Q2 2026 Financial Information (atco 2026 q2)

ATCO LTD. FINANCIAL INFORMATION

FOR THE SIX MONTHS ENDED JUNE 30, 2026

CORPORATE OFFICE: 5302 FORAND ST SW, CALGARY, ALBERTA, CANADA T3E 8B4 TEL: 403-292-7500 https://WWW.ATCO.COM

2026 SECOND QUARTER FINANCIAL INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2026

TABLE OF CONTENTS

Managementʼs Discussion and Analysis 2

Unaudited Interim Consolidated Financial Statements 44

ATCO LTD. MANAGEMENTʼS DISCUSSION

AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2026

This Management's Discussion and Analysis (MD&A) is meant to help readers understand key operational and financial events that influenced the results of ATCO Ltd. (ATCO, our, we, us, or the Company) during the six months ended June 30, 2026.

This MD&A was prepared as of July 27, 2026, and should be read with the Company's unaudited interim consolidated financial statements for the six months ended June 30, 2026. Additional information, including the Company's previous MD&As, Annual Information Form, and audited consolidated financial statements for the year ended December 31, 2025, is available on SEDAR+ at https://www.sedarplus.ca. Information contained in the 2025 MD&A is not discussed in this MD&A if it remains substantially unchanged.

The Company is controlled by Sentgraf Enterprises Ltd. and its controlling share owner, the Southern family. The Company includes controlling positions in Canadian Utilities Limited (Canadian Utilities or CU) (52.4 per cent ownership), ATCO Structures & Logistics Ltd. (ATCO Structures & Logistics) (100 per cent ownership), ATCO Land and Development Ltd. (ATCO Land and Development) (100 per cent ownership), ASHCOR Technologies Ltd. (Ashcor) (100 per cent ownership), and ATCO Energy Ltd. (ATCO Energy) (100 per cent ownership). The Company also has an equity investment in Neltume Ports S.A. (Neltume Ports) (40 per cent ownership). Throughout this MD&A, the Company's earnings attributable to Class I and Class II Shares and adjusted earnings are presented after non-controlling interests.

Terms used throughout this MD&A are defined in the Glossary at the end of this document.

ATCO LTD. 2026 MANAGEMENT'S DISCUSSION & ANALYSIS 2

TABLE OF CONTENTS

Page Performance Overview ................................................................................................................................................................ 4

Business Unit Performance ......................................................................................................................................................... 7

ATCO Structures & Logistics .................................................................................................................................................... 7

ATCO Investments .................................................................................................................................................................... 10

Canadian Utilities ....................................................................................................................................................................... 12

ATCO Energy Systems ........................................................................................................................................................ 12

ATCO EnPower...................................................................................................................................................................... 15

ATCO Australia ..................................................................................................................................................................... 17

Canadian Utilities Financing & Other.................................................................................................................................... 18

Policy and Regulatory Updates ................................................................................................................................................... 18

Other Expenses and Income........................................................................................................................................................ 19

Liquidity and Capital Resources .................................................................................................................................................. 21

Share Capital 24

Quarterly Information 25

Other Financial and Non-GAAP Measures................................................................................................................................. 27

Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares................................................. 28

Reconciliation of Capital Investment to Capital Expenditures .................................................................................................. 37

Other Financial Information 38

Glossary......................................................................................................................................................................................... 41

Appendix 1: Supplemental Non-Audited Financial Information 42

‌PERFORMANCE OVERVIEW

FINANCIAL METRICS

The following chart summarizes key financial metrics associated with our financial performance.

Three Months Ended

June 30

Six Months Ended

June 30

($ millions, єxcєpī pєr sharє daīa and ouīsīanding sharєs) 2026 2025 Change 2026 2025 Change

1. Toīal or sєgmєnīs mєasurєs (as dєrinєd in Naīional Insīrumєnī 52-112 - Non CAA7 and Oīhєr Financial Mєasurєs Disclosurє (NI 52-112)). Thє mosī dirєcīly comparablє mєasurє īo Adjusīєd Earnings (Loss) rєporīєd in accordancє wiīh Inīєrnaīional Financial Rєporīing Sīandards (IFRS) is Earnings Aīīribuīablє īo Class I non-voīing and Class II voīing sharєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

2. Non-CAA7 raīio (as dєrinєd in NI 52-112). Thє mosī dirєcīly comparablє mєasurє rєporīєd in accordancє wiīh IFRS is Earnings Aīīribuīablє īo Class I non-voīing and Class II voīing sharєs ($ pєr sharє). Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

3. Non-CAA7 rinancial mєasurє (as dєrinєd in NI 52-112). Thє mosī dirєcīly comparablє mєasurє rєporīєd in accordancє wiīh IFRS is capiīal єxpєndiīurєs. Capiīal invєsīmєnī is noī a sīandardizєd rinancial mєasurє undєr IFRS and may noī bє comparablє īo similar rinancial mєasurєs disclosєd by oīhєr issuєrs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Capiīal Invєsīmєnī īo Capiīal Expєndiīurєs" in īhis MDhA.

REVENUES

Revenues in the second quarter of 2026 were $1,319 million, $161 million higher than the same period in 2025 mainly due to additional revenues from the Stibnite Gold project, increased space rentals activity, and permanent modular construction sales in ATCO Structures, as well as increased customer rates and higher foreign exchange in ATCO Gas Australia. Revenues were also positively impacted by higher flow through revenues in Natural Gas Distribution and Electricity Distribution, growth in rate base in ATCO Energy Systems' businesses, and stronger seasonal spreads in natural gas storage services in ATCO EnPower.

ADJUSTED EARNINGS (1)

Adjusted earnings in the second quarter of 2026 were $114 million or $1.01 per share, compared to $101 million or $0.90 per share for the same period in 2025.

Higher adjusted earnings in the second quarter of 2026 were mainly due to increased space rentals activity and earnings from the Stibnite Gold project in ATCO Structures, and the impact of inflation indexing on rate base and increased customer rates in ATCO Gas Australia. Higher adjusted earnings were also due to growth in rate base in ATCO Energy Systems' businesses, and year-to-date recognition of final 2026 rates in Electricity Transmission following the Alberta Utilities Commission's (AUC) decision in the second quarter of 2026 approving the Negotiated Settlement Agreement (NSA) relating to the 2026-2027 General Tariff Application (GTA).

Additional detail on the financial performance of our business units is discussed in the "Business Unit Performance" section of this MD&A.

EARNINGS ATTRIBUTABLE TO CLASS I AND CLASS II SHARES

Earnings attributable to Class I and Class II Shares were $88 million in the second quarter of 2026, $24 million higher compared to the same period in 2025. Earnings attributable to Class I and Class II Shares include timing adjustments related to rate-regulated activities, unrealized gains or losses on mark-to-market forward and swap commodity contracts, one-time gains and losses, impairments, and items that are not in the normal course of business or a result of day-to-day operations.

These items are not included in adjusted earnings.

More information on these and other items is included in the "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" section of this MD&A.

CASH FLOWS FROM OPERATING ACTIVITIES

Cash flows from operating activities were $679 million in the second quarter of 2026, $166 million higher than the same period in 2025. This increase was mainly due to higher earnings within most business units, and increased customer receipts due to colder weather and higher customer rates in Natural Gas Distribution, partially offset by the timing of working capital.

COMMON SHARE DIVIDENDS

Dividends paid to Class I and Class II Share owners totalled $58 million in the second quarter of 2026. On July 9, 2026, the Board of Directors declared a third quarter dividend of 51.96 cents per share or $2.08 on an annualized basis. ATCO expects to continue to grow its dividends consistent with the sustainable growth of its investments.

Quarterly Dividend Rate 1993 - 2026 (dollars per share)

$0.5196

93 97 01 05 09 13 17 21 25 26

(1) Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

CAPITAL INVESTMENT (1) AND CAPITAL EXPENDITURES

Capital investment is a non-GAAP financial measure defined as cash used for capital expenditures, business combinations, and cash used in the Company's share of capital expenditures in joint ventures. Total capital investment of $489 million in the second quarter of 2026 was $46 million higher compared to the same period in 2025 mainly due to increased spending related to ongoing system upgrades and growth projects in the Regulated Utilities, including the Yellowhead Pipeline Project (Yellowhead Pipeline) in Natural Gas Transmission, and increased capital spending in ATCO Structures on space rental fleet additions, and ATCO Investments' project development. Higher capital investment was partially offset by the completion of the Central East Transfer-Out Project (CETO), and timing of capital maintenance projects and infrastructure upgrades in Electricity Transmission, and decreased capital spend in ATCO EnPower.

Capital expenditures, a GAAP measure reported in accordance with IFRS, includes additions to property, plant and equipment and intangibles as well as interest capitalized during construction. Total capital expenditures of $486 million in the second quarter of 2026 were $45 million higher compared to the same period in 2025 mainly due to the factors outlined above.

Capital expenditures in joint ventures and business combinations are excluded from capital expenditures.

Capital Expenditures for the Three Months Ended June 30, 2026

19%

81%

Regulated Utilities Other

Capital expenditures in Canadian Utilities' Regulated Utilities accounted for 81 per cent of the total in the second quarter of 2026. The remaining capital expenditures were primarily related to ATCO Structures' continued expansion of its space rentals fleet, and capital spending within ATCO Investments and ATCO EnPower.

(1) Non-CAA7 rinancial mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Capiīal Invєsīmєnī īo Capiīal Expєndiīurєs" in īhis MDhA.

‌BUSINESS UNIT PERFORMANCE

‌ATCO Structures & Logistics' activities are conducted through two complementary businesses: ATCO Structures and ATCO Frontec. ATCO Structures designs, builds and delivers products to service the essential need for housing and shelter around the globe. ATCO Frontec provides operational support services to government, defence and commercial clients.

REVENUES

ATCO Structures & Logistics revenues of $367 million and $674 million in the second quarter and first six months of 2026 were

$94 million and $110 million higher than the same periods in 2025 mainly due to ATCO Structures' additional revenues from the Stibnite Gold project, which commenced in the fourth quarter of 2025, increased space rentals activity, and permanent modular construction sales. These increases were partially offset by lower workforce housing sales in Australia, Canada and Chile.

ADJUSTED EARNINGS

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-CAA7 rinancial mєasurєs. Thє mosī dirєcīly comparablє mєasurє rєporīєd in accordancє wiīh IFRS is Earnings Aīīribuīablє īo Class I non-voīing and Class II voīing sharєs. Adjusīєd єarnings is noī a sīandardizєd rinancial mєasurє undєr IFRS and may noī bє comparablє īo similar rinancial mєasurєs disclosєd by oīhєr issuєrs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

2. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

ATCO Structures & Logistics adjusted earnings of $35 million and $63 million in the second quarter and first six months of 2026 were $3 million and $4 million higher than the same periods in 2025 mainly due to ATCO Structures' earnings from the Stibnite Gold project, increased space rentals activity, and permanent modular construction sales. Higher adjusted earnings were partially offset by ATCO Structuresʼ lower workforce housing sales in Australia, Canada and Chile, and the scheduled closure of ATCO Frontec's BC Hydro Site C camp in the first quarter of 2026.

Detailed information about the activities and financial results of the ATCO Structures & Logistics businesses is provided in the following sections.

ATCO STRUCTURES

ATCO Structures operates three business lines: Space Rentals, Workforce Housing, and Permanent Modular Construction. Space Rentals provides prefabricated, transportable spaces such as modular complexes, mobile offices, kiosks, storage, and sanitary solutions that support construction, manufacturing, industrial operations, education, and healthcare. Workforce Housing provides modular accommodation solutions designed for industrial and remote worksites supporting natural

resources, large-scale infrastructure development, and defence. Permanent Modular Construction serves both commercial and residential markets, providing modular buildings for education, healthcare, hospitality, sports and recreation, and residential solutions across the housing continuum, including single- and multi-family homes. ATCO Structures operates through two commercial streams: Sales, which encompasses sales of product and service offerings to customers across all three business lines; and Leasing, which includes leasing both Space Rentals and Workforce Housing products to customers.

ATCO Structures' adjusted earnings of $36 million and $63 million in the second quarter and first six months of 2026 were

$4 million and $5 million higher than the same periods in 2025 mainly due to ATCO Structures' earnings from the Stibnite Gold project, increased space rentals activity globally, and permanent modular construction sales primarily in Canada and the US. Higher adjusted earnings were partially offset by lower workforce housing sales activity from projects in Australia, Canada and Chile, and increased operating costs supporting expansion of the business.

The following table compares ATCO Structures' rental fleet for the second quarter and first six months of 2026 and 2025.

Three Months Ended

June 30

Six Months Ended

June 30

2026 2025 Change 2026 2025 Change

Rental Fleet

Space Rentals

ATCO Structures has increased its global space rentals fleet through increased capital investment in Canada, the US and Australia to capture market share and execute its expansion strategy for sustainable base business. ATCO Structures has increased the number of units on rent and realized higher average rental rates due to sustained demand from existing customers and growth in the customer base from newer branches in these regions. The demand is underpinned by strong general construction activity as well as projects across Canada, the US and Australia that support mining, energy, natural resource, technology and public infrastructure development. Utilization rates have improved while growing the number of units in the rental fleet through targeted investment to strengthen market position in regions with ongoing activity.

Workforce Housing

ATCO Structures is focused on maintaining the optimized level and mix of workforce housing fleet in Canada, the USA and Australia, which includes targeted investment to tailor fleet mix and expand fleet offerings in strategic locations to meet the current and anticipated market demand. During the quarter, there was heightened customer demand for new manufactured and used fleet products for purchase. The workforce housing market responds to both the capital spending cycle and development activity in various industries, primarily in remote locations where workforce accommodation is not readily available. As a result, workforce housing products tend to move in large tranches and ATCO Structures aims to strategically position its fleet in response to the short-term cycle ebbs and flows.

ATCO Structures Recent Developments

In the second quarter of 2026, ATCO Structures continued growing its market presence through organic strategic initiatives and investment, particularly in space rentals. This included expansion and optimization of the global rental fleet.

Awarded contracts, such as those summarized below, illustrate the diversity of geographies and industries that ATCO Structures services and contribute to the resilience of its growth. These highlighted projects represent awards during the period and do not comprise all activity or newly awarded contracts during the quarter.

Beyond the projects detailed below, ATCO Structures also received notices of award and limited notices to proceed for early-stage work, including infrastructure planning and camp design services, for energy development and energy infrastructure

projects in Western Canada and Western Australia. The contracts are anticipated to commence in 2026 and have a combined contract value of over $80 million. The contracts below include $87 million that follow limited notices to proceed received in the first quarter of 2026.

Canada

ATCO Structures was awarded contracts to provide space rental, workforce housing, and permanent modular construction solutions supporting mining projects in Western Canada, modular fleet providers and public infrastructure development in Central Canada, and housing in Northern Canada. These awards comprise over 365 modular units and total $89 million in sale contracts.

United States

ATCO Structures was previously awarded a $179 million contract by Perpetua Resources Corp. to supply and install a

1,052-person dormitory lodge and office facilities in support of the Stibnite Gold project located near Yellow Pine, Idaho. In the second quarter of 2026, manufacturing progressed in line with the original schedule. Site work is anticipated to commence in the third quarter of 2026 with the first handover milestone anticipated in the fourth quarter of 2026.

ATCO Structures was awarded contracts to provide space rental and workforce housing solutions supporting data centre construction in Texas, Oklahoma and Idaho, nuclear power generation in Idaho, gold mining in Nevada, and modular fleet providers across the continental US. These awards comprise over 250 modular units and total $23 million in sale and lease contracts.

Australia

ATCO Structures was awarded a $57 million sale contract to provide a workforce housing solution in support of a mining project in Western Australia. This award comprises over 160 units.

ATCO FRONTEC

ATCO Frontec provides facility operations and maintenance services, workforce lodging and support services, defence operations services, and disaster and emergency management services.

ATCO Frontec's adjusted earnings in the second quarter and first six months of 2026 were $1 million lower than the same periods in 2025 mainly due to the scheduled closure of the BC Hydro Site C camp in the first quarter of 2026.

ATCO Frontec Recent Developments

Defence Construction Canada Award

As defence spending begins to flow into Northern Canada, ATCO Frontec received a Defence Construction Canada contract to install and operate a temporary camp during the third quarter of 2026. The contract is in support of Operation Nanook, a Canadian Armed Forces' operation comprised of activities designed to exercise the defence of Canada and to secure northern regions, and will provide accommodations and services for up to 375 personnel in the community of Resolute Bay, Nunavut.

‌ATCO Investments incorporates our 40 per cent equity investment in Neltume Ports, and our wholly-owned subsidiaries ATCO Land and Development, Ashcor, and ATCO Energy. ATCO Investments also includes ATCO Corporate & Other which contains the global corporate head office in Calgary, Canada, ATCO licensing fees received, and financing expenses.

REVENUES

Including intersegment eliminations, ATCO Investments' revenues of $38 million and $73 million in the second quarter and first six months of 2026 were $5 million lower than the same periods in 2025 mainly due to decreased commodity prices in ATCO Energy and decreased volume and pricing at Ashcor facilities.

ADJUSTED EARNINGS

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-CAA7 rinancial mєasurєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

2. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

Including intersegment eliminations, ATCO Investments' adjusted earnings of $5 million and $15 million in the second quarter and first six months of 2026 were $1 million and $2 million lower than the same periods in 2025 mainly due to changes in cargo mix and operating margins in Neltume Ports, the impact of foreign exchange rates, and higher share-based compensation expense related to an increase in ATCO's share price in ATCO Corporate & Other. Lower adjusted earnings are partially offset by lower plant operating costs in Ashcor, and lower net interest expense in ATCO Corporate & Other.

Neltume Ports

Neltume Ports is a port operator and developer with a diversified portfolio of 17 multi-purpose, bulk cargo and container port facilities and 6 port operation services. The business is located primarily in Chile with additional operations in Uruguay, Argentina, Brazil, Guatemala, and the US.

Neltume Ports' adjusted earnings of $6 million and $13 million in the second quarter and first six months of 2026 were

$1 million and $2 million lower than the same periods in 2025 mainly due to changes in cargo mix and operating margins, and the impact of foreign exchange rates in the first quarter of 2026.

Other Investments

Other Investments includes ATCO Land and Development, Ashcor, and ATCO Energy. ATCO Land and Development is a commercial real estate business that holds investments for sale, lease or development. Ashcor is a company engaged in the recycling and marketing of ash, a waste byproduct of electricity generation. ATCO Energy provides retail electricity and natural gas services, home products, home maintenance services and professional home advice in Alberta, and includes our retail food services brand Blue Flame Kitchen.

Other Investments' adjusted earnings of $6 million and $13 million in the second quarter and first six months of 2026 were

$1 million and $3 million higher than the same periods in 2025 mainly due to lower plant operating costs at Ashcor's Battle River site, and increased commodity margins at ATCO Energy.

ATCO Corporate G Other

ATCO Corporate & Other contains the global corporate head office in Calgary, Canada, ATCO licensing fees received, and financing expenses.

ATCO Corporate & Other's adjusted earnings in the second quarter and first six months of 2026 were $1 million and

$3 million lower than the same periods in 2025 mainly due to higher share-based compensation expense related to an increase in ATCO's share price, partially offset by lower net interest expense.

RECENT DEVELOPMENTS

Other Investments

Grays Bay Road and Port Project

In the second quarter of 2026, the Government of Canada announced that the Grays Bay Road and Port Project (GBRP) was identified as a candidate for designation under the Building Canada Act. Designation under the Building Canada Act could provide greater regulatory certainty and approval timelines for GBRP, while supporting continued consultation with Indigenous and community groups.

In the first quarter of 2026, ATCO announced our approximately $10 million of staged investment for 40 per cent ownership in West Kitikmeot Resources Corp. (WKR). Backed by significant Inuit ownership, WKR is the sole proponent developing the Grays Bay Road and Port Project (GBRP), a critical infrastructure project consisting of a greenfield deepwater port with access to the Northwest Passage shipping corridor, a 230-kilometre all-season road leading inland, and a 6,000-foot airstrip. GBRP development is planned in multiple phases, with an expected in-service date of 2035 for the full project.

‌Canadian Utilities is a diversified global energy infrastructure corporation delivering operating and service excellence and innovative business solutions through ATCO Energy Systems (electricity and natural gas transmission and distribution, and international electricity operations); ATCO EnPower (generation, energy storage, industrial water solutions, and cleaner fuels); and ATCO Australia (natural gas distribution and electricity generation).

‌ATCO Energy Systems

REVENUES

ATCO Energy Systems revenues of $760 million and $1,680 million in the second quarter and first six months of 2026 were

$52 million and $46 million higher than the same periods in 2025. Higher revenues were mainly due to higher flow-through revenues in Natural Gas Distribution and Electricity Distribution, and growth in rate base. Higher revenues in the first six months of 2026 were partially offset by refunds to customers of Electricity Distribution and Natural Gas Distribution over the September 1, 2025 to February 28, 2026 period, resulting from the AUC's Second Generation Performance Based Regulation (PBR2) re-opener Phase II decision rendered in the second quarter of 2025. The Company was granted leave to appeal this decision, which was heard by the Alberta Court of Appeal on April 16, 2026.

ADJUSTED EARNINGS

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-CAA7 rinancial mєasurєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

2. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

ATCO Energy Systems' adjusted earnings of $64 million and $193 million in the second quarter and first six months of 2026 were $4 million and $11 million higher than the same periods in 2025 mainly due to growth in rate base. Adjusted earnings in the second quarter were also higher due to Electricity Transmission's 2026-2027 GTA negotiated settlement decision received from the AUC and the year-to-date recognition of final 2026 rates of which $3 million relates to the first quarter of 2026. In the first six months of 2026, higher earnings were also due to lower income tax expense due to the March 2026 enactment of Bill C-15 (Budget 2025 Implementation Act, No. 1) (Bill C-15), which reinstated the Accelerated Investment

Incentive and increased deductibility of eligible property acquired after 2024 and available for use before 2030. Higher adjusted earnings were partially offset by Natural Gas Transmission's 2026-2028 General Rate Application (GRA) which was approved by the AUC and included cost efficiencies in prior periods that are being passed on to customers.

Detailed information about the activities and financial results of ATCO Energy Systems' business segments is provided in the following sections.

Electricity Distribution

Electricity Distribution provides regulated electricity distribution and distributed generation mainly in northern and central east Alberta, the Yukon, the Northwest Territories, and in the Lloydminster area of Saskatchewan.

Electricity Distribution adjusted earnings of $18 million in the second quarter of 2026 were $1 million lower than the same period in 2025 mainly due to timing of cost efficiencies, partially offset by growth in rate base.

Electricity Distribution adjusted earnings of $42 million in the first six months of 2026 were $1 million higher than the same period in 2025 mainly due to growth in rate base, and lower income tax expense due to the March 2026 enactment of Bill C-15. Higher adjusted earnings were partially offset by timing of cost efficiencies.

Electricity Transmission

Electricity Transmission provides electricity transmission mainly in northern and central east Alberta, and in the Lloydminster area of Saskatchewan. Additionally, Electricity Transmission has a 35-year contract to be the operator of Alberta PowerLine, a 500-km electricity transmission line between Wabamun, near Edmonton, and Fort McMurray, Alberta.

Electricity Transmission adjusted earnings of $26 million and $50 million in the second quarter and first six months of 2026 were $3 million higher than the same periods in 2025 mainly due to growth in rate base. Adjusted earnings in the second quarter were also higher due to Electricity Transmission's 2026-2027 GTA negotiated settlement decision received from the AUC and the year-to-date recognition of final 2026 rates of which $3 million relates to the first quarter of 2026.

International Electricity Operations

International Electricity Operations includes a 50 per cent ownership in LUMA Energy, LLC (LUMA Energy), held by a subsidiary of Canadian Utilities. LUMA Energy is a company formed and awarded an Operations and Maintenance Agreement (OMA) with the Puerto Rico Public-Private Partnerships Authority and the Puerto Rico Electric Power Authority (PREPA).

LUMA Energy continues to operate under the terms of a Supplemental Agreement, which was extended on November 30, 2022.

International Electricity Operations adjusted earnings of $8 million in the second quarter of 2026 were $1 million higher than the same period in 2025 mainly due to higher management fees as a result of inflation adjustments, partially offset by lower foreign exchange rates.

International Electricity Operations adjusted earnings of $15 million in the first six months of 2026 were comparable to the same period in 2025.

Natural Gas Distribution

Natural Gas Distribution serves municipal, residential, commercial, and industrial customers throughout Alberta and in the Lloydminster area of Saskatchewan.

Natural Gas Distribution adjusted earnings in the second quarter of 2026 were comparable to the same period in 2025.

Natural Gas Distribution adjusted earnings in the first six months of 2026 were $5 million higher than the same period in 2025 mainly due to growth in rate base and lower income tax expense due to the March 2026 enactment of Bill C-15.

Natural Gas Transmission

Natural Gas Transmission receives natural gas on its pipeline system from various gas processing plants as well as from other natural gas transmission systems and transports it to end users within the province of Alberta or to other pipeline systems.

Natural Gas Transmission adjusted earnings of $15 million and $30 million in the second quarter and first six months of 2026 were $1 million and $2 million higher than the same periods in 2025 mainly due to growth in rate base and lower income tax

expense due to the March 2026 enactment of Bill C-15. Higher adjusted earnings were partially offset by the 2026-2028 GRA which was approved by the AUC and included cost efficiencies in prior periods that are being passed on to customers.

ATCO ENERGY SYSTEMS RECENT DEVELOPMENTS

Utility Infrastructure Projects

ATCO Energy Systems continues work on its two large utility infrastructure projects during the second quarter: the Yellowhead Pipeline in Natural Gas Transmission and CETO in Electricity Transmission.

• Yellowhead Pipeline consists of approximately 235 kilometres of high-pressure natural gas pipeline with the projected spend estimated at $2.9 billion based on a Class III estimate with an expected accuracy of +/-20 per cent. In the third quarter of 2025, the AUC approved the Need Assessment Application for the project, and on July 17, 2026, the AUC approved the facility application. With these two key regulatory filings approved, construction is now set to begin effective immediately. All major pipeline and compressor contracts, including supply and materials, have been awarded and the pipeline is 100 per cent contracted with customers. The Yellowhead Pipeline will support Alberta's continued economic growth, industrial expansion and rising energy demand.

  The Company expects to fund Yellowhead Pipeline's development within CU Inc., according to its regulated capital structure, which is 63 per cent regulated debt and 37 per cent regulated equity. The regulated debt is expected to be funded with CU Inc. debenture issuances throughout the remainder of 2026 and 2027. The regulated equity is expected to be funded with internally generated cash flows, equity contributions from Canadian Utilities and Indigenous partnerships are expected to contribute up to 30 per cent of the equity. In 2025, Canadian Utilities raised

  $500 million fixed-to-fixed rate subordinate notes and $200 million preferred shares to substantially pre-fund its equity contribution.

• In June 2026, ATCO and AltaLink L.P. announced the successful completion and energization of CETO. CETO consists of a 135-km 240kV transmission line, of which Electricity Transmission built 85-km of the transmission line and AltaLink L.P. constructed the remaining 50-km. Electricity Transmission's 85-km of the transmission line was energized on June 26, 2026, and was completed ahead of project schedule, below expected project spend, and with zero lost time injuries. CETO supports renewable energy integration in Alberta and transports electricity in the counties of Red Deer, Lacombe and Stettler, supplying more than 1,500 megawatts of electricity to Alberta's grid.

Funding Strategy

To fund ATCO Energy Systems' regulated debt requirements, the Company expects to issue debentures each year during the five-year (2026-2030) capital expenditure plan. For regulated equity requirements, in addition to cash flow from operations and the $0.7 billion financed in 2025, the Company expects to raise an additional $0.8 billion of capital securities (1) over the five-year (2026-2030) capital expenditure plan to fund the equity portion of investment. The current five-year (2026-2030) capital expenditure plan does not require common equity to fund the regulated utility growth.

ATCO ENERGY SYSTEMS REGULATORY DEVELOPMENTS

Natural Gas Transmission

2026-2028 General Rate Application (GRA)

On September 22, 2025, ATCO Pipelines filed its GRA with the AUC to establish its revenue requirement for 2026-2028. Increases over the three-year period are largely related to Yellowhead Pipeline. In January 2026, ATCO Pipelines and interveners reached a Negotiated Settlement Agreement (NSA) in principle, except for IT operations and maintenance (O&M) costs and other certain matters excluded from negotiations by the AUC.

On July 2, 2026, the AUC issued a decision for the excluded matters from the NSA. The decision approved a depreciation expense placeholder, IT O&M costs, established a capital deferral account to manage uncertainties for Yellowhead Pipeline, and granted 100 per cent of construction work in progress for Yellowhead Pipeline in rate base for 2026 ($53 million) and 2027 ($44 million) as a temporary credit relief measure during construction.

(1) Capiīal sєcuriīiєs could includє prєrєrrєd sharєs, hybrid bonds, and/or dєbєnīurєs.

Yellowhead Pipeline Project Facility Application

On July 17, 2026, the AUC approved ATCO Pipelinesʼ Facility Application for the approximately $2.9 billion Yellowhead Pipeline project as filed. The approval confirms that the project is in the public interest, authorizes construction and operation of the facilities, and resolves key matters related to routing, land access, environmental impacts, Indigenous engagement, and stakeholder concerns. The decision represents a significant regulatory milestone and enables ATCO Pipelines to proceed with project execution, with construction expected to begin effective immediately.

Electricity Transmission

2026-2027 General Tariff Application (GTA)

On November 21, 2025, Electricity Transmission filed its GTA with the AUC to establish its revenue requirement for 2026 and 2027. In June 2026, Electricity Transmission and interveners reached a comprehensive NSA, which was approved by the AUC on July 3, 2026. In rendering its decision to approve the NSA, the AUC excluded three line-move capital projects, which will be adjudicated separately. The NSA reflects modest tariff increases of less than 1 per cent in 2026 and 2027. The adjusted earnings impact of the decision was $7 million in the second quarter of 2026, of which half related to the first quarter of 2026.

‌ATCO EnPower

REVENUES

ATCO EnPower revenues of $76 million and $175 million in the second quarter and first six months of 2026 were $5 million and

$6 million higher than the same periods in 2025 mainly due to stronger seasonal spreads in natural gas storage services, higher generation at the Veracruz hydro facility in Mexico, and higher third party sales of emissions credits.

ADJUSTED EARNINGS

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-CAA7 rinancial mєasurєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

2. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

ATCO EnPower adjusted earnings of $8 million and $14 million in the second quarter and first six months of 2026 were

$2 million higher than the same periods in 2025 mainly due to stronger seasonal spreads in natural gas storage services, and higher generation at the Veracruz hydro facility in Mexico. Higher earnings in the quarter were partially offset by lower carbon pricing recognized for emissions credits generated, lower compensation related to turbine availability guarantees at the Forty Mile wind facility, and lower overall capture pricing.

Detailed information about the activities and financial results of ATCO EnPower's businesses is provided in the following sections.

Electricity Generation

Non-regulated electricity activities include the supply of electricity from solar, wind, hydroelectric, gas and distributed generation facilities in Canada, Mexico, and Chile.

Electricity Generation adjusted earnings in the second quarter and first six months of 2026 were comparable to the same periods in 2025.

The following table compares ATCO EnPowerʼs generation portfolio performance in Canada for the second quarter and first six months of 2026 and 2025.

Three Months Ended

June 30

Six Months Ended

June 30

2026 2025 Change 2026 2025 Change

1. Capaciīy sharє rєprєsєnīs īhє pєrcєnīagє or namєplaīє capaciīy ownєd by ATCO En7owєr, єxcєpī in rєspєcī or īhє Dєєrrooī and Barlow solar raciliīiєs, which arє rєprєsєnīєd aī 100 pєr cєnī bєcausє īhєy arє hєld by a conīrollєd subsidiary.

2. Capaciīy sharє incrєasєd by 19-MW as a rєsulī or complєīing īhє acquisiīion or īhє Elmworīh gєnєraīing sīaīion in īhє rourīh quarīєr or 2025.

3. 77A mєans 7owєr 7urchasє Agrєєmєnī.

The average realized price related to the generation portfolio of $67 per MWh and $71 per MWh in the second quarter and first six months of 2026 was lower compared to $71 per MWh and $74 per MWh in the second quarter and first six months of 2025. This is mainly due to declines in merchant pricing from the comparable periods in 2025.

Wind generation for the second quarter of 2026 was higher than the same period in 2025 due to higher average wind speed at both Forty Mile wind and Adelaide facilities. The Forty Mile wind facility continues to be affected by monthly grid curtailments of approximately 40 per cent caused by transmission system constraints in the southeast portion of Alberta resulting from inadequate transmission infrastructure and grid deficiencies leading to unprecedented levels of curtailment in the region. The Alberta Electric System Operator's (AESO) unequal curtailment practices also continue to benefit Renewable Energy Program (REP) facilities at the expense of non-REP generators in the area. Proposed incumbent protection mechanisms have not yet been finalized. ATCO EnPower continues to pursue all remedies associated with this situation through engagement and continues to evaluate options to secure a resolution.

Solar generation in the second quarter of 2026 was lower than the same period in 2025 driven in part due to wet weather conditions experienced during June at the Barlow, Deerfoot and Empress solar facilities. There was improved generation in the second quarter of 2026 at the hydroelectric facility compared to the same period in 2025 as reservoir levels remain elevated, supported by strong basin-wide snowpack, high precipitation, and mild weather. Natural gas generation in the second quarter of 2026 was higher than the same period in 2025 due to the fourth quarter 2025 acquisition of the Elmworth generating station.

Storage G Industrial Water

Storage & Industrial Water provides non-regulated natural gas storage, natural gas liquids storage, and industrial water services in Alberta and energy services in the Northwest Territories.

Storage & Industrial Water adjusted earnings of $9 million and $17 million in the second quarter and first six months of 2026 were $1 million and $2 million higher than the same periods in 2025 mainly due to stronger seasonal spreads in natural gas storage services.

‌ATCO Australia

REVENUES

ATCO Australia revenues of $75 million and $137 million in the second quarter and first six months of 2026 were $15 million and $20 million higher than the same periods in 2025 mainly due to increased customer rates in ATCO Gas Australia, and higher foreign exchange rates. Revenues for the first six months of 2026 were partially offset by the revenues received in the first quarter of 2025 from the South Australia Hydrogen Jobs Plan project in ATCO Power Australia.

ADJUSTED EARNINGS

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-CAA7 rinancial mєasurєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

2. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

ATCO Australia adjusted earnings of $18 million and $29 million in the second quarter and first six months of 2026 were

$7 million and $11 million higher than the same periods in 2025 mainly due to the impact of inflation indexing on rate base, higher foreign exchange rates, and higher customer rates in ATCO Gas Australia.

Detailed information about the activities and financial results of ATCO Australia's businesses is provided in the following sections.

ATCO Gas Australia

ATCO Gas Australia is a regulated provider of natural gas distribution services in western Australia, serving metropolitan Perth and surrounding regions.

ATCO Gas Australia adjusted earnings of $17 million and $27 million in the second quarter and first six months of 2026 were

$7 million and $11 million higher than the same periods in 2025 mainly due to the impact of inflation indexing on rate base, higher foreign exchange rates, and higher customer rates.

Australia inflation indexing in 2026 currently reflects an inflation assumption of 4.2 per cent, of which 2.1 per cent has been recognized in the first six months. In 2025, Australia inflation indexing reflected a full year inflation of 3.4 per cent, of which 1.4 per cent was recognized for the first six months of 2025. The impact of inflation on rate base is added to the rate base annually and is reflected in customer rates in future periods through the recovery of depreciation. Customer rates are adjusted annually through a mechanism, which adjusts the approved rates in real dollars for actual inflation.

ATCO Power Australia

ATCO Power Australia develops, builds, owns and operates energy and infrastructure assets, including the two natural gas fired generation plants: Karratha in the Pilbara region of Western Australia, and Osborne in Adelaide, South Australia.

ATCO Power Australia adjusted earnings of $1 million and $2 million in the second quarter and first six months of 2026 were comparable to the same periods in 2025.

RECENT DEVELOPMENTS

Osborne Power Purchase Agreement (PPA) Extension

In June 2026, ATCO Australia executed an extension to the Osborne PPA with Origin Energy Electricity Limited. The extension commences January 2028 and extends until December 2035, with five one-year options that enable further extensions to December 2040. The extension of the PPA is subject to a condition precedent on the land lease which is expected to be met in the second half of 2026.

‌Canadian Utilities Financing s Other

Canadian Utilities Financing & Other includes CU Inc. and Canadian Utilities preferred share dividends and financing expenses.

REVENUES

Including intersegment eliminations, Canadian Utilities Financing & Other revenues of $3 million and $6 million in the second quarter and first six months of 2026 were comparable to the same periods in 2025.

ADJUSTED EARNINGS (LOSS)

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

Including intersegment eliminations, Canadian Utilities Financing & Other adjusted loss in the second quarter and first six months of 2026 was $2 million and $8 million higher than the same periods in 2025 mainly due to increased interest expense on the debt issuance in the third quarter of 2025 related to the pre-funding of the Yellowhead Pipeline investment, and higher share-based compensation expense related to an increase in Canadian Utilities' share price, partially offset by higher interest income.

‌POLICY AND REGULATORY UPDATES

We constructively work with all levels of government to advocate for enabling policy and regulation, and to identify barriers that impede cost-effective, economy-wide solutions. We participate in a wide number of discussions, and the following are examples of where we focus our efforts on policies or regulations most relevant to our existing or planned projects.

CANADA

AFFORDABLE HOUSING

On June 18, 2026, legislation supporting the federal government's housing affordability agenda advanced the implementation of housing supply measures, including approximately $1.7 billion in funding for provinces and territories through Bill C-26, the Improving Housing Supply Acī. The funding is intended to support permitting, servicing, and other housing-enabling infrastructure initiatives designed to accelerate residential development and address housing shortages across Canada.

CANADA-ALBERTA ENERGY COOPERATION FRAMEWORK

On May 15, 2026, Canada and Alberta announced an Implementation Agreement supporting the Canada-Alberta Memorandum of Understanding (Implementation Agreement) on energy development and climate policy. The agreement establishes a framework for collaboration on industrial carbon pricing, electricity system growth, methane emission reductions and major project development. Governments also continued work on a coordinated environmental and impact assessment framework intended to streamline review processes for major energy and infrastructure projects.

ALBERTA

INDUSTRIAL CARBON PRICING FRAMEWORK

The Implementation Agreement provides additional clarity regarding Alberta's long-term industrial carbon pricing framework under the Technology Innovation and Emissions Reduction (TIER) system, including a defined carbon price pathway intended to provide greater certainty for industry and investors while supporting emissions reduction objectives.

On July 2, 2026, the Oil Sands Alliance and the governments of Canada and Alberta signed a non-binding memorandum of understanding supporting carbon capture and storage, industrial decarbonization, and long-term investment in emissions-reduction initiatives, further reinforcing the policy direction.

While these agreements provide additional policy certainty and support continued alignment on industrial emissions reduction objectives, aspects of the framework remain subject to further development and implementation, including elements of the industrial carbon pricing framework and related investment support mechanisms. The final design of these measures may influence compliance costs, investment decisions, and industrial competitiveness. ATCO continues to monitor developments and assess potential implications for its businesses and customers.

CLEAN ELECTRICITY REGULATIONS

The Implementation Agreement confirms that Alberta's obligations under the federal Clean Electricity Regulations will remain suspended while governments develop an alternative framework for the province's electricity sector. The agreement follows concerns raised by Alberta, including legal proceedings related to the application of the regulations on electricity reliability, affordability, and future investment. ATCO continues to monitor policy and regulatory developments as governments advance implementation of the framework.

ACCELERATING MAJOR PROJECT ASSESSMENTS

On June 23, 2026, Canada and Alberta signed a final Cooperation Agreement on Environmental and Impact Assessment, formalizing a coordinated approach to the review of major projects. The agreement supports the "one project, one review" objective by reducing duplication between federal and provincial assessment processes while maintaining environmental oversight and Indigenous consultation requirements. The framework is intended to improve regulatory clarity and support more efficient approvals for major energy, utility, transportation, and infrastructure projects.

‌OTHER EXPENSES AND INCOME

A financial summary of other consolidated expenses and income items for the second quarter and first six months of 2026 and 2025 is given below. These amounts are presented in accordance with IFRS accounting standards. They have not been adjusted for the timing of revenues and expenses associated with rate-regulated activities and other items that are not in the normal course of business.

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

OPERATING COSTS

Operating costs, which are total costs and expenses less depreciation and amortization, increased by $84 million and

$73 million in the second quarter and first six months of 2026 compared to the same periods in 2025. Increased operating costs were mainly due to increased material costs due to higher project activity in ATCO Structures, higher expenses in Natural Gas Distribution for third party franchise fees, and increased purchased power expenses in ATCO Electric Yukon. Increased operating costs were partially offset by higher unrealized and realized gains on derivative financial instruments in ATCO Energy, and non-recurring costs incurred in 2025 associated with restructuring activities and transition costs related to activities to shift the managed IT services from a single-vendor service provider to a hybrid model of multiple new vendors and internal teams.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization increased by $15 million and $25 million in the second quarter and first six months of 2026 compared to the same periods in 2025 mainly due to ongoing capital investments in the Regulated Utilities, and ATCO Structures' increase in global space rental fleet assets.

EARNINGS FROM INVESTMENT IN ASSOCIATE COMPANY

Earnings from investment in associate company relate to our 40 per cent ownership interest in Neltume Ports, a port operator and developer with a diversified portfolio of 17 multi-purpose, bulk cargo and container port facilities and 6 port operation services. The business is located primarily in Chile with additional operations in Uruguay, Argentina, Brazil, Guatemala, and the US.

Earnings from investment in associate company in the second quarter and first six months of 2026 were $1 million and

$2 million lower than the same periods in 2025 mainly due to changes in cargo mix and operating margins, and the impact of foreign exchange rates in the first quarter of 2026.

EARNINGS FROM INVESTMENT IN JOINT VENTURES

Earnings from investment in joint ventures is mainly comprised of Canadian Utilities' ownership positions in electricity generation plants; electricity operations in the Northwest Territories including Naka Power Utilities (NWT); LUMA Energy electricity operations and maintenance in Puerto Rico; and the Strathcona Storage Limited Partnership, which operates hydrocarbon storage facilities at the ATCO Heartland Energy Centre near Fort Saskatchewan, Alberta. It also includes certain ATCO Frontec ownership interests in joint ventures holding facilities operations and maintenance contracts.

Earnings from investment in joint ventures in the second quarter and first six months of 2026 were $1 million and $2 million higher than the same periods in 2025 mainly due to additional earnings from joint ventures within the ATCO Frontec business.

NET FINANCE COSTS

Net finance costs increased by $13 million and $23 million in the second quarter and first six months of 2026 compared to the same periods in 2025 mainly due to additional debt issued to fund ongoing capital investment.

INCOME TAX EXPENSE

Income taxes increased by $17 million and $21 million in the second quarter and first six months of 2026 compared to the same periods in 2025 mainly due to higher IFRS earnings before income taxes, and the impact of previously unrecognized deferred income taxes recorded in the prior year.

‌LIQUIDITY AND CAPITAL RESOURCES

Our financial position is supported by our diversified portfolio with a structured foundation of regulated and long-term contracted businesses. Our business strategies, funding of operations, and planned future growth are supported by maintaining strong investment grade credit ratings and access to capital markets at competitive rates. Primary sources of capital are cash flows from operations and capital markets. Liquidity is generated by cash flows from operations and is supported by appropriate levels of cash and available committed credit facilities.

CREDIT RATINGS

The following table shows the credit ratings assigned to ATCO, Canadian Utilities, CU Inc. and ATCO Gas Australia Pty Ltd (ATCO Gas Australia) at June 30, 2026.

S&P Global Ratings has assigned Canadian Utilities' subsidiary ATCO Gas Australia (1) an A- issuer and senior unsecured debt credit rating with a stable outlook.

(1) ATCO Cas Ausīralia is a rєgulaīєd providєr or naīural gas disīribuīion sєrvicєs in Wєsīєrn Ausīralia, sєrving mєīropoliīan 7єrīh and surrounding rєgions.

On June 24, 2026, Morningstar DBRS affirmed its 'A (high)' long-term corporate credit rating and stable outlook on Canadian Utilities' subsidiary, CU Inc.

On July 15, 2026, Morningstar DBRS affirmed its 'A (low)' long-term corporate credit rating and stable outlook on ATCO Ltd. and its 'A' long-term corporate credit rating and stable outlook on Canadian Utilities Limited.

Of the $4,592 million in total lines of credit, $743 million was in the form of uncommitted credit facilities with no set maturity date. The other $3,849 million in credit lines was committed with maturities between 2027 and 2031, and may be extended at the option of the lenders.

Of the $1,335 million in lines of credit used, $731 million was related to ATCO Gas Australia. Long-term committed credit lines are used to satisfy all of ATCO Gas Australia's term debt financing needs. The majority of the remaining usage is related to the funding needs in ATCO EnPower and CU Inc., the issuance of Canadian Utilities' letters of credit, and ATCO Structures & Logistics' expansion of its global rental fleet and working capital needs on workforce housing projects.

CONSOLIDATED CASH FLOWS

At June 30, 2026, the Company's cash position was $610 million. This represents an increase of $419 million compared to the cash position as of June 30, 2025. Cash movements for the second quarter and first six months of 2026 and 2025 are outlined in the following table:

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

The opening cash position of $699 million and $977 million in the second quarter and first six months of 2026 was $559 million and $883 million higher compared to the opening cash position for the second quarter and first six months of 2025 mainly due to increased issuance of long-term debt and Canadian Utilitiesʼ equity preferred shares related to growth projects for new customers in the Regulated Utilities.

Operating Activities

Cash flows from operating activities were $679 million in the second quarter of 2026, $166 million higher than the same period in 2025. This increase was mainly due to higher earnings within most business units, and increased customer receipts due to colder weather and higher customer rates in Natural Gas Distribution, partially offset by the timing of working capital.

Cash flows from operating activities were $1,408 million in the first six months of 2026, $138 million higher than the same period in 2025. This increase was mainly due to higher earnings within most business units, and lower income taxes paid in Natural Gas Distribution mainly due to a prior year tax refund received. Increases were partially offset by the timing of working capital.

Investing Activities

Cash flows used in investing activities were $427 million and $875 million in the second quarter and first six months of 2026,

$20 million and $2 million lower than the same periods in 2025 mainly due to the timing of capital projects and settlements related to accounts payable for capital projects in the Regulated Utilities and ATCO EnPower, partially offset by higher spend in ATCO Structures for ongoing expansion of the space rental fleet.

A reconciliation of capital investment to capital expenditures is summarized below.

Cash Used for Capital Investment and Capital Expenditures

Capital investment and capital expenditures for the second quarter and first six months of 2026 and 2025 are shown in the following table.

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Includєs addiīions īo propєrīy, planī and єquipmєnī, and inīangiblєs as wєll as $11 million and $20 million (2025 - $8 million and $13 million) or capiīalizєd inīєrєsī during consīrucīion ror īhє sєcond quarīєr and rirsī six monīhs or 2026.

2. Includєs $27 million and $70 million ror īhє sєcond quarīєr and rirsī six monīhs or 2026 (2025 - $43 million and $68 million) or capiīal єxpєndiīurєs, mainly in ATCO Enєrgy Sysīєms, īhaī wєrє rundєd wiīh īhє assisīancє or cusīomєr conīribuīions.

3. Non-CAA7 rinancial mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Capiīal Invєsīmєnī īo Capiīal Expєndiīurєs" in īhis MDhA.

Total capital investment of $489 million and $908 million in the second quarter and first six months of 2026 was $46 million and $2 million higher compared to the same periods in 2025 mainly due to increased spending related to ongoing system upgrades and growth projects in the Regulated Utilities, including Yellowhead Pipeline in Natural Gas Transmission, increased capital spending in ATCO Structures on space rental fleet additions, and ATCO Investments' project development. Higher capital investment was partially offset by the completion of CETO and timing of capital maintenance projects and infrastructure upgrades in Electricity Transmission, and decreased capital spend in ATCO EnPower.

Total capital expenditures of $486 million and $904 million in the second quarter and first six months of 2026 were $45 million and $4 million higher compared to the same periods in 2025 mainly due to the factors outlined above. Capital expenditures in joint ventures and business combinations are excluded from capital expenditures.

Financing Activities

Cash flows used in financing activities were $336 million and $897 million in the second quarter and first six months of 2026,

$319 million and $597 million higher compared to the same periods in 2025 mainly due to lower issuances of long-term debt, and higher repayment of debt in Canadian Utilities and CU Inc. in the first quarter of 2026.

Information pertaining to financing activities is summarized below.

Dividends and Common Shares

We have increased our common share dividend each year since 1993, a 33-year track record. Dividends paid to Class I Share and Class II Share owners totalled $58 million and $117 million in the second quarter and first six months of 2026.

On July 9, 2026, the Board of Directors declared a third quarter dividend of 51.96 cents per share. The payment of any dividend is at the discretion of the Board of Directors and depends on our financial condition and other factors.

Normal Course Issuer Bid (NCIB)

We believe that, from time to time, the market price of our Class I Shares may not fully reflect the value of our business, and that purchasing Class I Shares represents a desirable use of available funds. The purchase of Class I Shares, at appropriate prices, will also minimize any dilution resulting from the exercise of stock options.

On March 13, 2026, ATCO commenced an NCIB to purchase up to 2,017,264 outstanding Class I Shares. The bid will expire on March 12, 2027. To date, no shares have been purchased.

‌SHARE CAPITAL

ATCO's equity securities consist of Class I Shares and Class II Shares.

At July 27, 2026, we had outstanding 100,985,167 Class I Shares, 11,542,320 Class II Shares, and options to purchase 2,862,341 Class I Shares.

CLASS I NON-VOTING SHARES AND CLASS II VOTING SHARES

Each Class II Share may be converted into one Class I Share at any time at the share ownerʼs option. If an offer to purchase all Class II Shares is made, and such offer is accepted and taken up by the owners of a majority of the Class II Shares, and, if at the same time, an offer is not made to the Class I Share owners on the same terms and conditions, then the Class I Shares will be entitled to the same voting rights as the Class II Shares. The two share classes rank equally in all other respects, except for voting rights.

Of the 10,200,000 Class I Shares authorized for grant of options under our stock option plan 6,570,950 Class I Shares were available for issuance at June 30, 2026. Options may be granted to officers and key employees of the Company and its subsidiaries at an exercise price equal to the weighted average of the trading price of the shares on the Toronto Stock Exchange for the five trading days immediately preceding the grant date. The vesting provisions and exercise period (which cannot exceed 10 years) are determined at the time of grant.

‌QUARTERLY INFORMATION

The following table shows financial information for the eight quarters ended September 30, 2024 through June 30, 2026.

($ millions, єxcєpī ror pєr sharє daīa) Q3 2025 Q4 2025 Q1 2026 Q2 2026

1. Non-CAA7 raīio. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

2. Toīal or sєgmєnīs mєasurєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Class I and Class II Sharєs" in īhis MDhA.

Our financial results for the previous eight quarters reflect the cyclical demand for workforce housing and seasonality with our space rental products and services in ATCO Structures and ATCO Frontec, cargo volumes and margins at Neltume Ports, and in Canadian Utilities, the timing of utility regulatory decisions, and the seasonal nature of demand for natural gas and electricity.

ADJUSTED EARNINGS

Adjusted earnings in the third quarter of 2025 were higher than the same period in 2024 mainly due to ATCO Frontec's realized operating efficiencies, ATCO Structuresʼ increased space rental sale and leasing activity in Canada and the US and permanent modular construction activity in Canada, growth in rate base in ATCO Energy Systems' businesses, and higher customer rates in ATCO Gas Australia as a result of moving into a new Access Arrangement (AA6). Higher adjusted earnings were partially offset by a decrease in 2025 ROE in ATCO Energy Systems, and the completion of efficiency carryforward mechanism (ECM) funding in 2024 for Electricity Distribution and Natural Gas Distribution. Additionally, higher adjusted earnings were partially offset by lower interest income earned, the timing of certain expenses, and decreased earnings contribution from ATCO Energy, which was transferred to ATCO on August 1, 2024.

Adjusted earnings in the fourth quarter of 2025 were higher than the same period in 2024 mainly due to ATCO Structuresʼ increased sale and leasing activity in Canada and the US, permanent modular construction activity in the US, and favourable cargo mix and improved margins across operations within Neltume Ports' portfolio. Higher adjusted earnings were also due to growth in rate base in ATCO Energy Systems' businesses, and higher customer rates in ATCO Gas Australia as a result of moving into AA6. Higher earnings were partially offset by a decrease in 2025 ROE in ATCO Energy Systems, and the completion of ECM funding in 2024 for Electricity Distribution and Natural Gas Distribution. Additionally, higher earnings were partially offset by higher net finance costs.

Adjusted earnings in the first quarter of 2026 were higher than the same period in 2025 mainly due to increased adjusted earnings in ATCO Energy Systems driven by growth in rate base and lower income tax expense resulting from the March 2026 enactment of Bill C-15. Higher adjusted earnings were also due to the impact of inflation indexing on rate base and increased customer rates in ATCO Gas Australia, and ATCO Structures' earnings from the Stibnite Gold project and increased space rentals activity. Partially offsetting these increases in adjusted earnings were higher net interest expense and higher share-based compensation expense in both ATCO Corporate & Other and Canadian Utilities Financing & Other.

Adjusted earnings in the second quarter of 2026 were higher than the same period in 2025 mainly due to increased space rentals activity and earnings from the Stibnite Gold project in ATCO Structures, and the impact of inflation indexing on rate base and increased customer rates in ATCO Gas Australia. Higher adjusted earnings were also due to growth in rate base in ATCO Energy Systems' businesses, and year-to-date recognition of final 2026 rates in Electricity Transmission following the AUC's decision in the second quarter of 2026 approving the NSA relating to the 2026-2027 GTA.

EARNINGS ATTRIBUTABLE TO CLASS I AND CLASS II SHARES

Earnings attributable to Class I and Class II Shares include timing adjustments related to rate-regulated activities and unrealized gains or losses on mark-to-market forward and swap commodity contracts. They also include one-time gains and losses, impairments, and other items that are not in the normal course of business or a result of day-to-day operations recorded at various times over the past eight quarters. These items are excluded from adjusted earnings and are highlighted below:

• In the third quarter of 2024, fourth quarter of 2024, and first quarter of 2025, the Company recorded restructuring costs of $6 million (after-tax and non-controlling interests), $4 million (after-tax and non-controlling interests), and

  $8 million (after-tax and non-controlling interests), respectively, mainly related to staff reductions and associated severance costs. Restructuring costs incurred in 2025 were a continuation of restructuring activities commenced in 2024.

• In the third quarter of 2024, the transfer of ownership of ATCO Energy from Canadian Utilities to ATCO was completed. Canadian Utilities recorded a loss of $14 million ($7 million after non-controlling interests) which is eliminated on consolidation with ATCO.

• In each of the four quarters of 2025, the Company recognized IT transition costs of $5 million (after-tax and non-controlling interests), $3 million (after-tax and non-controlling interests), $1 million (after-tax and non-controlling interests) and $2 million (after-tax and non-controlling interests), respectively. The transition activities commenced on January 1, 2025 and concluded in the fourth quarter of 2025. The transition costs were primarily related to activities to shift the managed IT services from a single-vendor service provider to a hybrid model of multiple new vendors and internal teams.

• In the fourth quarter of 2025, the Company recognized asset impairments and write-offs of $253 million (after-tax and non-controlling interests) mainly related to the Alberta Renewables Portfolio in ATCO EnPower that was primarily driven by elevated curtailment from inadequate transmission infrastructure and electricity grid deficiencies, and certain hydrogen assets in Natural Gas Distribution which were impaired due to the uncertainty of utility hydrogen regulations. In addition, ATCO Gas Australia recognized an impairment related to the phasing out of an aging liquefied petroleum gas distribution network in Albany, Western Australia due to large sections of the system nearing the end of their service life.

‌OTHER FINANCIAL AND NON-GAAP MEASURES

This MD&A should be read with the Company's unaudited interim consolidated financial statements for the six months ended June 30, 2026. The unaudited interim consolidated financial statements are prepared according to International Accounting Standard (IAS) 34 Interim Financial Reporting using accounting policies consistent with IFRS as issued by the International Accounting Standards Board (IFRS Accounting Standards).

This MD&A contains various "total of segments measures", "non-GAAP financial measures", and "non-GAAP ratios" (as such terms are defined in NI 52-112), which are described in further detail below.

TOTAL OF SEGMENTS MEASURES

NI 52-112 defines a "total of segments measure" as a financial measure disclosed by an issuer that (a) is a subtotal or total of two or more reportable segments of an entity, (b) is not a component of a line item disclosed in the primary financial statements of the entity, (c) is disclosed in the notes to the financial statements of the entity, and (d) is not disclosed in the primary financial statements of the entity.

Consolidated adjusted earnings (loss) and adjusted earnings (loss) for each of ATCO Structures & Logistics, ATCO Investments, Canadian Utilities Limited, ATCO Energy Systems, ATCO EnPower, ATCO Australia, and Canadian Utilities Financing & Other are total of segments measures, as defined in NI 52-112.

Total of segments measures are most directly comparable to total earnings (loss) attributable to Class I and Class II Shares. Comparable total of segments measures for the same periods in 2025 have been calculated using the same composition and are disclosed alongside the current total of segments measures in this MD&A. A reconciliation of the total of segments measures with total earnings (loss) attributable to Class I and Class II Shares is presented in this MD&A.

NON-GAAP FINANCIAL MEASURES

NI 52-112 defines a "non-GAAP financial measure" as a financial measure disclosed by an issuer that (a) depicts the historical or expected future financial performance, financial position or cash flows of an entity, (b) with respect to its composition, excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the entity, (c) is not disclosed in the financial statements of the entity, and (d) is not a ratio, fraction, percentage or similar representation.

Capital investment; adjusted earnings (loss) for each of ATCO Structures, ATCO Frontec, Other Investments, Total Investments, ATCO Corporate & Other, Electricity Distribution, Electricity Transmission, International Electricity Operations, Total Electricity, Natural Gas Distribution, Natural Gas Transmission, Total Natural Gas, Electricity Generation, Storage & Industrial Water, ATCO Gas Australia, and ATCO Power Australia; and adjusted EBITDA for ATCO Structures and ATCO EnPower (inclusive of Electricity Generation and Storage & Industrial Water) are non-GAAP financial measures, as defined in NI 52-112.

Adjusted Earnings

Adjusted earnings (loss) are defined as earnings (loss) attributable to Class I and Class II Shares after adjusting for the timing of revenues and expenses associated with rate-regulated activities and unrealized gains or losses on mark-to-market forward and swap commodity contracts. Adjusted earnings (loss) also exclude one-time gains and losses, impairments, and items that are not in the normal course of business or a result of day-to-day operations.

Adjusted earnings (loss) present earnings (loss) from rate-regulated activities on the same basis as was considered prior to adopting IFRS Accounting Standards - that basis being the US accounting principles taking into account a more likely than not recognition threshold for rate regulated activities. Adjusted earnings (loss) are presented in Note 3 of the unaudited interim consolidated financial statements.

Adjusted earnings (loss) are most directly comparable to earnings (loss) attributable to Class I and Class II Shares. Adjusted earnings (loss) is not a standardized financial measure under the reporting framework used to prepare our financial statements. Adjusted earnings (loss) may not be comparable to similar financial measures disclosed by other issuers.

Managementʼs view is that adjusted earnings (loss) are a key measure of segment earnings (loss) that are used to assess

segment performance and allocate resources and allow for a more effective analysis of operating performance and trends. For investors, adjusted earnings (loss) may provide value as they exclude items that are not in the normal course of business and, as such, provide insight as to earnings (loss) resulting from the issuer's usual course of business. For further information, a "Reconciliation of Adjusted Earnings to Earnings attributable to Class I and Class II Shares" is presented in this MD&A.

Capital Investment

Capital investment is a non-GAAP financial measure defined as cash used for capital expenditures, business combinations, and cash used in the Company's share of capital expenditures in joint ventures. Capital expenditures include additions to property, plant and equipment and intangibles as well as interest capitalized during construction. Capital investment is most directly comparable to capital expenditures. Capital investment is not a standardized financial measure under the reporting framework used to prepare our financial statements. Capital investment may not be comparable to similar financial measures disclosed by other issuers. Management views capital investment as the Company's total cash investment in assets. For investors, capital investment is useful because it identifies how much cash is being used to acquire and invest in assets. For further information, a "Reconciliation of Capital Investment to Capital Expenditures" is presented in this MD&A.

Adjusted EBITDA

Further information regarding adjusted EBITDA, including a reconciliation of adjusted EBITDA to adjusted earnings for each of ATCO Structures and ATCO EnPower (inclusive of Electricity Generation and Storage & Industrial Water) is presented in Appendix 1: Supplemental Non-Audited Financial Information to this MD&A.

NON-GAAP RATIO

NI 52-112 defines a "non-GAAP ratio" as a financial measure disclosed by an issuer that (a) is in the form of a ratio, fraction, percentage or similar representation, (b) has a non-GAAP financial measure as one or more of its components, and (c) is not disclosed in the financial statements of the entity.

Adjusted earnings (loss) ($ per share) is a non-GAAP ratio, as defined in NI 52-112. Adjusted earnings (loss) per Class I and Class II Share is calculated by dividing adjusted earnings (loss) by the weighted average number of shares outstanding for the period.

‌RECONCILIATION OF ADJUSTED EARNINGS TO EARNINGS ATTRIBUTABLE TO CLASS I AND CLASS II SHARES

Adjusted earnings (loss) are earnings (loss) attributable to Class I and Class II Shares after adjusting for the timing of revenues and expenses associated with rate-regulated activities and unrealized gains or losses on mark-to-market forward and swap commodity contracts. Adjusted earnings (loss) also exclude one-time gains and losses, impairments, and items that are not in the normal course of business or a result of day-to-day operations.

Adjusted earnings (loss) are a key measure of segment earnings (loss) that management uses to assess segment performance and allocate resources. It is managementʼs view that adjusted earnings (loss) allow a better assessment of the economics of rate regulation in Canada and Australia than IFRS earnings (loss). Additional information regarding this measure is provided in the "Other Financial and Non-GAAP Measures" section of this MD&A.

The following tables reconcile adjusted earnings (loss) to the directly comparable financial measure, earnings (loss) attributable to Class I and Class II shares.

($ millions)

Three Months Ended

June 30

($ millions)

Six Months Ended

June 30

UNREALIZED GAINS AND LOSSES ON MARK-TO-MARKET FORWARD AND SWAP COMMODITY CONTRACTS

The Companyʼs electricity generation and electricity and natural gas retail businesses enter into fixed-price swap commodity contracts to manage exposure to electricity and natural gas prices and volumes. These contracts are measured at fair value. Unrealized gains and losses due to changes in the fair value of fixed-price swap commodity contracts where hedge accounting is not applied, or due to hedge ineffectiveness where hedge accounting is applied, together with reclassifications of unrealized gains or losses from other comprehensive income or loss related to both the electricity generation business and retail business, are recognized in the ATCO EnPower and ATCO Investments segments, respectively.

The Senior Management Team, consisting of the Chief Executive Officer (CEO) and other members of the Executive Committee, believes that removal of the unrealized gains and losses on mark-to-market forward and swap commodity contracts from the determination of adjusted earnings (loss) provides a better representation of operating results for the Company's operations.

Realized gains or losses are recognized in adjusted earnings (loss) when the commodity contracts are settled.

RATE-REGULATED ACTIVITIES

ATCO Electric Transmission, ATCO Electric Distribution, ATCO Electric Yukon, Naka Power Utilities (NWT), ATCO Gas, ATCO Pipelines and ATCO Gas Australia are collectively referred to as the Regulated Utilities.

IFRS 20, Regulatory Assets and Regulatory Liabilities (IFRS 20), was issued in May 2026 and is effective for annual periods starting January 1, 2029. The Company is in the process of evaluating IFRS 20 and given the Company has not yet adopted this accounting standard, the Regulated Utilities continue to be unable to recognize regulatory assets and regulatory liabilities from rate-regulated activities as may be directed by regulatory decisions. Instead, for IFRS purposes, the Regulated Utilities recognize revenues in earnings when amounts are billed to customers, consistent with the regulator-approved rate design.

Operating costs and expenses are recorded when incurred. Costs incurred in constructing an asset that meet the asset recognition criteria are included in the related property, plant and equipment or intangible asset.

Until the Company adopts IFRS 20, the Company considers standards issued by the Financial Accounting Standards Board in the US as another source of generally accepted accounting principles taking into account a more likely than not recognition threshold in accounting for rate-regulated activities in its internal reporting provided to the Senior Management Team, which believes that earnings (loss) presented in this manner are a better representation of the operating results of the Companyʼs rate-regulated activities. Therefore, the Company presents adjusted earnings (loss) as part of its segmented disclosures on this basis. Rate-regulated accounting (RRA) standards impact the timing of how certain revenues and expenses are recognized when compared to non-rate regulated activities, to appropriately reflect the economic impact of a regulator's decisions on revenues.

Rate-regulated accounting differs from IFRS Accounting Standards (pre-adoption of IFRS 20) in the following ways:

Timing Adjustment Items RRA Treatment

IFRS Accounting Standards Treatment (Pre-adoption of IFRS 20)

Additional revenues billed in current period

Revenues to be billed in future periods

Regulatory decisions received

Settlement of regulatory decisions and other items

Future removal and site restoration costs, and impact of colder temperatures.

Deferred income taxes, impact of warmer temperatures, and impact of inflation on rate base.

Regulatory decisions received which relate to current and prior periods.

Settlement of amounts receivable or payable to customers and other items.

The Company defers the recognition of cash received in advance of future expenditures.

The Company recognizes revenues associated with recoverable costs in advance of future billings to customers.

The Company recognizes the earnings impact from a regulatory decision pertaining to current and prior periods when the decision is received.

The Company recognizes the amount receivable or payable to customers as a reduction in its regulatory assets and liabilities when collected or refunded through future billings.

The Company recognizes revenues when amounts are billed to customers and costs when they are incurred.

The Company recognizes costs when they are incurred, but does not recognize their recovery until customer rates are changed and amounts are collected through future billings.

The Company does not recognize the earnings impact from a regulatory decision when it is received as regulatory assets and liabilities are not recorded under IFRS Accounting Standards.

The Company recognizes the earnings impact when customer rates are changed and amounts are recovered or refunded to customers through future billings.

For the second quarter and first six months of 2026 and 2025, the significant timing adjustments as a result of the differences between rate-regulated accounting and IFRS Accounting Standards (pre-adoption of IFRS 20) are as follows:

Three Months Ended

June 30

Six Months Ended

June 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Rєmoval and siīє rєsīoraīion cosīs arє billєd īo cusīomєrs ovєr īhє єsīimaīєd usєrul lirє or īhє rєlaīєd assєīs basєd on rorєcasī cosīs īo bє incurrєd in ruīurє pєriods.

2. Naīural Cas Disīribuīion's cusīomєr raīєs arє basєd on a rorєcasī or normal īєmpєraīurєs. Flucīuaīions in īєmpєraīurєs may rєsulī in morє or lєss rєvєnuє bєing rєcovєrєd rrom cusīomєrs īhan rorєcasī. Rєvєnuєs abovє or bєlow īhє normal īєmpєraīurєs in īhє currєnī pєriod arє rєrundєd īo or rєcovєrєd rrom cusīomєrs in ruīurє pєriods.

3. Incomє īaxєs arє billєd īo cusīomєrs whєn paid by īhє Company.

4. Thє inrlaīion-indєxєd porīion or ATCO Cas Ausīralia's raīє basє is billєd īo cusīomєrs īhrough īhє rєcovєry or dєprєciaīion in subsєquєnī pєriods basєd on īhє acīual or rorєcasīєd annual raīє or inrlaīion. Undєr raīє-rєgulaīєd accounīing, rєvєnuє is rєcognizєd in īhє currєnī pєriod ror īhє inrlaīion componєnī or raīє basє whєn iī is єarnєd. Dirrєrєncєs bєīwєєn īhє amounīs єarnєd and īhє amounīs billєd īo cusīomєrs arє dєrєrrєd and rєcognizєd in rєvєnuєs ovєr īhє sєrvicє lirє or īhє rєlaīєd assєī.

5. In connєcīion wiīh īhє 7BR2 rє-opєnєr dєcision rєndєrєd by īhє AUC on May 28, 2025, Elєcīriciīy Disīribuīion and Naīural Cas Disīribuīion rєrundєd $5 million (arīєr-īax and non-conīrolling inīєrєsīs) and $6 million (arīєr-īax and non-conīrolling inīєrєsīs), rєspєcīivєly, īo cusīomєrs ror īhє six monīhs єndєd Junє 30, 2026 (2025 - nil). Combinєd wiīh īhє amounīs rєrundєd īo cusīomєrs ror īhє yєar єndєd Dєcєmbєr 31, 2025, Elєcīriciīy Disīribuīion and Naīural Cas Disīribuīion havє now rєrundєd īhє īoīal amounī īhaī was dirєcīєd by īhє AUC in īhє 7BR2 rє-opєnєr dєcision, which was $15 million (arīєr-īax and non-conīrolling inīєrєsīs) ($35 million bєrorє īax and non-conīrolling inīєrєsīs) ror Elєcīriciīy Disīribuīion and $15 million (arīєr-īax and non-conīrolling inīєrєsīs) ($36 million bєrorє īax and non-conīrolling inīєrєsīs) ror Naīural Cas Disīribuīion.

6. Thє īhrєє monīhs єndєd Junє 30, 2026 includєs a dєcrєasє in єarnings ror īhє pєriod or $5 million (arīєr-īax and non-conīrolling inīєrєsīs) ror Elєcīriciīy Transmission rєlaīєd īo īhє 2026-2027 Cєnєral Tarirr Applicaīion Nєgoīiaīєd Sєīīlєmєnī Agrєєmєnī and ror Naīural Cas Transmission rєlaīєd īo īhє 2026-2028 Cєnєral Raīє Applicaīion dєcision.

IT COMMON MATTERS DECISION

Consistent with the treatment of the gain on sale in 2014 from the IT services business by the Company, financial impacts associated with the IT Common Matters decision are excluded from adjusted earnings. The amount excluded from adjusted earnings in the second quarter and first six months of 2026 was $1 million and $2 million (after-tax and non-controlling interests) (2025 - nil and $1 million (after-tax and non-controlling interests)).

TRANSITION OF MANAGED IT SERVICES

In the second quarter and first six months of 2025, the Company recognized IT transition costs of $3 million and $8 million (after-tax and non-controlling interests). The transition costs were primarily related to activities to shift from a single-vendor service provider to a hybrid model of multiple new vendors and internal teams. The transition activities commenced on January 1, 2025 and were substantially completed in the fourth quarter of 2025. As these costs were not in the normal course of business, they were excluded from adjusted earnings.

RESTRUCTURING

In the first six months of 2025, the Company recorded restructuring costs of $8 million (after-tax and non-controlling interests) that were mainly related to staff reductions and associated severance costs. As these costs were not in the normal course of business, they were excluded from adjusted earnings.

SEGMENTED RECONCILIATION OF ADJUSTED EARNINGS TO EARNINGS ATTRIBUTABLE TO CLASS I AND CLASS II SHARES

ATCO Structures G Logistics

The following tables reconcile adjusted earnings (loss) for the ATCO Structures & Logistics business unit to the directly comparable financial measure, earnings (loss) attributable to Class I and Class II shares.

($ millions)

Three Months Ended

June 30

($ millions)

Six Months Ended

June 30

ATCO Investments

The following tables reconcile adjusted earnings (loss) for ATCO Investments to the directly comparable financial measure, earnings (loss) attributable to Class I and Class II Shares.

($ millions)

Three Months Ended

June 30

($ millions)

Six Months Ended

June 30

ATCO Energy Systems

The following tables reconcile adjusted earnings (loss) for the ATCO Energy Systems business unit to the directly comparable financial measure, earnings (loss) attributable to Class I and Class II Shares.

($ millions)

Three Months Ended

June 30

($ millions)

Six Months Ended

June 30

ATCO EnPower

The following tables reconcile adjusted earnings (loss) for the ATCO EnPower business unit to the directly comparable financial measure, earnings (loss) attributable to Class I and Class II shares.

($ millions)

Three Months Ended

June 30

($ millions)

Six Months Ended

June 30

ATCO Australia

The following tables reconcile adjusted earnings for the ATCO Australia business unit to the directly comparable financial measure, earnings attributable to Class I and Class II shares.

($ millions)

Three Months Ended

June 30

($ millions)

Six Months Ended

June 30

‌RECONCILIATION OF CAPITAL INVESTMENT TO CAPITAL EXPENDITURES

Capital investment is a non-GAAP financial measure defined as cash used for capital expenditures, business combinations, and cash used in the Company's share of capital expenditures in joint ventures. In management's opinion, capital investment reflects the Company's total cash investment in assets. Capital expenditures include additions to property, plant and equipment and intangibles as well as interest capitalized during construction. Additional information regarding this non-GAAP measure is provided in the "Other Financial and Non-GAAP Measures" section of this MD&A.

($ millions)

Three Months Ended

June 30

($ millions)

Six Months Ended

June 30

(1) Thє businєss combinaīion rєrєrs īo ATCO Sīrucīurєs h Logisīics' acquisiīion or NRB Limiīєd in īhє īhird quarīєr or 2024 and īhє rinal wor½ing capiīal adjusīmєnī complєīєd in īhє rirsī quarīєr or 2025.

‌OTHER FINANCIAL INFORMATION

INTERNAL CONTROL OVER FINANCIAL REPORTING

The certification of interim filings for the interim period ended June 30, 2026 requires that the Company disclose in the interim MD&A any changes in the Companyʼs internal controls over financial reporting (ICFR) that occurred during the period that have materially affected, or are reasonably likely to materially affect, the Companyʼs ICFR. The Company confirms that no such changes were identified in the Companyʼs ICFR during the three months beginning on April 1, 2026 and ending on June 30, 2026.

ADOPTION OF AMENDED ACCOUNTING STANDARDS

Agreements referencing nature-dependent electricity

The Company has adopted the amendments to IFRS 9, Financial Instruments, and IFRS 7, Financial Instruments: Disclosures that are effective January 1, 2026. The amendments improve the reporting of the financial effects of nature-dependent electricity agreements, often structured as power purchase agreements. The amendments clarify the application of the own-use requirements, permit hedge accounting when these agreements are used as hedging instruments, and introduce new disclosure requirements to assist users of financial statements in understanding the effects of these agreements. The adoption of the amendments did not have a significant impact on the Company's unaudited interim consolidated financial statements.

Settlement by electronic payments

The Company has adopted the amendments to IFRS 9, Financial Instruments that are effective January 1, 2026. The amendments clarify the date of recognition and derecognition of financial assets and liabilities, with a new exception for financial liabilities settled using electronic forms of payment. The adoption of the amendments did not have a significant impact on the Company's unaudited interim consolidated financial statements.

IFRS ACCOUNTING STANDARDS NOT YET ADOPTED

Regulatory assets and regulatory liabilities

In May 2026, the International Accounting Standards Board issued IFRS 20, Regulatory Assets and Regulatory Liabilities, which establishes requirements for the recognition, measurement, presentation and disclosure of regulatory assets, regulatory liabilities and related income and expense arising from rate-regulated activities. The new standard is effective for annual periods beginning on or after January 1, 2029, with earlier adoption permitted.

The Company is evaluating the impact of IFRS 20 on its unaudited interim consolidated financial statements. The adoption of the standard is expected to affect the accounting for the Companyʼs rate-regulated activities in the ATCO Energy Systems and ATCO Australia segments.

FORWARD-LOOKING INFORMATION

Certain statements contained in this MD&A constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", "goals", "targets", "strategy", "future", and similar expressions. In particular, forward-looking information in this MD&A includes, but is not limited to, references to: the Company's strategic plans and investment strategy; the payment of dividends and dividend growth; expected growth, expansion and diversification opportunities; the expected timing of commencement, completion or commercial operations of activities, contracts and projects; the expected term or expiry of contracts; the impact or benefits of contracts, including economic and other benefits for the Company and its partners and counterparties; the size, storage, building, generation or transmission capacity expected from business units, assets and projects; expectations regarding ATCO Structures' various projects, including the Stibnite Gold project; expectations regarding ATCO Frontec's various projects, including as a result of the Defence Construction Canada award; the anticipated size, specifications and incremental natural gas delivery capacity of Yellowhead Pipeline, the anticipated capital spend on Yellowhead Pipeline and expected accuracy of the estimate, and expected timing for commencement of construction and bringing Yellowhead Pipeline on-stream; expectations regarding Yellowhead Pipeline's funding structure, including sources of equity and debt funding for the project and potential Indigenous equity participation on the project; expectations regarding CETO, including the anticipated

benefits of the project; expectations regarding the Company's funding strategy for ATCO Energy Systems' regulated debt and equity requirements, including anticipated debenture issuances over the five year (2026-2030) capital expenditure plan, cash flow from operations, $0.7 billion financed in 2025, and an additional $0.8 billion in capital securities to be raised, and common equity not being required to fund the regulated utility growth; the satisfaction of conditions precedent to, and the anticipated term of, the extended Osborne PPA; the expected impact of new legislation; the expected impact of IFRS Accounting Standards issued but not yet adopted, including IFRS 20; the expected timing and impact of policy and regulatory decisions and announcements; and the Companyʼs liquidity, capital resources, contractual financial obligations and other commitments.

Although the Company believes that the expectations reflected in the forward-looking information are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct. Forward-looking information should not be unduly relied upon. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors, which may cause actual results, levels of activity, and achievements to differ materially from those anticipated in such forward-looking information. The forward-looking information reflects the Company's beliefs and assumptions with respect to, among other things: the approval of capital expenditures; regulatory approvals to allow for the recovery of prudently incurred capital expenditures and to earn a fair return on investment; certain other regulatory applications being made and approved; the applicability and stability of legal and regulatory requirements in the jurisdictions in which we invest and/or operate; the payment of fees owing pursuant to applicable contracts; the growth of energy demand; inflation; the development and performance of technology and technological innovations and the ability to otherwise access and implement all technology necessary to achieve business objectives; continuing collaboration with certain business partners and engagement with new business partners, and regulatory and environmental groups; the performance of assets and equipment; demand levels for oil, natural gas, gasoline, diesel and other energy sources; certain levels of future energy use; future production rates; future revenue and earnings; the ability to meet current project schedules, and complete proposed development projects at currently estimated budgets; the availability of financing sources on acceptable terms; expected future borrowing costs and interest rates; and other assumptions inherent in management's expectations in respect of the forward-looking information identified herein.

The Company's actual results could differ materially from those anticipated in this forward-looking information as a result of, among other things: risks inherent in the performance of assets; capital efficiencies and cost savings; applicable laws and regulations and the interpretation and manner of enforcement of such laws and regulations; changes to government policies; regulatory decisions; competitive factors in the industries in which the Company operates; evolving market or economic conditions; credit risk; interest rate fluctuations; the availability and cost of labour, materials, services, infrastructure, and future demand for resources; the development and execution of projects, including development projects not proceeding on schedule or at all, or at currently estimated budgets; the availability of financing sources for development projects on acceptable terms; prices of electricity, natural gas, natural gas liquids, and renewable energy; the development and performance of technology and new energy efficient products, services, and programs including but not limited to the use of zero-emission and renewable fuels, carbon capture, and storage, electrification of equipment powered by zero-emission energy sources and utilization and availability of carbon offsets; potential cancellation, termination, default, non-compliance, or breach of contract by contract counterparties; the risk that payments owed may not be collected or received in a timely manner, or at all; risks associated with potential litigation proceedings; potential damage to our brand and/or reputation that may result from a failure to perform, or from factors outside of our control, or negative publicity related to significant projects, investments, operations or activities; the risk of operational disruptions, outages, or force majeure events; the occurrence of unexpected events such as fires, extreme weather conditions, explosions, blow-outs, equipment failures, transportation incidents, and other accidents or similar events; global pandemics; the imposition of or changes to existing customs duties, tariffs or other trade restrictions; geopolitical tensions and wars; risks associated with operating in international jurisdictions; and other risk factors, many of which are beyond the control of the Company. Due to the interdependencies and correlation of these factors, the impact of any one material assumption or risk on a forward-looking statement cannot be determined with certainty. Readers are cautioned that the foregoing lists are not exhaustive. For additional information about the principal risks that the Company faces, see the "Business Risks and Risk Management" section in the 2025 MD&A.

This MD&A may contain information that constitutes future-oriented financial information or financial outlook information, all of which are subject to the same assumptions, risk factors, limitations and qualifications set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise or inaccurate and, as such, undue reliance should not be placed on such future-oriented financial information or financial outlook information. The Company's actual results, performance and achievements could differ materially from those expressed in, or implied by, such future-oriented financial information or financial outlook information.