ALTAGAS REPORTS RECORD THIRD QUARTER RESULTS
Global Export Performance Drives Enterprise Growth and Canadian Trade Diversification
CALGARY, AB, Oct. 29, 2026 /CNW/ -- AltaGas Ltd. ("AltaGas" or the "Company") (TSX: ALA) reported third quarter 2026 financial results and provided an update on its operations, growth initiatives and corporate developments.
Third Quarter Highlights
(all financial figures are unaudited and in Canadian dollars unless otherwise noted)
Financial Highlights
- Normalized EBITDA1 was $389 million in the third quarter of 2026, compared to $268 million in the third quarter of 2025. Loss before income taxes was $30 million in the third quarter of 2026, compared to $20 million in the third quarter of 2025.
- Normalized EBITDA growth was principally driven by stronger global export volumes and margins, contributions from Pipestone II, and stronger fractionation and liquids handling performance.
- Normalized EPS1 was $0.29 in the third quarter of 2026, compared to $0.04 in the third quarter of 2025. GAAP EPS2 was a loss of $0.07 in the third quarter of 2026 compared to a loss of $0.08 in the third quarter of 2025.
- AltaGas is positioned to finish the year with momentum and expects to deliver financial results towards the high-end of its recently increased 2026 guidance range.
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(1) Non-GAAP measure; see discussion and reconciliation to US GAAP financial measures in the advisories of this news release or in AltaGas' Management's Discussion and Analysis (MD&A) as at and for the period ended September 30, 2026, which is available on www.sedarplus.ca. (2) GAAP EPS is equivalent to net income (loss) applicable to common shares divided by shares outstanding. |
Operational Highlights
- AltaGas exported a record 147,176 Bbl/d of liquid petroleum gases ("LPG") to Asia across 24 Very Large Gas Carriers ("VLGCs") in the third quarter of 2026, an 11 percent year-over-year increase.
- In October, the Company took delivery of its fourth contracted VLGC, with two additional time charters scheduled for 2027 and 2029, which will continue to support export growth and maritime risk management.
- The Company continued to invest in the modernization of its Utilities system with roughly $120 million of modernization spending during the quarter, bringing year-to-date pipeline replaced to over 40 miles.
Business Development and Growth
- Construction of Phase I of the Ridley Island Energy Export Facility ("REEF") continues to progress in line with the revised project plan and remains on track for first quarter 2027 completion. With Phase I approximately 90 percent complete, focus is shifting toward commissioning activities.
- Construction on Phase I and Phase II of the Dimsdale gas storage expansion projects remain on time and budget. Phase I facility is over 80 percent complete and is on track to enter service by 2026 year-end.
- The RIPET Methanol Removal project is expected to achieve mechanical completion in the coming weeks, with start-up on track for its 2026 year-end in-service date.
- SEMCO executed an agreement to acquire Xcel Energy's Michigan natural gas operations that will add roughly US$20 million of rate base and 5,800 customers while expanding its Upper Peninsula service territory.
Regulatory Updates
- In Virginia, Washington Gas received approval for a US$74 million revenue increase, including US$39 million of modernization rider roll-in, and a mid-point allowed ROE increase to 9.80 percent from 9.65 percent.
- In Michigan, SEMCO received approval for a US$33 million revenue increase effective January 1, 2027. Modernization programs were extended through 2031, supporting US$271 million of additional investment.
Balance Sheet
- Trailing adjusted net debt to normalized EBITDA1 exited the quarter at 4.3x, including 50 percent debt treatment on hybrids and preferred shares. This is below AltaGas' 4.5x - 5.0x target leverage range.
CEO Message
"AltaGas delivered another strong quarter, with normalized EBITDA increasing 45 percent year-over-year, driven by exceptional performance across our Midstream business," said Vern Yu, President and Chief Executive Officer of AltaGas. "We are carrying strong momentum into the fourth quarter and now expect to deliver full year financial results towards the high-end of our 2026 guidance ranges.
"In our Utilities, recent regulatory outcomes in Virginia and Michigan support our continued investment in the safety, reliability and resilience of our natural gas systems, which provide customers with the lowest cost home heating option. The extension of SEMCO's asset modernization programs through 2031, together with our agreement to acquire Xcel Energy's Michigan natural gas operations, reinforces our long-term commitment to grow in Michigan.
"The outlook for Canadian energy remains exceptionally strong. Growing natural gas and crude oil egress, including the recent FID on LNG Canada Phase 2, is expected to support continued production growth across Western Canada. This growth will drive incremental LPG supply, creating additional export demand that AltaGas is uniquely positioned to capture through its integrated Midstream platform, connecting Canadian LPGs to premium global markets. This quarter we exported over 147,000 barrels per day of LPGs to Asia, a quarterly record and an 11 percent increase over last year.
"Our open access export platform ensures that our tolling customers receive the benefit of global connectivity while driving material trade diversification for Canada. With REEF now 90 percent complete, our focus has shifted to commissioning and operational readiness ahead of start-up in the first quarter of 2027.
"With a strong balance sheet and clear strategic priorities, we remain focused on executing safely, delivering durable earnings growth and creating long-term value for shareholders."
Forward Focus, Guidance and Funding
Following a strong third quarter of 2026, AltaGas is expecting to deliver financial results towards the high-end of the recently increased guidance range, including:
- 2026 Normalized EBITDA guidance of $2.0 billion–$2.1 billion, compared to actual normalized EBITDA of $1.86 billion and income before taxes of $1.03 billion in 2025; and
- 2026 Normalized EPS guidance of $2.35–$2.60, compared to actual normalized EPS of $2.23 and GAAP EPS of $2.48 in 2025.
AltaGas is focused on delivering stable 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.
AltaGas is maintaining a disciplined, self-funded 2026 capital program of approximately $1.8 billion, excluding asset retirement obligations ("ARO"). The Company is allocating approximately 61 percent of its consolidated 2026 capital to its Utilities business, approximately 36 percent to the Midstream business, and the balance to the Corporate/Other segment.
Results by Segment
Normalized EBITDA (1) | Three Months Ended September 30 | |
($ millions) | 2026 | 2025 |
Utilities | $ 66 | $ 68 |
Midstream | 337 | 204 |
Corporate/Other | (14) | (4) |
Normalized EBITDA (1) | $ 389 | $ 268 |
(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 September 30 | |
($ millions) | 2026 | 2025 |
Utilities | $ (28) | $ (20) |
Midstream | 174 | 128 |
Corporate/Other | (176) | (128) |
Income Before Income Taxes | $ (30) | $ (20) |
Business Performance
Midstream
The Midstream segment reported normalized EBITDA of $337 million in the third quarter of 2026 compared to $204 million in the third quarter of 2025, while income before income taxes was $174 million in the third quarter of 2026 compared to $128 million in the third quarter of 2025. The 65 percent year-over-year increase in normalized Midstream EBITDA was driven by strong global export volumes and margins, contributions from Pipestone II and higher fractionation and liquids handling contributions.
AltaGas exported a record 147,176 Bbl/d of LPGs to Asia in the third quarter of 2026 across 24 VLGCs, reflecting strong global demand for Canadian LPG. Consolidated export volumes included approximately 89,134 Bbl/d at RIPET and approximately 58,042 Bbl/d at Ferndale. AltaGas continues to see strong interest from a diverse range of counterparties across Asia, with ongoing discussions around long-term contracting opportunities to diversify the region's supply and enhance long-term energy security.
The Company's Montney infrastructure continued to deliver strong growth with third quarter gathering and processing ("G&P") volumes increasing 20 percent year-over-year, driven by the addition of Pipestone II late in 2025 and higher utilization at Townsend. AltaGas' larger Pipestone complex averaged 94 percent utilization in the third quarter reflecting continued growth from Alberta Montney volumes.
Since October 2, 2026, AltaGas has been managing through a labour strike at Trigon Pacific Terminals. There has been no material impact on RIPET operations to date. AltaGas expects there will be some impact in the coming weeks and is actively implementing mitigation measures. Inclusive of this impact, AltaGas continues to expect full year 2026 results towards the upper end of its recently increased guidance ranges.
Growth Projects
REEF Phase I
Phase I construction of REEF is advancing in line with the revised plan with commercial operations expected in the first quarter of 2027. Onshore execution continues to progress with major equipment installation complete and the railroad utility corridor entering its final phase.
Construction of the 1.2-kilometer jetty, which had previously experienced construction delays due to severe weather, is complete. The Company recently installed the main loading platform, marine loading arms, and fire monitor towers. Focus has shifted to execution of the suction anchor and mooring system installation.
REEF Optimizations
The Company's REEF Optimization I project remains on time and on budget for a second half of 2027 in-service date, and will add approximately 30,000 Bbl/d of propane export capacity.
AltaGas continues to advance REEF's Optimization II project, which will add 60,000 Bbl/d of incremental LPG capacity. Key regulatory permits are secured and final cost estimates are nearing completion. REEF's capital-efficient expansions will further strengthen AltaGas' ability to meet growing Asian demand for North American LPGs.
RIPET
The RIPET Methanol Removal project is expected to achieve mechanical completion and enter the commissioning phase in the coming weeks, with start up on track for its 2026 year-end in-service date. The approximately $55 million project remains on budget and will ensure RIPET propane export volumes have the product specifications to reach all Asian markets.
Dimsdale Storage Expansion
Construction of the Dimsdale Phase I and II storage expansions remain on time and on budget. Phase I, which is expected to add six Bcf of storage capacity by 2026 year-end, is nearing completion, with the pipeline flowing gas and the remaining facility work over 80 percent complete. Phase II is expected to provide an additional 30 Bcf of gas storage by mid-2027. The Phase II facility is approximately 40 percent complete while the wells are approximately 50 percent complete.
NEBC Liquids Expansion
Construction of the NEBC Liquids Expansion project is planned to commence in early 2027 and has an expected in-service-date of mid-2028. Once complete, the project will provide an additional 6,000 Bbl/d of fractionation capacity in NEBC and improved liquids handling to serve production growth in the region.
Mountain Valley Pipeline Growth Projects
MVP Southgate construction continues to advance, with more than 70% of the pipeline complete and project completion expected by year-end 2026. AltaGas expects to incur approximately US$19 million of 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 remains 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$23.20/Bbl while tolling volumes remain in-line with previously disclosed levels of approximately 60 percent of export volumes.
Approximately 86 percent of the Company's remaining 2026 expected frac exposed volumes are hedged at US$23.50/Bbl, prior to transportation costs. AltaGas continues to actively manage risk across the Midstream platform through commercial contracting and a systematic hedging program to manage its commodity price exposure.
For the remainder of 2026, AltaGas has hedged materially all of its expected Baltic freight exposure through time charters, financial hedges, and tolled volumes.
Midstream Hedge Program | Remainder of 2026 |
Global Exports volumes hedged (%) (1) | 91 |
Average propane/butane FEI to North America hedge (US$/Bbl) (2) (3) | 23.20 |
Fractionation volume hedged (%) (3) | 86 |
Frac spread hedge rate - (US$/Bbl) (3) | 23.50 |
(1) | Approximate expected volumes hedged based on AltaGas' internally assumed export volumes. Hedged amounts include contracted tolling volumes and financial hedges. |
(2) | Does not include physical differential to FSK for C3 volumes. Butane is hedged as a percentage of WTI. |
(3) | Approximate average for the period. |
Utilities
Utilities reported normalized EBITDA of $66 million in the third quarter of 2026 compared to $68 million in the third quarter of 2025, while loss before income taxes was $28 million in the third quarter of 2026 compared to $20 million in the third quarter of 2025. The decrease in normalized EBITDA was primarily driven by higher operating and administrative costs, partially offset by revenue growth from system modernization investments and favourable asset optimization activity.
Regulatory Updates
AltaGas received final orders on its two outstanding rate cases in Michigan and Virginia, which marks the completion of four rate cases in the last 12 months and continued advancement of our Utilities' strategic priority of making timely regulatory filings. Together, these outcomes reduce regulatory uncertainty and provide greater visibility into future earnings and cash flow growth. They also support further investment in our regulated asset base and ensure the Company is positioned to continue to deliver safe, reliable and affordable natural gas to fuel everyday life.
In Virginia, the State Corporation Commission ("SCC of VA") provided Washington Gas approval for a total annual rate increase of US$74 million, including approximately US$35 million in incremental revenue and US$39 million in revenue previously recovered through pipeline modernization riders that will now be incorporated into base rates. It also authorized an allowed ROE range of 9.30 percent to 10.30 percent, with a midpoint of 9.80 percent, an increase from 9.65 percent previously. This outcome builds on Virginia's November 2025 approval of an extension to the three-year pipeline modernization program, which authorizes approximately US$700 million of investment over 2026–2028.
In Michigan, the Michigan Public Service Commission ("MPSC") provided SEMCO approval for a US$33 million annual revenue increase and an authorized ROE of 9.85 percent on a 50 percent equity / 50 percent debt capital structure. New rates take effect January 1, 2027, allowing for full first quarter of winter revenue contribution. The approval also secured extensions of SEMCO's Accelerated Mains Replacement Program ("MRP") and Infrastructure Reliability Improvement Program ("IRIP") through 2031, supporting total approved spending of US$271 million. The extension of these programs supports SEMCO's continued investment in the safety, reliability and resilience of the natural gas system, which delivers the lowest cost home heating to customers.
Michigan Acquisition
AltaGas executed an agreement to acquire approximately 5,800 customers in Michigan's Upper Peninsula from Xcel Energy that will add approximately US$20 million of rate base.
SEMCO looks forward to supporting these customers in their transition to a new service provider and continuing to invest in these assets to ensure long-term safe, reliable and affordable energy service following the anticipated close in the second half of 2027, pending regulatory approvals.
Growth Projects
Construction of the Keweenaw Connector Pipeline continued to progress during the quarter and is now approximately 85 percent complete. Major construction milestones include completion of mainline grading, pipe stringing, bending, welding, coating and ditching, with backfill activities nearing completion. The project remains on schedule for its planned year-end 2026 in-service date and is expected to enhance system reliability and support the long-term energy needs of customers throughout Michigan's Upper Peninsula.
AltaGas continues to make progress on its data center growth strategy, with two projects under agreement and advancing in Maryland and Virginia. The Company is leveraging its regulated utility platform to support growing power demand through investments in pipeline interconnections and related infrastructure, while maintaining a disciplined capital allocation approach.
AltaGas invested $372 million in Utilities capital during the quarter, including investing approximately $120 million towards the Company's various asset modernization programs and $30 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 $14 million for the third quarter of 2026, compared to a $4 million loss reported in the same quarter of 2025. Loss before income taxes in the Corporate/Other segment was $176 million in the third quarter of 2026, compared to a loss of $128 million in the same quarter of 2025. The decrease in normalized EBITDA was mainly driven by higher expenses related to employee incentive plans and increased spend on digital projects.
Consolidated Financial Results
Three Months Ended September 30 | ||
($ millions) | 2026 | 2025 |
Normalized EBITDA (1) | $ 389 | $ 268 |
Add (deduct): | ||
Depreciation and amortization | (145) | (125) |
Interest expense | (118) | (116) |
Income tax expense, net of normalizing items | (20) | (3) |
Preferred share dividends | (3) | (4) |
Other (2) | (12) | (9) |
Normalized net income (1) | $ 91 | $ 11 |
Loss before income taxes | $ (30) | $ (20) |
Net loss applicable to common shares | $ (21) | $ (25) |
Normalized funds from operations (1) | $ 249 | $ 148 |
Cash from operations | $ 122 | $ 34 |
($ 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) | 0.29 | 0.04 |
Normalized net income - diluted (1) | 0.29 | 0.04 |
Net loss per common share - basic | (0.07) | (0.08) |
Net loss per common share - diluted | (0.07) | (0.08) |
(1) | Non‑GAAP financial measure; see discussion in Non-GAAP Financial Measures section at the end of this news release. |
(2) | "Other" includes accretion expense, net income applicable to non-controlling interests, foreign exchange gains (losses), and unrealized foreign exchange losses (gains) on intercompany accounts payable and accounts receivables balances. |
(3) | Weighted average. |
Normalized EBITDA for the third quarter of 2026 was $389 million compared to $268 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.
Loss before income taxes was $30 million for the third quarter of 2026 compared to $20 million for the same quarter in 2025. Performance for the third quarter of 2026 was mainly due to higher unrealized losses on risk management contracts, higher depreciation and amortization expense, and higher foreign exchange losses, partially offset by the same previously referenced factors impacting normalized EBITDA. Please refer to the "Three Months Ended September 30" section of the Q3 2026 Management's Discussion and Analysis ("MD&A") for further details on the variance in loss before income taxes.
Normalized net income was $91 million or $0.29 per share for the third quarter of 2026, compared to $11 million or $0.04 per share reported for the same quarter of 2025. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA, partially offset by higher depreciation and amortization expense, higher income tax expense net of normalization adjustments, and higher foreign exchange losses net of normalization adjustments.
Net loss applicable to common shares for the third quarter of 2026 was $21 million ($0.07 per share), compared to $25 million ($0.08 per share) for the same quarter of 2025. The decreased loss was primarily due to higher income tax recovery and the absence of a loss on the redemption of preferred shares recognized in the third quarter of 2025, partially offset by the same previously referenced factors impacting loss before income taxes.
Normalized FFO was $249 million or $0.80 per share for the third quarter of 2026, compared to $148 million or $0.49 per share for the same quarter in 2025. The increase was mainly due to the same previously referenced factors impacting normalized EBITDA (after adjusting for non-cash items), partially offset by higher current income tax expense net of normalization adjustments and higher foreign exchange losses.
Cash from operations in the third quarter of 2026 was $122 million ($0.39 per share), compared to $34 million ($0.11 per share) for the same quarter of 2025. The increase was mainly due to higher earnings 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.
Interest expense for the third quarter of 2026 was $118 million, compared to $116 million for the same quarter in 2025. The increase was mainly due to higher average debt balances, the issuance of additional subordinated hybrid notes in the third quarter of 2025, and the impact of a higher average U.S./Canadian dollar exchange rate, partially offset by higher capitalized interest. Interest expense recorded on the subordinated hybrid notes in the third quarter of 2026 was $37 million, compared to $35 million for the same quarter of 2025.
Income tax recovery was $14 million for the third quarter of 2026, compared to $6 million for the same quarter of 2025. The increase was mainly due to a higher loss before income taxes.
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. | 31-Dec-26 | 16-Dec-26 |
Series G Preferred Shares | $0.376063 | 29-Sep-26 to 30-Dec-26 | 31-Dec-26 | 16-Dec-26 |
(1) Dividends on common shares and preferred shares are eligible dividends for Canadian income tax purposes. |
Conference Call and Webcast
AltaGas will hold a conference call today, October 29, 2026, at 9:00 a.m. MT (11:00 a.m. ET) to discuss third quarter of 2026 results and other corporate developments.
Date: Thursday, October 29, 2026
Time: 9:00 a.m. MT (11:00 a.m. ET)
Webcast: Webcast Link
Dial-in (Audio only): +1 289 514 5100 or toll free at +1 800 717 1738
Shortly after the conclusion of the call a replay will be available on the Company's website or by dialing +1 289 819 1325 or toll free +1 888 660 6264. Passcode 61557#.
AltaGas' Consolidated Financial Statements and accompanying notes for the third quarter of 2026, as well as its related MD&A, are now available online at www.altagas.ca. All documents will be filed with the Canadian securities regulatory authorities and will be posted under AltaGas' SEDAR+ profile at www.sedarplus.ca.
Non-GAAP Measures
This news release contains references to certain financial measures that do not have a standardized meaning prescribed by U.S. GAAP and may not be comparable to similar measures presented by other entities. The non-GAAP measures and their reconciliation to U.S. GAAP financial measures are shown below and within AltaGas' Management's Discussion and Analysis (MD&A) as at and for the period ended September 30, 2026. These non-GAAP measures provide additional information that Management believes is meaningful regarding AltaGas' operational performance, liquidity and capacity to fund dividends, capital expenditures, and other investing activities. Readers are cautioned that these non-GAAP measures should not be construed as alternatives to other measures of financial performance calculated in accordance with U.S. GAAP.
Normalized EBITDA
Three Months Ended September 30 | Nine Months Ended September 30 | |||
($ millions) | 2026 | 2025 | 2026 | 2025 |
Income (loss) before income taxes (GAAP financial measure) | $ (30) | $ (20) | $ 560 | $ 719 |
Add: | ||||
Depreciation and amortization | 145 | 125 | 417 | 379 |
Interest expense | 118 | 116 | 354 | 345 |
EBITDA | $ 233 | $ 221 | $ 1,331 | $ 1,443 |
Add (deduct): | ||||
Transaction costs related to acquisitions and dispositions (1) | 1 | 4 | 3 | 6 |
Unrealized losses (gains) on risk management contracts (2) | 141 | 40 | 240 | (176) |
Losses (gains) on sale of assets (3) | -- | -- | (2) | 3 |
Transition and restructuring costs (4) | 4 | 1 | 13 | 14 |
Provisions on assets | -- | -- | -- | 2 |
Accretion expenses | 2 | 2 | 5 | 4 |
Foreign exchange losses (5) | 8 | -- | 8 | 3 |
Normalized EBITDA | $ 389 | $ 268 | $ 1,598 | $ 1,299 |
(1) | Comprised of transaction costs related to acquisitions and dispositions of assets and/or equity investments in the period. These costs are included in the "operating and administrative" line item on the Consolidated Statements of Income (Loss). Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. |
(2) | Included in the "revenue", "cost of sales", and "foreign exchange losses" line items on the Consolidated Statements of Income (Loss). Please refer to Note 12 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 2026 for further details regarding AltaGas' risk management activities. |
(3) | Included in the "other income" line item on the Consolidated Statements of Income (Loss). |
(4) | 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 (Loss). |
(5) | Excludes unrealized losses (gains) on foreign exchange contracts that are recorded within the "foreign exchange losses" line item on the Consolidated Statements of Income (Loss). 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 (Loss) using income (loss) 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 September 30 | Nine Months Ended September 30 | |||
($ millions) | 2026 | 2025 | 2026 | 2025 |
Net income (loss) applicable to common shares (GAAP financial measure) | $ (21) | $ (25) | $ 414 | $ 542 |
Add (deduct) after-tax: | ||||
Transaction costs related to acquisitions and dispositions (1) | -- | 3 | 2 | 4 |
Unrealized losses (gains) on risk management contracts (2) | 107 | 32 | 183 | (133) |
Losses (gains) on sale of assets (3) | -- | -- | (1) | 2 |
Provisions on assets | -- | -- | -- | 1 |
Transition and restructuring costs (4) | 5 | 1 | 12 | 11 |
Loss on redemption of preferred shares | -- | 4 | -- | 4 |
Unrealized foreign exchange losses (gains) on intercompany | -- | (4) | (7) | 3 |
Normalized net income | $ 91 | $ 11 | $ 603 | $ 434 |
(1) | Comprised of transaction costs related to acquisitions and dispositions of assets and/or equity investments in the period. The pre-tax costs are included in the "operating and administrative" line item on the Consolidated Statements of Income (Loss). Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. |
(2) | The pre-tax amounts are included in the "revenue", "cost of sales", and "foreign exchange losses" line items on the Consolidated Statements of Income (Loss). Please refer to Note 12 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 2026 for further details regarding AltaGas' risk management activities. |
(3) | The pre-tax amounts are included in the "other income" line item on the Consolidated Statements of Income (Loss). |
(4) | 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 (Loss). After-tax restructuring cost normalizations also include the normalization of tax expenses related to legal entity restructuring. |
(5) | 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 (Loss). |
Normalized net income and normalized net income per share are used by Management to enhance the comparability of AltaGas' earnings, as these metrics reflect the underlying performance of AltaGas' business activities. Normalized 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 September 30 | Nine Months Ended September 30 | |||
($ millions) | 2026 | 2025 | 2026 | 2025 |
Cash from operations (GAAP financial measure) | $ 122 | $ 34 | $ 1,186 | $ 1,026 |
Add (deduct): | ||||
Net change in operating assets and liabilities | 122 | 106 | (21) | (123) |
Asset retirement obligations settled | -- | 3 | 2 | 4 |
Funds from operations | $ 244 | $ 143 | $ 1,167 | $ 907 |
Add (deduct): | ||||
Transaction costs related to acquisitions and dispositions (1) | 1 | 4 | 3 | 6 |
Transition and restructuring costs (2) | 4 | 1 | 13 | 14 |
Normalized funds from operations | $ 249 | $ 148 | $ 1,183 | $ 927 |
(1) | Comprised of transaction costs related to acquisitions and dispositions of assets and/or equity investments in the period. These costs exclude non-cash amounts and are included in the "operating and administrative" line item on the Consolidated Statements of Income (Loss). Transaction costs include expenses, such as legal fees, which are directly attributable to the acquisition or disposition. |
(2) | Comprised of transition and restructuring costs (including CFO transition). These costs are included in the "operating and administrative" line item on the Consolidated Statements of Income (Loss). |
Normalized funds from operations and funds from operations are used to assist Management and investors in analyzing the liquidity of the Corporation. Management uses these measures to understand the ability to generate funds for capital investments, debt repayment, dividend payments, and other investing activities.
Funds from operations and normalized funds from operations as presented should not be viewed as an alternative to cash from operations or other cash flow measures calculated in accordance with GAAP.
Net Debt, Adjusted Net Debt, and Adjusted Net Debt to Normalized EBITDA
($ millions, except adjusted net debt to normalized EBITDA) | September 30, | December 31, |
Short-term debt | $ 14 | $ 231 |
Current portion of long-term debt (1) | 377 | 469 |
Current portion of finance lease liabilities | 28 | 24 |
Long-term debt (2) | 7,942 | 7,010 |
Finance lease liabilities | 133 | 124 |
Subordinated hybrid notes (3) | 2,203 | 2,159 |
Total debt | 10,697 | 10,017 |
Less: cash and cash equivalents | (219) | (99) |
Net debt | $ 10,478 | $ 9,918 |
Add (deduct): | ||
Current portion of finance lease liabilities | (28) | (24) |
Finance lease liabilities | (133) | (124) |
50 percent debt treatment of subordinated hybrid notes | (1,102) | (1,080) |
50 percent debt treatment of preferred shares | 98 | 98 |
Adjusted net debt | $ 9,313 | $ 8,788 |
Adjusted net debt to normalized EBITDA (4) | 4.3 | 4.7 |
(1) | Net of debt issuance costs, unamortized premiums, and unamortized discounts of less than $1 million as at September 30, 2026 (December 31, 2025 - less than $1 million). |
(2) | Net of debt issuance costs, unamortized premiums, and unamortized discounts of $31 million as at September 30, 2026 (December 31, 2025 - $29 million). |
(3) | Net of debt issuance costs of $24 million as at September 30, 2026 (December 31, 2025 - $25 million). |
(4) | Calculated as adjusted net debt at the balance sheet date, divided by normalized EBITDA for the preceding 12 month period. |
Net debt, adjusted net debt, and adjusted net debt to normalized EBITDA are used by the Corporation to monitor its capital structure and assess its capital structure relative to earnings. They are also used as measures of the Corporation's overall financial strength and is presented to provide this perspective to analysts and investors. Net debt is defined as short-term debt, plus current and long-term portions of long-term debt, current and long-term portions of finance lease liabilities, and subordinated hybrid notes, less cash and cash equivalents. Adjusted net debt is defined as net debt less current and long-term portions of finance lease liabilities and 50 percent of subordinated hybrid notes, plus 50 percent of preferred shares. Adjusted net debt to normalized EBITDA is calculated by dividing adjusted net debt as defined above by normalized EBITDA for the preceding 12 month period.
Invested Capital and Net Invested Capital
Three Months Ended September 30 | Nine Months Ended September 30 | |||
($ millions) | 2026 | 2025 | 2026 | 2025 |
Cash used in investing activities (GAAP financial measure) | $ 519 | $ 425 | $ 1,408 | $ 1,134 |
Add (deduct): | ||||
Net change in non-cash capital expenditures (1) | 103 | 68 | 47 | 87 |
Contributions from non-controlling interests (2) | (76) | (105) | (216) | (251) |
Net invested capital | $ 546 | $ 388 | $ 1,239 | $ 970 |
Disposal of equity method investments | -- | -- | 2 | -- |
Invested capital | $ 546 | $ 388 | $ 1,241 | $ 970 |
(1) | Comprised of non-cash capital expenditures included in the "accounts payable and accrued liabilities" line item on the Consolidated Balance Sheets. Please refer to Note 18 of the unaudited condensed interim Consolidated Financial Statements as at and for the three and nine months ended September 30, 2026 for further details. |
(2) | 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 September 30 | Nine Months Ended September 30 | |||
($ millions) | 2026 | 2025 | 2026 | 2025 |
Normalized EBITDA | $ 389 | $ 268 | $ 1,598 | $ 1,299 |
Add (deduct): | ||||
Depreciation and amortization | (145) | (125) | (417) | (379) |
Interest expense | (118) | (116) | (354) | (345) |
Income tax recovery (expense) | 14 | 6 | (132) | (151) |
Normalizing items impacting income taxes (1) | (34) | (8) | (57) | 35 |
Accretion expenses | (2) | (2) | (5) | (4) |
Foreign exchange losses | (8) | -- | (8) | (3) |
Unrealized foreign exchange losses (gains) on intercompany | -- | (5) | (8) | 4 |
Net income applicable to non-controlling interests | (2) | (3) | (5) | (8) |
Preferred share dividends | (3) | (4) | (9) | (14) |
Normalized net income | $ 91 | $ 11 | $ 603 | $ 434 |
(1) Represents the income tax impact related to the normalizing items included in the calculation of normalized net income. |
Consolidated Financial Review
Three Months Ended September 30 | Nine Months Ended September 30 | |||
($ millions, except effective income tax rates) | 2026 | 2025 | 2026 | 2025 |
Revenue | 3,431 | 2,598 | 11,198 | 9,411 |
Normalized EBITDA (1) | 389 | 268 | 1,598 | 1,299 |
Income (loss) before income taxes | (30) | (20) | 560 | 719 |
Net income (loss) applicable to common shares | (21) | (25) | 414 | 542 |
Normalized net income (1) | 91 | 11 | 603 | 434 |
Total assets | 28,649 | 25,969 | 28,649 | 25,969 |
Total long-term liabilities | 14,851 | 14,139 | 14,851 | 14,139 |
Invested capital (1) | 546 | 388 | 1,241 | 970 |
Cash used in investing activities | 519 | 425 | 1,408 | 1,134 |
Dividends declared (2) | 104 | 95 | 313 | 284 |
Cash from operations | 122 | 34 | 1,186 | 1,026 |
Normalized funds from operations (1) | 249 | 148 | 1,183 | 927 |
Effective income tax rate (%) (3) | 45.9 | 29.1 | 23.6 | 21.0 |
Three Months Ended September 30 | Nine Months Ended September 30 | |||
($ per share, except shares outstanding) | 2026 | 2025 | 2026 | 2025 |
Net income (loss) per common share - basic | (0.07) | (0.08) | 1.33 | 1.81 |
Net income (loss) per common share - diluted | (0.07) | (0.08) | 1.33 | 1.81 |
Normalized net income - basic (1) | 0.29 | 0.04 | 1.93 | 1.45 |
Normalized net income - diluted (1) | 0.29 | 0.04 | 1.93 | 1.45 |
Dividends declared (2) | 0.33 | 0.32 | 1.00 | 0.95 |
Cash from operations | 0.39 | 0.11 | 3.80 | 3.43 |
Normalized funds from operations (1) | 0.80 | 0.49 | 3.79 | 3.10 |
Shares outstanding - basic (millions) | ||||
During the period (4) | 312 | 299 | 312 | 299 |
End of period | 312 | 299 | 312 | 299 |
(1) | Non‑GAAP financial measure or non-GAAP financial ratio; see discussion in Non-GAAP Financial Measures section of the MD&A. |
(2) | Dividends declared per common share per quarter: $0.315 per share beginning March 2025, increased to $0.334 per share effective March 2026. |
(3) | Due to relatively low loss before income taxes in the third quarter of 2026, the impact of permanent differences and the composition of earnings had a greater proportional effect on the effective income tax rate in the quarter. |
(4) | Weighted average. |
About AltaGas
AltaGas is a leading North American infrastructure company that connects customers and markets to affordable and reliable sources of energy. The Company operates a diversified, lower-risk, high-growth Utilities and Midstream business that is focused on delivering resilient and durable value for its stakeholders.
For more information visit www.altagas.ca or reach out to one of the following:
Jon Morrison
Senior Vice President, Corporate Development and Investor Relations
[email protected]
Aaron Swanson
Vice President, Investor Relations
[email protected]
Investor Inquiries
1-877-691-7199
[email protected]
Media Inquiries
1-403-206-2841
[email protected]
Forward-Looking Information
This news release contains forward-looking information (forward-looking statements). Words such as "may", "can", "would", "could", "should", "likely", "will", "intend", "plan", "anticipate", "believe", "aim", "seek", "future", "commit", "propose", "contemplate", "estimate", "focus", "strive", "forecast", "expect", "project", "potential", "target", "guarantee", "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 addition of two time charters scheduled for 2027 and 2029, respectively, and the anticipated benefits thereof; progress on the construction of REEF and the expected cost and timing for in-service; Phase I and II expansions of the Dimsdale Gas Storage Facility, including the anticipated capital cost, in-service dates and benefits thereof; the RIPET Methanol Removal project and the anticipated timing thereof; AltaGas' target leverage range; AltaGas' long-term commitment to growth in Michigan; the strong outlook for Canadian energy, including factors supporting production growth in Western Canada and the benefits to AltaGas' Midstream platform; AltaGas' focus on executing safely, delivering durable earnings growth and creating long-term value for shareholders; AltaGas' 2026 guidance including normalized earnings per share of $2.35 to $2.60 and normalized EBITDA of $2.0 to $2.1 billion; the expectation that AltaGas will deliver financial results towards the high-end of its 2026 guidance range; AltaGas' focus on delivering stable 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; the Trigon Pacific Terminals labour strike and the potential impacts thereof; 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; SEMCO's acquisition of assets from Xcel Energy, including the anticipated closing date and benefits thereof; that SEMCO will continue to invest in these assets and the anticipated benefits thereof; 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 in-service dates of new projects and acquisition and divestiture activities; taxes; operational expenses; returns on investments; dividend levels; and transaction costs.
AltaGas' forward-looking statements are subject to certain risks and uncertainties which could cause results or events to differ from current expectations, including, without limitation: health and safety risks; operating risks; infrastructure; natural gas supply risks; volume throughput; service interruptions; transportation of petroleum products; market risk; inflation; general economic conditions; cybersecurity, information, and control systems; climate-related risks; environmental regulation risks; regulatory risks; litigation; changes in law; Indigenous and treaty rights; dependence on certain partners; political uncertainty and civil unrest; risks related to conflict, including the conflicts in Eastern Europe and the Middle East; decommissioning, abandonment and reclamation costs; reputation risk; weather data; capital market and liquidity risks; interest rates; internal credit risk; foreign exchange risk; debt financing, refinancing, and debt service risk; counterparty and supplier risk; technical systems and processes incidents; growth strategy risk; construction and development; underinsured and uninsured losses; impact of competition in AltaGas' businesses; counterparty credit risk; composition risk; collateral; rep agreements; market value of 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 www.altagas.ca or through SEDAR+ at www.sedarplus.ca.
SOURCE AltaGas Ltd.
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