South Bow reported Distributable Cash Flow of $709 million , which Dafoe said was in line with revised guidance and “more than 30% above” the company’s original guidance. The stronger free cash flow allowed the company to accelerate deleveraging, ending 2025 with a net debt-to-normalized EBITDA ratio of 4.7x , slightly better than the 4.8x it expected.Dafoe emphasized that roughly 90% of the business is supported by long-term contracted cash flows, while the marketing affiliate “does make small contribution ...

Financial Performance and Key Metrics - South Bow reported normalized EBITDA of $1.02 billion for 2025, slightly above expectations of $1.01 billion, driven by the marketing segment [12] - Distributable Cash Flow was $709 million, exceeding original guidance by more than 30%, which improved the free cash flow position [13] - The company exited 2025 with a net debt to normalized EBITDA ratio of 4.7 times, better than the expected 4.8 times [13] Business Line Performance - The Blackrod Connection Project was successfully placed into commercial service, demonstrating the company's capability to execute organic projects [10] - The marketing segment contributed positively to the bottom line, although it remains a smaller portion of the overall business [12] Market Data and Key Metrics - The company noted that Canadian producers are looking to grow their asset bases significantly, which aligns with South Bow's customer-led strategy [6] - The policy environment in North America is becoming more favorable, presenting opportunities for production growth and additional egress [6] Company Strategy and Industry Competition - South Bow aims to balance growth with financial discipline, maintaining a strong balance sheet while returning dividends to shareholders [7] - The Prairie Connector Project is in early stages, with an open season to gauge commercial interest currently underway [8] - The company is focused on leveraging existing infrastructure to support anticipated crude oil production growth in the Western Canadian Sedimentary Basin [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to navigate challenges, emphasizing safety as a core value [4] - The company is optimistic about the lifting of pressure restrictions on the Keystone Pipeline, which could lead to increased spot movements in 2026 [11][22] Other Important Information - The company is committed to maintaining a sustainable dividend while pursuing growth opportunities [14] - Significant progress has been made on remedial actions related to Milepost 171, with ongoing collaboration with regulators [10] Q&A Session Summary Question: Can you discuss any early indications of commercial interest for the Prairie Connector Project? - Management indicated that they are in early stages and have good alignment with customers heading into the open season [18] Question: What is the timeline for lifting pressure restrictions on the Keystone system? - Management expects to continue remedial efforts and aims to lift the Corrective Action Order by the end of the year, potentially restoring operational capacity to previous levels [21][22] Question: How do you envision working with partners to get barrels down to the Gulf Coast? - Management emphasized the importance of risk allocation among stakeholders and the need for alignment to advance the project [29] Question: Can you provide an update on your appetite for acquisitions? - Management stated that they are pursuing both organic and inorganic growth opportunities, with a focus on leveraging pre-invested corridors [88] Question: How do you balance dividend growth versus reducing leverage? - Management confirmed that they will not consider dividend increases until they achieve a net debt to EBITDA ratio of 4 times [102]

South Bow (NYSE:SOBO) Q4 2025 Earnings call March 06, 2026 10:00 AM ET Company ParticipantsA.J. O'Donnell - Director of Equity ResearchAaron MacNeil - Director of Institutional Equity ResearchBevin Wirzba - President and CEOMartha Wilmot - Director of Investor RelationsRichard Prior - SVP and COORobert Hope - Managing Director of Equity ResearchRobert Kwan - Managing Director and the Global Head of Power, Utilities and Infrastructure ResearchVan Dafoe - SVP and CFOConference Call ParticipantsBenjamin Pham - ...

South Bow (NYSE:SOBO) Q4 2025 Earnings call March 06, 2026 10:00 AM ET Speaker6Day, thank you for standing by. Welcome to the South Bow fourth quarter and year-end 2025 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, we'll open up for questions. To ask a question during the session, you will need to press star 11 on your telephone. You'll then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again ...