South Bow Corp

Scaled crude-oil pipeline operator (Keystone) with very high margins and strong liquidity, slightly clipped by a revenue dip and ICFR weakness.

Strengths

• Gross margin 84% (92nd pct) and OCF margin 36% (75th pct) on a toll-based pipeline franchise
• Strong liquidity: current ratio 1.5 (87.5th pct), quick ratio top of sector, $549M cash

Risks

• Revenue declined 6.3% (37th pct)
• Disclosed material weakness in internal control over financial reporting

Notable findings

• Material weaknessCHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING Other than with respect to the material weakness and remediation efforts described in the MD&A and incorporated herein by reference, the prepara
• Strong balance sheetStrong balance sheet — $549M cash & investments