Mr. Francois Poirier reports

TC ENERGY REPORTS SOLID SECOND QUARTER 2023 RESULTS, WHILE SIGNIFICANTLY ADVANCING COASTAL GASLINK AND SOUTHEAST GATEWAY PROJECTS TO PLANNED COST AND SCHEDULE

TC Energy Corp. has released its second quarter results. Francois Poirier, TC Energy's president and chief executive officer, commented: "Today's announcement to separate our natural gas pipelines and power and energy solutions businesses from our liquids pipelines business will maximize the value of our assets. The separated industry-leading companies will have greater strategic focus to execute major projects, drive efficiencies and operational excellence, and enhanced flexibility to pursue disciplined growth." Mr. Poirier continued: "In addition, we have made significant progress on our 2023 strategic priorities. First, we continue to safely execute our secured capital program, including Coastal GasLink and Southeast Gateway, which remain on planned cost and schedule. Second, we have significantly accelerated our deleveraging goal ahead of our year-end target with the sale of a 40-per-cent equity interest in the Columbia Gulf and Columbia Gas systems for total cash proceeds of $5.2-billion. And third, we are safely and reliably operating our assets that provide essential services across North America, which is a testament to the dedication and hard work of our people."

Highlights:

• Strong performance during the first six months of 2023 delivered 10-per-cent comparable EBITDA (earnings before interest, taxes, depreciation and amortization) growth and 11-per-cent segmented earnings growth year-over-year.
• Second quarter 2023 results were underpinned by solid utilization and reliability across TC's assets:
  • Total NGTL system receipts were 13.5 Bcf/d (billion cubic feet), up 0.1 Bcf/d from second quarter 2022;
  • NGTL system achieved record single-day receipts of 14.6 Bcf on April 21, 2023;
  • U.S. natural gas pipelines flows averaged 25.4 Bcf/d, consistent with second quarter 2022;
  • Achieved record LNG (liquefied natural gas) feedgas deliveries of 3.8 Bcf on April 21, 2023;
  • Keystone pipeline system operational reliability of 94.6 per cent, ensuring the continued delivery of all contracted volumes;
  • Marketlink throughput increased over 150,000 barrels/day year-over-year;
  • Bruce Power achieved 94-per-cent availability while successfully completing a planned outage on unit 4 on time and within budget;
  • Strong cogeneration fleet performance with 93-per-cent availability.
• Second quarter 2023 financial results:
  • Net income attributable to common shares of $300-million or 24 cents per common share compared with $900-million or 90 cents per common share in second quarter 2022. Comparable earnings of $1-billion or 96 cents per common share compared with $1-billion or $1 per common share in 2022;
  • Segmented earnings of $1-billion compared with $1.7-billion in 2022 and comparable EBITDA of $2.5-billion compared with $2.4-billion in 2022.
• TC Energy's board of directors approved plans to spin off the liquids pipelines business and separate into two industry-leading, investment-grade companies. The separation is expected to be achieved on a tax-free basis to TC Energy shareholders, anticipated to be complete in the second half of 2024.
• Announced the sale of a 40-per-cent equity interest in Columbia Gas Transmission LLC and Columbia Gulf Transmission LLC to Global Infrastructure Partners (GIP) for proceeds of $5.2-billion. Closing of the transaction is anticipated during fourth quarter 2023, subject to customary closing conditions.
• Following the partial sale of a 40-per-cent equity interest in Columbia Gas and Columbia Gulf, TC continues to expect 2023 comparable EBITDA to be 5 to 7 per cent higher than 2022; however, comparable earnings per common share for 2023 is now expected to be generally consistent with 2022.
• Placed approximately $2.1-billion of natural gas and liquids capacity capital projects in service during the first six months of 2023, progressing to the company's expected $6-billion of assets placed into service in 2023.
• The Coastal GasLink project is approximately 91 per cent complete over all and continues to track cost and schedule with mechanical completion expected by year-end.
  • As previously communicated, based on the expectation that additional equity contributions will predominantly be financed by TC Energy, there is a pretax impairment charge of the full value of the company's investment in Coastal GasLink LP of $843-million ($809-million after tax) in second quarter 2023.
• Southeast Gateway pipeline project progressing according to planned milestones; commenced onshore pipe installation and facilities construction this summer and expects offshore pipe installation to begin by year-end.
• Placed North Baja XPress into service.
• Filed uncontested Columbia Gulf rate settlement on July 7, 2023.
• Government of Ontario announced the proposed Ontario pumped storage project moving to final evaluation from the Minister of Energy with a decision expected by the end of the year, subject to board approval.
• Finalized contracts to sell 50 megawatts under TC Energy's 24-by-seven carbon-free power offering in Alberta. Contract terms range from 15 to 20 years and are expected to commence in 2025.
• Declared a quarterly dividend of 93 cents per common share for the quarter ending Sept. 30, 2023.
• Dividend reinvestment and share purchase plan (DRP) participation rate amongst common shareholders was approximately 39 per cent, resulting in $374-million to be reinvested in common equity from the dividends declared on April 27, 2023.
• Subsequent to the dividends declared for the quarter ended June 30, 2023, which are being paid on July 31, 2023, TC Energy has discontinued the discounted DRP as outlined in its 2022 annual report.

2023 report on sustainability highlights progress across the business:

• Reduced absolute methane emissions by 14 per cent between 2019 and 2022, while increasing natural gas throughput 11 per cent and natural gas comparable EBITDA 20 per cent.
• Increased weighting of environmental, social and governance (ESG) from 25 per cent in 2022 to 30 per cent in 2023 corporate scorecard.
• Greater transparency with report on sustainability and ESG data sheet combined and published earlier in year, and publication of new methane emissions disclosure report and climate-related lobbying report.
• Advanced safety culture with third party safety assessment results being applied in 2023.
• Became a pilot member for the Task Force on Nature-based Financial Disclosures Commitment to supporting human rights in TC's code of business ethics policy and through the adoption of UN Global Compact principles into strategy, culture and day-to-day activities.

CEO message

"Delivering on TC's 2023 priorities

"We remain laser focused on our 2023 priorities and have achieved significant milestones during the first half of the year. We continue to safely execute major projects like Coastal GasLink and Southeast Gateway that continue to track cost and schedule. We have accelerated our deleveraging by advancing our $5-billion-plus asset divestiture program, and we continue to maximize the value and performance of our assets through safe operations and reliability of service. In late 2022, we initiated our Focus project, which is fundamentally about rethinking the way we do our work. We have recently completed our wave 1 initiative design and identified $750-million of annual run-rate opportunities to be realized by end of 2025, with approximately $150-million of that complete this year. These opportunities are predominantly in the form of capital reductions and other efficiencies, which primarily will flow back to our customers and enhance the competitiveness of our services, and are included in our $6-billion to $7-billion net capital expenditure outlook. Our wave 2 analysis, which recently commenced, indicates the potential for an additional $250-million of opportunities that in part represent an upside to our plan, and will be partially flowed back to our customers consistent with regulatory and commercial agreements.

"In conjunction with the spinoff of our liquids business and the combining of our highly integrated North American natural gas pipelines business into a single, unified business, our Focus project will enable us to unlock synergies to create value for our customers and our shareholders. As a result, Stanley (Stan) G. Chapman, III has been promoted to executive vice-president and chief operating officer, natural gas pipelines. His deep industry experience across North America will drive further integration and strengthen our business model through alignment and simplification, leading to safety, operational, commercial and project execution excellence.

"Unlocking shareholder value through the creation of two premium energy infrastructure companies

"On July 27, 2023, we announced our board of directors has approved plans to spin off our liquids pipelines business that follows a comprehensive two-year review to unlock incremental shareholder value. The separation of our natural gas pipelines and power and energy solutions businesses from our liquids pipelines business will maximize the value of our assets. Led by dedicated and highly experienced teams, both companies can pursue growth through disciplined capital allocation and a continued commitment to finding efficiencies and operational excellence.

• "TC Energy will focus on natural gas, driven by strong long-term fundamentals and power and energy solutions, driven by nuclear, pumped hydroenergy storage and new energy opportunities.
• The liquids pipelines company will focus on enhancing the value of our asset base by increasing capacity on underutilized portions of the system and increasing connectivity between critical Canadian supply and the largest, most resilient demand markets."

"Leading the spinoff entity, Bevin Wirzba, our executive vice-president and group executive, Canadian natural gas pipelines and liquids pipelines, and president, Coastal GasLink, will assume the role of president and CEO of the new liquids pipelines company. His expertise and leadership capabilities will capture the opportunities ahead as this world-class company provides critical infrastructure, with an unrivalled market position to connect resilient, safe and secure supply to the highest-demand markets.

"The separation is expected to be achieved on a tax-free basis to our shareholders and is anticipated to be complete in the second half of 2024. Additional information will be provided as we continue to advance this transformational initiative.

"Delivering on our $5-billion-plus asset divestiture program that significantly advances deleveraging target

"On July 24, 2023, we announced an agreement to monetize a 40-per-cent equity interest in Columbia Gas and Columbia Gulf with Global Infrastructure Partners for proceeds of $5.2-billion ($3.9-billion (U.S.)), subject to certain customary adjustments. With this sizable transaction, we will deliver on our $5-billion-plus asset divestiture program ahead of our year-end target and significantly advance toward our deleveraging target. Long-term fundamentals continue to underscore the role of natural gas in a sustainable energy future. Our strategic partnership with GIP and future partnerships across our portfolio will provide additional investment capacity to originate and execute on projects that will allow us to extend TC Energy's impact in enabling the energy transition. Closing of the transaction is anticipated in the fourth quarter of 2023, subject to customary closing conditions.

"2023 outlook and dividend declaration

"Following the sale of a 40-per-cent equity interest in Columbia Gas and Columbia Gulf we continue to expect 2023 comparable EBITDA to be 5 to 7 per cent higher than 2022; however, comparable earnings per common share for 2023 has decreased primarily due to higher expected net income attributable to non-controlling interests, partially offset by lower interest expense. As a result, comparable earnings per common share is now expected to be generally consistent with 2022. We expect capital spending in 2023 to continue to be $11.5-billion to $12-billion.

"Beyond 2024, we remain committed to limiting annual sanctioned net capital expenditures to $6-billion to $7-billion. At this level, we can continue to grow our business at a commensurate rate with our dividend growth outlook of 3 to 5 per cent, while also providing the optionality to further reduce leverage and/or return incremental capital to shareholders. Showcasing our commitment to delivering superior shareholder returns, TC Energy's board of directors declared a quarterly dividend of 93 cents per common share for the quarter ending Sept. 30, 2023, equating to $3.72 on an annualized basis. As outlined in our 2022 annual report, subsequent to the dividends declared for the quarter ended June 30, 2023, which will be paid on July 31, 2023, TC Energy has discontinued the discounted DRP.

"Exceptional year-to-date operational results drive a 10-per-cent year-over-year increase in comparable EBITDA

"During the first six months of the year, our diversified portfolio of critical energy infrastructure assets continued to safely and reliably meet North America's growing demand for energy. As a result, year to date, we have delivered 10-per-cent comparable EBITDA growth year-over-year and segmented earnings growth of 11 per cent. Our base business also remains robust. During the second quarter of 2023, we saw continued strong demand for our critical energy assets. We achieved record LNG feedgas deliveries of 3.8 Bcf on April 21, 2023, representing more than 30 per cent of current U.S. LNG exports while overall flows on our U.S. natural gas pipelines averaged 25.4 Bcf/d. Within our Canadian natural gas pipelines business, total average NGTL system receipts were 13.5 Bcf/d, up 0.1 Bcf/d from second quarter 2022. The NGTL system also achieved its highest record single-day receipts of 14.6 Bcf on April 21, 2023. Looking to our liquids pipelines business, operational reliability on the Keystone pipeline system was approximately 94.6 per cent. Marketlink throughput increased over 150,000 bbl/d year-over-year. During the quarter, Bruce Power achieved 94-per-cent availability and we continued to make significant progress on our major component replacement (MCR) program. We also saw strong cogeneration fleet performance during the quarter with 93-per-cent availability.

"Project execution: Coastal GasLink and Southeast Gateway remain on track with planned cost and schedule

"We continue to advance our industry-leading secured capital program. So far this year, we have placed approximately $2.1-billion of natural gas and liquids pipeline capacity capital projects into service, progressing to the $6-billion of projects we expect to place into service this year.

"As we work through the summer construction season, the Coastal GasLink project has reached approximately 91-per-cent overall completion. The team has made tremendous progress throughout the year. We remain on track with our capital cost estimate and continue to expect mechanical completion by year-end. To date, nearly 98 per cent of pipe has been welded and 92 per cent of all classified water crossings on the project are now complete. In addition, 639 km of the 670 km pipe has been installed and backfilled, with Section 6 being our third of eight sections achieving 100-per-cent pipe installation in June.

"We continue to advance our projects in Mexico. The Southeast Gateway pipeline project is progressing according to planned milestones, and we have begun onshore installation and facilities construction in Veracruz and Tabasco. We expect to begin offshore pipe installation in late 2023. The north section of the Villa de Reyes (VdR) pipeline was put into commercial operation in September, 2022, while the lateral section is mechanically complete with an expected commercial in-service date in the third quarter of 2023. Construction on the south section of VdR is targeted for mechanical completion by the end of the year.

"Recent progress and developments

In early July, the government of Ontario announced the Ministry of Energy will commence the final evaluation of the proposed Ontario pumped storage project (OPSP) with an expected decision by the end of 2023. OPSP is a critical component to Ontario's growing clean economy and would be the province's largest energy storage project, storing enough clean electricity to power one million homes while providing significant benefits and savings to consumers. We will continue to build our relationship with our prospective partner, the Saugeen Ojibway Nation, rooted on the basis of trust and collaboration.

"Following the December, 2022, Milepost 14 incident, we have completed the recovery and cleanup of all released product. We continue to make significant progress on restoration activities, including revegetation of the impacted area, and expect the majority of these activities to be completed this year. We have revised our environmental remediation cost estimate from $650-million to $794-million to meet the required restoration endpoints in alignment with our regulators. As previously announced, it is probable that the majority of the estimated costs will be eligible for insurance recovery, including cost increases as a result of increased reclamation costs. We continue to abide by the amended corrective action order (ACAO) and are implementing a comprehensive remedial work plan to enhance our pipeline integrity program and overall safety performance. As we progress this work, we continue to deliver all of our contract commitments while operating under pressure restrictions. I'm proud of the team that has safely worked over 1.2 million hours on site to support our ongoing response.

"Collectively, recent announcements represent meaningful progress toward our 2023 strategic priorities and position us exceptionally well for the long term, allowing us to unlock incremental shareholder value. As part of our ongoing capital rotation program, we will continue to evaluate opportunities to further our deleveraging objectives and optimally fund our secured capital program. Our commitment to strong balance sheet fundamentals and disciplined sanctioned net capital spending of $6-billion to $7-billion annually beyond 2024 will continue to provide the foundation for a long-term sustainable annual dividend growth rate of 3 to 5 per cent. Our continued success is underpinned by the strength and stability of our utility-like business model and our ability to further leverage our competitive strengths to move, generate and store the energy North America relies on in a secure and sustainable way."

Teleconference and webcast

TC will hold a teleconference and webcast on Friday, July 28, 2023, at 6:30 a.m. (MDT)/8:30 a.m. (EDT) to discuss its second quarter 2023 financial results and company developments. Presenters will include Mr. Poirier, president and chief executive officer; Joel Hunter, executive vice-president and chief financial officer; and other members of the executive leadership team.

Members of the investment community and other interested parties are invited to participate by calling 1-800-319-4610. No passcode is required. Please dial in 15 minutes prior to the start of the call. A live webcast of the teleconference will be available on TC Energy's website.

A replay of the teleconference will be available two hours after the conclusion of the call until midnight EDT on Aug. 4, 2023. Please call 1-855-669-9658 and enter pass code 0282.

The unaudited interim Condensed consolidated financial statements and management's discussion and analysis (MD&A) are available on TC's website and will be filed today under TC Energy's profile on SEDAR+ and with the U.S. Securities and Exchange Commission on EDGAR.

About TC Energy Corp.

TC Energy is team of over 7,000 energy problem solvers working to move, generate and store the energy North America relies on. Today, it is taking action to make that energy more sustainable and more secure. TC Energy is innovating and modernizing to reduce emissions from its business. And it is delivering new energy solutions -- from natural gas and renewables to carbon capture and hydrogen -- to help other businesses and industries decarbonize too. Along the way, TC invests in communities and partners with its neighbours, customers and governments to build the energy system of the future.

We seek Safe Harbor.