SOBO

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. South Bow (TSX:SOBO) is back on investor radars after reporting second quarter earnings, affirming its dividend and securing 20 year commitments backing the Prairie Connector and Liberty Bridge growth projects. See our latest analysis for South Bow. South Bow’s recent earnings beat, higher guidance and 20 year contract commitments come against a share price of CA$51.05, with a year to date share price return of 33.43% and a 1 year total shareholder return of 42.15%. This indicates positive momentum in how the market is weighing its growth prospects and risk profile. If these developments have you thinking about where to find other potential opportunities in energy infrastructure and related themes, it could be worth scanning the market using our screener for 36 power grid technology and infrastructure stocks The share price has already moved on South Bow’s earnings beat, higher guidance and long term contracts. The next step is to see whether the current valuation still leaves room for new buyers or argues for patience. South Bow’s most followed narrative sets a Fair Value of CA$61.10 against the latest close of CA$51.05. That gap reflects specific views on long term pipeline cash flows and project execution. Read the complete narrative. Curious what sits behind that Fair Value for South Bow? The narrative leans on measured revenue growth, firm margins and a richer future earnings multiple. Want to see how those assumptions stack up against your own expectations? Result: Fair Value of CA$61.10 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, South Bow’s story could shift quickly if Keystone pressure restrictions last longer than expected or if regulatory changes slow approvals for key projects. Find out about the key risks to this South Bow narrative. With both risks and rewards on the table for South Bow, it makes sense to review the data yourself and move quickly to shape your own view by weighing the company’s 4 key rewards and 2 important warning signs If South Bow has you thinking more critically about your portfolio, use the Simply Wall Street Screener to spot other opportunities before they move without you. Target reliable income by scanning for companies that look like potential income anchors through the 5 dividend fortresses. Hunt for quality at a sensible price using the 10 high quality undervalued stocks to see which stocks currently line up with your value checklist. Secure more stability in your portfolio by focusing on financially resilient companies via the solid balance sheet and fundamentals stocks screener (12 results). This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SOBO.TO. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 10 a.m. ET President and Chief Executive Officer - Bevin Wirzba Senior Vice President and Chief Financial Officer - P. Van Dafoe Senior Vice President and Chief Operating Officer - Richard Prior Operator: Good day, and thank you for standing by. Welcome to South Bow Q2 2026 Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Martha Wilmot. Please go ahead. Martha Wilmot: Thank you, Dana, and welcome, everyone, to South Bow's Second Quarter 2026 Earnings Call. With me today are Bevin Wirzba, President and Chief Executive Officer; Van Dafoe, Senior Vice President and Chief Financial Officer; and Richard Prior, Senior Vice President and Chief Operating Officer. Before I turn it over to Bevin, I'd like to remind listeners that today's remarks include forward-looking information and statements that are subject to the risks and uncertainties addressed in our public disclosure documents available under South Bow's SEDAR+ profile and in South Bow's filings with the SEC. Today's discussion will also include non-GAAP financial measures and ratios that may not be comparable to those presented by other entities. With that, I'll turn it over to Bevin. Bevin Wirzba: Good morning, everyone. We appreciate you joining us today. While we're proud of our safe and reliable operations, strong financial performance and improved outlook for 2026, the defining achievement of the first half of the year was the success of our open season and the momentum we've continued to build across our growth portfolio. Securing 465,000 barrels a day of 20-year customer commitments from a broad producer group was a significant milestone for our team and more importantly, a strong endorsement from our customers. This demonstrates the value of our corridor, the strength of our market position and the continued need for additional egress capacity to support growing Western Canadian crude oil production and deliver significant long-term economic benefits. These commitments are also a critical enabler for our customers. The production growth associated with these commitments will help generate the cash flows needed to enable ambitious larger scale investments across the Western Canadian Sedimentary Basin in the years ahead. Achieving commercial success has enabled us to move into the next phase of development as we advance the work required to support a final investment decision, which we are targeting for mid-2027. Over the coming months, we will focus on stakeholder engagement, execution planning, cost refinement, financing and securing the permit durability needed to support that decision. As we've said previously, permit durability remains a key requirement for South Bow. The infrastructure we operate today and the infrastructure we are looking to develop will be needed for decades to come, spanning multiple governments and market cycles while delivering significant long-term economic benefits. That's why it's critical that the certainty needed is in place to support these investments through the duration of their construction and throughout their operations. We have considered that requirement at every stage of this process, and we would not have launched the open season or advanced commercialization activities if we did not believe there was a credible path to securing the certainty needed to support a project of this importance and this scale. As with all growth opportunities, we will continue to evaluate the opportunity through the same disciplined low-risk framework that defines South Bow. With that, I'll hand it over to Richard to provide more detail on our operational performance, integrity activities and the progress we're making across our growth portfolio. Richard Prior: Thanks, Bevin. Safe and reliable operations, strong asset integrity and disciplined execution remain the foundation of our business. Starting with pipeline integrity, we continue to make meaningful progress on the remedial actions associated with the Milepost 171 incident. The data and insights gained through this work are being incorporated into our ongoing integrity management programs, helping to strengthen system integrity and support long-term safe and reliable operations. We remain encouraged by the progress we've made and continue to expect pressure restrictions to be lifted in a phased manner through the end of 2026 and into 2027 as this work advances. Turning to operations. Q2 was another solid quarter for the business. Performance on the U.S. Gulf Coast segment of the Keystone Pipeline System was particularly strong as disruptions to global crude oil trade drove increased demand for connectivity to refining and export markets. During the quarter, we established new throughput records on the U.S. Gulf Coast segment, reflecting close collaboration across our commercial and operational teams and highlighting the value of our corridor. Our team and assets continue to respond effectively to changing market conditions while providing customers with reliable access to the PADD 2 and 3 markets. More broadly, the quarter reinforced the strategic value of South Bow's Corridor. As Western Canadian production continues to grow, our customers increasingly value competitive market access, which we provide to North America's strongest demand markets. That same demand for market access underpins the growth opportunities we are advancing today, bringing me to our proposed Prairie Connector project and the joint development of the Liberty Bridge project with our partner, Bridger. As Bevin outlined in his earlier comments, our efforts today are focused on advancing the work required ahead of a final investment decision. To support disciplined planning and efficient execution, South Bow and Bridger are coordinating efforts while leveraging execution expertise and direct experience across our respective geographies. For Prairie Connector, our team continues to advance stakeholder engagement, execution planning and other development work streams. For Liberty Bridge, which would utilize an established corridor on privately held land to connect the Guernsey Hub to Cushing, our teams are active across a number of development work streams. That effort is focused on stakeholder and landowner engagement, permitting and execution planning. As we advance these projects, South Bow and Bridger will continue to bring the same operational, technical and commercial rigor that underpin our businesses. With that, I'll turn it over to Van to discuss our financial performance and updated outlook for 2026. P. Van Dafoe: Thanks, Richard, and good morning. Our second quarter results demonstrate the strength of South Bow's underlying business. Strong operational performance and elevated demand for capacity on the U.S. Gulf Coast segment of our system translated into another quarter of solid financial results. At the same time, we continue to strengthen our balance sheet, return capital to shareholders and advance our growth priorities. Our strong results during the first half of the year reflect the competitive positioning of our assets and the efforts of our team to deliver value through a dynamic market environment. As a result, we have increased our full year normalized EBITDA guidance to $1.04 billion within a range of 2% at the upper end and 1% at the lower end. We have also increased our full year distributable cash flow guidance to $665 million within a range of 2%. Our strong earnings and cash flow generation continue to support balance sheet improvement. At the end of the second quarter, our leverage ratio improved to 4.4x net debt-to-normalized EBITDA, reflecting a continued progress towards our highest capital allocation priority. This continued improvement in our financial position strengthens our ability to pursue growth opportunities while maintaining the disciplined capital allocation approach that defines South Bow. Accordingly, we have increased our growth capital outlook for the year to support development activities associated with the Prairie Connector and Liberty Bridge projects. These investments are focused on advancing the development activities required to support a final investment decision and are being evaluated through the same disciplined capital allocation lens that guides all investment decisions at South Bow. Finally, our Board of Directors approved our quarterly dividend of $0.50 per share yesterday, reflecting our ongoing commitment to returning capital to shareholders. With that brief overview of our financial performance and outlook, I'll turn it back to Bevin for closing remarks. Bevin Wirzba: Thanks, Van. Thanks, Richard. So before we move to questions, I'd like to briefly touch on an important Board leadership transition that we announced yesterday. As part of our Board of Directors' ongoing succession planning process, Hal Kvisle stepped down as Chair of the Board, and George Lewis was appointed Chair. On behalf of the entire management team and myself personally, I'd like to thank Hal for his leadership, counsel and mentorship through South Bow's launch as an independent company and congratulate George on his appointment. We look forward to continuing to work closely with both Hal and George as we execute on our long-term strategy. So in closing and looking more broadly at the first half of the year, I believe South Bow continues to demonstrate the strengths that differentiate our business. We have delivered safe and reliable operations, strengthened our financial position and advanced our growth portfolio in a disciplined manner. At the same time, we continue to advance opportunities that build on the strategic advantages of our corridor and the capabilities we have collectively developed through decades of operating critical energy infrastructure. These opportunities have the potential to strengthen our competitive positioning and support the next phase of growth for both South Bow and our customers. The success of the open season reinforces our view that customers strongly support the additional egress capacity needed to grow Western Canadian crude oil production and that South Bow is uniquely positioned to help meet that demand. As we look ahead over the coming months and quarters, our priorities remain unchanged. We will continue to focus on safe and reliable operations, disciplined growth and financial strength. We believe those principles, combined with the advantages of our corridor and the opportunities in front of us, position South Bow to continue creating long-term value for shareholders while meeting our customers' evolving market access needs. With that, I'll now ask the operator to open the line for questions. Operator: [Operator Instructions] Our first question comes from the line of Maurice Choy of RBC Capital Markets. Maurice Choy: I just want to start with the incremental details you shared about your successful open season. Obviously, there are many pipeline alternatives that are being proposed out there. So just curious whether at a very high level, what are your customers telling you about why your pipeline was the one that -- or at least one of the ones that they supported? Bevin Wirzba: Yes. Thank you, Maurice. Our customers, we've indicated all along that we are a customer-led strategy, and we've had the opportunity to listen what they like about our base systems and what they're really striving for. And obviously, having the highest netback that you can deliver is important to our customers. And so being -- having a competitive toll is very critical, which we delivered in our open season, a very competitive toll over the long term with certainty around those tolls over a 20-year period. The second thing was getting to a market that was resilient. And we've consistently said that the demand in the Gulf Coast for Canadian crude into that refining market was and is and will be resilient for decades to come. And so enabling a batch system to serve directly in a bullet down to the Gulf Coast is what our customers were looking for. In addition to that, we have, since creating the initial system of Keystone, been able to deliver to multiple delivery points and having that flexibility for our customers to deliver into different kind of exit markets is very critical for our customers. Maurice Choy: And maybe you could finish off with a question on Liberty as well as Prairie Connector. You mentioned multiple times today in the past about permit durability, and that's being a key requirement. I wonder if you could just paint a blue sky scenario for us what the ideal situation is for you in terms of permit durability. What does that look like? And just take one step further, like what are some of the things that your counterparty who can give you that durability still wants to see before giving you that durability? Bevin Wirzba: Yes. Maurice. I'd like to answer that by going back to first principles. As a developer, we've learned over the years that risk allocation in a project is really important. And there's risks that we should be managing and there's risks that our customers are undertaking and there's risks that are not able to be mitigated by ourselves or our customers. And that's what we focus on in terms of the permit durability component. And so while we all take execution and development risk across the project with our partner, our customers have taken 20-year commitments and commodity price exposure through that period, ensuring that we have a permitted project in place that can remain durable through that period is something that we'll need others to step in on. And so we've been working on programs in the United States that are well established to apply and to work through the process of seeking that durability in the United States. In Canada, there is -- there are fewer precedents, but we did achieve a precedent when we advanced previously projects, and we're trying to navigate those right now. And so we're going to be a little bit light on the details on what that looks like specifically, Maurice, but we're well advanced in those discussions to seek what we can achieve. And what's important for us is that we don't want to expose our shareholders to risk that they shouldn't be exposed through the development of a project like this. So we've proven that commerciality is there. We've proven that there's a desire to have the project move forward. We believe there's been very constructive support, both in Canadian governments as well as the United States government, and we're just trying to finalize what that -- what form that takes over the next number of months. Operator: Our next question comes from the line of Sam Burwell of Jefferies. George Burwell: I wanted to ask how much progress has been made on permitting Liberty given that you've characterized it as an existing corridor. So was there any pre-existing permitting to leverage? And then maybe at a higher level, how much is baked into the FID time line in the way of contingencies, particularly in regards to permitting on the U.S. side? Richard Prior: Yes. Thanks. It's Richard here. So with respect to the Liberty Bridge project, as we've mentioned, we acquired a significant amount of work that was previously done. And so we acquired that from Tallgrass and Bridger, which are owners of that work. And so that included a corridor engineering, number of right-of-way agreements that have been established, and that really puts you effectively a long way down the permitting process by having all of that work that was completed previously. And so we're -- there's more to come on this, and we're working right now and consulting with the agencies that will ultimately grant new permits for that part of the route. And we'll have more to say at the times that we complete those permit filings. And then in terms of your question around what's involved for, I guess, time line contingency. We looked at and studied as did Bridger, all of the statutory permitting time lines and the regulations that are required across the projects. And we've built those time lines into our schedule. We've also had consultations with the permitting agencies. And so our time line is according to those, and we believe that we're -- we maintain on track to reach an FID in mid-2027. George Burwell: Okay. Great. And then another thing I noticed in the press release was the reference to evaluating inorganic opportunities. I mean, not expecting you guys to say what you're going to buy and when. But maybe just like a little bit of color on sort of the scope and just do you have the bandwidth internally to pursue larger acquisitions while you're executing Prairie, Liberty and the whole scope of that project? Bevin Wirzba: Yes. Thank you, Sam. The first and most important thing is that when we look at inorganic opportunities, they're within the same risk preferences and kind of capital allocation principles that we've been demonstrating since our IPO. We do have the capacity internally. We've added team members through the year. We have a great team in place to evaluate opportunities. And we're seeing that with the strength of the growth prospects in our organic business that makes our currency through inorganic potential. But developing organically is obviously our priority. We've demonstrated that through the successful open season and moving that forward and build multiples are much more accretive to shareholders than acquisition multiples. But I want to be clear that we think that there could be complementary assets that we could add to the portfolio that match that joint strategy of both organic and inorganic going forward. Operator: Our next question comes from the line of Jeffrey Tonet (sic) [ Jeremy Tonet ] of JPMorgan Securities. Elias Jossen: This is Eli on for Jeremy. Just wanted to touch on long lead time item procurement, given a pretty expedited construction window here. Can you just frame whether you're already ordering and placing down payments on some of that equipment? And then maybe how much of a role do government subsidies play in those decisions? Bevin Wirzba: Yes, Eli, I think we've been clear that we wouldn't expose our shareholders to kind of material expenses or otherwise until we have the permit durability in place. And so with that in mind, we're obviously managing our plan towards FID to secure the necessary durability to make some long lead purchases. We're not at that point today. But we've obviously spoken to all our suppliers and contractors to get us comfortable around our mid-2027 FID time line for the project. Elias Jossen: Got you. And then maybe there's been a lot of discussions of stakeholder consideration so far on the call today. But if we think about some of the activity we've seen in Montana on the partner's project, how did that kind of factor into your overall decision to maintain the FID? And what kind of conversations are you having with your partner on that sort of opposition from the stakeholder? Bevin Wirzba: Yes. Eli, we're not going to speak on behalf of our partner, but you could appreciate even through Richard's remarks that we're well aware of all the permitting requirements and the importance of ensuring that stakeholders across our projects have the opportunity to be consulted through the normal regulatory processes. And so this is just par for the course from our perspective of how you advance the project. And so we are and our partner, is well aware of what those consultation requirements are. So those were already built into our schedule and our time frame of how to pursue and get ready for an FID decision. Operator: Our next question comes from the line of Aaron MacNeil of TD Cowen. Aaron MacNeil: Maybe I'll follow up on Maurice's question on permit durability. There's been some discussion of a potential DOE loan. Is that a necessary prerequisite in your view for permit durability? Or are there other potential avenues to deliver that kind of certainty that you need to proceed with a formal FID? And if so, what does that actually look like? Bevin Wirzba: Yes, Aaron, thanks for the question. The way we've been thinking about it is like almost an insurance tower, a stack of various programs, methods, commitments by others to help secure the risks that we believe that those providers are best positioned to provide that permit durability. So in the United States, there are existing programs that we're working through. As I mentioned, in Canada, there are less precedents on that front, but we've been -- we would not have -- as per my remarks, we've been in these discussions for well over a year. Obviously, we haven't gotten to conclusion on those discussions, but we wouldn't have proceeded with an open season if we didn't feel that we had customer support or broadly a pathway to secure what we needed in order to put -- allocate capital on behalf of our shareholders to move forward. Aaron MacNeil: Fair enough. Do you see the potential for permitting reform either before the midterms or during the lame-duck session as a potentially positive catalyst for either the Bridger expansion or Liberty Bridge projects? Or are you essentially too far along in both of those processes for it to matter? And if you are too far along, like can you speak to how permitting reform might help you sort of down the road on incremental projects in the future? Bevin Wirzba: Well, Aaron, I'm not a political expert, but we are a member organization of the American Petroleum Institute. And API on our behalf and on the behalf of all of our contributing members and participants have been actively working on the permitting reform file in the United States and believe that, that, in general, has achieved broadly bipartisan support in many aspects. And I can't comment on to whether or not it moves forward at a pace that supports what we're actively pursuing, but it certainly is a consideration that we've had for the last year. Operator: Our next question comes from the line of Ben Lund at Goldman Sachs. Benjamin Lund: I wanted to pick up on the broader picture, but more so on the demand for Canadian heavies. We've seen a lot of moving pieces in the market, but curious if you can speak to what you're seeing in terms of real-time demand signals down at the Gulf Coast so far in the third quarter? And then also, is there any appetite to increase and add incremental throughput capacity or delivery points on the Gulf Coast to capture more of the value when the Prairie barrels arrive? Bevin Wirzba: Yes, absolutely. Those are both great questions. We ran a 90-day open season, and there was a lot of macro activity going on during that period of time. And our customers are clearly -- as they are taking on the risk of commodity exposure into that market over the next 20-plus years are much more acutely aware of their views of the outlook of that market. But competitively sourcing reliable Canadian barrels out of a resource that has very low maintenance and maintenance capital to see those barrels and that supply be resilient in a variety of market environments really fits well with serving that Gulf Coast environment. To your second question, since the development of our base Keystone asset, we've continually looked at adding different delivery points. And consistent with the Prairie Connector project, our team has been in conversations of seeking different delivery points and markets to provide that flexibility for our customers to manage their exposure over the next 20 years. We do have marine access from our systems. And so we're continuing to look at those options as well as other refinery connections in the Gulf Coast. Benjamin Lund: That's helpful. And maybe just a quick one on the Intra-Alberta side. But beyond Blackrod Phase 1 and the opportunity for Phase 2, it seems like Grand Rapids and White Spruce are positioned well to capture the growth in the basin. I'd be curious how conversations are progressing with the producers in the region on incremental production. And then maybe how you'd frame up the way these types of projects compete for capital against the larger Prairie Connector and Liberty Bridge projects and even the kind of M&A that was mentioned earlier. Bevin Wirzba: Ben, if you take us back to January of 2025, there's a lot of uncertainty from -- on the geopolitics around our business. Our customers were not in a position to grow and the capital markets that they were supported by were looking for shareholder returns via buybacks and dividend growth. And fast forward a year, we have 2 very constructive governments, which has encouraged the capital markets as well as our customers to seek that growth. So we're very fortunate to have pre-invested capital in our Grand Rapids corridor that is positioned very well. Even in the event Prairie Connector didn't advance, the growth in the basin has allowed us to begin discussions around leveraging that pre-invested capital in our corridors in the Grand Rapids and in Hardisty to seek potential, seeing more barrels move and whether that's through West Coast solutions or out East or South via our systems, we have seen more opportunities and more discussions in the Intra-Alberta than we did at the time of spin for sure. And on the inorganic side, that means some of the inorganic assets that are in the Intra-Alberta probably have a little bit more value to them because they have a good growth outlook as well. And so we're just being cautious, and we'll be very disciplined on our approach on the inorganic side. Operator: Our next question comes from the line of Theresa Chen of Barclays. Theresa Chen: Bevin, would you elaborate a little bit more on your view of WCS growth over both near and medium term? Per your earlier comments and in the press release, it looks like production remains below total pipeline egress right now, but shippers are in active negotiations with the Canadian government, it seems. How do you see the path forward for WCS production moving over the next several years? What do you view as the key catalysts or constraints that will determine the pace of growth? Bevin Wirzba: Yes. Great question, Theresa. We had an outlook and going back to when we launched in that my comments around what the environment was like in 2025, we felt at that point in time, the basin had grown about 1 million barrels a day over the 10 years prior. And we felt that with the TMX pipeline coming on that we were around 250,000 barrels a day long egress, but that the growth in the basin through optimization capital primarily would see that, that supply-demand and egress balance get into a situation where we're short egress by kind of 2027. Now there's been some additional capacity developed, shifting our view maybe perhaps to mid-'27 where we'd see that the basin will have exceeded the capacity. And I've connected here very recently in the last few weeks with the CEOs of a number of our customers, and they share the same view that their base assets will be able to grow to achieve growth out of their assets to exceed what's currently available. And that's what really underpinned the desire of our customers to underwrite our Prairie Connector project as they see that from their base assets. Longer term, we see our project as a way to ramp into the larger aspirations that are occurring in Western Canada to see other egress markets. And consistently, I think if you read the quarterly releases of our customers, they've all been able to demonstrate very significant improvements in operating costs and maintenance capital cost to underwrite that growth. So we see the environment as being very constructive to support not only our base business, but also ongoing growth out of -- in the Intra-Alberta market. Theresa Chen: And on the topic of capacity to digest this magnitude of potential growth across your assets. Your comment about currency, your currency as a potential tool for inorganic growth, can you just elaborate more on potential financing options for both inorganic and organic? Currency is one consideration, but also possibly deep pools of private capital that may be available to you. Any thoughts there? Bevin Wirzba: Yes. Theresa, at our Investor Day in November, we laid out, I call them, the colors of the rainbow. There's -- obviously, there's equity, there's our shares, but there's also the pools of capital that have been very active, say, on the private insurance or investment-grade joint venture capital. The debt capital markets have been very constructive. And we've seen a number of processes this year. Some haven't come to conclusion, but we've been monitoring them closely. And so I'll pass it to Van to kind of describe kind of how we generally think of our capital stack. P. Van Dafoe: Yes. So out of the gate, obviously, our debt was at around 5x net debt to EBITDA. We brought that down to 4.4x. And so if you model it out and take the credit rating agencies into account, you can come to a conclusion on how much additional debt we can take on. And then besides that, we'd have to look at equity or that insurance capital or hybrids or other forms of capital. So as Bevin mentioned, we're looking at all forms, and we also are ensuring that the credit rating agencies are involved and are up to speed on our thoughts. Operator: Our next question comes from the line of Keith Stanley of Wolfe Research. Keith Stanley: First, I wanted to start, it's obviously very early days on this proposed 1 million barrel a day West Coast pipeline backed by the government. But how does that project being on the table impact how you think about Prairie Connector as well as, I guess, the timing for when and how you'd recontract Keystone, if it does at all? Bevin Wirzba: Thanks, Keith. Certainly, our customers that were part of that trilateral agreement were well aware of the ambitions of the government on other egress solutions. And even in that intimate knowledge of where that was going, they bid in very confidently into our open season on Prairie Connector. So we believe our commercialization is very solid there. What's important on recontracting, Keith, is irrespective of whatever solutions come up in the future is where you're delivering those barrels and at what cost. And we believe that we can continually be the most competitive solution for those barrels. And a West Coast solution, I mentioned to Theresa that we were really targeting the optimization barrels that were going to come in the basin, not the new greenfield projects to underwrite Prairie Connector. And so any material if as the West Coast solution moves forward, and we're encouraged by the basin growing and our customers growing, but those would require very significant greenfield investments, so new production streams in addition to the ones that are currently on our base systems. So these are incremental barrels, and we don't believe that they're -- that it's mutually exclusive to our systems to see our barrels move away. So as long as we do our job and provide the best customer solutions at a very competitive rate, we think that there's room for both. Keith Stanley: Got it. That makes a lot of sense. Second one on Prairie Connector, just to follow up. Are there ways to achieve the government assurance of permit durability beyond U.S. legislation that we might not be thinking of? You mentioned kind of like a stacked insurance type pyramid to figure this out. Maybe there's executive branch options. Just -- I guess my question is, are there multiple paths to get to the permit durability? Or is it one really that you have in mind? Bevin Wirzba: No. I think, Keith, as I mentioned, there are multiple paths. Going back to my risk allocation comments, there are many beneficiaries, not only ourselves and our customers, but many jurisdictions benefit from the economic benefits that this project will deliver. And so matching the right risks that are in the project to the right beneficiary is the path that we're taking. And so those are -- there's many of those discussions. And if I describe the pie of my day, it looks very different than it did 1.5 years ago. And same with our team, we're active on many fronts. Operator: Our next question comes from the line of Sumantra Banerjee of UBS. Sumantra Banerjee: Great to see the guidance raise. And aside from the market volatility that we've been seeing and also you talked about the pressure restrictions potentially being lifted before. I was curious if there's anything else that may push you towards the top end of the guidance? Bevin Wirzba: We've seen -- the first half of the year, I referred to there was a lot of macro environment volatility that provided some additional opportunity that the front half of the year, we may have -- we outperformed kind of our own budget expectations. But inventories in Hardisty and Cushing are at kind of all-time lows. And so we think that our guidance reflects our view that the second half of the year will be modest compared to the first half of the year. Things that could drive us to the upside would be just different events where those arbs open up. And the goal of our team, our system operating factor in this last bit exceeded our expectations as well. So having our systems open and available for spot volumes. As Richard pointed out, we had some record volumes. So we know what we can do. But right now, we're tempered by kind of inventory levels and the broader macro that's out there. Sumantra Banerjee: Got it. That's very helpful. And then I also wanted to touch upon Blackrod. That $10 million that you called out in the press release for the growth CapEx. Just curious about what activities are needed for that and the completion. Richard Prior: Yes. So it's Richard here. With respect to Blackrod, we're well into final wet commissioning activities. And so the capital that we're consuming in 2026 for the project, it's really just finalization activities of the project to get it into service. So we're -- we expect to be through all the wet commissioning activities here within the next month or 2. And then beyond that, it's just simple final reclamation of the site. Operator: Our next question comes from the line of Praneeth Satish of Wells Fargo. Praneeth Satish: So I realize it's still very early and Prairie Connector hasn't reached FID. But assuming the project does move forward as planned, how much future expansion capacity could the system support? Could Prairie Connector and Liberty Pipeline be expanded towards the original 800,000 barrels per day that Keystone XL was designed to move? Or could it move even higher? And then as we think about the expansion economics, I guess, is it reasonable to assume that any expansion would fall towards the low end of your 5x to 7x build multiple given that it's mostly brownfield? Bevin Wirzba: Yes. Great question, Praneeth. We're leveraging our pre-invested corridor, which was permitted for those higher volumes, as you suggest. We've decided an approach to capitalize Prairie Connector at a lower level to -- that could be underwritten by the 465,000 barrels a day that we achieved through the open season. But it is -- the systems are designed that could be easily expanded in the future to capture north of that 800,000 barrels a day in the future, and those would certainly be at a build multiple at the low end or even below the end of our normal range, given all we would need is additional pumping capacity. So we're matching our system design from up in Alberta, ex Hardisty all the way down to the Gulf Coast as a similarly sized system. Praneeth Satish: Got you. That's helpful -- sorry, go ahead. Bevin Wirzba: I was just going to say, and I think I know one of the first questions is why -- what made our project different. I think that expandability was a very high appeal to our customers in that they could see the ability to have contingency for our system to grow at very low rates. So that was another feature of our project. Praneeth Satish: Makes sense. And maybe staying on the project. So when we think about the time line from mid-2027 FID to year-end 2028 in-service date, I mean, does seem like a bit of a compressed time line there. Looking at the schedule, I guess that would be 2 construction windows. But can you help us understand if Prairie Connector and Liberty, can they be done in a single construction season? Or would it require 2? And just trying to get a sense of how much cushion there is there in that time frame. Richard Prior: Yes. I'd say at this point in time, we're focused on the base plan and the base schedule, which would be targeting a mid-2027 FID. And then as you point out, that gives us 2 construction seasons to build these pipelines. And we're not at this stage considering contingencies and accelerated schedules or different plans to that. So... Operator: Our next question comes from the line of Benjamin Pham of BMO. Benjamin Pham: You mentioned you're advancing the Prairie Connector project. You've now mentioned the joint development of the Liberty Bridge. Can you talk about your willingness or really the lack of willingness on the Bridger side of things with respect to why you didn't want to jointly develop that piece of the project? Bevin Wirzba: Well, Ben, this is a highly coordinated effort and project. There's clearly -- we're putting together 3 very good projects, all underwritten by customers and leveraging the strengths of each of our organizations. And so you could appreciate that by the time we get to FID, there will be much more clarity around how the overall execution and the structure of our plans going forward. We have our -- obviously, in Canada, we have our permits that we're maintaining and those have been maintained by us. Bridger has an expansion project that logically fits within that scope. And jointly, we're advancing the development of a different project. And so collectively, we feel that, that is a good approach to developing a project that can serve the needs of our customers. So there's not much more magic to it other than kind of we're working on what's in our backyards and working on 3 separate projects that are highly coordinated together. Benjamin Pham: Great. Got it. And I know there's a question earlier on the funding side of things, whether it's Prairie Connector or other initiatives on the go. Can you clarify the -- I know you mentioned the credit rating agencies. When you think about the 4x target, are you aligning with the agencies where you take a hybrid and then the project debt is off balance sheet? Can you clarify that -- how that works if you are aligned with the credit rating agencies? P. Van Dafoe: Yes, Ben, it's Van here. We keep the credit rating agencies up to speed. So they are mark-to-market on our modeling on Prairie Connector. And so there's different ways to use, let's say, nontraditional debt instruments. And again, we're working with the credit rating agencies to ensure our investment-grade rating stays where it is. Benjamin Pham: Okay. And then maybe just a follow-up on that related is you mentioned some comments on private capital as an opportunity in JVs. I recollect when South Bow was spun off from TRP, there was quite a wide spread between private and the public markets and that's what drove the public spinout. Can you characterize or comment on how that's changed, if any, over time? Now we're talking less about ESG, the public portfolio is much more positive than it was a few years ago. Has that gap closed in noticeably? Bevin Wirzba: Ben, I think it's very circumstantial to certain assets. There's certainly a significant increase in the pool of infrastructure capital globally. When we talk to private markets, the inflows that have come into those infrastructure funds is very, very significant. Obviously, you see a huge pull on those funds into the activities of data centers and other things. But the pools of capital flowing even into assets like ours are significant. So the markets are converging between private and public to a degree. But it's really focused on kind of the risk preferences and the commercial profile of the assets is very, very important for those private markets. And so when we refer to investment-grade joint ventures, it's long-life, highly contracted assets that are key. The capital is not flowing to merchant assets or things that have risk preferences that look differently to our business. Operator: I'm showing no further questions at this time. I would now like to turn it back to Bevin Wirzba for closing remarks. Bevin Wirzba: Yes. Thank you all for joining us today and for your continued interest in South Bow. We look forward to updating you on our progress in the months ahead and enjoy the rest of your summer. Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Before you buy stock in South Bow, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and South Bow wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $403,337!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,946!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 12, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. South Bow (SOBO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in South Bow Corporation? Here are five stocks we like better. South Bow raised its 2026 outlook, targeting normalized EBITDA of CAD 1.04 billion and distributable cash flow of CAD 665 million, supported by strong U.S. Gulf Coast Keystone demand. Net leverage improved to 4.4 times, and the board approved a CAD 0.50 quarterly dividend. The company secured 465,000 barrels per day of 20-year commitments through the Prairie Connector open season, enabling development to proceed toward a targeted mid-2027 final investment decision. The jointly advanced Liberty Bridge Project is on the same timetable, with both projects potentially entering service by late 2028. South Bow continues remediation following the Milepost 171 incident, with pressure restrictions expected to be lifted in phases through late 2026 and 2027. Management also sees Western Canadian production eventually outpacing available pipeline capacity and believes Prairie Connector could expand beyond 800,000 barrels per day. South Bow (NYSE:SOBO) said its second-quarter results reflected strong operating performance and elevated demand on the U.S. Gulf Coast portion of its Keystone Pipeline System, prompting the company to raise its 2026 financial outlook while advancing major expansion projects. President and Chief Executive Officer Bevin Wirzba said the company’s defining achievement in the first half was a successful open season that secured 465,000 barrels per day of 20-year customer commitments from a broad group of producers. The commitments support the proposed Prairie Connector Project and provide South Bow with a basis to advance toward a targeted final investment decision in mid-2027. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling “This demonstrates the value of our corridor, the strength of our market position, and the continued need for additional egress capacity to support growing Western Canadian crude oil production,” Wirzba said. Senior Vice-President and Chief Financial Officer Van Dafoe said strong operations and demand for capacity on the U.S. Gulf Coast segment produced solid second-quarter results. South Bow raised its full-year normalized EBITDA guidance to CAD 1.04 billion, with a range of 2% above and 1% below that figure. It also lifted projected distributable cash flow to CAD 665 million, within a range of 2%. → No Hangover: Revisiting Microsoft One Week After Earnings The company’s leverage ratio improved to 4.4 times net debt to normalized EBITDA at the end of the second quarter, Dafoe said, marking continued progress toward its balance-sheet objectives. South Bow also increased its growth capital outlook for 2026 to support development work on Prairie Connector and the Liberty Bridge Project. Dafoe said the spending is intended to advance work needed for an eventual final investment decision and remains subject to the company’s capital-allocation framework. → MarketBeat Week in Review – 08/03 - 08/07 The board approved a quarterly dividend of CAD 0.50 per share. During the question-and-answer session, Wirzba said South Bow’s first-half performance exceeded its internal budget expectations due in part to macroeconomic volatility that created additional opportunities. However, he said management expects the second half to be more modest than the first half, citing low inventories at Hardisty and Cushing and the broader market environment. Senior Vice-President and Chief Operating Officer Richard Prior said South Bow continued remedial work associated with the Milepost 171 incident. Information gathered through that work is being incorporated into the company’s integrity-management programs. South Bow expects pressure restrictions to be lifted in phases through the end of 2026 and into 2027 as the remediation work progresses, Prior said. Operationally, the company reported particularly strong performance on the U.S. Gulf Coast segment of Keystone. Disruptions in global crude trade increased demand for access to refining and export markets, and South Bow established new throughput records on that segment during the quarter. Wirzba told analysts that customers supported the Prairie Connector open season because of the project’s proposed competitive toll, long-term toll certainty, direct access to the Gulf Coast and flexibility to deliver into multiple markets. He said the company continues to evaluate additional delivery points, marine access and refinery connections along the Gulf Coast. South Bow is developing Prairie Connector and jointly advancing the Liberty Bridge Project with Bridger. Liberty Bridge would use an established corridor on privately held land to connect the Guernsey Hub and Cushing. Prior said South Bow acquired prior project work from Tallgrass and Bridger, including corridor engineering and a number of rights-of-way agreements. The company is consulting with relevant agencies before completing permit filings for the Liberty Bridge route. Management said both projects remain on track for a mid-2027 final investment decision. The preliminary schedule assumes two construction seasons between a mid-2027 decision and a targeted year-end 2028 in-service date. Wirzba said permit durability remains a key condition before South Bow will commit material capital or make long-lead equipment purchases. He described the company’s approach as a “stack” of programs, commitments and methods intended to allocate project risks to parties best positioned to manage them. “We wouldn’t have proceeded with an open season if we didn’t feel that we had customer support or broadly a pathway to secure what we needed in order to allocate capital on behalf of our shareholders to move forward,” Wirzba said. He said South Bow is working through established programs in the U.S. and seeking solutions in Canada, where he said there are fewer precedents. The company has incorporated statutory permitting timelines and consultations with agencies into its development schedule. Wirzba said the Prairie Connector system would initially be sized around the 465,000 barrels per day of commitments secured through the open season, while using a pre-invested corridor that had been permitted for higher volumes. He said the system could be expanded beyond 800,000 barrels per day through additional pumping capacity, potentially at the low end or below South Bow’s typical five-to-seven-times build-multiple range. South Bow expects Western Canadian production growth to eventually exceed current available pipeline capacity. Wirzba said the company previously expected a shortage of egress capacity around 2027, though additional capacity development may push that timing into mid-2027. He said recent discussions with customer chief executives reinforced management’s view that producers can grow their existing assets beyond currently available egress capacity. South Bow also sees growing opportunities for its intra-Alberta assets, including the Grand Rapids and Hardisty corridors. The company is completing final wet commissioning activities for Blackrod and expects that work to conclude within the next month or two, Prior said. Remaining work would consist of final site reclamation. South Bow also said it is evaluating potential inorganic opportunities, although Wirzba emphasized that organic development remains the company’s priority. He said any acquisitions would need to meet South Bow’s risk preferences and capital-allocation principles, while management continues to consider funding options including debt, equity, insurance capital, hybrid securities and investment-grade joint ventures. Separately, South Bow announced a board leadership transition. Hal Kvisle stepped down as board chair and George Lewis was appointed chair as part of the board’s succession-planning process. South Bow Corp is a strategic liquids pipeline company. It is a new liquids-focused midstream infrastructure company. South Bow Corp is based in Canada. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "South Bow Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Secured 465,000 barrels per day of 20-year customer commitments, validating the strategic value of the corridor and the long-term demand for Western Canadian crude egress. Performance beat driven by record throughput on the U.S. Gulf Coast segment, benefiting from global trade disruptions that increased demand for connectivity to refining and export markets. Management attributes commercial success to a customer-led strategy focused on delivering the highest netbacks through competitive, certain tolls and access to resilient PADD 3 markets. Operational progress continues on remedial actions for the Milepost 171 incident, with data insights being integrated into long-term integrity management programs. Strategic positioning is reinforced by the batch system's flexibility, allowing customers to deliver directly to multiple exit markets and refining hubs. The company maintains a disciplined low-risk framework for growth, prioritizing organic development while remaining open to inorganic opportunities that match existing risk preferences. Targeting a Final Investment Decision (FID) for mid-2027, contingent on securing permit durability and refining execution costs for the Prairie Connector and Liberty Bridge projects. Expect pressure restrictions on the Keystone system to be lifted in a phased manner through the end of 2026 and into 2027 as integrity work advances. Guidance for 2026 normalized EBITDA increased to $1.04 billion, though management anticipates a more modest second half due to currently low inventory levels at Hardisty and Cushing. The project timeline assumes two construction seasons following the mid-2027 FID to reach a year-end 2028 in-service date, utilizing existing statutory permitting timelines. Future expansion capacity beyond the initial 465,000 barrels per day is possible, potentially exceeding 800,000 barrels per day at build multiples at or below the 5x to 7x range. Permit durability remains a critical requirement; management will not expose shareholders to material capital risk until certainty is secured across multiple jurisdictions. Leverage ratio improved to 4.4x net debt-to-normalized EBITDA, reflecting a priority to strengthen the balance sheet ahead of major growth capital outlays. Announced a Board leadership transition with George Lewis appointed as Chair, succeeding Hal Kvisle as part of a planned succession process. Management is evaluating a 'stack' of insurance and government programs to mitigate political and regulatory risks that cannot be managed by the company or its customers. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management views permit durability as a risk-allocation exercise where non-mitigatable political risks should be held by beneficiaries like governments rather than shareholders. Discussions are well-advanced in both the U.S. and Canada to establish a 'stack' of commitments or programs that ensure project certainty through construction and operation. Management believes the projects are not mutually exclusive, as Prairie Connector targets optimization of existing basin growth rather than new greenfield production. South Bow's competitive advantage lies in delivering to the Gulf Coast, which remains a more resilient and higher-value market for Canadian heavy crude than West Coast alternatives. The company is exploring 'colors of the rainbow' for funding, including debt, hybrid instruments, and investment-grade joint ventures with private infrastructure capital. Management emphasized that any financing will be coordinated with credit rating agencies to maintain an investment-grade rating while pursuing accretive growth.

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Secured 465,000 barrels per day of 20-year customer commitments, demonstrating strong market endorsement and long-term revenue visibility. Raised full-year 2026 normalized EBITDA guidance to $1.04 billion and distributable cash flow guidance to $665 million, reflecting strong operational performance. Improved leverage ratio to 4.4 times net debt to normalized EBITDA, strengthening the balance sheet and supporting future growth investments. Established new throughput records on the US Gulf Coast segment of the Keystone Pipeline, capitalizing on increased demand for market access. Advanced growth portfolio with Prairie Connector and Liberty Bridge projects, targeting FID by mid-2027, leveraging pre-invested corridors for cost-efficient expansion. Pressure restrictions from the milepost 171 incident remain, with phased lifting expected only through end of 2026 and into 2027, limiting full operational capacity. Permit durability remains a key uncertainty, with no final assurance yet, posing a risk to the FID timeline and project execution. Second-half 2026 outlook is tempered by low inventory levels at Hardesty and Cushing, potentially limiting upside despite strong first-half performance. Growth capital expenditures increased to support development activities, adding financial commitments before FID and potentially impacting near-term cash flows. The compressed timeline from mid-2027 FID to year-end 2028 in-service for Prairie Connector and Liberty Bridge leaves limited contingency for construction delays. Warning! GuruFocus has detected 13 Warning Signs with SOBO. Is SOBO fairly valued? Test your thesis with our free DCF calculator. Q: What are customers telling you about why they supported your pipeline over other proposed alternatives?A: Bevan Wirzba, President and CEO, explained that the success was driven by a customer-led strategy. Key factors included a highly competitive toll with certainty over the 20-year term, access to the resilient Gulf Coast refining market, and the flexibility of multiple delivery points on the Keystone system, which allows customers to manage their market exposure effectively. Q: Can you paint a "blue sky" scenario for permit durability and what counterparties need to see before granting it?A: Bevan Wirzba, President and CEO, stated that permit durability is about allocating risks that cannot be mitigated by the company or its customers to other beneficiaries, such as governments. He noted that while the U.S. has established programs, Canada has fewer precedents. The company is in advanced discussions to secure this certainty, which is critical to avoid exposing shareholders to undue risk, and they are targeting a final investment decision (FID) for mid-2027. Q: How much progress has been made on permitting for the Liberty Bridge project, and what contingencies are baked into the FID timeline?A: Richard Pryor, SVP and COO, said the project leverages significant pre-existing work acquired from Tallgrass and Bridger, including an established corridor and rights-of-way, which puts them far along in the permitting process. They have consulted with permitting agencies and built statutory timelines into their schedule, keeping them on track for an FID in mid-2027. Q: Are you evaluating inorganic opportunities, and do you have the bandwidth to pursue them while executing Prairie Connector and Liberty Bridge?A: Bevan Wirzba, President and CEO, confirmed they are evaluating inorganic opportunities within the same disciplined risk framework. They have added team members to handle the workload. While organic growth is the priority due to better build multiples, they see potential for complementary assets that align with their joint organic and inorganic strategy. Q: Are you ordering long-lead-time items now, and what role do government subsidies play in those decisions?A: Bevan Wirzba, President and CEO, clarified that they will not expose shareholders to material expenses until permit durability is secured. They are managing the plan towards the mid-2027 FID and have spoken with suppliers and contractors to ensure the timeline is feasible, but they are not at the point of making long-lead purchases yet. Q: Is a potential DOE loan a necessary prerequisite for permit durability, or are there other avenues to achieve the needed certainty?A: Bevan Wirzba, President and CEO, described permit durability as an "insurance tower" or a stack of various programs and commitments from different providers. They are working through existing U.S. programs and seeking precedents in Canada. The company would not have launched the open season without a credible path to securing the needed certainty, and discussions have been ongoing for over a year. Q: What are you seeing in real-time demand for Canadian heavy crude on the Gulf Coast, and is there appetite to add incremental capacity or delivery points?A: Bevan Wirzba, President and CEO, noted that customers are acutely aware of the long-term outlook for the Gulf Coast market, which is driving demand for reliable Canadian barrels. The company is continually evaluating new delivery points and markets, including marine access and additional refinery connections, to provide flexibility for customers over the next 20 years. Q: How do you view the path for Western Canadian Select (WCS) production growth over the next several years?A: Bevan Wirzba, President and CEO, said the basin is expected to exceed egress capacity by mid-2027, driven by optimization capital and improved operating costs. Recent conversations with customer CEOs confirm their base assets can support growth beyond current capacity, which underpinned the demand for the Prairie Connector project. The environment is constructive for both the base business and intra-Alberta growth. Q: How does the proposed government-backed West Coast pipeline impact your thinking on Prairie Connector and recontracting Keystone?A: Bevan Wirzba, President and CEO, stated that customers were aware of the West Coast ambitions yet still confidently bid into the Prairie Connector open season. He emphasized that the key is delivering barrels at a competitive cost, and they believe they can remain the most competitive solution. The West Coast project would target new greenfield production, making it incremental and not mutually exclusive to their systems. Q: Could Prairie Connector and Liberty Bridge be expanded towards the original 800,000 barrels per day, and what would the economics look like?A: Bevan Wirzba, President and CEO, confirmed the systems are designed for easy expansion beyond the initial 465,000 barrels per day, potentially exceeding 800,000 barrels per day. Expansion would only require additional pumping capacity, resulting in build multiples at the low end or even below their normal five to seven times range. This expandability was a key appeal to customers. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

CALGARY, Alberta, Aug. 05, 2026 (GLOBE NEWSWIRE) -- South Bow Corp. (TSX & NYSE: SOBO) (South Bow or the Company) reports its second-quarter 2026 financial and operational results. Unless otherwise noted, all financial figures in this news release are presented in U.S. dollars. Highlights Safety and operational performance Recorded second-quarter 2026 average throughput of approximately 596,000 barrels per day (bbl/d) on the Keystone Pipeline and approximately 800,000 bbl/d on the U.S. Gulf Coast segment of the Keystone Pipeline System. Continued to advance remedial actions relating to the Milepost 171 (MP-171) incident, including in-line inspections and integrity digs, while continuing to work closely with the Company's in-line inspection technology vendors. Findings from these activities are being incorporated into the Company's remedial work plan and ongoing integrity management programs to enhance system integrity and support safe, reliable operations. Financial performance Delivered strong second-quarter 2026 financial results, as disruptions to global crude oil trade flows drove strong demand for capacity on the U.S. Gulf Coast segment of the Keystone Pipeline System. Strengthened the Company's financial position, maintaining total long-term debt and net debt1 outstanding of $5.7 billion and $4.6 billion, respectively, at the end of the second quarter of 2026. As at June 30, 2026, the Company's net debt-to-normalized EBITDA ratio1 was 4.4 times, down from 4.7 times as at March 31, 2026. Returns to shareholders Returned $104 million or $0.50/share to shareholders in the second quarter of 2026 through South Bow's sustainable dividend. Declared a quarterly dividend of $0.50/share, payable on Oct. 15, 2026, to shareholders of record at the close of business on Sept. 29, 2026. The dividend will be designated as an eligible dividend for Canadian income tax purposes. 1 Non-GAAP financial measure or non-GAAP ratio that does not have a standardized meaning under generally accepted accounting principles (GAAP) and may not be comparable to similar measures presented by other entities. See "Specified financial measures" in this news release. Corporate updates Announced the successful outcome of South Bow's previously disclosed open season, securing 20-year binding commitments from nine customers, totalling 465,000 bbl/d of firm transportation service from Hardisty, Alta., to U.S. delivery points. Advanced execution planning, permitting activities, and stakeholder engagement across the Company's growth initiatives, including South Bow's proposed Prairie Connector project and the jointly proposed Liberty Bridge Pipeline project with Bridger Pipeline LLC (Bridger). See "Growth initiatives" in this news release for additional details. Increased 2026 normalized EBITDA guidance to $1,040 million, with a range of 2% at the upper end and 1% at the lower end, and 2026 distributable cash flow guidance to $665 million, within a range of 2%, following stronger-than-expected first-half 2026 results; and revised 2026 growth capital expenditures guidance to approximately $80 million, within a range of $10 million, primarily to reflect $65 million of anticipated pre-final investment decision (FID) development costs associated with the Prairie Connector and Liberty Bridge Pipeline projects. South Bow's unaudited consolidated interim financial statements and notes (the financial statements) as at and for the three and six months ended June 30, 2026, and related management's discussion and analysis (the Q2 2026 MD&A) are available on South Bow's website at www.southbow.com, under South Bow's SEDAR+ profile at www.sedarplus.ca, and in South Bow's filings with the U.S. Securities and Exchange Commission (SEC) at www.sec.gov. Certain disclosure within "Specified Financial Measures" in the Q2 2026 MD&A is incorporated by reference into this news release. Financial and operational results Per-share amounts, with the exception of dividends, are based on weighted average diluted common shares outstanding. Non-GAAP financial measure or non-GAAP ratio that does not have a standardized meaning under GAAP and may not be comparable to similar measures presented by other entities. See "Specified financial measures" in this news release. Supplementary financial measure. See "Specified Financial Measures" in the Q2 2026 MD&A, certain information from which is incorporated by reference into this news release. Includes 50% equity treatment of South Bow's junior subordinated notes. SOF measures South Bow's ability to deliver crude oil at the planned maximum rate of the Keystone Pipeline. Comprises throughput originating in Hardisty, Alta. transported on the Keystone Pipeline, and throughput originating in Cushing, Okla. transported on Marketlink for destination in the U.S. Gulf Coast. Growth initiatives South Bow continues to advance its organic growth strategy, with a focus on the proposed Prairie Connector project and the joint development of the proposed Liberty Bridge Pipeline project with Bridger. In the second quarter of 2026, South Bow reached a significant milestone by securing 20-year binding commitments from nine customers, totalling 465,000 bbl/d of firm transportation service from Hardisty, Alta., to U.S. delivery points, reflecting strong commercial support. Key activities underway include advancing permitting and regulatory approvals, pursuing government assurances related to permit durability, progressing execution planning, refining cost estimates, engaging with communities, landowners, Indigenous and Tribal Nations, and other stakeholders, and evaluating financing alternatives. As development activities progress, South Bow and Bridger remain focused on securing the regulatory certainty and permit durability required to support a FID, targeted for mid-2027. Any FID will remain subject to the successful completion of these activities and will be evaluated in accordance with South Bow's risk preferences and capital allocation framework. South Bow expects its share of total pre-FID development costs in 2026 to be approximately $65 million. South Bow continues to evaluate select inorganic growth opportunities that would strengthen the competitiveness of its base business and further diversify its portfolio. Prairie Connector project South Bow continues to advance development of the proposed Prairie Connector project, including progressing stakeholder engagement and execution planning activities. If sanctioned, the 530-kilometre (330-mile) Prairie Connector project would extend from Hardisty, Alta., to the Canada-U.S. border, where it would connect to Bridger's downstream facilities. The project is expected to include approximately 380 kilometres (240 miles) of new 36-inch pipeline and associated facilities, while also leveraging approximately 150 kilometres (95 miles) of previously installed and preserved 36-inch pipeline and two pump stations. Liberty Bridge Pipeline project South Bow and Bridger continue to jointly advance development of the proposed Liberty Bridge Pipeline project, including progressing stakeholder engagement, permitting, and execution planning activities. Development efforts are supported by a route that follows an existing corridor on privately held lands. If sanctioned, the Liberty Bridge Pipeline project would extend from Guernsey, Wyo., to Cushing, Okla., where it would connect to the U.S. Gulf Coast segment of the Keystone Pipeline System and other downstream facilities. Outlook Market outlook Recent geopolitical events have caused significant market volatility, underscoring the importance of a secure and reliable North American energy supply. In this environment, South Bow's strategically positioned infrastructure continues to play an important role in connecting growing Western Canadian crude oil supply to key refining and export markets. South Bow continues to expect modest growth in Western Canadian Sedimentary Basin (WCSB) crude oil supply through 2026, with production remaining below total pipeline egress capacity. As a result, demand for uncommitted capacity on the Keystone Pipeline is anticipated to remain tempered in the near term. Following strong demand for capacity on the U.S. Gulf Coast segment of the Keystone Pipeline System in the second quarter of 2026, declining crude oil inventories in Cushing, Okla. have caused pricing differentials to tighten, and as a result, demand for capacity on the U.S. Gulf Coast segment of the Keystone Pipeline System is expected to moderate in the second half of 2026. 2026 guidance South Bow's annual guidance aims to inform readers about Management's expectations for 2026 financial and operational results. Readers are cautioned that these estimates may not be suitable for any other purpose. See "Forward-looking information and statements" in this news release for additional information regarding factors that could cause actual events to be significantly different from those anticipated. South Bow is increasing its 2026 normalized EBITDA guidance to $1,040 million, with a range of 2% at the upper end and 1% at the lower end, driven by stronger-than-expected first-half 2026 results, including strong operational performance and elevated demand for capacity on the U.S. Gulf Coast segment of the Keystone Pipeline System. South Bow is increasing its 2026 distributable cash flow guidance to $665 million, within a range of 2%, driven by higher normalized EBITDA, partially offset by increased current income taxes. South Bow is increasing its 2026 growth capital expenditures guidance to approximately $80 million, within a range of $10 million, which includes $65 million of anticipated pre-FID development costs associated with the proposed Prairie Connector and Liberty Bridge Pipeline projects. The remaining growth capital expenditures include approximately $10 million for completion of the Blackrod Connection Project and $5 million for land purchases. The Company continues to expect its net debt-to-normalized EBITDA ratio to decline modestly through 2026 relative to year-end 2025. South Bow's updated 2026 annual guidance and results for the six months ended June 30, 2026 are outlined below: See South Bow's Nov. 13, 2025 news release "South Bow Reports Third-quarter 2025 Results, Provides 2026 Outlook, and Declares Dividend", available on South Bow's website at www.southbow.com, under South Bow's SEDAR+ profile at www.sedarplus.ca, and in South Bow's filings with the SEC at www.sec.gov. Assumes average foreign exchange rate of C$/U.S.$1.39. The historical results for the six months ended June 30, 2026 should not be relied upon as a basis for forecasting results for the year ended Dec. 31, 2026. See the Company's MD&A for the year ended Dec. 31, 2025 for historical normalized EBITDA, distributable cash flow, growth capital expenditures, and maintenance capital expenditures for such period. Comprised of interest expense and interest income and other. Supplementary financial measure. See "Specified Financial Measures" in the Q2 2026 MD&A, certain information from which is incorporated by reference into this news release. Includes approximately $65 million of anticipated pre-FID development costs associated with the proposed Prairie Connector and Liberty Bridge Pipeline projects, subject to development cost-sharing agreements with open season customers. Maintenance capital expenditures are generally recoverable through South Bow's tolling arrangements. Capital allocation priorities South Bow takes a disciplined approach to capital allocation to preserve optionality and maximize total shareholder returns over the long term. The Company's capital allocation priorities are built on a foundation of financial strength and supported by South Bow's stable, predictable cash flows. South Bow's capital allocation priorities include: Board of Directors update Hal Kvisle has stepped down as Chair of the Board of Directors (the Board) and George Lewis has been appointed Chair, effective immediately, as part of the Board's ongoing succession planning process. Mr. Kvisle will continue to serve as a director of South Bow and has been appointed Chair of the Governance and Risk Committee. "On behalf of the management team, I would like to thank Hal for his leadership and guidance through South Bow's launch as an independent company, including his mentorship as I transitioned into the role of Chief Executive Officer, and congratulate George on his appointment as Chair," said Bevin Wirzba, South Bow's Chief Executive Officer. "It has been a privilege to serve as Chair of South Bow and support the Company through its early stages as a standalone business," said Mr. Kvisle. "South Bow has established a strong foundation, and I look forward to continuing to contribute as a director as the Company advances its long-term strategy." About George Lewis Mr. Lewis has served as a director of South Bow since 2024 and brings extensive executive leadership and public company board experience, including a 30-year career with Royal Bank of Canada. "I am honoured to assume the role of Chair and thank my fellow directors for their confidence," said Mr. Lewis. "Hal's leadership has helped shape South Bow's strong position today, and I look forward to working with the Board and management team as we continue executing our strategy and creating long-term value for shareholders." Conference call and webcast details South Bow's senior leadership will host a conference call and webcast to discuss the Company's second-quarter 2026 results on Aug. 6, 2026 at 8 a.m. MT (10 a.m. ET). Register ahead of time to receive a unique PIN to access the conference call via telephone. Once registered, participants can dial into the conference call from their telephone via the unique PIN or click on the "Call Me" option to receive an automated call directly on their telephone. Visit www.southbow.com/investors for the replay following the event. Specified financial measures Non-GAAP financial measures and non-GAAP ratios In this news release, South Bow references certain non-GAAP financial measures and non-GAAP ratios that do not have standardized meanings under GAAP and may not be comparable to similar measures presented by other entities. These non-GAAP financial measures and non-GAAP ratios include adjustments to the composition of the most directly comparable GAAP measures. Management considers these non-GAAP financial measures and non-GAAP ratios to be important in evaluating and understanding the operational performance and liquidity of South Bow. These non-GAAP financial measures and non-GAAP ratios should not be considered in isolation or as a substitute for financial information or measures of performance presented in accordance with GAAP. South Bow's non-GAAP financial measures used in this news release include: normalized EBITDA; segment normalized EBITDA; normalized net income; distributable cash flow; and net debt. South Bow's non-GAAP ratios used in this news release include: normalized net income per share; and net debt-to-normalized EBITDA ratio. These non-GAAP financial measures and non-GAAP ratios are further described below, with a reconciliation to their most directly comparable GAAP measure. Normalizing items Normalized measures are, or include, non-GAAP financial measures and non-GAAP ratios and include normalized EBITDA, segment normalized EBITDA, normalized net income, normalized net income per share, distributable cash flow, and net debt-to-normalized EBITDA ratio. Management uses these normalized measures to assess the financial performance of South Bow's operations and compare period-over-period results. During certain reporting periods, the Company may incur costs that are not indicative of core operations or results. These normalized measures represent income (loss), adjusted for specific normalizing items that are believed to be significant; however, are not reflective of South Bow's underlying operations in the period. These specific normalizing items include gains or losses on sales of assets or assets held for sale, unrealized fair value adjustments related to risk management activities, tariff charges, separation, acquisition, integration, and restructuring costs, and other charges, including but not limited to, impairment, contractual costs, preliminary costs associated with major business development projects, and settlements. South Bow excludes the unrealized fair value adjustments related to risk management activities, as these represent the changes in the fair value of derivatives, but do not accurately reflect the gains and losses that will be realized at settlement and impact income. Therefore, South Bow does not consider these items reflective of the Company's underlying operations, despite providing effective economic hedges. Realized gains and losses on grade financial contracts are adjusted to improve comparability, as they settle in a subsequent period to the underlying transaction they are hedged against. South Bow excludes tariff charges as they are not reflective of ongoing business conducted by the Company and are subject to uncertainty. Separation costs relate to internal costs and external fees incurred in connection with the spinoff from TC Energy Corporation on Oct. 1, 2024. These items have been excluded from normalized measures, as Management does not consider them reflective of ongoing operations and they are non-recurring in nature. Business development projects represent initial expenditures incurred by the Company for the evaluation of future growth projects. These costs have been excluded from normalized measures, as Management does not consider them reflective of ongoing operations conducted by the Company. Normalized EBITDA and segment normalized EBITDA Normalized EBITDA and segment normalized EBITDA are used as measures of earnings from ongoing operations. Management uses these measures to monitor and evaluate the financial performance of the Company's operations and to identify and evaluate trends. These measures are useful for investors as they allow for a more accurate comparison of financial performance of the Company across periods for ongoing operations. Normalized EBITDA and segment normalized EBITDA represent income (loss) before income taxes, adjusted for the normalizing items described above under the heading "Normalizing items", in addition to excluding charges for depreciation and amortization, interest expense, interest income and other, and other income. Normalized EBITDA and segment normalized EBITDA guidance are forward-looking non-GAAP financial measures. South Bow does not provide a reconciliation of such forward-looking measures to the most directly comparable financial measure calculated and presented in accordance with GAAP due to unknown variables and the uncertainty related to future results. These unknown variables may be inherently difficult to determine without unreasonable efforts. Guidance for normalized EBITDA and segment normalized EBITDA are calculated in the same manner as described above for historical normalized EBITDA and segment normalized EBITDA, as applicable. The following table reconciles income (loss) before income taxes to normalized EBITDA for the indicated periods: The following tables reconcile income (loss) before income taxes to normalized EBITDA by operating segment for the indicated periods: Normalized net income and normalized net income per share Normalized net income represents net income adjusted for the normalizing items described above under the heading "Normalizing items" and is used by Management to assess the earnings that it believes are representative of South Bow's operations. By adjusting for non-recurring items and other factors that do not reflect the Company's ongoing performance, normalized net income provides a clearer picture of the Company's continuing operations. This measure is particularly useful for investors as it allows for a more accurate comparison of financial performance and trends across different periods. On a per-share basis, normalized net income is derived by dividing the normalized net income by the weighted average diluted common shares outstanding at the end of the period. Management believes this per-share measure is valuable for investors as it provides insight into South Bow's profitability on a per-share basis, assisting in evaluating the Company's performance. The following table reconciles net income to normalized net income for the indicated periods: Distributable cash flow Distributable cash flow is used to assess the cash generated through business operations that can be used for South Bow's capital allocation decisions, helping investors understand the Company's cash-generating capabilities and its potential for returning value to shareholders. Distributable cash flow is based on income (loss) before income taxes, adjusted for depreciation and amortization, the normalizing items described above under the heading "Normalizing items", and further adjusted for specific items, including income and distributions from the Company's equity investments, maintenance capital expenditures, which are capitalized and generally recoverable through South Bow's tolling arrangements, and current income taxes. Distributable cash flow guidance is a forward-looking non-GAAP financial measure. South Bow does not provide a reconciliation of such forward-looking measure to the most directly comparable financial measure calculated and presented in accordance with GAAP due to unknown variables and the uncertainty related to future results. These unknown variables may be inherently difficult to determine without unreasonable efforts. Guidance for distributable cash flow is calculated in the same manner as described above for historical distributable cash flow, as applicable. In the second quarter of 2025, South Bow modified the definition of distributable cash flow to no longer adjust income (loss) before income taxes for interest income and other. Management believes that this modified definition of distributable cash flow more accurately reflects the amount of cash generated through business operations that can be used for South Bow's capital allocation decisions. Comparative measures have been restated to reflect these changes. The following table reconciles income (loss) before income taxes to distributable cash flow for the indicated periods: Supplementary financial measure. See "Specified Financial Measures" in the Q2 2026 MD&A, certain information from which is incorporated by reference into this news release. Maintenance capital expenditures are generally recoverable through South Bow's tolling arrangements. Refers to the adjustments made to normalized net income, net of tax, and includes other income, risk management instruments, Keystone variable toll disputes, separation costs, business development projects, tariff charges, and Keystone XL costs and other. Net debt and net debt-to-normalized EBITDA ratio Net debt is used as a key leverage measure to assess and monitor South Bow's financing structure, providing an overview of the Company's long-term debt obligations, net of cash and cash equivalents. Management believes this measure is useful for investors as it offers insights into the Company's financial health and its ability to manage and service its debt obligations. Net debt is defined as the sum of total long-term debt with 50% equity treatment of the Company's junior subordinated notes, operating lease liabilities, and dividends payable, less cash and cash equivalents. Net debt-to-normalized EBITDA ratio is used to monitor South Bow's leverage position relative to its normalized EBITDA for the trailing four quarters. This ratio provides investors with insight into the Company's ability to service its long-term debt obligations relative to its operational performance. A lower ratio indicates stronger financial health and greater capacity to meet its debt obligations. The following table reconciles total long-term debt to net debt as at the dates indicated: Includes 50% equity treatment of South Bow's junior subordinated notes. Calculated as the normalized EBITDA for the trailing four quarters from the applicable period end. Supplementary financial measures The information under the heading "Supplementary Financial Measures" in South Bow's Q2 2026 MD&A is incorporated by reference into this news release. The Q2 2026 MD&A is available on South Bow's website at www.southbow.com, under South Bow's SEDAR+ profile at www.sedarplus.ca, and in South Bow's filings with the SEC at www.sec.gov. Forward-looking information and statements This news release contains certain forward-looking statements and forward-looking information (collectively, forward-looking statements), including forward-looking statements within the meaning of the "safe harbor" provisions of applicable securities legislation, that are based on South Bow's current expectations, estimates, projections, and assumptions in light of its experience and its perception of historical trends. All statements other than statements of historical facts may constitute forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as, "anticipate", "will", "expect", "estimate", "potential", "future", "outlook", "strategy", "maintain", "ongoing", "intend", and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements, including certain financial outlooks, pertaining to, without limitation, the following: expectations regarding the remedial actions of the MP-171 incident, including the continued incorporation of findings into the Company's ongoing integrity management programs; expected dividends and the designation thereof; the Company's continued advancement of its growth strategy and its focuses; expectations regarding the advancement of the Prairie Connector project, including continued focus on obtaining regulatory certainty, anticipated timing of a FID, and the Company's share of estimated total pre-FID development costs in 2026; expected pipelines and facilities associated with the Prairie Connector project; the Company's continued evaluation of select inorganic growth opportunities that would strengthen the competitiveness of its base business and provide portfolio diversification; expectations regarding the advancement of the Liberty Bridge Pipeline project; expected pipelines and facilities associated with the Liberty Bridge Pipeline project; that South Bow's strategically positioned infrastructure continues to play an important role in connecting growing Western Canadian crude oil supply to key refining and export markets; South Bow's updated financial guidance for 2026 and beyond, including 2026 normalized EBITDA and third-quarter 2026 normalized EBITDA, 2026 financial charges, 2026 effective tax rate, 2026 distributable cash flow, 2026 growth and maintenance capital expenditures, 2026 net debt-to-normalized EBITDA ratio, and the Company's share of the total amount of pre-FID development costs anticipated to be incurred in 2026; that WCSB crude oil supply will grow modestly through 2026 and expectations regarding uncommitted capacity on the Keystone Pipeline as a result thereof; expectations regarding demand for capacity on the U.S. Gulf Coast segment of the Keystone Pipeline System; South Bow's expectation that its net debt-to-normalized EBITDA ratio will decline modestly through 2026; that South Bow's maintenance capital expenditures in 2026 will generally be recoverable through its tolling arrangements; South Bow's corporate vision and strategy, including its strategic and capital allocation priorities, its satisfaction thereof, and outlook; and South Bow's financial strength and flexibility. The forward-looking statements are based on certain assumptions that South Bow has made in respect thereof as of the date of this news release regarding, among other things: oil and gas industry development activity levels and the geographic region of such activity; WCSB crude oil supply; that favourable market conditions exist and that South Bow has and will have available capital to fund its capital expenditures and other planned spending; prevailing commodity prices, interest rates, inflation levels, carbon prices, tax rates, and exchange rates; the ability of South Bow to maintain current credit ratings; the availability of capital to fund future capital requirements; future operating costs; asset integrity costs; that all required regulatory and environmental approvals can be obtained on the necessary terms in a timely manner; the timely and effective implementation of the plan to remediate the material weakness in the Company's internal controls; and prevailing regulatory, tax, and environmental laws and regulations. Although South Bow believes the assumptions and other factors reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these assumptions and factors will prove to be correct and, as such, forward-looking statements are not guarantees of future performance. Forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual events or results to differ materially, including, but not limited to: the regulatory environment and related decisions and requirements; the impact of competitive entities and pricing; reliance on third parties to successfully operate and maintain certain assets; the strength and operations of the energy industry; weakness or volatility in commodity prices; non-performance or default by counterparties; actions taken by governmental or regulatory authorities; the impacts of ongoing geopolitical events; the ability of South Bow to acquire or develop and maintain necessary infrastructure; fluctuations in operating results; adverse general economic and market conditions; the ability to access various sources of debt and equity capital on acceptable terms; the remediation of the material weakness in the Company's internal controls and the timing thereof; the identification of additional material weaknesses or deficiencies in the Company's internal controls; and adverse changes in credit. The foregoing list of assumptions and risk factors should not be construed as exhaustive. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the results implied by forward-looking statements, refer to South Bow's annual information form for the year ended Dec. 31, 2025, available under South Bow's SEDAR+ profile at www.sedarplus.ca and, from time to time, in South Bow's public disclosure documents, available on South Bow's website at www.southbow.com, under South Bow's SEDAR+ profile at www.sedarplus.ca, and in South Bow's filings with the SEC at www.sec.gov. The forward-looking information in this news release also includes financial outlooks and other related forward-looking information. Management approved the financial outlooks contained in this news release, including 2026 normalized EBITDA and segment normalized EBITDA, third-quarter 2026 normalized EBITDA, 2026 financial charges, 2026 effective tax rate, 2026 distributable cash flow, 2026 growth and maintenance capital expenditures, 2026 net debt-to-normalized EBITDA ratio, and the Company's share of the total amount of pre-FID development costs anticipated to be incurred in 2026, as of the date of this news release. This financial outlook information is based on, among other things, the various assumptions disclosed in this news release, including those under "Forward-looking information and statements" as of the date hereof. The internal projections, expectations, or beliefs are based on the 2026 budget, which is subject to change in light of ongoing results, prevailing economic conditions, commodity prices, and industry conditions and regulations. The purpose of these financial outlooks is to inform readers about Management's expectations for the Company's financial and operational results in 2026, and such information may not be appropriate for other purposes. South Bow's future shareholder distributions, including but not limited to the payment of dividends, if any, and the level thereof, is uncertain. Any decision to pay dividends on South Bow's shares (including the actual amount, the declaration date, the record date, and the payment date in connection therewith and any special dividends) will be subject to the discretion of the Board and may depend on a variety of factors, including, without limitation, South Bow's business performance, financial condition, financial requirements, growth plans, expected capital requirements, and other conditions existing at such future time, including, without limitation, contractual restrictions and satisfaction of the solvency tests imposed on South Bow under applicable corporate law. Further, the actual amount, the declaration date, the record date, and the payment date of any dividend are subject to the discretion of the Board. There can be no assurance that South Bow will pay dividends in the future. The forward-looking statements contained in this news release speak only as of the date hereof. South Bow does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. All forward-looking statements contained in this news release are expressly qualified by this cautionary statement. About South Bow South Bow safely operates 4,900 kilometres (3,045 miles) of crude oil pipeline infrastructure, connecting Alberta crude oil supplies to U.S. refining markets in Illinois, Oklahoma, and the U.S. Gulf Coast through our unrivalled market position. We take pride in what we do—providing safe and reliable transportation of crude oil to North America's highest demand markets. As an investment-grade entity based in Calgary, Alberta, South Bow's common shares trade on the Toronto Stock Exchange and the New York Stock Exchange under the symbol SOBO. To learn more, visit www.southbow.com.

Williams Companies, Inc. (The) (WMB) came out with quarterly earnings of $0.5 per share, missing the Zacks Consensus Estimate of $0.52 per share. This compares to earnings of $0.46 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -3.85%. A quarter ago, it was expected that this pipeline operator would post earnings of $0.65 per share when it actually produced earnings of $0.73, delivering a surprise of +12.31%. Over the last four quarters, the company has surpassed consensus EPS estimates just once. The Williams Companies, which belongs to the Zacks Oil and Gas - Production and Pipelines industry, posted revenues of $3.05 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1%. This compares to year-ago revenues of $2.78 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. The Williams Companies shares have added about 19% since the beginning of the year versus the S&P 500's gain of 9.4%. While The Williams Companies has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for The Williams Companies was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.56 on $3.19 billion in revenues for the coming quarter and $2.35 on $12.82 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Oil and Gas - Production and Pipelines is currently in the bottom 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. South Bow Corporation (SOBO), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This company is expected to post quarterly earnings of $0.45 per share in its upcoming report, which represents a year-over-year change of +7.1%. The consensus EPS estimate for the quarter has been revised 0.6% lower over the last 30 days to the current level. South Bow Corporation's revenues are expected to be $516.13 million, down 1.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report South Bow Corporation (SOBO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The market expects South Bow Corporation (SOBO) to deliver a year-over-year increase in earnings on lower revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 5. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This company is expected to post quarterly earnings of $0.44 per share in its upcoming report, which represents a year-over-year change of +4.8%. Revenues are expected to be $516.13 million, down 1.5% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.56% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that an aggregate change may not always reflect the direction of estimate revisions by each of the covering analysts. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction). The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For South Bow Corporation, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +3.41%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that South Bow Corporation will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that South Bow Corporation would post earnings of $0.46 per share when it actually produced earnings of $0.44, delivering a surprise of -4.35%. Over the last four quarters, the company has beaten consensus EPS estimates three times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. South Bow Corporation appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Oil and Gas - Production and Pipelines industry, Williams Companies, Inc. (The) (WMB), is soon expected to post earnings of $0.52 per share for the quarter ended June 2026. This estimate indicates a year-over-year change of +13%. Revenues for the quarter are expected to be $3.08 billion, up 10.9% from the year-ago quarter. The consensus EPS estimate for The Williams Companies has been revised 0.4% lower over the last 30 days to the current level. However, a higher Most Accurate Estimate has resulted in an Earnings ESP of +7.95%. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP indicates that The Williams Companies will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed EPS estimates just once. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report South Bow Corporation (SOBO) : Free Stock Analysis Report Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research