Core Viewpoint - South Bow Corp. reported its third-quarter 2025 financial and operational results, highlighting stable performance and providing an outlook for 2026, with a focus on financial strength and growth opportunities [1]. Financial Performance - Revenue for Q3 2025 was $461 million, with a net income of $93 million ($0.45/share) [5][8]. - Normalized EBITDA for Q3 2025 was $254 million, a 2% increase from Q2 2025, driven by maintenance capital expenditures [5][8]. - Distributable cash flow reached $236 million, an increase of $69 million from Q2 2025, attributed to changes in U.S. tax legislation and tax optimization efforts [5][8]. - Total long-term debt remained stable at $5.8 billion, with a net debt of $4.8 billion, maintaining a net debt-to-normalized EBITDA ratio of 4.6 times as of September 30, 2025 [5][8]. - Dividends declared totaled $104 million or $0.50/share during Q3 2025, with a quarterly dividend of $0.50/share approved for payment on January 15, 2026 [5][8]. Operational Performance - Average throughput on the Keystone Pipeline was approximately 584,000 bbl/d in Q3 2025, with the U.S. Gulf Coast segment averaging about 703,000 bbl/d [5][8]. - The Blackrod Connection Project achieved mechanical completion and is on track for commercial service in early 2026, with expected cash flow increases in the latter half of 2026 and into 2027 [5][8]. - Remedial actions related to the Milepost 171 incident are ongoing, with six in-line inspections and 37 integrity digs completed to date [5][8]. Returns to Shareholders - The company declared dividends totaling $104 million in Q3 2025, maintaining a strong commitment to returning value to shareholders [5][8]. - The board approved a quarterly dividend of $0.50/share, reinforcing the company's focus on sustainable shareholder returns [5][8]. 2026 Outlook - South Bow's 2026 guidance projects normalized EBITDA of approximately $1.03 billion, with about 90% secured through committed arrangements [10][22]. - The company anticipates a modest increase in its net debt-to-normalized EBITDA ratio through 2026, reflecting ongoing investments and one-time separation costs [10][22]. - Distributable cash flow for 2026 is expected to be around $655 million, influenced by higher anticipated current taxes compared to 2025 [10][22].

Core Viewpoint - South Bow Corp. reports strong financial and operational results for 2024, highlighting its successful spinoff from TC Energy and providing an optimistic outlook for 2025, despite anticipated challenges in the market. Spinoff Transaction - South Bow launched as an independent company on October 1, 2024, completing its separation from TC Energy Corp. [5] - The company raised approximately $5.8 billion through an initial notes offering on August 28, 2024, and repaid outstanding long-term debt to TC Energy affiliates on the spinoff date [5]. Safety and Operational Performance - South Bow achieved record occupational and process safety performance in 2024 [5]. - The Keystone Pipeline recorded an annual System Operating Factor (SOF) of 95%, with average throughput of approximately 626,000 barrels per day (bbl/d), a 5% increase from 2023 [5]. - The U.S. Gulf Coast segment of the Keystone Pipeline System averaged approximately 795,000 bbl/d, increasing by 15% relative to 2023 [5]. Financial Performance - South Bow generated revenue of $488 million and $2,120 million for the three months and year ended December 31, 2024, respectively [11]. - The company recognized net income of $55 million ($0.26/share) and $316 million ($1.52/share) for the same periods [11]. - Normalized EBITDA for the year ended December 31, 2024, was $1,091 million, a 2% increase from 2023 [11]. - Distributable cash flow was $183 million and $608 million for the three months and year ended December 31, 2024, respectively [11]. Capital Expenditures and Debt - South Bow exited 2024 with total long-term debt of $5.7 billion and net debt of $4.9 billion, with a net debt-to-normalized EBITDA ratio of 4.5 times [11]. - The company expects its net debt-to-normalized EBITDA ratio to increase modestly in 2025 due to investments in the Blackrod Connection Project and one-time spinoff costs [6]. Returns to Shareholders - South Bow declared its inaugural quarterly dividend of $104 million ($0.50/share) on November 7, 2024, and plans to pay a similar dividend on April 15, 2025 [12]. 2025 Guidance - The company projects normalized EBITDA of approximately $1.01 billion for 2025, with about 90% secured through committed arrangements [20]. - Distributable cash flow is expected to be approximately $535 million, which will fund the anticipated annual dividend of $416 million ($2.00/share) [20]. - Capital expenditures for growth are estimated at $110 million for the Blackrod Connection Project in 2025 [20].