South Bow Corp

Basis of Presentation

The following management's discussion and analysis (“MD&A”) was prepared as of March 5, 2025 and is a review of the results of operations and the liquidity and capital resources of South Bow Corporation and its subsidiaries (collectively, “South Bow” or the “Company”). The MD&A should be read in conjunction with the accompanying annual audited consolidated financial statements and notes thereto (“accompanying financial statements”) of South Bow as at and for the year ended December 31, 2024, as well as South Bow’s annual information form for the year ended December 31, 2024 (“AIF”), each of which are available on South Bow’s website atwww.southbow.com, under South Bow’s electronic profile on SEDAR+ atwww.sedarplus.ca, and with the U.S. Securities and Exchange Commission (“SEC”) atwww.sec.gov.

Effective October 1, 2024, South Bow completed its spinoff (referred to as the “Spinoff”) from TC Energy Corporation (“TC Energy” or “Former Parent”) and began operating as an independent publicly traded entity. South Bow's common shares commenced regular-way trading on the Toronto Stock Exchange ("TSX") on October 2, 2024 and on the New York Stock Exchange ("NYSE") on October 8, 2024, in each case under the ticker symbol "SOBO". The Spinoff was executed under various agreements outlining the governance of the Company's relationship with the Former Parent during the transition period, including, but not limited to, the Separation Agreement, the Transition Services Agreement ("TSA"), the Tax Matters Agreement ("TMA"), and the Employee Matters Agreement. Refer to Note 2, Basis of Presentation and Accounting Policies of South Bow’s accompanying financial statements for more information.

Prior to October 1, 2024, South Bow's financial statements were prepared using information derived from the consolidated financial statements and accounting records of TC Energy, including the historical cost basis of assets and liabilities comprising the Company, as well as the historical revenues, direct costs, and allocations of indirect costs attributable to the operations of the Company, using the historical accounting policies applied by TC Energy. The presentation of certain prior period comparatives have been updated for consistency with current year presentation.

South Bow has designated the United States dollar (“USD” or “U.S.$”) as its reporting currency to reflect its primary earnings currency. Comparative figures from periods prior to completing the Spinoff were previously reported in Canadian dollars (“CAD” or “C$”) under the Former Parent and have been retrospectively translated to USD using the applicable exchange rates at the respective dates. Refer to Note 3, Accounting Policy Changes of South Bow’s accompanying financial statements for more information. Unless otherwise noted, all figures throughout this MD&A are in USD.

This MD&A contains non-GAAP financial measures and forward-looking statements. Readers are cautioned that the MD&A should be read in conjunction with South Bow’s disclosure under Non-GAAP Financial Measures and Forward-looking Information included in this MD&A. Refer to Glossary in this MD&A for abbreviations commonly used.