AltaGas : Financials Document(Q2 2026 Financial Report Final)

About this update from Altagas Ltd.

ALTAGAS REPORTS RECORD SECOND QUARTER RESULTS Strong Year-to-Date Performance Drives 2026 Guidance Increase Calgary, Alberta (July 30, 2026) AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) reported second quarter 2026 financial results and provides an update on its 2026 guidance, operations, growth initiatives and corporate developments. Second Quarter Highlights (all financial figures are unaudited and in Canadian dollars unless otherwise noted) Financial Highlights Normalized EBITDA 1 was $391 million in the second quarter of 2026, compared to the $342 million recorded in the second quarter of 2025. Income before income taxes was $383 million in the second quarter of 2026, an increase from $226 million in the second quarter of 2025. Normalized EBITDA growth was primarily driven by increased global export volumes and margins, Pipestone II contributions, Utilities pipe modernization investments and higher retail margins in Utilities. Normalized EPS 1 was $0.31 in the second quarter of 2026, compared to $0.27 in the second quarter of 2025, while GAAP EPS 2 was $0.92 in the second quarter of 2026 compared to $0.59 in the second quarter of 2025. Guidance and Balance Sheet Update AltaGas has increased its 2026 guidance, raising normalized EBITDA by four percent to a new range of $2.0 billion-$2.1 billion and normalized EPS by six percent to a range of $2.35-$2.60. The increase reflects strong performance year-to-date and a constructive outlook for both segments for the balance of the year. Adjusted net debt to normalized EBITDA 1 exited the quarter at 4.4x on a trailing basis, including 50 percent debt treatment on subordinated hybrids and preferred shares, below the low-end of AltaGas' target leverage range. AltaGas is increasing its 2026 capital budget from $1.7 billion to $1.8 billion, reflecting higher capital expenditures for the construction of the Ridley Island Energy Export Facility ("REEF") and positive final investment decisions ("FIDs") on two Northeast British Columbia ("NEBC") growth projects. Operational Highlights AltaGas exported a record 144,420 Bbl/d of liquid petroleum gases ("LPG") to Asia across 23 Very Large Gas Carriers ("VLGCs"), a 13 percent year-over-year increase. The Company continues to execute its 2026 Accelerated Replacement Programs ("ARP") focused on long-term safety and reliability, deploying over $200 million of capital and replacing 21 miles of pipe year-to-date. Business Development and Growth AltaGas continues to focus on long-term partnerships that leverage shared infrastructure. In the second quarter, AltaGas entered a new agreement with Tourmaline Oil Corp. ("Tourmaline") to develop the Groundbirch Rail Terminal in NEBC, where Tourmaline will own the facility and AltaGas will operate liquids logistics under a long-term LPG tolling and export agreement. In addition, the announced ACE rail terminal partnership in Fort Saskatchewan with Keyera and CN Rail will enhance transportation operating efficiencies. Construction of REEF continues to advance, with the project approximately 85 percent complete. While onshore execution has remained strong and ahead of plan, in-water construction has proven to be challenging due to maritime conditions and weather delays. As a result, onshore efficiencies are not expected to fully offset higher maritime construction costs. Accordingly, the partnership is modestly increasing the capital cost estimate for the project by 12 percent to approximately $1.5 billion with commercial operations to commence before the end of the first quarter in 2027. 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 June 30, 2026, which is available on https://www.sedarplus.ca . (2) GAAP EPS is equivalent to Net income applicable to common shares divided by shares outstanding. With 80 percent of the jetty complete, and in-water jetty work expected to be completed in the coming weeks, AltaGas views the revised capital cost and schedule as achievable and supported by a strong execution plan with sufficient capital and schedule contingencies. AltaGas has reached a positive FID on the $125 million NEBC Liquids Expansion project, which includes a depropanizer, natural gas liquids ("NGL") treater expansion, and debottlenecking work at Townsend that will add 6,000 Bbls/d of fractionation capacity in NEBC. The project is expected to be completed by mid-2028. CEO Message " AltaGas delivered record results in the first half of 2026, reflecting strong execution across our business and supportive market fundamentals," said Vern Yu, President and Chief Executive Officer of AltaGas. "Our increased guidance reflects strong operational performance in the first half of 2026 and confidence in our outlook for the balance of 2026. "The long-term outlook for our Utilities business is strong. Demand for natural gas across the U.S. continues to increase, driven by expanding commercial and industrial activity, data center and large-load development, and ongoing population growth. The Mid-Atlantic region is at the center of this expansion and requires safe, reliable, and affordable energy to support continued economic growth. "We remain on-track to deliver approximately 10 percent Utilities rate base growth in 2026 through a combination of infrastructure modernization, system expansions, and new customer connections. These investments enhance system safety and reliability, support customer growth, and position our Utilities to continue delivering stable earnings growth. "The outlook for our Midstream business is also very robust. Asian LPG demand has increased by more than two million barrels per day over the past decade and is expected to grow by another one million barrels per day by 2040. At the same time, energy security and supply diversification have become increasingly important in Asia as recent geopolitical events have reinforced the value of reliable energy supply. Canada has a unique opportunity to help meet global energy demand needs and AltaGas' West Coast export platform is the most efficient and cost effective global LPG supply source into East Asia. "We are excited to bring the first phase of REEF into service in early 2027 and further strengthen Canada's position as a leading LPG exporter to Asia. Beyond REEF Phase I and Optimization I, we continue to advance a visible portfolio of growth opportunities, including additional LPG export capacity, potential ethane exports, and broader Midstream expansion projects. We are pleased to demonstrate additional Midstream growth with positive FID's of the NEBC Liquids Expansion project and the Groundbirch Rail partnership. "The future is bright for AltaGas. We have a clear path to grow our Utilities and Midstream businesses, supported by strong fundamentals, disciplined capital allocation, and a deep inventory of high-quality growth opportunities. We remain focused on executing safely and efficiently while continuing to deliver dependable earnings growth and long-term shareholder value." Forward Focus, Guidance and Funding Following a strong second quarter of 2026 and record first half results, AltaGas has increased its 2026 financial guidance. The guidance revision has been driven primarily by stronger performance from the global export business: 2026 Normalized EBITDA guidance of $2.0 billion-$2.1 billion represents a four percent increase from original guidance; and 2026 Normalized EPS guidance of $2.35-$2.60, represents a six percent increase from original guidance. AltaGas is focused on delivering resilient and growing normalized EPS and normalized FFO per share while operating with strong financial flexibility. This strategy is designed to support steady dividend growth and provide the opportunity for continued capital appreciation for long-term shareholders. Reflecting the increased capital costs related to jetty construction of REEF, and additional midstream capital associated with the NEBC Liquids Expansion and Groundbirch Rail Terminal, AltaGas has increased its 2026 capital program guidance from approximately $1.7 billion to approximately $1.8 billion, excluding ARO. The Company is allocating approximately 61 percent of its consolidated 2026 capital to its Utilities business, approximately 36 percent to the Midstream business, and the balance to the Corporate/Other segment. Results by Segment Normalized EBITDA (1) Three Months Ended June 30 ($ millions) 2026 2025 Utilities $ 142 $ 134 Midstream 285 215 Corporate/Other (36) (7) Normalized EBITDA (1) $ 391 $ 342 (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 June 30 ($ millions) 2026 2025 Utilities $ 33 $ 95 Midstream 509 263 Corporate/Other (159) (132) Income Before Income Taxes $ 383 $ 226 Business Performance Midstream The Midstream segment reported normalized EBITDA of $285 million in the second quarter of 2026 compared to $215 million in the second quarter of 2025, while income before income taxes was $509 million in the second quarter of 2026 compared to $263 million in the second quarter of 2025. The 33 percent year-over-year increase in normalized Midstream EBITDA was driven by strong global export volumes and margins, and contributions from Pipestone II. Financial performance was partially offset by lower extraction contribution and higher segment general and administrative expenses ("G&A"), principally related to incentive compensation expenses due to AltaGas' rising share price. AltaGas exported a record 144,420 Bbl/d of LPGs to Asia in the second quarter of 2026, across 23 VLGCs, reflecting strong demand for North American LPG exports throughout the region. Consolidated export volumes included approximately 84,800 Bbl/d from 13 cargoes at RIPET and approximately 59,600 Bbl/d from 10 cargoes at Ferndale. During the quarter, AltaGas delivered volumes to a diverse customer base across Asia, including China, South Korea, and Japan. Demand was robust as customers sought both near-term supply solutions amid Middle East supply disruptions and discussions on long-term contracting opportunities to diversify supply sources and enhance energy security. Performance across the broader Midstream platform remained strong. AltaGas' Montney infrastructure continued to deliver resilient growth despite weaker regional gas prices, with second quarter gathering and processing ("G&P") volumes increasing eight percent year-over-year, led by the Pipestone Complex. Fractionation and Liquids Handling volumes increased 20 percent year-over-year, supported by strong utilization at North Pine, which continued to operate near its 25,000 Bbl/d capacity. Growth Projects REEF Phase I Construction of Phase I of REEF continues to advance and is expected to achieve commercial operations before the end of the first quarter in 2027. The revised schedule reflects delays to in-water jetty construction resulting from adverse weather conditions and marine-related operating constraints. Onshore execution has progressed well, with major equipment installation more than 90 percent complete and the rail utility corridor 80 percent complete. As a result of additional resources deployed to support jetty construction activities, gross project costs are now expected to total approximately $1.5 billion, representing a 12 percent increase from the original estimate. The revised budget primarily reflects weather-related delays and marine mammal protection measures that affected construction of the 1.2-kilometer jetty and resulted in materially higher downtime than originally anticipated. Export Optimization Projects The Company's REEF Optimization I project remains on budget and on schedule for an expected in-service date in the second half of 2027 and will add approximately 30,000 Bbl/d of incremental propane export capacity for a gross capital cost of $110 million. AltaGas continues to advance the 60,000 Bbl/d REEF Optimization II project, with key regulatory permits secured and engineering work progressing toward final cost estimates. Together, these capital-efficient expansions are expected to further strengthen AltaGas' ability to meet growing Asian demand for North American LPGs. RIPET RIPET's methanol removal project remains on budget and on track for completion by 2026 year-end. Civil work began in June and continues, while mechanical mobilization is expected in early August. Dimsdale Storage Expansion Construction of the Dimsdale Phase I and II storage expansion remain on budget and schedule and are now more than 50 percent complete. Pipeline tie-ins have been completed and facility construction continues to advance. Drilling activities for the injection wells remain on track to begin in the third quarter. Phase I is expected to add six Bcf of storage capacity by 2026 year-end, while Phase II is expected to provide an additional 30 Bcf by mid-2027. Groundbirch Rail Terminal and NEBC Liquids Expansion Projects AltaGas and Tourmaline have reached an agreement to develop the Groundbirch Rail Terminal in NEBC. Tourmaline will own the facility, while AltaGas will operate and manage liquids logistics. The project is initially expected to move up to 10,000 Bbl/d of LPG on rail, with the potential to grow substantially over time, and is underpinned by a long-term LPG tolling agreement, to support Tourmaline's Groundbirch operations. The NEBC Liquids Expansion is expected to provide an additional 6,000 Bbl/d of fractionation capacity in NEBC and improved liquids handling to serve production growth in the region and has a planned in-service-date of mid-2028. Mountain Valley Pipeline Growth Projects Construction of MVP Southgate is underway, with pipeline welding commencing in early July and an accelerated construction completion timeline of year-end 2026. AltaGas expects to incur the majority of its US$19 million capital commitment for MVP Southgate in 2026. MVP Boost also continues to advance, with efforts focused on resolving the remaining regulatory approvals, and remains on track for completion by mid-2028. AltaGas believes the long-term outlook for the MVP Mainline, Boost and Southgate remain compelling as the assets will compound long-term value for the Company's shareholders. AltaGas continues to advance a substantial portfolio of high-return growth opportunities across its Midstream platform, including REEF Optimization II, Pipestone III, additional LPG export capacity, potential ethane exports, and related liquids infrastructure investments. The Company remains focused on advancing regulatory, engineering, commercial, and contracting activities to support future capital allocation decisions and long-term growth. Risk Management AltaGas' Midstream operations are well-hedged for the remainder of 2026 with approximately 91 percent of the remaining 2026 expected global export volumes tolled or financially hedged. Merchant volumes are hedged at an average Far East Index ("FEI") to North American financial hedge price of US$21.81/Bbl while tolling volumes remain in-line with previously disclosed levels. Approximately 84 percent of the Company's remaining 2026 expected frac exposed volumes are hedged at US$22.34/Bbl, prior to transportation costs. AltaGas continues to actively manage risk across the Midstream platform through commercial contracting and a systematic hedging program to manage its commodity price exposure. For the remainder of 2026, AltaGas has hedged all of its expected Baltic freight exposure through time charters, financial hedges, and tolled volumes. Midstream Hedge Program Q3 2026 Q4 2026 Remainder of 2026 Global Exports volumes hedged (%) (1) 96 85 91 Average propane/butane FEI to North America hedge (US$/Bbl) (2) (3) 21.23 22.57 21.81 Fractionation volume hedged (%) (3) 88 81 84 Frac spread hedge rate - (US$/Bbl) (3) 20.95 23.5 22.34 Approximate expected volumes hedged based on AltaGas' internally assumed export volumes. Hedged amounts include contracted tolling volumes and financial hedges. Does not include physical differential to FSK for C3 volumes. Butane is hedged as a percentage of WTI. Approximate average for the period. Utilities Utilities reported normalized EBITDA of $142 million in the second quarter of 2026 compared to $134 million in the second quarter of 2025, while income before income taxes was $33 million in the second quarter of 2026 compared to $95 million in the second quarter of 2025. The six percent year-over-year increase in normalized EBITDA was primarily driven by continued system modernization investments, new rates in D.C. and Virginia, and favourable Retail performance. Regulatory Updates AltaGas continues to advance its regulatory agenda, supported by a constructive outcome in Maryland and anticipated decisions in both Virginia and Michigan during the second half of 2026. In Maryland, AltaGas recently received an order related to the Company's December 2025 filing. The PSC of MD approved US$38.1 million of new annual revenue, inclusive of certain costs currently recovered through the STRIDE Plan surcharge, based on an allowed return on equity ("ROE") of 9.4 percent. The Company continues to review the impact of the order, with requests for reconsideration due by August 26, 2026. In Virginia, interim rates remain in effect while AltaGas seeks approximately US$104 million of rate relief, consisting of US$65 million of incremental annual revenue and a US$39 million SAVE surcharge. In Michigan, SEMCO's February 2026 filing requests approximately US$61 million of incremental annual revenue and includes a proposal to extend its modernization programs through 2031, representing approximately US$284 million of additional investment. On June 30, 2026, the PSC of D.C. approved the extension of PROJECTpipes 2 through December 31, 2026 due to the extension of the District SAFE procedural schedule, with an incremental spending limit of US$18 million for previously approved projects. The company recently completed the regulatory hearings related to District SAFE and expects resolution before year end 2026. Growth Projects The Keweenaw Connector Pipeline in Michigan advanced into active construction during the second quarter and remains on track for its planned 2026 year-end in-service date. Grading, pipe stringing, bending and welding activities are underway, with all line pipe and the majority of major materials delivered during the quarter. Safety performance remains strong and, once in service, the pipeline is expected to enhance system reliability and support the long-term energy needs of customers across Michigan's Upper Peninsula. AltaGas' Utilities business continues to advance its data center growth opportunities, with two agreements executed, multiple FEED studies completed and a growing backlog of projects at various stages of development. The two contracted projects continue to progress as planned and remain on track for completion by 2026 year-end. AltaGas remains focused on pursuing these opportunities through a disciplined and de-risked approach, primarily by investing in pipeline interconnections and related regulated infrastructure that connect onsite power generation to Utility systems. AltaGas invested $239 million in Utilities capital during the quarter, including investing approximately $130 million towards the Company's various asset modernization programs and $21 million towards new customer growth. These investments improve the safety and reliability of the network while helping maintain affordability through lowering long-term operating costs. Corporate/Other The Corporate/Other segment reported a normalized EBITDA loss of $36 million for the second quarter of 2026, compared to a $7 million loss reported in the same quarter of 2025. Loss before income taxes in the Corporate/ Other segment was $159 million in the second quarter of 2026, compared to a loss before income taxes of $132 million in the same quarter of 2025. Higher G&A expenses related to employee incentive costs were the main driver of the increased loss. Consolidated Financial Results Three Months Ended June 30 ($ millions) 2026 2025 Normalized EBITDA (1) $ 391 $ 342 Add (deduct): Depreciation and amortization (137) (126) Interest expense (117) (114) Income tax expense, net of normalizing items (31) (15) Preferred share dividends (3) (5) Other (2) (6) (1) Normalized net income (1) $ 97 $ 81 Net income applicable to common shares $ 288 $ 175 Normalized funds from operations (1) $ 283 $ 228 Cash from operations $ 490 $ 365 ($ per share, except shares outstanding) Shares outstanding - basic (millions) During the period (3) 312 299 End of period 312 299 Normalized net income - basic (1) 0.31 0.27 Normalized net income - diluted (1) 0.31 0.27 Net income per common share - basic 0.92 0.59 Net income per common share - diluted 0.92 0.58 Non-GAAP financial measure; see discussion in Non-GAAP Financial Measures section at the end of this news release. "Other" includes accretion expense, net income applicable to non-controlling interests, foreign exchange losses, and unrealized foreign exchange losses (gains) on intercompany accounts payable and accounts receivables balances. Weighted average. Normalized EBITDA for the second quarter of 2026 was $391 million compared to $342 million for the same quarter in 2025. The largest factors contributing to the year-over-year increase are described in the Business Performance sections above. Income before income taxes was $383 million for the second quarter of 2026 compared to $226 million for the same quarter in 2025. Performance for the second quarter of 2026 was mainly due to higher unrealized gains on risk management contracts and the same previously referenced factors impacting normalized EBITDA, partially offset by higher depreciation and amortization expense, and higher interest expense. Please refer to the "Three Months Ended June 30" section of the Q2 2026 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 $97 million or $0.31 per share for the second quarter of 2026, compared to $81 million or $0.27 per share reported for the same quarter of 2025. Normalized FFO was $283 million or $0.91 per share for the second quarter of 2026, compared to $228 million or $0.76 per share for the same quarter in 2025. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA and lower current income tax expense net of normalization adjustments, partially offset by higher interest expense. Cash from operations in the second quarter of 2026 was $490 million ($1.57 per share), compared to $365 million ($1.22 per share) for the same quarter of 2025. The increase was mainly due to favourable variances in the net change in operating assets and liabilities, primarily as a result of fluctuations in commodity prices and sales volumes, as well as higher net income after taxes (after adjusting for non-cash items). Interest expense for the second quarter of 2026 was $117 million, compared to $114 million for the same quarter in 2025. The increase was mainly due to the issuance of additional subordinated hybrid notes in the third quarter of 2025 and higher average interest rates. Interest expense recorded on the subordinated hybrid notes in the second quarter of 2026 was $36 million, compared to $34 million for the same quarter of 2025. Income tax expense was $91 million for the second quarter of 2026, compared to $44 million for the same quarter of 2025. The increase was mainly due to higher income before income taxes compared to the same quarter of 2025. Quarterly Common Share Dividend and Preferred Share Dividend The Board of Directors approved the following schedule of Dividends: Type (1) Dividend (per share) Period Payment Date Record Common Shares $0.334 n.a. 29-Sep-26 16-Sep-26 Series G Preferred Shares $0.376063 30-Jun-26 to 29-Sep-26 29-Sep-26 16-Sep-26 Dividends on common shares and preferred shares are eligible dividends for Canadian income tax purposes. Conference Call and Webcast AltaGas will hold a conference call today, July 30, 2026, at 9:00 a.m. MT (11:00 a.m. ET) to discuss second quarter of 2026 results and other corporate developments. Date: Thursday, July 30, 2026 Time: 9:00 a.m. MT (11:00 a.m. ET) Webcast: https://app.webinar.net/yNG4peKE7rD Dial-in (Audio only): +1 437 900 0527 or toll free at +1 888 510 2154 Shortly after the conclusion of the call a replay will be available on the Company's website or by dialing +1 289 819 1450 or toll free +1 888 660 6345. Passcode 06893#. AltaGas' Consolidated Financial Statements and accompanying notes for the second quarter of 2026, as well as its related MD&A, are now available online at https://www.altagas.ca . All documents will be filed with the Canadian securities regulatory authorities and will be posted under AltaGas' SEDAR+ profile at https://www.sedarplus.ca . Non-GAAP Measures This news release contains references to certain financial measures that do not have a standardized meaning prescribed by U.S. GAAP and may not be comparable to similar measures presented by other entities. The non-GAAP measures and their reconciliation to U.S. GAAP financial measures are shown below and within AltaGas' Management's Discussion and Analysis (MD&A) as at and for the period ended June 30, 2026. These non-GAAP measures provide additional information that Management believes is meaningful regarding AltaGas' operational performance, liquidity and capacity to fund dividends, capital expenditures, and other investing activities. Readers are cautioned that these non-GAAP measures should not be construed as alternatives to other measures of financial performance calculated in accordance with U.S. GAAP. Normalized EBITDA Three Months Ended Six Months Ended June 30 June 30 ($ millions) 2026 2025 2026 2025 Income before income taxes (GAAP financial measure) $ 383 $ 226 $ 590 $ 739 Add: Depreciation and amortization 137 126 272 254 Interest expense 117 114 236 229 EBITDA $ 637 $ 466 $ 1,098 $ 1,222 Add (deduct): Transaction costs related to acquisitions and dispositions (1) 1 2 2 2 Unrealized losses (gains) on risk management contracts (2) (250) (131) 99 (216) Losses (gains) on sale of assets (3) (2) 1 (2) 3 Transition and restructuring costs (4) 2 2 9 13 Provisions on assets - - - 2 Accretion expenses 2 1 3 2 Foreign exchange losses (5) 1 1 - 3 Normalized EBITDA $ 391 $ 342 $ 1,209 $ 1,031 Comprised of transaction costs related to acquisitions and dispositions of assets and/or equity investments in the period. These costs are included in the "operating and administrative" line item on the Consolidated Statements of Income. Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. Included in the "revenue", "cost of sales", and "foreign exchange losses" line items on the Consolidated Statements of Income. Please refer to Note 12 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and six months ended June 30, 2026 for further details regarding AltaGas' risk management activities. Included in the "other income" line item on the Consolidated Statements of Income. Comprised of transition and restructuring costs (including CFO transition). These costs are included in the "operating and administrative" line item on the Consolidated Statements of Income. Excludes unrealized losses (gains) on foreign exchange contracts that have been entered into for the purpose of cash management. These losses (gains) are included above in the line "unrealized losses (gains) on risk management contracts". 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 Six Months Ended June 30 June 30 ($ millions) 2026 2025 2026 2025 Net income applicable to common shares (GAAP financial measure) $ 288 $ 175 $ 435 $ 567 Add (deduct) after-tax: Transaction costs related to acquisitions and dispositions (1) 1 1 2 1 Unrealized losses (gains) on risk management contracts (2) (190) (100) 76 (165) Losses (gains) on sale of assets (3) (1) 1 (1) 2 Provisions on assets - - - 1 Transition and restructuring costs (4) 1 1 7 10 Unrealized foreign exchange losses (gains) on intercompany accounts payable and accounts receivable balances (5) (2) 3 (7) 7 Normalized net income $ 97 $ 81 $ 512 $ 423 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 "operating and administrative" line item on the Consolidated Statements of Income. Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. The pre-tax amounts are included in the "revenue", "cost of sales", and "foreign exchange losses" line items on the Consolidated Statements of Income. Please refer to Note 12 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and six months ended June 30, 2026 for further details regarding AltaGas' risk management activities. The pre-tax amounts are included in the "other income" line item on the Consolidated Statements of Income. Comprised of transition and restructuring costs (including CFO transition). These pre-tax costs are included in the "operating and administrative" line item on the Consolidated Statements of Income. Relates to unrealized foreign exchange losses (gains) 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 gain (loss) on foreign currency translation, and the impact to the Canadian entity is recorded through the "foreign exchange losses" line item on the Consolidated Statements of Income. Normalized net income and normalized net income per share are used by Management to enhance the comparability of AltaGas' earnings, as these metrics reflect the underlying performance of AltaGas' business activities. Normalized EPS is calculated as normalized net income divided by the average number of shares outstanding during the period. Normalized Funds from Operations Three Months Ended Six Months Ended June 30 June 30 ($ millions) 2026 2025 2026 2025 Cash from operations (GAAP financial measure) $ 490 $ 365 $ 1,064 $ 992 Add (deduct): Net change in operating assets and liabilities (212) (142) (143) (229) Asset retirement obligations settled 2 1 2 1 Funds from operations $ 280 $ 224 $ 923 $ 764 Add (deduct): Transaction costs related to acquisitions and dispositions (1) 1 2 2 2 Transition and restructuring costs (2) 2 2 9 13 Normalized funds from operations $ 283 $ 228 $ 934 $ 779 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 "operating and administrative" line item on the Consolidated Statements of Income. Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. Comprised of transition and restructuring costs (including CFO transition). These pre-tax costs are included in the "operating and administrative" line item on the Consolidated Statements of Income. Normalized funds from operations and funds from operations are used to assist Management and investors in analyzing the liquidity of the Corporation. Management uses these measures to understand the ability to generate funds for capital investments, debt repayment, dividend payments, and other investing activities. Funds from operations and normalized funds from operations as presented should not be viewed as an alternative to cash from operations or other cash flow measures calculated in accordance with GAAP. ($ millions, except adjusted net debt to normalized EBITDA) June 30, December 31, 2026 2025 Net Debt, Adjusted Net Debt, and Adjusted Net Debt to Normalized EBITDA Short-term debt $ 31 $ 231 Current portion of long-term debt (1) 318 469 Current portion of finance lease liabilities 26 24 Long-term debt (2) 7,465 7,010 Finance lease liabilities 126 124 Subordinated hybrid notes (3) 2,205 2,159 Total debt 10,171 10,017 Less: cash and cash equivalents (131) (99) Net debt $ 10,040 $ 9,918 Add (deduct): Current portion of finance lease liabilities (26) (24) Finance lease liabilities (126) (124) 50 percent debt treatment of subordinated hybrid notes (1,103) (1,080) 50 percent debt treatment of preferred shares 98 98 Adjusted net debt $ 8,883 $ 8,788 Adjusted net debt to normalized EBITDA (4) 4.4 4.7 Net of debt issuance costs, unamortized premiums, and unamortized discounts of less than $1 million as at June 30, 2026 (December 31, 2025 - less than $1 million). Net of debt issuance costs, unamortized premiums, and unamortized discounts of $30 million as at June 30, 2026 (December 31, 2025 - $29 million). Net of debt issuance costs of $24 million as at June 30, 2026 (December 31, 2025 - $25 million). Calculated as adjusted net debt at the balance sheet date, divided by normalized EBITDA for the preceding 12 month period. Net debt, adjusted net debt, and adjusted net debt to normalized EBITDA are used by the Corporation to monitor its capital structure and assess its capital structure relative to earnings. It is also used as a measure of the Corporation's overall financial strength and is presented to provide this perspective to analysts and investors. Net debt is defined as short-term debt, plus current and long-term portions of long-term debt, current and long-term portions of finance lease liabilities, and subordinated hybrid notes, less cash and cash equivalents. Adjusted net debt is defined as net debt adjusted for current and long-term portions of finance lease liabilities, 50 percent of subordinated hybrid notes, and 50 percent of preferred shares. Adjusted net debt to normalized EBITDA is calculated by dividing adjusted net debt as defined above by normalized EBITDA for the preceding 12 month period. Invested Capital and Net Invested Capital Three Months Ended Six Months Ended June 30 June 30 ($ millions) 2026 2025 2026 2025 Cash used in investing activities (GAAP financial measure) $ 438 $ 357 $ 889 $ 709 Add (deduct): Net change in non-cash capital expenditures (1) 29 49 (56) 19 Contributions from non-controlling interests (2) (62) (76) (140) (146) Net invested capital $ 405 $ 330 $ 693 $ 582 Disposal of equity method investments 2 - 2 - Invested capital $ 407 $ 330 $ 695 $ 582 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 18 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and six months ended June 30, 2026 for further details. Excludes cash received from advance cash calls related to forecasted capital spend. 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 cash paid for business acquisitions and proceeds from disposals of assets and equity investments in the period. Net invested capital is calculated based on the investing activities section in the Consolidated Statements of Cash Flows, adjusted for items such as non-cash capital expenditures, and contributions from non-controlling interests. 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. Supplemental Calculations Reconciliation of Normalized EBITDA to Normalized Net Income The below table provides a supplemental reconciliation of normalized EBITDA to normalized net income. Both of these non-GAAP measures have been previously reconciled to the relevant GAAP financial measures in the section above. This supplemental information is provided as additional information to assist analysts and investors in comparing normalized EBITDA to normalized net income and is not intended as a substitute for the reconciliations to the nearest comparable GAAP measures. Readers should not place undue reliance on this supplemental reconciliation. Three Months Ended Six Months Ended June 30 June 30 ($ millions) 2026 2025 2026 2025 Normalized EBITDA $ 391 $ 342 $ 1,209 $ 1,031 Add (deduct): Depreciation and amortization (137) (126) (272) (254) Interest expense (117) (114) (236) (229) Income tax expense (91) (44) (146) (157) Normalizing items impacting income taxes (1) 60 28 (23) 43 Accretion expenses (2) (1) (3) (2) Foreign exchange losses (1) (1) - (3) Unrealized foreign exchange losses (gains) on intercompany accounts payable and accounts receivable balances (2) 4 (8) 9 Net income applicable to non-controlling interests (1) (2) (3) (5) Preferred share dividends (3) (5) (6) (10) Normalized net income $ 97 $ 81 $ 512 $ 423 Represents the income tax impact related to the normalizing items included in the calculation of normalized EBITDA. Consolidated Financial Review Three Months Ended Six Months Ended June 30 June 30 ($ millions, except effective income tax rates) 2026 2025 2026 2025 Revenue 3,797 2,844 7,767 6,813 Normalized EBITDA (1) 391 342 1,209 1,031 Income before income taxes 383 226 590 739 Net income applicable to common shares 288 175 435 567 Normalized net income (1) 97 81 512 423 Total assets 27,712 25,275 27,712 25,275 Total long-term liabilities 14,404 13,615 14,404 13,615 Invested capital (1) 407 330 695 582 Cash used in investing activities 438 357 889 709 Dividends declared (2) 104 95 209 189 Cash from operations 490 365 1,064 992 Normalized funds from operations (1) 283 228 934 779 Effective income tax rate (%) 23.7 19.7 24.8 21.3 Three Months Ended Six Months Ended June 30 June 30 ($ per share, except shares outstanding) 2026 2025 2026 2025 Net income per common share - basic 0.92 0.59 1.40 1.90 Net income per common share - diluted 0.92 0.58 1.40 1.89 Normalized net income - basic (1) 0.31 0.27 1.64 1.41 Normalized net income - diluted (1) 0.31 0.27 1.64 1.41 Dividends declared (2) 0.33 0.32 0.67 0.63 Cash from operations 1.57 1.22 3.42 3.32 Normalized funds from operations (1) 0.91 0.76 2.99 2.61 Shares outstanding - basic (millions) During the period (3) 312 299 312 299 End of period 312 299 312 299 Non-GAAP financial measure or non-GAAP financial ratio; see discussion in Non-GAAP Financial Measures section of the MD&A. Dividends declared per common share per quarter: $0.315 per share beginning March 2025, increased to $0.334 per share effective March 2026. 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 https://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", "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 Groundbirch Rail Terminal, including expected commercial arrangements; progress on REEF. including the anticipated timing, benefits and capital cost thereof and related execution plan and capital and schedule contingencies; the NEBC Liquids Expansion, including the anticipated timing, benefits and capital cost thereof; the strong long-term outlook for AltaGas' Utilities business, including increasing natural gas demand across the US; the expectation that AltaGas will deliver 10 percent Utilities rate base growth in 2026; the robust outlook for AltaGas' Midstream business, including Asian LPG demand growth through 2040 and the unique opportunity to meet global energy demand; that AltaGas has a clear path to grow the Utilities and Midstream businesses and its focus on executing safely and efficiently while continuing to deliver dependable earnings growth and long-term shareholder value; AltaGas' 2026 guidance including normalized earnings per share of $2.35 to $2.60 and normalized EBITDA of $2.0 billion to $2.1 billion; AltaGas' focus on delivering resilient and growing normalized EPS and normalized FFO per share while operating with strong financial flexibility and the anticipated benefits thereof; AltaGas' 2026 capital program of approximately $1.8 billion, excluding ARO; the allocation of consolidated 2026 capital to the Company's Utilities, Midstream and Corporate/Other segments; AltaGas' Midstream and Utilities Growth Projects, including the anticipated timing, benefits and capital costs thereof; additional midstream growth projects, including REEF Optimization II, Pipestone III, additional LPG export capacity, potential ethane exports, and related liquids infrastructure investments; the Company's hedging program and AltaGas' 2026 Midstream Hedge Program quarterly estimates; expected filing, procedure and decision dates for rate cases in the Utilities business; timing of material regulatory filings, proceedings and decisions in the Utilities business; 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 and butane 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 inservice 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 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 for the year ended December 31, 2025 ("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 https://www.altagas.ca or through SEDAR+ at https://www.sedarplus.ca . AltaGas Ltd. Management's Discussion & Analysis For the three and six months ended June 30, 2026 Dated: July 29, 2026 AltaGas Business Overview and Organization AltaGas Ltd. ("AltaGas", the "Company", or the "Corporation") is a leading North American energy 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 focused on delivering resilient and durable value for its stakeholders. AltaGas has three reporting segments - Utilities, Midstream, and Corporate/ Other. Utilities Segment AltaGas' Utilities segment owns and operates franchised, cost-of-service, rate-regulated natural gas distribution and storage utilities that are focused on providing safe, reliable, and affordable energy to its customers. In the second quarter of 2026, AltaGas' Utilities provided energy to 1.6 million residential and commercial customers with an average rate base of US$5.6 billion. The Utilities segment includes two utilities that deliver essential energy across four major United States ("U.S.") jurisdictions: Washington Gas Light Company ("Washington Gas") is the Company's largest operating utility and serves 1.2 million customers across Virginia, Maryland, and the District of Columbia ("D.C."); and SEMCO Energy, Inc. ("SEMCO Energy") serves 333,000 customers in Southern Michigan and Michigan's Upper Peninsula. The Utilities segment also includes other storage facilities and contracts for interstate natural gas transportation and storage services, as well as WGL Energy Services, Inc. ("WGL Energy Services"), an affiliated retail energy marketing business, which sells natural gas and electricity directly to residential, commercial, and industrial customers across Maryland, Virginia, Delaware, Pennsylvania, Ohio, New Jersey, and D.C. Midstream Segment AltaGas' Midstream segment is a leading North American platform that connects customers and markets to critical forms of energy. From wellhead to tidewater, the Company is focused on providing its customers with safe and reliable service and connectivity across the Midstream value chain that facilitates the best outcomes for their businesses. This includes global market access for North American Liquefied Petroleum Gases ("LPGs"), which provides North American producers and aggregators with attractive netbacks for propane and butane while delivering diversity of supply and supporting stronger energy security in Asia to AltaGas' downstream customers. AltaGas' Midstream platform is heavily focused on the Montney and Deep Basin resource plays and centers around open access LPG exports, which is where the Company believes the market is headed for Canadian resource development over the long-term. AltaGas also operates a broader set of midstream infrastructure assets across the Western Canadian Sedimentary Basin ("WCSB") and select regions in the U.S., which are all focused on connecting customers and markets in the most efficient manner possible. There are three core pillars to AltaGas' Midstream platform that are integral to each other and facilitate the Company's wellhead to tidewater and beyond value chain. These include: Global Exports , which includes AltaGas' two operational LPG export terminals that provide open market access to approximately 70 counterparties, for nameplate export capacity of up to 155,000 Bbl/d of propane and butane to key demand markets in Asia, and a third terminal currently under construction; Natural Gas Gathering, Processing and Extraction , which includes 1.2 Bcf/d of extraction processing capacity and 1.3 Bcf/d of raw field gas processing capacity, which is heavily focused on the Montney and Deep Basin; and Fractionation and Liquids Handling , which includes 70 MBbl/d of fractionation capacity and a sizable liquids handling footprint. The Midstream segment also consists of natural gas and natural gas liquids ("NGLs") marketing businesses, domestic logistics, trucking and rail terminals, liquids storage with 3.2 million barrels of capacity through a network of underground salt caverns through the Company's Strathcona Storage JV with ATCO Energy Solutions Ltd., 15 Bcf of natural gas storage through the Dimsdale natural gas storage facility ("Dimsdale"), as well as AltaGas' 10 percent equity interest in the Mountain Valley Pipeline ("MVP"), which is a 2.0 Bcf/d transportation pipeline that transports natural gas from the Marcellus region across Virginia and West Virginia to key downstream demand markets with pipeline expansion and extension opportunities. Corporate/Other Segment AltaGas' Corporate/Other segment consists of the Company's corporate activities and a small portfolio of gas-fired power generation and distribution assets capable of generating 508 MW of power, primarily in California. Second Quarter Highlights Normalized EBITDA, normalized funds from operations, normalized net income, and adjusted net debt are non-GAAP financial measures. Normalized funds from operations per share, normalized net income per share, and adjusted net debt to normalized EBITDA are non-GAAP ratios. Please see Non - GAAP Financial Measures section of this Management's Discussion and Analysis ("MD&A"). Financial Highlights Normalized EBITDA was $391 million in the second quarter of 2026, compared to the $342 million recorded in the second quarter of 2025. Income before income taxes was $383 million in the second quarter of 2026, an increase from $226 million in the second quarter of 2025. Normalized EBITDA growth was primarily driven by increased global export volumes and margins, Pipestone II contributions, Utilities pipe modernization investments and higher retail margins in Utilities. Normalized earnings per share ("EPS") was $0.31 in the second quarter of 2026 compared to $0.27 in the second quarter of 2025, while GAAP EPS was $0.92 in the second quarter of 2026 compared to $0.59 in the second quarter of 2025. Guidance and Balance Sheet Update AltaGas has increased its 2026 guidance, raising normalized EBITDA by four percent to a new range of $2.0 billion-$2.1 billion and normalized EPS by six percent to a range of $2.35-$2.60. The increase reflects strong performance year-to-date and a constructive outlook for both segments for the balance of the year. Adjusted net debt to normalized EBITDA exited the quarter at 4.4x on a trailing basis, including 50 percent debt treatment on subordinated hybrids and preferred shares, below the low-end of AltaGas' target leverage range. AltaGas is increasing its 2026 capital budget from $1.7 billion to $1.8 billion, reflecting higher capital expenditures for the construction of the Ridley Island Energy Export Facility ("REEF") and positive final investment decisions ("FIDs") on two Northeast British Columbia ("NEBC") growth projects. Operational Highlights AltaGas exported a record 144,420 Bbl/d of LPGs to Asia across 23 Very Large Gas Carriers ("VLGCs"), a 13 percent year-over-year increase. The Company continues to execute its 2026 Accelerated Replacement Programs ("ARP") focused on longterm safety and reliability, deploying over $200 million of capital and replacing 21 miles of pipe year-to-date. Business Development and Growth AltaGas continues to focus on long-term partnerships that leverage shared infrastructure. In the second quarter, AltaGas entered a new agreement with Tourmaline Oil Corp. ("Tourmaline") to develop the Groundbirch Rail Terminal in NEBC, where Tourmaline will own the facility and AltaGas will operate liquids logistics under a long-term LPG tolling and export agreement. In addition, the announced ACE rail terminal partnership in Fort Saskatchewan with Keyera and CN Rail will enhance transportation operating efficiencies. Construction of REEF continues to advance, with the project approximately 85 percent complete. While onshore execution has remained strong and ahead of plan, in-water construction has proven to be challenging due to maritime conditions and weather delays. As a result, onshore efficiencies are not expected to fully offset higher maritime construction costs. Accordingly, the partnership is modestly increasing the capital cost estimate for the project by 12 percent to approximately $1.5 billion with commercial operations to commence before the end of the first quarter in 2027. With 80 percent of the jetty complete, and in-water jetty work expected to be completed in the coming weeks, AltaGas views the revised capital cost and schedule as achievable and supported by a strong execution plan with sufficient capital and schedule contingencies. AltaGas has reached a positive FID on the $125 million NEBC Liquids Expansion project, which includes a depropanizer, natural gas liquids ("NGL") treater expansion, and debottlenecking work at Townsend that will add 6,000 Bbls/d of fractionation capacity in NEBC. The project is expected to be completed by mid-2028. Consolidated Financial Review Three Months Ended Six Months Ended June 30 June 30 ($ millions, except effective income tax rates) 2026 2025 2026 2025 Revenue 3,797 2,844 7,767 6,813 Normalized EBITDA (1) 391 342 1,209 1,031 Income before income taxes 383 226 590 739 Net income applicable to common shares 288 175 435 567 Normalized net income (1) 97 81 512 423 Total assets 27,712 25,275 27,712 25,275 Total long-term liabilities 14,404 13,615 14,404 13,615 Invested capital (1) 407 330 695 582 Cash used in investing activities 438 357 889 709 Dividends declared (2) 104 95 209 189 Cash from operations 490 365 1,064 992 Normalized funds from operations (1) 283 228 934 779 Effective income tax rate (%) 23.7 19.7 24.8 21.3 Three Months Ended Six Months Ended June 30 June 30 ($ per share, except shares outstanding) 2026 2025 2026 2025 Net income per common share - basic 0.92 0.59 1.40 1.90 Net income per common share - diluted 0.92 0.58 1.40 1.89 Normalized net income - basic (1) 0.31 0.27 1.64 1.41 Normalized net income - diluted (1) 0.31 0.27 1.64 1.41 Dividends declared (2) 0.33 0.32 0.67 0.63 Cash from operations 1.57 1.22 3.42 3.32 Normalized funds from operations (1) 0.91 0.76 2.99 2.61 Shares outstanding - basic (millions) During the period (3) 312 299 312 299 End of period 312 299 312 299 Non-GAAP financial measure or non-GAAP financial ratio; see discussion in the Non-GAAP Financial Measures section of this MD&A. Dividends declared per common share per quarter: $0.315 per share beginning March 2025, increased to $0.334 per share effective March 2026. Weighted average. Results of Operations by Reporting Segment Normalized EBITDA (1) Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 2026 2025 Utilities $ 142 $ 134 $ 697 $ 635 Midstream 285 215 558 412 Sub-total: Operating Segments $ 427 $ 349 $ 1,255 $ 1,047 Corporate/Other (36) (7) (46) (16) $ 391 $ 342 $ 1,209 $ 1,031 Non-GAAP financial measure; see discussion in the Non-GAAP Financial Measures section of this MD&A. Income (Loss) Before Income Taxes Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 2026 2025 Utilities $ 33 $ 95 $ 491 $ 541 Midstream 509 263 398 467 Sub-total: Operating Segments $ 542 $ 358 $ 889 $ 1,008 Corporate/Other (159) (132) (299) (269) $ 383 $ 226 $ 590 $ 739 Revenue Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 2026 2025 Utilities $ 971 $ 1,016 $ 3,001 $ 2,886 Midstream 2,813 1,813 4,738 3,897 Sub-total: Operating Segments $ 3,784 $ 2,829 $ 7,739 $ 6,783 Corporate/Other 13 15 28 30 $ 3,797 $ 2,844 $ 7,767 $ 6,813 Three Months Ended June 30 Normalized EBITDA for the second quarter of 2026 was $391 million, compared to $342 million for the same quarter of 2025, primarily driven by strong performance from the Midstream segment. In the Midstream segment, the increase in normalized EBITDA was primarily driven by stronger contributions from the global exports business due to higher margins and volumes, as well as contributions from Pipestone II, which was placed into service in December 2025, partially offset by higher operating and administrative costs, lower earnings at the extraction facilities due to lower realized frac spreads, and lower processing and fractionation revenue at Harmattan due to a planned turnaround. Please refer to the Midstream Segment section of this MD&A for more details on the factors impacting Midstream results. In the Utilities segment, the increase in normalized EBITDA was primarily attributable to higher contributions from WGL's retail business, higher revenue associated with ARP investments, and the impacts of the 2024 D.C. and 2025 Virginia rate cases, partially offset by higher operating and administrative expenses and decreased asset optimization activities at Washington Gas. Please refer to the Utilities Segment section of this MD&A for more details on the factors impacting Utilities results. In the Corporate/Other segment, the decrease in normalized EBITDA was mainly driven by higher expenses related to employee incentive plans, primarily as a result of the increasing share price in the second quarter of 2026, as well as increased personnel costs. Please refer to the Corporate/Other Segment section of this MD&A for more details on the factors impacting Corporate/Other results. Income before income taxes for the second quarter of 2026 was $383 million, compared to $226 million for the same quarter of 2025. The increase was mainly due to higher unrealized gains on risk management contracts and the same previously referenced factors impacting normalized EBITDA, partially offset by higher depreciation and amortization expense, and higher interest expense. Net income applicable to common shares for the second quarter of 2026 was $288 million ($0.92 per share), compared to $175 million ($0.59 per share) for the same quarter of 2025. The increase was primarily due to the same previously referenced factors impacting income before income taxes, partially offset by higher income tax expense. Normalized funds from operations for the second quarter of 2026 was $283 million ($0.91 per share), compared to $228 million ($0.76 per share) for the same quarter of 2025. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA and lower current income tax expense net of normalization adjustments, partially offset by higher interest expense. Cash from operations in the second quarter of 2026 was $490 million ($1.57 per share), compared to $365 million ($1.22 per share) for the same quarter of 2025. The increase was mainly due to favourable variances in the net change in operating assets and liabilities, primarily as a result of fluctuations in commodity prices and sales volumes, as well as higher net income after taxes (after adjusting for non-cash items). Please refer to the Liquidity section of this MD&A for further details on the variance in cash from operations. Interest expense for the second quarter of 2026 was $117 million, compared to $114 million for the same quarter of 2025. The increase was mainly due to the issuance of additional subordinated hybrid notes in the third quarter of 2025 and higher average interest rates. Interest expense recorded on the subordinated hybrid notes in the second quarter of 2026 was $36 million, compared to $34 million for the same quarter of 2025. AltaGas recorded income tax expense of $91 million for the second quarter of 2026, compared to $44 million for the same quarter of 2025. The increase was mainly due to higher income before income taxes compared to the same quarter of 2025. Normalized net income was $97 million ($0.31 per share) for the second quarter of 2026, compared to $81 million ($0.27 per share) for the same quarter of 2025. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA, partially offset by higher income tax expense net of normalization adjustments, higher depreciation and amortization expense, unfavourable variances in foreign exchange losses after foreign exchange related normalizations, and higher interest expense. Please refer to the Non-GAAP Financial Measures section of this MD&A for further details on normalization adjustments. Six Months Ended June 30 Normalized EBITDA for the first half of 2026 was $1,209 million, compared to $1,031 million for the same period in 2025. The increase was largely driven by strong results from both the Midstream and Utilities segments. In the Midstream segment, the increase in normalized EBITDA was mainly driven by stronger contributions from the global exports business due to higher margins and tolling volumes, contributions from Pipestone II, which was placed into service in December 2025, and higher contributions from the fractionation and liquids handling business supported by improved marketing margins. These factors were partially offset by higher operating and administrative expenses, lower earnings at the extraction facilities due to lower realized frac spreads, and lower processing and fractionation revenue at Harmattan due to a planned turnaround in the second quarter of 2026. Please refer to the Midstream Segment section of this MD&A for more details on the factors impacting Midstream results. In the Utilities segment, the increase in normalized EBITDA was primarily due to the impacts of the 2024 D.C. and 2025 Virginia rate cases, the gain on partial settlement of Washington Gas' post-retirement benefit pension plan in the first quarter of 2026, increased asset optimization activities at Washington Gas, and higher revenue associated with ARP investments. These factors were partially offset by higher operating and administrative expenses and lower contributions from WGL's retail business. Please refer to the Utilities Segment section of this MD&A for more details on the factors impacting Utilities results. In the Corporate/Other segment, the decrease in normalized EBITDA was mainly driven by higher employee incentive compensation expense, primarily as a result of the increasing share price in the first half of 2026, as well as increased personnel costs. Please refer to the Corporate/Other Segment section of this MD&A for more details on the factors impacting Corporate/Other results. Income before income taxes for the first half of 2026 was $590 million, compared to $739 million for the same period in 2025. The decrease was mainly due to unrealized losses on risk management contracts compared to unrealized gains in the same period in 2025, higher depreciation and amortization expense, and higher interest expense, partially offset by the same previously referenced factors impacting normalized EBITDA and lower transition and restructuring costs. Net income applicable to common shares for the first half of 2026 was $435 million ($1.40 per share), compared to $567 million ($1.90 per share) for the same period in 2025. The decrease was mainly due to the same previously referenced factors impacting income before income taxes, partially offset by lower income tax expense and lower preferred share dividends. Normalized funds from operations for the first half of 2026 was $934 million ($2.99 per share), compared to $779 million ($2.61 per share) for the same period in 2025. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA and lower normalized current tax expense, partially offset by higher non-cash items included in normalized EBITDA, higher interest expense, and lower distributions from equity investments. Cash from operations for the first half of 2026 was $1,064 million ($3.42 per share), compared to $992 million ($3.32 per share) for the same period in 2025. The increase was mainly due to higher net income after taxes (after adjusting for non-cash items), partially offset by unfavourable variances in the net change in operating assets and liabilities, primarily as a result of fluctuations in commodity prices and sales volumes, as well as lower distributions from equity investments. Please refer to the Liquidity section of this MD&A for further details on the variance in cash from operations. Interest expense for the first half of 2026 was $236 million, compared to $229 million for the same period in 2025. The increase was mainly due to the issuance of additional subordinated hybrid notes in the third quarter of 2025, higher average debt balances, and lower capitalized interest, partially offset by the impact of a lower average U.S./ Canadian dollar exchange rate. For the six months ended June 30, 2026, AltaGas recorded total interest expense of $73 million on the subordinated hybrid notes compared to $68 million for the same period in 2025. AltaGas recorded income tax expense of $146 million for the first half of 2026, compared to $157 million for the same period in 2025. The decrease in tax expense was mainly due to lower income before income taxes. Normalized net income was $512 million ($1.64 per share) for the first half of 2026, compared to $423 million ($1.41 per share) for the same period in 2025. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA and lower preferred share dividends, partially offset by higher income tax expense after normalization adjustments, higher depreciation and amortization expense, unfavourable variances in foreign exchange losses after foreign exchange related normalizations, and higher interest expense. Please refer to the Non-GAAP Financial Measures section of this MD&A for further details on normalization adjustments. 2026 Outlook Given AltaGas' strong financial and operating performance in the first half of 2026, AltaGas is increasing its normalized EBITDA guidance to $2.0 billion to $2.1 billion, up from the previous range of $1.925 to $2.025 billion. Similarly, normalized earnings per share guidance has been increased to $2.35 to $2.60, up from the previous range of $2.20 to $2.45. This compares to actual normalized EBITDA of $1.863 billion and normalized earnings per share of $2.23 in 2025, as well as GAAP net income per share of $2.48 in 2025. For the year ended December 31, 2025, income before income taxes was $1,029 million while net income applicable to common shares was $747 million. The Utilities segment is expected to contribute approximately 50 percent of normalized EBITDA in 2026, with year-over-year expected growth primarily driven by continued rate base growth through new rates in Virginia, D.C., and Maryland, ongoing capital investments in asset modernization programs on behalf of AltaGas' customers, and positive contribution from new customer growth, partially offset by lower expected gains related to the partial settlements of Washington Gas' post-retirement benefit pension plan, lower expected performance from WGL's retail business, as well as higher operating and administrative expenses. The Midstream segment is expected to contribute approximately 50 percent of normalized EBITDA, with year-over-year expected growth driven primarily by stronger expected global export volumes and margins and a full year of contributions from the Pipestone II facility, partially offset by lower frac spreads. The Corporate/Other segment is expected to be a modest offset to normalized EBITDA due to the increase in incentive compensation expenses driven by AltaGas' rising share price. The anticipated increase in normalized earnings per share from $2.23 in 2025 to a range of $2.35 to $2.60 in 2026 is expected to be driven primarily by the same factors supporting growth in normalized EBITDA, partially offset by higher income tax expense after normalization adjustments, increased depreciation and amortization, and higher interest expense. The outlook for normalized EBITDA and normalized earnings per share incorporates assumptions regarding the Canadian/U.S. dollar exchange rate and AltaGas' existing foreign exchange hedging program. Actual results may vary based on the performance of underlying businesses within each segment and changes to key assumptions. For additional information regarding risks and uncertainties that may impact results, please refer to the Risk Factors section of AltaGas' 2025 Annual Information Form, which is available on SEDAR+ at https://www.sedarplus.ca . AltaGas continues to focus on de-risking its business and managing direct commodity price exposure to drive predictable and durable results. While the Company has exposure, it maintains an active hedging program that proactively hedges commodity price and spread risk to mitigate the impact of fluctuations in margins and cash flows. For the remainder of 2026, AltaGas has hedged materially all of its expected Baltic freight exposure through time charters, financial hedges, and tolled volumes, in addition to the hedges in the following table: Midstream Hedge Program Q3 2026 Q4 2026 Remainder of 2026 Global Exports volumes hedged (%) (1) 96 85 91 Average propane/butane Far East Index ("FEI") to North America hedge (US$/ Bbl) (2) (3) 21.23 22.57 21.81 Fractionation volumes hedged (%) (3) 88 81 84 Frac spread hedge rate (US$/Bbl) (3) 20.95 23.50 22.34 Approximate expected volumes hedged based on AltaGas' internally assumed export volumes. Hedged amounts include contracted tolling volumes and financial hedges. Does not include physical differential to FSK for C3 volumes. Butane is hedged as a percentage of WTI. Approximate average for the period. Sensitivity Analysis AltaGas' financial performance is affected by factors such as changes in commodity prices, foreign exchange rates, and weather. The following table illustrates the approximate effect of these key variables on AltaGas' expected normalized results for the remainder of 2026: Factor Increase or decrease Approximate impact on normalized results for the remainder of 2026 ($ millions) Degree day variance from normal - Utilities (1) (2) 5 percent 4 Change in Canadian dollar per U.S. dollar exchange rate (3) (4) 0.05 2 Propane and butane FEI to North America spreads (1) (5) US$1/Bbl 3 Represents expected impact on normalized EBITDA for the remainder of 2026. Degree days - Utilities relate to SEMCO Energy Gas Company ("SEMCO") and D.C. service areas. Degree days are a measure of coldness determined daily as the numbers of degrees the average temperature during the day in question is below 65 degrees Fahrenheit. Degree days for a particular period are the average of degree days during the prior 15 years for SEMCO and during the prior 30 years for Washington Gas. Represents expected impact on normalized net income for the remainder of 2026. The sensitivity is net of hedges on U.S. denominated earnings currently in place. Refer to the Risk Management section of this MD&A for more details. The sensitivity is calculated on merchant barrels net of hedges currently in place for the remainder of the year. The impact on normalized EBITDA due to changes in the spread will vary and is being managed through an active hedging program. Capital Expenditures AltaGas is maintaining a disciplined capital program and currently expects to deploy approximately $1.8 billion of invested capital in 2026. The increase from the previous estimate of $1.7 billion is due to an increase in expected capital related to the construction of REEF and additional Midstream capital associated with new growth projects. 2026 Estimated 2025 Actuals Invested Capital $1.8 billion $1.4 billion Split by segment: Utilities 61 % 52 % Midstream 36 % 45 % Corporate 3 % 3 % In 2026, Utilities capital expenditures are expected to be focused primarily on safety and reliability initiatives, including asset modernization and pipeline replacement programs, system betterment projects, and new customer additions. The increase in expected Utilities capital spending is primarily driven by construction of the Keweenaw Connector Pipeline in Michigan and ARP investments in Virginia under the approved SAVE plan. In the Midstream segment, capital expenditures are expected to be directed towards growth and optimization projects, including REEF, REEF Optimization I, the Dimsdale Phase I and Phase II expansions, and the RIPET Methanol Removal Project, as well as maintenance, administrative, and other optimization capital across the existing asset base. AltaGas remains focused on capital-efficient organic growth, disciplined capital allocation, and enhancing balance sheet strength and financial flexibility. AltaGas' 2026 committed capital program is expected to be funded through internally-generated cash flows, driven by higher annual investment capacity from growing normalized EBITDA, and enhanced financial flexibility as a result of AltaGas' stronger balance sheet. Please refer to the Net Invested Capital and Non-GAAP Financial Measures sections of this MD&A for additional information on the components of AltaGas' invested capital. Growth Capital Project Updates The following table summarizes the status of AltaGas' significant growth projects: Project AltaGas' Estimated Ownership Cost (1) Interest Project Description and Status Expected In-Service Date Midstream Projects REEF 50% The total estimated project cost for REEF has been increased from $1.35 billion to approximately $1.5 billion, on a gross basis. The capital cost will be allocated between AltaGas and Vopak according to their respective ownership interests, subject to final adjustments for certain cost categories. REEF is a large-scale LPG and bulk liquids export terminal with supporting marine infrastructure currently under construction on Ridley Island, British Columbia, adjacent to RIPET. The project is being developed by AltaGas and Vopak and will have export capacity of approximately 56,000 Bbl/d. Construction continues to advance across all major work fronts, with the project approximately 85 percent complete and activities increasingly focused on completion and readiness for commissioning. Engineering is complete, all major process equipment -including the LPG accumulators and bullets - has been installed, and remaining fabrication required for project completion has been delivered or is progressing to site in line with the construction schedule. Mechanical construction activities are nearing completion, supporting the planned demobilization of contractors and the transition to commissioning. Mitigation efforts remain focused on maintaining alignment with the revised execution schedule with commercial operations expected to commence before the end of the first quarter in 2027. First quarter of 2027 REEF Optimization I 50% $110 million, on a gross basis. AltaGas' cost is expected to be approximately $55 million on a net basis. REEF Optimization I will increase REEF's throughput capacity by approximately 30,000 Bbl/d. Detailed engineering is progressing and long-lead equipment has been awarded. The partnership is also advancing engineering, permitting, and stakeholder engagement activities for REEF Optimization II, which could support an additional 25,000 to 65,000 Bbls/d of throughput capacity, with timing aligned to market fundamentals and customer demand. Detailed engineering and procurement activities for Optimization I continue to progress as planned. Design, fabrication, and construction activities associated with scope integrated into the active REEF project area have advanced to align with the broader REEF execution schedule, supporting efficiencies across both projects. In areas outside the REEF facility, the site foundations contractor has begun mobilization as planned in support of the overall project schedule. Second half of 2027 AltaGas' Estimated Expected Project Ownership Cost (1) Project Description and Status In-Service Interest Date Midstream Projects, continued RIPET Methanol Removal Project 70% $53 million, on a gross basis. AltaGas' cost is expected to be approximately $37 million on a net basis. AltaGas reached a positive FID on the RIPET Methanol Removal Project in April 2025. This project will expand RIPET's access to all Asian markets while ensuring fungible propane specifications between RIPET and REEF. The engineering, procurement, and fabrication contract has been awarded and equipment fabrication is underway. In October 2025, AltaGas and Vopak finalized commercial terms for Vopak's participation in the project, with Vopak funding 30 percent of total project costs through its proportionate ownership in the RIPET partnership. Construction activities have commenced, with equipment shipments expected to begin in the third quarter of 2026. 2026 Year-end Dimsdale Phase I Expansion 100% $65 million AltaGas reached a positive FID on the Phase I expansion of the Company's Dimsdale Gas Storage Facility in August 2025. The 6 Bcf expansion is supported by two 10-year firm storage contracts. Phase I includes a direct connection to the NGTL mainline through a new high-capacity pipeline, facility debottlenecking initiatives, including new dehydration equipment, and a new meter station. These investments are expected to expand capacity, enhance reliability, and reduce operating costs. Construction of the pipeline system for Phase I is mechanically complete and brownfield construction activities have commenced and are progressing as planned. 2026 Year-end Dimsdale Phase II Expansion 100% $165 million AltaGas reached a positive FID on the Phase II expansion of the Company's Dimsdale Gas Storage Facility in January 2026. The 30 Bcf expansion is supported by multi-year, take-or-pay firm storage service contracts. Phase II includes the construction of additional compression and dehydration capacity, as well as the drilling of five new storage wells, increasing gas storage capacity in the Alberta Montney region. Drilling of the new storage wells is expected to commence in the third quarter of 2026. Mid 2027 NEBC Liquids Expansion 100% $125 million AltaGas has reached positive FID on a liquids expansion and debottlenecking project that will expand NEBC liquids handling and fractionation capacity by 6,000 Bbls/d. The project includes a depropanizer and mercaptan treating at Townsend, debutanizer upgrades, additional loading capacity and additional bullet storage at North Pine, and is expected to be completed by mid-2028. Mid 2028 AltaGas' Estimated Expected Project Ownership Cost (1) Project Description and Status In-Service Interest Date Midstream Projects, continued MVP Mainline Expansion Project ("MVP Boost") 10% The total estimated project cost for MVP Boost is approximately US$400 million to US$540 million, which will be split amongst the partners according to their respective ownership interests. AltaGas' net capital investment is expected to be approximately US$40 million to US$54 million. The MVP Mainline Expansion is a compression-only upgrade that will add 600 MMcf/d of new firm capacity on the existing 303-mile mainline, increasing firm capacity to 2.6 Bcf/d (a 30 percent uplift). The FEED study is complete and following a highly oversubscribed open season, the partners have increased the size of the proposed MVP Boost expansion. In October 2025, the project sponsors filed a formal application with the Federal Energy Regulatory Commission ("FERC") seeking authorization to construct the project, which includes compression upgrades at existing facilities and one new compressor station. The project is targeting a mid-2028 in-service date, which is a year earlier than previously expected. The entire 600 MMcf/d of incremental capacity is fully contracted by investment grade utilities under 20-year take-or-pay agreements. MVP Boost is a highly economic expansion project with an approximate three times capex to EBITDA build multiple, underpinned by robust power generation and data center demand in Northern Virginia and Southeast markets. Mid 2028 MVP Southgate Project 5% Approximately US$370 million to US$430 million, on a gross basis. AltaGas' cost is expected to be approximately US$19 million to US$22 million on a net basis. The MVP Southgate Project is an interstate natural gas pipeline in which AltaGas holds a 5.1 percent equity interest. Redesigned in 2023, the project will extend MVP approximately 31 miles from Pittsylvania County, Virginia to Rockingham County, North Carolina. Following temporary administrative stays related to Clean Water Act Section 401 Water Quality Certifications in Virginia and North Carolina, the 4th U.S. Circuit Court of Appeals lifted the stays in April 2026, allowing construction activities to proceed. Construction subsequently commenced in Virginia, and in June 2026, FERC authorized the commencement of construction activities in North Carolina after determining that all applicable pre-construction requirements had been satisfied. All key regulatory approvals have now been secured, construction activities are advancing, and the project is targeting completion by year-end 2026. AltaGas remains confident that MVP Southgate will be completed and placed into service and continues to support the project as it enables downstream customer connectivity to critical natural gas transportation infrastructure and enhances U.S. energy security. 2026 Year-end AltaGas' Estimated Expected Project Ownership Cost (1) Project Description and Status In-Service Interest Date Utilities Projects (2) Accelerated Utility Pipe Replacement Programs - Washington Gas - D.C. 100% Estimated US$136 million for the period from March 2024 through December 2026 for PROJECT pipes 2, plus additional expenditures for District SAFE upon final approval. The Public Service Commission of the District of Columbia ("PSC of D.C.") has issued several orders extending the second phase of Washington Gas' ARP in D.C. On June 16, 2026, Washington Gas filed an application with the PSC of D.C. to extend PROJECT pipes 2 through December 31, 2026, with an additional spending limit of US$25 million. On June 30, 2026, the PSC of D.C. approved the extension of PROJECT pipes 2 through December 31, 2026 due to the extension of the District SAFE procedural schedule, with an authorized spending limit of US$18 million for previously approved projects. On September 27, 2024, Washington Gas filed its restructured plan for the third phase of its ARP in D.C., District SAFE, requesting US$215 million for the period from March 1, 2025 through December 31, 2027. On March 4, 2026, the PSC of D.C. approved District SAFE, with modifications, for the period from July 1, 2026 through June 30, 2029, with a total allowed spend of US$150 million. On May 4, 2026, the PSC of D.C. granted reconsideration of its approval of District SAFE. Hearings were held in July 2026 and post-hearing briefs are due in August 2026. A final order in the District SAFE case is expected in the second half of 2026. Individual assets are placed into service throughout the program and are captured in rate base through rate riders. Accelerated Utility Pipe Replacement Programs - Washington Gas -Maryland 100% Estimated US$330 million over the five year period from January 2024 to December 2028, plus additional expenditures for subsequent phases upon approval. On December 13, 2023, the Public Service Commission of Maryland ("PSC of MD") affirmed a public law judge's proposed order for the third phase of Washington Gas' ARP ("STRIDE 3") in Maryland, with a total five-year spending cap of US$330 million. On June 1, 2025, the Maryland Next Generation Energy Act ("NGEA") became effective, which includes amendments to the STRIDE law to include additional requirements for a company to recover costs under STRIDE. On October 21, 2025, the PSC of MD directed Washington Gas to, within sixty days, justify how its current STRIDE 3 Plan complies with the NGEA or submit proposed revisions to its plan that would bring it into compliance with the NGEA. Washington Gas made a responsive Compliance Filing on December 20, 2025. On December 29, 2025, the PSC of MD issued a Letter Order limiting further STRIDE work in 2026 to those projects that were active as of the issuance of the Order, pending the PSC of MD's consideration of the NGEA Compliance Filing. On February 26, 2026, the PSC of MD approved the Company's 2026 Project List and surcharges and directed Commission Staff to file proposed regulations to establish standards for NGEA compliance. The 2026 Project List outlook is approximately US$60 million. Individual assets are placed into service throughout the program and are captured in rate base through rate riders. AltaGas' Estimated Expected Project Ownership Cost (1) Project Description and Status In-Service Interest Date Utilities Projects, continued (2) Accelerated Utility Pipe Replacement Programs - Washington Gas -Virginia 100% Estimated US$700 million over the three year period from January 2026 to December 2028, plus additional expenditures for subsequent phases upon approval. On May 26, 2022, the Virginia State Corporation Commission ("SCC of VA") approved Washington Gas' proposed amendment for the 2023 to 2027 SAVE Plan with a total five-year spending cap of US$878 million, which may be exceeded by up to 5 percent. On November 25, 2025, the SCC of VA issued an order shortening the previous five-year authorization by two years, reducing the spending cap from approximately US$878 million to US$413 million through December 2025. This has been replaced with a new three-year authorization of US$700 million, which may be exceeded by up to 5 percent, for the period from 2026 to 2028. Individual assets are placed into service throughout the program and are captured in rate base through rate riders. Accelerated Mains Replacement program ("MRP") and Infrastructure Reliability Improvement Program ("IRIP") - SEMCO ENERGY - Michigan 100% Estimated US$99 million from 2025 to 2027, plus additional expenditures for subsequent phases upon approval. In September 2024, the Michigan Public Service Commission ("MPSC") approved the extension of SEMCO's MRP and IRIP programs for US$46 million and US$68 million, respectively, for the period from 2025 to 2027, which includes US$15 million of spend for 2025 approved through the previous program. In its base rate application filed in February 2026, SEMCO proposed to reset both programs and requested an estimated spend of US$284 million for the period from 2027 to 2031. This would replace the currently approved US$40 million planned for 2027 under the existing programs. A decision is expected in the fourth quarter of 2026. Individual assets are placed into service throughout the program and are captured in rate base through rate riders. Keweenaw Connector Pipeline - SEMCO ENERGY - Michigan 100% Estimated US$135 million In May 2025, SEMCO obtained regulatory approval for the Keweenaw Connector Pipeline, a system reinforcement project in Michigan's Keweenaw Peninsula. This project is designed to improve system resiliency and ensure reliable natural gas service for 14,000 existing customers in the region. In addition to enhancing reliability, the project also increases system capacity, allowing for future growth in the area. Permitting, property acquisition, and design have been completed. The material and construction contracts have been awarded and pipeline construction has begun. 2026 Year-end These amounts are estimates and are subject to change based on various factors. Unless otherwise noted, the amounts reflect AltaGas' share of the various projects. The utility accelerated replacement programs are long-term projects with multiple phases for which expenditures are approved by the regulators and managed in multi-year increments. Utilities Financial Results Three Months Ended June 30 Six Months Ended June 30 2026 2025 2026 2025 Normalized EBITDA $ 142 $ 134 $ 697 $ 635 Income before income taxes $ 33 $ 95 $ 491 $ 541 Revenue $ 971 $ 1,016 $ 3,001 $ 2,886 Operating Statistics Three Months Ended June 30 Six Months Ended June 30 2026 2025 2026 2025 Natural gas deliveries - end-use (Bcf) (1) 16.1 16.4 82.9 89.9 Natural gas deliveries - transportation (Bcf) (1) 26.2 20.7 68.2 65.2 Service sites (thousands) (2) 1,575 1,567 1,575 1,567 Degree day variance from normal - SEMCO (Michigan) (%) (3) (8.5) 3.6 (2.3) 0.5 Degree day variance from normal - Washington Gas (D.C.) (%) (3) (4) (14.2) (31.1) 2.2 (8.5) Retail energy marketing - gas sales volumes (Mmcf) 8,583 11,572 31,844 34,077 Retail energy marketing - electricity sales volumes (GWh) 3,688 3,575 7,501 7,264 Bcf is one billion cubic feet. Service sites reflect all of the service sites of the utilities, including transportation and non-regulated business lines. A degree day is a measure of coldness determined daily as the number of degrees the average temperature during the day in question is below 65 degrees Fahrenheit. Degree days for a particular period are determined by adding the degree days incurred during each day of the period. Normal degree days for a particular period are the average of degree days during the prior 15 years for SEMCO and during the prior 30 years for Washington Gas. A positive number indicates that weather is colder than normal and a negative number indicates that weather is warmer than normal. In certain of Washington Gas' jurisdictions (Virginia and Maryland) there are billing mechanisms in place which are designed to eliminate the effects of variance in customer usage caused by weather and other factors such as conservation. In D.C., there is no weather normalization billing mechanism nor does Washington Gas hedge to offset the effects of weather. As a result, colder or warmer weather will result in variances to financial results. Three Months Ended June 30 Normalized EBITDA in the Utilities segment was $142 million in the second quarter of 2026, compared to $134 million in the same quarter of 2025. The increase in normalized EBITDA was mainly due to higher contributions from WGL's retail business, higher revenue associated with ARP investments, the positive net impact of the 2024 D.C. and 2025 Virginia rate cases, and customer growth. These factors were partially offset by higher operating and administrative expenses, including long-term incentive compensation due to AltaGas' rising share price, and decreased asset optimization activities at Washington Gas. The Utilities segment income before income taxes was $33 million in the second quarter of 2026, compared to $95 million in the same quarter of 2025. The decrease was mainly due to unrealized losses on risk management contracts compared to unrealized gains for the same quarter of 2025 and higher depreciation and amortization expense, partially offset by the same previously referenced factors impacting normalized EBITDA. Six Months Ended June 30 The Utilities segment reported normalized EBITDA of $697 million in the first half of 2026, compared to $635 million in the same period in 2025. The increase in normalized EBITDA was mainly due to the positive net impact of the 2024 D.C. and 2025 Virginia rate cases, the gain on partial settlement of Washington Gas' post-retirement benefit pension plan in the first quarter of 2026, increased asset optimization activities at Washington Gas, higher revenue associated with ARP investments, and customer growth. These factors were partially offset by higher operating and administrative expenses, including long-term incentive compensation due to AltaGas' rising share price, the impact of the lower average U.S./Canadian dollar exchange rate, and lower contributions from WGL's retail business. The Utilities segment income before income taxes was $491 million in the first half of 2026, compared to $541 million in the same period in 2025. The decrease was mainly due to unrealized losses on risk management contracts compared to unrealized gains in the same period of 2025 and higher depreciation and amortization expense, partially offset by the same previously referenced factors impacting normalized EBITDA and lower transition and restructuring costs. Utilities Regulatory Updates Utility/ Jurisdiction Date Filed Request Status Expected Timing of Decision Washington Gas -Virginia July 2025 US$104 million gross increase in base rates, including US$39 million currently collected through the SAVE surcharge. On a net basis, the incremental amount of the base rate increase requested was US$65 million. On July 31, 2025, Washington Gas filed an application with the SCC of VA seeking authority to increase existing rates and charges for natural gas service in the Commonwealth of Virginia. The application requested an annual revenue increase of approximately US$104 million based on a 10.9 percent return on equity. Of the requested increase, US$39 million related to rolling expenditures incurred under the SAVE Plan to base rates and resetting the associated surcharge, while US$65 million represented an increase to base rate revenues. Under the Order for Notice and Hearing issued on September 5, 2025, Washington Gas implemented interim rates, subject to refund, effective December 30, 2025. Intervenor testimony was received in April 2026 and Washington Gas filed rebuttal testimony on May 15, 2026. Washington Gas, Commission Staff, and the City of Alexandria subsequently entered into a stipulation agreement, reflecting an annual revenue increase of US$74 million, inclusive of the US$39 million SAVE roll-in to base rates, and a 9.8 percent return on equity. A hearing on the stipulation was held on June 9, 2026. On July 13, 2026, the Hearing Examiner issued a report recommending that the SCC of VA approve the proposed stipulation. Second half of 2026. Washington Gas -Maryland December 2025 US$82 million gross increase in base rates, including US$15 million currently collected through the STRIDE surcharge. On a net basis, the incremental amount of the base rate increase requested was US$67 million. On December 29, 2025, Washington Gas filed an application seeking authority to increase existing rates and charges for natural gas service in Maryland. The application requests an annual revenue increase of approximately US$82 million based on a 10.9 percent return on equity. Of the requested increase, US$15 million relates to costs currently recovered through the STRIDE Plan surcharge, while US$67 million represents an increase in base rate revenues. Intervenor testimony was filed on March 31, 2026 and Washington Gas submitted rebuttal testimony on April 28, 2026. An evidentiary hearing was held during the week of May 18, 2026, and post-hearing briefs have been filed. On July 27, 2026, the PSC of MD issued a Final Order approving an annual revenue increase of approximately US$38 million, inclusive of certain costs currently recovered through the STRIDE Plan surcharge, based on a 9.4 percent return on equity. Washington Gas continues to review the impact of the order and requests for reconsideration are du...

View stock analysis, news, and events for Altagas Ltd.