year of steady dividend increases. We look forward to continuing to compound shareholder value in 2025 through advancing our strategy and focusing on execution."

2025 GUIDANCE

AltaGas expects to achieve normalized EPS¹ of $2.10 - $2.30 and normalized EBITDA¹ of $1,775 million - $1,875 million in 2025. AltaGas' 2025 outlook anticipates year-over-year growth across the Utilities, Midstream and Corporate segments, and includes the assumption of a divestiture of its 10 percent interest in MVP at the end of the second quarter of 2025.

The Utilities segment is expected to represent 54 to 58 percent of 2025 normalized EBITDA¹. Growth is expected to be driven by a combination of continued new customer additions, rate base growth from our asset modernization programs, normal weather conditions, stronger performance from the Retail business, asset optimization activities, and ongoing cost management.

Washington Gas currently has an active rate case application in the District of Columbia ("D.C.") with requested rates designed to collect an incremental US$34 million in annual revenue, net of US$12 million in Accelerated Replacement Program ("ARP") surcharge. New rates are expected to benefit 2026 financial performance and not have a large impact in 2025. Washington Gas also has a US$215 million asset modernization extension application under review in D.C. and anticipates a decision by May 2025.

Through ongoing customer additions, asset modernization investments, and continued system expansion, AltaGas estimates having the ability to grow rate base by up to eight percent annually over the next five years. The ultimate amount of realized rate base growth will be a function of the Company's capital allocation priorities. Based on the current Midstream capital investments in 2025, the Company expects to deliver rate base growth below this level in 2025 with an increase in growth rates in 2026 and beyond.

The Midstream segment is expected to represent 42 to 46 percent of 2025 normalized EBITDA¹. Growth is expected to be driven by strong global export volumes and higher utilization at the Company's existing Montney facilities, including the Townsend complex, North Pine, and Pipestone I. These positive factors are expected to be partially offset by a lower contribution from MVP as AltaGas is actively evaluating divestiture opportunities and has only included a partial year of contribution from the pipeline in the first half of 2025, and lower co-generation revenue at the Harmattan complex.

AltaGas continues to focus on de-risking its business through long-term commercial contracting while actively managing residual commodity price exposure through financial hedging. In 2024, AltaGas made strong progress on this initiative with global exports tolling estimated to be roughly 56 percent of export volumes for the 2024-2025 NGL year.

As disclosed in the third quarter of 2024, AltaGas continued to advance key Midstream commercial priorities in recent months, including:

• Entering two agreements that have a high-single digit average contract length with a large investment grade international energy company in Northeastern B.C. ("NEBC") for a total of 100 Mmcf/d of gas processing capacity at the Townsend facility, along with associated liquids handling and fractionation services.
  
  

• Extending the contract term with a large Canadian investment grade producer at the Pipestone I gas processing facility in the Alberta Montney for an additional five years, including gas processing, liquids handling and marketing services.
  
  

• Advancing long-term tolling arrangements across the global exports platform with a number of agreements now in definitive documentation stages. This includes AltaGas having contracts in hand or being in active negotiations for more than 100 percent of first phase capacity for REEF. AltaGas continues to target having 60 percent of its export volumes under long-term tolling agreements by the start of the 2027 NGL year.

The Corporate segment is also expected to show stronger year-over-year financial performance in 2025 due to Blythe operating at more stable levels following the extended downtime that was experienced in the first quarter of 2024.

2025 STRATEGIC PRIORITIES

AltaGas has shown strong progress across its strategic priorities in 2024 and remains focused on advancing these priorities in 2025. Specifically, AltaGas' 2025 strategic priorities are:

1. Optimizing assets for maximum returns through increasing utilization rates, extending asset lives, and controlling operating costs to drive the highest returns on capital.

2. Active de-risking through long-term commercial contracting in Midstream, systematic hedging of residual risks, and active regulatory initiatives focused on AltaGas and our customers' long-term interest in the Utilities.

3. Continued balance sheet deleveraging and moving towards the Company's 4.0x Adjusted Net Debt to normalized EBITDA leverage target.

4. Advancing key growth projects, including our asset modernization programs at the Utilities, the completion and commissioning of Pipestone II, and material construction progress at REEF.

5. Continuing to take actions to drive long-term per share value creation across the enterprise.

AltaGas will continue to be very active in advocacy in 2025 and champion the critical work that our company and industry does in delivering safe, reliable, and affordable energy to our global customer base every day. This includes Washington Gas advancing two statements of claims to challenge proposed local gas bans in Maryland and the District of Columbia and ensure our customers have the right to choose their energy source. Natural gas and NGLs are essential to modern day life, and we will continue to advocate for their unfettered use to keep society moving forward.

2025 DIVIDEND INCREASE

AltaGas' Board of Directors approved a six percent increase to the annual common share dividend to $1.26 per share for the 2025 calendar year, which equates to a rate of $0.315 per common share on a quarterly basis. Subject to approval of the Board of Directors, the first quarterly dividend of $0.315 per common share is expected to be effective for the March 2025 dividend and will be paid on March 31, 2025, to common shareholders of record on March 17, 2025. These dividends are eligible dividends for Canadian income tax purposes.

2025 CAPITAL

AltaGas' 2025 capital expenditure plan of approximately $1.4 billion, excluding ARO, is modestly weighted towards the Utilities business, which is anticipated to deliver stable rate base growth and drive strong risk-adjusted returns. The Company is allocating approximately 51 percent of consolidated 2025 capital to the Utilities business and approximately 45 percent to the Midstream business. This represents a higher allocation to the Midstream segment compared to prior years due to continued investment in AltaGas' key growth projects, REEF and Pipestone II, as well as various other business development and optimization projects.

The Company will fund 2025 capital requirements through a combination of internally generated cash flows, the investment capacity associated with stronger normalized EBITDA across the enterprise, and ongoing capital recycling with the divestiture of the Company's interest in MVP planned for 2025. Additional asset sales will be considered on an opportunistic basis, with any potential proceeds to be used to strengthen the balance sheet and increase financial flexibility.

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 energy infrastructure business that is focused on delivering stable and growing 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
Jon.Morrison@altagas.ca

Aaron Swanson
Vice President, Investor Relations
Aaron.Swanson@altagas.ca

Investor Inquiries
1-877-691-7199

Media Inquiries
1-403-206-2841
media.relations@altagas.ca

FORWARD-LOOKING INFORMATION

This news release contains forward-looking information (forward-looking statements). Words such as "guidance", "may", "can", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "aim", "seek", "propose", "contemplate", "estimate", "focus", "strive", "forecast", "expect", "project", "target", "potential", "objective", "continue", "outlook", "vision", "opportunity" and similar expressions suggesting future events or future performance, as they relate to the 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: 2025 guidance including normalized EBITDA guidance of $1,775 million to $1,875 million and normalized EPS guidance of $2.10 to $2.30; the Company's capital program of $1.4 billion, excluding ARO; allocation of capital among Utilities, Midstream and digital and systems initiatives; the future dividend strategy including a six percent increase to AltaGas' anticipated common share dividend; the Company's commitment to delivering regular, sustainable and annual dividend increases; the Company's CAGR guidance on dividends to 2029; AltaGas' de-leveraging journey and its 4.0x Adjusted Net Debt to Normalized EBITDA leverage target; the belief that de-leveraging will provide AltaGas with strong long-term financial flexibility and that monetization of MVP is the most immediate path to reducing leverage along with cash flows from the Pipestone II and REEF projects providing incremental de-leveraging; driving factors behind the Utilities' long-term growth outlook; the expectation that investment opportunities in the Utilities will improve the long-term safety and reliability of the network and the anticipated benefits therefrom; increased investment in the Midstream business and the anticipated benefits therefrom including the growth outlook for the Midstream platform; AltaGas' strategic plan, its ability to deliver on the strategic plan and the anticipated value for shareholders therefrom; AltaGas' growth opportunities including the potential of AI and datacenter demand for natural gas; the expectation that AltaGas will continue to benefit from increased demand for additional gas processing, liquids handing, fractionation and export capacity; AltaGas commitment to its 2025 capital plan and compounding shareholder value in 2025; anticipated year-over-year growth across the Utilities, Midstream and Corporate segments; the assumption that AltaGas will divest its 10 percent interest in MVP at the end of the second quarter of 2025; the expectation that the Utilities segment will generate approximately 54 to 58 percent of 2025 normalized EBITDA driven by continued new customer additions, rate base growth from asset modernization programs, normal weather conditions, stronger performance from the Retail business, asset optimization activities and ongoing cost management; anticipated annual revenue from Washington Gas' active rate case application in DC and the anticipated benefits therefrom in 2026; timing for receiving a decision on Washington Gas' asset modernization extension application in DC; anticipated rate base growth of up to eight percent annually over the next five years with the expectation that AltaGas will deliver rate base growth below that level in 2025 with an increase in growth rates in 2026 and beyond; the expectation that the Midstream segment will generate approximately 42 to 46 percent of 2025 normalized EBITDA driven by  strong global export volumes and higher utilization at the Company's existing Montney facilities; AltaGas' focus on de-risking its business through long-term commercial contracting and actively managing residual commodity price exposure through financial hedging; AltaGas' target of having 60 percent of its export volumes under long-term tolling agreements by the start of the 2027 NGL year; anticipated financial performance of the Corporate segment in 2025 due to Blythe operating at more stable levels; AltaGas' strategic priorities and its commitment to advancing these priorities in 2025; AltaGas' commitment to being active in advocacy in 2025 including challenging proposed gas bans in Maryland and DC; anticipated approval of the quarterly dividend on common shares and the effective date and timing for payment to shareholders of such dividend; the expectation that the Utilities business will deliver stable rate base growth and drive strong risk-adjusted returns; the allocation of consolidated 2025 capital to the Utilities and Midstream businesses; the expectation that the Company will fund 2025 capital requirements through a combination of internally generated cash flows, the investment capacity associated with stronger normalized EBITDA across the enterprise, and ongoing capital recycling with the divestiture of the Company's interest in MVP planned for 2025; consideration of asset sales and the use of potential proceeds therefrom; and anticipated capital expenditure by segment and expected projects for each segment.

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 rate; anticipated timing of asset sale and acquisition closings; the U.S/Canadian dollar exchange rate; 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; natural gas supply risk; 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 the Common Shares and other securities; variability of dividends; potential sales of additional shares; labor relations; key personnel; risk management costs and limitations; commitments associated with regulatory approvals for the acquisition of WGL; cost of providing retirement plan benefits; failure of service providers; risks related to pandemics, epidemics or disease outbreaks and the other factors discussed under the heading "Risk Factors" in the Corporation's Annual Information Form (AIF) for the year ended December 31, 2023 and set out in AltaGas' other continuous disclosure documents.

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

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

Additional information relating to AltaGas, including its quarterly and annual Management's Discussion and Analysis (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.

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 in AltaGas' MD&A as at and for the period ended September 30, 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 US GAAP. 

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, and interest expense. Normalized EBITDA includes additional adjustments for transaction costs related to acquisitions and dispositions, unrealized losses (gains) on risk management contracts, gains on investments, gains on sale of assets, restructuring costs, dilution loss on equity investment, provisions (reversal of provisions) on assets, provisions on investments accounted for by the equity method, foreign exchange gains, and accretion expenses related to asset retirement obligations. AltaGas presents normalized EBITDA as a supplemental measure. Normalized EBITDA is used by Management to enhance the understanding of AltaGas' earnings over periods. 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 EPS is calculated as normalized net income divided by the average number of shares outstanding during the period.  Normalized net income is calculated from the Consolidated Statements of Income (Loss) using net income (loss) applicable to common shares adjusted for transaction costs related to acquisitions and dispositions, unrealized losses (gains) on risk management contracts, non-controlling interest portion of non-GAAP adjustments, gains on investments, gains on sale of assets, provisions on assets, restructuring costs, dilution loss on equity investment, and provisions on investments accounted for by the equity method. Normalized net income per share is used by Management to enhance the comparability of AltaGas' earnings, as these metrics reflect the underlying performance of AltaGas' business activities.

Net debt is used by the Corporation to monitor its capital structure and financing requirements. It is also used as a measure of the Corporation's overall financial strength and is presented to provide this perspective to analysts and investors. Net debt is defined as short-term debt, plus current and long-term portions of long-term debt, current and long-term portions of finance lease liabilities, and Hybrid Notes, less cash and cash equivalents. Adjusted net debt is defined as net debt adjusted for current and long-term portions of finance lease liabilities, Hybrid Notes, and debt associated with acquisitions that occurred in the last half of the fiscal year. Adjusted net debt to normalized EBITDA is calculated by dividing adjusted net debt as defined above by normalized EBITDA for the preceding twelve-month period.

SOURCE AltaGas Ltd.

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