What does South Bow do and what are its main business segments?

What is the revenue and EPS growth rate for South Bow year over year?

Did South Bow beat or miss consensus estimates last quarter?

What is the market's earnings forecast for South Bow next quarter?

What were the key takeaways from South Bow's earnings call?

What were the key takeaways from South Bow’s earnings call?

What factors drove the changes in South Bow's revenue and profit?

What guidance did South Bow's management provide for the next earnings period?

- **Resilient Performance**: Q3 EBITDA $250M, DCF $236M (incl. $71M tax recovery), reaffirming 2025 EBITDA guidance of $1.01B.
- **Tax Efficiency**: 2025-2026 tax rate 20-21%, with 2026 DCF revised to $655M; U.S. legislation extends interest deductions, benefiting 2025-2026.
- **Growth Momentum**: BlackRod on track for early 2026 in-service; 2026 EBITDA outlook +$25M from marketing recovery, +$10M from BlackRod ramp-up.
- **Safety & Compliance**: Milepost 171 remedial actions show no systemic issues; Keystone pressure restrictions expected to lift in 2026, aligning with market differentials.
- **Capital Discipline**: 2026 capital program $35M (maintenance $25M, growth $10M); 2-3% EBITDA growth target maintained via disciplined project execution.

**【CEO Opening Remarks】**
- South Bow delivered stable earnings in Q3 2025, prioritizing capital allocation through dividends, growth projects (e.g., BlackRod), and cost savings from early transition services exit.
- Emphasized strategic focus on safe operations, growth portfolio execution, competitiveness, and disciplined capital allocation.
- BlackRod project achieved mechanical completion in October, on schedule and within budget, with commissioning underway for early 2026 in-service.

**【COO Operational Update】**
- Remedial actions at Milepost 171: Inline inspections (6 runs) and 37 integrity digs show no systemic issues; advanced technologies being integrated for long-term safety.
- Keystone pressure restrictions expected to lift in phases in 2026, aligning with widening market differentials.
- Legal proceedings related to variable toll disputes resolved in October, with $22M indemnification cap from TC Energy.

**【CFO Financial Performance】**
- Q3 2025: Normalized EBITDA $250M, DCF $236M (incl. $71M tax recovery from U.S. legislation changes).
- 2025 Guidance: Normalized EBITDA $1.01B, DCF ~$700M; 2026 Outlook: EBITDA $1.03B (+$25M marketing, +$10M BlackRod, -$15M Keystone).
- Effective tax rate revised to 20-21% vs. prior 25-27%; 2026 capital program: $25M maintenance, $10M growth (BlackRod connection).

**【Q&A Highlights】**
- **Tax Optimization**: $71M recovery in 2025; benefits extend to 2026 via interest deduction cap extension, with 2027 reverting to prior tax cadence.
- **Growth Projects**: BlackRod template for future organics; 2026 focus on maturing projects leveraging pre-invested corridors (e.g., Alberta/Keystone XL legacy assets).
- **CapEx Assumptions**: ~$100M annual average for 2-3% EBITDA growth; no material projects sanctioned yet, but pipeline discussions active.
- **Variable Toll Impact**: $33M payments/$19M receipts over 6/2 years, excluded from EBITDA, neutral to cash flow.


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