ALTAGAS REPORTS STRONG SECOND QUARTER 2025 RESULTS

Executive Summary

• AltaGas reported strong second quarter 2025 financial results, with normalized EPS more than doubling year-over-year to $0.27 and normalized EBITDA increasing 16% to $342 million.
• The company reiterated its full-year 2025 guidance, targeting normalized EBITDA of $1,775–$1,875 million and normalized EPS of $2.10–$2.30, driven by robust performance in its Midstream and Utilities segments.
• Significant operational milestones include record LPG export volumes, new long-term tolling agreements with Keyera, Pembina, and BASF, and positive progress on major capital projects including REEF, Pipestone II, and the Keweenaw Connector Pipeline.

Key Details

• Financial Performance (Q2 2025 vs Q2 2024):
  • Normalized EPS: $0.27 (vs $0.14).
  • GAAP EPS: $0.59 (vs loss of $0.14).
  • Normalized EBITDA: $342 million (vs $295 million), a 16% increase.
  • Income before income taxes: $226 million (vs loss of $46 million).
  • Adjusted net debt to normalized EBITDA: 4.6x (down from 5.1x at year-end 2024).
• Segment Results:
  • Midstream: Normalized EBITDA of $215 million (up 23% YoY) and income before taxes of $263 million (up from $46 million). Growth driven by global exports, higher Montney gas processing volumes (+12%), and improved Mountain Valley Pipeline (MVP) earnings.
  • Utilities: Normalized EBITDA of $134 million (up 10% YoY) and income before taxes of $95 million (up from $31 million). Growth driven by modernization investments, asset optimization, and colder weather in Michigan.
  • Corporate/Other: Normalized EBITDA loss of $7 million (vs loss of $2 million), primarily due to higher employee incentive plan expenses.
• Operational Highlights:
  • Record LPG export volumes of 127,814 Bbl/d to Asia (up 4% YoY), including 12 VLGCs from Ridley Island and 8 from Ferndale.
  • Gas processing volumes up 8% YoY, led by Montney assets.
  • Washington Gas filed a rate case in Virginia seeking a $65 million base rate increase, with interim rates expected by early 2026.
• New Commercial Agreements:
  • Keyera Corp: Committed to an additional 12,500 Bbl/d of LPG tolling capacity over 15 years starting in 2028, doubling total contracted capacity to 25,000 Bbl/d.
  • Pembina Pipeline Corporation: Signed long-term tolling agreements for an additional 10,000 Bbl/d starting April 2026 and another 10,000 Bbl/d starting April 2027.
  • BASF Intertrade AG: Signed a long-term butane export capacity agreement at the Ridley Island Energy Export Facility (REEF).
• Project Updates:
  • REEF: On budget and on track for year-end 2026 in-service date (ISD). Site prep complete; LPG accumulators 85% fabricated. Evaluating options to increase Phase I throughput by 15,000–20,000 Bbl/d in the first year post-ISD, with potential for up to 60,000 Bbl/d more by end of decade.
  • Pipestone II: On budget and on track for late 2025 ISD; construction over 85% complete. Fully contracted under long-term take-or-pay agreements.
  • Keweenaw Connector Pipeline: Received regulatory approval in Michigan. 30-mile pipeline with ~$120 million capital cost, expected ISD in 2027.
  • DTE Energy Interconnect: SEMCO awarded contract to construct natural gas interconnect for DTE Energy's Belle River coal-to-natural gas conversion, expected completion Q4 2025.
• Guidance & Capital:
  • Reiterated 2025 Normalized EBITDA guidance of $1,775–$1,875 million.
  • Reiterated 2025 Normalized EPS guidance of $2.10–$2.30.
  • Maintaining disciplined, self-funded 2025 capital program of ~$1.4 billion (excluding ARO), with ~51% allocated to Utilities and ~45% to Midstream.
• Dividends:
  • Board approved common share dividend of $0.315 per share (Record Date: Sept 16, 2025; Payment Date: Sept 29, 2025).
  • Preferred share dividends approved for Series A ($0.19125), Series B ($0.33422), and Series G ($0.376063) for the period June 30–Sept 29, 2025.

Notable Quotes

• "We're pleased with our strong second-quarter performance, which reflects continued execution of our strategic priorities and positions us well to meet our 2025 guidance," said Vern Yu, President and CEO of AltaGas.
• "Customer demand for our open-access export terminals is robust, as reflected in the agreements we've announced with Keyera, BASF, and Pembina."
• "We're excited about the long-term outlook for our Utilities... We're making significant investments to connect new customers and modernize our network to enhance long-term safety, reliability, and energy security."