Q3 2026 Management's Discussion & Analysis (atco 2026 q3 mda)

ATCO LTD. MANAGEMENT'S DISCUSSION

AND ANALYSIS

FOR THE NINE MONTHS ENDED SEPTEMBER 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 nine months ended September 30, 2026.

This MD&A was prepared as of November 5, 2026, and should be read with the Company's unaudited interim consolidated financial statements for the nine months ended September 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. (Sentgraf) 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.

Page Unlocking ATCO's Next Chapter of Growth .............................................................................................................................. 2

Performance Overview ................................................................................................................................................................ 5

Business Unit Performance ......................................................................................................................................................... 8

ATCO Structures & Logistics .................................................................................................................................................... 8

ATCO Investments .................................................................................................................................................................... 11

Canadian Utilities ....................................................................................................................................................................... 13

ATCO Energy Systems ........................................................................................................................................................ 13

ATCO EnPower...................................................................................................................................................................... 16

ATCO Australia ..................................................................................................................................................................... 18

Canadian Utilities Financing & Other.................................................................................................................................... 19

Policy, Regulatory & Other Recent Events.................................................................................................................................. 19

Other Expenses and Income........................................................................................................................................................ 21

Liquidity and Capital Resources 23

Share Capital 26

Quarterly Information.................................................................................................................................................................... 27

Other Financial and Non-GAAP Measures 29

Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares 30

Reconciliation of Capital Investment to Capital Expenditures 40

Other Financial Information ......................................................................................................................................................... 41

Glossary 45

Appendix 1: Supplemental Non-Audited Financial Information 46

On October 6, 2026, ATCO, Canadian Utilities and Emera Incorporated (Emera) announced a transformational agreement to create a Canadian utility and energy infrastructure powerhouse. Emera and Canadian Utilities will combine in a merger of equals to form one of the 20 largest utilities in North America.

In connection with the transaction, ATCO will spin-out its industrial services businesses, into "New ATCO", focused on housing, defence, and other investments, including ports and retail energy. New ATCO will emerge as a new publicly-traded company with a clear growth agenda and distinct investor proposition.

The transaction was approved following a process and comprehensive reviews by all three Boards, including independent Special Committees for ATCO and Canadian Utilities, supported by independent financial and legal advice.

Housing & Structures

Market-Leading Modular Platform

Defence Services & N e

orthern Infrastructur

Mission-Critical Operations

Investments

Diversified Real-Asset Exposure

New ATCO will emerge as a purpose-built industrial services company with dedicated leadership, capital and strategic focus, positioned to build, deploy and operate in complex and remote environments across North America and international markets.

As a focused industrial services company built on nearly 80 years of operating and investment experience, best-in-class Indigenous relationships, and a proven track record supporting defence, security and critical infrastructure projects, New ATCO will be well positioned to capitalize on opportunities arising from housing availability, defence modernization, Arctic sovereignty, economic security and northern development. Through its established capabilities and strategic investments, New ATCO expects to play an important role in supporting workforce accommodations, military housing, operational facilities, transportation infrastructure and other nation-building projects across Canada and beyond. Supported by a disciplined approach to capital deployment and the flexibility of a standalone company, New ATCO is expected to have a strong foundation for both organic and acquisition-led growth, creating a clearer path to long-term value recognition.

New ATCO will continue with global operations with headquarters in Calgary, Alberta. Nancy Southern will serve as Chair and Chief Executive Officer and Katie Patrick will serve as Chief Financial & Investment Officer.

The Emera and Canadian Utilities combined company is expected to have greater financial strength, broader capabilities, and enhanced investment capacity to support expected growing energy and infrastructure needs across its operations. This increased scale will position the company to support a range of capital-intensive priorities with plans to execute on a $33.5 billion capital plan through 2030 for CU and 2031 for Emera, which is expected to drive average annual rate base growth of approximately 7 per cent and 7.5 to 8.5 per cent, respectively. This plan is expected to continue supporting investments in

(1)

growth opportunities driven by electrification, transmission, energy security, and other major energy infrastructure needs across Canada, the United States and Australia.

The combined company will operate as Emera. Its public company headquarters will remain in Halifax, while maintaining Canadian Utilities' corporate and operational headquarters in Calgary and Edmonton, with a strong continued presence in Canadian Utilities' key markets including Perth, Australia. Emera's US operations will continue to be headquartered in Tampa, Florida.

Both Canadian Utilities and Emera will benefit from this greater geographic and regulatory diversification, enhanced financial flexibility and continued exposure to two of the fastest growth jurisdictions in North America - Florida and Alberta; greater economies of scale; and deeper access to skilled labour and leadership.

(1) ATCO Mexico operates in Mexico.

The transaction is structured as an all-share transaction. As part of the merger, Emera is required to acquire: (a) all of the issued and outstanding Class I non-voting shares of ATCO (the ATCO Class I Shares) and Class II voting shares of ATCO (the ATCO Class II Shares); and (b) all of the issued and outstanding Class A non-voting shares of Canadian Utilities (the Canadian Utilities Class A Shares) and Class B common shares of Canadian Utilities (the Canadian Utilities Class B Shares) not held by ATCO.

ATCO and Canadian Utilities non-voting shareholders will receive Emera voting common shares. Canadian Utilities preferred shares will remain outstanding, and no fractional Emera shares will be issued.

Following completion of the transaction, existing Emera shareholders are expected to collectively own approximately 60 per cent of the combined company, while former ATCO and Canadian Utilities shareholders are expected to collectively own approximately 40 per cent.

Under the terms of the Arrangement: (a) the holders of ATCO Class I Shares will receive 0.865 of a common share of Emera (the Emera Shares) and one Class I non-voting share of New ATCO (the New ATCO Class I Shares) for each ATCO Class I Share held; (b) the holders of ATCO Class II Shares will receive 0.865 of an Emera Share and one Class II voting share of New ATCO (the New ATCO Class II Shares) for each ATCO Class II Share held; (c) the holders of Canadian Utilities Class A Shares (other than ATCO) will receive 0.755 of an Emera Share for each Canadian Utilities Class A Share held; and (d) the holders of Canadian Utilities Class B Shares (other than ATCO) will receive 0.819 of an Emera Share for each Canadian Utilities Class B Share held.

Completion of the transaction is subject to the satisfaction of customary conditions, including applicable securityholder, court, stock exchange and regulatory approvals. The transaction is expected to close in the third or fourth quarter of 2027. While the transaction progresses, it remains business as usual for Emera, ATCO and Canadian Utilities and their employees. The companies remain focused on customers, employees, safety, reliability and operations.

A joint management information circular containing details of the transaction will be prepared and made available to applicable securityholders of ATCO, Canadian Utilities, and Emera in connection with the special meeting of such securityholders expected to be held in early 2027.

Additional details regarding the transaction, including a copy of the arrangement agreement and the full text of the fairness opinions, will be included in the circular. The transaction will be effected by way of a court-approved plan of arrangement under the Canada Business Corporations Act.

In order to proceed, the arrangement must be approved by:

• at least two-thirds of the votes cast by holders of ATCO Class I and Class II Shares, voting together as a single class;

• at least two-thirds of the votes cast by holders of ATCO Class I and Class II Shares, ATCO options and ATCO SARs, voting together as a single class;

• at least two-thirds of the votes cast by holders of Canadian Utilities Class A Shares;

• at least two-thirds of the votes cast by holders of Canadian Utilities Class B Shares;

• at least two-thirds of the votes cast by holders of Canadian Utilities Class A and Class B Shares, Canadian Utilities options and Canadian Utilities SARs, voting together as a single class;

• a simple majority of the votes cast by the holders of Canadian Utilities Class A Shares, excluding votes required to be excluded under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions; and

• a simple majority of the votes cast by Emera shareholders for the issuance of Emera Shares in connection with the transaction,

in each case by applicable holders present or represented by proxy at the applicable meeting, and such other approvals as may be required under applicable securities laws or by the Court of King's Bench of Alberta in connection with the arrangement. On each such arrangement resolution, all applicable ATCO and Canadian Utilities securityholders (including holders of non-voting shares, options and share appreciation rights (SARs)) are entitled to one vote for each security held.

As part of the transaction, ATCO Class I and Class II shareholders will also be asked to approve the continuance of ATCO as a federal corporation under the Canada Business Corporations Act, which is a technical step needed to complete the arrangement. New ATCO is a separate company that is being incorporated in Alberta and will remain an Alberta company headquartered in Calgary. The continuance will require approval by two-thirds of the votes cast by holders of ATCO Class I and Class II common shares present or represented by proxy at the ATCO special meeting, voting together as a single class (with one vote per share). The arrangement will not proceed unless the continuance is approved.

The transaction is subject to the receipt of all required court, regulatory and stock exchange approvals, including approval of the Court of King's Bench of Alberta, the Alberta Utilities Commission, the US Federal Communications Commission, the US Federal Energy Regulatory Commission, Comisión Nacional Antimonopolio of Mexico, the Toronto Stock Exchange and the New York Stock Exchange, and approvals or notifications under the Competition Act (Canada), the Canada Transportation Act, the Australian Foreign Acquisitions and Takeovers Act 1975, the Australian Competition and Consumer Act 2010, the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the Committee on Foreign Investment in the United States.

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

Three Months Ended

September 30

Nine Months Ended September 30

($ millions, except per share data and outstanding shares) 2026 2025 Change 2026 2025 Change

1. Total of segments measures (as defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure (NI 52-112)). The most directly comparable measure to Adjusted Earnings (loss) reported in accordance with International Financial Reporting Standards (IFRS) is Earnings Attributable to Class I non-voting and Class II voting shares. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

2. Non-GAAP ratio (as defined in NI 52-112). The most directly comparable measure reported in accordance with IFRS is Earnings Attributable to Class I non-voting and Class II voting shares ($ per share). See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

3. Non-GAAP financial measure (as defined in NI 52-112). The most directly comparable measure reported in accordance with IFRS is capital expenditures. Capital investment is not a standardized financial measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Capital Investment to Capital Expenditures" in this MD&A.

Revenues in the third quarter of 2026 were $1,335 million, $151 million higher than the same period in 2025 mainly due to additional revenues from the Stibnite Gold project, increased permanent modular construction sales and space rentals leasing activity in ATCO Structures, as well as increased customer rates and higher foreign exchange rates in ATCO Gas Australia.

Revenues were also positively impacted by higher flow-through revenues in Natural Gas Distribution and Electricity Distribution, an increase in revenue requirement in Natural Gas Transmission from the inclusion of construction work in progress for the Yellowhead Pipeline in the 2026 rate base, as approved by the Alberta Utilities Commission (AUC), and stronger seasonal spreads in natural gas storage services in ATCO EnPower.

Adjusted earnings in the third quarter of 2026 were $112 million or $1.00 per share, compared to $103 million or $0.92 per share for the same period in 2025.

Higher adjusted earnings in the third quarter of 2026 were mainly due to increased space rentals leasing activity and earnings from the Stibnite Gold project in ATCO Structures, the impact of inflation indexing on rate base and increased customer rates in ATCO Gas Australia, and growth in rate base in ATCO Energy Systems' businesses. Higher adjusted earnings were partially offset by changes in cargo mix and operating margins as well as the timing of certain activities in Neltume Ports, and the timing of cost efficiencies in Electricity Distribution and Natural Gas Distribution.

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 were $83 million in the third quarter of 2026, $2 million lower 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 were $635 million in the third quarter of 2026, $83 million higher than the same period in 2025. This increase was mainly due to higher earnings, excluding the impact of non-cash items, across most business units and higher customer contributions, partially offset by the timing of working capital.

Dividends paid to Class I and Class II Share owners totalled $59 million in the third quarter of 2026. On October 8, 2026, the Board of Directors declared a fourth quarter dividend of 51.96 cents per share or $2.08 on an annualized basis.

$0.5196

93 97 01 05 09 13 17 21 25 26

(1) Total of segments measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

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 $728 million in the third quarter of 2026 was $258 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 Yellowhead Pipeline in Natural Gas Transmission, and higher spending in ATCO EnPower, largely related to storage expansion projects.

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 $725 million in the third quarter of 2026 were $258 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 September 30, 2026

14%

86%

Regulated Utilities Other

Capital expenditures in Canadian Utilities' Regulated Utilities accounted for 86 per cent of the total in the third 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-GAAP financial measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Capital Investment to Capital Expenditures" in this MD&A.

‌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.

ATCO Structures & Logistics revenues of $384 million and $1,058 million in the third quarter and first nine months of 2026 were $47 million and $157 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 permanent modular construction sales including residential housing, and space rentals leasing activity. Higher revenues in the first nine months of 2026 were partially offset by lower workforce housing sales.

Three Months Ended

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-GAAP financial measures. The most directly comparable measure reported in accordance with IFRS is Earnings Attributable to Class I non-voting and Class II voting shares. Adjusted earnings is not a standardized financial measure under IFRS and may not be comparable to similar financial measures disclosed by other issuers. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

2. Total of segments measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

ATCO Structures & Logistics adjusted earnings of $40 million and $103 million in the third quarter and first nine months of 2026 were $8 million and $12 million higher than the same periods in 2025 mainly due to ATCO Structures' earnings from the Stibnite Gold project, increased space rentals leasing activity, and permanent modular construction sales. Additionally, adjusted earnings were positively impacted by ATCO Frontec's earnings from a Defence Construction Canada contract during the third quarter of 2026. Higher adjusted earnings were partially offset by higher operating costs in ATCO Structures to support the expansion of the business, and the scheduled closure of ATCO Frontec's BC Hydro Site C camp in the first quarter of 2026. Adjusted earnings in the first nine months of 2026 were also partially offset by ATCO Structures' lower workforce housing sales.

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

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 $34 million and $97 million in the third quarter and first nine months of 2026 were

$4 million and $9 million higher than the same periods in 2025 mainly due to earnings from the Stibnite Gold project, increased space rentals leasing activity globally, and increased permanent modular construction sales primarily in Canada and the US. Higher adjusted earnings were partially offset by increased operating costs supporting expansion of the business. Additionally, adjusted earnings in the first nine months of 2026 were partially offset by ATCO Structures' lower workforce housing sales in Australia, Canada and Chile.

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

Three Months Ended

September 30

Nine Months Ended September 30

2026 2025 Change 2026 2025 Change

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, and projects supporting mining, energy, natural resource, technology and public infrastructure development in Canada, the US and Australia. 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 US 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. In the first nine months of 2026, there has been 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.

In the third 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 served by ATCO Structures and contribute to the resilience of its growth. These highlighted projects represent selected contract awards during the quarter and do not comprise all activity or newly awarded contracts in this period.

Beyond the projects detailed below, ATCO Structures also received notices of award and limited notices to proceed for affordable housing and mining projects in Western Canada with an expected combined contract value of $50 million. These contracts are anticipated to commence in 2026.

ATCO Structures was awarded contracts to provide space rentals and workforce housing solutions supporting energy infrastructure and healthcare projects in Western Canada, and public infrastructure development and mining projects in Western and Central Canada. These awards comprise over 120 modular units and total $54 million in sale and lease 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 third quarter of 2026, manufacturing of all units for the dormitory lodge was completed in line with the original schedule. Site work commenced 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, workforce housing, and permanent modular construction solutions supporting technology and data centre construction in Idaho and Texas, gold mining in Nevada and Washington, and energy projects in Louisiana. These awards comprise over 280 modular units and total $55 million in sale and lease contracts.

Australia

ATCO Structures was awarded contracts to provide workforce housing solutions supporting energy projects in Western Australia, and mining projects in Western Australia and Queensland. These awards comprise over 450 modular units and total

$160 million in sale and lease contracts.

Subsequent to quarter end and effective October 1, 2026, ATCO Frontec's Camp Services operations, which include workforce lodging and support services, have been transferred to ATCO Structures and will be reported as part of the ATCO Structures business going forward. ATCO Structures will combine this Camp Services offering with its existing Workforce Housing product to more efficiently meet customer demand for turnkey modular camp solutions.

ATCO Frontec provides facility operations and maintenance services, defence operations services, and disaster and emergency management services. Prior to October 1, 2026, Frontec also provided workforce lodging and support services.

ATCO Frontec's adjusted earnings of $6 million and $6 million in the third quarter and first nine months of 2026 were

$4 million and $3 million higher than the same periods in 2025 mainly due to additional earnings from a Defence Construction Canada contract during the third quarter of 2026, increased earnings from the Polar Over-the-Horizon Radar project, and increased occupancy at the Jansen Discovery Lodge and Artemis Gold camps. Higher adjusted earnings were partially offset by the scheduled closure of the BC Hydro Site C camp in the first quarter of 2026.

Polar Over-the-Horizon Radar (POTHR) Project Milestone

Frontec has received formal approval from the Defence Research and Development Canada Technical Authority for Factory Acceptance Testing for the POTHR project, which will provide long range surveillance of Canadian territory and surrounding areas within the Arctic Circle using a high frequency radar system. This is a major milestone in the project representing 25 per cent of the contract value. In September 2026, the project was set up for Field Testing in Ottawa which will demonstrate that

the system performs as designed in an operational environment. Field Testing is expected to be completed by the end of the year. As of September 30, 2026, the POTHR project is approximately 68 per cent complete.

Subsequent to quarter end and effective October 1, 2026, ATCO Frontec's Camp Services operations, which include workforce lodging and support services, have been transferred to ATCO Structures and will be reported as part of the ATCO Structures business going forward.

‌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.

Including intersegment eliminations, ATCO Investments' revenues of $49 million and $122 million in the third quarter and first nine months of 2026 were $6 million and $11 million lower than the same periods in 2025 mainly due to decreased commodity prices in ATCO Energy and decreased volume at Ashcor facilities.

Three Months Ended

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-GAAP financial measures. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

2. Total of segments measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

Including intersegment eliminations, ATCO Investments' adjusted earnings of $12 million and $27 million in the third quarter and first nine months of 2026 were $1 million and $3 million lower than the same periods in 2025 mainly due to the timing of changes in cargo mix and operating margins at Neltume Ports, lower interest income, and higher share-based compensation expense related to an increase in ATCO's share price in ATCO Corporate & Other. Lower adjusted earnings were partially offset by increased commodity margins at ATCO Energy, and lower plant operating costs in Ashcor.

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 $5 million and $18 million in the third quarter and first nine months of 2026 were

$5 million and $7 million lower than the same periods in 2025 mainly due to changes in cargo mix and operating margins, timing of certain activities, and an additional nonrecurring service which contributed approximately $2 million to adjusted earnings in the third quarter of 2025.

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 $19 million in the third quarter and first nine months of 2026 were

$2 million and $5 million higher than the same periods in 2025 mainly due to increased commodity margins at ATCO Energy, and lower plant operating costs at Ashcor's Battle River site.

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 third quarter of 2026 were $2 million higher than the same period in 2025 mainly due to the timing of certain expenses.

ATCO Corporate & Other's adjusted earnings in the first nine months of 2026 were $1 million lower than the same period in 2025 mainly due to higher share-based compensation expense related to an increase in ATCO's share price, and lower interest income.

Ownership Interest Increases

In the third quarter of 2026, Neltume Ports completed the $65 million USD ($90 million CAD) acquisition of an additional 50 per cent interest in Puerto Coronel, increasing its ownership to 75 per cent.

Vancouver Bulk Terminal Joint Venture

The Vancouver Bulk Terminal, a joint venture between Neltume Ports and Nautilus International Holding Corporation, remains on schedule for the construction of the soda ash export bulk facility at Terminal 2 within the Port of Vancouver, Washington, and is expected to be completed in the fourth quarter of 2026.

‌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 of $747 million and $2,427 million in the third quarter and first nine months of 2026 were

$84 million and $130 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, growth in rate base, and an increase in revenue requirement in Natural Gas Transmission from the inclusion of construction work in progress for the Yellowhead Pipeline in the 2026 rate base, as approved by the AUC. Higher revenues in the first nine months of 2026 were partially offset by refunds to Electricity Distribution and Natural Gas Distribution customers from September 1, 2025 to February 28, 2026, resulting from the AUC's Second Generation Performance Based Regulation (PBR2) Re-opener Phase II decision issued in the second quarter of 2025.

Three Months Ended

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-GAAP financial measures. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

2. Total of segments measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

ATCO Energy Systems' adjusted earnings of $54 million and $247 million in the third quarter and first nine months of 2026 were $1 million and $12 million higher than the same periods in 2025 mainly due to growth in rate base. Higher adjusted earnings were also due to lower income tax expense resulting from the March 2026 enactment of the Budget 2025 Implementation Act, No. 1 (Bill C-15), which reinstated the Accelerated Investment Incentive and increased the deductibility of eligible property acquired after 2024 and available for use before 2030. Higher adjusted earnings were partially offset by the timing of cost efficiencies in Electricity Distribution and Natural Gas Distribution, and Natural Gas Transmission's AUC-

approved 2026-2028 General Rate Application (GRA), which included cost efficiencies from 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 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 $19 million and $61 million in the third quarter and first nine months of 2026 were

$2 million and $1 million lower than the same periods in 2025 mainly due to timing of cost efficiencies, partially offset by growth in rate base, and in the first nine months of 2026, lower income tax expense due to the March 2026 enactment of Bill C-15.

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 $25 million and $75 million in the third quarter and first nine months of 2026 were

$2 million and $5 million higher than the same periods in 2025 mainly due to growth in rate base.

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 with the Puerto Rico Public-Private Partnerships Authority and the Puerto Rico Electric Power Authority.

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 and $23 million in the third quarter and first nine months of 2026 were comparable to the same periods in 2025.

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 third quarter of 2026 were $3 million lower than the same period in 2025 mainly due to the timing of cost efficiencies, partially offset by growth in rate base.

Natural Gas Distribution adjusted earnings of $39 million in the first nine months of 2026 were $2 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, partially offset by the timing of cost efficiencies.

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 $19 million and $49 million in the third quarter and first nine months of 2026 were $4 million and $6 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 from prior periods that are being passed on to customers.

ATCO Energy Systems continues work on the Yellowhead Pipeline in Natural Gas Transmission. Yellowhead Pipeline consists of approximately 235 kilometres of high-pressure natural gas pipeline with the projected spend estimated at $2.9 billion. 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 has commenced. 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 and equity contributions from Canadian Utilities, with Indigenous partnerships expected to contribute up to 30 per cent of the equity. In 2025, Canadian Utilities raised $500 million of fixed-to-fixed rate subordinated notes and $200 million of preferred shares to substantially pre-fund its equity contribution.

October 13, 2026, groundbreaking of the Yellowhead Pipeline

To fund ATCO Energy Systems' regulated debt requirements, CU Inc., a wholly-owned subsidiary of Canadian Utilities, 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, Canadian Utilities 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.

Second Generation Performance Based Regulation (PBR2) Re-opener: Phase I and Phase II Appeals

On September 3, 2026, the Alberta Court of Appeal (ABCA) upheld the AUC's PBR2 re-opener and PBR2 remedy decisions, including the previously directed refund of $71 million ($30 million after-tax and non-controlling interests) to Electricity Distribution and Natural Gas Distribution customers, which was made over the period September 1, 2025 to February 28, 2026. As a result of the ABCA's decision, the refunds were determined to be non-recoverable. As the financial impact of the ABCA's decision is not indicative of day-to-day operations, it has been excluded from adjusted earnings.

(1) Capital securities could include preferred shares, hybrid bonds, and/or debentures.

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 Negotiated Settlement Agreement (NSA), which excluded three line-move capital projects. The NSA was approved by the AUC on July 3, 2026. On October 8, 2026, the AUC issued its decision on the three line-move capital projects, substantially approving all remaining costs outside the previously approved NSA.

ATCO EnPower revenues of $70 million and $245 million in the third quarter and first nine months of 2026 were $11 million and

$17 million higher than the same periods in 2025 mainly due to stronger seasonal spreads in natural gas storage services.

Three Months Ended

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-GAAP financial measures. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

2. Total of segments measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

ATCO EnPower adjusted earnings of $8 million in the third quarter of 2026 were $1 million lower than the same period in 2025 mainly due to lower carbon pricing recognized for emissions credits generated, lower compensation related to turbine availability guarantees at the Forty Mile wind facility, and lower generation at the Veracruz hydro facility in Mexico. Lower adjusted earnings were partially offset by stronger seasonal spreads in natural gas storage services and lower depreciation expense due to asset impairments related to the Renewables portfolio in the fourth quarter of 2025.

ATCO EnPower adjusted earnings of $22 million in the first nine months of 2026 were $1 million higher than the same period in 2025 mainly due to stronger seasonal spreads in natural gas storage services and lower depreciation expense due to asset impairments related to the Renewables portfolio in the fourth quarter of 2025. Higher adjusted earnings were partially offset by lower carbon pricing recognized for emissions credits generated and lower compensation related to turbine availability guarantees at the Forty Mile wind facility.

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

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 third quarter and first nine months of 2026 were each $2 million lower than the same periods in 2025 mainly due to lower carbon pricing recognized for emissions credits generated, lower compensation related to turbine availability guarantees at the Forty Mile wind facility, and lower generation at the Veracruz hydro facility in Mexico. Lower adjusted earnings were partially offset by lower depreciation expense due to asset impairments related to the Renewables portfolio in the fourth quarter of 2025.

The following table compares ATCO EnPower's generation portfolio performance in Canada for the third quarter and first nine months of 2026 and 2025.

Three Months Ended

September 30

Nine Months Ended September 30

2026 2025 Change 2026 2025 Change

1. Capacity share represents the percentage of nameplate capacity owned by ATCO EnPower, except in respect of the Deerfoot and Barlow solar facilities, which are represented at 100 per cent because they are held by a controlled subsidiary.

2. Capacity share increased by 19-MW as a result of completing the acquisition of the Elmworth generating station in the fourth quarter of 2025.

3. PPA means Power Purchase Agreement.

The average realized price related to the generation portfolio of $67 per MWh and $70 per MWh in the third quarter and first nine months of 2026 was lower compared to $68 per MWh and $72 per MWh in the same periods in 2025. This is mainly due to declines in merchant pricing from the comparable periods in 2025.

Wind generation in the third quarter of 2026 was higher overall than the same period in 2025, driven by improved wind resource at the Adelaide wind facility. This was partially offset by lower generation at the Forty Mile wind facility driven by higher Independent System Operator (ISO)-directed curtailment which offset a higher wind resource. The Forty Mile wind facility continues to be affected by significant ISO-directed curtailments caused by transmission system constraints in the southeast portion of Alberta resulting from inadequate transmission infrastructure and ongoing grid deficiencies with unprecedented levels of curtailment in the region continuing. 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.

Incumbent protection measures were released by the Government of Alberta on October 2, 2026. The incumbent protection mechanisms will apply to incumbent generators beginning in 2028 and are expected to partially mitigate the financial losses occurring as a result of curtailment at the Forty Mile wind facility.

Solar generation in the third quarter of 2026 was lower than the same period in 2025 driven in part by outages experienced during August and September at the Empress solar facility which offset improved performance at the Deerfoot solar facility.

There was improved generation in the third 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 third quarter of 2026 was higher than the same period in 2025 due to the fourth quarter 2025 acquisition of the Elmworth generating station.

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 $8 million and $25 million in the third quarter and first nine months of 2026 were $1 million and $3 million higher than the same periods in 2025 mainly due to stronger seasonal spreads in natural gas storage services.

During the third quarter of 2026, the Atlas Carbon Storage Hub was selected as one of five global recipients of the 2026 Clean Energy Ministerial (CEM) - Mission Innovation (MI) "Carbon Management Project Awards". The project was nominated by the Government of Canada and recognized by an international expert committee from among 17 nominated projects representing eight CEM and MI Member Countries. The award recognizes innovation and excellence in carbon management and highlights the strategic importance of the Atlas Carbon Storage Hub in advancing large-scale carbon capture and storage solutions.

ATCO Australia revenues of $81 million and $218 million in the third quarter and first nine months of 2026 were $13 million and

$33 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 nine 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.

Three Months Ended

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Non-GAAP financial measures. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

2. Total of segments measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

ATCO Australia adjusted earnings of $15 million and $44 million in the third quarter and first nine months of 2026 were

$1 million and $12 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 is a regulated provider of natural gas distribution services in Western Australia, serving metropolitan Perth and surrounding regions.

ATCO Gas Australia adjusted earnings of $16 million and $43 million in the third quarter and first nine months of 2026 were

$4 million and $15 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 a full year inflation assumption of approximately 4 per cent, of which 3.2 per cent has been recognized in the first nine months. In 2025, Australia inflation indexing reflected a full year inflation of 3.4 per cent, of which 2.1 per cent was recognized for the first nine 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 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 in the third quarter and first nine months of 2026 were each $3 million lower than the same periods in 2025 mainly due to the execution of a settlement deed in the third quarter of 2025 for the South Australia

Hydrogen Jobs Plan project after the terms of the Early Contractor Involvement were agreed upon with the Department of Energy and Mining.

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

Including intersegment eliminations, Canadian Utilities Financing & Other revenues of $4 million and $10 million in the third quarter and first nine months of 2026 were comparable to the same periods in 2025.

Three Months Ended

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Total of segments measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

Including intersegment eliminations, Canadian Utilities Financing & Other adjusted loss in the third quarter of 2026 was

$1 million lower than the same period in 2025 mainly due to the recognition of a one-time income tax adjustment in the third quarter of 2026 and higher interest income, partially offset by increased interest expense on the debt issuance in the third quarter of 2025 related to the pre-funding of the Yellowhead Pipeline investment.

Including intersegment eliminations, Canadian Utilities Financing & Other adjusted loss in the first nine months of 2026 was

$7 million higher than the same period 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 the recognition of a one-time income tax adjustment in the third quarter of 2026, and higher interest income.

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.

During the third quarter of 2026, the federal government advanced implementation of Canada's Defence Industrial Strategy, a long-term initiative intended to strengthen Canada's defence capabilities, domestic supply chains, strategic infrastructure, and industrial capacity. The strategy includes a focus on northern and Arctic development, critical infrastructure resilience, workforce development, and partnerships with provinces, territories, Indigenous communities, and industry. The initiative forms part of broader federal efforts to strengthen economic security and support strategic infrastructure investment across Canada. ATCO continues to monitor developments and assess potential implications for its businesses and customers.

On September 9, 2026, amendments to the Physical Activities Regulations came into force, removing certain project types from the federal Impact Assessment Act project list, including international and interprovincial electrical transmission lines and

pipelines regulated by the Canada Energy Regulator (CER). Under the amended framework, these projects will be subject to review through existing regulatory processes administered by the CER rather than through a separate federal impact assessment process. The amendments form part of broader federal initiatives intended to reduce regulatory duplication, streamline project reviews, and improve permitting efficiency for major infrastructure projects.

On September 15, 2026, the federal government announced the Productivity Mega-Deduction, a significant expansion of capital cost expense measures intended to reduce the cost of capital and encourage business investment. The measure expands immediate expense treatment to a broader range of capital assets, including certain energy infrastructure, pipelines, fibre-optic cable, software, research and development expenditures, and other eligible depreciable property. The government has stated that the measure is intended to improve Canada's investment competitiveness and support private-sector investment.

On September 21, 2026, the Government of Canada introduced Bill C-39, the Building Canada Strong Act, legislation intended to accelerate the development of major infrastructure and energy projects by streamlining federal review and permitting processes. The proposed legislation would establish a target of completing federal reviews and project decisions within one year following submission of a complete application and includes measures intended to improve regulatory coordination, reduce duplication, and provide greater certainty for project proponents and investors. The legislation also proposes reforms affecting federal impact assessments, energy and transportation infrastructure approvals, Indigenous consultation processes, and major trade corridor development. If enacted, the proposed changes may support more efficient development of utility, transmission, energy, transportation, and infrastructure projects across Canada.

On July 13, 2026, the governments of Canada and Alberta, together with members of the Oil Sands Alliance, entered into an agreement to advance the Pathways Project, a large-scale carbon capture and storage initiative intended to reduce emissions from Alberta's oil sands operations. The agreement includes commitments to support carbon capture and storage development through investment incentives, including the finalization and extension of the Alberta Carbon Capture Incentive Program, the extension of federal carbon capture investment tax credits, and carbon sequestration arrangements for the Pathways Project. The agreement also includes commitments to advance industrial decarbonization, enhance carbon market certainty, and review regulatory and policy frameworks intended to support investment, emissions reductions, and major-project development. Governments identified carbon capture and storage as a key component of Alberta's long-term emissions reduction strategy while supporting economic growth and competitiveness.

During the third quarter of 2026, the AESO continued implementation of Alberta's electricity market and transmission reforms, including the Restructured Energy Market and Optimal Transmission Planning (OTP) initiatives. In September 2026, the AESO initiated stakeholder consultation on proposed ISO rules supporting OTP, which implements Alberta's transition to a cost-benefit-based approach for transmission planning and development. The framework is intended to support affordability while ensuring efficient investment in transmission infrastructure.

During the third quarter of 2026, the governments of Alberta, Saskatchewan, and the NWT expanded their existing collaboration on energy development through a memorandum of understanding focused on nuclear technologies, including small modular reactors and microreactors. The agreement also supports continued cooperation on workforce development, supply chains, energy security, and long-term electricity infrastructure planning. The agreement builds on previous interjurisdictional collaboration among western Canadian governments and reflects ongoing efforts to evaluate technologies and infrastructure that could support future energy needs, reliability objectives, and economic development.

On October 2, 2026, the Government of Alberta released the Incumbency Treatment Policy as part of its broader electricity framework reforms. The policy provides direction regarding the future treatment of incumbent transmission facility owners and establishes principles intended to support the transition to Alberta's evolving transmission planning and development framework. The policy is being implemented through the AESO's electricity market and transmission reform initiatives, including OTP. The policy may influence the development, ownership, and procurement of future transmission infrastructure projects in Alberta. ATCO continues to monitor implementation activities and assess potential implications for transmission investment opportunities and the province's evolving electricity framework.

We monitor broader industry and government developments that may influence existing or planned projects in the communities in which we operate. The following are examples of recent events that are relevant to our existing businesses and potential future growth opportunities.

In September 2026, the LNG Canada joint venture participants announced a final investment decision on Phase 2 of the LNG Canada export facility in Kitimat, British Columbia. Phase 2 will add two liquified natural gas (LNG) trains, doubling the facility's capacity from 14 million tonnes per annum to 28 million tonnes per annum, with commercial operations expected in the early 2030s. Phase 2 will also require an expansion of the Coastal GasLink pipeline. The growth of LNG exports is expected to increase demand for natural gas infrastructure in Western Canada, including natural gas transmission and natural gas and natural gas liquids storage.

On June 26, 2026, the Government of Canada referred its Transmission InterConnect Investment Strategy to the federal Major Projects Office to identify high-priority interprovincial transmission projects and potential financing solutions. The five priority projects identified include the restoration of the Alberta-British Columbia Intertie and the upgrade of the Alberta-Saskatchewan intertie, which are expected to add approximately 400 megawatts of combined trade capacity. Stronger interprovincial connections are expected to improve grid reliability and support electricity trade between provinces.

The Grays Bay Road and Port Project, developed by West Kitikmeot Resources Corp., in which ATCO is investing for a 40 per cent ownership interest, has been referred to the Major Projects Office, with a decision on its potential listing under the Building Canada Act expected by the end of 2026.

A financial summary of other consolidated expenses and income items for the third quarter and first nine 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

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

Operating costs, which are total costs and expenses less depreciation, amortization and impairments, increased by

$129 million and $202 million in the third quarter and first nine 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, and the recognition of a past service cost adjustment related to the Company's other post-employment benefit obligation resulting from the Government of Alberta's Health Statutes Amendment Act, 2025 (No. 2) (Bill 11), which changes the coordination of benefits between employer-sponsored health plans and certain provincial health programs. Operating costs were also higher due to higher flow-through costs in ATCO Energy Systems, including purchased power expenses in ATCO Electric Yukon and third-party franchise fees in Natural Gas Distribution, as well as increased maintenance in ATCO Energy Systems' businesses. Increased operating costs were partially offset by higher unrealized and realized gains on derivative financial instruments in ATCO Energy, and nonrecurring 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, amortization, and impairments increased by $22 million and $47 million in the third quarter and first nine months of 2026 compared to the same periods in 2025 mainly due to ongoing capital investments in the Regulated Utilities, and an increase in global space rentals fleet assets in ATCO Structures. Also, in the third quarter of 2026, ATCO Investments exited its packaged food services and geospatial data services businesses resulting in the recognition of a $9 million (after-tax) charge related to assets that no longer have any economic value and related exit costs.

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 third quarter and first nine months of 2026 were $3 million and

$5 million lower than the same periods in 2025 mainly due to changes in cargo mix and operating margins, timing of certain activities, and an additional nonrecurring service which contributed approximately $2 million to adjusted earnings in the third quarter of 2025.

Earnings from investment in joint ventures mainly comprises 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 third quarter and first nine months of 2026 were comparable to the same periods in 2025.

Net finance costs increased by $8 million and $31 million in the third quarter and first nine months of 2026 compared to the same periods in 2025 mainly due to additional debt issued to fund ongoing capital investment.

Income taxes decreased by $9 million in the third quarter of 2026 compared to the same period in 2025 mainly due to recognition of previously unrecognized deferred income taxes and lower IFRS earnings before income taxes.

Income taxes increased by $12 million in the first nine months of 2026 compared to the same period in 2025 mainly due to higher IFRS earnings before income taxes and lower investment tax credits, partially offset by the recognition of previously unrecognized deferred income taxes.

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.

The following table shows the credit ratings assigned to ATCO, Canadian Utilities, CU Inc. and ATCO Gas Australia Pty Ltd (ATCO Gas Australia) at September 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 negative outlook as of October 7, 2026.

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

Following the October 6, 2026 announcement regarding the transaction involving ATCO, Canadian Utilities, and Emera, several credit rating agencies issued reports reflecting their initial assessments of the transaction.

On October 6, 2026, Fitch Ratings affirmed its 'BBB+' long-term issuer credit rating on ATCO Ltd. and its 'A-' long-term issuer credit rating on Canadian Utilities Limited, but placed both ratings on watch negative as Fitch expects to equalize ATCO's and Canadian Utilities' ratings with Emera's upon closing of the transaction. At the same time, Fitch Ratings affirmed CU Inc.'s 'A-' long-term issuer rating with a stable outlook. CU Inc.'s stable outlook reflects Fitch's expectation that CU Inc.'s rating will remain above Emera's consolidated credit profile.

On October 7, 2026, S&P Global Ratings revised Canadian Utilities' subsidiary ATCO Gas Australia's 'A-' issuer credit rating with a stable outlook to an 'A-' issuer credit rating with a negative outlook.

On October 8, 2026, Morningstar DBRS placed ATCO's 'A (low)' and Canadian Utilities' 'A' issuer credit ratings under review with developing implications to reflect uncertainty on ATCO's and Canadian Utilities' overall credit risk profiles created by the transaction with Emera. At the same time, Morningstar DBRS affirmed its 'A (high)' long-term issuer credit rating and stable outlook on CU Inc., noting it does not expect the transaction with Emera will have a material impact on CU Inc.'s credit risk profile.

At September 30, 2026, ATCO and its subsidiaries had the following lines of credit.

Of the $4,602 million in total lines of credit, $743 million was in the form of uncommitted credit facilities with no set maturity date. The other $3,859 million in credit lines was committed with maturities between 2027 and 2031, and may be extended at the option of the lenders.

Of the $1,489 million in lines of credit used, $738 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.

At September 30, 2026, the Company's cash position was $542 million. This represents a decrease of $360 million compared to the cash position as of September 30, 2025. Cash movements for the third quarter and first nine months of 2026 and 2025 are outlined in the following table:

Three Months Ended

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

The opening cash position of $610 million and $977 million in the third quarter and first nine months of 2026 was $419 million and $883 million higher compared to the opening cash position for the same periods in 2025 mainly due to increased issuance of long-term debt and Canadian Utilities' equity preferred shares related to growth projects for new customers in the Regulated Utilities, partially offset by redemption of equity preferred shares.

Cash flows from operating activities were $635 million in the third quarter of 2026, $83 million higher than the same period in 2025. This increase was mainly due to higher earnings, excluding the impact of non-cash items, across most business units and higher customer contributions, partially offset by the timing of working capital.

Cash flows from operating activities were $2,043 million in the first nine months of 2026, $221 million higher than the same period in 2025. This increase was mainly due to higher earnings, excluding the impact of non-cash items, across most business units, higher customer contributions, and lower income taxes paid in Natural Gas Distribution mainly due to prior year tax refunds received. Increases were partially offset by the timing of working capital.

Cash flows used in investing activities were $580 million and $1,455 million in the third quarter and first nine months of 2026,

$118 million and $116 million higher than the same periods in 2025 mainly due to higher capital spending in the Regulated Utilities, including the Yellowhead Pipeline in Natural Gas Transmission, partially offset by the timing of settlements related to accounts payable for capital projects in the Regulated Utilities and ATCO EnPower.

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 third quarter and first nine months of 2026 and 2025 are shown in the following table.

Three Months Ended

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Includes additions to property, plant and equipment, and intangibles as well as $9 million and $29 million (2025 - $10 million and $23 million) of capitalized interest during construction for the third quarter and first nine months of 2026.

2. Includes $41 million and $111 million for the third quarter and first nine months of 2026 (2025 - $29 million and $97 million) of capital expenditures, mainly in ATCO Energy Systems, that were funded with the assistance of customer contributions.

3. Non-GAAP financial measure. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Capital Investment to Capital Expenditures" in this MD&A.

Total capital investment of $728 million and $1,636 million in the third quarter and first nine months of 2026 was $258 million and $260 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, and increased capital spending in ATCO Structures on space rentals fleet additions. Higher capital investment was partially offset by the completion of the Central East Transfer-Out Project in Electricity Transmission and lower capital maintenance spending in Electricity Distribution.

Total capital expenditures of $725 million and $1,629 million in the third quarter and first nine months of 2026 were $258 million and $262 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.

Cash flows used in financing activities were $127 million and $1,024 million in the third quarter and first nine months of 2026,

$746 million and $1,343 million higher compared to the same periods in 2025 mainly due to lower issuances of long-term debt, as ATCO, Canadian Utilities, and CU Inc. issued debentures in 2025, partially offset by lower repayment of long-term debt.

Information pertaining to financing activities is summarized below.

Other Debt

In the third quarter and first nine months of 2026, CU Inc., a wholly owned subsidiary of Canadian Utilities, borrowed $135 million and $135 million, respectively, from its unsecured extendible revolving credit facility (2025 - $35 million and $275 million).

Project Finance Covenant

At September 30, 2026, Deerfoot Barlow Solar Limited Partnership, an indirect subsidiary of Canadian Utilities in ATCO EnPower, was not in compliance with a debt service coverage ratio covenant on its $53 million credit facility. The lender provided waivers and deferred the September 30, 2026 debt payment while a potential restructuring is discussed. As a waiver has not been confirmed through September 30, 2027, the facility is classified as a current liability.

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 $59 million and $176 million in the third quarter and first nine months of 2026.

On October 8, 2026, the Board of Directors declared a fourth 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.

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

At November 4, 2026, we had outstanding 101,012,417 Class I Shares, 11,542,320 Class II Shares, and options to purchase 2,833,591 Class I Shares.

Each Class II Share may be converted into one Class I Share at any time at the share owner's 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, 6,572,450 Class I Shares were available for issuance at September 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.

The following table shows financial information for the eight quarters ended December 31, 2024 through September 30, 2026.

($ millions, except for per share data) Q4 2025 Q1 2026 Q2 2026 Q3 2026

1. Non-GAAP ratio. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

2. Total of segments measures. See "Other Financial and Non-GAAP Measures" and "Reconciliation of Adjusted Earnings to Earnings Attributable to Class I and Class II Shares" in this MD&A.

Our financial results for the previous eight quarters reflect the cyclical demand for workforce housing and seasonality with our space rentals 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 in the fourth quarter of 2025 were higher than the same period in 2024 mainly due to ATCO Structures' 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 return on equity in ATCO Energy Systems, and the completion of efficiency carryover mechanism 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.

Adjusted earnings in the third quarter of 2026 were higher than the same period in 2025 mainly due to increased space rentals leasing activity and earnings from the Stibnite Gold project in ATCO Structures, the impact of inflation indexing on rate base and increased customer rates in ATCO Gas Australia, and growth in rate base in ATCO Energy Systems' businesses. Higher adjusted earnings were partially offset by changes in cargo mix and operating margins as well as the timing of certain activities in Neltume Ports, and the timing of cost efficiencies in Electricity Distribution and Natural Gas Distribution.

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 fourth quarter of 2024 and first quarter of 2025, the Company recorded restructuring costs of $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 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 were substantially complete 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.

• In the third quarter of 2026, following the ABCA decision upholding the AUC's PBR2 re-opener and PBR2 remedy decisions, $30 million (after-tax and non-controlling interests) of directed refunds to Electricity Distribution and Natural Gas Distribution customers over the period September 1, 2025 to February 28, 2026 were determined to be non-recoverable, with the related financial impact reflected in rate-regulated activities.

• In the third quarter of 2026, the Company recognized a $18 million (after-tax and non-controlling interests) past service cost adjustment related to its other post-employment benefit obligation resulting from the Government of Alberta's Health Statutes Amendment Act, 2025 (No. 2) (Bill 11), which changes the coordination of benefits between employer-sponsored health plans and certain provincial health programs.

• In the third quarter of 2026, ATCO Investments exited its packaged food services and geospatial data services businesses resulting in the recognition of a $9 million (after-tax) charge related to assets that no longer have any economic value and related exit costs.

This MD&A should be read with the Company's unaudited interim consolidated financial statements for the nine months ended September 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.

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.

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 (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.

Management's 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 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.

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.

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.

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 management's view that adjusted earnings (loss) allow for 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

September 30

($ millions)

Nine Months Ended September 30

In May 2025, the AUC issued its PBR2 re-opener decision, directing ATCO Electric Distribution and ATCO Gas Distribution to refund $35 million and $36 million, respectively, to customers over the six-month period from September 1, 2025 to February 28, 2026. The Company appealed the decision to the Alberta Court of Appeal (ABCA) and refunded the amounts as directed by the AUC while the appeal was pending. These refunds to customers were reflected as adjustments in rate-regulated activities, as they were recognized as reductions of revenue under IFRS Accounting Standards.

In September 2026, the ABCA upheld the AUC's PBR2 re-opener decision, resulting in a reduction of adjusted earnings to reverse the impact of the rate-regulated adjustment related to refunds to customers (see rate-regulated activities section below). However, as the financial impacts of $15 million (after-tax and non-controlling interests) for Electricity Distribution and

$15 million (after-tax and non-controlling interests) for Natural Gas Distribution arose from this one-time PBR2 re-opener ABCA decision, these amounts are not indicative of day-to-day operations and as such, have been excluded from adjusted earnings for the three and nine months ended September 30, 2026.

The Government of Alberta's Health Statutes Amendment Act, 2025 (No. 2) (Bill 11) changes the coordination of benefits between employer-sponsored health plans and certain provincial health programs. As a result, the Company recognized a

$41 million ($18 million after-tax and non-controlling interests) past service cost adjustment related to its other post-employment benefits obligation for the three and nine months ended September 30, 2026. As the impact arises from a one-time legislative change, the amount has been excluded from adjusted earnings.

In September 2026, ATCO Investments exited its packaged food services and geospatial data services businesses as part of a change in strategic direction. As a result, the Company recognized a $9 million (after-tax) charge for the three and nine months ended September 30, 2026, related to assets that no longer have any economic value and related exit costs. As these costs were not in the normal course of business, they have been excluded from adjusted earnings.

The Company's 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 believes that removal of the unrealized gains and losses on mark-to-market forward and swap commodity contracts from the determination of adjusted earnings provides a better representation of operating results for the Company's operations.

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

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 beginning on or after January 1, 2029. The Company is in the process of evaluating IFRS 20 and given that 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 United States 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 presented in this manner are a better representation of the operating results of the Company's rate-regulated activities. Therefore, the Company presents adjusted earnings 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)

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 third quarter and first nine 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

September 30

Nine Months Ended September 30

($ millions) 2026 2025 Change 2026 2025 Change

1. Removal and site restoration costs are billed to customers over the estimated useful life of the related assets based on forecast costs to be incurred in future periods.

2. Income taxes are billed to customers when paid by the Company.

3. Natural Gas Distribution's customer rates are based on a forecast of normal temperatures. Fluctuations in temperatures may result in more or less revenue being recovered from customers than forecast. Revenues above or below the normal temperatures in the current period are refunded to or recovered from customers in future periods.

4. The inflation-indexed portion of ATCO Gas Australia's rate base is billed to customers through the recovery of depreciation in subsequent periods based on the actual or forecasted annual rate of inflation. Under rate-regulated accounting, revenue is recognized in the current period for the inflation component of rate base when it is earned. Differences between the amounts earned and the amounts billed to customers are deferred and recognized in revenues over the service life of the related asset.

5. In connection with the PBR2 re-opener decision rendered by the AUC on May 28, 2025, Electricity Distribution and Natural Gas Distribution refunded $5 million (after-tax and non-controlling interests) and $6 million (after-tax and non-controlling interests), respectively, to customers for the nine months ended September 30, 2026 (2025 - $2 million (after-tax and non-controlling interests) and $2 million (after-tax and non-controlling interests)). Combined with the amounts refunded to customers for the year ended December 31, 2025, Electricity Distribution and Natural Gas Distribution have now refunded the total amount that was directed by the AUC in the PBR2 re-opener decision, which was $15 million (after-tax and non-controlling interests) ($35 million before tax and non-controlling interests) for Electricity Distribution and $15 million (after-tax and non-controlling interests) ($36 million before tax and non-controlling interests) for Natural Gas Distribution.

6. Following the September 3, 2026 ABCA decision upholding the AUC's PBR2 re-opener decision, the $71 million ($30 million after-tax and non-controlling interests) previously refunded to customers is no longer considered recoverable, resulting in a $30 million (after-tax and non-controlling interests) reduction in adjusted earnings.

7. The three and nine months ended September 30, 2026 include an increase in earnings for the period of $8 million (after-tax and non-controlling interests) related to the Yellowhead Pipeline deferral, reflecting a future refund to customers. The Yellowhead Pipeline deferral is intended to capture the difference between the actual project spend and the estimated project spend reflected in revenues approved to be recovered from customers.

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 amounts excluded from adjusted earnings in the third quarter and first nine months of 2026 were nil and $2 million (after-tax and non-controlling interests) (2025 - $1 million (after-tax and non-controlling interests) and $2 million (after-tax and non-controlling interests)).

In the third quarter and first nine months of 2025, the Company recognized IT transition costs of $1 million and $9 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.

In the first nine 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.

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

($ millions)

Three Months Ended

September 30

($ millions)

Nine Months Ended September 30

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

September 30

($ millions)

Nine Months Ended September 30

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

September 30

($ millions)

Nine Months Ended September 30

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

September 30

($ millions)

Nine Months Ended September 30

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

($ millions)

Three Months Ended

September 30