South Bow Corp
For the period ended Dec 31, 2025. Filed Mar 16, 2026.
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The yearly report of certain Canadian companies, filed under a joint US and Canadian system. It is the main yearly account these companies give US investors, largely as filed in Canada.
FY2025 · Filed Mar 16, 2026
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Contents
EX-99.3 · Normalized EBITDA and Segment Normalized EBITDA
Normalized EBITDA and Segment Normalized EBITDA
Normalized EBITDA is a measure indicative of core operations. Management uses this measure to monitor and evaluate the financial performance of the Company's operations and to identify and evaluate trends. This measure is useful for investors as Management believes it allows for more comparable performance of the Company across periods for ongoing operations. Normalized EBITDA represents income before income taxes adjusted for the normalizing items, in addition to excluding charges for depreciation and amortization, interest expense, interest income and other, and other income.
Normalized EBITDA 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 normalized EBITDA is calculated in the same manner as described above for historical normalized EBITDA, as applicable.
The following table reconciles income (loss) before income taxes to normalized EBITDA for the three months and year ended December 31, 2025 and 2024:
| Three Months Ended December 31, | Year Ended December 31, | |||
|---|---|---|---|---|
| U.S.$ millions | 2025 | 2024 | 2025 | 2024 |
| Income before income taxes 1 | 153 | 72 | 497 | 418 |
| Adjusted for specific items: | ||||
| Depreciation and amortization 1 | 58 | 62 | 247 | 246 |
| Interest expense 1 | 83 | 84 | 331 | 388 |
| Interest income and other 1 | (18) | 28 | (41) | (12) |
| Other income 1 | — | — | (20) | — |
| Risk management instruments 2 | (11) | 57 | (36) | 8 |
| Keystone variable toll disputes 3 | 5 | (3) | 48 | 8 |
| MP-14 costs | — | 4 | — | 4 |
| Separation costs 4 | 1 | (1) | 9 | 29 |
| Tariff charges 5 | — | — | 1 | — |
| Keystone XL costs and other 6 | (19) | (13) | (14) | 2 |
| Normalized EBITDA | 252 | 290 | 1,022 | 1,091 |
Per the consolidated statements of income.
Unrealized (gains) losses on risk management instruments incurred by the Marketing segment.
Adjustments recorded to revenue in the consolidated statements of income in relation to disputes on historical variable tolls. Refer to the Recent Developments section of this MD&A for additional details.
Expenses recorded within plant operating costs and other in the consolidated statements of income in relation to non-recurring separation-related activities incurred to establish South Bow as an independent company.
Tariff charges incurred on the Company’s Marketing activities recorded within plant operating costs and other in the consolidated statements of income.
Adjustments and charges recorded in other expenses in the consolidated statements of income relating to Keystone XL termination activities.
The following tables reconcile income (loss) before income tax to normalized EBITDA by operating segment for the three months and year ended December 31, 2025 and 2024:
| Three Months Ended December 31, 2025 | ||||
|---|---|---|---|---|
| U.S.$ millions | Keystone Pipeline System | Marketing | Intra-Alberta & Other | Total |
| Income (loss) before income taxes | 211 | 3 | (61) | 153 |
| Adjusted for specific items: | ||||
| Depreciation and amortization | 58 | — | — | 58 |
| Interest expense | (1) | — | 84 | 83 |
| Interest income and other | (13) | — | (5) | (18) |
| Other income | — | — | — | — |
| Risk management instruments | — | (11) | — | (11) |
| Keystone variable toll disputes | 5 | — | — | 5 |
| Separation costs | — | — | 1 | 1 |
| Keystone XL costs and other | (19) | — | — | (19) |
| Segment Normalized EBITDA | 241 | (8) | 19 | 252 |
| Three Months Ended December 31, 2024 | ||||
|---|---|---|---|---|
| U.S.$ millions | Keystone Pipeline System | Marketing | Intra-Alberta & Other | Total |
| Income (loss) before income taxes | 205 | (32) | (101) | 72 |
| Adjusted for specific items: | ||||
| Depreciation and amortization | 59 | — | 3 | 62 |
| Interest expense | (1) | — | 85 | 84 |
| Interest income and other | (1) | (1) | 30 | 28 |
| Other income | — | — | — | — |
| Risk management instruments | — | 57 | — | 57 |
| Keystone variable toll disputes | (3) | — | — | (3) |
| MP-14 Costs | 4 | — | — | 4 |
| Separation costs | — | — | (1) | (1) |
| Keystone XL costs and other | (13) | — | — | (13) |
| Segment Normalized EBITDA | 250 | 24 | 16 | 290 |
| Year Ended December 31, 2025 | ||||
|---|---|---|---|---|
| U.S.$ millions | Keystone Pipeline System | Marketing | Intra-Alberta & Other | Total |
| Income (loss) before income taxes | 741 | 27 | (271) | 497 |
| Adjusted for specific items: | ||||
| Depreciation and amortization | 236 | — | 11 | 247 |
| Interest expense | — | — | 331 | 331 |
| Interest income and other | (21) | (2) | (18) | (41) |
| Other income | (20) | — | — | (20) |
| Risk management instruments | — | (36) | — | (36) |
| Keystone variable toll disputes | 48 | — | — | 48 |
| Separation costs | — | — | 9 | 9 |
| Tariff charges | — | 1 | — | 1 |
| Keystone XL costs and other | (14) | — | — | (14) |
| Segment Normalized EBITDA | 970 | (10) | 62 | 1,022 |
| Year Ended December 31, 2024 | ||||
|---|---|---|---|---|
| U.S.$ millions | Keystone Pipeline System | Marketing | Intra-Alberta & Other | Total |
| Income (loss) before income taxes | 778 | 6 | (366) | 418 |
| Adjusted for specific items: | ||||
| Depreciation and amortization | 238 | — | 8 | 246 |
| Interest expense | 1 | 1 | 386 | 388 |
| Interest income and other | (3) | (3) | (6) | (12) |
| Risk management instruments | — | 8 | — | 8 |
| Keystone variable toll disputes | 8 | — | — | 8 |
| MP-14 costs | 4 | — | — | 4 |
| Separation costs | — | — | 29 | 29 |
| Keystone XL costs and other | 2 | — | — | 2 |
| Segment Normalized EBITDA | 1,028 | 12 | 51 | 1,091 |
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