What it is: A midstream energy business, paid to move and store hydrocarbons under contract.
What moves the needle: Gross margin has run about 82% and operating margin about 51% through the cycle, a wide spread between price and the cost of what it sells — whether that advantage is durable pricing power or a margin that can erode is the question the record is for. That margin has stayed fairly steady relative to where it runs (42%–54% over the years), so unit growth and cost discipline, not a moving line, are the lever. Read this kind of business on throughput and the contracts behind it. On its own account, the filing leans hardest on cyclicality & demand, set against the numbers in what the filing emphasizes, below.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 20-F →

Capacity arrangements and transportation is 82% of revenue, with Marketing activities the other meaningful line at 20%.

Revenue by product line, FY2025

Capacity arrangements and transportation82%$1.6B
Marketing activities20%$403M
Other6%$118M
Other-9%($169M)

By geographyUnited States79%Canada Export20%Canada Domestic1%

From the segment footnote of the company's own 20-F. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2023–2025

realized figures from each filing · older years to the left

2023’23	2024’24	2025’25	TTMTTMDec 2025
				Income statement
$2.0B	$2.1B	$2.0B	$2.0B	RevenueRevenue
82%	82%	84%	84%	Gross marginGross mgn
$1.1B	$1.1B	$828M	$1.1B	Operating incomeOp. inc.
53.6%	51.5%	41.7%	54.9%	Operating marginOp. mgn
$442M	$316M	$433M	$433M	Net incomeNet inc.
21%	24%	13%	13%	Effective tax rateTax rate
				Cash flow & returns
$779M	$529M	$717M	$717M	Operating cash flowOp. cash
$244M	$246M	$247M	$247M	DepreciationDeprec.
$93M	($33M)	$37M	$37M	Working capital & otherWC & other
$47M	$141M	$178M	$141M	CapexCapex
2.3%	6.7%	9.0%	7.1%	Capex / revenueCapex/rev
$732M	$388M	$539M	$576M	Owner earningsOwner earn.
36.5%	18.3%	27.1%	29.0%	Owner earnings marginOE mgn
$732M	$388M	$539M	$576M	Free cash flowFCF
36.5%	18.3%	27.1%	29.0%	Free cash flow marginFCF mgn
—	$0	$416M	$416M	Dividends paidDiv. paid
				Balance sheet
$262M	$397M	$549M	$549M	Cash & investmentsCash+inv
$1.3B	$1.2B	$1.1B	$1.1B	ReceivablesReceiv.
$160M	$207M	$100M	$100M	InventoryInvent.
$1.5B	$1.4B	$1.2B	$1.2B	Operating working capitalOper. WC
$2.6B	$2.2B	$2.0B	$2.0B	Current assetsCur. assets
$2.1B	$1.8B	$1.3B	$1.3B	Current liabilitiesCur. liab.
1.3×	1.2×	1.5×	1.5×	Current ratioCurr. ratio
$12.0B	$11.3B	$11.2B	$11.2B	Total assetsAssets
4.9×	2.8×	2.5×	3.3×	Interest coverageInt. cov.
				Per share
208M	208M	209M	208M	Shares out (diluted)Shares
$9.66	$10.18	$9.51	$9.55	Revenue / shareRev/sh
$2.13	$1.52	$2.07	$2.08	EPS (diluted)EPS
$3.53	$1.86	$2.58	$2.77	Owner earnings / shareOE/sh
$3.53	$1.86	$2.58	$2.77	Free cash flow / shareFCF/sh
—	$0.00	$1.99	$2.00	Dividends / shareDiv/sh
$0.23	$0.68	$0.85	$0.68	Cap. spending / shareCapex/sh

The record, charted

FY2023–2025

Each measure over its full record; the current point and the worst year marked.

Share count

209Mpeak FY2025

Gross margin

84%low FY2024

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$539Mowner earningsvs.$433Mnet incomelow FY2024

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2023FY2025

Owner-earnings bridge

FY2023–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business turned $433M of profit into $539M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.

Reported net income$433M

Owner earnings$539M · 27% of revenue

	FY2025	FY2024	FY2023
Reported net income	$433M	$316M	$442M
Depreciation & amortizationnon-cash charge added back	+$247M	+$246M	+$244M
Working capital & othertiming of cash in and out, other non-cash items	+$37M	−$33M	+$93M
Cash from operations	$717M	$529M	$779M
Capital expenditurecash put back in to keep running and to grow	−$178M	−$141M	−$47M
Owner earnings	$539M	$388M	$732M
Owner-earnings marginowner earnings ÷ revenue	27%	18%	37%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 40-F · source on SEC EDGAR →

Material weakness in financial controls

“Management identified a material weakness related to the design and operating effectiveness of certain general IT controls that are relevant to the preparation of the Company's consolidated financial statements.”

The figures below are only as sound as the controls that produced them. read the note →

Will it survive?

Can it pay its interest? 3.3×

Adequate

Operating income $1.1B ÷ interest expense $331M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? —

Debt under-captured — leverage unknown, not low

What this means
This company pays far more interest than its tagged debt implies (the rest sits under segment dimensions the data source strips), so its net cash or net debt cannot be read honestly: the gap is unknown, not zero, and 'net cash' here would be exactly the fiction the figure is meant to prevent. Judge it on the record and owner earnings instead.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital —

Debt under-captured

What this means
This company's interest bill implies far more debt than its filings tag at the consolidated level (the rest sits under segment dimensions the data source strips), so invested capital, and the return on it, cannot be read honestly. Judge this one on Owner Earnings and the record instead.
Owner-earnings margin 27%

High through the cycle

3-yr median margin, range 18%–37%; latest $576M = operating cash $717M − maintenance capex $141M

Industry peers: median 5%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 29% of revenue this year, a 27% median across 3 years.
Are earnings backed by cash? 1.66×

Cash-backed

Cash from ops $717M ÷ net income $433M

In the filing’s words The filing discloses a material weakness in its financial controls — the reported numbers here, and the record built on them, are only as reliable as the controls that produced them.

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 72%

Returns about half

Dividends + buybacks $416M ÷ Owner Earnings $576M

What this means
Of $576M Owner Earnings, $416M (72%) went back to shareholders, $416M dividends, $0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 0.57×

Harvesting

Capex $141M ÷ depreciation $247M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 0 of 2 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $2.0B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Near

Current ratio ≥ 2× · 1.50×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt —

Debt ≤ working capital · —

What this means
The filings tag only a fraction of the debt this company's interest bill implies (much of it sits under segment dimensions the data source strips), so this test can't be run honestly.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $1.91/share (latest year $2.08), the averaged base the calculator's gate runs on. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of fiscal year-end, Dec 31, 2025

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$2.0B

Cash & short-term investments$549M
Receivables$1.1B
Inventory$100M
Other current assets$259M

Current liabilities$1.3B

Other current liabilities$1.3B

Current ratio1.50×all current assets ÷ what's due · Graham looked for 2×

Quick ratio1.43×stricter: inventory excluded

Cash ratio0.41×strictest: cash alone against what's due

Working capital$674Mthe cushion left after near-term bills

Deeper floors

Net current asset value($6.5B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$3M$3M of it operating leases

Deferred revenue$16Mcustomer cash collected before delivery; operating float

From the company's latest filing.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Income taxes as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Pipelines & Midstream

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
PAAPlains All American Pipeline L.P. Common	$44.3B	10%	2.9%	—	5%
PAGPPlains GP Holdings L.P. Class A	$44.3B	10%	2.9%	—	5%
DINOHF Sinclair	$26.9B	19%	3.8%	7%	3%
MPLXMPLX LP Common	$9.7B	—	40.3%	18%	47%
SOBOSouth Bow Corporation	$2.0B	82%	51.5%	—	27%
GELGenesis Energy	$1.6B	—	10.9%	—	3%
DKLDelek Logistics Partners L.P. Common	$1.0B	25%	20.9%	—	17%
Group median	—	19%	10.9%	—	5%

The price

What a price has to assume.

What the price implies

reverse-DCF

Enter the US price, in dollars: the NYSE/Nasdaq quote you hold. South Bow Corporation's US listing is the ordinary share itself. The record tables elsewhere on this page remain as filed.

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what South Bow Corporation has delivered.

Today’s price $

Base Normalize · through-cycle ($553M) Net of stock comp

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · since FY2023−14%/yr

Owner-earnings yield—

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Owner earnings $576M on 208M shares outstanding, per the 40-F cover, as of 2025-12-31; net cash $549M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh SOBO against another business →

Cite: Owner Scorecard, "South Bow Corporation (SOBO), the owner's record," https://ownerscorecard.com/c/SOBO, data as of 2026-07-09.

Manual order: ← SNY its page in the Manual SOGP →

Industry order: ← SMC the Pipelines & Midstream chapter TGS →