Operator: Thank you for standing by. This is the conference operator. Welcome to the Second Quarter 2026 Results Conference Call and Webcast for ATCO Ltd. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Mr. Colin Jackson, Senior Vice President, Financial Operations. Go ahead, Mr. Jackson.
Colin Jackson: Thank you, and good morning, everyone. We are pleased you could join us for ATCO's second quarter 2026 conference call. On the line today, we have Katie Patrick, Chief Financial and Investment Officer and Adam Beattie, President of ATCO Structures. Before we move into today's remarks, I would like to take a moment to acknowledge the numerous traditional territories and homelands on which our global facilities are located. Today, I am speaking to you from our ATCO Park head office in Calgary, which is located in the Treaty 7 region. This is the ancestral territory of the Blackfoot Confederacy, comprised of the Siksika, the Kainai, and the Piikani Nations. the Tsuut'ina Nation, and the Stoney Nakoda Nations, which include the Chiniki, Bearspaw and Goodstoney First Nations. I also want to recognize the city of Calgary is home to the Métis Nation of Alberta, Districts 5 and 6. During our second quarter, proudly celebrated National Indigenous History Month in Canada. A time to honor the stories, achievements and resiliency of Indigenous peoples. May we continue to respect and celebrate diverse history, languages, and culture of Indigenous peoples beyond the month of June. Today's remarks will include forward-looking statements. They are subject to important risks and uncertainties. For more information on these risks and uncertainties, please refer to our filings with the Canadian securities regulators. During today's presentation, we may refer to certain non-GAAP and other financial measures. Including adjusted earnings and adjusted EBITDA. These measures do not have any standardized meaning under IFRS and as a result, they may not be comparable to similar measures presented by other entities. And now I will turn the call over to Katie for her opening remarks.
Katie Patrick: Thanks, Colin, and good morning, everyone. Thank you for joining us today. I will start today with some perspective on our current operating environment and the strong tailwinds for our businesses. And then Adam and I will provide some detailed quarterly performance updates. We are operating in a significant period of opportunity for ATCO. One shaped by shifting geopolitics, growing demand for secure and resilient infrastructure and a renewed focus on the essential services that support communities and economies. In many ways, this moment dates to the company's early days when ATCO's ability to move quickly, build boldly, and solve complex challenges was foundational to creating the business we are today. The critical concerns that face the communities and the countries we operate in include housing, energy and defense. These sectors are being shaped by economic demand and geopolitical factors and will result in significant opportunities creating a growing need for resilient infrastructure and services for industries, partners, and governments. With decades of experience operating across each of these sectors, in diverse locations, including Canada's challenging northern environment, ATCO is well positioned to benefit from these tailwinds as investment in these areas continues to accelerate. Our experience in key partnerships across housing, energy and defense over the past 80 years aligns to what the world needs. Our purpose-built strategy supports sustainable growth in these key areas and will drive stable earnings and dividends to shareowners in the years to come. Focusing on Canada's North, we remain optimistic about the significant growth opportunities in this region. Specifically those tied to the defense sector. In recent months, the federal government has publicly committed a sizable investment in Canada's defense sector with a focus on Arctic sovereignty. The funding announced to date is specifically earmarked for developing, modernizing and building up key infrastructure projects including $32 billion defense infrastructure upgrades over the next 10 years. And $2.7 billion to build out a network of support sites and hubs. In addition to this, there is approximately $80 billion in government defense infrastructure spending between the modernization of the North American Aerospace Defense Command and the United States proposed Golden Dome for America project. While we view these projects as critical developments, contracting for these opportunities is still very much in its early stages. As these projects materialize, we believe ATCO is well positioned to capitalize on current and future opportunities in the North. For several reasons. We have executed and supported operations, including defense-specific projects in Canada's Arctic since 1987. That is almost 40 years of operational expertise. Demonstrating our long history and success in the North. Importantly, over that period of time, we have developed Indigenous partnerships that has led to meaningful participation. This is a fundamental part of our history. Culture and our ongoing commitments to partner and collaborate with Indigenous communities. And lastly, we have the construction knowledge needed to successfully build in Canada's North. As you see on the slide, we have unique Arctic expertise from coast to coast in the North. We are a trusted defense partner who maintains and operates mission-critical infrastructure. Earlier this year, we announced a $10 million investment in West Kitikmeot Resources, who will develop the Grays Bay Road and Port project in Nunavut. The Grays Bay Road and Port project is a critical piece of infrastructure in the North and will include a deepwater port with access to the Northwest Passage shipping corridor. We are optimistic this development will grow into a strong foundational investment for the ATCO portfolio longer-term. The project has been referred to Canada's Major Projects Office, and at the end of June was named as one of the first three projects to be considered under the federal government's Building Canada Act. As I said, we are very excited for the opportunities ahead. With ATCO positioned to play a central role in some of these nation-building initiatives. With that, I will now turn it over to Adam.
Adam Beattie: Thank you, Katie, and good morning, everyone. ATCO Structures delivered $36 million of adjusted earnings in Q2. marks the 16th consecutive quarter of year-over-year earnings growth. Earnings this quarter were driven by space rentals activity in the United States, Canada, and Australia. Our Stibnite Gold Project and new contracts tied to permanent modular construction as well. While it was an impressive quarter across all our geographies, our rentals and sales business lines in the United States were a key driver and saw significant earnings growth year-over-year. The earnings uptick was driven by four of our newer branches including Phoenix, San Antonio, Louisiana and Seattle, which are now operating at significantly increased capacity attaining optimal targeted utilizations. Our continued success across the business is led by the execution of our industry-leading teams. We are improving fleet performance and have considerable demand favorably positioning us through to the end of 2026. As you can see on the slide, adjusted EBITDA for the quarter was $82 million up 17% year-over-year. Along with the average rental rates for our global space rental business, which averaged $896 per month. a 10% increase year-over-year. We continue to progress our Stibnite Gold Project a key contract for our U.S. business and during the quarter we completed manufacturing for Phase 1 of the project and continue to expect the first handover milestone to occur in the later part of fourth quarter of this year. By demonstrating our ability to execute and to deliver complex remote project sites we put ATCO Structures on the map for other major developments across the United States, which helps to grow our market share and gain a stronger foothold in the U.S. Last quarter, we were pleased to highlight some additional projects in our queue. I am happy to share more about them today. In Canada, we successfully secured a handful of contracts during the quarter totaling $89 million. These contracts include space rentals, workforce housing, and permanent modular construction solutions encompassing over 365 modular units. In the United States, we secured $23 million in contracts for space rentals and workforce housing solutions. Which includes 250 modular units. And in Australia, we successfully secured a $57 million contract to provide workforce housing solutions for a mining project in Western Australia. This contract will include 160 modular units. In addition to these, we have been highly successful in securing space rental contracts for a number of data center projects in New South Wales and Victoria where we see continued opportunities going forward. These projects have strong economics with high fleet numbers required per project and long rental durations averaging 24- to 36-month terms. We have seen positive growth across the geographies we operate in. Last quarter, I spoke about the $100 million in limited notices to proceed or LNTPs and contracts we received. Several of which have now materialized into secured projects that I just highlighted. I am pleased to share that this momentum is continuing. And this quarter we have received another $80 million in new notices of award and LNTPs. Which we expect to commence in 2026. As Katie mentioned at the outset, ATCO is focused on housing, energy and defense. ATCO Structures is a key pillar of this strategy. We see strong demand for our products in our commercial, industrial and residential sectors. When I look ahead to the back half of this year, many of our manufacturing facilities have strong backlogs through to the end of 2026 and into 2027. Our major geographies and sectors, including the emergence of new customer groups, particularly in data center construction and as I mentioned earlier, increases in energy and mining sector performance and continued success in urban affordable housing. With that, I will now pass the call back over to Katie.
Katie Patrick: Thank you, Adam. Looking at this quarter's results, I am pleased to share that ATCO achieved adjusted earnings of $114 million or $1.01 per share in the second quarter of this year. This is up 13% year-over-year. Higher adjusted earnings in the second quarter were driven by ATCO Structures increased space rental activity and earnings from the Stibnite project. As I mentioned on this morning's CU call, inflation indexing on rate base and increased rates at ATCO Gas Australia also supported earnings for our utility business. We see positive momentum across the ATCO portfolio as we execute on our strategic roadmap heading into the back half of the year. Looking at our specific businesses, ATCO's investment in Utilities delivered adjusted earnings of $74 million for the quarter. up $11 million year-over-year. This is an impressive result and importantly, all three of our key businesses within CU delivered strong growth in the quarter. As for ATCO Structures and Logistics, delivered adjusted earnings of $35 million, up $3 million compared to the same period in 2025. Looking at our cash flows, our standalone ATCO businesses which excludes Canadian Utilities, reported cash flow from operating activities of $122 million in Q2, up almost 70% compared to the prior year. This increase is reflective of higher fleet sales in ATCO Structures and the timing of accounts receivable collection. This growth in cash flow gives us the flexibility we need for future growth within the ATCO businesses. Quarter after quarter, we have demonstrated the value of ATCO's by continuously driving earnings growth. We are pleased with the progress we have made so far this year and the strong foundation we have built across the business. While there is still a lot of work ahead, our priorities are clear. Our teams are focused, and we remain confident on our ability to execute. As we look ahead, we see consistent earnings growth for the entire ATCO portfolio in the back half of the year. That concludes our prepared remarks, and I will now turn the call back to Colin.
Colin Jackson: Thank you, Katie and Adam. In the interest of time, we ask you to limit yourself to two questions. If you have additional questions, you are welcome to rejoin the queue. I will now turn it over to our conference operator for questions.
Operator: Thank you, sir. And we will now begin the question-and-answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. Our first question today will come from Ben Pham with BMO. Please go ahead.
Ben Pham: Hi, thanks. How is everybody? I wanted to maybe touch on the regulated CapEx. I know that is more to the CU level, but I wanted to flesh out a bit you have the Yellowhead Project in there. that is roughly one-quarter of the backlog. SITL is now complete. When you think about the remaining CapEx is it mainly mostly a bunch of smaller projects that are paying that? Or is there a couple more SITL-type projects in there? That drive that?
Katie Patrick: Yeah. I hi, Benjamin. I Thanks for the question. I think you are correct that it does become smaller projects when you compare it to the $2.9 billion Yellowhead project, which is obviously very large. So, yes, they are smaller in magnitude, the rest of the projects that are in there. You know, there is we did provide a detailed breakdown of sort of the categories of spending in the appendices to our IR materials. So you can kind of see the types of spending that there is, including resiliency and IT investments, etcetera. So in short, yes. It is smaller projects. But only when you compare it to a $2.9 billion project. There are still some on a relative basis, larger projects included in that. Some transmission opportunities, etcetera, that would be on the larger side, but they do not compare to the large Yellowhead Project. Okay. I got it.
Ben Pham: I was thinking more of the SITL comparison, but I totally appreciate that. Maybe just on the structure side, say, you think that the last couple of years, your earnings has had a nice uptick, I think, $80 million to $90 million to $100 million and moving higher. When you think about even the past though, and correct me if I am wrong. I think it I think Structures peaked out at something like $200 million in the past cycle. Is there still ability when you think about your backlog, your manufacturing capacity, the current policy backdrop, market backdrop. Is there a blue sky scenario that you can theoretically get back to $200 million over time?
Adam Beattie: Thanks, Benjamin. Our peak was not $200 million so but it was probably closer to the $150 million at the structures level. Maybe a little bit less than that. But I would have to confirm that. Certainly, I think that is future opportunity very achievable. We have expanded capacity certainly within the business and our fleet sizing. So if you look back to 2007, our fleet size was about 13,000 units. And it is now up to 27,000 units. So if you look at the mix of earnings is different. Those peak years were very driven by large one-off workforce housing camp project opportunities particularly within the oil sands. That mix of where our revenue or income has come from as highly shifted to our fleet business. So if you both look at the foundational business of our fleet that is over 2x and then you add on the project opportunities that are ahead of us, with those kind of resource sector cycles, I think you can look at some pretty good indications of where the market could potentially go for us with additional increase capacities in both our manufacturing facilities and our human capital, our resources to execute these large-scale projects as well as that supporting foundational base business. Plus, the housing and residential sector that we were not operating within in that previous times.
Ben Pham: Okay. Got it. Thanks for the color.
Operator: And our next question will come from Rob Hope with Scotiabank. Please go ahead.
Rob Hope: Yes. Good morning, everyone. Maybe just sticking with structure. So you mentioned increased space rental activity and rates When you take a look across your large fleet, where are you seeing the most incremental demand as well as the most incremental kind of price movement upwards?
Adam Beattie: Yes. Thanks, Robert. Good morning. I think we are probably seeing it in all of our sectors. So if you look at it across all of our geographies have improved space rentals performance. The ones that are driving significant improvements, I would say, the U.S. We have got high utilization there. We have high utilization in Australia that is performing very well and there is some very good tailwinds that we are seeing there. Particularly with some of these new market sectors like the data centers that I mentioned. And also, Canada is very strong. But not to be underplayed is our Chilean and Mexican businesses are also performing extremely well in the space rental sector.
Rob Hope: Alright. Appreciate that. And then also in the MD&A, permanent modular construction sales in both the U.S. and Canada were kind of called out as being a tailwind. Can you provide us an update on kind of the permanent sales what the strategy is there as well as, what percentage of the business is that now?
Adam Beattie: Yeah. So like as we said, it is more of an emerging business, but we have certainly we have seen increased activity in those sectors. And if you give some indication there, that probably sits think I have given some previous indication that it is probably about 10% to 12% of our revenue stream. A consolidated as a percentage of our consolidation. Thank you. And the opportunities there are really we have the affordable multifamily and then we have our triple M business arm that is very focused on single-family housing as well. And then we do a lot of other products, education, and some community buildings, O&M buildings, some other sort of permanent office establishments, healthcare facilities. Other sectors like that. But they are on the smaller scale to the residential penetration that we are having in the market. Thank you.
Operator: And our next question will come from Maurice Choy with RBC. Please go ahead.
Maurice Choy: Thank you and good morning everyone. Over the past few years, SNL has been able to successfully diversify its customer base. But as opposed to-- we look historically, SNL has fairly focused its business on the resource sector. If you think about the potential growth in the WCSB, I wonder if you could share your outlook on securing space rental, workforce housing or even permanent modular construction solutions as the energy sector does take off in the coming years?
Adam Beattie: Yeah. I certainly strategically if you look at those business lines, they do not cross over to distort resource capacity to service each of those sectors independently. So we are we are very confident in that model where we have built those channels to be resourced and have capacity to service each of those sectors effectively for the future growth that certainly we see in each of those markets.
Maurice Choy: Maybe this is a quick follow-up. I suppose historically, you have been able to secure fairly large deals whenever new pipeline, for example, is built. I assume those sales, those connections, those relationships are still in place. Such that we do see quite a bit of pipeline growth, for example, SNL should be positioned to secure some contract wins?
Adam Beattie: Definitely. So we have got very strong relationships within those customer sectors in each of our geographies, and they are only increasing. And I think certainly our ability to execute, like it is it is not lost on any of you that we have gone from basically one manufacturing facility in Canada to five. And so our ability to even service a broader geographic footprint in Canada and in the U.S. and in Australia, 13 manufacturing facilities globally actually increases our ability to service that customer base in a more timely fashion. So we have more capacity available so we can actually execute multiple projects simultaneously.
Katie Patrick: And I think Adam touched on it, but I will just add I think as we diversified our customer base, it does not mean we have left any customer from our past. So I think Correct. it is only additive. That makes sense.
Maurice Choy: It is a good shift from energy customers to more defense and housing type of spending, I think you have mentioned earlier that there are a number of federal initiatives to support spending here. And I wonder if you could help share your thoughts on the timing or roadmap ahead before we start seeing, some of these initiatives meaningfully lead to earnings or contract wins at SNL?
Katie Patrick: Yeah. Yeah. I can talk generally about of the overall spending profile. Maybe Adam can chime in more specifically around the modular opportunity. With the defense spending. So we referenced that you know, there is been $35 billion of announcements around defense spending, particularly in the North. And those are targeted on, a few specific opportunities to upgrade some of our existing defense locations in the North. The Government of Canada has been very-- those are 10-year type of numbers, just to be clear. So the $35 billion is over 10 years. So this is a long term opportunity. The government of Canada, it came out quite aggressively with their timing on trying to get some of those awards. There have been some delays in fully getting out the RFPs for those contracts. But they still are trying to move quickly to get some of those contracts and the upgrades around the there are five main facilities that they are looking to upgrade. And they have said publicly, I think, that those will be coming in the next in the next year trying to get all five of those out. So that gives an idea where I think everyone is somewhat waiting on the government to get these out there. But I do think that the first phases of this will come pretty quickly. It is over that 10-year period. And I will let Adam comment on sort of the modular side of the opportunity there.
Adam Beattie: Yeah. Just expanding on that. Maurice. Like, I think when you look at certainly defense or some of the northern projects and where they are being located and you link that back into housing. We feel housing comes before major or we believe whether that is temporary workforce housing or permanent infrastructure to support communities that are expanding or even defense-based on-base housing for military personnel. Those are going to come a little earlier We believe as these contracts start materializing So, the solution for personnel needs to come prior to projects. So I think over the next 6 to 18 months, you will see a lot more materiality in terms of housing requirements for some of these project opportunities or funding allocations that have been put into defense particularly in regional areas on base and even in the North that needs to be thought about prior to the projects kicking off.
Maurice Choy: Makes sense. Thank you very much.
Operator: And our next question will come from John Mould with TD Cowen. Please go ahead.
John Mould: Hi. Just one for me maybe on the structure side. Just wondering what you are seeing in terms of M&A markets there, Specifically, I think the U.S., you have called out before that things there were looking pretty frothy. I am just wondering how active you have been in considering any potential opportunities on the M&A side within your business you know, not just in the U.S., but I would say, you know, more broadly. Any insight there, appreciate it.
Adam Beattie: Yeah. Certainly, John. Like, we are actively looking at opportunities both what comes to us and what we seek out. More strategically. So that is a key part of our strategy. The U.S. still has a pretty high expectation in terms of multiples. In this sector. And our growth plan, our organic growth plan there has certainly been very successful and we certainly wanna keep prioritization on that. But if you look at M&A, we are certainly active in that market in terms of looking at what opportunities will present themselves over the next couple of years. Targets, if you look at regionally, I think our main areas would be Australia, Canada, and the U.S. Okay.
John Mould: I was also trying to tease out if there is any other markets you might be might be looking at entering, but, sounds like that is not the case at this point. Is that fair?
Adam Beattie: We are always looking. We are a global company. We look at global projects. So we do keep our finger to the pulse in other markets. But certainly, the synergy value from our existing operations is advantageous particularly in the M&A sector. That is fair.
John Mould: Okay. All my other questions were answered. Thank you very much.
Operator: Our next question will come from Mark Thomas Jarvi with CIBC Capital Markets. Please go ahead.
Mark Jarvi: Thanks. Hi, everyone. Katie, you mentioned that you think you can see, I believe your term was consistent earnings growth. How would you frame consistent? Is that what you have seen in the last 12 months? what has happened in the first half of the year? Like, how should we interpret those comments?
Katie Patrick: Yeah. I think consistent. Consistent would be consistently up for sure. I think know, we have we do not provide forward specific guidance, but, our track record that we have had with structures over the past couple years, I think we can expect that to continue in the in the near to medium term. And from the CU side, I know, you know, I think we have we have laid out a pretty clear roadmap to the type of capital growth and deployment that we can expect from CU.
Mark Jarvi: Yes. Certainly, on the utility side, I think it is pretty transparent and obvious. I guess it is more on the structure side. Given the LNTP stuff that you guys flagged last quarter, this quarter, good end market demand. I am just curious if you would be disappointed if you only had the same growth you had last year or the expectation that growth can maybe take up from this level right now?
Katie Patrick: I do not think anyone's going to be disappointed when we continue to have double-digit growth that we have had. I think that is a very solid that is where we have kind of been. And I think certainly would not be a disappointment if we were able to continue to deliver that Got it.
Mark Jarvi: And then, Adam, how would you frame the competitive landscape just overall in terms of your peers' ability to deliver on the business? It seems like all the end markets are seeing strong demand. You have talked about your manufacturing footprint, your human capital being in a good position. Do you feel like the demand is starting to exhaust some of your peers' capacity? And does that allow you to take maybe market share? Just curious on how you are seeing the competitive landscape right now.
Adam Beattie: Yeah. Yeah. We are-- look, certainly, we are seeing that we are we are certainly taking a portion of market share. We think some of our advantages certainly into the near future around our capacity to manufacture is highly advantageous. Like you know, it drives a lot of fleet demand or growth like there is different strategies for how companies grow. And we think we have a multi-pronged strategy. We have a strong fleet growth strategy. We have manufacturing capability and we are well funded and we are generating good cash flow that we are reinvesting in growth in the business. So we feel that we are very well positioned compared to our competitors. Now that does not mean that they are not competitive or not highly competitive. So we have got a lot of respect for them as well. But we feel like we are in a strong position. To execute on the strategies that we have ahead of us.
Mark Jarvi: And then just in terms of the rental rate trends we have seen, could you kind of parse apart what do you think is driving that?
Adam Beattie: Certainly some of the see the advantage that you get from the rental fleet business is new capital goes in plus you have existing fleet assets that have all capital costs that were built quite a period ago. That certainly supports the growth in average rental rate plus demand Once you get demand in new sectors coming in, like data centers and those kind of projects, obviously, it puts an increased demand on the amount of excess accessible fleet in the market and that supports the ability to have slight increases on your rental rates.
Mark Jarvi: Great. Thanks, everyone.
Operator: And this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Colin Jackson for any closing remarks.
Colin Jackson: Thank you. And thank you all for participating today. Appreciate your interest in ATCO, and we are looking forward to speaking with you again soon.
Operator: And this brings today's conference call to a close. You may now disconnect your lines at this time. And thank you for participating and have a pleasant day.