TC Energy | South Bow Spinoff

As announced on July 27, 2023, the Board of Directors approved the proposed plan to separate TC Energy into two independent, investment-grade, publicly listed companies: TC Energy Corporation and South Bow Corporation. For the proposed separation to become effective, it must be approved by our shareholders.

TC Energy's Board of Directors and management team are confident the proposed separation will enhance long-term value for TC Energy shareholders by creating two highly focused, premium energy infrastructure companies. Each company will be structured to reflect distinct value propositions and the ability to pursue and achieve greater success than a combined entity by executing tailored strategies targeted to distinct customer sets. South Bow will be a low-risk, liquids transportation and storage business focused on enhancing the value of its unrivalled asset base. As a standalone entity with a distinct capital allocation strategy, South Bow will have greater flexibility to invest in strategic opportunities to expand, extend and unlock the full potential of its competitive corridor connecting WCSB crude oil to the U.S. Midwest and Gulf Coast.

Upon closing of the spinoff, the shares of South Bow are expected to be listed on the Toronto Stock Exchange (TSX) and New York Stock Exchange (NYSE) under the trading symbol "SOBO". TC Energy common shares are expected to continue trading on the TSX and NYSE under TC Energy's current trading symbol "TRP".

If you are a shareholder as of the Distribution Record Date you will receive, in exchange for each TC Energy share you hold on the Distribution Record Date, one New TC Energy Common Share and 0.2 of a South Bow Common Share. Accordingly, immediately after giving effect to the Arrangement, those persons who were shareholders as of the Distribution Record Date will hold all of the outstanding New TC Energy Common Shares and all of the outstanding South Bow common shares.

TC Energy shareholders as of the Distribution Record Date will receive, in exchange for each TC Energy share, one new TC Energy share and 0.2 of a South Bow common share. Shareholder dividends, on a pro forma combined basis, are expected to remain whole between TC Energy and South Bow following the spinoff Transaction.

Shareholder dividend expected to remain whole¹
Expected dividend split to be:

• ~86% TC Energy
• ~14% South Bow

¹ Dividends are at the discretion of the respective Board of Directors.

The directors of South Bow will be: Hal Kvisle, Chansoo Joung, George Lewis, Leonard Mallett, Bob Phillips, Sonya Reed, Shannon Ryhorchuk, Mary Pat Salomone, Frances Vallejo, Don Wishart and Bevin Wirzba.

TC Energy is holding its 2024 Annual and Special Meeting on Tuesday June 4, 2024 at 8 a.m. MDT via a virtual-only format using a live audio webcast available online at https://web.lumiagm.com/423961867 , password: "tc2024" (case sensitive). A physical or in-person meeting will not be held.

Registered shareholders and duly appointed proxyholders will be able to attend and ask questions at the virtual meeting.

Registered shareholders and duly appointed proxyholders can also vote in real-time at the virtual meeting by completing a ballot online during the virtual meeting, provided that they complete the instructions outlined in the 2024 Management Information Circular.

Guests and non-registered or beneficial shareholders who have not appointed themselves as a proxyholder will be able to listen to the meeting but will not be able to ask questions or vote.

Registered shareholders

If you hold your shares directly and have a share certificate or DRS Advice in your name, you may attend the meeting by following the instructions below on the day of the meeting:

• Log in online at https://web.lumiagm.com/423961867 using a web browser on a smartphone, tablet or computer.
• Click "I have a login" and then enter your control number located on the form of proxy or in the email notification you received from Computershare, and password "tc2024" (case sensitive).

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Non-Registered (beneficial) shareholders

If you hold your shares beneficially through a broker, nominee or intermediary, you may attend the meeting by completing the following two steps by May 30, 2024:

1. Appoint yourself or another person attending the meeting as a duly appointed proxyholder, by following the instructions on page 12 of the Management Information Circular.
2. Visit https://www.computershare.com/TCEnergyAGM to register to attend the meeting. To register, enter your account number located on your voting information form, your name and email address. After the proxy deadline, Computershare will send you or your proxyholder via email a username that will be required to log into the meeting.

On the day of the meeting:

• Log in online at https://web.lumiagm.com/423961867 using a web browser on a smartphone, tablet or computer.
• Click "I have a login" and then enter the four letter username provided to you or your proxyholder by Computershare, and password "tc2024" (case sensitive).

Please note that non-registered shareholders must complete steps 1 by May 30, 2024 and step 2 by 8:00 AM MDT on May 31 in order to be able to vote at the meeting as a duly appointed proxyholder. In some cases, your intermediary may send you additional documentation that must also be completed in order for you to vote. If you do not complete these steps by the deadlines noted above, you may still attend the meeting as a guest.

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Guests

If you are not a registered shareholder or a duly appointed proxyholder or if you are a non-registered shareholder and you have not appointed yourself as a proxyholder, you can still attend the meeting and listen by following the instructions below on the day of the meeting:

• Log in online at https://web.lumiagm.com/423961867 using a web browser on a smartphone, tablet or computer.
• Select "Guest" and complete the information requested in the form.

Common shareholders of record on April 16, 2024 are entitled to receive notice of the meeting and vote their shares at the meeting. TC Energy’s Board of Directors set this date to comply with legal requirements and allow enough time for shareholders to receive and review the materials, make their voting decisions and send in their voting instructions before the deadline.

You have two ways to vote:

• by proxy*, or
• by virtually attending the meeting and voting.

*voting by proxy means you are giving someone else the authority to attend the meeting and vote for you (your proxyholder).

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Registered shareholders

We mail the Notice directly to you, and your package includes a proxy form. You may request a paper copy of the 2024 Management Information Circular and the TC Energy Annual Report by following the instructions in the Notice that was mailed to you. If you are a registered shareholder, you must return your signed proxy form in order to vote by proxy. The securities represented by your proxy will be voted or withheld from voting in accordance with the instructions provided in your proxy on any ballot that may be called for. If you appoint the TC Energy representatives named in the proxy form and specify your voting instructions, your shares will be voted, or withheld from voting, accordingly.

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Non-Registered (beneficial) shareholders

Your broker, its agent or its nominee can only vote your shares if they have received proper voting instructions from you. If you are a beneficial shareholder, your package includes a voting instruction form. Complete the form and follow the return instructions on the form. The voting instruction form is similar to a proxy form, however, it can only instruct the registered shareholder how to vote your shares. You cannot use the form to vote your shares directly. Your broker is required by law to receive voting instructions from you before voting your shares. Every broker has their own mailing procedures and instructions for returning the completed voting instruction form, so be sure to follow the instructions provided on the form which may require you to take action earlier than the deadline for voting by proxy.

Most brokers delegate responsibility for obtaining instructions from their clients to Broadridge Investor Communications Corporation (Broadridge). Broadridge, or any other intermediary, as applicable, mails the proxy materials and voting instruction form to beneficial shareholders, at our expense. The voting instruction form will name the same TC Energy representatives listed on page 11 to act as TC Energy Proxyholders.

The purpose of the Arrangement and the related transactions is to separate TC Energy into two independent, investment-grade, publicly listed companies:

1. TC Energy – a low-risk diversified, growth-oriented natural gas and energy solutions company, uniquely positioned to meet growing industry and consumer demand for reliable, lower-carbon energy and lower emitting energy sources, including natural gas and
2. South Bow – a critical energy infrastructure company, with an unrivalled market position to connect resilient, safe and secure liquids supply to the highest demand markets with incremental growth and value creation opportunities.

The South Bow Shareholder Rights Plan is designed to ensure that South Bow Shareholders are treated fairly and provide the South Bow Board with adequate time to identify, develop, and negotiate alternative value maximizing transactions if there is a take-over bid for South Bow. For more information on the South Bow Shareholder Rights Plan see Schedule L of the 2024 Management Information Circular.

In order to pass:

• subject to any further order of the Court, the Arrangement Resolution must be approved by at least two-thirds of the votes cast by shareholders present or represented by proxy at the meeting; and
• the South Bow Shareholder Rights Plan Resolution must be approved by at least a simple majority of the votes cast by shareholders present or represented by proxy at the meeting.

The Liquids Pipelines spinoff is the result of a rigorous, two-year strategic review and analysis of potential alternatives conducted by the Board, management, and financial, tax and legal advisors. The Board considered a variety of transaction alternatives to address the long-term future of the Liquids Pipelines business. See ‘The Arrangement – Background to the Arrangement’ on page 56 of the 2024 Management Information Circular for more information.

The Board recommends that shareholders vote for the Arrangement Resolution and for the South Bow Shareholder Rights Plan Resolution.

Under the proposed spinoff, TC Energy shareholders as of the Distribution Record Date, as defined in the 2024 Management Information Circular dated April 10, 2024, will receive, in exchange for each TC Energy common share, one new TC Energy common share and 0.2 of a South Bow common share.

Assuming the spinoff is successfully completed, we expect to distribute DRS Advices for the South Bow Common Shares to Shareholders as soon as practicable after the Distribution Record Date. After such distribution, certificates and DRS Advices for TC Energy Common Shares issued prior to the completion of the Arrangement will be deemed to represent the New TC Energy Common Shares issued pursuant to the Arrangement and accordingly no new certificates will be issued for New TC Energy Common Shares.

Our 2024 Management Information Circular includes the audited carve-out financial statements of the Liquids Pipelines business for the years ended December 31, 2023, 2022 and 2021, the unaudited pro forma financial statements of South Bow for the year ended December 31, 2023 and the audited financial statements of South Bow for the period from incorporation on December 15, 2023 to December 31, 2023. To review these financial statements, please see Schedule G, Schedule H and Schedule I in the 2024 Management Information Circular.

Cautionary Note: The historical carve-out and pro forma financial information for South Bow included in the Circular has been prepared for illustrative purposes only and may not be indicative of the operating results or financial condition that would have been achieved if the Arrangement had been completed on the date or for the periods noted therein, nor do they purport to project the results of operations or financial position for any future period or as of any future date. See Risk Factors – Risks Relating to Carve-Out Financial Statements in Schedule F of our 2024 Management Information Circular.

The use of the phrase "tax-free" in the 2024 Management Information Circular is a reference to the tax-deferred nature of the Arrangement. The receipt of South Bow Common Shares pursuant to the Arrangement is generally intended not to result in taxable income or gain to Holders, (as defined in the Management Information Circular) for Canadian federal income tax purposes or U.S. federal income tax purposes.

More information can be found in the ‘Material Income Tax Considerations – Certain Canadian Federal Income Tax Considerations and Material Income Tax Considerations – Certain United States Federal Income Tax Considerations’ section of the 2024 Management Information Circular.