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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of July 2022

TC Energy Corporation

(Commission File No. 1-31690)

TransCanada PipeLines Limited

(Commission File No. 1-8887)

(Translation of Registrants’ Names into English)

450 - 1 Street S.W., Calgary, Alberta, T2P 5H1, Canada

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F o Form 40-F þ

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Exhibits 13.1 and 13.2 to this report, furnished on Form 6-K, shall be incorporated by reference into each of the following Registration Statements under the Securities Act of 1933, as amended: Form S-8 (File Nos. 333-5916, 333-8470, 333-9130, 333-151736, 333-184074, 333-227114 and 333-237979), Form F-3 (File Nos. 33-13564 and 333-6132) and Form F-10 (File Nos. 333-151781, 333-161929, 333-208585, 333-250988, 333-252123, 333-253333 and 333-261533).

Exhibits 31.1, 31.2, 32.1, 32.2 and 99.1 to this report, furnished on Form 6-K, are furnished, not filed, and will not be incorporated by reference into any registration statement filed by the registrants under the Securities Act of 1933, as amended.

Explanatory Note

TransCanada PipeLines Limited (“TransCanada PipeLines”) is a wholly owned subsidiary of TC Energy Corporation (“TC Energy”). TransCanada PipeLines is relying on the continuous disclosure documents filed by TC Energy pursuant to an exemption from the requirements of National Instrument 51-102 - Continuous Disclosure Obligations and as provided in the decision of the Alberta Securities Commission and Ontario Securities Commission in Re TransCanada Corporation, 2019 ABASC 1, issued on January 3, 2019. Consistent with the exemptive relief, information contained in this Form 6-K is that provided by TC Energy.

EXHIBIT INDEX


13.1			Management’s Discussion and Analysis of Financial Condition and Results of Operations of TC Energy Corporation as at and for the period ended June 30 , 2022.

13.2			Consolidated comparative interim unaudited financial statements of TC Energy Corporation for the period ended June 30 , 2022 (included in TC Energy Corporation's Second Quarter 2022 Quarterly Report to Shareholders).

31.1			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1			Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2			Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.1			A copy of the registrant's news release of Ju ly 28 , 2022.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: July 28, 2022	TC ENERGY CORPORATION TRANSCANADA PIPELINES LIMITED

	By:	/s/ Joel E. Hunter
		Joel E. Hunter
		Executive Vice-President and Chief Financial Officer


	By:	/s/ G. Glenn Menuz
		G. Glenn Menuz
		Vice-President and Controller

Document

EXHIBIT 13.1

Quarterly report to shareholders

Second quarter 2022

Financial highlights


	three months ended June 30		six months ended June 30
(millions of $, except per share amounts)	2022	2021	2022	2021

Income
Revenues	3,637	3,182	7,137	6,563
Net income/(loss) attributable to common shares	889	975	1,247	(82)
per common share – basic	$0.90	$1.00	$1.27	($0.08)

Comparable EBITDA1	2,369	2,246	4,757	4,735
Comparable earnings	979	1,038	2,082	2,144
per common share	$1.00	$1.06	$2.12	$2.22

Cash flows
Net cash provided by operations	942	1,711	2,649	3,377
Comparable funds generated from operations	1,566	1,754	3,431	3,777
Capital spending2	1,482	1,439	3,206	3,324



Dividends declared
Per common share	$0.90	$0.87	$1.80	$1.74

Basic common shares outstanding (millions)
– weighted average for the period	983	979	982	966
– issued and outstanding at end of period	984	979	984	979

1Additional information on Segmented earnings, the most directly comparable GAAP measure, can be found in the Consolidated results section.

2Includes Capital expenditures and Contributions to equity investments. Refer to the Financial conditions – Cash used in investing activities section for additional information.

Management’s discussion and analysis

July 27, 2022

This management’s discussion and analysis (MD&A) contains information to help the reader make investment decisions about TC Energy Corporation (TC Energy). It discusses our business, operations, financial position, risks and other factors for the three and six months ended June 30, 2022, and should be read with the accompanying unaudited Condensed consolidated financial statements for the three and six months ended June 30, 2022, which have been prepared in accordance with U.S. GAAP.

This MD&A should also be read in conjunction with our December 31, 2021 audited Consolidated financial statements and notes and the MD&A in our 2021 Annual Report. Capitalized abbreviated terms that are used but not otherwise defined herein are defined in our 2021 Annual Report. Certain comparative figures have been adjusted to reflect the current period's presentation.

FORWARD-LOOKING INFORMATION

We disclose forward-looking information to help the reader understand management’s assessment of our future plans and financial outlook and our future prospects overall.

Statements that are forward looking are based on certain assumptions and on what we know and expect today and generally include words like anticipate, expect, believe, may, will, should, estimate or other similar words.

Forward-looking statements in this MD&A include information about the following, among other things:

•our financial and operational performance, including the performance of our subsidiaries

•expectations about strategies and goals for growth and expansion, including acquisitions

•expected cash flows and future financing options available, including portfolio management

•expected dividend growth

•expected access to and cost of capital

•expected costs and schedules for planned projects, including projects under construction and in development

•expected capital expenditures, contractual obligations, commitments and contingent liabilities

•expected regulatory processes and outcomes

•statements related to our GHG emissions reduction goals

•expected outcomes with respect to legal proceedings, including arbitration and insurance claims

•the expected impact of future tax and accounting changes

•expected industry, market and economic conditions

•the expected impact of COVID-19.

Forward-looking statements do not guarantee future performance. Actual events and results could be significantly different because of assumptions, risks or uncertainties related to our business or events that happen after the date of this MD&A.

2 | TC Energy Second Quarter 2022

Our forward-looking information is based on the following key assumptions and subject to the following risks and uncertainties:

Assumptions

•realization of expected benefits from acquisitions, divestitures and energy transition

•regulatory decisions and outcomes

•planned and unplanned outages and the use of our pipeline, power and storage assets

•integrity and reliability of our assets

•anticipated construction costs, schedules and completion dates

•access to capital markets, including portfolio management

•expected industry, market and economic conditions

•inflation rates and commodity prices

•interest, tax and foreign exchange rates

•nature and scope of hedging

•expected impact of COVID-19.

Risks and uncertainties

•realization of expected benefits from acquisitions and divestitures

•our ability to successfully implement our strategic priorities and whether they will yield the expected benefits

•our ability to implement a capital allocation strategy aligned with maximizing shareholder value

•the operating performance of our pipeline, power and storage assets

•amount of capacity sold and rates achieved in our pipeline businesses

•the amount of capacity payments and revenues from our power generation assets due to plant availability

•production levels within supply basins

•construction and completion of capital projects

•cost and availability of, and inflationary pressure on labour, equipment and materials

•the availability and market prices of commodities

•access to capital markets on competitive terms

•interest, tax and foreign exchange rates

•performance and credit risk of our counterparties

•regulatory decisions and outcomes of legal proceedings, including arbitration and insurance claims

•our ability to effectively anticipate and assess changes to government policies and regulations, including those related to the environment and COVID-19

•our ability to realize the value of tangible assets and contractual recoveries, including those specific to the Keystone XL pipeline project

•competition in the businesses in which we operate

•unexpected or unusual weather

•acts of civil disobedience

•cyber security and technological developments

•ESG related risks

•impact of energy transition on our business

•economic conditions in North America as well as globally

•global health crises, such as pandemics and epidemics, including COVID-19 and the unexpected impacts related thereto.

You can read more about these factors and others in this MD&A and in other reports we have filed with Canadian securities regulators and the SEC, including the MD&A in our 2021 Annual Report.

TC Energy Second Quarter 2022 | 3

As actual results could vary significantly from the forward-looking information, you should not put undue reliance on forward-looking information and should not use future-oriented information or financial outlooks for anything other than their intended purpose. We do not update our forward-looking statements due to new information or future events, unless we are required to by law.

FOR MORE INFORMATION

You can find more information about TC Energy in our Annual Information Form and other disclosure documents, which are available on SEDAR (www.sedar.com).

NON-GAAP MEASURES

This MD&A references the following non-GAAP measures:

•comparable EBITDA

•comparable EBIT

•comparable earnings

•comparable earnings per common share

•funds generated from operations

•comparable funds generated from operations.

These measures do not have any standardized meaning as prescribed by GAAP and therefore may not be comparable to similar measures presented by other entities. Discussions throughout this MD&A on the factors impacting comparable earnings, comparable earnings before interest, taxes, depreciation and amortization (comparable EBITDA) and comparable earnings before interest and taxes (comparable EBIT) are consistent with the factors that impact net income attributable to common shares and segmented earnings, respectively, except where noted otherwise.

Comparable measures

We calculate comparable measures by adjusting certain GAAP measures for specific items we believe are significant but not reflective of our underlying operations in the period. Except as otherwise described herein, these comparable measures are calculated on a consistent basis from period to period and are adjusted for specific items in each period, as applicable.

Our decision not to adjust for a specific item in reporting comparable measures is subjective and made after careful consideration. Specific items may include:

•gains or losses on sales of assets or assets held for sale

•income tax refunds, valuation allowances and adjustments resulting from changes in legislation and enacted tax rates

•unrealized fair value adjustments related to risk management activities and Bruce Power funds invested for post-retirement benefits

•legal, contractual, bankruptcy and other settlements

•impairment of goodwill, plant, property and equipment, investments and other assets

•acquisition and integration costs

•restructuring costs.

We exclude from comparable measures the unrealized gains and losses from changes in the fair value of derivatives related to financial and commodity price risk management activities. These derivatives generally provide effective economic hedges but do not meet the criteria for hedge accounting. Beginning in first quarter 2022, with retroactive restatement of prior periods, we exclude from comparable measures our proportionate share of the unrealized gains and losses from changes in the fair value of Bruce Power's investments held for post-retirement benefits and derivatives related to its risk management activities. These changes in fair value are recorded in net income. As these amounts do not accurately reflect the gains and losses that will be realized at settlement, we do not consider them reflective of our underlying operations.

4 | TC Energy Second Quarter 2022

We also exclude from comparable measures the unrealized foreign exchange gains and losses on the peso-denominated loan receivable from an affiliate as well as the corresponding proportionate share of Sur de Texas foreign exchange gains and losses, as the amounts do not accurately reflect the gains and losses that will be realized at settlement. These amounts offset within each reporting period, resulting in no impact on net income. This peso-denominated loan was fully repaid in first quarter 2022.

The following table identifies our non-GAAP measures against their most directly comparable GAAP measures.


Comparable measure			GAAP measure

comparable EBITDA			segmented earnings
comparable EBIT			segmented earnings
comparable earnings			net income attributable to common shares
comparable earnings per common share			net income per common share
funds generated from operations			net cash provided by operations
comparable funds generated from operations			net cash provided by operations

Comparable EBITDA and comparable EBIT

Comparable EBITDA represents segmented earnings adjusted for certain specific items, excluding non-cash charges for depreciation and amortization. We use comparable EBITDA as a measure of our earnings from ongoing operations as it is a useful indicator of our performance and is also presented on a consolidated basis. Comparable EBIT represents segmented earnings adjusted for specific items and is an effective tool for evaluating trends in each segment. Refer to each business segment for a reconciliation to segmented earnings.

Comparable earnings and comparable earnings per common share

Comparable earnings represents earnings attributable to common shareholders on a consolidated basis, adjusted for specific items. Comparable earnings is comprised of segmented earnings, Interest expense, AFUDC, Interest income and other, Income tax expense, Non-controlling interests and Preferred share dividends, adjusted for specific items. Refer to the Consolidated results section for reconciliations to Net income attributable to common shares and Net income per common share.

Funds generated from operations and comparable funds generated from operations

Funds generated from operations reflects net cash provided by operations before changes in operating working capital. The components of changes in working capital are disclosed in our 2021 Consolidated financial statements. We believe funds generated from operations is a useful measure of our consolidated operating cash flows because it excludes fluctuations from working capital balances, which do not necessarily reflect underlying operations in the same period, and is used to provide a consistent measure of the cash generating ability of our businesses. Comparable funds generated from operations is adjusted for the cash impact of specific items noted above. Refer to the Financial condition section for a reconciliation to Net cash provided by operations.

TC Energy Second Quarter 2022 | 5

Consolidated results


	three months ended June 30		six months ended June 30
(millions of $, except per share amounts)	2022	2021	2022	2021

Canadian Natural Gas Pipelines	385	361	743	717
U.S. Natural Gas Pipelines	711	688	1,021	1,561
Mexico Natural Gas Pipelines	162	138	282	290
Liquids Pipelines	261	250	533	(2,258)
Power and Storage	170	158	246	321
Corporate	(10)	(36)	21	(4)
Total segmented earnings	1,679	1,559	2,846	627
Interest expense	(620)	(583)	(1,200)	(1,153)
Allowance for funds used during construction	63	64	138	114
Interest income and other	(43)	127	18	189
Income/(loss) before income taxes	1,079	1,167	1,802	(223)
Income tax (expense)/recovery	(148)	(147)	(471)	293
Net income	931	1,020	1,331	70
Net income attributable to non-controlling interests	(9)	(6)	(20)	(75)
Net income/(loss) attributable to controlling interests	922	1,014	1,311	(5)
Preferred share dividends	(33)	(39)	(64)	(77)
Net income/(loss) attributable to common shares	889	975	1,247	(82)
Net income/(loss) per common share – basic	$0.90	$1.00	$1.27	($0.08)

Net income/(loss) attributable to common shares decreased by $86 million or $0.10 per common share and increased by $1.3 billion or $1.35 per common share for the three and six months ended June 30, 2022 compared to the same periods in 2021. The increase for the six months ended June 30, 2022 is primarily due to the $2.2 billion after-tax asset impairment of the Keystone XL pipeline project in first quarter 2021, partially offset by a $531 million after-tax goodwill impairment charge related to Great Lakes and a $195 million income tax expense for the settlement related to prior years' income tax assessments in Mexico in first quarter 2022 and also reflected the impact of common shares issued for the acquisition of TC PipeLines, LP in first quarter 2021.

The following specific items were recognized in Net income/(loss) attributable to common shares and were excluded from comparable earnings:

2022 results

•an after-tax goodwill impairment charge of $531 million in first quarter 2022 related to Great Lakes. Refer to the Other information – Critical accounting estimates and accounting policy changes section for additional information

•a $2 million and $195 million income tax expense for the three and six months ended June 30, 2022 for the settlement related to prior years' income tax assessments in Mexico

•after-tax preservation and storage costs for Keystone XL pipeline project assets of $3 million and $8 million for the three and six months ended June 30, 2022, which could not be accrued as part of the Keystone XL asset impairment charge

•$9 million and $24 million after-tax unrealized losses for the three and six months ended June 30, 2022 on our proportionate share of Bruce Power's fair value adjustment on funds invested for post-retirement benefits and risk management activities.

6 | TC Energy Second Quarter 2022

2021 results

•a $2.2 billion after-tax asset impairment charge, predominantly in first quarter 2021, net of expected contractual recoveries and other contractual and legal obligations, related to the termination of the Keystone XL pipeline project following the January 2021 revocation of the Presidential Permit

•after-tax preservation and storage costs for Keystone XL pipeline project assets of $16 million primarily in second quarter 2021, which could not be accrued as part of the Keystone XL impairment charge and interest expense on the Keystone XL project-level credit facility prior to its termination

•a $13 million after-tax recovery of certain costs from the IESO in second quarter 2021 associated with the Ontario natural gas-fired power plants sold in 2020

•a $2 million year-to-date after-tax unrealized gain on our proportionate share of Bruce Power's fair value adjustment on funds invested for post-retirement benefits and risk management activities.

Net income in both periods included unrealized gains and losses from changes in risk management activities which we exclude, along with the above noted items, to arrive at comparable earnings. A reconciliation of Net income/(loss) attributable to common shares to comparable earnings is shown in the following table.

RECONCILIATION OF NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHARES TO COMPARABLE EARNINGS


	three months ended June 30		six months ended June 30
(millions of $, except per share amounts)	2022	2021	2022	2021

Net income/(loss) attributable to common shares	889	975	1,247	(82)
Specific items (net of tax):
Great Lakes goodwill impairment charge	—	—	531	—
Settlement of Mexico prior years' income tax assessments	2	—	195	—
Keystone XL asset impairment charge and other	—	2	—	2,194
Keystone XL preservation and other	3	16	8	16



Gain on sale of Ontario natural gas-fired power plants	—	(13)	—	(13)

Bruce Power unrealized fair value adjustments	9	—	24	(2)
Risk management activities1	76	58	77	31
Comparable earnings	979	1,038	2,082	2,144
Net income/(loss) per common share	$0.90	$1.00	$1.27	($0.08)
Specific items (net of tax):
Great Lakes goodwill impairment charge	—	—	0.54	—
Settlement of Mexico prior years' income tax assessments	—	—	0.20	—
Keystone XL asset impairment charge and other	—	—	—	2.27
Keystone XL preservation and other	0.01	0.01	0.01	0.02



Gain on sale of Ontario natural gas-fired power plants	—	(0.01)	—	(0.01)

Bruce Power unrealized fair value adjustments	0.01	—	0.02	(0.01)
Risk management activities	0.08	0.06	0.08	0.03
Comparable earnings per common share	$1.00	$1.06	$2.12	$2.22

TC Energy Second Quarter 2022 | 7


1	Risk management activities	three months ended June 30		six months ended June 30
	(millions of $)	2022	2021	2022	2021

	U.S. Natural Gas Pipelines	13	(4)	(2)	2
	Liquids Pipelines	5	(14)	35	10
	Canadian Power	3	1	(28)	1
	U.S. Power	(4)	—	(4)	—
	Natural Gas Storage	(58)	2	(65)	3
	Foreign exchange	(60)	(63)	(38)	(58)
	Income tax attributable to risk management activities	25	20	25	11
	Total unrealized losses from risk management activities	(76)	(58)	(77)	(31)

COMPARABLE EBITDA TO COMPARABLE EARNINGS

Comparable EBITDA represents segmented earnings adjusted for the specific items described above and excludes non-cash charges for depreciation and amortization. For further information on our reconciliation to comparable EBITDA refer to the business segment financial results sections.


	three months ended June 30		six months ended June 30
(millions of $, except per share amounts)	2022	2021	2022	2021

Comparable EBITDA
Canadian Natural Gas Pipelines	681	684	1,325	1,370
U.S. Natural Gas Pipelines	915	879	2,022	1,934
Mexico Natural Gas Pipelines	190	164	338	344
Liquids Pipelines	341	366	670	759
Power and Storage	252	157	409	335
Corporate	(10)	(4)	(7)	(7)
Comparable EBITDA	2,369	2,246	4,757	4,735
Depreciation and amortization	(635)	(633)	(1,261)	(1,278)
Interest expense	(620)	(577)	(1,200)	(1,147)
Allowance for funds used during construction	63	64	138	114
Interest income and other included in comparable earnings	17	158	84	250
Income tax expense included in comparable earnings	(173)	(175)	(352)	(378)
Net income attributable to non-controlling interests	(9)	(6)	(20)	(75)
Preferred share dividends	(33)	(39)	(64)	(77)
Comparable earnings	979	1,038	2,082	2,144
Comparable earnings per common share	$1.00	$1.06	$2.12	$2.22

8 | TC Energy Second Quarter 2022

Comparable EBITDA – 2022 versus 2021

Comparable EBITDA increased by $123 million for the three months ended June 30, 2022 compared to the same period in 2021 primarily due to the net effect of the following:

•higher Power and Storage EBITDA primarily attributable to increased Natural Gas Storage and other earnings from actively managing our natural gas positions in second quarter 2022 to capture favourable Alberta natural gas spreads as well as positive contributions from Bruce Power primarily due to a higher contract price that was partially offset by lower volumes resulting from greater planned outage days

•increased EBITDA in U.S. Natural Gas Pipelines primarily reflects a stronger U.S. dollar in 2022 with otherwise consistent earnings in second quarter 2022 versus the same period in 2021

•higher EBITDA from Mexico Natural Gas Pipelines predominantly driven by increased equity earnings from Sur de Texas due to lower interest expense attributable to the repayment of our peso-denominated loan with the subsequent issuance of a U.S. dollar-denominated loan on March 15, 2022

•decreased EBITDA from Liquids Pipelines as a result of lower contracted volumes on the U.S. Gulf Coast section of the Keystone Pipeline System, partially offset by higher contributions from liquids marketing activities, mainly attributable to higher margins

•consistent EBITDA in Canadian Natural Gas Pipelines reflecting lower flow-through costs on our Canadian rate-regulated pipelines offset by higher rate-base earnings on the NGTL System

•the positive foreign exchange impact of a stronger U.S. dollar on the Canadian dollar equivalent segmented earnings in our U.S. dollar-denominated operations. As detailed below, U.S. dollar-denominated comparable EBITDA decreased by US$25 million to US$1.1 billion compared to 2021; however, this was translated at a rate of 1.28 in 2022 versus 1.23 in 2021. Refer to the Foreign exchange discussion below for additional information.

Comparable EBITDA increased by $22 million for the six months ended June 30, 2022 compared to the same period in 2021 primarily due to the net effect of the following:

•increased EBITDA in U.S. Natural Gas Pipelines predominantly from increased earnings on Columbia Gas following the FERC-approved settlement for higher transportation rates effective February 2021, increased earnings from our mineral rights business and higher incremental earnings from growth projects placed in service, partially offset by higher property taxes

•higher Power and Storage EBITDA primarily attributable to increased Natural Gas Storage and other earnings from actively managing our natural gas positions in second quarter 2022 to capture favourable Alberta natural gas spreads as well as positive contributions from Bruce Power mainly due to a higher contract price that was partially offset by lower volumes resulting from greater planned outage days

•decreased EBITDA from Liquids Pipelines as a result of lower contracted volumes and marketing margins on the U.S. Gulf Coast section of the Keystone Pipeline System, partially offset by higher long-haul contracted volumes

•lower EBITDA from Canadian Natural Gas Pipelines largely attributable to the impact of lower flow-through costs on our Canadian rate-regulated pipelines, partially offset by higher rate-base earnings on the NGTL System

•the positive foreign exchange impact of a stronger U.S. dollar on the Canadian dollar equivalent segmented earnings in our U.S. dollar-denominated operations. As detailed below, U.S. dollar-denominated comparable EBITDA decreased by US$55 million to US$2.3 billion compared to 2021; however, this was translated at a rate of 1.27 in 2022 versus 1.25 in 2021. Refer to the Foreign exchange discussion below for additional information.

Due to the flow-through treatment of certain costs including income taxes, financial charges and depreciation in our Canadian rate-regulated pipelines, changes in these costs impact our comparable EBITDA despite having no significant effect on net income.

TC Energy Second Quarter 2022 | 9

Comparable earnings – 2022 versus 2021

Comparable earnings decreased by $59 million or $0.06 per common share for the three months ended June 30, 2022 compared to the same period in 2021 and was primarily the net effect of:

•changes in comparable EBITDA described above

•lower Interest income and other mainly attributable to realized losses in 2022 compared to realized gains in 2021 on derivatives used to manage our net exposure to foreign exchange rate fluctuations on U.S. dollar-denominated income

•higher Interest expense primarily due to higher long-term debt and junior subordinated note issuances, net of maturities, the foreign exchange impact of a stronger U.S. dollar in 2022 and higher interest rates on increased levels of short-term borrowings.

Comparable earnings decreased by $62 million or $0.10 per common share for the six months ended June 30, 2022 compared to the same period in 2021 and was primarily the net effect of:

•changes in comparable EBITDA described above

•lower Interest income and other mainly attributable to lower realized gains in 2022 compared to 2021 on derivatives used to manage our net exposure to foreign exchange rate fluctuations on U.S. dollar-denominated income

•higher Interest expense primarily due to higher interest rates on increased levels of short-term borrowings, long-term debt and junior subordinated note issuances, net of maturities, the foreign exchange impact of a stronger U.S. dollar in 2022 and lower capitalized interest as a result of its cessation for the Keystone XL pipeline project following the revocation of the Presidential Permit in January 2021

•lower Net income attributable to non-controlling interests following the March 2021 acquisition of all outstanding common units of TC PipeLines, LP not beneficially owned by TC Energy

•decreased Income tax expense primarily due to lower earnings and flow-through taxes, partially offset by higher U.S. state rate adjustments in 2021

•higher AFUDC primarily due to expansion projects in our Canadian and U.S. natural gas pipelines

•lower Depreciation and amortization in Canadian Natural Gas Pipelines on the Canadian Mainline, partially offset by higher depreciation on the NGTL System from expansion facilities that were placed in service and in U.S. Natural Gas Pipelines mainly due to the timing of certain adjustments related to the Columbia Gas rate case settlement.

Foreign exchange

Certain of our businesses generate all or most of their earnings in U.S. dollars and, since we report our financial results in Canadian dollars, changes in the value of the U.S. dollar against the Canadian dollar directly affect our comparable EBITDA and may also impact comparable earnings. As our U.S. dollar-denominated operations continue to grow, this exposure increases. A portion of the U.S. dollar-denominated comparable EBITDA exposure is naturally offset by U.S. dollar-denominated amounts below comparable EBITDA within Depreciation and amortization, Interest expense and other income statement line items. The balance of the exposure is actively managed on a rolling forward basis up to three years using foreign exchange derivatives; however, the natural exposure beyond that period remains. The net impact of the U.S. dollar movements on comparable earnings for the three and six months ended June 30, 2022 compared to the same periods in 2021, after considering natural offsets and economic hedges, was not significant.

The components of our financial results denominated in U.S. dollars are set out in the table below, including our U.S. and Mexico Natural Gas Pipelines operations along with the majority of our Liquids Pipelines business. Comparable EBITDA is a non-GAAP measure.

10 | TC Energy Second Quarter 2022

Pre-tax U.S. dollar-denominated income and expense items


	three months ended June 30		six months ended June 30
(millions of US$)	2022	2021	2022	2021

Comparable EBITDA
U.S. Natural Gas Pipelines	716	717	1,591	1,550
Mexico Natural Gas Pipelines1	156	151	288	310
Liquids Pipelines	188	217	371	445
	1,060	1,085	2,250	2,305
Depreciation and amortization	(239)	(224)	(477)	(442)
Interest on long-term debt and junior subordinated notes	(318)	(313)	(623)	(630)

Allowance for funds used during construction	22	23	48	40
Non-controlling interests and other	(16)	(4)	(28)	(50)
	509	567	1,170	1,223
Average exchange rate - U.S. to Canadian dollars	1.28	1.23	1.27	1.25

1Excludes interest expense on our inter-affiliate loan with Sur de Texas which is fully offset in Interest income and other.

TC Energy Second Quarter 2022 | 11

Outlook

Comparable EBITDA and comparable earnings

Our overall comparable EBITDA and comparable earnings per common share outlook for 2022 remains consistent with the 2021 Annual Report. We continue to monitor the impact of changes in energy markets, our construction projects and regulatory proceedings as well as COVID-19 for any potential effect on our 2022 comparable EBITDA and comparable earnings per share.

Consolidated capital spending and equity investments

Our total capital expenditures for 2022 are now expected to be approximately $8.5 billion. The increase from what was outlined in the 2021 Annual Report is primarily due to the partner equity contribution of approximately $1.3 billion we expect to make in 2022 to the Coastal GasLink Limited Partnership (Coastal GasLink LP) in accordance with revised agreements impacting Coastal GasLink LP. Refer to the Recent developments – Canadian Natural Gas Pipelines section for additional information on the Coastal GasLink project. In addition, higher project costs are expected for the NGTL System reflecting inflationary pressures on labour and materials, additional regulatory conditions and other factors. We continue to monitor developments on all of our construction projects, work on cost mitigation strategies and assess market conditions as well as the impact of COVID-19 for further changes to our overall 2022 capital program.

12 | TC Energy Second Quarter 2022

Capital program

We are developing quality projects under our capital program. These long-life infrastructure assets are supported by long-term commercial arrangements with creditworthy counterparties and/or regulated business models and are expected to generate significant growth in earnings and cash flows. In addition, many of these projects advance our goals to reduce our own carbon footprint as well as that of our customers.

Our capital program consists of approximately $28 billion of secured projects that represent commercially supported, committed projects that are either under construction or are in, or preparing to commence, the permitting stage.

Three years of maintenance capital expenditures for our businesses are included in the secured projects table. Maintenance capital expenditures on our regulated Canadian and U.S. natural gas pipelines are added to rate base on which we have the opportunity to earn a return and recover these expenditures through current or future tolls, which is similar to our capacity capital projects on these pipelines. Tolling arrangements in our liquids pipelines business provide for the recovery of maintenance capital expenditures.

During the six months ended June 30, 2022, we placed approximately $1.6 billion of capacity capital projects into service primarily related to the NGTL System. In addition, approximately $0.7 billion of maintenance capital expenditures were incurred.

All projects are subject to cost and timing adjustments due to factors including weather, market conditions, route refinement, permitting conditions, scheduling and timing of regulatory permits, as well as other potential restrictions and uncertainties, including the ongoing impact of COVID-19. Amounts exclude capitalized interest and AFUDC, where applicable.

TC Energy Second Quarter 2022 | 13

Secured projects

Estimated and incurred project costs referred to in the following table include 100 per cent of the capital expenditures related to our wholly-owned projects and our share of equity contributions to fund projects within our equity investments, primarily Coastal GasLink and Bruce Power.


	Expected in-service date	Estimated project cost	Project costs incurred as at June 30, 2022
(billions of $)

Canadian Natural Gas Pipelines
NGTL System1	2022	3.4	2.8
	2023	2.5	0.3
	2024+	0.6	0.1
Canadian Mainline	2022	0.2	0.2
Coastal GasLink2	2023	2.1	0.2
Regulated maintenance capital expenditures	2022-2024	2.2	0.3
U.S. Natural Gas Pipelines
Modernization III (Columbia Gas)	2022-2024	US 1.2	US 0.2
Delivery market projects	2025	US 1.5	—
Other capital	2022-2028	US 1.9	US 1.1
Regulated maintenance capital expenditures	2022-2024	US 2.1	US 0.3
Mexico Natural Gas Pipelines
Villa de Reyes	2022-2023	US 1.0	US 0.9
Tula3	—	US 0.8	US 0.6

Liquids Pipelines
Other capacity capital	2022-2023	US 0.2	US 0.1
Recoverable maintenance capital expenditures	2022-2024	0.3	—
Power and Storage
Bruce Power – life extension4	2022-2027	4.4	2.1

Other
Non-recoverable maintenance capital expenditures5	2022-2024	0.6	0.1
		25.0	9.3
Foreign exchange impact on secured projects6		2.5	0.9
Total secured projects (Cdn$)		27.5	10.2

1Estimated project costs for 2022 and 2023 include $0.7 billion for Foothills related to the West Path Delivery Program.

2Subsequent to revised project agreements executed between Coastal GasLink LP and LNG Canada and a binding commitment subject to the execution of definitive agreements with our partners in Coastal GasLink LP, the estimated project cost noted above represents our share of anticipated partner equity contributions to the project. Mechanical in-service is expected to be reached by the end of 2023. Commercial in-service of the Coastal GasLink pipeline will occur after completion of commissioning the pipeline. Refer to the Recent developments – Canadian Natural Gas Pipelines section for additional information on the settlement agreement and binding commitment related to Coastal GasLink.

3The east section of the Tula pipeline is available for interruptible transportation services. We are working to procure necessary land access on the west section of the Tula pipeline to finalize its construction. The central segment construction has been delayed due to pending Indigenous consultation processes under the responsibility of the Secretary of Energy. Refer to the Recent developments – Mexico Natural Gas Pipelines section for additional information.

4Reflects our expected share of cash contributions for the Bruce Power Unit 6 Major Component Replacement (MCR) program, expected to be in service in 2023, and the Unit 3 MCR, expected to be in service in 2026, as well as amounts to be invested under the Asset Management program through 2027 and the incremental uprate initiative. Refer to the Recent developments – Power and Storage section for additional information.

5Includes non-recoverable maintenance capital expenditures from all segments and is primarily comprised of our proportionate share of maintenance capital expenditures for Bruce Power and other Power and Storage assets.

6Reflects U.S./Canada foreign exchange rate of 1.29 at June 30, 2022.

14 | TC Energy Second Quarter 2022

Projects under development

In addition to our secured projects, we have a portfolio of projects that we are currently pursuing that are in varying stages of development. Projects under development have greater uncertainty with respect to timing and estimated project costs and are subject to corporate and regulatory approvals, unless otherwise noted. Each business segment has also outlined additional areas of focus for further ongoing business development activities and growth opportunities. As these projects are advanced and reach necessary milestones, they will be included in the secured projects table.

Canadian Natural Gas Pipelines

We continue to focus on optimizing the utilization and value of our existing Canadian Natural Gas Pipelines assets, including in-corridor expansions, providing connectivity to LNG export terminals and connections to growing shale gas supplies. Sustainability development projects are expected to include additional compressor station electrification and waste heat capture power generation on our systems as well as other GHG abatement initiatives.

U.S. Natural Gas Pipelines

Delivery Market Projects

Projects are in development that are expected to replace, upgrade and modernize certain U.S. Natural Gas Pipelines facilities while reducing emissions along portions of our pipeline systems in principal delivery markets. The enhanced facilities are expected to improve reliability of our systems and allow for additional transportation services under long-term contracts to address growing demand in the U.S. Midwest and the Mid-Atlantic regions, while reducing direct carbon dioxide equivalent emissions. Included in our secured projects are the US$0.7 billion VR Project on Columbia Gas and the US$0.8 billion WR Project on ANR, two delivery market projects that were approved in 2021 with expected in-service dates in the second half of 2025.

Renewable Natural Gas Hub Development

We announced a strategic collaboration with GreenGasUSA to explore development of a network of natural gas transportation hubs, including renewable natural gas (RNG). These transportation hubs would provide centralized access to existing energy transportation infrastructure for RNG sources, such as farms, wastewater treatment facilities and landfills. We believe that this collaboration will rapidly expand and provide incremental capability to the 10 current RNG interconnects across our U.S. natural gas pipeline footprint. The development of these hubs is an important step towards the acceleration of methane capture projects and the concurrent reduction of GHG emissions.

Other Opportunities

We are currently pursuing a variety of projects, including compression replacement, while furthering the electrification of our fleet, power generation and LDCs, expanding our modernization programs and in-corridor expansion opportunities on our existing systems. These projects are expected to improve the reliability of our systems with an environmental focus on cleaner energy.

We are also developing multiple transmission projects to link gas supply to the facilities that will meet the growing global demand for North American LNG.

Mexico Natural Gas Pipelines

We are currently evaluating new growth projects driven by Mexico’s economic expansion and the need to connect natural gas to new regions of the country to serve power plants, industrial demand and LNG exports and, in doing so, reduce reliance on costly, carbon-intensive fuel oil. Potential projects include the completion of the central segment of Tula as well as a new offshore pipeline that would connect additional natural gas supply to Southeast Mexico and capacity expansions on existing assets.

TC Energy Second Quarter 2022 | 15

Liquids Pipelines

Grand Rapids Phase II

Regulatory approvals have been obtained for Phase II of Grand Rapids, which consists of completing the 36-inch pipeline for crude oil service and converting the 20-inch pipeline from crude oil to diluent service. Commercial support is being pursued with prospective customers.

Terminals Projects

We continue to pursue projects associated with our terminals in Alberta and the U.S. to expand our core business and add operational flexibility for our customers.

Other Opportunities

We remain focused on maximizing the value of our liquids assets by expanding and leveraging our existing infrastructure and enhancing connectivity and service offerings to our customers. We are pursuing selective growth opportunities to add incremental value to our Liquids Pipelines business and expansions that leverage available capacity on our existing infrastructure. We remain disciplined in our approach and will position our business development activities strategically to capture opportunities within our risk preferences.

Power and Storage

Bruce Power

Life Extension Program

The continuation of Bruce Power’s life extension program through to 2033 will require the investment of our proportionate share of Major Component Replacement (MCR) program costs on Units 4, 5, 7 and 8, as well as the remaining Asset Management program costs which continue beyond 2033, extending the life of Units 3 to 8 and the Bruce Power site to 2064. Preparation work for the Unit 4 MCR is well underway and work for the Unit 5, 7 and 8 MCRs has also begun. Future MCR investments will be subject to discrete decisions for each unit with specified off-ramps available to Bruce Power and the IESO. We expect to spend approximately $4.8 billion for our proportionate share of the Bruce Power MCR program costs for Units 4, 5, 7 and 8 and the remaining Asset Management program costs beyond 2027, as well as the incremental uprate initiative discussed below.

Uprate Initiative

Bruce Power's Project 2030 has a goal of achieving a site peak output of 7,000 MW by 2033 in support of climate change targets and future clean energy needs. Project 2030 is focused on continued asset optimization, innovation and leveraging new technology, which could include integration with storage and other forms of energy, to increase the site peak output. Project 2030 is arranged in three stages with the first two stages fully approved for execution. Stage 1 started in 2019 and is expected to add 150 MW of output and Stage 2, which began in early 2022, is targeting another 200 MW. Stage 3 requires Stages 1 and 2 to be complete and would enable an increase to the reactor power limit.

Development-Stage Projects

Ontario Pumped Storage

We continue to progress the development of the Ontario Pumped Storage project (OPSP), an energy storage facility located near Meaford, Ontario that would provide 1,000 MW of flexible, clean energy to Ontario’s electricity system using a process known as pumped hydro storage.

The OPSP has been granted long-term land access to the fourth Canadian Division Training Centre for development of the project on this site from the Federal Minister of National Defence and has been included in Gate 2 of the IESO's Unsolicited Proposals Process. Once in service, this project would store emission-free energy when available and provide that energy to Ontario during periods of peak demand, thereby maximizing the value of existing emission-free generation in the province.

Saddlebrook Solar and Storage

We are proposing to construct and operate the Saddlebrook Solar and Storage project, a solar and energy storage solution that consists of a solar-generating facility located near Aldersyde, Alberta that will operate in conjunction with a battery energy storage system.

16 | TC Energy Second Quarter 2022

The proposed generating facility will produce approximately 81 MW of power and the battery storage system will provide up to 40 MWh of energy storage capacity and is expected to reduce GHG emissions by approximately 115,000 tonnes per year. The project is expected to be partially funded through Emissions Reduction Alberta’s Biotechnology, Electricity and Sustainable Transportation Challenge. We expect to make an FID on the project in 2022 with the first phases of commissioning beginning in 2023.

Canyon Creek Pumped Storage

We are utilizing the existing site infrastructure from a decommissioned coal mine, located near Hinton, Alberta, to develop a pumped hydro storage project that is expected to have an initial generating capacity of 75 MW, expandable through future development to 400 MW. The facility is expected to provide up to 37 hours of on-demand, flexible, clean energy and ancillary services to the Alberta electricity grid. The project has received the approval of the Alberta Utilities Commission and the required approval of the Government of Alberta for hydro projects under the Dunvegan Hydro Development Act (Alberta).

The Canyon Creek Pumped Storage project is part of a larger product offering by us, a 24-by-7 carbon-free power product in the Province of Alberta and includes output from other projects currently under construction or being developed, thereby positioning our customers to manage hourly power needs with cost certainty and achieve decarbonization goals by sourcing power from emission-free assets.

Renewable Energy Contracts and/or Investment Opportunities

Through a Request for Information (RFI) process conducted in 2021, we are seeking potential contracts and/or investment opportunities in wind, solar and storage energy projects to meet the electricity needs of the U.S. portion of the Keystone Pipeline System and supply renewable energy products and services to industrial and oil and gas sectors proximate to our in-corridor demand. To date in 2022, we have finalized contracts for approximately 580 MW and 240 MW from wind energy and solar projects, respectively. We continue to evaluate the proposals received through the RFI process and expect to finalize additional contracts in 2022.

Other Opportunities

We are actively building our customer-focused origination platform across North America, providing commodity products and energy services to help customers address the challenges of energy transition. Our existing network of assets, customers and suppliers provide a mutual opportunity in which we can tailor solutions to meet their clean energy needs. Although we may adopt custom-tailored strategies, the core underpinning remains consistent, which is that every opportunity we undertake will ultimately be driven by customer needs allowing us to complement each other’s capabilities, diversify risk and share learnings as we navigate the energy transition. 

OTHER ENERGY SOLUTIONS

Hydrogen Hubs

As part of our JDA with Nikola, on April 26, 2022, we announced a plan to evaluate a hydrogen production hub on 140 acres in Crossfield, Alberta, where we currently operate our natural gas storage facility. We expect an FID by the end of 2023, subject to customary regulatory approvals.

Alberta Carbon Grid

In June 2021, we announced a partnership with Pembina Pipeline Corporation to jointly develop a world-scale carbon transportation and sequestration system which, when fully constructed, is expected to be capable of transporting more than 20 million tonnes of carbon dioxide annually. On March 29, 2022, the ACG received notice from the Government of Alberta that our Final Project Proposal to build and operate a carbon storage hub and gathering lines in Alberta’s industrial heartland was among the successful proponents. The project has been invited to move forward into the next stage of the Province’s CCUS process and enter into an evaluation agreement to further assess the viability of this project. Designed to be an open-access system, the ACG proposes to leverage existing right of ways and/or pipelines to connect the Alberta Industrial Heartland emissions region to a key sequestration location.

CORPORATE

Mexico Tax Audit

In 2019, the Mexican tax authority, the Tax Administration Services (SAT), completed an audit of the 2013 tax return of one of our subsidiaries in Mexico. The audit resulted in a tax assessment that denied the deduction for all interest expense and an assessment of additional tax, penalties and financial charges totaling less than US$1 million. We disagreed with this assessment and commenced litigation to challenge it. In January 2022, we received the tax court’s ruling on the 2013 tax return, which upheld the SAT assessment. From September 2021 to February 2022, the SAT issued assessments for tax years 2014 through 2017 which denied the deduction of all interest expense as well as assessed incremental withholding tax on the interest. These assessments totaled approximately US$490 million in income and withholding taxes, interest, penalties and other financial charges.

On April 27, 2022, we settled with the SAT on all of the above matters for the tax years 2013 through 2021. In the six months ended June 30, 2022, we recorded US$152 million of income tax expense (inclusive of withholding taxes, interest, penalties and other financial charges).

Dividend Reinvestment Plan

To prudently fund our growth program that includes increased project costs on the NGTL System and following our commitment to make an equity contribution of $1.9 billion to Coastal GasLink LP, we have reinstated issuance of common shares from treasury at a two per cent discount under our Dividend Reinvestment Plan (DRP) commencing with the dividends declared on July 27, 2022.

TC Energy Second Quarter 2022 | 35

Financial condition

We strive to maintain financial strength and flexibility in all parts of the economic cycle. We rely on our operating cash flows to sustain our business, pay dividends and fund a portion of our growth. In addition, we access capital markets and engage in portfolio management to meet our financing needs, manage our capital structure and to preserve our credit ratings.

We believe we have the financial capacity to fund our existing capital program through predictable and growing cash flows from operations, access to capital markets, portfolio management, joint ventures, asset-level financing, cash on hand and substantial committed credit facilities. Annually, in fourth quarter, we renew and extend our credit facilities as required.

At June 30, 2022, our current assets totaled $9.3 billion and current liabilities amounted to $14.5 billion, leaving us with a working capital deficit of $5.2 billion compared to $5.6 billion at December 31, 2021. Our working capital deficiency is considered to be in the normal course of business and is managed through:

•our ability to generate predictable and growing cash flows from operations

•a total of $10.1 billion of committed revolving credit facilities, of which $4.8 billion of short-term borrowing capacity remains available, net of $5.3 billion backstopping outstanding commercial paper balances. We also have arrangements in place for a further $2.4 billion of demand credit facilities of which $1.1 billion remained available as at June 30, 2022

•our access to capital markets, including through securities issuances, incremental credit facilities, portfolio management activities, DRP and Corporate ATM programs, if deemed appropriate.

CASH PROVIDED BY OPERATING ACTIVITIES


	three months ended June 30		six months ended June 30
(millions of $)	2022	2021	2022	2021

Net cash provided by operations	942	1,711	2,649	3,377
Increase in operating working capital	618	27	578	259
Funds generated from operations	1,560	1,738	3,227	3,636
Specific items:
Settlement of Mexico prior years' income tax assessments	2	—	195	—
Keystone XL preservation and other	5	21	11	21
Current income tax (recovery)/expense on Keystone XL asset impairment charge, preservation and other	(1)	(5)	(2)	120




Comparable funds generated from operations	1,566	1,754	3,431	3,777

Net cash provided by operations

Net cash provided by operations decreased by $769 million and $728 million for the three and six months ended June 30, 2022, compared to the same periods in 2021 primarily due to lower funds generated from operations as well as the amount and timing of working capital changes.

Comparable funds generated from operations

Comparable funds generated from operations, a non-GAAP measure, helps us assess the cash generating ability of our businesses by excluding the timing effects of working capital changes as well as the cash impact of our specific items.

Comparable funds generated from operations decreased by $188 million and $346 million for the three and six months ended June 30, 2022, compared to the same periods in 2021 primarily due to lower comparable earnings as described in the Consolidated results section, as well as lower distributions from operating activities of our equity investments.

36 | TC Energy Second Quarter 2022

CASH USED IN INVESTING ACTIVITIES


	three months ended June 30		six months ended June 30
(millions of $)	2022	2021	2022	2021

Capital spending
Capital expenditures	(1,263)	(1,214)	(2,771)	(2,859)

Contributions to equity investments	(219)	(225)	(435)	(465)
	(1,482)	(1,439)	(3,206)	(3,324)
Keystone XL contractual recoveries	473	—	473	—

Loans to affiliate repaid/(issued), net	51	(220)	(112)	(220)
Other distributions from equity investments	32	—	32	—
Deferred amounts and other	(107)	(98)	(53)	(404)
Net cash used in investing activities	(1,033)	(1,757)	(2,866)	(3,948)

Capital expenditures in 2022 were incurred primarily for the expansion of the NGTL System, ANR and Columbia Gas projects, as well as maintenance capital expenditures. Lower capital spending in 2022 compared to 2021 reflects the termination of the Keystone XL pipeline project following the revocation of the Presidential Permit in January 2021 as well as reduced spending on Columbia Gulf projects, partially offset by higher capital spending on the NGTL System.

Contributions to equity investments decreased in 2022 compared to 2021 mainly due to reduced cash calls from Bruce Power.

As part of refinancing activities with the Sur de Texas joint venture, on March 15, 2022, our peso-denominated loan was fully repaid upon maturity in the amount of $1.2 billion and was subsequently replaced with a new U.S. dollar-denominated loan of an equivalent $1.2 billion. Contributions to equity investments and Other distributions from equity investments are presented above on a net basis, although they are reported on a gross basis in our Condensed consolidated statement of cash flows. Refer to the Financial risks and financial instruments – Related party transactions section for additional information.

In the six months ended June 30, 2022, we received $473 million of contractual recoveries with respect to the Keystone XL pipeline project termination in 2021.

Loans to affiliate represent issuances and repayments on the subordinated demand revolving credit facility and the subordinated loan agreement that we entered into with Coastal GasLink LP to provide additional liquidity and funding to the project. Refer to the Financial risks and financial instruments – Related party transactions section for additional information.

CASH PROVIDED BY FINANCING ACTIVITIES


	three months ended June 30		six months ended June 30
(millions of $)	2022	2021	2022	2021

Notes payable (repaid)/issued, net	(116)	247	214	(2,460)
Long-term debt issued, net of issue costs	2,510	1,822	2,510	7,751
Long-term debt repaid	—	—	(26)	(980)
Junior subordinated notes issued, net of issue costs	(3)	(1)	1,008	495

Redeemable non-controlling interest repurchased	—	—	—	(633)
Dividends and distributions paid	(932)	(898)	(1,847)	(1,749)
Common shares issued, net of issue costs	29	26	158	60
Preferred shares redeemed	(1,000)	(500)	(1,000)	(500)
Other	12	(10)	17	(15)



Net cash provided by financing activities	500	686	1,034	1,969

TC Energy Second Quarter 2022 | 37

Long-term debt issued

The following table outlines significant long-term debt issuances in the six months ended June 30, 2022:

(millions of Canadian $, unless otherwise noted)

Company

Issue date

Type

Maturity date

Amount

Interest rate

TRANSCANADA PIPELINES LIMITED

May 2022

Medium Term Notes

May 2032

800

5.33

May 2022

Medium Term Notes

May 2026

400

4.35

May 2022

Medium Term Notes

May 2052

300

5.92

ANR PIPELINE COMPANY

May 2022

Senior Unsecured Notes

May 2032

US 300

3.43

May 2022

Senior Unsecured Notes

May 2034

US 200

3.58

May 2022

Senior Unsecured Notes

May 2037

US 200

3.73

May 2022

Senior Unsecured Notes

May 2029

US 100

3.26

Junior subordinated notes issued

In March 2022, we issued US$800 million of junior subordinated notes through TransCanada Trust, a wholly-owned financing trust subsidiary of TCPL. We used the proceeds from the issuance to redeem all issued and outstanding TC Energy Series 15 preferred shares on May 31, 2022 pursuant to their terms. Refer to Note 9, Junior subordinated notes issued, of our Condensed consolidated financial statements for additional information.

DIVIDENDS

On July 27, 2022, we declared quarterly dividends on our common shares of $0.90 per share payable on October 31, 2022, to shareholders of record at the close of business on September 30, 2022.

DIVIDEND REINVESTMENT PLAN

To prudently fund our growth program that includes increased project costs on the NGTL System and following our commitment to make an equity contribution of $1.9 billion to Coastal GasLink LP, we have reinstated issuance of common shares from treasury at a two per cent discount under our DRP commencing with the dividends declared on July 27, 2022.

SHARE INFORMATION

At July 22, 2022, we had 984 million issued and outstanding common shares and 6 million outstanding options to buy common shares, of which 3 million were exercisable.

On May 31, 2022, we redeemed all of the 40 million issued and outstanding Series 15 preferred shares at a redemption price of $25.00 per share and paid the final quarterly dividend of $0.30625 per Series 15 preferred share for the period up to but excluding May 31, 2022, as previously announced on April 1, 2022.

CONTRACTUAL OBLIGATIONS

In 2022, capital expenditure commitments increased primarily due to an additional equity contribution expected to be made to Coastal GasLink LP of $1.9 billion as a result of the revised project agreements. Otherwise, the capital expenditure commitments are largely consistent with December 31, 2021, reflecting the net effect of normal course fulfillment of commitments related to construction, partially offset by new commitments on capital projects.

There were no material changes to our contractual obligations in second quarter 2022 or to payments due in the next five years or after. Refer to our 2021 Annual Report for more information about our contractual obligations.

38 | TC Energy Second Quarter 2022

Financial risks and financial instruments

We are exposed to market risk and counterparty credit risk and have strategies, policies and limits in place to manage the impact of these risks on our earnings, cash flows and, ultimately, shareholder value.

Risk management strategies, policies and limits are designed to ensure our risks and related exposures are in line with our business objectives and risk tolerance.

Refer to our 2021 Annual Report for more information about the risks we face in our business which have not changed substantially since December 31, 2021, other than as noted within this MD&A.

INTEREST RATE RISK

We utilize both short- and long-term debt to finance our operations which exposes us to interest rate risk. We typically pay fixed rates of interest on our long-term debt and floating rates on short-term debt including our commercial paper programs and amounts drawn on our credit facilities. A small portion of our long-term debt bears interest at floating rates. In addition, we are exposed to interest rate risk on financial instruments and contractual obligations containing variable interest rate components. We actively manage our interest rate risk using interest rate derivatives.

Many of our financial instruments and contractual obligations with variable rate components reference U.S. dollar London Interbank Offered Rate (LIBOR), of which certain rate settings have ceased to be published at the end of 2021 with full cessation by mid-2023. We expect to use practical expedients available in the guidance to treat contract modifications as events that do not require contract remeasurement or reassessment of previous accounting determinations. As such, these changes are not expected to have a material impact on our consolidated financial statements. In the six months ended June 30, 2022, we have not identified any applicable contract modifications as a result of reference rate reform. We continue to monitor any new developments with respect to this guidance.

On May 16, 2022, Refinitiv Benchmark Services (UK) Limited, the administrator of the Canadian Dollar Offered Rate (CDOR), announced that the calculation and publication of all tenors of CDOR will permanently cease following a final publication on June 28, 2024. We are currently evaluating the impact of this guidance on contracts and financial instruments with variable rate components that reference CDOR and have not yet determined the effect on our consolidated financial statements.

FOREIGN EXCHANGE RISK

Certain of our businesses generate all or most of their earnings in U.S. dollars and, since we report our financial results in Canadian dollars, changes in the value of the U.S. dollar against the Canadian dollar can affect our comparable EBITDA and comparable earnings. Refer to the Consolidated results – Foreign exchange section for additional information.

A small portion of our Mexico Natural Gas Pipelines monetary assets and liabilities are peso-denominated, while the functional currency for our Mexico operations is U.S. dollars. These peso-denominated balances are revalued to U.S. dollars and, as a result, changes in the value of the Mexican peso against the U.S. dollar can affect our net income. In addition, foreign exchange gains or losses calculated for Mexico income tax purposes on the revaluation of the Sur de Texas U.S. dollar-denominated loan payable to us and our partner result in peso-denominated deferred income tax expense or recovery for Sur de Texas, leading to fluctuations in comparable EBITDA. These exposures are managed using foreign exchange derivatives, with the hedging gains and losses recorded in Interest income and other.

We hedge a portion of our net investment in foreign operations (on an after-tax basis) with U.S. dollar-denominated debt, cross-currency interest rate swaps, foreign exchange forwards and foreign exchange options as appropriate.

TC Energy Second Quarter 2022 | 39

COUNTERPARTY CREDIT RISK

We have exposure to counterparty credit risk in a number of areas including:

•cash and cash equivalents

•accounts receivable and certain contractual recoveries

•available-for-sale assets

•fair value of derivative assets

•loans receivable.

Market events causing disruptions in global energy demand and supply may contribute to economic uncertainties impacting a number of our customers. While the majority of our credit exposure is to large creditworthy entities, we maintain close monitoring and communication with those counterparties experiencing greater financial pressures. Refer to our 2021 Annual Report for more information about the factors that mitigate our counterparty credit risk exposure.

We review financial assets carried at amortized cost for impairment using the lifetime expected loss of the financial asset at initial recognition and throughout the life of the financial asset. We use historical credit loss and recovery data, adjusted for our judgment regarding current economic and credit conditions, along with supportable forecasts to determine any impairment, which is recognized in Plant operating costs and other. At June 30, 2022, we had no significant credit losses, no significant credit risk concentration and no significant amounts past due or impaired.

We have significant credit and performance exposure to financial institutions because they hold cash deposits and provide committed credit lines and letters of credit that help manage our exposure to counterparties and provide liquidity in commodity, foreign exchange and interest rate derivative markets.

LIQUIDITY RISK

Liquidity risk is the risk that we will not be able to meet our financial obligations as they come due. We manage our liquidity risk by continuously forecasting our cash flows and ensuring we have adequate cash balances, cash flows from operations, committed and demand credit facilities and access to capital markets to meet our operating, financing and capital expenditure obligations under both normal and stressed economic conditions.

RELATED PARTY TRANSACTIONS

Loans receivable from affiliates

Related party transactions are conducted in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

40 | TC Energy Second Quarter 2022

Sur de Texas

We hold a 60 per cent equity interest in a joint venture with IEnova to own the Sur de Texas pipeline, for which we are the operator. In 2017, we entered into a MXN$21.3 billion unsecured revolving credit facility with the joint venture, which bore interest at a floating rate and was fully repaid upon maturity on March 15, 2022 in the amount of approximately $1.2 billion.

Our Condensed consolidated statement of income reflected the related interest income and foreign exchange impact on this loan which were fully offset upon consolidation with corresponding amounts included in our proportionate share of Sur de Texas' equity earnings as follows:


	three months ended June 30		six months ended June 30		Affected line item in the Condensed consolidated statement of income
(millions of $)	2022	2021	2022	2021

Interest income1	—	21	19	42	Interest income and other
Interest expense2	—	(21)	(19)	(42)	Income from equity investments
Foreign exchange gains/(losses)1	—	32	(28)	(3)	Interest income and other
Foreign exchange (losses)/gains1	—	(32)	28	3	Income from equity investments

1Included in our Corporate segment.

2Included in our Mexico Natural Gas Pipelines segment.

As part of refinancing activities with the Sur de Texas joint venture, on March 15, 2022, the peso-denominated loan discussed above was replaced with a new U.S. dollar-denominated loan of an equivalent $1.2 billion (US$938 million) with a floating interest rate and maturity date of March 15, 2023. At June 30, 2022, Loans receivable from affiliates under Current assets on our Condensed consolidated balance sheet reflected this $1.2 billion (US$938 million) loan receivable from the Sur de Texas joint venture.

Coastal GasLink LP

We hold a 35 per cent equity interest in Coastal GasLink LP, and have been contracted to develop and operate the Coastal GasLink pipeline.

Subordinated Demand Revolving Credit Facility

We have a subordinated demand revolving credit facility with Coastal GasLink LP to provide additional short-term liquidity and funding flexibility to the project. The facility bears interest at a floating market-based rate and had a capacity of $500 million with an outstanding balance of $1 million at June 30, 2022 (December 31, 2021 – $1 million) reflected in Loans receivable from affiliates under Current assets on our Condensed consolidated balance sheet.

Subordinated Loan Agreement

In 2021, we entered into a subordinated loan agreement with Coastal GasLink LP to provide temporary financing to fund incremental project costs as a bridge to a required increase in project-level financing. In March 2022, TC Energy increased its commitment under this subordinated loan agreement by $500 million, which brought the total capacity of this loan to $3.8 billion with an outstanding balance of $350 million as at June 30, 2022 (December 31, 2021 – $238 million) that is reflected in Long-term loans receivable from affiliate on our Condensed consolidated balance sheet. This loan balance is expected to be repaid prior to the in-service date of the pipeline.

Upon completion of and subject to definitive agreements with our equity partners, this loan agreement will be amended such that any amounts loaned to Coastal GasLink LP going forward will earn a floating market-based interest rate, which will be repaid subsequent to the in-service date of the Coastal GasLink pipeline when final costs are determined.

TC Energy Second Quarter 2022 | 41

In accordance with a binding commitment subject to the execution of definitive agreements with our Coastal GasLink LP partners, our commitment under the amended subordinated loan agreement between TC Energy and Coastal GasLink LP will be stepped down from the current $3.8 billion over time as capacity under the project-level credit facilities is increased and we make installment payments of the $1.9 billion equity contribution we have committed to make to Coastal GasLink LP.

FINANCIAL INSTRUMENTS

With the exception of long-term debt and junior subordinated notes, our derivative and non-derivative financial

instruments are recorded on the balance sheet at fair value unless they were entered into and continue to be held for the purpose of receipt or delivery in accordance with our normal purchase and sales exemptions and are documented as such. In addition, fair value accounting is not required for other financial instruments that qualify for certain accounting exemptions.

Derivative instruments

We use derivative instruments to reduce volatility associated with fluctuations in commodity prices, interest rates and foreign exchange rates. Derivative instruments, including those that qualify and are designated for hedge accounting treatment, are recorded at fair value.

The majority of derivative instruments that are not designated or do not qualify for hedge accounting treatment have been entered into as economic hedges to manage our exposure to market risk and are classified as held for trading. Changes in the fair value of held-for-trading derivative instruments are recorded in net income in the period of change. This may expose us to increased variability in reported operating results since the fair value of the held-for-trading derivative instruments can fluctuate significantly from period to period.

The recognition of gains and losses on derivatives for Canadian natural gas regulated pipeline exposures is determined through the regulatory process. Gains and losses arising from changes in the fair value of derivatives accounted for as part of RRA, including those that qualify for hedge accounting treatment, are expected to be recovered or refunded through the tolls charged by us. As a result, these gains and losses are deferred as regulatory assets or regulatory liabilities and are collected from or refunded to the ratepayers in subsequent years when the derivative settles.

Balance sheet presentation of derivative instruments

The balance sheet presentation of the fair value of derivative instruments is as follows:


(millions of $)	June 30, 2022	December 31, 2021

Other current assets	548	169
Other long-term assets	58	48
Accounts payable and other	(694)	(221)
Other long-term liabilities	(55)	(47)
	(143)	(51)

42 | TC Energy Second Quarter 2022

Unrealized and realized gains and losses on derivative instruments

The following summary does not include hedges of our net investment in foreign operations:


	three months ended June 30		six months ended June 30
(millions of $)	2022	2021	2022	2021

Derivative Instruments Held for Trading1
Amount of unrealized (losses)/gains in the period
Commodities	(20)	(15)	(58)	16
Foreign exchange	(60)	(63)	(38)	(58)

Amount of realized gains/(losses) in the period
Commodities	255	48	396	109
Foreign exchange	(13)	117	28	158

Derivative Instruments in Hedging Relationships
Amount of realized (losses)/gains in the period
Commodities	(15)	(12)	(18)	(23)

Interest rate	1	(6)	(2)	(12)

1Realized and unrealized gains and losses on held-for-trading derivative instruments used to purchase and sell commodities are included on a net basis in Revenues. Realized and unrealized gains and losses on foreign exchange held-for-trading derivative instruments are included on a net basis in Interest income and other.

For further details on our non-derivative and derivative financial instruments, including classification assumptions made in the calculation of fair value and additional discussion of exposure to risks and mitigation activities, refer to Note 13, Risk management and financial instruments, of our Condensed consolidated financial statements.

TC Energy Second Quarter 2022 | 43

Other information

CONTROLS AND PROCEDURES

Management, including our President and CEO and our CFO, evaluated the effectiveness of our disclosure controls and procedures as at June 30, 2022, as required by the Canadian securities regulatory authorities and by the SEC and concluded that our disclosure controls and procedures are effective at a reasonable assurance level.

There were no changes in second quarter 2022 that had or are likely to have a material impact on our internal control over financial reporting.

CRITICAL ACCOUNTING ESTIMATES AND ACCOUNTING POLICY CHANGES

When we prepare financial statements that conform with U.S. GAAP, we are required to make estimates and assumptions that affect the timing and amounts we record for our assets, liabilities, revenues and expenses because these items may be affected by future events. We base the estimates and assumptions on the most current information available, using our best judgment. We also regularly assess the assets and liabilities themselves. A summary of our critical accounting estimates is included in our 2021 Annual Report.

Impairment of long-lived assets and goodwill

Goodwill is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate it might be impaired. We can initially make this assessment based on qualitative factors. If we conclude that it is more likely than not that the fair value of the reporting unit is less than its carrying value, we will then perform a quantitative goodwill impairment test.

During first quarter 2022, we elected to pursue an unanticipated opportunity to extend the existing recourse rates on Great Lakes. This prompted us to re-evaluate the impact of maintaining recourse rates at the current level as opposed to moving forward with the previously presumed Great Lakes rate case process in 2022.

On March 18, 2022, Great Lakes reached a pre-filing settlement with its customers and filed an unopposed rate case settlement with FERC by which Great Lakes and the settling parties agreed to maintain existing recourse rates through October 31, 2025. While the settlement created short-term rate certainty, it prompted a re-evaluation of Great Lakes’ long-term free cash flows. With recourse rates maintained at the current level for the next three years, the expectation of increased contracting, growth and other near-term commercial and regulatory opportunities were negatively impacted.

Management performed a quantitative impairment test that evaluated a range of assumptions through a discounted cash flow analysis using a risk-adjusted discount rate. It was determined that the estimated fair value of the Great Lakes reporting unit no longer exceeded its carrying value, including goodwill, and that an impairment charge was necessary. As a result, we recorded a pre-tax goodwill impairment charge of $571 million ($531 million after tax) within the U.S. Natural Gas Pipelines segment that is included in Goodwill and asset impairment charges and other in the Condensed consolidated statement of income and was excluded from comparable earnings. The remaining goodwill balance related to Great Lakes is US$122 million at June 30, 2022 (December 31, 2021 – US$573 million). There is a risk that continued reductions in future cash flow forecasts and adverse changes in other key assumptions could result in a future impairment of the goodwill balance relating to Great Lakes.

We have elected to allocate goodwill impairment charges first to goodwill that is non-deductible for income tax purposes, with any remaining charge allocated to tax-deductible goodwill. The majority of the Great Lakes goodwill impairment charge was allocated to non-deductible goodwill and the income tax recovery of $40 million was attributable to the portion of the goodwill that was deductible for income tax purposes.

Accounting changes

Our significant accounting policies have remained unchanged since December 31, 2021 other than as described in Note 2, Accounting changes, of our Condensed consolidated financial statements. A summary of our significant accounting policies is included in our 2021 Annual Report.

44 | TC Energy Second Quarter 2022

Quarterly results

SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA


	2022		2021				2020
(millions of $, except per share amounts)	Second	First	Fourth	Third	Second	First	Fourth	Third

Revenues	3,637	3,500	3,584	3,240	3,182	3,381	3,297	3,195
Net income/(loss) attributable to common shares	889	358	1,118	779	975	(1,057)	1,124	904
Comparable earnings	979	1,103	1,028	970	1,038	1,106	1,069	891
Per share statistics:
Net income/(loss) per common share – basic	$0.90	$0.36	$1.14	$0.80	$1.00	($1.11)	$1.20	$0.96
Comparable earnings per common share	$1.00	$1.12	$1.05	$0.99	$1.06	$1.16	$1.14	$0.95
Dividends declared per common share	$0.90	$0.90	$0.87	$0.87	$0.87	$0.87	$0.81	$0.81

FACTORS AFFECTING QUARTERLY FINANCIAL INFORMATION BY BUSINESS SEGMENT

Quarter-over-quarter revenues and net income fluctuate for reasons that vary across our business segments.

In our Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines and Mexico Natural Gas Pipelines segments, except for seasonal fluctuations in short-term throughput volumes on U.S. pipelines, quarter-over-quarter revenues and segmented earnings generally remain relatively stable during any fiscal year. Over the long term, however, they fluctuate because of:

•regulatory decisions

•negotiated settlements with customers

•newly constructed assets being placed in service

•acquisitions and divestitures

•developments outside of the normal course of operations

•certain fair value adjustments.

In Liquids Pipelines, annual revenues and segmented earnings are based on contracted and uncontracted spot transportation, as well as liquids marketing activities. Quarter-over-quarter revenues and segmented earnings are affected by:

•regulatory decisions

•newly constructed assets being placed in service

•acquisitions and divestitures

•demand for uncontracted transportation services

•liquids marketing activities and commodity prices

•developments outside of the normal course of operations

•certain fair value adjustments.

In Power and Storage, quarter-over-quarter revenues and segmented earnings are affected by:

•weather

•customer demand

•newly constructed assets being placed in service

•acquisitions and divestitures

•market prices for natural gas and power

•capacity prices and payments

•planned and unplanned plant outages

•developments outside of the normal course of operations

•certain fair value adjustments.

TC Energy Second Quarter 2022 | 45

FACTORS AFFECTING FINANCIAL INFORMATION BY QUARTER

We calculate comparable measures by adjusting certain GAAP and non-GAAP measures for specific items we believe are significant but not reflective of our underlying operations in the period.

In second quarter 2022, comparable earnings also excluded:

•preservation and storage costs for Keystone XL pipeline project assets of $3 million after tax, which could not be accrued as part of the Keystone XL asset impairment charge

•a $2 million income tax expense for the settlement related to prior years' income tax assessments in Mexico.

In first quarter 2022, comparable earnings also excluded:

•an after-tax goodwill impairment charge of $531 million related to Great Lakes

•a $193 million income tax expense for the settlement-in-principle of matters related to prior years' income tax assessments in Mexico

•preservation and storage costs for Keystone XL pipeline project assets of $5 million after tax, which could not be accrued as part of the Keystone XL asset impairment charge.

In fourth quarter 2021, comparable earnings also excluded:

•an incremental $60 million after-tax reduction to the Keystone XL asset impairment charge, net of expected contractual recoveries and other contractual and legal obligations, related to the termination of the Keystone XL pipeline project

•an after-tax gain of $19 million related to the sale of the remaining interest in Northern Courier

•preservation and storage costs for Keystone XL pipeline project assets of $10 million after tax, which could not be accrued as part of the Keystone XL asset impairment charge

•a $7 million after-tax gain related to pension adjustments as part of the Voluntary Retirement Program (VRP)

•an incremental $6 million income tax expense related to the sale of our Ontario natural gas-fired power plants sold in 2020.

In third quarter 2021, comparable earnings also excluded:

•a $55 million after-tax expense with respect to transition payments incurred as part of the VRP

•preservation and other costs of $11 million after tax primarily related to the preservation and storage of Keystone XL pipeline project assets.

In second quarter 2021, comparable earnings also excluded:

•preservation and other costs of $16 million after tax, which could not be accrued as part of the Keystone XL asset impairment charge and interest expense on the Keystone XL project-level credit facility prior to its termination

•a $13 million after-tax recovery of certain costs from the IESO associated with the Ontario natural gas-fired power plants sold in 2020

•an incremental $2 million after-tax asset impairment charge, net of expected contractual recoveries and other contractual and legal obligations, related to the termination of the Keystone XL pipeline project.

46 | TC Energy Second Quarter 2022

In first quarter 2021, comparable earnings also excluded:

•an after-tax asset impairment charge, net of expected contractual recoveries and other contractual and legal obligations, of $2.2 billion related to the formal suspension of the Keystone XL pipeline project following the January 2021 revocation of the Presidential Permit.

In fourth quarter 2020, comparable earnings also excluded:

•an incremental after-tax loss of $81 million related to the sale of our Ontario natural gas-fired power plants

•an income tax valuation allowance release of $18 million related to certain prior years' U.S. income tax losses resulting from our reassessment of deferred tax assets that are more likely than not to be realized

•an additional $18 million income tax recovery related to state income taxes on the sale of certain Columbia Midstream assets in 2019.

In third quarter 2020, comparable earnings also excluded:

•an incremental after-tax loss of $45 million related to the sale of the Ontario natural gas-fired power plants

•a $6 million reduction in the after-tax gain related to the sale of a 65 per cent equity interest in Coastal GasLink LP.

TC Energy Second Quarter 2022 | 47

Document

EXHIBIT 13.2

Condensed consolidated statement of income


	three months ended June 30		six months ended June 30
(unaudited - millions of Canadian $, except per share amounts)	2022	2021	2022	2021

Revenues
Canadian Natural Gas Pipelines	1,175	1,126	2,263	2,245
U.S. Natural Gas Pipelines	1,397	1,206	2,846	2,557
Mexico Natural Gas Pipelines	156	149	308	303
Liquids Pipelines	692	516	1,360	1,089
Power and Storage	217	185	360	369
	3,637	3,182	7,137	6,563
Income from Equity Investments	236	157	441	416
Operating and Other Expenses
Plant operating costs and other	1,173	959	2,179	1,845
Commodity purchases resold	173	—	301	—
Property taxes	213	196	420	392
Depreciation and amortization	635	633	1,261	1,278
Goodwill and asset impairment charges and other	—	9	571	2,854
	2,194	1,797	4,732	6,369
Gain on Sale of Assets	—	17	—	17
Financial Charges
Interest expense	620	583	1,200	1,153
Allowance for funds used during construction	(63)	(64)	(138)	(114)
Interest income and other	43	(127)	(18)	(189)
	600	392	1,044	850
Income/(Loss) before Income Taxes	1,079	1,167	1,802	(223)
Income Tax Expense/(Recovery)
Current	94	58	369	267
Deferred	54	89	102	(560)
	148	147	471	(293)
Net Income	931	1,020	1,331	70
Net income attributable to non-controlling interests	9	6	20	75
Net Income/(Loss) Attributable to Controlling Interests	922	1,014	1,311	(5)
Preferred share dividends	33	39	64	77
Net Income/(Loss) Attributable to Common Shares	889	975	1,247	(82)
Net Income/(Loss) per Common Share
Basic and diluted	$0.90	$1.00	$1.27	($0.08)

Weighted Average Number of Common Shares (millions)
Basic	983	979	982	966
Diluted	984	979	983	966

See accompanying Notes to the Condensed consolidated financial statements.

48 | TC Energy Second Quarter 2022

Condensed consolidated statement of comprehensive income


	three months ended June 30		six months ended June 30
(unaudited - millions of Canadian $)	2022	2021	2022	2021

Net Income	931	1,020	1,331	70
Other Comprehensive Income/(Loss), Net of Income Taxes
Foreign currency translation gains and losses on net investment in foreign operations	663	(233)	362	(531)
Change in fair value of net investment hedges	(27)	13	(8)	24
Change in fair value of cash flow hedges	(6)	(11)	12	—
Reclassification to net income of gains and losses on cash flow hedges	7	10	15	18

Reclassification to net income of actuarial gains and losses on pension and other post-retirement benefit plans	3	4	4	7
Other comprehensive income/(loss) on equity investments	165	(57)	345	130
Other comprehensive income/(loss)	805	(274)	730	(352)
Comprehensive Income/(Loss)	1,736	746	2,061	(282)
Comprehensive income attributable to non-controlling interests	13	6	22	63
Comprehensive Income/(Loss) Attributable to Controlling Interests	1,723	740	2,039	(345)
Preferred share dividends	33	39	64	77
Comprehensive Income/(Loss) Attributable to Common Shares	1,690	701	1,975	(422)

See accompanying Notes to the Condensed consolidated financial statements.

TC Energy Second Quarter 2022 | 49

Condensed consolidated statement of cash flows


	three months ended June 30		six months ended June 30
(unaudited - millions of Canadian $)	2022	2021	2022	2021

Cash Generated from Operations
Net income	931	1,020	1,331	70
Depreciation and amortization	635	633	1,261	1,278
Goodwill and asset impairment charges and other	—	9	571	2,854
Deferred income taxes	54	89	102	(560)
Income from equity investments	(236)	(157)	(441)	(416)
Distributions received from operating activities of equity investments	208	215	442	502
Employee post-retirement benefits funding, net of expense	(5)	1	(11)	6
Gain on sale of assets	—	(17)	—	(17)
Equity allowance for funds used during construction	(45)	(45)	(98)	(79)
Unrealized losses on financial instruments	80	78	96	42
Foreign exchange (gains)/losses on loan receivable from affiliate	—	(32)	28	3
Other	(62)	(56)	(54)	(47)
Increase in operating working capital	(618)	(27)	(578)	(259)
Net cash provided by operations	942	1,711	2,649	3,377
Investing Activities
Capital expenditures	(1,263)	(1,214)	(2,771)	(2,859)

Contributions to equity investments	(219)	(225)	(1,634)	(465)
Keystone XL contractual recoveries	473	—	473	—
Loans to affiliate repaid/(issued), net	51	(220)	(112)	(220)

Other distributions from equity investments	32	—	1,231	—
Deferred amounts and other	(107)	(98)	(53)	(404)
Net cash used in investing activities	(1,033)	(1,757)	(2,866)	(3,948)
Financing Activities
Notes payable (repaid)/issued, net	(116)	247	214	(2,460)
Long-term debt issued, net of issue costs	2,510	1,822	2,510	7,751
Long-term debt repaid	—	—	(26)	(980)
Junior subordinated notes issued, net of issue costs	(3)	(1)	1,008	495

Redeemable non-controlling interest repurchased	—	—	—	(633)
Dividends on common shares	(885)	(852)	(1,738)	(1,613)
Dividends on preferred shares	(32)	(38)	(63)	(77)
Distributions to non-controlling interests	(13)	(8)	(23)	(59)
Distributions on Class C Interests	(2)	—	(23)	—
Common shares issued, net of issue costs	29	26	158	60
Preferred shares redeemed	(1,000)	(500)	(1,000)	(500)
Other	12	(10)	17	(15)
Net cash provided by financing activities	500	686	1,034	1,969
Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents	22	(9)	14	(40)
Increase in Cash and Cash Equivalents	431	631	831	1,358
Cash and Cash Equivalents
Beginning of period	1,073	2,257	673	1,530
Cash and Cash Equivalents
End of period	1,504	2,888	1,504	2,888

See accompanying Notes to the Condensed consolidated financial statements.

50 | TC Energy Second Quarter 2022

Condensed consolidated balance sheet


(unaudited - millions of Canadian $)		June 30, 2022	December 31, 2021

ASSETS
Current Assets
Cash and cash equivalents		1,504	673
Accounts receivable		3,820	3,092
Loans receivable from affiliates		1,209	1,217
Inventories		1,045	724

Other current assets		1,681	1,717
		9,259	7,423
Plant, Property and Equipment	net of accumulated depreciation of $33,281 and $31,930, respectively	72,609	70,182
Equity Investments		9,324	8,441
Long-Term Loans Receivable from Affiliate		350	238
Restricted Investments		1,987	2,182
Regulatory Assets		1,904	1,767
Goodwill		12,215	12,582
Other Long-Term Assets		1,485	1,403
		109,133	104,218
LIABILITIES
Current Liabilities
Notes payable		5,466	5,166
Accounts payable and other		5,900	5,099
Dividends payable		896	879
Accrued interest		621	577
Current portion of long-term debt		1,599	1,320
		14,482	13,041
Regulatory Liabilities		4,251	4,300
Other Long-Term Liabilities		1,057	1,059
Deferred Income Tax Liabilities		6,501	6,142
Long-Term Debt		39,990	37,341
Junior Subordinated Notes		10,074	8,939
		76,355	70,822
EQUITY
Common shares, no par value		26,891	26,716
Issued and outstanding:	June 30, 2022 – 984 million shares December 31, 2021 – 981 million shares
Preferred shares		2,499	3,487
Additional paid-in capital		717	729
Retained earnings		3,254	3,773
Accumulated other comprehensive loss		(706)	(1,434)
Controlling Interests		32,655	33,271
Non-Controlling Interests		123	125
		32,778	33,396
		109,133	104,218

Contingencies and Guarantees (Note 14)

Variable Interest Entities (Note 15)

Subsequent Events (Note 16)

See accompanying Notes to the Condensed consolidated financial statements.

TC Energy Second Quarter 2022 | 51

Condensed consolidated statement of equity


	three months ended June 30		six months ended June 30
(unaudited - millions of Canadian $)	2022	2021	2022	2021

Common Shares
Balance at beginning of period	26,860	26,589	26,716	24,488
Shares issued:
Exercise of stock options	31	29	175	67
Acquisition of TC PipeLines, LP, net of transaction costs	—	—	—	2,063
Balance at end of period	26,891	26,618	26,891	26,618
Preferred Shares
Balance at beginning of period	3,487	3,980	3,487	3,980
Redemption of shares	(988)	(493)	(988)	(493)
Balance at end of period	2,499	3,487	2,499	3,487
Additional Paid-In Capital
Balance at beginning of period	717	—	729	2
Keystone XL project-level credit facility retirement and issuance of Class C Interests	—	737	—	737
Acquisition of TC PipeLines, LP	—	—	—	(398)
Repurchase of redeemable non-controlling interest	—	394	—	394
Issuance of stock options, net of exercises	—	—	(12)	(1)
Reclassification of additional paid-in capital deficit to retained earnings	—	(397)	—	—
Balance at end of period	717	734	717	734
Retained Earnings
Balance at beginning of period	3,261	3,082	3,773	5,367
Net income/(loss) attributable to controlling interests	922	1,014	1,311	(5)
Common share dividends	(885)	(852)	(1,769)	(1,704)
Preferred share dividends	(32)	(38)	(49)	(55)
Redemption of preferred shares	(12)	(7)	(12)	(7)
Reclassification of additional paid-in capital deficit to retained earnings	—	397	—	—
Balance at end of period	3,254	3,596	3,254	3,596
Accumulated Other Comprehensive Loss
Balance at beginning of period	(1,507)	(2,152)	(1,434)	(2,439)
Other comprehensive income/(loss) attributable to controlling interests	801	(274)	728	(340)
Acquisition of TC PipeLines, LP	—	—	—	353
Balance at end of period	(706)	(2,426)	(706)	(2,426)
Equity Attributable to Controlling Interests	32,655	32,009	32,655	32,009
Equity Attributable to Non-Controlling Interests
Balance at beginning of period	124	125	125	1,682
Net income attributable to non-controlling interests	9	6	20	74
Other comprehensive income/(loss) attributable to non-controlling interests	4	—	2	(12)
Distributions declared to non-controlling interests	(14)	(9)	(24)	(59)
Acquisition of TC PipeLines, LP	—	—	—	(1,563)
Balance at end of period	123	122	123	122
Total Equity	32,778	32,131	32,778	32,131

See accompanying Notes to the Condensed consolidated financial statements.

52 | TC Energy Second Quarter 2022

Notes to Condensed consolidated financial statements

(unaudited)

1. BASIS OF PRESENTATION

These Condensed consolidated financial statements of TC Energy Corporation (TC Energy or the Company) have been prepared by management in accordance with U.S. GAAP. The accounting policies applied are consistent with those outlined in TC Energy’s annual audited Consolidated financial statements for the year ended December 31, 2021, except as described in Note 2, Accounting changes. Capitalized and abbreviated terms that are used but not otherwise defined herein are identified in the 2021 audited Consolidated financial statements included in TC Energy’s 2021 Annual Report.

These Condensed consolidated financial statements reflect adjustments, all of which are normal recurring adjustments that are, in the opinion of management, necessary to reflect fairly the financial position and results of operations for the respective periods. These Condensed consolidated financial statements do not include all disclosures required in the annual financial statements and should be read in conjunction with the 2021 audited Consolidated financial statements included in TC Energy’s 2021 Annual Report. Certain comparative figures have been adjusted to reflect the current period's presentation.

Earnings for interim periods may not be indicative of results for the fiscal year in certain of the Company’s segments primarily due to:

•Natural gas pipelines segments – the timing of regulatory decisions and seasonal fluctuations in short-term throughput volumes on U.S. pipelines

•Liquids Pipelines – fluctuations in throughput volumes on the Keystone Pipeline System and marketing activities

•Power and Storage – the impacts of seasonal weather conditions on customer demand, market supply and prices of natural gas and power as well as maintenance outages in certain of the Company’s investments in electrical power generation plants and Canadian non-regulated gas storage facilities.

Use of Estimates and Judgments

In preparing these financial statements, TC Energy is required to make estimates and assumptions that affect both the amount and timing of recording assets, liabilities, revenues and expenses since the determination of these items may be dependent on future events. The Company uses the most current information available and exercises careful judgment in making these estimates and assumptions. In the opinion of management, these Condensed consolidated financial statements have been properly prepared within reasonable limits of materiality and within the framework of the Company’s significant accounting policies included in the annual audited Consolidated financial statements for the year ended December 31, 2021, except as described in Note 2, Accounting changes.

TC Energy Second Quarter 2022 | 53

2. ACCOUNTING CHANGES

Reference Rate Reform

In March 2020, FASB issued optional guidance with respect to the expected cessation of the U.S. dollar London Interbank Offered Rate (LIBOR), for which certain rate settings ceased to be published at the end of 2021 with full cessation by mid-2023. The guidance provides optional expedients for contracts and hedging relationships that are affected by reference rate reform if certain criteria are met. The Company expects to use practical expedients available in the guidance to treat contract modifications as events that do not require contract remeasurement or reassessment of previous accounting determinations. As such, these changes are not expected to have a material impact on the Company's consolidated financial statements.

To date, the Company has completed its analysis of contracts impacted by reference rate reform as well as the necessary system changes to facilitate the adoption of the proposed standard market reference rates. For the six months ended June 30, 2022, the Company has not identified any applicable contract modifications as a result of reference rate reform. TC Energy continues to monitor any new developments with respect to this guidance.

On May 16, 2022, Refinitiv Benchmark Services (UK) Limited, the administrator of the Canadian Dollar Offered Rate (CDOR), announced that the calculation and publication of all tenors of CDOR will permanently cease following a final publication on June 28, 2024. The Company is currently evaluating the impact of this guidance on contracts and financial instruments with variable rate components that reference CDOR and has not yet determined the effect on its consolidated financial statements.

Changes in Accounting Policies for 2022

Government Assistance

In November 2021, the FASB issued new guidance that expands annual disclosure requirements for entities that account for a transaction with a government by applying a grant or contribution accounting model by analogy to other accounting guidance. Entities are required to disclose the nature of the transactions, the related accounting policies used to account for the transactions, the effect of the transactions on an entity’s financial statements and any significant terms and conditions of the transaction. This new guidance is effective for annual disclosure requirements at December 31, 2022 and can be applied either prospectively or retrospectively, with early application permitted. The Company adopted the guidance effective January 1, 2022 on a prospective basis and it did not have a material impact on the Company's consolidated financial statements.

Contract Assets and Liabilities from Contracts with Customers

In October 2021, the FASB issued new guidance that amends the accounting for contract assets and liabilities from contracts with customers acquired in a business combination. At the acquisition date, an acquirer should account for the contract assets and liabilities in accordance with guidance on revenue from contracts with customers. This new guidance is effective January 1, 2023 and is applied prospectively with early adoption permitted. Early adoption requires the application of the amendments retrospectively to all business combinations with an acquisition date in the year of early adoption. The Company elected to adopt the new guidance effective January 1, 2022 and it did not have any impact on the Company's consolidated financial statements.

54 | TC Energy Second Quarter 2022

3. SEGMENTED INFORMATION


three months ended June 30, 2022	Canadian Natural Gas Pipelines	U.S. Natural Gas Pipelines	Mexico Natural Gas Pipelines	Liquids Pipelines	Power and Storage
(unaudited - millions of Canadian $)						Corporate1		Total

Revenues	1,175	1,397	156	692	217	—		3,637
Intersegment revenues	—	34	—	—	12	(46)	2	—
	1,175	1,431	156	692	229	(46)		3,637
Income from equity investments	5	59	48	13	111	—		236
Plant operating costs and other	(423)	(456)	(14)	(171)	(145)	36	2	(1,173)
Commodity purchase resold	—	—	—	(163)	(10)	—		(173)
Property taxes	(76)	(106)	—	(30)	(1)	—		(213)
Depreciation and amortization	(296)	(217)	(28)	(80)	(14)	—		(635)


Segmented Earnings/(Losses)	385	711	162	261	170	(10)		1,679
Interest expense								(620)
Allowance for funds used during construction								63
Interest income and other								(43)
Income before Income Taxes								1,079
Income tax expense								(148)
Net Income								931
Net income attributable to non-controlling interests								(9)
Net Income Attributable to Controlling Interests								922
Preferred share dividends								(33)
Net Income Attributable to Common Shares								889

1Includes intersegment eliminations.

2The Company records intersegment sales at contracted rates. For segmented reporting, these transactions are included as Intersegment revenues in the segment providing the service and Plant operating costs and other in the segment receiving the service. These transactions are eliminated on consolidation. Intersegment profit is recognized when the product or service has been provided to third parties or otherwise realized.

TC Energy Second Quarter 2022 | 55


three months ended June 30, 2021	Canadian Natural Gas Pipelines	U.S. Natural Gas Pipelines	Mexico Natural Gas Pipelines	Liquids Pipelines	Power and Storage
(unaudited - millions of Canadian $)						Corporate1		Total

Revenues	1,126	1,206	149	516	185	—		3,182
Intersegment revenues	—	36	—	—	—	(36)	2	—
	1,126	1,242	149	516	185	(36)		3,182
Income/(loss) from equity investments	2	51	28	18	90	(32)	3	157
Plant operating costs and other	(369)	(327)	(13)	(169)	(113)	32	2	(959)

Property taxes	(75)	(91)	—	(28)	(2)	—		(196)
Depreciation and amortization	(323)	(187)	(26)	(78)	(19)	—		(633)
Asset impairment charge and other	—	—	—	(9)	—	—		(9)
Gain on sale of assets	—	—	—	—	17	—		17
Segmented Earnings/(Losses)	361	688	138	250	158	(36)		1,559
Interest expense								(583)
Allowance for funds used during construction								64
Interest income and other3								127
Income before Income Taxes								1,167
Income tax expense								(147)
Net Income								1,020
Net income attributable to non-controlling interests								(6)
Net Income Attributable to Controlling Interests								1,014
Preferred share dividends								(39)
Net Income Attributable to Common Shares								975

1Includes intersegment eliminations.

3Income/(loss) from equity investments includes the Company's proportionate share of Sur de Texas foreign exchange gains and losses on the peso-denominated loans from affiliates which are fully offset in Interest income and other by the corresponding foreign exchange losses and gains on the affiliate receivable balance. Refer to Note 7, Loans receivable from affiliates, for additional information.

56 | TC Energy Second Quarter 2022


six months ended June 30, 2022	Canadian Natural Gas Pipelines	U.S. Natural Gas Pipelines	Mexico Natural Gas Pipelines	Liquids Pipelines	Power and Storage
(unaudited - millions of Canadian $)						Corporate1		Total

Revenues	2,263	2,846	308	1,360	360	—		7,137
Intersegment revenues	—	68	—	—	12	(80)	2	—
	2,263	2,914	308	1,360	372	(80)		7,137
Income from equity investments	9	138	57	27	182	28	3	441
Plant operating costs and other	(796)	(823)	(27)	(344)	(262)	73	2	(2,179)
Commodity purchase resold	—	—	—	(291)	(10)	—		(301)
Property taxes	(151)	(209)	—	(58)	(2)	—		(420)
Depreciation and amortization	(582)	(428)	(56)	(161)	(34)	—		(1,261)
Goodwill impairment charge	—	(571)	—	—	—	—		(571)

Segmented Earnings	743	1,021	282	533	246	21		2,846
Interest expense								(1,200)
Allowance for funds used during construction								138
Interest income and other3								18
Income before Income Taxes								1,802
Income tax expense								(471)
Net Income								1,331
Net income attributable to non-controlling interests								(20)
Net Income Attributable to Controlling Interests								1,311
Preferred share dividends								(64)
Net Income Attributable to Common Shares								1,247

1Includes intersegment eliminations.

3Income from equity investments includes the Company's proportionate share of Sur de Texas foreign exchange gains and losses on the peso-denominated loans from affiliates which are fully offset in Interest income and other by the corresponding foreign exchange losses and gains on the affiliate receivable balance until March 15, 2022, when it was fully repaid upon maturity. Refer to Note 7, Loans receivable from affiliates, for additional information.

TC Energy Second Quarter 2022 | 57


six months ended June 30, 2021	Canadian Natural Gas Pipelines	U.S. Natural Gas Pipelines	Mexico Natural Gas Pipelines	Liquids Pipelines	Power and Storage
(unaudited - millions of Canadian $)						Corporate1		Total

Revenues	2,245	2,557	303	1,089	369	—		6,563
Intersegment revenues	—	74	—	—	13	(87)	2	—
	2,245	2,631	303	1,089	382	(87)		6,563
Income from equity investments	4	122	66	36	185	3	3	416
Plant operating costs and other	(729)	(634)	(25)	(315)	(222)	80	2	(1,845)

Property taxes	(150)	(183)	—	(56)	(3)	—		(392)
Depreciation and amortization	(653)	(375)	(54)	(158)	(38)	—		(1,278)
Asset impairment charge and other	—	—	—	(2,854)	—	—		(2,854)
Gain on sale of assets	—	—	—	—	17	—		17
Segmented Earnings/(Losses)	717	1,561	290	(2,258)	321	(4)		627
Interest expense								(1,153)
Allowance for funds used during construction								114
Interest income and other3								189
Loss before Income Taxes								(223)
Income tax recovery								293
Net Income								70
Net income attributable to non-controlling interests								(75)
Net Loss Attributable to Controlling Interests								(5)
Preferred share dividends								(77)
Net Loss Attributable to Common Shares								(82)

1Includes intersegment eliminations.

3Income from equity investments includes the Company's proportionate share of Sur de Texas foreign exchange gains and losses on the peso-denominated loans from affiliates which are fully offset in Interest income and other by the corresponding foreign exchange losses and gains on the affiliate receivable balance. Refer to Note 7, Loans receivable from affiliates, for additional information.

Total Assets by Segment


(unaudited - millions of Canadian $)	June 30, 2022	December 31, 2021

Canadian Natural Gas Pipelines	26,736	25,213
U.S. Natural Gas Pipelines	46,608	45,502
Mexico Natural Gas Pipelines	7,796	7,547
Liquids Pipelines	15,620	14,951
Power and Storage	6,959	6,563
Corporate	5,414	4,442
	109,133	104,218

58 | TC Energy Second Quarter 2022

4. REVENUES

Disaggregation of Revenues

The following tables summarize total Revenues for the three and six months ended June 30, 2022 and 2021:


three months ended June 30, 2022	Canadian Natural Gas Pipelines	U.S. Natural Gas Pipelines	Mexico Natural Gas Pipelines	Liquids Pipelines	Power and Storage	Total
(unaudited - millions of Canadian $)

Revenues from contracts with customers
Capacity arrangements and transportation	1,157	1,034	148	464	—	2,803
Power generation	—	—	—	—	103	103
Natural gas storage and other1	18	366	8	2	139	533
	1,175	1,400	156	466	242	3,439
Other revenues2,3	—	(3)	—	226	(25)	198
	1,175	1,397	156	692	217	3,637

1Includes $18 million of fee revenues from an affiliate related to development and construction of the Coastal GasLink pipeline project which is 35 per cent owned by TC Energy.

2Other revenues include income from the Company's marketing activities, financial instruments and lease arrangements. Refer to Note 13, Risk management and financial instruments, for additional information on financial instruments.

3Includes $30 million of operating lease income.


three months ended June 30, 2021	Canadian Natural Gas Pipelines	U.S. Natural Gas Pipelines	Mexico Natural Gas Pipelines	Liquids Pipelines	Power and Storage	Total
(unaudited - millions of Canadian $)

Revenues from contracts with customers
Capacity arrangements and transportation	1,103	948	141	485	—	2,677
Power generation	—	—	—	—	79	79
Natural gas storage and other1	23	247	8	1	82	361
	1,126	1,195	149	486	161	3,117
Other revenues2,3	—	11	—	30	24	65
	1,126	1,206	149	516	185	3,182

1Includes $23 million of fee revenues from an affiliate related to development and construction of the Coastal GasLink pipeline project which is 35 per cent owned by TC Energy.

3Includes $32 million of operating lease income.

TC Energy Second Quarter 2022 | 59



six months ended June 30, 2022	Canadian Natural Gas Pipelines	U.S. Natural Gas Pipelines	Mexico Natural Gas Pipelines	Liquids Pipelines	Power and Storage	Total
(unaudited - millions of Canadian $)

Revenues from contracts with customers
Capacity arrangements and transportation	2,224	2,231	293	973	—	5,721
Power generation	—	—	—	—	190	190
Natural gas storage and other1	39	623	15	3	205	885
	2,263	2,854	308	976	395	6,796
Other revenues2,3	—	(8)	—	384	(35)	341
	2,263	2,846	308	1,360	360	7,137

1Includes $39 million of fee revenues from an affiliate related to development and construction of the Coastal GasLink pipeline project which is 35 per cent owned by TC Energy.

3Includes $61 million of operating lease income.



six months ended June 30, 2021	Canadian Natural Gas Pipelines	U.S. Natural Gas Pipelines	Mexico Natural Gas Pipelines	Liquids Pipelines	Power and Storage	Total
(unaudited - millions of Canadian $)

Revenues from contracts with customers
Capacity arrangements and transportation	2,195	2,067	287	971	—	5,520
Power generation	—	—	—	—	158	158
Natural gas storage and other1	50	457	16	2	158	683
	2,245	2,524	303	973	316	6,361
Other revenues2,3	—	33	—	116	53	202
	2,245	2,557	303	1,089	369	6,563

1Includes $50 million of fee revenues from an affiliate related to development and construction of the Coastal GasLink pipeline project which is 35 per cent owned by TC Energy.

3Includes $64 million of operating lease income.

Contract Balances


(unaudited - millions of Canadian $)	June 30, 2022	December 31, 2021	Affected line item on the Condensed consolidated balance sheet


Receivables from contracts with customers	1,627	1,627	Accounts receivable
Contract assets	243	202	Other current assets
Long-term contract assets	302	249	Other long-term assets
Contract liabilities1	91	90	Accounts payable and other
Long-term contract liabilities	187	184	Other long-term liabilities

1During the six months ended June 30, 2022, nil (2021 – $8 million) revenues were recognized that were included in contract liabilities at the beginning of the period.

60 | TC Energy Second Quarter 2022

Contract assets and long-term contract assets primarily relate to the Company’s right to revenues for services completed but not invoiced at the reporting date on long-term committed capacity natural gas pipelines contracts. The change in contract assets is primarily related to the transfer to Accounts receivable when these rights become unconditional and the customer is invoiced, as well as the recognition of additional revenues that remain to be invoiced. Contract liabilities and long-term contract liabilities primarily relate to force majeure fixed capacity payments received on long-term capacity arrangements in Mexico.

Future Revenues from Remaining Performance Obligations

As at June 30, 2022, future revenues from long-term pipeline capacity arrangements and transportation as well as natural gas storage and other contracts extending through 2049 are approximately $25.6 billion, of which approximately $3.8 billion is expected to be recognized during the remainder of 2022.

5. GOODWILL

Goodwill is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate it might be impaired. The Company can initially make this assessment based on qualitative factors. If the Company concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying value, it will then perform a quantitative goodwill impairment test.

Great Lakes

During first quarter 2022, TC Energy elected to pursue an unanticipated opportunity to extend the existing recourse rates on Great Lakes. This prompted the Company to re-evaluate the impact of maintaining recourse rates at the current level as opposed to moving forward with the previously presumed Great Lakes rate case process in 2022.

Management performed a quantitative impairment test that evaluated a range of assumptions through a discounted cash flow analysis using a risk-adjusted discount rate. It was determined that the estimated fair value of the Great Lakes reporting unit no longer exceeded its carrying value, including goodwill, and that an impairment charge was necessary. As a result, the Company recorded a pre-tax goodwill impairment charge of $571 million ($531 million after tax) within the U.S. Natural Gas Pipelines segment that is included in Goodwill and asset impairment charges and other in the Company's Condensed consolidated statement of income. The remaining goodwill balance related to Great Lakes is US$122 million at June 30, 2022 (December 31, 2021 – US$573 million). There is a risk that continued reductions in future cash flow forecasts and adverse changes in other key assumptions could result in a future impairment of the goodwill balance relating to Great Lakes.

The Company has elected to allocate goodwill impairment charges first to goodwill that is non-deductible for income tax purposes, with any remaining charge allocated to tax-deductible goodwill. The majority of the Great Lakes goodwill impairment charge was allocated to non-deductible goodwill and the income tax recovery of $40 million was attributable to the portion of the goodwill that was deductible for income tax purposes.

TC Energy Second Quarter 2022 | 61

6. INCOME TAXES

Effective Tax Rates

The effective income tax rates were 26 per cent and 132 per cent for the six months ended June 30, 2022 and 2021, respectively. The decrease in the effective income tax rate was primarily due to the impacts of the Keystone XL asset impairment charge and other recorded in 2021, partially offset by the settlement of Mexico income tax assessments discussed below and the non-tax deductible portion of the Great Lakes goodwill impairment charge recorded in the six months ended June 30, 2022.

Mexico Tax Audit

In 2019, the Mexican tax authority, the Tax Administration Services (SAT), completed an audit of the 2013 tax return of one of the Company’s subsidiaries in Mexico. The audit resulted in a tax assessment that denied the deduction for all interest expense and an assessment of additional tax, penalties and financial charges totaling less than US$1 million. The Company disagreed with this assessment and commenced litigation to challenge it. In January 2022, TC Energy received the tax court’s ruling on the 2013 tax return, which upheld the SAT assessment. From September 2021 to February 2022, the SAT issued assessments for tax years 2014 through 2017 which denied the deduction of all interest expense as well as assessed incremental withholding tax on the interest. These assessments totaled approximately US$490 million in income and withholding taxes, interest, penalties and other financial charges.

On April 27, 2022, TC Energy settled with the SAT on all of the above matters for the tax years 2013 through 2021. In the six months ended June 30, 2022, the Company recorded US$152 million of income tax expense (inclusive of withholding taxes, interest, penalties and other financial charges).

7. LOANS RECEIVABLE FROM AFFILIATES

Sur de Texas

TC Energy holds a 60 per cent equity interest in a joint venture with IEnova to own the Sur de Texas pipeline, for which TC Energy is the operator. In 2017, TC Energy entered into a MXN$21.3 billion unsecured revolving credit facility with the joint venture, which bore interest at a floating rate and was fully repaid upon maturity on March 15, 2022 in the amount of approximately $1.2 billion.

The Company's Condensed consolidated statement of income reflected the related interest income and foreign exchange impact on this loan which were fully offset upon consolidation with corresponding amounts included in TC Energy’s proportionate share of Sur de Texas' equity earnings as follows:


(unaudited - millions of Canadian $)	three months ended June 30		six months ended June 30		Affected line item in the Condensed consolidated statement of income
	2022	2021	2022	2021

Interest income1	—	21	19	42	Interest income and other
Interest expense2	—	(21)	(19)	(42)	Income from equity investments
Foreign exchange gains/(losses)1	—	32	(28)	(3)	Interest income and other
Foreign exchange (losses)/gains1	—	(32)	28	3	Income from equity investments

1Included in the Corporate segment.

2Included in the Mexico Natural Gas Pipelines segment.

62 | TC Energy Second Quarter 2022

On March 15, 2022, as part of refinancing activities with the Sur de Texas joint venture the peso-denominated loan discussed above was replaced with a new U.S. dollar-denominated loan of an equivalent $1.2 billion (US$938 million) with a floating interest rate and maturity date of March 15, 2023. At June 30, 2022, Loans receivable from affiliates under Current assets on the Company's Condensed consolidated balance sheet reflected this $1.2 billion (US$938 million) loan receivable from the Sur de Texas joint venture.

These loans represent TC Energy's proportionate share of debt financing to the joint venture. The related repayment and issuance discussed above are included in Investing activities in the Company's Condensed consolidated statement of cash flows.

Coastal GasLink Pipeline Limited Partnership

TC Energy holds a 35 per cent equity interest in Coastal GasLink Pipeline Limited Partnership (Coastal GasLink LP), and has been contracted to develop and operate the Coastal GasLink pipeline.

Subordinated Demand Revolving Credit Facility

The Company has a subordinated demand revolving credit facility with Coastal GasLink LP to provide additional short-term liquidity and funding flexibility to the project. The facility bears interest at a floating market-based rate and had a capacity of $500 million with an outstanding balance of $1 million as at June 30, 2022 (December 31, 2021 – $1 million) reflected in Loans receivable from affiliates under Current assets on the Company's Condensed consolidated balance sheet.

Subordinated Loan Agreement

In 2021, TC Energy entered into a subordinated loan agreement with Coastal GasLink LP to provide interim temporary financing to fund incremental project costs as a bridge to a required increase in project-level financing. Under this agreement, financing was provided through a combination of interest-bearing loans subject to floating market-based interest rates and non-interest-bearing loans. The total capacity committed under this subordinated loan agreement was $3.8 billion with an outstanding balance of $350 million as at June 30, 2022 (December 31, 2021 – $238 million) that is reflected in Long-term loans receivable from affiliate on the Company’s Condensed consolidated balance sheet. Refer to Note 16, Subsequent events, for additional information on the amendments to this loan agreement.

TC Energy Second Quarter 2022 | 63

8. LONG-TERM DEBT

Long-Term Debt Issued

Long-term debt issued by the Company in the six months ended June 30, 2022 included the following:

(unaudited - millions of Canadian $, unless otherwise noted)

Company

Issue date

Type

Maturity date

Amount

Interest rate

TRANSCANADA PIPELINES LIMITED

May 2022

Medium Term Notes

May 2032

800

5.33

May 2022

Medium Term Notes

May 2026

400

4.35

May 2022

Medium Term Notes

May 2052

300

5.92

ANR PIPELINE COMPANY

May 2022

Senior Unsecured Notes

May 2032

US 300

3.43

May 2022

Senior Unsecured Notes

May 2034

US 200

3.58

May 2022

Senior Unsecured Notes

May 2037

US 200

3.73

May 2022

Senior Unsecured Notes

May 2029

US 100

3.26

Capitalized Interest

In the three and six months ended June 30, 2022, TC Energy capitalized interest related to capital projects of $4 million and $6 million, respectively (2021 – $1 million and $18 million, respectively).

9. JUNIOR SUBORDINATED NOTES ISSUED

Junior subordinated notes issued by the Company in the six months ended June 30, 2022 included the following:

(unaudited - millions of Canadian $, unless otherwise noted)

Company

Issue date

Type

Maturity date

Amount

Interest rate

TransCanada PipeLines Limited

March 2022

Junior Subordinated Notes1

March 2082

US 800

5.85

1The junior subordinated notes were issued to TransCanada Trust, a financing trust subsidiary wholly owned by TCPL. While the obligations of TransCanada Trust are fully and unconditionally guaranteed by TCPL on a subordinated basis, TransCanada Trust is not consolidated in TC Energy's financial statements since TCPL does not have a variable interest in TransCanada Trust and the only substantive assets of TransCanada Trust are junior subordinated notes of TCPL.

In March 2022, TransCanada Trust (the Trust) issued US$800 million of Trust Notes – Series 2022-A to investors with a fixed interest rate of 5.60 per cent per annum for the first 10 years and resetting on the 10th anniversary and every five years thereafter. All of the proceeds of the issuance by the Trust were loaned to TCPL for US$800 million of junior subordinated notes of TCPL at an initial fixed rate of 5.85 per cent per annum, including a 0.25 per cent administration charge. The rate on the junior subordinated notes of TCPL will reset every five years commencing March 2032 until March 2052 to the then Five-Year Treasury Rate, as defined in the document governing the subordinated notes, plus 4.236 per cent per annum; from March 2052 until March 2082, the interest rate will reset to the then Five-Year Treasury Rate plus 4.986 per cent per annum. The junior subordinated notes are callable at TCPL's option at any time from December 7, 2031 to March 7, 2032 and on each interest payment and reset date thereafter at 100 per cent of the principal amount plus accrued and unpaid interest to the date of redemption.

The junior subordinated notes are subordinated in right of payment to existing and future senior indebtedness and other obligations of TCPL.

64 | TC Energy Second Quarter 2022

10. COMMON SHARES AND PREFERRED SHARES

The Board of Directors of TC Energy declared quarterly dividends as follows:


	three months ended June 30		six months ended June 30
(unaudited - Canadian $, rounded to two decimals)	2022	2021	2022	2021

per common share	0.90	0.87	1.80	1.74

per Series 1 preferred share	0.22	0.22	0.43	0.43
per Series 2 preferred share	0.16	0.12	0.28	0.25
per Series 3 preferred share	0.11	0.11	0.21	0.21
per Series 4 preferred share	0.12	0.08	0.20	0.17
per Series 5 preferred share	0.12	0.12	0.24	0.24
per Series 6 preferred share	0.14	0.10	0.25	0.20
per Series 7 preferred share	0.24	0.24	0.49	0.49
per Series 9 preferred share	0.24	0.24	0.47	0.47
per Series 11 preferred share	0.21	0.21	0.21	0.21
per Series 13 preferred share	—	0.34	—	0.34
per Series 15 preferred share	0.31	0.31	0.31	0.31

Preferred Shares

On May 31, 2022, TC Energy redeemed all 40,000,000 issued and outstanding Series 15 preferred shares at a redemption price of $25.00 per share and paid the final quarterly dividend of $0.30625 per Series 15 preferred share, for the period up to but excluding May 31, 2022. The Company used the proceeds from the March 2022 issuance of US$800 million of junior subordinated notes through the Trust to finance this preferred share redemption.

TC Energy Second Quarter 2022 | 65

11. OTHER COMPREHENSIVE INCOME/(LOSS) AND ACCUMULATED OTHER COMPREHENSIVE LOSS

Components of other comprehensive income/(loss), including the portion attributable to non-controlling interests and related tax effects, are as follows:


three months ended June 30, 2022	Before tax amount	Income tax (expense)/recovery	Net of tax amount
(unaudited - millions of Canadian $)

Foreign currency translation gains and losses on net investment in foreign operations	633	30	663
Change in fair value of net investment hedges	(36)	9	(27)
Change in fair value of cash flow hedges	(7)	1	(6)
Reclassification to net income of gains and losses on cash flow hedges	9	(2)	7
Reclassification to net income of actuarial gains and losses on pension and other post-retirement benefit plans	3	—	3
Other comprehensive income on equity investments	219	(54)	165
Other Comprehensive Income	821	(16)	805


three months ended June 30, 2021	Before tax amount	Income tax (expense)/recovery	Net of tax amount
(unaudited - millions of Canadian $)

Foreign currency translation gains and losses on net investment in foreign operations	(231)	(2)	(233)
Change in fair value of net investment hedges	17	(4)	13
Change in fair value of cash flow hedges	(14)	3	(11)
Reclassification to net income of gains and losses on cash flow hedges	12	(2)	10
Reclassification to net income of actuarial gains and losses on pension and other post-retirement benefit plans	6	(2)	4
Other comprehensive loss on equity investments	(76)	19	(57)
Other Comprehensive Loss	(286)	12	(274)


six months ended June 30, 2022	Before tax amount	Income tax (expense)/recovery	Net of tax amount
(unaudited - millions of Canadian $)

Foreign currency translation gains and losses on net investment in foreign operations	340	22	362
Change in fair value of net investment hedges	(11)	3	(8)
Change in fair value of cash flow hedges	17	(5)	12
Reclassification to net income of gains and losses on cash flow hedges	24	(9)	15
Reclassification to net income of actuarial gains and losses on pension and other post-retirement benefit plans	5	(1)	4
Other comprehensive income on equity investments	459	(114)	345
Other Comprehensive Income	834	(104)	730

66 | TC Energy Second Quarter 2022


six months ended June 30, 2021	Before tax amount	Income tax (expense)/recovery	Net of tax amount
(unaudited - millions of Canadian $)

Foreign currency translation gains and losses on net investment in foreign operations	(519)	(12)	(531)
Change in fair value of net investment hedges	32	(8)	24

Reclassification to net income of gains and losses on cash flow hedges	23	(5)	18
Reclassification to net income of actuarial gains and losses on pension and other post-retirement benefit plans	9	(2)	7
Other comprehensive income on equity investments	173	(43)	130
Other Comprehensive Loss	(282)	(70)	(352)

The changes in AOCI by component are as follows:


three months ended June 30, 2022	Currency translation adjustments	Cash flow hedges	Pension and other post-retirement benefit plans adjustments	Equity investments	Total1
(unaudited - millions of Canadian $)

AOCI balance at April 1, 2022	(1,289)	(86)	(112)	(20)	(1,507)
Other comprehensive income/(loss) before reclassifications2	632	(6)	—	166	792
Amounts reclassified from AOCI	—	7	3	(1)	9
Net current period other comprehensive income	632	1	3	165	801
AOCI balance at June 30, 2022	(657)	(85)	(109)	145	(706)

1All amounts are net of tax. Amounts in parentheses indicate losses recorded to OCI.

2Other comprehensive income/(loss) before reclassifications on currency translation adjustments is net of a non-controlling interest gain of $4 million.


six months ended June 30, 2022	Currency translation adjustments	Cash flow hedges	Pension and other post-retirement benefit plans adjustments	Equity investments	Total1
(unaudited - millions of Canadian $)

AOCI balance at January 1, 2022	(1,009)	(112)	(113)	(200)	(1,434)
Other comprehensive income before reclassifications2	352	12	—	347	711
Amounts reclassified from AOCI3	—	15	4	(2)	17
Net current period other comprehensive income	352	27	4	345	728

AOCI balance at June 30, 2022	(657)	(85)	(109)	145	(706)

1All amounts are net of tax. Amounts in parentheses indicate losses recorded to OCI.

2Other comprehensive income before reclassifications on currency translation adjustments is net of a non-controlling interest gain of $2 million.

3Losses related to cash flow hedges reported in AOCI and expected to be reclassified to net income in the next 12 months are estimated to be $38 million ($29 million, net of tax) at June 30, 2022. These estimates assume constant commodity prices, interest rates and foreign exchange rates over time, however, the amounts reclassified will vary based on the actual value of these factors at the date of settlement.

TC Energy Second Quarter 2022 | 67

Details about reclassifications out of AOCI into the Condensed consolidated statement of income are as follows:


	three months ended June 30		six months ended June 30		Affected line item in the Condensed consolidated statement of income1
(unaudited - millions of Canadian $)	2022	2021	2022	2021

Cash flow hedges
Commodities	(5)	(3)	(14)	(5)	Revenues (Power and Storage)
Interest rate	(4)	(9)	(10)	(18)	Interest expense
	(9)	(12)	(24)	(23)	Total before tax
	2	2	9	5	Income tax expense/(recovery)
	(7)	(10)	(15)	(18)	Net of tax
Pension and other post-retirement benefit plans
Amortization of actuarial losses	(3)	(6)	(5)	(9)	Plant operating costs and other2
	—	2	1	2	Income tax expense/(recovery)
	(3)	(4)	(4)	(7)	Net of tax
Equity investments
Equity income	1	(10)	2	(18)	Income from equity investments
	—	3	—	5	Income tax expense/(recovery)
	1	(7)	2	(13)	Net of tax

1All amounts in parentheses indicate expenses to the Condensed consolidated statement of income.

2These AOCI components are included in the computation of net benefit cost. Refer to Note 12, Employee post-retirement benefits, for additional information.

12. EMPLOYEE POST-RETIREMENT BENEFITS

The net benefit cost recognized for the Company’s pension benefit plans and other post-retirement benefit plans is as follows:


	three months ended June 30				six months ended June 30
	Pension benefit plans		Other post-retirement benefit plans		Pension benefit plans		Other post-retirement benefit plans
(unaudited - millions of Canadian $)	2022	2021	2022	2021	2022	2021	2022	2021

Service cost1	36	42	1	2	72	85	2	3
Other components of net benefit cost1
Interest cost	31	30	3	3	62	60	6	6
Expected return on plan assets	(60)	(59)	(4)	(3)	(119)	(117)	(7)	(6)
Amortization of actuarial losses	2	5	1	—	5	11	1	1
Amortization of regulatory asset	3	8	1	1	6	14	1	1
	(24)	(16)	1	1	(46)	(32)	1	2
Net Benefit Cost	12	26	2	3	26	53	3	5

1Service cost and other components of net benefit cost are included in Plant operating costs and other in the Condensed consolidated statement of income.

68 | TC Energy Second Quarter 2022

13. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS

Risk Management Overview

TC Energy has exposure to market risk and counterparty credit risk, and has strategies, policies and limits in place to manage the impact of these risks on its earnings, cash flows and, ultimately, shareholder value.

Counterparty Credit Risk

TC Energy’s exposure to counterparty credit risk includes its cash and cash equivalents, accounts receivable and certain contractual recoveries, available-for-sale assets, the fair value of derivative assets and loans receivable.

Market events causing disruptions in global energy demand and supply may contribute to economic uncertainties impacting a number of TC Energy's customers. While the majority of the Company's credit exposure is to large creditworthy entities, TC Energy maintains close monitoring and communication with those counterparties experiencing greater financial pressures. Refer to TC Energy's 2021 Annual Report for more information about the factors that mitigate the Company's counterparty credit risk exposure.

The Company reviews financial assets carried at amortized cost for impairment using the lifetime expected loss of the financial asset at initial recognition and throughout the life of the financial asset. TC Energy uses historical credit loss and recovery data, adjusted for management's judgment regarding current economic and credit conditions, along with supportable forecasts to determine any impairment, which is recognized in Plant operating costs and other. At June 30, 2022, there were no significant credit losses, no significant credit risk concentration and no significant amounts past due or impaired.

The Company has significant credit and performance exposure to financial institutions because they hold cash deposits and provide committed credit lines and letters of credit that help manage our exposure to counterparties and provide liquidity in commodity, foreign exchange and interest rate derivative markets.

Net Investment in Foreign Operations

The Company hedges a portion of its net investment in foreign operations (on an after-tax basis) with U.S. dollar-denominated debt, cross-currency interest rate swaps, foreign exchange forwards and foreign exchange options as appropriate.

The fair values and notional amounts for the derivatives designated as a net investment hedge were as follows:

June 30, 2022

December 31, 2021

(unaudited - millions of Canadian $, unless otherwise noted)

Fair value1,2

Notional amount

Fair value1,2

Notional amount

U.S. dollar foreign exchange options (maturing 2022 to 2023)

(11)

US 3,800

(4)

US 3,800

U.S. dollar cross-currency interest rate swaps (maturing 2023 to 2025)

US 300

US 400

US 4,100

US 4,200

1Fair value equals carrying value.

2No amounts have been excluded from the assessment of hedge effectiveness.

The notional amounts and fair values of U.S. dollar-denominated debt designated as a net investment hedge were as follows:

(unaudited - millions of Canadian $, unless otherwise noted)

June 30, 2022

December 31, 2021

Notional amount

31,400 (US 24,400)

30,700 (US 24,200)

Fair value

30,600 (US 23,800)

35,500 (US 28,100)

TC Energy Second Quarter 2022 | 69

Non-Derivative Financial Instruments

Fair value of non-derivative financial instruments

Available-for-sale assets are recorded at fair value which is calculated using quoted market prices where available. Certain non-derivative financial instruments included in Cash and cash equivalents, Accounts receivable, Loans receivable from affiliates, Other current assets, Long-term loans receivable from affiliate, Restricted investments, Other long-term assets, Notes payable, Accounts payable and other, Dividends payable, Accrued interest and Other long-term liabilities have carrying amounts that approximate their fair value due to the nature of the item or the short time to maturity. Each of these instruments are classified in Level II of the fair value hierarchy, except for the Company's LMCI equity securities which are classified in Level I.

Credit risk has been taken into consideration when calculating the fair value of non-derivative financial instruments.

Balance sheet presentation of non-derivative financial instruments

The following table details the fair value of non-derivative financial instruments, excluding those where carrying amounts approximate fair value, and would be classified in Level II of the fair value hierarchy:


	June 30, 2022		December 31, 2021
(unaudited - millions of Canadian $)	Carrying amount	Fair value	Carrying amount	Fair value

Long-term debt, including current portion1,2	(41,589)	(40,516)	(38,661)	(45,615)
Junior subordinated notes	(10,074)	(9,059)	(8,939)	(9,236)
	(51,663)	(49,575)	(47,600)	(54,851)

1Long-term debt is recorded at amortized cost, except for US$600 million (December 31, 2021 – nil) that is attributed to hedged risk and recorded at fair value.

2Net income for the three and six months ended June 30, 2022 included unrealized losses of $2 million (December 31, 2021 – nil) for fair value adjustments attributable to the hedged interest rate risk associated with interest rate swap fair value hedging relationships on US$600 million of long-term debt at June 30, 2022 (December 31, 2021 – nil). There were no other unrealized gains or losses from fair value adjustments to the non-derivative financial instruments.

Available-for-sale assets summary

The following tables summarize additional information about the Company's restricted investments that were classified as available-for-sale assets:


	June 30, 2022		December 31, 2021
(unaudited - millions of Canadian $)	LMCI restricted investments	Other restricted investments1	LMCI restricted investments	Other restricted investments1

Fair values of fixed income securities2,3
Maturing within 1 year	1	47	—	26
Maturing within 1-5 years	33	113	8	107
Maturing within 5-10 years	1,080	—	1,150	—
Maturing after 10 years	72	—	84	—
Fair value of equity securities2,4	671	—	817	—
	1,857	160	2,059	133

1Other restricted investments have been set aside to fund insurance claim losses to be paid by the Company's wholly-owned captive insurance subsidiary.

2Available-for-sale assets are recorded at fair value and included in Other current assets and Restricted investments on the Company's Condensed consolidated balance sheet.

3Classified in Level II of the fair value hierarchy.

4Classified in Level I of the fair value hierarchy.

70 | TC Energy Second Quarter 2022


	June 30, 2022		June 30, 2021

(unaudited - millions of Canadian $)	LMCI restricted investments1	Other restricted investments2	LMCI restricted investments1	Other restricted investments2

Net unrealized (losses)/gains in the period
three months ended	(151)	(2)	49	—
six months ended	(300)	(6)	9	(1)
Net realized losses in the period3
three months ended	(14)	—	(2)	—
six months ended	(16)	—	(3)	—

1Gains and losses arising from changes in the fair value of LMCI restricted investments impact the subsequent amounts to be collected through tolls to cover future pipeline abandonment costs. As a result, the Company records these gains and losses as regulatory assets and liabilities, respectively.

2Losses on other restricted investments are included in Interest income and other in the Condensed consolidated statement of income.

3Realized losses on the sale of LMCI restricted investments are determined using the average cost basis.

Derivative Instruments

Fair value of derivative instruments

The fair value of foreign exchange and interest rate derivatives has been calculated using the income approach which uses period-end market rates and applies a discounted cash flow valuation model. The fair value of commodity derivatives has been calculated using quoted market prices where available. In the absence of quoted market prices, third-party broker quotes or other valuation techniques have been used. The fair value of options has been calculated using the Black-Scholes pricing model. Credit risk has been taken into consideration when calculating the fair value of derivative instruments. Unrealized gains and losses on derivative instruments are not necessarily representative of the amounts that will be realized on settlement.

In some cases, even though the derivatives are considered to be effective economic hedges, they do not meet the specific criteria for hedge accounting treatment or are not designated as a hedge and are accounted for at fair value with changes in fair value recorded in net income in the period of change. This may expose the Company to increased variability in reported earnings because the fair value of the derivative instruments can fluctuate significantly from period to period.

The recognition of gains and losses on derivatives for Canadian natural gas regulated pipeline exposures is determined through the regulatory process. Gains and losses arising from changes in the fair value of derivatives accounted for as part of rate-regulated accounting, including those that qualify for hedge accounting treatment, are expected to be recovered or refunded through the tolls charged by the Company. As a result, these gains and losses are deferred as regulatory assets and regulatory liabilities and are collected from or refunded to the rate payers in subsequent years when the derivative settles.

TC Energy Second Quarter 2022 | 71

Balance sheet presentation of derivative instruments

The balance sheet classification of the fair value of derivative instruments was as follows:


at June 30, 2022	Cash flow hedges	Fair value hedges	Net investment hedges	Held for trading	Total fair value of derivative instruments1
(unaudited - millions of Canadian $)

Other current assets
Commodities2	—	—	—	525	525
Foreign exchange	—	—	8	14	22
Interest rate	1	—	—	—	1
	1	—	8	539	548
Other long-term assets
Commodities2	—	—	—	24	24
Foreign exchange	—	—	16	9	25
Interest rate	5	4	—	—	9
	5	4	16	33	58
Total Derivative Assets	6	4	24	572	606
Accounts payable and other
Commodities2	(27)	—	—	(590)	(617)
Foreign exchange	—	—	(15)	(62)	(77)

	(27)	—	(15)	(652)	(694)
Other long-term liabilities
Commodities2	(5)	—	—	(32)	(37)
Foreign exchange	—	—	(7)	(9)	(16)
Interest rate	—	(2)	—	—	(2)
	(5)	(2)	(7)	(41)	(55)
Total Derivative Liabilities	(32)	(2)	(22)	(693)	(749)
Total Derivatives	(26)	2	2	(121)	(143)

1Fair value equals carrying value.

2Includes purchases and sales of power, natural gas, liquids and emission credits.

72 | TC Energy Second Quarter 2022


at December 31, 2021	Cash flow hedges	Net investment hedges	Held for trading	Total fair value of derivative instruments1
(unaudited - millions of Canadian $)

Other current assets
Commodities2	—	—	122	122
Foreign exchange	—	10	37	47

	—	10	159	169
Other long-term assets
Commodities2	—	—	8	8
Foreign exchange	—	32	6	38
Interest rate	2	—	—	2
	2	32	14	48
Total Derivative Assets	2	42	173	217
Accounts payable and other
Commodities2	(23)	—	(138)	(161)
Foreign exchange	—	(4)	(46)	(50)
Interest rate	(10)	—	—	(10)
	(33)	(4)	(184)	(221)
Other long-term liabilities
Commodities2	(4)	—	(6)	(10)
Foreign exchange	—	(19)	(10)	(29)
Interest rate	(8)	—	—	(8)
	(12)	(19)	(16)	(47)
Total Derivative Liabilities	(45)	(23)	(200)	(268)
Total Derivatives	(43)	19	(27)	(51)

1Fair value equals carrying value.

2Includes purchases and sales of power, natural gas and liquids.

The majority of derivative instruments held for trading have been entered into for risk management purposes and all are subject to the Company's risk management strategies, policies and limits. These include derivatives that have not been designated as hedges or do not qualify for hedge accounting treatment but have been entered into as economic hedges to manage the Company's exposures to market risk.

Derivatives in fair value hedging relationships

The following table details amounts recorded on the Condensed consolidated balance sheet in relation to cumulative adjustments for fair value hedges included in the carrying amount of the hedged liabilities:

Carrying amount

Fair value hedging adjustments1

(unaudited - millions of Canadian $)

June 30, 2022

December 31, 2021

June 30, 2022

December 31, 2021

Long-term debt

(774)

—

(2)

—

1At June 30, 2022 and December 31, 2021, adjustments for discontinued hedging relationships included in these balances were nil.

TC Energy Second Quarter 2022 | 73

Notional and maturity summary

The maturity and notional amount or quantity outstanding related to the Company's derivative instruments excluding hedges of the net investment in foreign operations was as follows:


at June 30, 2022	Power	Natural Gas	Liquids	Emission credits	Foreign exchange	Interest rate
(unaudited)

Net sales/(purchases)1	419	(35)	4	100	—	—
Millions of U.S. dollars	—	—	—	—	7,884	700
Millions of Mexican pesos	—	—	—	—	8,700	—
Maturity dates	2022-2026	2022-2027	2022-2023	2022	2022-2026	2025-2030

1Volumes for power, natural gas, liquids and emission credit derivatives are in GWh, Bcf, MMBbls and thousand metric tonnes CO2, respectively.


at December 31, 2021	Power	Natural Gas	Liquids	Foreign exchange	Interest rate
(unaudited)

Net sales/(purchases)1	490	(52)	4	—	—
Millions of U.S. dollars	—	—	—	6,636	650
Millions of Mexican pesos	—	—	—	5,500	—
Maturity dates	2022-2026	2022-2027	2022	2022-2026	2024-2026

1Volumes for power, natural gas and liquids derivatives are in GWh, Bcf and MMBbls, respectively.

Unrealized and Realized Gains and Losses on Derivative Instruments

The following summary does not include hedges of the net investment in foreign operations:


	three months ended June 30		six months ended June 30
(unaudited - millions of Canadian $)	2022	2021	2022	2021

Derivative Instruments Held for Trading1
Amount of unrealized (losses)/gains in the period
Commodities	(20)	(15)	(58)	16
Foreign exchange	(60)	(63)	(38)	(58)
Amount of realized gains/(losses) in the period
Commodities	255	48	396	109
Foreign exchange	(13)	117	28	158
Derivative Instruments in Hedging Relationships
Amount of realized (losses)/gains in the period
Commodities	(15)	(12)	(18)	(23)
Interest rate	1	(6)	(2)	(12)

74 | TC Energy Second Quarter 2022

Derivatives in cash flow hedging relationships

The components of OCI (Note 11) related to the change in fair value of derivatives in cash flow hedging relationships before tax and including the portion attributable to non-controlling interests were as follows:


	three months ended June 30		six months ended June 30
(unaudited - millions of Canadian $, pre-tax)	2022	2021	2022	2021

Change in fair value of derivative instruments recognized in OCI1
Commodities	(14)	(11)	(19)	(15)
Interest rate	7	(3)	36	15
	(7)	(14)	17	—

1No amounts have been excluded from the assessment of hedge effectiveness. Amounts in parentheses indicate losses recorded to OCI.

Effect of fair value and cash flow hedging relationships

The following table details amounts presented in the Condensed consolidated statement of income in which the effects of fair value or cash flow hedging relationships were recorded:


	three months ended June 30		six months ended June 30
(unaudited - millions of Canadian $)	2022	2021	2022	2021

Fair Value Hedges
Interest rate contracts1
Hedged items	(2)	—	(2)	—
Derivatives designated as hedging instruments	1	—	1	—
Cash Flow Hedges
Reclassification of losses on derivative instruments from AOCI to Net income2,3
Commodities4	(5)	(3)	(14)	(5)
Interest rate1	(4)	(9)	(10)	(18)

1Presented within Interest expense in the Condensed consolidated statement of income.

2Refer to Note 11, Other comprehensive income/(loss) and accumulated other comprehensive loss, for the components of OCI related to derivatives in cash flow hedging relationships.

3There are no amounts recognized in earnings that were excluded from effectiveness testing.

4Presented within Revenues (Power and Storage) in the Condensed consolidated statement of income.

TC Energy Second Quarter 2022 | 75

Offsetting of derivative instruments

The Company enters into derivative contracts with the right to offset in the normal course of business as well as in the event of default. TC Energy has no master netting agreements, however, similar contracts are entered into containing rights to offset. The Company has elected to present the fair value of derivative instruments with the right to offset on a gross basis on the Condensed consolidated balance sheet. The following table shows the impact on the presentation of the fair value of derivative instrument assets and liabilities had the Company elected to present these contracts on a net basis:


at June 30, 2022	Gross derivative instruments	Amounts available for offset1	Net amounts
(unaudited - millions of Canadian $)

Derivative instrument assets
Commodities	549	(494)	55
Foreign exchange	47	(41)	6
Interest rate	10	—	10
	606	(535)	71
Derivative instrument liabilities
Commodities	(654)	494	(160)
Foreign exchange	(93)	41	(52)
Interest rate	(2)	—	(2)
	(749)	535	(214)

1Amounts available for offset do not include cash collateral pledged or received.


at December 31, 2021	Gross derivative instruments	Amounts available for offset1	Net amounts
(unaudited - millions of Canadian $)

Derivative instrument assets
Commodities	130	(91)	39
Foreign exchange	85	(54)	31
Interest rate	2	(1)	1
	217	(146)	71
Derivative instrument liabilities
Commodities	(171)	91	(80)
Foreign exchange	(79)	54	(25)
Interest rate	(18)	1	(17)
	(268)	146	(122)

1Amounts available for offset do not include cash collateral pledged or received.

With respect to the derivative instruments presented above, the Company provided cash collateral of $164 million and letters of credit of $71 million at June 30, 2022 (December 31, 2021 – $144 million and $130 million, respectively) to its counterparties. At June 30, 2022, the Company held no cash collateral and an $11 million balance in letters of credit (December 31, 2021 – nil and $6 million, respectively) from counterparties on asset exposures.

Credit-risk-related contingent features of derivative instruments

Derivative contracts entered into to manage market risk often contain financial assurance provisions that allow parties to the contracts to manage credit risk. These provisions may require collateral to be provided if a credit-risk-related contingent event occurs, such as a downgrade in the Company’s credit rating to non-investment grade. The Company may also need to provide collateral if the fair value of its derivative financial instruments exceeds pre-defined exposure limits.

76 | TC Energy Second Quarter 2022

Based on contracts in place and market prices at June 30, 2022, the aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position was $15 million (December 31, 2021 – $5 million), for which the Company has provided no collateral in the normal course of business. If the credit-risk-related contingent features in these agreements were triggered on June 30, 2022, the Company would have been required to provide collateral equal to the fair value of the related derivative instruments discussed above. Collateral may also need to be provided should the fair value of derivative instruments exceed pre-defined contractual exposure limit thresholds.

The Company has sufficient liquidity in the form of cash and undrawn committed revolving credit facilities to meet these contingent obligations should they arise.

Fair Value Hierarchy

The Company’s financial assets and liabilities recorded at fair value have been categorized into three categories based on a fair value hierarchy.


Levels			How fair value has been determined

Level I			Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. An active market is a market in which frequency and volume of transactions provides pricing information on an ongoing basis.
Level II			This category includes interest rate and foreign exchange derivative assets and liabilities where fair value is determined using the income approach and commodity derivatives where fair value is determined using the market approach. Inputs include published exchange rates, interest rates, interest rate swap curves, yield curves and broker quotes from external data service providers.
Level III			This category includes long-dated commodity transactions in certain markets where liquidity is low and the Company uses the most observable inputs available or, if not available, long-term broker quotes to estimate the fair value for these transactions. There is uncertainty caused by using unobservable market data which may not accurately reflect possible future changes in fair value.

The fair value of the Company’s derivative assets and liabilities measured on a recurring basis, including both current and non-current portions, were categorized as follows:


at June 30, 2022	Quoted prices in active markets (Level I)	Significant other observable inputs (Level II)1	Significant unobservable inputs (Level III)1
(unaudited - millions of Canadian $)				Total

Derivative instrument assets
Commodities	435	114	—	549
Foreign exchange	—	47	—	47
Interest rate	—	10	—	10
Derivative instrument liabilities
Commodities	(488)	(151)	(15)	(654)
Foreign exchange	—	(93)	—	(93)
Interest rate	—	(2)	—	(2)
	(53)	(75)	(15)	(143)

1There were no transfers from Level II to Level III for the six months ended June 30, 2022.

TC Energy Second Quarter 2022 | 77


at December 31, 2021	Quoted prices in active markets (Level I)	Significant other observable inputs (Level II)1	Significant unobservable inputs (Level III)1
(unaudited - millions of Canadian $)				Total

Derivative instrument assets
Commodities	39	91	—	130
Foreign exchange	—	85	—	85
Interest rate	—	2	—	2
Derivative instrument liabilities
Commodities	(49)	(116)	(6)	(171)
Foreign exchange	—	(79)	—	(79)
Interest rate	—	(18)	—	(18)
	(10)	(35)	(6)	(51)

1There were no transfers from Level II to Level III for the year ended December 31, 2021.

The following table presents the net change in fair value of derivative assets and liabilities classified as Level III of the fair value hierarchy:


	three months ended June 30		six months ended June 30
(unaudited - millions of Canadian $)	2022	2021	2022	2021

Balance at beginning of period	(12)	(4)	(6)	(4)
Net losses included in Net income	(2)	(1)	(8)	(1)

Net losses included in OCI	(1)	—	(1)	—

Balance at End of Period1	(15)	(5)	(15)	(5)

1For the three and six months ended June 30, 2022, there were unrealized losses of $2 million and $8 million, recognized in Revenues attributed to derivatives in the Level III category that were held at June 30, 2022 (2021 – unrealized losses of $1 million and $1 million, respectively).

78 | TC Energy Second Quarter 2022

14. CONTINGENCIES AND GUARANTEES

Contingencies

TC Energy and its subsidiaries are subject to various legal proceedings, arbitrations and actions arising in the normal course of business. While the final outcome of such legal proceedings and actions cannot be predicted with certainty, it is the opinion of management that the resolution of such normal course proceedings and actions will not have a material impact on the Company’s consolidated financial position or results of operations.

Guarantees

TC Energy and its partner on the Sur de Texas pipeline, IEnova, have jointly guaranteed the financial performance of the entity which owns the pipeline. Such agreements include a guarantee and a letter of credit which are primarily related to the delivery of natural gas.

TC Energy and its joint venture partner on Bruce Power, BPC Generation Infrastructure Trust, have each severally guaranteed certain contingent financial obligations of Bruce Power related to a lease agreement and contractor and supplier services.

The Company and its partners in certain other jointly-owned entities have either (i) jointly and severally, (ii) jointly or (iii) severally guaranteed the financial performance of these entities. Such agreements include guarantees and letters of credit which are primarily related to construction services and the payment of liabilities. For certain of these entities, any payments made by TC Energy under these guarantees in excess of its ownership interest are to be reimbursed by its partners.

The carrying value of these guarantees has been included in Other long-term liabilities on the Condensed consolidated balance sheet. Information regarding the Company’s guarantees is as follows:


		June 30, 2022		December 31, 2021
(unaudited - millions of Canadian $)	Term	Potential exposure1	Carrying value	Potential exposure1	Carrying value

Sur de Texas	to 2043	95	—	93	—
Bruce Power	to 2023	88	—	88	—
Other jointly-owned entities	to 2043	80	3	80	4
		263	3	261	4

1TC Energy's share of the potential estimated current or contingent exposure.

TC Energy Second Quarter 2022 | 79

15. VARIABLE INTEREST ENTITIES

Consolidated VIEs

The Company's consolidated VIEs consist of legal entities where the Company is the primary beneficiary. As the primary beneficiary, the Company has the power, through voting or similar rights, to direct the activities of the VIE that most significantly impact economic performance including purchasing or selling significant assets; maintenance and operations of assets; incurring additional indebtedness; or determining the strategic operating direction of the entity. In addition, the Company has the obligation to absorb losses or the right to receive benefits from the consolidated VIE that could potentially be significant to the VIE.

A significant portion of the Company’s assets are held through VIEs in which the Company holds a 100 per cent voting interest, the VIE meets the definition of a business and the VIE’s assets can be used for general corporate purposes. The consolidated VIEs whose assets cannot be used for purposes other than the settlement of the VIE’s obligations, or are not considered a business, are as follows:


(unaudited - millions of Canadian $)	June 30, 2022	December 31, 2021

ASSETS
Current Assets
Cash and cash equivalents	65	72
Accounts receivable	71	70
Inventories	28	28
Other current assets	9	13
	173	183
Plant, Property and Equipment	3,758	3,672
Equity Investments	900	890
Goodwill	427	421

	5,258	5,166
LIABILITIES
Current Liabilities
Accounts payable and other	241	232
Accrued interest	17	17
Current portion of long-term debt	30	29
	288	278
Regulatory Liabilities	71	66
Other Long-Term Liabilities	—	1
Deferred Income Tax Liabilities	13	13
Long-Term Debt	2,033	2,025
	2,405	2,383

80 | TC Energy Second Quarter 2022

Non-Consolidated VIEs

The Company’s non-consolidated VIEs consist of legal entities where the Company is not the primary beneficiary as it does not have the power to direct the activities that most significantly impact the economic performance of these VIEs or where this power is shared with third parties. The Company contributes capital to these VIEs and receives ownership interests that provide it with residual claims on assets after liabilities are paid.

The carrying value of these VIEs and the maximum exposure to loss as a result of the Company's involvement with these VIEs are as follows:


(unaudited - millions of Canadian $)	June 30, 2022	December 31, 2021

Balance Sheet Exposure
Loan receivable from affiliate1	1	1
Equity investments
Bruce Power	4,757	4,493
Pipeline equity investments	2,135	1,605
Long-term loans receivable from affiliate1	350	238
Off-Balance Sheet Exposure2
Coastal GasLink3	3,425	3,037
Bruce Power4	2,249	974
Pipeline equity investments	98	171
Maximum Exposure to Loss	13,015	10,519

1 Refer to Note 7, Loans receivable from affiliates, for additional information.

2 Includes maximum potential exposure to guarantees and future funding commitments.

3 Represents the total capacity of $3,775 million committed under a subordinated loan agreement with Coastal GasLink LP less the $350 million balance outstanding under this loan agreement as at June 30, 2022 (December 31, 2021 – $3,275 million and $238 million, respectively). Refer to Note 7, Loans receivable from affiliates, and Note 16, Subsequent events, for additional information.

4 On March 7, 2022, the IESO verified Bruce Power's Unit 3 MCR program final cost and schedule duration estimate submitted in December 2021. As at June 30, 2022, the maximum exposure includes TC Energy’s portion of capital to be invested under the Unit 3 MCR program as well as the expected increase in the capital to be invested under the Asset Management program through 2027.

TC Energy Second Quarter 2022 | 81

16. SUBSEQUENT EVENTS

Coastal GasLink LP

Settlement Agreement with LNG Canada

Coastal GasLink LP and LNG Canada have reached a settlement that addresses and resolves disputes over certain incurred and anticipated costs of the Coastal GasLink pipeline project. Capital costs have increased from the original project cost estimate due to scope increases and the impacts of COVID-19, weather and other events outside of Coastal GasLink LP’s control. The revised project agreements incorporate a new cost estimate. Following execution of these revised project agreements with LNG Canada, the Coastal GasLink LP project-level credit facilities will be increased.

TC Energy Equity Contributions and Subordinated Loan Agreement

In accordance with a binding commitment subject to the execution of definitive agreements with the Coastal GasLink LP partners, TC Energy will make an equity contribution to Coastal GasLink LP of $1.9 billion, which will be paid in installments commencing in August 2022, with no resulting change to its 35 per cent ownership.

In 2021, TC Energy entered into a subordinated loan agreement with Coastal GasLink LP to provide interim temporary financing to fund incremental project costs. Total capacity of this loan was $3.8 billion with an outstanding balance of $350 million as at June 30, 2022. The balance outstanding on this loan as at June 30, 2022 is expected to be repaid prior to the in-service date of the pipeline. In accordance with a binding commitment subject to the execution of definitive agreements with the Coastal GasLink LP partners, following amendments to this loan agreement, financing available to Coastal GasLink LP going forward will be provided through an interest-bearing loan, subject to a floating market-based interest rate, which will be repaid subsequent to the in-service date of the Coastal GasLink pipeline when final costs are determined.

Dividend Reinvestment Plan

TC Energy has reinstated issuance of common shares from treasury at a two per cent discount under its Dividend Reinvestment Plan commencing with the dividends declared on July 27, 2022.

82 | TC Energy Second Quarter 2022

Document

EXHIBIT 31.1

Certifications

I, François L. Poirier, certify that:

1.I have reviewed this quarterly report on Form 6-K of TC Energy Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4.The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the issuer’s most recent fiscal quarter (the issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5.The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.


Dated: July 28, 2022			/s/ François L. Poirier
			François L. Poirier
			President and Chief Executive Officer

1 of 2

Certifications

I, François L. Poirier, certify that:

1.I have reviewed this quarterly report on Form 6-K of TransCanada PipeLines Limited;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.


Dated: July 28, 2022			/s/ François L. Poirier
			François L. Poirier
			President and Chief Executive Officer

2 of 2

Document

EXHIBIT 31.2

Certifications

I, Joel E. Hunter, certify that:

1.I have reviewed this quarterly report on Form 6-K of TC Energy Corporation;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.


Dated: July 28, 2022			/s/ Joel E. Hunter
			Joel E. Hunter
			Executive Vice-President and Chief Financial Officer

1 of 2

Certifications

I, Joel E. Hunter, certify that:

1.I have reviewed this quarterly report on Form 6-K of TransCanada PipeLines Limited;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.


Dated: July 28, 2022			/s/ Joel E. Hunter
			Joel E. Hunter
			Executive Vice-President and Chief Financial Officer

2 of 2

Document

EXHIBIT 32.1

TC ENERGY CORPORATION

450 – 1st Street S.W.

Calgary, Alberta, Canada

T2P 5H1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

REGARDING PERIODIC REPORT CONTAINING

FINANCIAL STATEMENTS

I, François L. Poirier, the Chief Executive Officer of TC Energy Corporation (the "Company"), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify, in connection with the Company’s Quarterly Report as filed on Form 6-K for the period ended June 30, 2022 with the Securities and Exchange Commission (the "Report"), that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


			/s/ François L. Poirier
			François L. Poirier
			Chief Executive Officer
			July 28, 2022

1 of 2

TRANSCANADA PIPELINES LIMITED

450 – 1st Street S.W.

Calgary, Alberta, Canada

T2P 5H1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

REGARDING PERIODIC REPORT CONTAINING

FINANCIAL STATEMENTS

I, François L. Poirier, the Chief Executive Officer of TransCanada PipeLines Limited (the "Company"), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify, in connection with the Company's Quarterly Report as filed on Form 6-K for the period ended June 30, 2022 with the Securities and Exchange Commission (the "Report"), that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


			/s/ François L. Poirier
			François L. Poirier
			Chief Executive Officer
			July 28, 2022

2 of 2

Document

EXHIBIT 32.2

TC ENERGY CORPORATION

450 – 1st Street S.W.

Calgary, Alberta, Canada

T2P 5H1

CERTIFICATION OF CHIEF FINANCIAL OFFICER

REGARDING PERIODIC REPORT CONTAINING

FINANCIAL STATEMENTS

I, Joel E. Hunter, the Chief Financial Officer of TC Energy Corporation (the "Company"), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify, in connection with the Company’s Quarterly Report as filed on Form 6-K for the period ended June 30, 2022 with the Securities and Exchange Commission (the "Report"), that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


			/s/ Joel E. Hunter
			Joel E. Hunter
			Chief Financial Officer
			July 28, 2022

1 of 2

TRANSCANADA PIPELINES LIMITED

450 – 1st Street S.W.

Calgary, Alberta, Canada

T2P 5H1

CERTIFICATION OF CHIEF FINANCIAL OFFICER

REGARDING PERIODIC REPORT CONTAINING

FINANCIAL STATEMENTS

I, Joel E. Hunter, the Chief Financial Officer of TransCanada PipeLines Limited (the "Company"), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify, in connection with the Company's Quarterly Report as filed on Form 6-K for the period ended June 30, 2022 with the Securities and Exchange Commission (the "Report"), that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


			/s/ Joel E. Hunter
			Joel E. Hunter
			Chief Financial Officer
			July 28, 2022

2 of 2

Document

EXHIBIT 99.1


Quarterly Report to Shareholders

TC Energy reports solid second quarter 2022 results

High utilization continues across our system while advancing Canada's largest LNG solution

CALGARY, Alberta – July 28, 2022 – TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) released its second quarter results today. TC Energy's President and Chief Executive Officer, François Poirier commented, “Through the first six months of 2022, we have delivered strong results reflecting the high utilization we continue to see across our entire system. Demand for clean, responsibly sourced natural gas remains high in North America, with energy security also driving incremental growth in the global LNG market.” Poirier continued, “I am pleased to report we have reached a significant milestone with the Coastal GasLink Limited Partnership (Coastal GasLink LP), signing revised agreements with LNG Canada that will allow the safe and timely execution of our largest LNG-linked project. The 670-kilometre Coastal GasLink project is approximately 70 per cent complete, with mechanical in-service expected by the end of 2023. Together with LNG Canada, this project will provide the first direct path for Canadian natural gas to reach global LNG markets. By leveraging our competitive strengths, we continue to develop solutions to move, generate and store the energy North America relies on in a secure and increasingly sustainable way."

Highlights

(All financial figures are unaudited and in Canadian dollars unless otherwise noted)

•Consistent with our 2021 Annual Report outlook, 2022 comparable EBITDA is expected to be modestly higher than 2021, while 2022 comparable earnings per common share are expected to be consistent with 2021

•Second quarter 2022 results were underpinned by solid utilization and reliability across our assets. The continued need for energy security has placed renewed focus on the long-term role our infrastructure will play in responsibly fulfilling North America's energy demands:

◦Continued to deliver around a quarter of volumes destined for export from U.S. LNG facilities through our U.S. Natural Gas Pipelines and advanced 3.3 Bcf/d of additional projects during the first six months of the year

◦Total NGTL System deliveries averaged 12.8 Bcf/d, up nine per cent compared to second quarter 2021

◦U.S. Natural Gas Pipelines flows averaged 25.4 Bcf/d, up over three per cent compared to second quarter 2021

◦Bruce Power planned outages were completed ahead of schedule with results further augmented by the approximately $10/MWh increase in the contract power price that went into effect on April 1, 2022 related to the ongoing MCR program, asset management work and annual adjustments

◦During the quarter, the Keystone Pipeline System safely delivered nearly 610,000 Bbl/d as we placed approximately 30 per cent of the 2019 Open Season contracts into service effective April 1, 2022 with additional volumes anticipated through year end

•Second quarter 2022 financial results:

◦Net income attributable to common shares of $0.9 billion or $0.90 per common share compared to a net income of $1.0 billion or $1.00 per common share in 2021. Comparable earnings1 of $1.0 billion or $1.00 per common share compared to $1.0 billion or $1.06 per common share in 2021

◦Segmented earnings of $1.7 billion compared to segmented earnings of $1.6 billion in 2021 and comparable EBITDA1 of $2.4 billion compared to $2.2 billion in 2021

◦Net cash provided by operations of $0.9 billion compared to 2021 results of $1.7 billion and comparable funds generated from operations1 was $1.6 billion compared to $1.8 billion in 2021

1 Comparable earnings, comparable earnings per common share, comparable funds generated from operations and comparable EBITDA are non-GAAP measures used throughout this news release. These measures do not have any standardized meaning under GAAP and therefore are unlikely to be comparable to similar measures presented by other companies. The most directly comparable GAAP measures are Net income attributable to common shares, Net income per common share, Net cash provided by operations and Segmented earnings, respectively. For more information on non-GAAP measures, refer to the Non-GAAP section of this news release.

•Declared a quarterly dividend of $0.90 per common share for the quarter ending September 30, 2022

•Reinstated issuance of common shares from treasury at a two per cent discount under our Dividend Reinvestment Plan (DRP) commencing with the dividends declared on July 27, 2022 to prudently fund our growth program that includes increased project costs on the NGTL System and following our commitment to make an equity contribution of $1.9 billion to Coastal GasLink LP. We expect the DRP will be activated for a period of four quarters based on historical participation

•Continued to advance our $28 billion secured capital program, with $1.5 billion invested in second quarter 2022

•Reached revised project agreements with LNG Canada on the Coastal GasLink project which is now approximately 70 per cent complete

•To date in 2022, finalized contracts for approximately 580 MW and 240 MW from wind energy and solar projects, respectively, that will largely be used to provide renewable power to portions of the Keystone Pipeline System. We expect to finalize additional contracts in 2022.


	three months ended June 30		six months ended June 30
(millions of $, except per share amounts)	2022	2021	2022	2021

Income
Net income/(loss) attributable to common shares	889	975	1,247	(82)
per common share – basic	$0.90	$1.00	$1.27	($0.08)

Segmented earnings
Canadian Natural Gas Pipelines	385	361	743	717
U.S. Natural Gas Pipelines	711	688	1,021	1,561
Mexico Natural Gas Pipelines	162	138	282	290
Liquids Pipelines	261	250	533	(2,258)
Power and Storage	170	158	246	321
Corporate	(10)	(36)	21	(4)
Total segmented earnings	1,679	1,559	2,846	627

Comparable EBITDA
Canadian Natural Gas Pipelines	681	684	1,325	1,370
U.S. Natural Gas Pipelines	915	879	2,022	1,934
Mexico Natural Gas Pipelines	190	164	338	344
Liquids Pipelines	341	366	670	759
Power and Storage	252	157	409	335
Corporate	(10)	(4)	(7)	(7)
Comparable EBITDA	2,369	2,246	4,757	4,735
Depreciation and amortization	(635)	(633)	(1,261)	(1,278)
Interest expense	(620)	(577)	(1,200)	(1,147)
Allowance for funds used during construction	63	64	138	114
Interest income and other included in comparable earnings	17	158	84	250
Income tax expense included in comparable earnings	(173)	(175)	(352)	(378)
Net income attributable to non-controlling interests	(9)	(6)	(20)	(75)
Preferred share dividends	(33)	(39)	(64)	(77)
Comparable earnings	979	1,038	2,082	2,144
Comparable earnings per common share	$1.00	$1.06	$2.12	$2.22

Net cash provided by operations	942	1,711	2,649	3,377
Comparable funds generated from operations	1,566	1,754	3,431	3,777
Capital spending1	1,482	1,439	3,206	3,324

Dividends declared
Per common share	$0.90	$0.87	$1.80	$1.74
Basic common shares outstanding (millions)
– weighted average for the period	983	979	982	966
– issued and outstanding at end of period	984	979	984	979

1Includes Capital expenditures and Contributions to equity investments.

CEO Message

Based on solid performance year-to-date, we reiterate that 2022 comparable EBITDA is expected to be modestly higher than 2021 and our 2022 comparable earnings per common share outlook is expected to be consistent with 2021. Please refer to the 2021 Annual Report for additional details. During the three months ended June 30, 2022, comparable earnings of $1.00 per common share and comparable funds generated from operations of $1.6 billion reflect the utility-like nature of our business together with contributions from projects that entered service in 2021 and 2022. By leveraging our competitive strengths, we continue to develop solutions to move, generate and store the energy North America relies on in a secure and increasingly sustainable way.

Results in the second quarter of 2022 are underpinned by high utilization rates across our asset base that continued to reliably meet North America's growing demand for energy. The NGTL System had total system deliveries averaging 12.8 Bcf/d, up nine per cent compared to second quarter 2021. Our U.S. Natural Gas Pipelines flows averaged 25.4 Bcf/d, up over three per cent year-over-year, which included a new all-time daily power load peak delivery of 2.75 Bcf on ANR. During the first six months, we continue to advance approximately 3.3 Bcf/d of LNG-linked projects in our U.S. Natural Gas business. Combining our U.S. Natural Gas projects with Coastal GasLink, TC Energy remains well positioned to continue to expand it's share of the North American LNG market. Bruce Power operational performance during the second quarter was exceptional with fewer outage days than planned. Project execution is on track, with Unit 6 MCR moving to the last part of the installation phase and remains on time and on budget. Additionally, during the quarter the Keystone Pipeline System safely delivered nearly 610,000 Bbl/d as we placed approximately 30 per cent of the 2019 Open Season contracts into service effective April 1, 2022 with additional volumes anticipated through year end.

We are also pleased to announce Coastal GasLink LP has achieved a significant milestone with the execution of revised project agreements with LNG Canada that incorporate a revised cost estimate for the project of $11.2 billion. The revised agreement allows us to continue the safe and timely execution of the 670-kilometre project which is now approximately 70 per cent complete, with two of eight sections finished and expected mechanical in-service by the end of 2023. The Wilde Lake compressor facility near Chetwynd at the eastern end of the route is also nearing completion, representing one of the most significant pieces of infrastructure on the project. Together with LNG Canada, the 2.1 Bcf/d project will provide the first direct path for western Canadian natural gas to reach global LNG markets, displacing coal-fired power and potentially reducing global GHG emissions by 60 to 90 million tonnes per year. Coastal GasLink LP is proud to be leading the way in terms of how energy projects are advanced in Canada, with over $1.4 billion in contracting opportunities awarded to Indigenous and local communities to date and with the recent 10 per cent equity option announcement with our Indigenous partners. In our view, global LNG fundamentals remain supportive of additional LNG exports from western Canada that we believe can be supported by the expansion of the Coastal GasLink project.

Our revised agreements with LNG Canada establish a better framework for project advancement and further strengthens our long-term partnership. The agreements resolve uncertainty over specific and anticipated costs, mitigate project funding and execution risks and allow us to continue the safe and timely execution of the project. We continue to believe the project remains economically viable and subject to a final investment decision, we anticipate a potential second phase of Coastal GasLink could enhance TC Energy's project returns.

Our industry-leading secured capital program is now $28 billion and we expect to sanction approximately $5 billion of projects per year throughout the decade. Importantly, our secured capital projects are largely underpinned by long-term take-or-pay contracts and/or regulated business models, giving us visibility to deliver earnings and cash flow growth, while reducing our GHG emissions intensity and continuing to lower our overall leverage metrics. As we stated at our 2021 Investor Day, our secured capital program is expected to deliver a 2021-2026 comparable EBITDA compounded annual growth rate of five per cent that will support our dividend growth, funding of capital commitments and reduction of our overall leverage metrics.

Looking forward, we have an extraordinary opportunity to support energy security and move toward a low carbon future. Our critical energy infrastructure assets are connecting North America's premier basins to LNG export facilities. We intend to continue expanding, extending and modernizing our existing natural gas pipeline network. Bruce Power's zero-emission power delivery continues to grow through our $4.4 billion life extension program, with more investments anticipated through this decade. We are also enhancing our existing liquids infrastructure and adding operational flexibility for our customers. Additionally, we see opportunities to originate new energy solutions like the Alberta Carbon Grid, large-scale hydrogen production, pumped hydro storage and solar and wind PPAs. We remain confident in our business plan and expect to continue to grow our common share dividend at an annual rate of three to five per cent. This is consistent with our conservative approach to capital allocation, historic risk-adjusted return profile and is expected to provide the capacity to fund our sizeable capital program while enhancing our financial strength and flexibility.

OUTLOOK

Comparable EBITDA and comparable earnings

•Our overall comparable EBITDA and comparable earnings per common share outlook for 2022 remains consistent with the 2021 Annual Report. 2022 comparable EBITDA is expected to be modestly higher than 2021 and 2022 comparable earnings per common share outlook is expected to be consistent with 2021. Please refer to the 2021 Annual Report for additional details. We continue to monitor the impact of changes in energy markets, our construction projects and regulatory proceedings as well as COVID-19 for any potential effect on our 2022 comparable EBITDA and comparable earnings per share.

Consolidated capital spending and equity investments

•Our total capital expenditures for 2022 are now expected to be approximately $8.5 billion. The increase from what was outlined in the 2021 Annual Report is primarily due to the partner equity contributions of approximately $1.3 billion we expect to make in 2022 to Coastal GasLink LP in accordance with revised agreements impacting Coastal GasLink LP. Refer to the Recent Developments – Canadian Natural Gas Pipelines section for additional information on the Coastal GasLink project. In addition, higher project costs are expected for the NGTL System reflecting inflationary pressures on labour and materials, additional regulatory conditions and other factors. We continue to monitor developments on all of our construction projects, work on cost mitigation strategies and assess market conditions as well as the impact of COVID-19 for further changes to our overall 2022 capital program.

NOTABLE RECENT DEVELOPMENTS INCLUDE:

Canadian Natural Gas Pipelines

•Coastal GasLink: Coastal GasLink LP and LNG Canada have reached a settlement that addresses and resolves disputes over certain incurred and anticipated costs of the Coastal GasLink pipeline project.

•NGTL System: In the six months ended June 30, 2022, the NGTL System placed approximately $1.5 billion of capacity projects in service.

U.S. Natural Gas Pipelines

•ANR Section 4 Rate Case: ANR filed a Section 4 rate case with FERC on January 28, 2022 requesting an increase to ANR's maximum transportation rates effective August 1, 2022, subject to refund upon completion of the rate proceeding. The rate case is progressing as expected as we continue to pursue a collaborative process to find a mutually beneficial outcome with our customers, FERC and other stakeholders through settlement negotiations.

Mexico Natural Gas Pipelines

•Tula and Villa de Reyes: The CFE initiated arbitration in June 2019 for the Tula and Villa de Reyes projects, disputing fixed capacity payments due to force majeure events. Arbitration proceedings are currently suspended while management continues to progress collaborative settlement discussions with the CFE.

Power and Storage

•Bruce Power Life Extension: On March 7, 2022, the IESO verified Bruce Power's Unit 3 MCR program final cost and schedule duration estimate submitted in December 2021. The Unit 3 MCR program is scheduled to begin in first quarter 2023 with expected completion in 2026.

•Renewable Energy Contracts and/or Investment Opportunities: Through an RFI process conducted in 2021, we are seeking potential contracts and/or investment opportunities in wind, solar and energy storage projects to meet the electricity needs of the U.S. portion of the Keystone Pipeline System and supply renewable energy products and services to industrial and oil and gas sectors proximate to our in-corridor demand. To date in 2022, we have finalized contracts for approximately 580 MW and 240 MW from wind energy and solar projects, respectively. We continue to evaluate the proposals received through the RFI process and expect to finalize additional contracts in 2022.


	three months ended June 30				six months ended June 30
(millions of $, unless otherwise noted)	2022		2021		2022		2021

Items included in comparable EBITDA and EBIT comprised of:
Revenues1	438		405		847		806
Operating expenses	(226)		(238)		(457)		(463)
Depreciation and other	(92)		(77)		(177)		(162)
Comparable EBITDA and EBIT2	120		90		213		181
Bruce Power – other information
Plant availability3,4	79	%	85	%	82	%	85	%
Planned outage days4	127		91		204		165
Unplanned outage days	3		7		17		22
Sales volumes (GWh)5	4,702		5,032		9,677		10,096
Realized power price per MWh6	$92		$81		$87		$80


	three months ended June 30		six months ended June 30
(millions of US$, unless otherwise noted)	2022	2021	2022	2021

Columbia Gas	350	355	766	763
ANR	141	150	312	301
Columbia Gulf	46	52	105	109
Great Lakes1,2	35	36	92	77
GTN2,3	43	40	94	55
Other U.S. pipelines2,4	92	77	202	137
TC PipeLines, LP2,5	—	—	—	24
Non-controlling interests5	9	7	20	84
Comparable EBITDA	716	717	1,591	1,550
Depreciation and amortization	(169)	(153)	(336)	(301)
Comparable EBIT	547	564	1,255	1,249
Foreign exchange impact	151	128	339	310
Comparable EBIT (Cdn$)	698	692	1,594	1,559
Specific items:
Great Lakes goodwill impairment charge	—	—	(571)	—
Risk management activities	13	(4)	(2)	2
Segmented earnings (Cdn$)	711	688	1,021	1,561