Canadian Utilities : Documents & Filings (cu 2026 q2)

About this update from Canadian Utilities Limited Class A

CANADIAN UTILITIES LIMITED FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED JUNE 30, 2026 CORPORATE OFFICE: 5302 FORAND ST SW, CALGARY, ALBERTA, CANADA T3E 8B4 TEL: 403-292-7500 https://WWW.CANADIANUTILITIES.COM 2026 SECOND QUARTER FINANCIAL INFORMATION MANAGEMENT'S DISCUSSION AND ANALYSIS UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2026 TABLE OF CONTENTS Managementʼs Discussion and Analysis 2 Unaudited Interim Consolidated Financial Statements 36 CANADIAN UTILITIES LIMITED MANAGEMENTʼS DISCUSSION AND ANALYSIS FOR THE SIX MONTHS ENDED JUNE 30, 2026 This Management's Discussion and Analysis (MD&A) is meant to help readers understand key operational and financial events that influenced the results of Canadian Utilities Limited (Canadian Utilities, our, we, us, or the Company) during the six months ended June 30, 2026. This MD&A was prepared as of July 27, 2026, and should be read with the Company's unaudited interim consolidated financial statements for the six months ended June 30, 2026. Additional information, including the Company's previous MD&As, Annual Information Form, and audited consolidated financial statements for the year ended December 31, 2025, is available on SEDAR+ at https://www.sedarplus.ca . Information contained in the 2025 MD&A is not discussed in this MD&A if it remains substantially unchanged. The Company is controlled by ATCO Ltd. (ATCO) and its controlling share owner, Sentgraf Enterprises Ltd. and its controlling share owner, the Southern family. Terms used throughout this MD&A are defined in the Glossary at the end of this document. CANADIAN UTILITIES LIMITED 2025 MANAGEMENT'S DISCUSSION & ANALYSIS 2 TABLE OF CONTENTS Page Performance Overview ........................................................................................................................................................ 4 Business Unit Performance ................................................................................................................................................. 7 ATCO Energy Systems .................................................................................................................................................... 7 ATCO EnPower ................................................................................................................................................................ 10 ATCO Australia ................................................................................................................................................................. 12 Financing & Other ............................................................................................................................................................ 13 Policy and Regulatory Updates ........................................................................................................................................... 14 Other Expenses and Income ................................................................................................................................................ 15 Liquidity and Capital Resources .......................................................................................................................................... 16 Share Capital ......................................................................................................................................................................... 18 Quarterly Information ............................................................................................................................................................ 19 Other Financial and Non-GAAP Measures ......................................................................................................................... 21 Reconciliation of Adjusted Earnings to Earnings Attributable to Equity Owners of the Company ................................ 22 Reconciliation of Capital Investment to Capital Expenditures .......................................................................................... 29 Other Financial Information 29 Glossary 32 Appendix 1: Supplemental Non-Audited Financial Information 33 ‌PERFORMANCE OVERVIEW FINANCIAL METRICS The following chart summarizes key financial metrics associated with our financial performance. Three Months Ended June 30 Six Months Ended June 30 ($ millions, єxcєpī pєr sharє daīa and ouīsīanding sharєs) 2026 2025 Change 2026 2025 Change Key Financial Metrics Revenues 914 842 72 1,998 1,927 71 Adjusted earnings (loss) (1) 140 121 19 382 353 29 ATCO Energy Systems (1) 124 116 8 370 348 22 ATCO EnPower (1) 15 12 3 26 23 3 ATCO Australia (1) 34 21 13 55 34 21 Financing & Other (1) (33) (28) (5) (69) (52) (17) Adjusted earnings ($ per share) (2) 0.51 0.45 0.06 1.40 1.30 0.10 Earnings attributable to equity owners of the Company 128 111 17 352 347 5 Earnings attributable to Class A and Class B shares 109 92 17 314 309 5 Earnings attributable to Class A and Class B shares ($ per share) 0.40 0.34 0.06 1.15 1.14 0.01 Diluted earnings attributable to Class A and Class B shares ($ per share) 0.40 0.34 0.06 1.15 1.14 0.01 Total assets 24,599 23,878 721 24,599 23,878 721 Long-term debt 12,075 11,074 1,001 12,075 11,074 1,001 Equity attributable to equity owners of the Company 6,566 6,976 (410) 6,566 6,976 (410) Cash dividends declared per Class A and Class B share (cents per share) 46.23 45.77 0.46 92.46 91.54 0.92 Cash flows from operating activities 557 441 116 1,161 1,078 83 Capital investment (3) 406 384 22 760 786 (26) Capital expenditures 403 382 21 756 783 (27) Other Financial Metrics Weighted average Class A and Class B shares outstanding (īhousands) : Basic 272,315 271,808 507 272,235 271,694 541 Diluted 273,106 272,009 1,097 272,941 271,823 1,118 Toīal or sєgmєnīs mєasurєs (as dєrinєd in Naīional Insīrumєnī 52-112 - Non CAA7 and Oīhєr Financial Mєasurєs Disclosurє (NI 52-112)). Thє mosī dirєcīly comparablє mєasurє īo Adjusīєd Earnings (Loss) rєporīєd in accordancє wiīh Inīєrnaīional Financial Rєporīing Sīandards (IFRS) is Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. Non-CAA7 raīio (as dєrinєd in NI 52-112). Thє mosī dirєcīly comparablє mєasurє rєporīєd in accordancє wiīh IFRS is Earnings Aīīribuīablє īo Class A and Class B sharєs ($ pєr sharє). Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. Non-CAA7 rinancial mєasurє (as dєrinєd in NI 52-112). Thє mosī dirєcīly comparablє mєasurє rєporīєd in accordancє wiīh IFRS is capiīal єxpєndiīurєs. Capiīal invєsīmєnī is noī a sīandardizєd rinancial mєasurє undєr IFRS and may noī bє comparablє īo similar rinancial mєasurєs disclosєd by oīhєr issuєrs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Capiīal Invєsīmєnī īo Capiīal Expєndiīurєs" in īhis MDhA. REVENUES Revenues in the second quarter of 2026 were $914 million, $72 million higher than the same period in 2025 mainly due to increased customer rates and higher foreign exchange in ATCO Gas Australia, higher flow through revenues in Natural Gas Distribution and Electricity Distribution, growth in rate base in ATCO Energy Systems' businesses, and stronger seasonal spreads in natural gas storage services in ATCO EnPower. ADJUSTED EARNINGS (1) Adjusted earnings in the second quarter of 2026 were $140 million or $0.51 per share, compared to $121 million or $0.45 per share for the same period in 2025. Higher adjusted earnings in the second quarter of 2026 were mainly due to the impact of inflation indexing on rate base and increased customer rates in ATCO Gas Australia, growth in rate base in ATCO Energy Systems' businesses, and year-to-date recognition of final 2026 rates in Electricity Transmission following the Alberta Utilities Commission's (AUC) decision in the second quarter of 2026 approving the Negotiated Settlement Agreement (NSA) relating to the 2026-2027 General Tariff Application (GTA). Higher adjusted earnings were partially offset by Natural Gas Transmission's 2026-2028 General Rate Application (GRA) which was approved by the AUC and included cost efficiencies in prior periods that are being passed on to customers. 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 EQUITY OWNERS OF THE COMPANY Earnings attributable to equity owners of the Company were $128 million in the second quarter of 2026, $17 million higher compared to the same period in 2025. Earnings attributable to equity owners of the Company include timing adjustments related to rate-regulated activities, dividends on equity preferred shares of the Company, 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 Equity Owners of the Company" section of this MD&A. Earnings attributable to equity owners of the Company are earnings attributable to Class A shares and Class B shares plus dividends on equity preferred shares of the Company. Additional information regarding earnings attributable to Class A shares and Class B shares is presented in Note 5 of the unaudited interim consolidated financial statements. CASH FLOWS FROM OPERATING ACTIVITIES Cash flows from operating activities were $557 million in the second quarter of 2026, $116 million higher than the same period in 2025. This increase was mainly due to higher earnings within most business units, and increased customer receipts due to colder weather and higher customer rates in Natural Gas Distribution, partially offset by the timing of working capital. COMMON SHARE DIVIDENDS Dividends paid to Class A and Class B share owners in the second quarter of 2026 totalled $126 million. On July 9, 2026, the Board of Directors declared a third quarter dividend of 46.23 cents per share or $1.85 on an annualized basis. We aim to grow dividends in-line with our sustainable earnings growth, which is linked to growth from our regulated and long-term contracted investments. Quarterly Dividend Rate 1972 - 2026 (dollars per share) $0.4623 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26 (1) Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. CAPITAL INVESTMENT (1) AND CAPITAL EXPENDITURES Capital investment is a non-GAAP financial measure defined as cash used for capital expenditures, business combinations, and cash used in the Company's share of capital expenditures in joint ventures. Total capital investment of $406 million in the second quarter of 2026 was $22 million higher compared to the same period in 2025 mainly due to increased spending related to ongoing system upgrades and growth projects in the Regulated Utilities, including the Yellowhead Pipeline Project (Yellowhead Pipeline) in Natural Gas Transmission. Higher capital investment was partially offset by the completion of the Central East Transfer-Out Project (CETO) and timing of capital maintenance projects and infrastructure upgrades in Electricity Transmission, and decreased capital spend in ATCO EnPower. Capital expenditures, a GAAP measure reported in accordance with IFRS, includes additions to property, plant and equipment and intangibles as well as interest capitalized during construction. Total capital expenditures of $403 million in the second quarter of 2026 were $21 million higher compared to the same period in 2025 due to the factors outlined above. Capital expenditures in joint ventures and business combinations are excluded from capital expenditures. Capital Expenditures for the Three Months Ended June 30, 2026 2% 98% Regulated Utilities Other Capital expenditures in the Regulated Utilities accounted for 98 per cent of the total in the second quarter of 2026. The remaining capital expenditures were primarily related to capital spending within ATCO EnPower. (1) Non-CAA7 rinancial mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Capiīal Invєsīmєnī īo Capiīal Expєndiīurєs" in īhis MDhA. ‌BUSINESS UNIT PERFORMANCE ‌REVENUES ATCO Energy Systems revenues of $760 million and $1,680 million in the second quarter and first six months of 2026 were $52 million and $46 million higher than the same periods in 2025. Higher revenues were mainly due to higher flow-through revenues in Natural Gas Distribution and Electricity Distribution, and growth in rate base. Higher revenues in the first six months of 2026 were partially offset by refunds to customers of Electricity Distribution and Natural Gas Distribution over the September 1, 2025 to February 28, 2026 period, resulting from the AUC's Second Generation Performance Based Regulation (PBR2) re-opener Phase II decision rendered in the second quarter of 2025. The Company was granted leave to appeal this decision, which was heard by the Alberta Court of Appeal on April 16, 2026. ADJUSTED EARNINGS Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 Change 2026 2025 Change Electricity Electricity Distribution (1) 35 38 (3) 81 80 1 Electricity Transmission (1) 51 44 7 96 89 7 International Electricity Operations (1) 15 14 1 29 29 - Total Electricity (1) 101 96 5 206 198 8 Natural Gas Natural Gas Distribution (1) Natural Gas Transmission (1) (7) 30 (6) (1) 26 4 106 58 97 53 9 5 Total Natural Gas (1) 23 20 3 164 150 14 Total ATCO Energy Systems (2) 124 116 8 370 348 22 Non-CAA7 rinancial mєasurєs. Thє mosī dirєcīly comparablє mєasurє rєporīєd in accordancє wiīh IFRS is Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company. Adjusīєd єarnings is noī a sīandardizєd rinancial mєasurє undєr IFRS and may noī bє comparablє īo similar rinancial mєasurєs disclosєd by oīhєr issuєrs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. ATCO Energy Systems' adjusted earnings of $124 million and $370 million in the second quarter and first six months of 2026 were $8 million and $22 million higher than the same periods in 2025 mainly due to growth in rate base. Adjusted earnings in the second quarter were also higher due to Electricity Transmission's 2026-2027 GTA negotiated settlement decision received from the AUC and the year-to-date recognition of final 2026 rates of which $3 million relates to the first quarter of 2026. In the first six months of 2026, higher earnings were also due to lower income tax expense due to the March 2026 enactment of Bill C-15 (Budget 2025 Implementation Act, No. 1) (Bill C-15), which reinstated the Accelerated Investment Incentive and increased deductibility of eligible property acquired after 2024 and available for use before 2030. Higher adjusted earnings were partially offset by Natural Gas Transmission's 2026-2028 General Rate Application (GRA) which was approved by the AUC and included cost efficiencies in prior periods that are being passed on to customers. Detailed information about the activities and financial results of ATCO Energy Systems' business segments is provided in the following sections. Electricity Distribution Electricity Distribution provides regulated electricity distribution and distributed generation mainly in northern and central east Alberta, the Yukon, the Northwest Territories, and in the Lloydminster area of Saskatchewan. Electricity Distribution adjusted earnings of $35 million in the second quarter of 2026 were $3 million lower than the same period in 2025 mainly due to timing of cost efficiencies, partially offset by growth in rate base. Electricity Distribution adjusted earnings of $81 million in the first six months of 2026 were $1 million higher than the same period in 2025 mainly due to growth in rate base, and lower income tax expense due to the March 2026 enactment of Bill C-15. Higher adjusted earnings were partially offset by timing of cost efficiencies. Electricity Transmission Electricity Transmission provides electricity transmission mainly in northern and central east Alberta, and in the Lloydminster area of Saskatchewan. Additionally, Electricity Transmission has a 35-year contract to be the operator of Alberta PowerLine, a 500-km electricity transmission line between Wabamun, near Edmonton, and Fort McMurray, Alberta. Electricity Transmission adjusted earnings of $51 million and $96 million in the second quarter and first six months of 2026 were $7 million higher than the same periods in 2025 mainly due to growth in rate base. Adjusted earnings in the second quarter were also higher due to Electricity Transmission's 2026-2027 GTA negotiated settlement decision received from the AUC and the year-to-date recognition of final 2026 rates of which $3 million relates to the first quarter of 2026. International Electricity Operations International Electricity Operations includes a 50 per cent ownership in LUMA Energy, LLC (LUMA Energy), held by a subsidiary of Canadian Utilities. LUMA Energy is a company formed and awarded an Operations and Maintenance Agreement (OMA) with the Puerto Rico Public-Private Partnerships Authority and the Puerto Rico Electric Power Authority (PREPA). LUMA Energy continues to operate under the terms of a Supplemental Agreement, which was extended on November 30, 2022. International Electricity Operations adjusted earnings of $15 million in the second quarter of 2026 were $1 million higher than the same period in 2025 mainly due to higher management fees as a result of inflation adjustments, partially offset by lower foreign exchange rates. International Electricity Operations adjusted earnings of $29 million in the first six months of 2026 were comparable to the same period in 2025. Natural Gas Distribution Natural Gas Distribution serves municipal, residential, commercial, and industrial customers throughout Alberta and in the Lloydminster area of Saskatchewan. Natural Gas Distribution adjusted earnings in the second quarter of 2026 were $1 million lower than the same period in 2025 mainly due to timing of cost efficiencies, partially offset by growth in rate base. Natural Gas Distribution adjusted earnings in the first six months of 2026 were $9 million higher than the same period in 2025 mainly due to growth in rate base and lower income tax expense due to the March 2026 enactment of Bill C-15. Natural Gas Transmission Natural Gas Transmission receives natural gas on its pipeline system from various gas processing plants as well as from other natural gas transmission systems and transports it to end users within the province of Alberta or to other pipeline systems. Natural Gas Transmission adjusted earnings of $30 million and $58 million in the second quarter and first six months of 2026 were $4 million and $5 million higher than the same periods in 2025 mainly due to growth in rate base and lower income tax expense due to the March 2026 enactment of Bill C-15. Higher adjusted earnings were partially offset by the 2026-2028 GRA which was approved by the AUC and included cost efficiencies in prior periods that are being passed on to customers. ATCO ENERGY SYSTEMS RECENT DEVELOPMENTS Utility Infrastructure Projects ATCO Energy Systems continues work on its two large utility infrastructure projects during the second quarter: the Yellowhead Pipeline in Natural Gas Transmission and CETO in Electricity Transmission. Yellowhead Pipeline consists of approximately 235 kilometres of high-pressure natural gas pipeline with the projected spend estimated at $2.9 billion based on a Class III estimate with an expected accuracy of +/-20 per cent. In the third quarter of 2025, the AUC approved the Need Assessment Application for the project, and on July 17, 2026, the AUC approved the facility application. With these two key regulatory filings approved, construction is now set to begin effective immediately. All major pipeline and compressor contracts, including supply and materials, have been awarded and the pipeline is 100 per cent contracted with customers. The Yellowhead Pipeline will support Alberta's continued economic growth, industrial expansion and rising energy demand. The Company expects to fund Yellowhead Pipeline's development within CU Inc., according to its regulated capital structure, which is 63 per cent regulated debt and 37 per cent regulated equity. The regulated debt is expected to be funded with CU Inc. debenture issuances throughout the remainder of 2026 and 2027. The regulated equity is expected to be funded with internally generated cash flows, equity contributions from Canadian Utilities and Indigenous partnerships are expected to contribute up to 30 per cent of the equity. In 2025, Canadian Utilities raised $500 million fixed-to-fixed rate subordinate notes and $200 million preferred shares to substantially pre-fund its equity contribution. In June 2026, ATCO and AltaLink L.P. announced the successful completion and energization of CETO. CETO consists of a 135-km 240kV transmission line, of which Electricity Transmission built 85-km of the transmission line and AltaLink L.P. constructed the remaining 50-km. Electricity Transmission's 85-km of the transmission line was energized on June 26, 2026, and was completed ahead of project schedule, below expected project spend, and with zero lost time injuries. CETO supports renewable energy integration in Alberta and transports electricity in the counties of Red Deer, Lacombe and Stettler, supplying more than 1,500 megawatts of electricity to Alberta's grid. Funding Strategy To fund ATCO Energy Systems' regulated debt requirements, the Company expects to issue debentures each year during the five-year (2026-2030) capital expenditure plan. For regulated equity requirements, in addition to cash flow from operations and the $0.7 billion financed in 2025, the Company expects to raise an additional $0.8 billion of capital securities (1) over the five-year (2026-2030) capital expenditure plan to fund the equity portion of investment. The current five-year (2026-2030) capital expenditure plan does not require common equity to fund the regulated utility growth. ATCO ENERGY SYSTEMS REGULATORY DEVELOPMENTS Natural Gas Transmission 2026-2028 General Rate Application (GRA) On September 22, 2025, ATCO Pipelines filed its GRA with the AUC to establish its revenue requirement for 2026-2028. Increases over the three-year period are largely related to Yellowhead Pipeline. In January 2026, ATCO Pipelines and interveners reached a Negotiated Settlement Agreement (NSA) in principle, except for IT operations and maintenance (O&M) costs and other certain matters excluded from negotiations by the AUC. On July 2, 2026, the AUC issued a decision for the excluded matters from the NSA. The decision approved a depreciation expense placeholder, IT O&M costs, established a capital deferral account to manage uncertainties for Yellowhead Pipeline, and granted 100 per cent of construction work in progress for Yellowhead Pipeline in rate base for 2026 ($53 million) and 2027 ($44 million) as a temporary credit relief measure during construction. Yellowhead Pipeline Project Facility Application On July 17, 2026, the AUC approved ATCO Pipelinesʼ Facility Application for the approximately $2.9 billion Yellowhead Pipeline project as filed. The approval confirms that the project is in the public interest, authorizes construction and operation of the facilities, and resolves key matters related to routing, land access, environmental impacts, Indigenous engagement, and (1) Capiīal sєcuriīiєs could includє prєrєrrєd sharєs, hybrid bonds, and/or dєbєnīurєs. stakeholder concerns. The decision represents a significant regulatory milestone and enables ATCO Pipelines to proceed with project execution, with construction expected to begin effective immediately. Electricity Transmission 2026-2027 General Tariff Application (GTA) On November 21, 2025, Electricity Transmission filed its GTA with the AUC to establish its revenue requirement for 2026 and 2027. In June 2026, Electricity Transmission and interveners reached a comprehensive NSA, which was approved by the AUC on July 3, 2026. In rendering its decision to approve the NSA, the AUC excluded three line-move capital projects, which will be adjudicated separately. The NSA reflects modest tariff increases of less than 1 per cent in 2026 and 2027. The adjusted earnings impact of the decision was $7 million in the second quarter of 2026, of which half related to the first quarter of 2026. ‌REVENUES ATCO EnPower revenues of $76 million and $175 million in the second quarter and first six months of 2026 were $5 million and $6 million higher than the same periods in 2025 mainly due to stronger seasonal spreads in natural gas storage services, higher generation at the Veracruz hydro facility in Mexico, and higher third party sales of emissions credits. ADJUSTED EARNINGS Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 Change 2026 2025 Change Electricity Generation (1) Storage G Industrial Water (1) (2) 17 (2) - 14 3 (6) 32 (5) (1) 28 4 Total ATCO EnPower (2) 15 12 3 26 23 3 Non-CAA7 rinancial mєasurєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. ATCO EnPower adjusted earnings of $15 million and $26 million in the second quarter and first six months of 2026 were $3 million higher than the same periods in 2025 mainly due to stronger seasonal spreads in natural gas storage services, and higher generation at the Veracruz hydro facility in Mexico. Higher earnings in the quarter were partially offset by lower carbon pricing recognized for emissions credits generated, lower compensation related to turbine availability guarantees at the Forty Mile wind facility, and lower overall capture pricing. Detailed information about the activities and financial results of ATCO EnPower's businesses is provided in the following sections. Electricity Generation Non-regulated electricity activities include the supply of electricity from solar, wind, hydroelectric, gas and distributed generation facilities in Canada, Mexico, and Chile. Electricity Generation adjusted earnings in the second quarter and first six months of 2026 were comparable to the same periods in 2025. The following table compares ATCO EnPowerʼs generation portfolio performance in Canada for the second quarter and first six months of 2026 and 2025. Three Months Ended June 30 Six Months Ended June 30 2026 2025 Change 2026 2025 Change Capacity Share (1) (2) (MW) Generation (MWh) Wind Solar Hydroelectric Natural Gas % Merchant % PPA (3) Average Realized Price (:/MWh) 409 254,538 151,503 63,031 38,903 1,101 37 63 67 390 19 233,564 20,974 144,334 7,169 64,939 (1,908) 24,291 14,612 - 1,101 33 4 67 (4) 71 (4) 409 465,742 322,370 93,703 44,526 5,143 33 67 71 390 19 467,018 (1,276) 345,608 (23,238) 93,502 201 27,908 16,618 - 5,143 30 3 70 (3) 74 (3) Capaciīy sharє rєprєsєnīs īhє pєrcєnīagє or namєplaīє capaciīy ownєd by ATCO En7owєr, єxcєpī in rєspєcī or īhє Dєєrrooī and Barlow solar raciliīiєs, which arє rєprєsєnīєd aī 100 pєr cєnī bєcausє īhєy arє hєld by a conīrollєd subsidiary. Capaciīy sharє incrєasєd by 19-MW as a rєsulī or complєīing īhє acquisiīion or īhє Elmworīh gєnєraīing sīaīion in īhє rourīh quarīєr or 2025. 77A mєans 7owєr 7urchasє Agrєєmєnī. The average realized price related to the generation portfolio of $67 per MWh and $71 per MWh in the second quarter and first six months of 2026 was lower compared to $71 per MWh and $74 per MWh in the second quarter and first six months of 2025. This is mainly due to declines in merchant pricing from the comparable periods in 2025. Wind generation for the second quarter of 2026 was higher than the same period in 2025 due to higher average wind speed at both Forty Mile wind and Adelaide facilities. The Forty Mile wind facility continues to be affected by monthly grid curtailments of approximately 40 per cent caused by transmission system constraints in the southeast portion of Alberta resulting from inadequate transmission infrastructure and grid deficiencies leading to unprecedented levels of curtailment in the region. The Alberta Electric System Operator's (AESO) unequal curtailment practices also continue to benefit Renewable Energy Program (REP) facilities at the expense of non-REP generators in the area. Proposed incumbent protection mechanisms have not yet been finalized. ATCO EnPower continues to pursue all remedies associated with this situation through engagement and continues to evaluate options to secure a resolution. Solar generation in the second quarter of 2026 was lower than the same period in 2025 driven in part due to wet weather conditions experienced during June at the Barlow, Deerfoot and Empress solar facilities. There was improved generation in the second quarter of 2026 at the hydroelectric facility compared to the same period in 2025 as reservoir levels remain elevated, supported by strong basin-wide snowpack, high precipitation, and mild weather. Natural gas generation in the second quarter of 2026 was higher than the same period in 2025 due to the fourth quarter 2025 acquisition of the Elmworth generating station. Storage G Industrial Water Storage & Industrial Water provides non-regulated natural gas storage, natural gas liquids storage, and industrial water services in Alberta and energy services in the Northwest Territories. Storage & Industrial Water adjusted earnings of $17 million and $32 million in the second quarter and first six months of 2026 were $3 million and $4 million higher than the same periods in 2025 mainly due to stronger seasonal spreads in natural gas storage services. ‌REVENUES ATCO Australia revenues of $75 million and $137 million in the second quarter and first six months of 2026 were $15 million and $20 million higher than the same periods in 2025 mainly due to increased customer rates in ATCO Gas Australia, and higher foreign exchange rates. Revenues for the first six months of 2026 were partially offset by the revenues received in the first quarter of 2025 from the South Australia Hydrogen Jobs Plan project in ATCO Power Australia. ADJUSTED EARNINGS Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 Change 2026 2025 Change ATCO Gas Australia (1) ATCO Power Australia (1) 32 2 18 14 3 (1) 52 3 30 22 4 (1) Total ATCO Australia (2) 34 21 13 55 34 21 Non-CAA7 rinancial mєasurєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. ATCO Australia adjusted earnings of $34 million and $55 million in the second quarter and first six months of 2026 were $13 million and $21 million higher than the same periods in 2025 mainly due to the impact of inflation indexing on rate base, higher foreign exchange rates, and higher customer rates in ATCO Gas Australia. Detailed information about the activities and financial results of ATCO Australia's businesses is provided in the following sections. ATCO Gas Australia ATCO Gas Australia is a regulated provider of natural gas distribution services in western Australia, serving metropolitan Perth and surrounding regions. ATCO Gas Australia adjusted earnings of $32 million and $52 million in the second quarter and first six months of 2026 were $14 million and $22 million higher than the same periods in 2025 mainly due to the impact of inflation indexing on rate base, higher foreign exchange rates, and higher customer rates. Australia inflation indexing in 2026 currently reflects an inflation assumption of 4.2 per cent, of which 2.1 per cent has been recognized in the first six months. In 2025, Australia inflation indexing reflected a full year inflation of 3.4 per cent, of which 1.4 per cent was recognized for the first six months of 2025. The impact of inflation on rate base is added to the rate base annually and is reflected in customer rates in future periods through the recovery of depreciation. Customer rates are adjusted annually through a mechanism, which adjusts the approved rates in real dollars for actual inflation. ATCO Power Australia ATCO Power Australia develops, builds, owns and operates energy and infrastructure assets, including the two natural gas fired generation plants: Karratha in the Pilbara region of Western Australia, and Osborne in Adelaide, South Australia. ATCO Power Australia adjusted earnings of $2 million and $3 million in the second quarter and first six months of 2026 were $1 million lower than the same periods in 2025 mainly due to earnings from the South Australia Hydrogen Jobs Plan project recognized in 2025. RECENT DEVELOPMENTS Osborne Power Purchase Agreement (PPA) Extension In June 2026, ATCO Australia executed an extension to the Osborne PPA with Origin Energy Electricity Limited. The extension commences January 2028 and extends until December 2035, with five one-year options that enable further extensions to December 2040. The extension of the PPA is subject to a condition precedent on the land lease which is expected to be met in the second half of 2026. ‌Financing & Other includes CU Inc. and Canadian Utilities preferred share dividends and financing expenses. REVENUES Including intersegment eliminations, Canadian Utilities Financing & Other revenues of $3 million and $6 million in the second quarter and first six months of 2026 were comparable to the same periods in 2025. ADJUSTED EARNINGS (LOSS) Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 Change 2026 2025 Change Financing G Other (1) (33) (28) (5) (69) (52) (17) Toīal or sєgmєnīs mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. Including intersegment eliminations, Financing & Other adjusted loss in the second quarter and first six months of 2026 was $5 million and $17 million higher than the same periods in 2025 mainly due to increased interest expense on the debt issuance in the third quarter of 2025 related to the pre-funding of the Yellowhead Pipeline investment, and higher share-based compensation expense related to an increase in Canadian Utilities' share price, partially offset by higher interest income. ‌POLICY AND REGULATORY UPDATES We constructively work with all levels of government to advocate for enabling policy and regulation, and to identify barriers that impede cost-effective, economy-wide solutions. We participate in a wide number of discussions, and the following are examples of where we focus our efforts on policies or regulations most relevant to our existing or planned projects. CANADA CANADA-ALBERTA ENERGY COOPERATION FRAMEWORK On May 15, 2026, Canada and Alberta announced an Implementation Agreement supporting the Canada-Alberta Memorandum of Understanding (Implementation Agreement) on energy development and climate policy. The agreement establishes a framework for collaboration on industrial carbon pricing, electricity system growth, methane emission reductions and major project development. Governments also continued work on a coordinated environmental and impact assessment framework intended to streamline review processes for major energy and infrastructure projects. ALBERTA INDUSTRIAL CARBON PRICING FRAMEWORK The Implementation Agreement provides additional clarity regarding Alberta's long-term industrial carbon pricing framework under the Technology Innovation and Emissions Reduction (TIER) system, including a defined carbon price pathway intended to provide greater certainty for industry and investors while supporting emissions reduction objectives. On July 2, 2026, the Oil Sands Alliance and the governments of Canada and Alberta signed a non-binding memorandum of understanding supporting carbon capture and storage, industrial decarbonization, and long-term investment in emissions-reduction initiatives, further reinforcing the policy direction. While these agreements provide additional policy certainty and support continued alignment on industrial emissions reduction objectives, aspects of the framework remain subject to further development and implementation, including elements of the industrial carbon pricing framework and related investment support mechanisms. The final design of these measures may influence compliance costs, investment decisions, and industrial competitiveness. ATCO continues to monitor developments and assess potential implications for its businesses and customers. CLEAN ELECTRICITY REGULATIONS The Implementation Agreement confirms that Alberta's obligations under the federal Clean Electricity Regulations will remain suspended while governments develop an alternative framework for the province's electricity sector. The agreement follows concerns raised by Alberta, including legal proceedings related to the application of the regulations on electricity reliability, affordability, and future investment. ATCO continues to monitor policy and regulatory developments as governments advance implementation of the framework. ACCELERATING MAJOR PROJECT ASSESSMENTS On June 23, 2026, Canada and Alberta signed a final Cooperation Agreement on Environmental and Impact Assessment, formalizing a coordinated approach to the review of major projects. The agreement supports the "one project, one review" objective by reducing duplication between federal and provincial assessment processes while maintaining environmental oversight and Indigenous consultation requirements. The framework is intended to improve regulatory clarity and support more efficient approvals for major energy, utility, transportation, and infrastructure projects. ‌OTHER EXPENSES AND INCOME A financial summary of other consolidated expenses and income items for the second quarter and first six months of 2026 and 2025 is given below. These amounts are presented in accordance with IFRS accounting standards. They have not been adjusted for the timing of revenues and expenses associated with rate-regulated activities and other items that are not in the normal course of business. Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 Change 2026 2025 Change Operating costs 447 428 19 947 935 12 Depreciation and amortization 194 182 12 383 363 20 Earnings from investment in joint ventures 19 19 - 40 40 - Net finance costs 122 110 12 243 221 22 Income tax expense 39 27 12 107 95 12 OPERATING COSTS Operating costs, which are total costs and expenses less depreciation and amortization, increased by $19 million and $12 million in the second quarter and first six months of 2026 compared to the same periods in 2025 mainly due to higher expenses in Natural Gas Distribution for third party franchise fees, and increased purchased power expenses in ATCO Electric Yukon. Increased operating costs were partially offset by non-recurring costs incurred in 2025 associated with restructuring activities and transition costs related to activities to shift the managed IT services from a single-vendor service provider to a hybrid model of multiple new vendors and internal teams. DEPRECIATION AND AMORTIZATION Depreciation and amortization increased by $12 million and $20 million in the second quarter and first six months of 2026 compared to the same periods in 2025 mainly due to ongoing capital investments in the Regulated Utilities. EARNINGS FROM INVESTMENT IN JOINT VENTURES Earnings from investment in joint ventures is mainly comprised of Canadian Utilities' ownership positions in electricity generation plants; electricity operations in the Northwest Territories including Naka Power Utilities (NWT); LUMA Energy electricity operations and maintenance in Puerto Rico; and the Strathcona Storage Limited Partnership, which operates hydrocarbon storage facilities at the ATCO Heartland Energy Centre near Fort Saskatchewan, Alberta. Earnings from investment in joint ventures in the second quarter and first six months of 2026 were comparable to the same periods in 2025. NET FINANCE COSTS Net finance costs increased by $12 million and $22 million in the second quarter and first six months of 2026 compared to the same periods in 2025 mainly due to additional debt issued to fund ongoing capital investment. INCOME TAX EXPENSE Income taxes in the second quarter and first six months of 2026 were $12 million higher than the same periods in 2025 mainly due to higher IFRS earnings before income taxes, and the impact of previously unrecognized deferred income taxes recorded in the prior year. ‌LIQUIDITY AND CAPITAL RESOURCES Our financial position is supported by our diversified portfolio with a structured foundation of regulated and long-term contracted businesses. Our business strategies, funding of operations, and planned future growth are supported by maintaining strong investment grade credit ratings and access to capital markets at competitive rates. Primary sources of capital are cash flows from operations and capital markets. Liquidity is generated by cash flows from operations and is supported by appropriate levels of cash and available committed credit facilities. CREDIT RATINGS The following table shows the credit ratings assigned to Canadian Utilities, CU Inc. and ATCO Gas Australia Pty Ltd (ATCO Gas Australia) at June 30, 2026. DBRS Fitch Canadian Utilities Issuer A A- Senior unsecured debt A A- Commercial paper R-1 (low) F2 Preferred shares CU Inc. PFD-2 BBB Issuer A (high) A- Senior unsecured debt A (high) A Commercial paper R-1 (low) F2 Preferred shares PFD-2 (high) BBB+ S&P Global Ratings has assigned Canadian Utilities' subsidiary ATCO Gas Australia (1) an A- issuer and senior unsecured debt credit rating with a stable outlook. (1) ATCO Cas Ausīralia is a rєgulaīєd providєr or naīural gas disīribuīion sєrvicєs in Wєsīєrn Ausīralia, sєrving mєīropoliīan 7єrīh and surrounding rєgions. On June 24, 2026, Morningstar DBRS affirmed its 'A (high)' long-term corporate credit rating and stable outlook on Canadian Utilities' subsidiary, CU Inc. On July 15, 2026, Morningstar DBRS affirmed its 'A' long-term corporate credit rating and stable outlook on Canadian Utilities Limited. LINES OF CREDIT At June 30, 2026, Canadian Utilities and its subsidiaries had the following lines of credit. ($ millions) Total Used Available Long-term committed 2,962 918 2,044 Uncommitted 450 100 350 Total 3,412 1,018 2,394 Of the $3,412 million in total lines of credit, $450 million was in the form of uncommitted credit facilities with no set maturity date. The other $2,962 million in credit lines was committed with maturities betwee n 2027 and 2031, an d may be extended at the option of the lenders. Of the $1,018 million in lines of credit used, $731 million was related to ATCO Gas Australia. Long-term committed credit lines are used to satisfy all of ATCO Gas Australia's term debt financing needs. The majority of the remaining usage is related to the funding needs in ATCO EnPower, CU Inc., and the issuance of letters of credit. CONSOLIDATED CASH FLOWS At June 30, 2026, the Company's cash position was $251 million. This represents an increase of $303 million compared to the cash position as of June 30, 2025. Cash movements for the second quarter and first six months of 2026 and 2025 are outlined in the following table: Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 Change 2026 2025 Change Cash position, beginning of period 355 (82) 437 671 (80) 751 Cash from (used in): Operating activities 557 441 116 1,161 1,078 83 Investing activities (357) (399) 42 (730) (774) 44 Financing activities (301) (11) (290) (851) (277) (574) Foreign currency translation (3) (1) (2) - 1 (1) Cash position, end of the period 251 (52) 303 251 (52) 303 The opening cash position of $355 million and $671 million in the second quarter and first six months of 2026 was $437 million and $751 million higher compared to the opening cash position for the second quarter and first six months of 2025 mainly due to increased issuance of long-term debt and Canadian Utilitiesʼ equity preferred shares related to growth projects for new customers in the Regulated Utilities, partially offset by higher redemption of equity preferred shares and repayments of debt. Operating Activities Cash flows from operating activities were $557 million in the second quarter of 2026, $116 million higher than the same period in 2025. This increase was mainly due to higher earnings within most business units, and increased customer receipts due to colder weather and higher customer rates in Natural Gas Distribution, partially offset by the timing of working capital. Cash flows from operating activities were $1,161 million in the first six months of 2026, $83 million higher than the same period in 2025. This increase was mainly due to higher earnings within most business units, and lower income taxes paid in Natural Gas Distribution mainly due to a prior year tax refund received. Increases were partially offset by the timing of working capital. Investing Activities Cash flows used in investing activities were $357 million and $730 million in the second quarter and first six months of 2026, $42 million and $44 million lower than the same periods in 2025 mainly due to the timing of capital projects and settlements related to accounts payable for capital projects in the Regulated Utilities and ATCO EnPower. Cash Used for Capital Investment and Capital Expenditures Capital investment and capital expenditures for the second quarter and first six months of 2026 and 2025 are shown in the following table. Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 Change 2026 2025 Change ATCO Energy Systems Electricity Natural Gas 146 222 146 - 192 30 297 379 337 (40) 346 33 368 338 30 676 683 (7) ATCO EnPower ATCO Australia CU Financing G Other 10 25 - 15 (5) 24 1 5 (5) 30 49 1 45 (15) 45 4 10 (9) Canadian Utilities Total Capital Expenditures (1) (2) 403 382 21 756 783 (27) Capital Expenditures in joint ventures ATCO Energy Systems Electricity ATCO EnPower 1 2 1 - 1 1 1 3 1 - 2 1 Canadian Utilities Total Capital Investment (3) 406 384 22 760 786 (26) Includєs addiīions īo propєrīy, planī and єquipmєnī, and inīangiblєs as wєll as $11 million and $20 million (2025 - $8 million and $13 million) or capiīalizєd inīєrєsī during consīrucīion ror īhє sєcond quarīєr and rirsī six monīhs or 2026. Includєs $27 million and $70 million ror īhє sєcond quarīєr and rirsī six monīhs or 2026 (2025 - $43 million and $68 million) or capiīal єxpєndiīurєs, mainly in ATCO Enєrgy Sysīєms, īhaī wєrє rundєd wiīh īhє assisīancє or cusīomєr conīribuīions. Non-CAA7 rinancial mєasurє. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Capiīal Invєsīmєnī īo Capiīal Expєndiīurєs" in īhis MDhA. Total capital investment of $406 million in the second quarter of 2026 was $22 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. Higher capital investment was partially offset by the completion of CETO and timing of capital maintenance projects and infrastructure upgrades in Electricity Transmission, and decreased capital spend in ATCO EnPower. Total capital investment of $760 million in the first six months of 2026 was $26 million lower compared to the same period in 2025 mainly due to the completion of CETO and timing of capital maintenance projects and infrastructure upgrades in Electricity Transmission, and decreased capital spend in ATCO EnPower. Lower capital investment was partially offset by increased spending related to ongoing system upgrades and growth projects in the Regulated Utilities, including Yellowhead Pipeline in Natural Gas Transmission. Total capital expenditures of $403 million in the second quarter of 2026 and $756 million in the first six months of 2026 were $21 million higher and $27 million lower, respectively, compared to the same periods in 2025 due to the factors outlined above. Capital expenditures in joint ventures and business combinations are excluded from capital expenditures. Financing Activities Cash flows used in financing activities were $301 million and $851 million in the second quarter and first six months of 2026, $290 million and $574 million higher than the same periods in 2025 mainly due to lower issuances of long-term debt, and higher repayment of debt. Information pertaining to financing activities is summarized below. Dividends and Common Shares We have increased our common share dividend each year since 1972, a 54-year track record. Dividends paid to Class A and Class B share owners totalled $126 million and $252 million in the second quarter and first six months of 2026. On July 9, 2026, the Board of Directors declared a third quarter dividend of 46.23 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. ‌SHARE CAPITAL Canadian Utilitiesʼ equity securities consist of Class A shares and Class B shares. At July 27, 2026, we had outstanding 205,731,737 Class A shares, 66,598,854 Class B shares, and options to purchase 2,834,250 Class A shares. CLASS A NON-VOTING SHARES AND CLASS B COMMON SHARES Class A and Class B share owners are entitled to share equally, on a share for share basis, in all dividends the Company declares on either of such classes of shares as well as in the Companyʼs remaining property on dissolution. Class B share owners are entitled to vote and to exchange at any time each share held for one Class A share. If a take-over bid is made for the Class B shares and if it would result in the offeror owning more than 50 per cent of the outstanding Class B shares (excluding any Class B shares acquired upon conversion of Class A shares), the Class A share owners are entitled, for the duration of the take-over bid, to exchange their Class A shares for Class B shares and to tender the newly exchanged Class B shares to the take-over bid. Such right of exchange and tender is conditional on completion of the applicable take-over bid. In addition, Class A share owners are entitled to exchange their shares for Class B shares if ATCO Ltd., the Companyʼs controlling share owner, ceases to own or control, directly or indirectly, more than 10,000,000 of the issued and outstanding Class B shares. In either case, each Class A share is exchangeable for one Class B share, subject to changes in the exchange ratio for certain events such as a stock split or rights offering. Of the 12,800,000 Class A shares authorized for grant of options under our stock option plan, 9,149,600 Class A shares were available for issuance at June 30, 2026. Options may be granted to officers and key employees of the Company and its subsidiaries at an exercise price equal to the weighted average of the trading price of the shares on the Toronto Stock Exchange for the five trading days immediately preceding the grant date. The vesting provisions and exercise period (which cannot exceed 10 years) are determined at the time of grant. ‌QUARTERLY INFORMATION The following table shows financial information for the eight quarters ended September 30, 2024 through June 30, 2026. ($ millions, єxcєpī ror pєr sharє daīa) Q3 2025 Q4 2025 Q1 2026 Q2 2026 Revenues 792 971 1,084 914 Earnings (loss) attributable to equity owners of the Company 100 (328) 224 128 Earnings (loss) attributable to Class A and B shares 80 (347) 205 109 Earnings (loss) per Class A and Class B share ($) 0.29 (1.28) 0.75 0.40 Diluted earnings (loss) per Class A and Class B share ($) 0.29 (1.28) 0.75 0.40 Adjusted earnings per Class A and Class B share ($) (1) 0.40 0.72 0.89 0.51 Adjusted earnings (loss) (2) ATCO Energy Systems (2) 98 196 246 124 ATCO EnPower (2) 16 4 11 15 ATCO Australia (2) 27 8 21 34 Financing & Other (2) and Intersegment Eliminations (33) (11) (36) (33) Total adjusted earnings (2) 108 197 242 140 ($ millions, єxcєpī ror pєr sharє daīa) Q3 2024 Q4 2024 Q1 2025 Q2 2025 Revenues 810 981 1,085 842 Earnings attributable to equity owners of the Company 12 164 236 111 Earnings (loss) attributable to Class A and Class B shares (8) 145 217 92 Earnings (loss) per Class A and Class B share ($) (0.03) 0.53 0.80 0.34 Diluted earnings (loss) per Class A and Class B share ($) (0.03) 0.53 0.80 0.34 Adjusted earnings per Class A and Class B share ($) (1) 0.38 0.74 0.85 0.45 Adjusted earnings (loss) (2) ATCO Energy Systems (2) 94 205 232 116 ATCO EnPower (2) 14 4 11 12 ATCO Australia (2) 15 5 13 21 Financing & Other (2) and Intersegment Eliminations (21) (11) (24) (28) Total adjusted earnings (2) 102 203 232 121 Non-CAA7 raīio. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. Toīal or sєgmєnīs mєasurєs. Sєє "Oīhєr Financial and Non-CAA7 Mєasurєs" and "Rєconciliaīion or Adjusīєd Earnings īo Earnings Aīīribuīablє īo Equiīy Ownєrs or īhє Company" in īhis MDhA. Our financial results for the previous eight quarters reflect the timing of utility regulatory decisions, and the seasonal nature of demand for natural gas and electricity. ADJUSTED EARNINGS Adjusted earnings in the third quarter of 2025 were higher than the same period in 2024 mainly due to growth in rate base in ATCO Energy Systems' businesses, and higher customer rates in ATCO Gas Australia as a result of moving into a new Access Arrangement (AA6). Higher earnings were partially offset by a decrease in 2025 ROE in ATCO Energy Systems, and completion of the efficiency carryforward mechanism (ECM) funding in 2024 for Electricity Distribution and Natural Gas Distribution. Additionally, higher adjusted earnings were partially offset by lower interest income earned, the timing of certain expenses, and decreased earnings contribution from ATCO Energy which was transferred to ATCO on August 1, 2024. Adjusted earnings in the fourth quarter of 2025 were higher than the same period in 2024 mainly due to growth in rate base in ATCO Energy Systems' businesses, and higher customer rates in ATCO Gas Australia as a result of moving into AA6. Higher earnings were partially offset by a decrease in 2025 ROE in ATCO Energy Systems, and completion of the ECM funding in 2024 for Electricity Distribution and Natural Gas Distribution. Additionally, higher earnings were partially offset by higher net finance costs, and decreased earnings contribution from ATCO Energy, which was sold to ATCO on August 1, 2024. 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. Partially offsetting these increases in adjusted earnings were higher net interest expense and higher share-based compensation expense in Financing & Other. Adjusted earnings in the second quarter of 2026 were higher than the same period in 2025 mainly due to the impact of inflation indexing on rate base and increased customer rates in ATCO Gas Australia, growth in rate base in ATCO Energy Systems' businesses, and year-to-date recognition of final 2026 rates in Electricity Transmission following the AUC decision in the second quarter of 2026 approving the NSA relating to the 2026-2027 GTA. Higher adjusted earnings were partially offset by Natural Gas Transmission's 2026-2028 GRA which was approved by the AUC and included cost efficiencies in prior periods that are being passed on to customers. EARNINGS ATTRIBUTABLE TO EQUITY OWNERS OF THE COMPANY Earnings attributable to equity owners of the Company 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 the first quarter of 2025, the Company recorded restructuring costs of $7 million (after-tax) and $14 million (after-tax), respectively, mainly related to staff reductions and associated severance costs. Restructuring costs incurred in 2025 were a continuation of restructuring activities commenced in 2024. In the third quarter of 2024, the Company sold its 100 per cent investment in ATCO Energy to ATCO. As a result of the transaction, a loss on sale of $14 million (after-tax) was recorded. In each of the four quarters of 2025, the Company recognized IT transition costs of $7 million (after-tax), $5 million (after-tax), $2 million (after-tax), and $4 million (after-tax), respectively. The transition activities commenced on January 1, 2025 and concluded in the fourth quarter of 2025. The transition costs were primarily related to activities to shift the managed IT services from a single-vendor service provider to a hybrid model of multiple new vendors and internal teams. In the fourth quarter of 2025, the Company recognized asset impairments and write-offs of $471 million (after-tax) mainly related to the Alberta Renewables Portfolio in ATCO EnPower that was primarily driven by elevated curtailment from inadequate transmission infrastructure and electricity grid deficiencies, and certain hydrogen assets in Natural Gas Distribution which were impaired due to the uncertainty of utility hydrogen regulations. In addition, ATCO Gas Australia recognized an impairment related to the phasing out of an aging liquefied petroleum gas distribution network in Albany, Western Australia due to large sections of the system nearing the end of their service life. ‌OTHER FINANCIAL AND NON-GAAP MEASURES This MD&A should be read with the Company's unaudited interim consolidated financial statements for the six months ended June 30, 2026. The unaudited interim consolidated financial statements are prepared according to International Accounting Standard (IAS) 34 Interim Financial Reporting using accounting policies consistent with IFRS as issued by the International Accounting Standards Board (IFRS Accounting Standards). This MD&A contains various "total of segments measures", "non-GAAP financial measures", and "non-GAAP ratios" (as such terms are defined in NI 52-112), which are described in further detail below. TOTAL OF SEGMENTS MEASURES NI 52-112 defines a "total of segments measure" as a financial measure disclosed by an issuer that (a) is a subtotal or total of two or more reportable segments of an entity, (b) is not a component of a line item disclosed in the primary financial statements of the entity, (c) is disclosed in the notes to the financial statements of the entity, and (d) is not disclosed in the primary financial statements of the entity. Consolidated adjusted earnings (loss) and adjusted earnings (loss) for each of ATCO Energy Systems, ATCO EnPower, ATCO Australia, and 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 equity owners of the Company. 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 equity owners of the Company is presented in this MD&A. NON-GAAP FINANCIAL MEASURES NI 52-112 defines a "non-GAAP financial measure" as a financial measure disclosed by an issuer that (a) depicts the historical or expected future financial performance, financial position or cash flows of an entity, (b) with respect to its composition, excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the entity, (c) is not disclosed in the financial statements of the entity, and (d) is not a ratio, fraction, percentage or similar representation. Capital investment; adjusted earnings (loss) for each of 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 EnPower (inclusive of Electricity Generation and Storage & Industrial Water) are non-GAAP financial measures, as defined in NI 52-112. Adjusted Earnings Adjusted earnings (loss) are defined as earnings (loss) attributable to equity owners of the Company after adjusting for the timing of revenues and expenses associated with rate-regulated activities, dividends on equity preferred shares of the Company, 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 equity owners of the Company. Adjusted earnings (loss) is not a standardized financial measure under the reporting framework used to prepare our financial statements. Adjusted earnings (loss) may not be comparable to similar financial measures disclosed by other issuers. Managementʼs view is that adjusted earnings (loss) are a key measure of segment earnings (loss) that are used to assess segment performance and allocate resources and allow for a more effective analysis of operating performance and trends. For investors, adjusted earnings (loss) may provide value as they exclude items that are not in the normal course of business and, as such, provide insight as to earnings (loss) resulting from the issuer's usual course of business. For further information, a "Reconciliation of Adjusted Earnings to Earnings attributable to Equity Owners of the Company" is presented in this MD&A. Capital Investment Capital investment is a non-GAAP financial measure defined as cash used for capital expenditures, business combinations, and cash used in the Company's share of capital expenditures in joint ventures. Capital expenditures include additions to property, plant and equipment and intangibles as well as interest capitalized during construction. Capital investment is most directly comparable to capital expenditures. Capital investment is not a standardized financial measure under the reporting framework used to prepare our financial statements. Capital investment may not be comparable to similar financial measures disclosed by other issuers. Management views capital investment as the Company's total cash investment in assets. For investors, capital investment is useful because it identifies how much cash is being used to acquire and invest in assets. For further information, a "Reconciliation of Capital Investment to Capital Expenditures" is presented in this MD&A. Adjusted EBITDA Further information regarding adjusted EBITDA, including a reconciliation of adjusted EBITDA to adjusted earnings for ATCO EnPower (inclusive of Electricity Generation and Storage & Industrial Water) is presented in Appendix 1: Supplemental Non-Audited Financial Information to this MD&A. NON-GAAP RATIO NI 52-112 defines a "non-GAAP ratio" as a financial measure disclosed by an issuer that (a) is in the form of a ratio, fraction, percentage or similar representation, (b) has a non-GAAP financial measure as one or more of its components, and (c) is not disclosed in the financial statements of the entity. Adjusted earnings (loss) ($ per share) is a non-GAAP ratio, as defined in NI 52-112. Adjusted earnings (loss) per Class A and Class B share are calculated by dividing adjusted earnings (loss) by the weighted average number of shares outstanding for the period. ‌RECONCILIATION OF ADJUSTED EARNINGS TO EARNINGS ATTRIBUTABLE TO EQUITY OWNERS OF THE COMPANY Adjusted earnings (loss) are earnings (loss) attributable to equity owners of the Company after adjusting for the timing of revenues and expenses associated with rate-regulated activities, dividends on equity preferred shares of the Company, and unrealized gains or losses on mark-to-market forward and swap commodity contracts. Adjusted earnings (loss) also exclude one-time gains and losses, impairments, and items that are not in the normal course of business or a result of day-to-day operations. Adjusted earnings (loss) are a key measure of segment earnings (loss) that management uses to assess segment performance and allocate resources. It is managementʼs view that adjusted earnings (loss) allow a better assessment of the economics of rate regulation in Canada and Australia than IFRS earnings (loss). Additional information regarding this measure is provided in the "Other Financial and Non-GAAP Measures" section of this MD&A. The following tables reconcile adjusted earnings (loss) to the directly comparable financial measure, earnings (loss) attributable to equity owners of the Company. ($ millions) Three Months Ended June 30 2026 ATCO Energy Systems ATCO EnPower ATCO Australia Financing G Other Intersegment Eliminations Total 2025 Revenues 760 76 75 7 (4) 914 708 71 60 7 (4) 842 Adjusted earnings (loss) Unrealized losses on mark-to-market forward and swap commodity contracts Rate-regulated activities IT Common Matters decision Transition of managed IT services Dividends on equity preferred shares of Canadian Utilities Limited Other 124 15 34 (33) - 140 116 12 21 (28) - 121 - - - - - - - (2) - - - (2) (11) - (19) - - (30) (10) - (10) - - (20) (1) - - - - (1) - - - - - - - - - - - - (4) (1) - - - (5) - - - 19 - 19 - - - 19 - 19 - - - - - - - (2) - - - (2) Earnings (loss) attributable to equity owners of the Company 112 15 15 (14) - 128 102 7 11 (9) - 111 ($ millions) Six Months Ended June 30 2026 ATCO Energy Systems ATCO EnPower ATCO Australia Financing G Other Intersegment Eliminations Total 2025 Revenues 1,680 175 137 14 (8) 1,998 1,634 169 117 15 (8) 1,927 Adjusted earnings (loss) Rate-regulated activities IT Common Matters decision Transition of managed IT services Restructuring Dividends on equity preferred shares of Canadian Utilities Limited Other 370 26 55 (69) - 382 348 23 34 (52) - 353 (35) - (31) - - (66) 3 - (18) - - (15) (2) - - - - (2) (1) - - - - (1) - - - - - - (11) (1) - - - (12) - - - - - - (10) (2) (1) (1) - (14) - - - 38 - 38 - - - 38 - 38 - - - - - - - (2) - - - (2) Earnings (loss) attributable to equity owners of the Company 333 26 24 (31) - 352 329 18 15 (15) - 347 UNREALIZED GAINS AND LOSSES ON MARK-TO-MARKET FORWARD AND SWAP COMMODITY CONTRACTS The Company's electricity generation business enters into fixed-price swap electricity contracts in order to manage exposure to electricity prices for its renewable facilities. These contracts, comprising virtual power purchase agreements, are measured at fair value. Unrealized gains and losses due to changes in the fair value of the fixed-price electricity 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, are recognized in the ATCO EnPower operating segment. The Senior Management Team, consisting of the Chief Executive Officer (CEO) and other members of the Executive Committee, believes that removal of the unrealized gains and losses on mark-to-market forward and swap commodity contracts from the determination of adjusted earnings (loss) provides a better representation of operating results for the Company's operations. Realized gains or losses are recognized in adjusted earnings (loss) when the commodity contracts are settled. RATE-REGULATED ACTIVITIES ATCO Electric Transmission, ATCO Electric Distribution, ATCO Electric Yukon, Naka Power Utilities (NWT), ATCO Gas, ATCO Pipelines and ATCO Gas Australia are collectively referred to as the Regulated Utilities. IFRS 20, Regulatory Assets and Regulatory Liabilities (IFRS 20), was issued in May 2026 and is effective for annual periods starting January 1, 2029. The Company is in the process of evaluating IFRS 20 and given the Company has not yet adopted this accounting standard, the Regulated Utilities continue to be unable to recognize regulatory assets and regulatory liabilities from rate-regulated activities as may be directed by regulatory decisions. Instead, for IFRS purposes, the Regulated Utilities recognize revenues in earnings when amounts are billed to customers, consistent with the regulator-approved rate design. Operating costs and expenses are recorded when incurred. Costs incurred in constructing an asset that meet the asset recognition criteria are included in the related property, plant and equipment or intangible asset. Until the Company adopts IFRS 20, the Company considers standards issued by the Financial Accounting Standards Board in the US as another source of generally accepted accounting principles taking into account a more likely than not recognition threshold in accounting for rate-regulated activities in its internal reporting provided to the Senior Management Team, which believes that earnings presented in this manner are a better representation of the operating results of the Companyʼs 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) Additional revenues billed in current period Revenues to be billed in future periods 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. 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 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. Timing Adjustment Items RRA Treatment IFRS Accounting Standards Treatment (Pre-adoption of IFRS 20) Regulatory decisions received Settlement of regulatory decisions and other items Regulatory decisions received which relate to current and prior periods. Settlement of amounts receivable or payable to customers and other items. 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 does not recognize the earnings impact from a regulatory decision when it is received as regulatory assets and liabilities are not recorded under IFRS Accounting Standards. The Company recognizes the earnings impact when customer rates are changed and amounts are recovered or refunded to customers through future billings. For the second quarter and first six months of 2026 and 2025, the significant timing adjustments as a result of the differences between rate-regulated accounting and IFRS Accounting Standards (pre-adoption of IFRS 20) are as follows: Three Months Ended June 30 Six Months Ended June 30 ($ millions) 2026 2025 Change 2026 2025 Change Additional revenues billed in current period Future removal and site restoration costs (1) 37 32 5 76 65 11 Impact of colder temperatures (2) 3 - 3 - - - Revenues to be billed in future periods Deferred income taxes (3) (37) (32) (5) (91) (68) (23) Impact of warmer temperatures (2) - (6) 6 (7) (7) - Impact of inflation on rate base (4) (16) (6) (10) (24) (11) (13) Settlement of regulatory decisions and other items PBR2 re-opener proceeding refund to customers (5) - - - (20) - (20) Other (6) (17) (8) (9) - 6 (6) (30) (20) (10) (66) (15) (51) Rєmoval and siīє rєsīoraīion cosīs arє billєd īo cusīomєrs ovєr īhє єsīimaīєd usєrul lirє or īhє rєlaīєd assєīs basєd on rorєcasī cosīs īo bє incurrєd in ruīurє pєriods. Naīural Cas Disīribuīion's cusīomєr raīєs arє basєd on a rorєcasī or normal īєmpєraīurєs. Flucīuaīions in īєmpєraīurєs may rєsulī in morє or lєss rєvєnuє bєing rєcovєrєd rrom cusīomєrs īhan rorєcasī. Rєvєnuєs abovє or bєlow īhє normal īєmpєraīurєs in īhє currєnī pєriod arє rєrundєd īo or rєcovєrєd rrom cusīomєrs in ruīurє pєriods. Incomє īaxєs arє billєd īo cusīomєrs whєn paid by īhє Company. Thє inrlaīion-indєxєd porīion or ATCO Cas Ausīralia's raīє basє is billєd īo cusīomєrs īhrough īhє rєcovєry or dєprєciaīion in subsєquєnī pєriods basєd on īhє acīual or rorєcasīєd annual raīє or inrlaīion. Undєr raīє-rєgulaīєd accounīing, rєvєnuє is rєcognizєd in īhє currєnī pєriod ror īhє inrlaīion componєnī or raīє basє whєn iī is єarnєd. Dirrєrєncєs bєīwєєn īhє amounīs єarnєd and īhє amounīs billєd īo cusīomєrs arє dєrєrrєd and rєcognizєd in rєvєnuєs ovєr īhє sєrvicє lirє or īhє rєlaīєd assєī. In connєcīion wiīh īhє 7BR2 rє-opєnєr dєcision rєndєrєd by īhє AUC on May 28, 2025, Elєcīriciīy Disīribuīion and Naīural Cas Disīribuīion rєrundєd $10 million (arīєr-īax) and $10 million (arīєr-īax), rєspєcīivєly, īo cusīomєrs ror īhє six monīhs єndєd Junє 30, 2026 (2025 - nil). Combinєd wiīh īhє amounīs rєrundєd īo cusīomєrs ror īhє yєar єndєd Dєcєmbєr 31, 2025, Elєcīriciīy Disīribuīion and Naīural Cas Disīribuīion havє now rєrundєd īhє īoīal amounī īhaī was dirєcīєd by īhє AUC in īhє 7BR2 rє-opєnєr dєcision, which was $28 million (arīєr-īax) ($35 million bєrorє īax) ror Elєcīriciīy Disīribuīion and $28 million (arīєr-īax) ($36 million bєrorє īax) ror Naīural Cas Disīribuīion. Thє īhrєє monīhs єndєd Junє 30, 2026 includєs a dєcrєasє in єarnings ror īhє pєriod or $9 million (arīєr-īax) ror Elєcīriciīy Transmission rєlaīєd īo īhє 2026-2027 CTA Nєgoīiaīєd Sєīīlєmєnī Agrєєmєnī and ror Naīural Cas Transmission rєlaīєd īo īhє 2026-2028 CRA dєcision. IT COMMON MATTERS DECISION Consistent with the treatment of the gain on sale in 2014 from the IT services business by the Company, financial impacts associated with the IT Common Matters decision are excluded from adjusted earnings. The amount excluded from adjusted earnings in the second quarter and first six months of 2026 was $1 million (after-tax) and $2 million (after-tax) (2025 - nil and $1 million (after-tax)). TRANSITION OF MANAGED IT SERVICES In the second quarter and first six months of 2025, the Company recognized IT transition costs of $5 million (after-tax) and $12 million (after-tax). The transition costs were primarily related to activities to shift from a single-vendor service provider to a hybrid model of multiple new vendors and internal teams. The transition activities commenced on January 1, 2025 and were substantially completed in the fourth quarter of 2025. As these costs were not in the normal course of business, they were excluded from adjusted earnings. RESTRUCTURING In the first six months of 2025, the Company recorded restructuring costs of $14 million (after-tax) that were mainly related to staff reductions and associated severance costs. As these costs were not in the normal course of business, they were excluded from adjusted earnings. SEGMENTED RECONCILIATION OF ADJUSTED EARNINGS TO EARNINGS ATTRIBUTABLE TO EQUITY OWNERS OF THE COMPANY ATCO Energy Systems The following tables reconcile adjusted earnings (loss) for the ATCO Energy Systems business unit to the directly comparable financial measure, earnings (loss) attributable to equity owners of the Company. ($ millions) Three Months Ended June 30 2026 Canadian Utilities Limited 2025 Electricity Natural Gas ATCO Energy Systems Electricity Electricity Distribution Transmission International Electricity Operations Total Electricity Natural Gas Natural Gas Distribution Transmission Total Natural Gas Adjusted earnings (loss) Rate-regulated activities IT Common Matters decision Transition of managed IT services 35 51 15 101 (7) 30 23 124 38 44 14 96 (6) 26 20 116 (12) (15) - (27) 23 (7) 16 (11) (8) (3) - (11) 4 (3) 1 (10) - - - - (1) - (1) (1) - - - - - - - - - - - - - - - - (2) - - (2) (2) - (2) (4) Earnings (loss) attributable to equity owners of the Company 23 36 15 74 15 23 38 112 28 41 14 83 (4) 23 19 102 ($ millions) Six Months Ended June 30 2026 Canadian Utilities Limited 2025 Electricity Natural Gas ATCO Energy Systems Electricity Electricity Distribution Transmission International Electricity Total Electricity Natural Gas Natural Gas Distribution Transmission Total Natural Gas Adjusted earnings Rate-regulated activities IT Common Matters decision Transition of managed IT services Restructuring 81 96 29 206 106 58 164 370 80 89 29 198 97 53 150 348 (27) (20) - (47) 23 (11) 12 (35) (8) (10) - (18) 27 (6) 21 3 (1) - - (1) (1) - (1) (2) (1) - - (1) - - - (1) - - - - - - - - (5) - - (5) (6) - (6) (11) - - - - - - - - (4) (2) - (6) (2) (2) (4) (10) Earnings attributable to equity owners of the Company 53 76 29 158 128 47 175 333 62 77 29 168 116 45 161 329 ATCO EnPower The following tables reconcile adjusted earnings (loss) for the ATCO EnPower business unit to the directly comparable financial measure, earnings (loss) attributable to equity owners of the Company. ($ millions) Three Months Ended June 30 2026 Canadian Utilities Limited 2025 Electricity Generation Storage G Industrial Water ATCO EnPower Adjusted earnings (loss) Unrealized losses on mark-to-market forward and swap commodity contracts Transition of managed IT services Other (2) 17 15 (2) 14 12 - - - (2) - (2) - - - - (1) (1) - - - (2) - (2) Earnings (loss) attributable to equity owners of the Company (2) 17 15 (6) 13 7 ($ millions) Six Months Ended June 30 2026 Canadian Utilities Limited 2025 Electricity Generation Storage G Industrial Water ATCO EnPower Adjusted earnings (loss) Transition of managed IT services Restructuring Other (6) 32 26 (5) 28 23 - - - - (1) (1) - - - - (2) (2) - - - (2) - (2) Earnings (loss) attributable to equity owners of the Company (6) 32 26 (7) 25 18 ATCO Australia The following tables reconcile adjusted earnings for the ATCO Australia business unit to the directly comparable financial measure, earnings attributable to equity owners of the Company. ($ millions) Three Months Ended June 30 2026 Canadian Utilities Limited 2025 ATCO Gas Australia ATCO Power Australia ATCO Australia Adjusted earnings Rate-regulated activities 32 2 34 18 3 21 (19) - (19) (10) - (10) Earnings attributable to equity owners of the Company 13 2 15 8 3 11 ($ millions) Six Months Ended June 30 2026 Canadian Utilities Limited 2025 ATCO Gas Australia ATCO Power Australia ATCO Australia Adjusted earnings Rate-regulated activities Restructuring 52 3 55 30 4 34 (31) - (31) (18) - (18) - - - (1) - (1) Earnings attributable to equity owners of the Company 21 3 24 11 4 15 ‌RECONCILIATION OF CAPITAL INVESTMENT TO CAPITAL EXPENDITURES Capital investment is a non-GAAP financial measure defined as cash used for capital expenditures, business combinations, and cash used in the Company's share of capital expenditures in joint ventures. In management's opinion, capital investment reflects the Company's total cash investment in assets. Capital expenditures include additions to property, plant and equipment and intangibles as well as interest capitalized during construction. Additional information regarding this non-GAAP measure is provided in the "Other Financial and Non-GAAP Measures" section of this MD&A. Three Months Ended ($ millions) June 30 2026 ATCO Energy ATCO ATCO Financing Total 2025 Systems En Power Au stralia G Other Capital Investment 369 12 25 - 406 339 16 24 5 384 Capital Expenditures in joint ventures (1) (2) - - (3) (1) (1) - - (2) Capital Expenditures 368 10 25 - 403 338 15 24 5 382 ($ millions) Capital Investment 677 33 49 1 760 684 47 45 10 786 Capital Expenditures in joint ventures (1) (3) - - (4) (1) (2) - - (3) Capital Expenditures 676 30 49 1 756 683 45 45 10 783 2025 ATCO Energy Systems ATCO EnPower ATCO Australia Financing G Other Six Months Ended 2026 June 30 Total ‌OTHER FINANCIAL INFORMATION INTERNAL CONTROL OVER FINANCIAL REPORTING The certification of interim filings for the interim period ended June 30, 2026 requires that the Company disclose in the interim MD&A any changes in the Companyʼs internal controls over financial reporting (ICFR) that occurred during the period that have materially affected, or are reasonably likely to materially affect, the Companyʼs ICFR. The Company confirms that no such changes were identified in the Companyʼs ICFR during the three months beginning on April 1, 2026 and ending on June 30, 2026. ADOPTION OF AMENDED ACCOUNTING STANDARDS Agreements referencing nature-dependent electricity The Company has adopted the amendments to IFRS 9, Financial Instruments, and IFRS 7, Financial Instruments: Disclosures that are effective January 1, 2026. The amendments improve the reporting of the financial effects of nature-dependent electricity agreements, often structured as power purchase agreements. The amendments clarify the application of the own- use requirements, permit hedge accounting when these agreements are used as hedging instruments, and introduce new disclosure requirements to assist users of financial statements in understanding the effects of these agreements. The adoption of the amendments did not have a significant impact on the Company's unaudited interim consolidated financial statements. Settlement by electronic payments The Company has adopted the amendments to IFRS 9, Financial Instruments that are effective January 1, 2026. The amendments clarify the date of recognition and derecognition of financial assets and liabilities, with a new exception for financial liabilities settled using electronic forms of payment. The adoption of the amendments did not have a significant impact on the Company's unaudited interim consolidated financial statements. IFRS ACCOUNTING STANDARDS NOT YET ADOPTED Regulatory assets and regulatory liabilities In May 2026, the International Accounting Standards Board issued IFRS 20, Regulatory Assets and Regulatory Liabilities, which establishes requirements for the recognition, measurement, presentation and disclosure of regulatory assets, regulatory liabilities and related income and expense arising from rate-regulated activities. The new standard is effective for annual periods beginning on or after January 1, 2029, with earlier adoption permitted. The Company is evaluating the impact of IFRS 20 on its unaudited interim consolidated financial statements. The adoption of the standard is expected to affect the accounting for the Companyʼs rate-regulated activities in the ATCO Energy Systems and ATCO Australia segments. FORWARD-LOOKING INFORMATION Certain statements contained in this MD&A constitute forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "plan", "estimate", "expect", "may", "will", "intend", "should", "goals", "targets", "strategy", "future", and similar expressions. In particular, forward-looking information in this MD&A includes, but is not limited to, references to: the Company's strategic plans and investment strategy; the payment of dividends and dividend growth; expected growth, expansion and diversification opportunities; the expected timing of commencement, completion or commercial operations of activities, contracts and projects; the expected term or expiry of contracts; the impact or benefits of contracts, including economic and other benefits for the Company and its partners and counterparties; the size, storage, building, generation or transmission capacity expected from business units, assets and projects; the anticipated size, specifications and incremental natural gas delivery capacity of Yellowhead Pipeline, the anticipated capital spend on Yellowhead Pipeline and expected accuracy of the estimate, and expected timing for commencement of construction and bringing Yellowhead Pipeline on-stream; expectations regarding Yellowhead Pipeline's funding structure, including sources of equity and debt funding for the project and potential Indigenous equity participation on the project; expectations regarding CETO, including the anticipated benefits of the project; expectations regarding the Company's funding strategy for ATCO Energy Systems' regulated debt and equity requirements, including anticipated debenture issuances over the five year (2026-2030) capital expenditure plan, cash flow from operations, $0.7 billion financed in 2025, and an additional $0.8 billion in capital securities to be raised, and common equity not being required to fund the regulated utility growth; the satisfaction of conditions precedent to, and the anticipated term of, the extended Osborne PPA; the expected impact of new legislation; the expected impact of IFRS Accounting Standards issued but not yet adopted, including IFRS 20; the expected timing and impact of policy and regulatory decisions and announcements; and the Companyʼs liquidity, capital resources, contractual financial obligations and other commitments. Although the Company believes that the expectations reflected in the forward-looking information are reasonable based on the information available on the date such statements are made and processes used to prepare the information, such statements are not guarantees of future performance and no assurance can be given that these expectations will prove to be correct. Forward-looking information should not be unduly relied upon. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors, which may cause actual results, levels of activity, and achievements to differ materially from those anticipated in such forward-looking information. The forward-looking information reflects the Company's beliefs and assumptions with respect to, among other things: the approval of capital expenditures; regulatory approvals to allow for the recovery of prudently incurred capital expenditures and to earn a fair return on investment; certain other regulatory applications being made and approved; the applicability and stability of legal and regulatory requirements in the jurisdictions in which we invest and/or operate; the payment of fees owing pursuant to applicable contracts; the growth of energy demand; inflation; the development and performance of technology and technological innovations and the ability to otherwise access and implement all technology necessary to achieve business objectives; continuing collaboration with certain business partners and engagement with new business partners, and regulatory and environmental groups; the performance of assets and equipment; demand levels for oil, natural gas, gasoline, diesel and other energy sources; certain levels of future energy use; future production rates; future revenue and earnings; the ability to meet current project schedules, and complete proposed development projects at currently estimated budgets; the availability of financing sources on acceptable terms; expected future borrowing costs and interest rates; and other assumptions inherent in management's expectations in respect of the forward-looking information identified herein. The Company's actual results could differ materially from those anticipated in this forward-looking information as a result of, among other things: risks inherent in the performance of assets; capital efficiencies and cost savings; applicable laws and regulations and the interpretation and manner of enforcement of such laws and regulations; changes to government policies; regulatory decisions; competitive factors in the industries in which the Company operates; evolving market or economic conditions; credit risk; interest rate fluctuations; the availability and cost of labour, materials, services, infrastructure, and future demand for resources; the development and execution of projects, including development projects not proceeding on schedule or at all, or at currently estimated budgets; the availability of financing sources for development projects on acceptable terms; prices of electricity, natural gas, natural gas liquids, and renewable energy; the development and performance of technology and new energy efficient products, services, and programs including but not limited to the use of zero-emission and renewable fuels, carbon capture, and storage, electrification of equipment powered by zero-emission energy sources and utilization and availability of carbon offsets; potential cancellation, termination, default, non-compliance, or breach of contract by contract counterparties; the risk that payments owed may not be collected or received in a timely manner, or at all; risks associated with potential litigation proceedings; potential damage to our brand and/or reputation that may result from a failure to perform, or from factors outside of our control, or negative publicity related to significant projects, investments, operations or activities; the risk of operational disruptions, outages, or force majeure events; the occurrence of unexpected events such as fires, extreme weather conditions, explosions, blow-outs, equipment failures, transportation incidents, and other accidents or similar events; global pandemics; the imposition of or changes to existing customs duties, tariffs or other trade restrictions; geopolitical tensions and wars; risks associated with operating in international jurisdictions; and other risk factors, many of which are beyond the control of the Company. Due to the interdependencies and correlation of these factors, the impact of any one material assumption or risk on a forward-looking statement cannot be determined with certainty. Readers are cautioned that the foregoing lists are not exhaustive. For additional information about the principal risks that the Company faces, see the "Business Risks and Risk Management" section in the 2025 MD&A. This MD&A may contain information that constitutes future-oriented financial information or financial outlook information, all of which are subject to the same assumptions, risk factors, limitations and qualifications set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise or inaccurate and, as such, undue reliance should not be placed on such future-oriented financial information or financial outlook information. The Company's actual results, performance and achievements could differ materially from those expressed in, or implied by, such future-oriented financial information or financial outlook information. The Company has included such information in order to provide readers with a more complete perspective on its future operations and its current expectations relating to its future performance. Such information may not be appropriate for other purposes and readers are cautioned that such information should not be used for purposes other than those for which it has been disclosed herein. Future-oriented financial information or financial outlook information contained herein was made as of the date of this MD&A. Any forward-looking information contained in this MD&A represents the Company's expectations as of the date hereof, and is subject to change after such date. The Company disclaims any intention or obligation to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required by applicable securities legislation. ADDITIONAL INFORMATION Additional information relating to the Company, including the Companyʼs audited consolidated financial statements for the year ended December 31, 2025, unaudited interim consolidated financial statements for the six months ended June 30, 2026, and most recent Annual Information Form dated February 25, 2026, can be found on SEDAR+ at https://www.sedarplus.ca . Copies of these documents may also be obtained upon request from Investor Relations at 3rd Floor, West Building, 5302 Forand Street S.W., Calgary, Alberta, T3E 8B4, telephone 403-292-7500, or email [email protected] . Corporate information is also available on the Company's website at https://www.canadianutilities.com . ‌GLOSSARY Access Arrangement (AA) means the agreement between ATCO Gas Australia and the Economic Regulatory Authority that outlines the terms and conditions of accessing the gas network of Western Australia. It outlines the services provided, revenue and policies under which the network operator, ATCO Gas Australia, functions. Access Arrangement 6 (AA6) refers to the AA covering the period January 1, 2025 to December 31, 2029. AESO means Alberta Electric System Operator. Alberta Utilities means Electricity Distribution, Electricity Transmission, Natural Gas Distribution and Natural Gas Transmission, and their related subsidiaries. AUC means the Alberta Utilities Commission. Class A shares means Class A non-voting common shares of the Company. Class B shares means Class B common shares of the Company. Company means Canadian Utilities Limited and, unless the context otherwise requires, includes its subsidiaries and joint arrangements. Customer contributions are non-refundable cash contributions made by customers for certain additions to property, plant and equipment, mainly in ATCO Energy Systems. These contributions are made when the estimated revenue is less than the cost of providing service. EBITDA means earnings before interest, taxes, depreciation and amortization. ECM means efficiency carry-over mechanism. ESG means Environmental, Social and Governance. GAAP means Canadian generally accepted accounting principles. GRA means general rate application. GTA means general tariff application. IFRS means International Financial Reporting Standards. Megawatt (MW) is a measure of electric power equal to 1,000,000 watts. PBR means Performance Based Regulation. PPA means Power Purchase Agreement. Regulated Utilities means Electricity Distribution, Electricity Transmission, Natural Gas Distribution, Natural Gas Transmission, ATCO Gas Australia and their related subsidiaries. ROE means return on equity. ‌APPENDIX 1: SUPPLEMENTAL NON-AUDITED FINANCIAL INFORMATION Management uses numerous metrics and financial measures to evaluate our success and better identify possible challenges while capitalizing on emerging opportunities and continuing to deliver high-performing results. These measures support our ability to assess segment performance and allocate resources and allow for a more effective analysis of operating performance and trends. From time to time, management may choose to provide supplemental non-audited financial information to help readers further understand key operational and financial events that may influence the results during a quarter. SUPPLEMENTAL INFORMATION ADJUSTED EBITDA (1) Adjusted EBITDA is a non-GAAP financial measure. It is an additional important metric for ATCO EnPower and is representative of core operational results. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA after adjustments, excluding 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 EBITDA is most directly comparable to earnings (loss) attributable to equity owners but is not a standardized financial measure under the reporting framework used to prepare our financial statements. Adjusted EBITDA may not be comparable to similar financial measures disclosed by other issuers. ATCO EnPower The following tables reconcile adjusted EBITDA for the ATCO EnPower business unit to adjusted earnings (loss) (1) (2) for the second quarter and first six months of 2026 and 2025. A reconciliation of adjusted earnings to earnings attributable to equity owners of the Company is presented in the "Reconciliation Of Adjusted Earnings To Earnings Attributable To Equity Owners of the Company" in this MD&A. ($ millions) Three Months Ended June 30 2026 Canadian Utilities Limited 2025 Electricity Generation Storage G Industrial Water ATCO EnPower Adjusted earnings (loss) (1) (2) (2) 17 15 (2) 14 12 Add: Interest expense Income tax expense Depreciation and amortization 9 - 9 7 - 7 (1) 6 5 - 4 4 8 3 11 9 5 14 Total Adjusted EBITDA (1) 14 26 40 14 23 37 (1) Non-CAA7 rinancial mєasurєs as dєrinєd in NI 52-112. (2) Adjusīєd єarnings (loss) arє dєrinєd as єarnings (loss) aīīribuīablє īo єquiīy ownєrs or īhє Company arīєr adjusīing ror īhє īiming or rєvєnuєs and єxpєnsєs associaīєd wiīh raīє-rєgulaīєd acīiviīiєs and unrєalizєd gains or lossєs on mar½-īo-mar½єī rorward and swap commodiīy conīracīs. Adjusīєd єarnin...

View stock analysis, news, and events for Canadian Utilities Limited Class A