AltaGas Canada Inc. Announces Fourth Quarter and Full Year 2018 Financial Results

Calgary, Alberta--(Newsfile Corp. - March 7, 2019) - AltaGas Canada Inc. (TSX: ACI) ("ACI") today announced its fourth quarter and full year 2018 financial results.

Highlights:

• Achieved normalized net income¹ of $41.8 million ($1.39 per share) for 2018 which is equivalent to $40.5 million ($1.35 per share)¹ when adjusted for ACI's new capital structure;
• Delivered 6 percent growth in combined utilities rate base, which increased to $886 million at year end 2018 compared to $834 million at the end of 2017;
• ACI continues to execute on its robust growth capital program of approximately $330 million in expenditures planned between 2019 - 2023;
• ACI expects compound annual adjusted normalized net income growth of approximately 5 percent between 2019 - 2023; and
• Declared a first quarter 2019 dividend of $0.2375 per share.

For the full year 2018, net income after taxes was $45.3 million ($1.51 per share) compared to $41.7 million ($1.39 per share) in 2017. Normalized net income¹ for 2018 was $41.8 million ($1.39 per share) compared to $42.5 million ($1.42 per share) in 2017. When adjusted for the new capital structure of ACI as if the Initial Public Offering ("IPO") had been completed at the beginning of 2018, adjusted normalized net income would be $40.5 million ($1.35 per share).

2018 normalized net income decreased slightly compared to 2017 primarily due to lower generation from ACI's renewable power assets, higher operating and administrative expenses, and higher interest expense, partially offset by rate base growth at all of the utilities, colder weather in Alberta and Nova Scotia and lower income tax expense.

"Solid 2018 financial results highlight the strength of our diverse business portfolio with strong performance coming from our utilities being offset by lower contributions from our renewable assets due to an abnormally low water year at the Northwest BC Hydro facilities and lower wind resources at Bear Mountain," said Jared Green, President and Chief Executive Officer of ACI. "As we move in to 2019, we are already executing on our growth program and we have a number of other attractive opportunities in front of us. 2019 will be our first full year as a brand new company and we are excited about delivering growth and value to all of our stakeholders."

In the fourth quarter of 2018, net income after taxes was $20.8 million ($0.69 per share) compared to $17.1 million ($0.57 per share) for the same period in 2017. Normalized net income for the fourth quarter 2018 was $20.0 million ($0.67 per share) compared to $16.6 million ($0.55 per share) in the fourth quarter of 2017.

2019 Outlook and Capital Program

Over the 2019 - 2023 time period ACI expects to achieve approximately 5 percent compound annual normalized net income growth from the adjusted normalized net income of $40.5 million achieved in 2018. Over this period, ACI expects to spend approximately $330 million at its utilities through investments in system betterment projects to maintain the safety and reliability of its utility infrastructure, new business opportunities and technology improvements. ACI expects these investments will grow its rate base to over $1 billion and expects to fund this capital program utilizing internally generated cash flow and a small amount of incremental debt.

In 2019, ACI expects growth in adjusted normalized net income to be driven primarily by additions to rate base at the utilities, normal weather and stronger expected results from ACI's renewable power assets, partially offset by higher expected income tax expense. ACI expects capital spend to be in the range of $75 to $85 million. The expected capital spend also includes approximately $10 million for the Etzikom Lateral regulated pipeline project located in Southern Alberta, which is expected to be in service in Q4, 2019.

ACI Dividend Declaration

On March 6, 2019 the Board of Directors of ACI declared a dividend of $0.2375 per common share, payable on March 29, 2019 to shareholders of record at the close of business on March 15, 2019. The ex-dividend date is March 14, 2019. This dividend is an eligible dividend for Canadian income tax purposes.

About ACI

ACI is a Canadian company with natural gas distribution utilities and renewable power generation assets. ACI serves approximately 130,000 customers, delivering low carbon energy, safely and reliably. For more information visit: www.altagascanada.ca.

For Further Information Contact:

Shareholder Relations
587-955-3660
Shareholder.Relations@altagascanada.ca

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1. Non-GAAP measure; see discussion in the advisories of this news release and reconciliation to U.S. GAAP financial measures shown in ACI’s Management's Discussion and Analysis (MD&A) as at and for the period ended December 31, 2018, which is available on www.sedar.com.

This news release contains forward-looking information (forward-looking statements). Words such as "may", "can", "would", "could", "should", "will", "intend", "plan", "anticipate", "believe", "expect", "project", "target", "potential", "objective", "continue", "outlook", "opportunity" and similar expressions suggesting future events or future performance, as they relate to ACI or any affiliate of ACI, 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: growth capital program with approximately $330 million planned between 2019 - 2023; expected compound annual normalized net income growth of approximately 5 percent between 2019 - 2023 from the 2018 adjusted normalized net income; expected 2019 capital spend in the range of $75 to $85 million; expected capital spend of approximately $10 million on the Etzikom Lateral regulated pipeline project; expected expenditures of approximately $330 million at its utilities between 2019 and 2023 and anticipated sources of funding; expected rate base growth to over $1 billion between 2019 and 2023; expected in-service date for the Etzikom Lateral regulated pipeline project; and timing of March dividend payment. .

ACI's forward-looking statements are subject to certain risks and uncertainties which could cause results or events to differ from current expectations, including, without limitation: legislative and regulatory environment; demand for natural gas; access to and use of capital markets; market value of ACI's securities; ACI's ability to pay dividends; ACI's ability refinance its debt; prevailing economic conditions; the potential for service interruptions and physical damage to infrastructure; natural gas supply; ability of the company to maintain, replace and expand its regulated assets; and impact of labour relations and reliance on key personnel. Applicable risk factors are discussed more fully under the heading "Risk Factors" in ACI's MD&A as at and for the period ended December 31, 2018, which is available on www.sedar.com.

Many factors could cause ACI's actual results, performance or achievements to vary from those described in this news 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, 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 ACI's 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. ACI 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 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.

This news release contains references to certain financial measures used by ACI that do not have a standardized meaning prescribed by U.S. GAAP and may not be comparable to similar measures presented by other entities. 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. The non-GAAP measures and their reconciliation to US GAAP financial measures are shown in ACI's MD&A as at and for the period ended December 31, 2018. These non-GAAP measures provide additional information that Management believes is meaningful in describing ACI's operational performance, liquidity and capacity to fund dividends, capital expenditures, and other investing activities. The specific rationale for, and incremental information associated with, each non-GAAP measure is discussed below.

Normalized net income represents net income after taxes adjusted for after tax impact of unrealized gain (loss) on foreign exchange contracts and other typically non-recurring items. This measure is presented in order to enhance the comparability of results, as it reflects the underlying performance of the Company. Normalized net income as presented should not be viewed as an alternative to net income after taxes or other measures of income calculated in accordance with U.S. GAAP as an indicator of performance.

Adjusted normalized net income reflects Management's estimates of ACI's normalized net income for the year ended December 31, 2018 assuming the IPO had been closed at the beginning of the period. Although many of the adjustments are estimates and are not objectively determinable, ACI believes that the amounts represent reasonable estimates of its normalized net income for the year ended December 31, 2018 based on the assumptions made. ACI believes adjusted normalized net income is useful to investors and analysts when trying to determine what the results of operations for 2018 would have been if it was under ACI's capital structure going forward.

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