TransCanada Reports 2012 Comparable Earnings of $1.3 Billion

TransCanada Reports 2012 Comparable Earnings of $1.3 Billion 
Increases Common Share Dividend by Five Per Cent 
CALGARY, ALBERTA -- (Marketwire) -- 02/12/13 -- TransCanada
Corporation (TSX:TRP) (NYSE:TRP) (TransCanada or the Company) today
announced comparable earnings for fourth quarter 2012 of $318 million
or $0.45 per share. For the year ended December 31, 2012, comparable
earnings were $1.3 billion or $1.89 per share. TransCanada's Board of
Directors also declared a quarterly dividend of $0.46 per common
share for the quarter ending March 31, 2013, equivalent to $1.84 per
common share on an annualized basis, an increase of five per cent.
This is the thirteenth consecutive year the Board of Directors has
raised the dividend. 
"TransCanada's diverse set of high-quality critical energy
infrastructure assets performed relatively well over the course of
2012," said Russ Girling, TransCanada's president and chief executive
officer. "While the majority of our assets continued to generate
stable and predictable earnings and cash flow, plant outages at Bruce
Power and Sundance A along with a lower contribution from certain
natural gas pipelines did adversely affect our financial results.  
"In 2012, we made significant progress on a number of initiatives to
improve earnings and position our Company for continued growth,"
added Girling. "We commenced construction on the Gulf Coast Project,
advanced Keystone XL, received positive decisions related to Sundance
A and Ravenswood, and placed $3.4 billion of new assets into service.
The restart of Bruce Power Units 1 and 2, the return to service of
Sundance A in fall 2013, and the start up of other natural gas
pipeline and energy projects are expected to have a positive impact
on earnings and cash flow in 2013. Looking forward, TransCanada is
well positioned to grow sustainable earnings, cash flow and dividends
as we complete our current capital program, benefit from an
anticipated recovery in natural gas and power prices and execute on
our significant portfolio of secured new growth opportunities." 
Over the next three years, subject to required approvals, TransCanada
expects to complete $12 billion of projects that are currently in
advanced stages of development. They include the Gulf Coast Project,
Keystone XL, th
e Keystone Hardisty Terminal, the initial phase of the
Grand Rapids Pipeline, the Tamazunchale extension, the acquisition of
nine Ontario Solar projects, and the ongoing expansion of the Alberta
System. 
During the course of 2012 and early 2013, the Company also
commercially secured an additional $13 billion of long-life,
contracted energy infrastructure projects that are expected to be
placed into service in 2016 and beyond. They include the Coastal
GasLink and Prince Rupert Gas Transmission projects that would move
natural gas to Canada's West Coast for liquefaction and shipment to
Asian markets, the Topolobampo and Mazatlan Gas Pipeline projects in
Mexico, completion of the Grand Rapids and Northern Courier oil
pipeline projects in Northern Alberta, and the Napanee Generating
Station in Eastern Ontario. TransCanada expects these projects to
generate predictable, sustained earnings and cash flow. 
Fourth Quarter and Year-End Highlights 
(All financial figures are unaudited and in Canadian dollars unless
noted otherwise) 


 
--  Fourth quarter financial results 
    --  Comparable earnings of $318 million or $0.45 per share 
    --  Net income attributable to common shares of $306 million or $0.43
        per share 
    --  Comparable earnings before interest, taxes, depreciation and
        amortization (EBITDA) of $1.1 billion 
    --  Funds generated from operations of $818 million 
--  For the year ended December 31, 2012 
    --  Comparable earnings of $1.3 billion or $1.89 per share 
    --  Net income attributable to common shares of $1.3 billion or $1.84
        per share 
    --  Comparable EBITDA of $4.2 billion 
    --  Funds generated from operations of $3.3 billion 
--  Announced an increase in the quarterly common share dividend of five per
    cent to $0.46 per share for the quarter ending March 31, 2013 
--  Selected to develop a proposed $5 billion pipeline that would transport
    natural gas to the recently announced Pacific Northwest LNG export
    facility near Prince Rupert, British Columbia (B.C.). An additional $1
    to $1.5 billion of Alberta System expansions would be required as part
    of the project 
--  Awarded US$1.4 billion in contracts to build the Topolobampo and
    Mazatlan natural gas pipelines in Mexico 
--  Signed a 20-year Power Purchase Arrangement (PPA) with the Ontario Power
    Authority (OPA) to develop the $1 billion Napanee natural gas-fired
    power plant in Eastern Ontario 
--  Bruce Power completed the refurbishment of Units 1 and 2 and placed the
    units into commercial service on October 22 and October 31, respectively
--  Continued to advance construction on the US$2.3 billion Gulf Coast
    Project that will transport crude oil from Cushing, Oklahoma to the U.S.
    Gulf Coast 
--  Governor of Nebraska approved the re-route of Keystone XL through the
    state 

 
Comparable earnings for fourth quarter 2012 were $318 million or
$0.45 per share compared to $365 million or $0.52 per share for the
same period in 2011. The decrease was primarily due to lower earnings
contributions from Western Power, Bruce Power and certain natural gas
pipelines including the Canadian Mainline, ANR and Great Lakes. 
Comparable earnings for the year ended December 31, 2012 were $1.3
billion or $1.89 per share compared to $1.6 billion or $2.22 per
share in 2011. Incremental earnings from Keystone and recently
commissioned assets were more than offset by lower contributions from
Western Power, Bruce Power, U.S. Power and certain natural gas
pipelines including the Canadian Mainline, ANR and Great Lakes. 
Net income attributable to common shares for fourth quarter 2012 was
$306 million or $0.43 per share compared to $376 million or $0.53 per
share in fourth quarter 2011. For the year ended December 31, 2012,
net income attributable to common shares was $1.3 billion or $1.84
per share compared to $1.5 billion or $2.17 per share in 2011. 
Notable recent developments in Oil Pipelines, Natural Gas Pipelines,
Energy and Corporate include:  
Oil Pipelines: 


 
--  Gulf Coast Project: In August 2012, TransCanada started construction on
    the US$2.3 billion Gulf Coast Project. The 36-inch pipeline, which will
    extend from Cushing, Oklahoma to the U.S. Gulf Coast, is expected to
    have an initial capacity of up to 700,000 barrels per day (bbl/d) with
    an ultimate capacity of 830,000 bbl/d. Construction of the pipeline is
    approximately 45 per cent complete and is expected to be in service in
    late 2013.  
 
--  Keystone XL: On January 4, 2013, the Nebraska Department of
    Environmental Quality issued its final evaluation report on the proposed
    re-route of Keystone XL to the Governor of Nebraska. The report noted
    that the new route avoids the Nebraska Sandhills, and that construction
    and operation of the pipeline is expected to have minimal environmental
    impacts in Nebraska. On January 22, 2013, the Governor of Nebraska
    approved the re-route through the state. The new route now becomes part
    of the project's Presidential Permit application with the U.S.
    Department of State, which was filed on May 4, 2012. 
    
    Subject to regulatory approvals, TransCanada expects Keystone XL to be
    in se
rvice in late 2014 or early 2015. The approximate cost of the 36-
    inch, 830,000 bbl/d line is US$5.3 billion. As of December 31, 2012,
    US$1.8 billion has been invested in the project. 
 
--  Grand Rapids Pipeline: In October 2012, TransCanada announced that it
    entered into binding agreements with Phoenix Energy Holdings Limited
    (Phoenix) to develop the Grand Rapids Pipeline in Northern Alberta.
    TransCanada and Phoenix will each own 50 per cent of the proposed $3
    billion pipeline project that includes both a crude oil and a diluent
    line to transport volumes approximately 500 kilometres (km) (300 miles)
    between the producing area northwest of Fort McMurray and the Edmonton /
    Heartland region. The pipeline will be the first to serve the growing
    oil sands region west of the Athabasca River. TransCanada will be the
    operator and Phoenix has entered into a long-term commitment to ship
    crude oil and diluent on the system. 
    
    The Grand Rapids Pipeline system, subject to regulatory approvals, is
    expected to be placed into service in multiple stages, with initial
    crude oil service by mid-2015. Once completed in 2017, the full system
    will have the capacity to move up to 900,000 bbl/d of crude oil and
    330,000 bbl/d of diluent.
    
 
--  Canadian Mainline Conversion: TransCanada has determined a conversion of
    a portion of the Canadian Mainline natural gas pipeline system to crude
    oil service is both technically and economically feasible. Through a
    combination of converted natural gas pipeline and new construction, the
    proposed pipeline would deliver crude oil between Hardisty, Alberta and
    markets in Eastern Canada. The Company has begun soliciting input from
    stakeholders and prospective shippers to determine market acceptance of
    the proposed project. 

 
Natural Gas Pipelines: 


 
--  Alberta System: During 2012, TransCanada continued to expand its Alberta
    System by completing and placing into service pipeline projects
    totalling approximately $650 million. This work included completion of
    the Horn River project in May, which extended the Alberta System into
    the Horn River shale play in Northeast B.C. 
    
    In 2012, the National Energy Board (NEB) approved approximately $640
    million of additional expansions, including the Leismer-Kettle River
    Crossover project, a 30-inch, 77 km (46 mile) pipeline. This project
    will cost an estimated $160 million and is intended to increase capacity
    to meet demand in northeastern Alberta. As of December 31, approximately
    $330 million of additional projects were awaiting approval, including
    the $100 million Chinchaga expansion and the $230 million Komie North
    project that would extend the Alberta System further into the Horn River
    area. On January 30, 2013, the NEB issued its recommendation to the
    Governor-in-Council that the proposed Chinchaga Expansion component of
    that project be approved, but denied the proposed Komie North Extension
    component. All applications awaiting approval as of the end of 2012 have
    now been addressed. 
    
    TransCanada proposes to extend the Alberta System in Northeast B.C. to
    connect to both the recently announced Prince Rupert Gas Transmission
    Project and to incremental North Montney gas supply. This new
    infrastructure would allow the Pacific Northwest LNG facility to access
    both the abundant North Montney natural gas supply and other Western
    Canada Sedimentary Basin supply through the extensive Alberta System.
    Initial capital cost estimates are $1 to $1.5 billion, with an in
    service date of late 2015 targeted for a large portion of this
    infrastructure. 
 
--  Prince Rupert Gas Transmission Project: In January 2013, TransCanada was
    selected by Progress Energy Canada Ltd. (Progress), to design, build,
    own and operate the proposed $5 billion Prince Rupert Gas Transmission
    pipeline. This proposed pipeline will transport natural gas primarily
    from the North Montney gas-producing region near Fort St John, B.C., to
    the proposed Pacific Northwest LNG export facility near Prince Rupert,
    B.C. Progress and TransCanada expect to finalize definitive agreements
    in early 2013, subject to approvals by their respective Boards of
    Directors. The project is expected to be placed in service by the end of
    2018, subject to regulatory approvals and a final investment decision to
    be made by Progress. 
 
--  Topolobampo Pipeline Project: In November 2012, Mexico's Comision
    Federal de Electricidad (CFE) awarded TransCanada the Topolobampo
    pipeline project, from Chihuahua to Topolobampo, Mexico. The project,
    which is supported by a 25-year contract with CFE, is a 530 km (329
    mile) natural gas pipeline with a capacity of 670 million cubic feet per
    day (MMcf/d). The project is expected to cost approximately US$1 billion
    and be in service in mid-2016. 
 
--  Mazatlan Pipeline Project: In November 2012, the CFE also awarded
    TransCanada the Mazatlan pipeline project, which will extend from El Oro
    to Mazatlan, Mexico and interconnect with the Topolobampo pipeline. The
    project consists of a 413 km (257 mile) natural gas pipeline with a
    capacity of 200 MMcf/d that is supported by a 25-year contract with CFE.
    It is expected to cost approximately US$400 million and be in service by
    fourth quarter 2016. 
 
--  Canadian Mainline: An NEB hearing began in June 2012 to address our
    application to change the business structure and the terms and
    conditions of service for the Canadian Mainline, including tolls for
    2012 and 2013. The hearing concluded in December 2012 and a decision is
    expected in late first quarter or early second quarter 2013. 
    
    In May 2012, TransCanada received NEB approval to build new pipeline
    facilities to provide Southern Ontario with additional natural gas
    supply from the Marcellus shale basin. On November 1, 2012, a portion of
    these facilities began transporting natural gas.

 
Energy: 


 
--  Bruce Power: In late 2012, Bruce Power completed the multi-year
    refurbishment of Units 1 and 2 by placing them into commercial service
    on October 22 and October 31, respectively. Both units have operated at
    reduced output levels following their return to service and in late
    November 2012, Bruce Power took Unit 1 offline for an approximate one
    month maintenance outage. Bruce Power expects the availability
    percentages for Units 1 and 2 to increase over time; however, these
    units have not operated for an extended period of time and may
    experience slightly higher forced outage rates and reduced availability
    percentages in 2013. 
    
    Bruce Power also continued its strategy to maximize the operating life
    of its reactors. It returned Unit 3 to service in June 2012 after
    completing the seven month West Shift Plus life extension outage. Unit 4
    is expected to return to service in late first quarter 2013 after the
    completion of an expanded outage program that began in August 2012.
    These outages are expected to allow Units 3 and 4 to produce low cost
    electricity until at least 2021.
    
    In 2013, the overall plant availability is expected to be appro
ximately
    90 per cent for Bruce A and in the high 80 per cent range for Bruce B.
    Following the full return to service of both Units 1 and 2, Bruce Power
    will be capable of producing 6,200 megawatts (MW) of emission-free power
    for the province of Ontario. 
    
    
--  Napanee Generating Station:  On December 17, 2012, TransCanada signed a
    20-year contract with the OPA to develop, own and operate a new 900 MW
    natural gas-fired power plant. The facility will be located at Ontario
    Power Generation's Lennox Generating Station in the town of Greater
    Napanee in Eastern Ontario. The Napanee Generating Station will replace
    the facility that was planned and subsequently cancelled in the
    community of Oakville. The Company has been reimbursed for $250 million
    of costs, primarily related to natural gas turbines that were purchased
    for the Oakville project which will be deployed at Napanee. The Company
    will further invest approximately $1 billion in the Napanee facility.  
 
--  CrossAlta Acquisition: In December 2012, the Company acquired the
    remaining 40 per cent interests in the Crossfield Gas Storage facility
    and CrossAlta Gas Storage & Services Ltd. marketing company from BP for
    approximately $214 million, net of cash acquired. TransCanada now owns
    100 per cent of these operations. This acquisition added 27 billion
    cubic feet (Bcf) of working gas storage capacity to the Company's
    existing portfolio in Alberta. 
    
    
--  Cartier Wind: The 111 MW second phase of Gros-Morne was placed into
    service on November 6, 2012. This marks the completion of the 590 MW
    Cartier Wind project in Quebec, the largest wind development in Canada.
    All of the power produced by Cartier Wind is sold under 20-year PPAs to
    Hydro-Quebec. 
 
--  Ravenswood: In 2011, TC Ravenswood, LLC jointly filed two formal
    complaints with the Federal Energy Regulatory Commission (FERC)
    challenging how the New York Independent System Operator (NYISO) applied
    its buy-side mitigation rules affecting bidding criteria associated with
    two new power plants that began service in the New York Zone J market
    during the summer of 2011. 
    
    In June 2012, the FERC addressed the first complaint, indicating it
    would take steps to increase transparency and accountability for future
    mitigation exemption tests (MET) and decisions. In September, 2012, the
    FERC granted an order on the second complaint, directing the NYISO to
    retest the two new power plants as well as a transmission project
    currently under construction using an amended set of assumptions to more
    accurately perform the MET calculations in accordance with existing
    rules and tariff provisions. The recalculation was completed in November
    2012 and it was determined that one of the plants had been granted an
    exemption in error. That exemption was revoked and the plant is now
    required to offer its capacity at a floor price which has put upward
    pressure on capacity auction prices since December. The order was
    prospective only and has no impact on capacity prices for prior periods.

 
Corporate: 


 
--  The Board of Directors of TransCanada declared a quarterly dividend of
    $0.46 per share for the quarter ending March 31, 2013 on TransCanada's
    outstanding common shares. The quarterly amount is equivalent to $1.84
    per common share on an annual basis and represents a five per cent
    increase over the previous amount. 
 
--  In January 2013, TransCanada issued US$750 million of senior notes
    maturing on January 15, 2016, bearing interest at an annual rate of 0.75
    per cent. The net proceeds of the offering were used to reduce short-
    term indebtedness and for general corporate purposes. 
 
--  As previously disclosed, TransCanada adopted U.S. generally accepted
    accounting principles (U.S. GAAP) effective January 1, 2012.
    Accordingly, the 2012 financial information, along with comparative
    financial information for 2011, has been prepared in accordance with
    U.S. GAAP. 

 
Teleconference - Audio and Slide Presentation: 
TransCanada will hold a teleconference and webcast on Tuesday,
February 12, 2013 to discuss its fourth quarter 2012 financial
results. Russ Girling, TransCanada's president and chief executive
officer and Don Marchand, executive vice-president and chief
financial officer, along with other members of the TransCanada
executive leadership team, will discuss the financial results and
Company developments at 1:00 p.m. (MST) / 3:00 p.m. (EST). 
Analysts, members of the media and other interested parties are
invited to participate by calling 866.226.1793 or 416.340.2218
(Toronto area). Please dial in 10 minutes prior to the start of the
call. No pass code is required. A live webcast of the teleconference
will be available at www.transcanada.com.  
A replay of the teleconference will be available two hours after the
conclusion of the call until 11:59 PM (EST) February 19, 2013. Please
call 905.694.9451 or 800.408.3053 (North America only) and enter pass
code 6260206. 
With more than 60 years' experience, TransCanada is a leader in the
responsible development and reliable operation of North American
energy infrastructure, including natural gas and oil pipelines, power
generation and gas storage facilities. TransCanada operates a network
of natural gas pipelines that extends more than 68,500 kilometres
(42,500 miles), tapping into virtually all major gas supply basins in
North America. TransCanada is one of the continent's largest
providers of gas storage and related services with over 400 billion
cubic feet of storage capacity. A growing independent power producer,
TransCanada owns or has interests in over 11,800 megawatts of power
generation in Canada and the United States. TransCanada is developing
one of North America's largest oil delivery systems. TransCanada's
common shares trade on the Toronto and New York stock exchanges under
the symbol TRP. For more information visit: www.transcanada.com/ or
check us out on Twitter @TransCanada. 
Fourth Quarter 2012 Financial Highlights  


 
Operating Results                                                           
                                                                            
                                 Three months ended           Year end ended
(unaudited)                             December 31              December 31
(millions of dollars)              2012        2011         2012        2011
============================================================================
                                                                            
Revenues                          2,089       2,015        8,007       7,839
                                                                            
Comparable EBITDA(1)              1,052       1,120        4,245       4,544
                                                                            
Net Income Attributable to                                                  
 Common Shares                      306         376        1,299       1,526
                                                                            
Comparable Earnings(1)              318         365        1,330       1,559
                                                                            
Cash Flows                                                                  
  Funds generated from                                                      
   operations(1)                    818         837        3,284       3,451
  Decrease in operating                                                     
   working capital                  207          90          287         235
                           -------------------------------------------------
  Net cash provided by                                                      
   operations                     1,025         927        3,571       3,686
 
                           =================================================
                                                                            
Capital Expenditures              1,040         920        2,595       2,513
                           =================================================
                                                                            
                                                                            
Common Share Statistics                                                     
                                                                            
                                    Three months ended        Year end ended
                                           December 31           December 31
(unaudited)                            2012       2011       2012       2011
============================================================================
                                                                            
Net Income per Share - Basic       $   0.43   $   0.53   $   1.84   $   2.17
                                                                            
Comparable Earnings per Share(1)   $   0.45   $   0.52   $   1.89   $   2.22
                                                                            
Dividends Declared per Common                                               
 Share                             $   0.44   $   0.42   $   1.76   $   1.68
                                                                            
Basic Common Shares Outstanding                                             
 (millions)                                                                 
  Average for the period                705        703        705        702
  End of period                         705        703        705        703
                                ============================================
                                                                            
(1) Refer to the Non-GAAP Measures section in this news release for further 
discussion of Comparable EBITDA, Comparable Earnings, Funds Generated from  
Operations and Comparable Earnings per Share.                               

 
Forward-Looking Information  
TransCanada Corporation (TransCanada or the Company) discloses
forward-looking information to help current and potential investors
understand management's assessment of the Company's future plans and
financial outlook, and future prospects overall.  
Statements that are forward-looking are based on what the Company
knows and expects today and generally include words like anticipate,
expect, believe, may, will, should, estimate or other similar words.  
Forward-looking statements in this news release may include
information about the following, among other things:  


 
--  anticipated business prospects 
--  financial and operational performance, including the performance of
    TransCanada's subsidiaries 
--  expectations or projections about strategies and goals for growth and
    expansion 
--  expected cash flows 
--  expected costs for planned projects, including projects under
    development 
--  expected schedules for planned projects (including anticipated
    construction and completion dates) 
--  expected regulatory processes and outcomes 
--  expected outcomes with respect to legal proceedings, including
    arbitration 
--  expected capital expenditures and contractual obligations 
--  expected operating and financial results 
--  the expected impact of future commitments and contingent liabilities 
--  expected industry, market and economic conditions. 

 
Forward-looking statements do not guarantee future performance.
Actual events and results could be significantly different because of
various assumptions, risks or uncertainties related to TransCanada's
business or events that happen after the date of this news release.  
TransCanada's forward-looking information is based on the following
key assumptions, risks and uncertainties, among other things: 
Assumptions 


 
--  inflation rates, commodity prices and capacity prices 
--  timing of debt issuances and hedging 
--  regulatory decisions and outcomes 
--  foreign exchange rates 
--  interest rates 
--  tax rates 
--  planned and unplanned outages and the use of the Company's pipeline and
    energy assets 
--  integrity and reliability of our assets 
--  access to capital markets 
--  anticipated construction costs, schedules and completion dates 
--  acquisitions and divestitures. 

 
Risks and uncertainties 


 
--  TransCanada's ability to successfully implement strategic initiatives 
--  whether these strategic initiatives will yield the expected benefits 
--  the operating performance of the Company's pipeline and energy assets 
--  amount of capacity sold and rates achieved in our U.S. pipeline business
--  the availability and price of energy commodities 
--  the amount of capacity payments and revenues received from TransCanada's
    energy business 
--  regulatory decisions and outcomes 
--  outcomes of legal proceedings, including arbitration 
--  performance of counterparties 
--  changes in the political environment 
--  changes in environmental and other laws and regulations 
--  competitive factors in the pipeline and energy sectors 
--  construction and completion of capital projects 
--  labour, equipment and material costs 
--  access to capital markets 
--  cybersecurity 
--  interest and currency exchange rates 
--  weather 
--  technological developments 
--  economic conditions in North America as well as globally. 

 
More information about these and other factors is available in
reports TransCanada has filed with Canadian securities regulators and
the U.S. Securities and Exchange Commission.  
Readers should not put undue reliance on forward-looking information.
TransCanada does not update forward-looking statements based on new
information or future events, unless required to by law. 
Non-GAAP Measures  
TransCanada uses the measures Comparable Earnings, Comparable
Earnings per Share, Earnings Before Interest, Taxes, Depreciation and
Amortization (EBITDA), Comparable EBITDA, Earnings Before Interest
and Taxes (EBIT), Comparable EBIT, Comparable Interest Expense,
Comparable Interest Income and Other, Comparable Income Taxes and
Funds Generated from Operations in this news release. These measures
do not have any standardized meaning as prescribed by U.S. generally
accepted accounting principles (GAAP). They are, therefore,
considered to be non-GAAP measures and are unlikely to be comparable
to similar measures presented by other entities. Management of
TransCanada uses these non-GAAP measures to improve its ability to
compare financial results among reporting periods and to enhance its
understanding of operating performance, liquidity and ability to
generate funds to finance operations. These non-GAAP measures are
also provided to readers as additional information on TransCanada's
operating performance, liquidity and ability to generate funds to
finance operations.  
EBITDA is an approximate measure of the Company's pre-tax operating
cash flow and is generally used to better measure performance and
evaluate trends of individual assets. EBITDA comprises earnings
before deducting interest and other financial charges, income taxes,
depreciation and amortization, net income attributable to
non-controlling interests and preferred share dividends. EBITDA
includes income from equity investments. EBIT is a measure of the
Company's earnings from ongoing operations and is generally used to
better measure performance and evaluate trends within each segment.
EBIT comprises earnings before deducting interest and other financial
charges, income taxes, net income attributable to non-controlling
interests and preferred share dividends. EBIT includes income from
equity investments.  
Comparable Earnings, Comparable EBITDA, Comparable EBIT, Comparable
Interest Expense
, Comparable Interest Income and Other, and
Comparable Income Taxes comprise Net Income Applicable to Common
Shares, EBITDA, EBIT, Interest Expense, Interest Income and Other,
and Income Taxes, respectively, and are adjusted for specific items
that are significant but are not reflective of the Company's
underlying operations in the period. Specific items are subjective,
however, management uses its judgement and informed decision-making
when identifying items to be excluded in calculating these non-GAAP
measures, some of which may recur. Specific items may include but are
not limited to certain fair value adjustments relating to risk
management activities, income tax refunds and adjustments, gains or
losses on sales of assets, legal and bankruptcy settlements, and
write-downs of assets and investments. These non-GAAP measures are
calculated on a consistent basis from period to period. The specific
items for which such measures are adjusted in each applicable period
may only be relevant in certain periods and are disclosed in the
Reconciliation of Non-GAAP Measures table in this news release.  
The Company engages in risk management activities to reduce its
exposure to certain financial and commodity price risks by utilizing
derivatives. The risk management activities which TransCanada
excludes from Comparable Earnings provide effective economic hedges
but do not meet the specific criteria for hedge accounting treatment
and, therefore, changes in their fair values are recorded in Net
Income each year. The unrealized gains or losses from changes in the
fair value of these derivative contracts are not considered to be
representative of the underlying operations in the current period or
the positive margin that will be realized upon settlement. As a
result, these amounts have been excluded in the determination of
Comparable Earnings.  
The Reconciliation of Non-GAAP Measures table in this news release
presents a reconciliation of these non-GAAP measures to Net Income
Attributable to Common Shares. Comparable Earnings per Common Share
is calculated by dividing Comparable Earnings by the weighted average
number of common shares outstanding for the period.  
Funds Generated from Operations comprise Net Cash Provided by
Operations before changes in operating working capital and allows
management to better measure consolidated operating cash flow,
excluding fluctuations from working capital balances which may not
necessarily be reflective of underlying operations in the same
period. 


 
Reconciliation of Non-GAAP Measures                                         
                                                                            
Three months ended December 31                                              
(unaudited)(millions of dollars except per                                  
 share amounts)                                       2012             2011 
============================================================================
                                                                            
Comparable EBITDA                                    1,052            1,120 
Depreciation and amortization                         (343)            (341)
                                          ----------------------------------
Comparable EBIT                                        709              779 
                                          ==================================
                                                                            
Other income statement items                                                
Comparable interest expense                           (246)            (251)
Comparable interest income and other                    20                8 
Comparable income taxes                               (123)            (124)
Net income attributable to non-controlling                                  
 interests                                             (28)             (33)
Preferred share dividends                              (14)             (14)
                                          ----------------------------------
Comparable earnings                                    318              365 
                                                                            
Specific item (net of tax):                                                 
  Risk management activities(1)                        (12)              11 
                                          ----------------------------------
Net income attributable to common shares               306              376 
                                          ----------------------------------
                                                                            
Comparable interest expense                           (246)            (251)
Specific item:                                                              
  Risk management activities                             -                - 
                                          ----------------------------------
Interest expense                                      (246)            (251)
                                          ----------------------------------
                                                                            
Comparable interest income and other                    20                8 
Specific item:                                                              
  Risk management activities(1)                         (5)              35 
                                          ----------------------------------
Interest income and other                               15               43 
                                          ----------------------------------
                                                                            
Comparable income taxes                               (123)            (124)
Specific item:                                                              
  Risk management activities(1)                          5               (2)
                                          ----------------------------------
Income taxes expense                                  (118)            (126)
                                          ----------------------------------
                                                                            
Comparable earnings per common share             $    0.45        $    0.52 
Specific item (net of tax):                                                 
  Risk management activities(1)                      (0.02)            0.01 
                                          ----------------------------------
Net income per common share                      $    0.43        $    0.53 
                                          ==================================
                                                                            
Three months ended December 31                                              
(unaudited)(millions of dollars)                      2012             2011 
============================================================================
                                                                            
Funds generated from operations                        818              837 
Decrease in operating working capital                  207               90 
                                          ----------------------------------
Net cash provided by operations                      1,025              927 
                                          ==================================
                                                                            
                                                                            
EBITDA and EBIT by Business Segment                                         
                                                                            
Three months ended                                                          
December 31, 2012       Natural                                             
(unaud
ited)(millions        Gas        Oil                                  
 of dollars)          Pipelines  Pipelines     Energy  Corporate      Total 
============================================================================
                                                                            
Comparable EBITDA           690        172        222        (32)     1,052 
Depreciation and                                                            
 amortization              (236)       (36)       (68)        (3)      (343)
                     -------------------------------------------------------
Comparable EBIT             454        136        154        (35)       709 
                     =======================================================
                                                                            
                                                                            
Three months ended                                                          
December 31, 2011       Natural                                             
(unaudited)(millions        Gas        Oil                                  
 of dollars)          Pipelines  Pipelines     Energy  Corporate      Total 
============================================================================
                                                                            
Comparable EBITDA           716        179        254        (29)     1,120 
Depreciation and                                                            
 amortization              (235)       (35)       (67)        (4)      (341)
                     -------------------------------------------------------
Comparable EBIT             481        144        187        (33)       779 
                     =======================================================
                                                                            
 (1) Three months ended December 31                                         
(unaudited)(millions of dollars)                     2012              2011 
============================================================================
                                                                            
Risk Management Activities Gains/(Losses):                                  
Canadian Power                                         (6)                - 
U.S. Power                                             (5)              (33)
Natural Gas Storage                                    (1)               11 
Interest rate                                           -                 - 
Foreign exchange                                       (5)               35 
Income taxes attributable to risk                                           
 management activities                                  5                (2)
                                          ----------------------------------
Risk Management Activities                            (12)               11 
                                          ==================================
                                                                            
                                                                            
Reconciliation of Non-GAAP Measures                                         
                                                                            
Year ended December 31                                                      
(unaudited)(millions of dollars except per                                  
 share amounts)                                       2012             2011 
============================================================================
                                                                            
Comparable EBITDA                                    4,245            4,544 
Depreciation and amortization                       (1,375)          (1,328)
                                          ----------------------------------
Comparable EBIT                                      2,870            3,216 
                                          ==================================
                                                                            
Other income statement items                                                
Comparable interest expense                           (976)            (939)
Comparable interest income and other                    86               60 
Comparable income taxes                               (477)            (594)
Net income attributable to non-controlling                                  
 interests                                            (118)            (129)
Preferred share dividends                              (55)             (55)
                                          ----------------------------------
Comparable earnings                                  1,330            1,559 
                                                                            
Specific items (net of tax):                                                
 Sundance A PPA arbitration decision                   (15)               - 
 Risk management activities(1)                         (16)             (33)
                                          ----------------------------------
Net income attributable to common shares             1,299            1,526 
                                          ----------------------------------
                                                                            
Comparable interest expense                           (976)            (939)
Specific item:                                                              
 Risk management activities(1)                           -                2 
                                          ----------------------------------
Interest expense                                      (976)            (937)
                                          ----------------------------------
                                                                            
Comparable interest income and other                    86               60 
Specific item:                                                              
 Risk management activities(1)                          (1)              (5)
                                          ----------------------------------
Interest income and other                               85               55 
                                          ----------------------------------
                                                                            
Comparable income taxes                               (477)            (594)
Specific items:                                                             
 Sundance A PPA arbitration decision                     5                - 
 Risk management activities(1)                           6               19 
                                          ----------------------------------
Income taxes expense                                  (466)            (575)
                                          ----------------------------------
                                                                            
Comparable earnings per common share             $    1.89        $    2.22 
Specific items (net of tax):                                                
 Sundance A PPA arbitration decision                 (0.02)               - 
 Risk management activities(1)                       (0.03)           (0.05)
                                          ----------------------------------
Net income per common share                      $    1.84        $    2.17 
                                          ==================================
                                                                            
                                                                            
Year ended December 31                                                      
(unaudited)(millions of dollars)                      2012             2011 
========
====================================================================
                                                                            
Funds generated from operations                      3,284            3,451 
Decrease in operating working capital                  287              235 
                                          ----------------------------------
Net cash provided by operations                      3,571            3,686 
                                          ==================================
                                                                            
                                                                            
EBITDA and EBIT by Business Segment                                         
                                                                            
Year ended                                                                  
December 31, 2012       Natural                                             
(unaudited) (millions       Gas        Oil                                  
 of dollars)          Pipelines  Pipelines     Energy  Corporate      Total 
============================================================================
                                                                            
Comparable EBITDA         2,741        698        903        (97)     4,245 
Depreciation and                                                            
 amortization              (933)      (145)      (283)       (14)    (1,375)
                     -------------------------------------------------------
Comparable EBIT           1,808        553        620       (111)     2,870 
                     =======================================================
                                                                            
                                                                            
Year ended                                                                  
December 31, 2011       Natural                                             
(unaudited)(millions        Gas        Oil                                  
 of dollars)          Pipelines  Pipelines     Energy  Corporate      Total 
============================================================================
                                                                            
Comparable EBITDA         2,875        587      1,168        (86)     4,544 
Depreciation and                                                            
 amortization              (923)      (130)      (261)       (14)    (1,328)
                     -------------------------------------------------------
Comparable EBIT           1,952        457        907       (100)     3,216 
                     =======================================================
                                                                            
 (1) Year ended December 31                                                 
(unaudited)(millions of dollars)                       2012            2011 
============================================================================
                                                                            
Risk Management Activities Gains/(Losses):                                  
Canadian Power                                            4               1 
U.S. Power                                               (1)            (48)
Natural Gas Storage                                     (24)             (2)
Interest rate                                             -               2 
Foreign exchange                                         (1)             (5)
Income taxes attributable to risk management                                
 activities                                               6              19 
                                            --------------------------------
Risk Management Activities                              (16)            (33)
                                            ================================

 
Consolidated Results of Operations 
Fourth Quarter Results  
Comparable Earnings in fourth quarter 2012 were $318 million or $0.45
per share compared to $365 million or $0.52 per share for the same
period in 2011. Comparable Earnings excluded net unrealized after-tax
losses of $12 million ($17 million pre-tax) (2011 - gains of $11
million after tax; ($13 million pre-tax)) resulting from changes in
the fair value of certain risk management activities.  
Comparable Earnings decreased $47 million or $0.07 per share in
fourth quarter 2012 compared to the same period in 2011 and reflected
the following: 


 
--  decreased Canadian Natural Gas Pipelines net income primarily due to
    lower earnings from the Canadian Mainline which excluded incentive
    earnings and reflected a lower investment base; 
    
    
--  decreased U.S. and International Natural Gas Pipelines Comparable EBIT
    primarily due to lower revenues on Great Lakes due to uncontracted
    capacity and lower rates as well as lower revenues and higher costs on
    ANR; 
    
    
--  decreased Oil Pipelines Comparable EBIT which reflected increased
    business development activity and related costs; 
    
    
--  decreased Energy Comparable EBIT as a result of the Sundance A Power
    Purchase Arrangement (PPA) force majeure as well as lower equity
    earnings from ASTC Power Partnership resulting from an unfavorable
    Sundance B PPA arbitration decision. These decreases were partially
    offset by higher contributions from Eastern Power due to incremental
    earnings from Cartier Wind, as well as from U.S. Power due to higher
    generation volumes and realized power and capacity prices in New York; 
    
    
--  decreased Comparable Interest Expense due to capitalized interest for
    the Gulf Coast Project partially offset by reduced capitalized interest
    related to our investment in Bruce Power as a result of refurbished
    Bruce A Units 1 and 2 being placed in service; and 
    
    
--  increased Comparable Interest Income and Other due to higher realized
    gains in 2012 compared to losses in 2011 on derivatives used to manage
    the Company's exposure to foreign exchange rate fluctuations on U.S.
    dollar-denominated income. 

 
Annual Results  
Comparable Earnings in 2012 were $1,330 million or $1.89 per share
compared to $1,559 million or $2.22 per share for 2011. Comparable
Earnings in 2012 excluded net unrealized after-tax losses of $16
million ($22 million pre-tax) (2011 - losses of $33 million after tax
($52 million pre-tax)) resulting from changes in the fair value of
certain risk management activities. Comparable Earnings in 2012 also
excluded a negative after-tax charge of $15 million ($20 million
pre-tax) following the July 2012 Sundance A PPA arbitration decision
that was recorded in second quarter 2012 but related to amounts
originally recorded in fourth quarter 2011.  
Comparable Earnings decreased $229 million or $0.33 per share in 2012
compared to 2011 and reflected the following: 


 
--  decreased Canadian Natural Gas Pipelines net income primarily due to
    lower earnings from the Canadian Mainline which excluded incentive
    earnings and reflected a lower investment base; 
    
    
--  decreased U.S. and International Natural Gas Pipelines Comparable EBIT
    which primarily reflected lower revenue resulting from lower rates and
    uncontracted capacity on Great Lakes, as well as lower transportation
    and storage revenues, lower incidental commodity sales and higher
    operating costs on ANR, partially offset by incremental earnings from
    the Guadalajara pipeline, which was placed in service in June 2011; 
    
    
--  increased Oil Pipelines Comparable EBIT which reflected higher Keystone
    Pipeline System revenues primarily due to higher contracted volumes and
    12 months of earnings in 2012 compa
red to 11 months in 2011, partially
    offset by higher business development activity and related costs; 
    
    
--  decreased Energy Comparable EBIT primarily as a result of the Sundance A
    PPA force majeure, decreased Equity Income from Bruce Power due to
    increased outage days and lower earnings from U.S. Power due to lower
    realized prices, higher load serving costs and reduced water flows at
    U.S. hydro facilities. These decreases were partially offset by
    incremental earnings from Cartier Wind and Coolidge; 
    
    
--  increased Comparable Interest Expense due to incremental interest
    expense on new debt issues, net of maturities, in 2012 and 2011 and the
    negative impact of a stronger U.S. dollar on U.S. dollar-denominated
    interest; 
    
    
--  increased Comparable Interest Income and Other due to higher realized
    gains in 2012 on derivatives used to manage the Company's exposure to
    Foreign Exchange rate fluctuations on U.S. dollar-denominated income and
    gains in 2012 compared to losses in 2011 on translation of foreign
    denominated working capital balances; and 
    
    
--  decreased Comparable Income Taxes primarily due to lower pre-tax
    earnings in 2012 compared to 2011. 

 
U.S. Dollar-Denominated Balances  
On a consolidated basis, the impact of changes in the value of the
U.S. dollar on U.S. operations is partially offset by other U.S.
dollar-denominated items as set out in the following table. The
resultant pre-tax net exposure is managed using derivatives, further
reducing the Company's exposure to changes in the Canadian-U.S.
foreign exchange rate. The average exchange rate to convert a U.S.
dollar to a Canadian dollar for fourth quarter 2012 and year ended
December 31, 2012 was 0.99 and 1.00, respectively (2011 - 1.02 and
0.99, respectively).  


 
Summary of Significant U.S. Dollar-Denominated Amounts                      
                                                                            
(unaudited)                        Three months ended            Year ended 
(millions of U.S. dollars, pre-           December 31           December 31 
 tax)                                 2012       2011       2012       2011 
============================================================================
                                                                            
U.S. and International Natural                                              
 Gas Pipelines Comparable                                                   
 EBIT(1)                               159        183        660        761 
U.S. Oil Pipelines Comparable                                               
 EBIT(1)                                94         91        363        301 
U.S. Power Comparable EBIT(1)           17          4         88        164 
Interest on U.S. dollar-                                                    
 denominated long-term debt           (186)      (185)      (740)      (734)
Capitalized interest on U.S.                                                
 capital expenditures                   43         23        124        116 
U.S. non-controlling interests                                              
 and other                             (52)       (49)      (192)      (192)
                                --------------------------------------------
                                        75         67        303        416 
                                ============================================
                                                                            
(1) Refer to the Non-GAAP Measures section in this news release for further 
discussion of Comparable EBIT.                                              

 
Natural Gas Pipelines  
Natural Gas Pipelines' Comparable EBIT was $454 million in fourth
quarter 2012 compared to $481 million for the same period in 2011.  


 
Natural Gas Pipelines Results                                               
                                                                            
                                   Three months ended            Year ended 
(unaudited)                               December 31           December 31 
(millions of dollars)                 2012       2011       2012       2011 
============================================================================
                                                                            
Canadian Natural Gas Pipelines                                              
Canadian Mainline                      250        262        994      1,058 
Alberta System                         195        185        749        742 
Foothills                               30         31        120        127 
Other (TQM(1), Ventures LP)              7          8         29         34 
                                --------------------------------------------
Canadian Natural Gas Pipelines                                              
 Comparable EBITDA(2)                  482        486      1,892      1,961 
Depreciation and amortization(3)      (182)      (178)      (715)      (711)
                                --------------------------------------------
Canadian Natural Gas Pipelines                                              
 Comparable EBIT(2)                    300        308      1,177      1,250 
                                --------------------------------------------
                                                                            
U.S. and International Natural                                              
 Gas Pipelines (in U.S. dollars)                                            
ANR                                     63         73        254        306 
GTN(4)                                  28         26        112        131 
Great Lakes(5)                          11         20         62        101 
TC PipeLines, LP(1)(6)(7)               17         21         74         85 
Other U.S. Pipelines                                                        
 (Iroquois(1), Bison(4),                                                    
 Portland(7)(8))                        32         31        111        111 
International (Tamazunchale,                                                
 Guadalajara(9), TransGas(1),                                               
 Gas Pacifico/INNERGY(1))               27         25        112         77 
General, administrative and                                                 
 support costs                          (4)        (3)        (8)        (9)
Non-controlling interests(7)            39         46        161        173 
                                --------------------------------------------
U.S. and International Natural                                              
 Gas Pipelines Comparable                                                   
 EBITDA(2)                             213        239        878        975 
Depreciation and amortization(3)       (54)       (56)      (218)      (214)
                                --------------------------------------------
U.S. and International Natural                                              
 Gas Pipelines Comparable                                                   
 EBIT(2)                               159        183        660        761 
Foreign exchange                        (1)         5          -         (7)
                                --------------------------------------------
U.S. and International Natural                                              
 Gas Pipelines Comparable                                                   
 EBIT(2) (in Canadian dollars)         158        188        660        754 
                                --------------------------------------------
                                                                            
Natural Gas Pipelines Business                                              
 Development Comparable EBITDA    
                                          
 and EBIT(2)                            (4)       (15)       (29)       (52)
                                --------------------------------------------
                                                                            
Natural Gas Pipelines Comparable                                            
 EBIT(2)                               454        481      1,808      1,952 
                                ============================================
                                                                            
Summary:                                                                    
Natural Gas Pipelines Comparable                                            
 EBITDA(2)                             690        716      2,741      2,875 
Depreciation and amortization         (236)      (235)      (933)      (923)
                                --------------------------------------------
Natural Gas Pipelines Comparable                                            
 EBIT(2)                               454        481      1,808      1,952 
                                ============================================
                                                                            
(1) Results from TQM, Northern Border, Iroquois, TransGas and Gas           
Pacifico/INNERGY reflect the Company's share of equity income from these    
investments.                                                                
(2) Refer to the Non-GAAP Measures section in this news release for further 
discussion of Comparable EBITDA and Comparable EBIT.                        
(3) Does not include depreciation and amortization from equity investments. 
(4) Results reflect TransCanada's direct ownership interest of 75 per cent  
effective May 2011 and 100 per cent prior to that date.                     
(5) Represents TransCanada's 53.6 per cent direct ownership interest.       
(6) Effective May 2011, TransCanada's ownership interest in TC PipeLines, LP
decreased from 38.2 per cent to 33.3 per cent. As a result, TC PipeLines,   
LP's results include TransCanada's decreased ownership in TC PipeLines, LP  
and TransCanada's effective ownership through TC PipeLines, LP of 8.3 per   
cent of each of GTN and Bison since May 2011.                               
(7) Non-Controlling Interests reflect Comparable EBITDA for the portions of 
TC PipeLines, LP and Portland not owned by TransCanada.                     
(8) Includes TransCanada's 61.7 per cent ownership interest.                
(9) Includes Guadalajara's operations since June 2011 when the asset was    
placed in service.                                                          
                                                                            
                                                                            
Net Income for Wholly Owned Canadian Natural Gas Pipelines                  
                                                                            
                                  Three months ended              Year ended
(unaudited)                              December 31             December 31
(millions of dollars)               2012        2011        2012        2011
============================================================================
                                                                            
Canadian Mainline                     47          60         187         246
Alberta System                        55          51         208         200
Foothills                              4           4          19          22
                            ================================================

 
Canadian Natural Gas Pipelines  
Canadian Mainline's net income of $47 million in fourth quarter 2012
decreased $13 million compared to the same period in 2011. Canadian
Mainline's net income for fourth quarter 2011 included incentive
earnings earned under an incentive arrangement in the five-year tolls
settlement that expired December 31, 2011. In the absence of a
National Energy Board decision with respect to its 2012-2013 tolls
application, Canadian Mainline's 2012 results reflect the last
approved rate of return on common equity of 8.08 per cent on deemed
common equity of 40 per cent and exclude incentive earnings. In
addition, Canadian Mainline's fourth quarter 2012 net income
decreased as a result of a lower average investment base compared to
the prior year.  
The Alberta System's net income of $55 million in fourth quarter 2012
increased by $4 million compared to the same period in 2011 as a
result of a higher average investment base, partially offset by lower
incentive earnings.  
Canadian Mainline's Comparable EBITDA for fourth quarter 2012 of $250
million decreased $12 million compared to $262 million in the same
period in 2011. The Alberta System's Comparable EBITDA was $195
million for fourth quarter 2012 compared to $185 million in the same
period in 2011. EBITDA from the Canadian Mainline and the Alberta
System reflect the net income variances discussed above as well as
variances in depreciation, financial charges and income taxes which
are recovered in revenue on a flow-through basis and, therefore, do
not impact net income.  
U.S. and International Natural Gas Pipelines  
ANR's Comparable EBITDA in fourth quarter 2012 of US$63 million
decreased US$10 million compared to the same period in 2011 primarily
due to lower transportation revenues and higher costs.  
Great Lakes' Comparable EBITDA for fourth quarter 2012 of US$11
million decreased US$9 million compared to the same period in 2011
and was primarily the result of lower transportation revenue due to
uncontracted capacity and lower rates compared to the same period in
2011. 
Business Development  
Natural Gas Pipelines' Business Development Comparable EBITDA loss
from business development activities decreased $11 million for fourth
quarter 2012 compared to the same period in 2011. The decrease in
business development costs were primarily related to reduced activity
in 2012 for the Alaska Pipeline Project.   


 
Operating Statistics                                                        
                                                                            
Year ended                  Canadian             Alberta                    
 December 31             Mainline(1)           System(2)              ANR(3)
(unaudited)           2012      2011      2012      2011      2012      2011
============================================================================
                                                                            
Average                                                                     
 investment base                                                            
 (millions of                                                               
 dollars)            5,737     6,179     5,501     5,074       n/a       n/a
Delivery volumes                                                            
 (Bcf)                                                                      
 Total               1,551     1,887     3,645     3,517     1,620     1,706
 Average per day       4.2       5.2      10.0       9.6       4.4       4.7
                ============================================================
                                                                            
(1) Canadian Mainline's throughput volumes in the above table reflect       
physical deliveries to domestic and export markets. Canadian Mainline's     
physical receipts originating at the Alberta border and in Saskatchewan for 
the year ended December 31, 2012 were 859 billion cubic feet (Bcf) (2011 -  
1,160 Bcf); average per day was 2.4 Bcf (2011 - 3.2 Bcf).                   
(2) Field receipt volumes for the Alberta System for the year ended December
31, 2012 were 3,660 Bcf (2011 - 3,622 Bcf); average per day was 10.0 Bcf    
(2011 - 9.9 Bcf).                             
                              
(3) Under its current rates, which are approved by the FERC, ANR's results  
are not impacted by changes in its average investment base.                 

 
Oil Pipelines  
Oil Pipelines' Comparable EBIT in fourth quarter 2012 was $136
million compared to $144 million in the same period in 2011.  


 
Oil Pipelines Results                                                       
                                                                            
                                                                     Eleven 
                                                                     months 
                                                      Year ended      ended 
                                  Three months ended    December   December 
(unaudited)                           December 31             31         31 
(millions of dollars)                 2012       2011       2012       2011 
============================================================================
                                                                            
Keystone Pipeline System               180        179        712        589 
Oil Pipelines Business                                                      
 Development                            (8)         -        (14)        (2)
                                --------------------------------------------
Oil Pipelines Comparable                                                    
 EBITDA(1)                             172        179        698        587 
Depreciation and amortization          (36)       (35)      (145)      (130)
                                --------------------------------------------
Oil Pipelines Comparable EBIT(1)       136        144        553        457 
                                --------------------------------------------
                                                                            
Comparable EBIT denominated as                                              
 follows:                                                                   
Canadian dollars                        44         51        191        159 
U.S. dollars                            94         91        363        301 
Foreign exchange                        (2)         2         (1)        (3)
                                --------------------------------------------
Oil Pipelines Comparable EBIT(1)       136        144        553        457 
                                ============================================
                                                                            
(1) Refer to the Non-GAAP Measures section in this news release for further 
discussion of Comparable EBITDA and Comparable EBIT.                        

 
The Keystone Pipeline System's Comparable EBITDA of $180 million in
fourth quarter 2012 is consistent with the same period in 2011.  
EBITDA from the Keystone Pipeline System is primarily generated from
payments received under long-term commercial arrangements for
capacity that are not dependant on actual throughput. Uncontracted
capacity is offered to the market on a spot basis and, when capacity
is available, provides opportunities to generate incremental EBITDA.  
Business Development spending increased $8 million in fourth quarter
2012 compared to the same period in 2011 and reflected increased
business development activity and related costs.  
Energy  
Energy's Comparable EBIT was $154 million in fourth quarter 2012
compared to $187 million for the same period in 2011.  


 
Energy Results                                                              
                                                                            
                                   Three months ended            Year ended 
(unaudited)                               December 31           December 31 
(millions of dollars)                 2012       2011       2012       2011 
============================================================================
                                                                            
Canadian Power                                                              
Western Power(1)(2)                     84        142        335        483 
Eastern Power(1)(3)                     94         82        345        297 
Bruce Power(1)                          (8)        (1)        14        110 
General, administrative and                                                 
 support costs                         (14)       (15)       (48)       (43)
                                --------------------------------------------
Canadian Power Comparable                                                   
 EBITDA(4)                             156        208        646        847 
Depreciation and amortization(5)       (35)       (35)      (152)      (141)
                                --------------------------------------------
Canadian Power Comparable                                                   
 EBIT(4)                               121        173        494        706 
                                --------------------------------------------
                                                                            
U.S. Power (in U.S. dollars)                                                
Northeast Power                         62         44        257        314 
General, administrative and                                                 
 support costs                         (14)       (12)       (48)       (41)
                                --------------------------------------------
U.S. Power Comparable EBITDA(4)         48         32        209        273 
Depreciation and amortization          (31)       (28)      (121)      (109)
                                --------------------------------------------
U.S. Power Comparable EBIT(4)           17          4         88        164 
Foreign exchange                         -         (1)         -         (4)
                                --------------------------------------------
U.S. Power Comparable EBIT(4)                                               
 (in Canadian dollars)                  17          3         88        160 
                                --------------------------------------------
                                                                            
Natural Gas Storage                                                         
Alberta Storage(1)                      23         24         77         84 
General, administrative and                                                 
 support costs                          (3)        (2)       (10)        (6)
                                --------------------------------------------
Natural Gas Storage Comparable                                              
 EBITDA(4)                              20         22         67         78 
Depreciation and amortization(5)        (2)        (3)       (10)       (12)
                                --------------------------------------------
Natural Gas Storage Comparable                                              
 EBIT(4)                                18         19         57         66 
                                                                            
Energy Business Development                                                 
 Comparable EBITDA and EBIT(4)                                              
                                        (2)        (8)       (19)       (25)
                                --------------------------------------------
                                                                            
Energy Comparable EBIT(1)(4)           154        187        620        907 
                                ============================================
                                                                            
Summary:                                                                    
Ener
gy Comparable EBITDA(1)(4)         222        254        903      1,168 
Depreciation and amortization(5)       (68)       (67)      (283)      (261)
                                --------------------------------------------
Energy Comparable EBIT(1)(4)           154        187        620        907 
                                ============================================
                                                                            
(1) Results from ASTC Power Partnership, Portlands Energy, Bruce Power and  
CrossAlta (up to December 18, 2012) reflect the Company's share of equity   
income from these investments. On December 18, 2012, the Company acquired   
the remaining 40 per cent interest in CrossAlta to bring its ownership      
interest to 100 per cent.                                                   
(2)Includes Coolidge effective May 2011.                                    
(3) Includes Cartier Wind phase two of Gros-Morne effective November 2012,  
phase one of Gros-Morne effective November 2011, and Montagne-Seche         
effective November 2011.                                                    
(4) Refer to the Non-GAAP Measures section in this news release for further 
discussion of Comparable EBITDA and Comparable EBIT.                        
(5) Does not include depreciation and amortization of equity investments.   
                                                                            
                                                                            
Canadian Power                                                              
                                                                            
Western and Eastern Canadian Power Comparable EBIT(1)(2)(3)                 
                                                                            
                                   Three months ended            Year ended 
(unaudited)                               December 31           December 31 
(millions of dollars)                 2012       2011       2012       2011 
============================================================================
                                                                            
Revenues                                                                    
 Western power                         158        219        640        822 
 Eastern power                         106        105        415        391 
 Other(4)                               25         15         91         69 
                                --------------------------------------------
                                       289        339      1,146      1,282 
                                --------------------------------------------
                                                                            
Income from Equity                                                          
 Investments(5)                         23         32         68        117 
                                --------------------------------------------
                                                                            
Commodity Purchases Resold                                                  
 Western power                         (74)       (89)      (281)      (368)
 Other(6)                               (2)         4         (5)        (9)
                                --------------------------------------------
                                       (76)       (85)      (286)      (377)
                                --------------------------------------------
                                                                            
Plant operating costs and other        (58)       (62)      (218)      (242)
Sundance A PPA arbitration                                                  
 decision                                -          -        (30)         - 
General, administrative and                                                 
 support costs                         (14) 
      (15)       (48)       (43)
                                --------------------------------------------
Comparable EBITDA(1)                   164        209        632        737 
Depreciation and amortization(7)       (35)       (35)      (152)      (141)
                                --------------------------------------------
Comparable EBIT(1)                     129        174        480        596 
                                ============================================
                                                                            
(1) Refer to the Non-GAAP Measures section in this news release for further 
discussion of Comparable EBITDA and Comparable EBIT.                        
(2) Includes Coolidge effective May 2011.                                   
(3) Includes Cartier Wind phase two of Gros-Morne effective November 2012,  
phase one of Gros-Morne effective November 2011, and Montagne-Seche         
effective November 2011.                                                    
(4) Includes sales of excess natural gas purchased for generation and       
thermal carbon black.                                                       
(5) Results reflect equity income from TransCanada's 50 per cent ownership  
interest in each of ASTC Power Partnership, which holds the Sundance B PPA, 
and Portlands Energy.                                                       
(6) Includes the cost of excess natural gas not used in operations.         
(7) Excludes depreciation and amortization of equity investments.           
                                                                            
                                                                            
 

 
Western and Eastern Canadian Power Operating Statistics(1)                  
                                                                            
                               Three months ended                Year ended 
                                      December 31               December 31 
(unaudited)                     2012         2011         2012         2011 
============================================================================
                                                                            
Volumes (GWh)                                                               
 Generation                                                                 
  Western Power(2)               714          669        2,691        2,606 
  Eastern Power(3)               908          852        4,384        3,714 
 Purchased                                                                  
  Sundance A & B and                                                        
   Sheerness PPAs(4)           2,017        1,875        6,906        7,909 
  Other purchases                  -           45           46          248 
                        ----------------------------------------------------
                               3,639        3,441       14,027       14,477 
                        ====================================================
 Contracted                                                                 
  Western Power(2)             2,192        2,125        8,240        8,381 
  Eastern Power(3)               908          852        4,384        3,714 
 Spot                                                                       
  Western Power                  539          464        1,403        2,382 
                        ----------------------------------------------------
                               3,639        3,441       14,027       14,477 
                        ====================================================
Plant Availability(5)                                                       
Western Power(2)(6)               97%          97%          96%          97%
Eastern Power(3)(7)               93%          88%          90%          93%
                        ==============================================
======
                                                                            
(1) Includes TransCanada's share of equity investments' volumes.            
(2) Includes Coolidge effective May 2011.                                   
(3) Includes Cartier Wind phases one and two of Gros-Morne effective        
November 2011 and November 2012, respectively, and Montagne-Seche effective 
November 2011. Also includes volumes related to TransCanada's 50 per cent   
ownership interest in Portlands Energy.                                     
(4) Includes TransCanada's 50 per cent ownership interest of Sundance B     
volumes through the ASTC Power Partnership. No volumes were delivered under 
the Sundance A PPA in 2012 or 2011.                                         
(5) Plant availability represents the percentage of time in a period that   
the plant is available to generate power regardless of whether it is        
running.                                                                    
(6) Excludes facilities that provide power under PPAs.                      
(7) Becancour has been excluded from the availability calculation as power  
generation has been suspended since 2008.                                   

 
Western Power's Comparable EBITDA of $84 million in fourth quarter
2012 decreased $58 million compared to the same period in 2011
primarily due to the Sundance A PPA force majeure and decreased
equity earnings from the ASTC Power Partnership as a result of the
Sundance B PPA arbitration decision.   
Throughout 2011 and first quarter 2012, revenues and costs related to
the Sundance A PPA had been recorded as though the outages of Units 1
and 2 were interruptions of supply in accordance with the terms of
the PPA. As a result of the Sundance A PPA arbitration decision
received in July 2012, no further revenues and costs related to the
PPA will be recorded until Units 1 and 2 are returned to service
because the plant is in force majeure. Comparable EBITDA for the
three months ended December 31, 2011 included $57 million of accrued
earnings related to the Sundance A PPA.   
Western Power's Power Revenues of $158 million in fourth quarter 2012
decreased $61 million compared to the same period in 2011 primarily
due to the Sundance A PPA force majeure.  
Western Power's Commodity Purchases Resold of $74 million decreased
$15 million compared to the same period in 2011 primarily due to the
Sundance A PPA force majeure, partially offset by higher purchased
volumes as a result of lower PPA plant outage days.  
Eastern Power's Comparable EBITDA of $94 million in fourth quarter
2012 increased $12 million compared to the same period in 2011. The
increase was primarily due to incremental Cartier Wind earnings from
phases one and two of Gros-Morne which were placed in service in
November 2011 and November 2012, respectively and Montagne-Seche
which was placed in service in November 2011, partially offset by
lower Becancour contractual earnings.  
Income from Equity Investments of $23 million decreased $9 million
compared to the same period in 2011 primarily due to the Sundance B
PPA arbitration decision. In second quarter 2010, Sundance B Unit 3
experienced an unplanned outage related to mechanical failure of
certain generator components and was subject to a force majeure claim
by the facility operator, TransAlta Corporation. The ASTC Power
Partnership, which holds the Sundance B PPA, disputed the claim under
the binding dispute resolution process provided in the PPA as it did
not believe TransAlta's claim met the test of force majeure.
TransCanada therefore recorded equity earnings from its 50 per cent
ownership interest in ASTC Power Partnership as though this event was
a normal plant outage. In November 2012, an arbitration decision was
reached with the arbitration panel granting partial force majeure
relief to TransAlta and TransCanada reduced fourth quarter equity
earnings by $11 million to reflect the amount which will not be
recovered as a result of the decision.   
Approximately 80 per cent of Western Power sales volumes were sold
under contract in fourth quarter 2012, compared to 82 per cent in
fourth quarter 2011. To reduce its exposure to spot market prices in
Alberta, as at December 31, 2012, Western Power had entered into
fixed-price power sales contracts to sell approximately 6,700
gigawatt hours (GWh) for 2013 and 4,300 GWh for 2014.  
Eastern Power's sales volumes were 100 per cent sold under contract
and are expected to be fully contracted going forward.  


 
Bruce Power Results                                                         
                                                                            
(TransCanada's share)                                                       
(unaudited)                                                                 
(millions of dollars           Three months ended                Year ended 
 unless otherwise                     December 31               December 31 
 indicated)                     2012         2011         2012         2011 
============================================================================
                                                                            
Income/(Loss) from                                                          
 Equity Investments(1)                                                      
 Bruce A                         (54)         (15)        (149)          33 
 Bruce B                          46           14          163           77 
                        ----------------------------------------------------
                                  (8)          (1)          14          110 
                        ====================================================
Comprised of:                                                               
 Revenues                        228          181          763          817 
 Operating expenses             (165)        (148)        (567)        (565)
 Depreciation and other          (71)         (34)        (182)        (142)
                        ----------------------------------------------------
                                  (8)          (1)          14          110 
                        ====================================================
                                                                            
Bruce Power - Other                                                         
 Information                                                                
Plant availability(2)                                                       
 Bruce A(3)                       52%          68%          54%          90%
 Bruce B                         100%          89%          95%          88%
 Combined Bruce Power             79%          82%          81%          89%
Planned outage days                                                         
 Bruce A                         123           55          336           60 
 Bruce B                           -           43           46          135 
Unplanned outage days                                                       
 Bruce A                          11            3           18           16 
 Bruce B                           -            -           25           24 
Sales volumes (GWh)(1)                                                      
 Bruce A(3)                    1,609        1,050        4,194        5,475 
 Bruce B                       2,278        1,956        8,475        7,859 
                        ----------------------------------------------------
                               3,887        3,006       12,669       13,334 
                        ----------------------------------------------------
Realized sales price per                                                    
 MWh                                                                        
 Bruce A                   $      68    $      66    $      68    $      66 
 Bruce B(4)                $      
54    $      53    $      55    $      54 
 Combined Bruce Power      $      57    $      56    $      57    $      57 
                        ====================================================
                                                                            
(1) Represents TransCanada's 48.9 per cent ownership interest in Bruce A and
31.6 per cent ownership interest in Bruce B.                                
(2) Plant availability represents the percentage of time in a year that the 
plant is available to generate power regardless of whether it is running.   
(3) Plant availability and sales volumes for 2012 include the incremental   
impact of Units 1 and 2 which were returned to service on October 22 and    
October 31, respectively.                                                   
(4) Includes revenues received under the floor price mechanism and from     
contract settlements as well as volumes and revenues associated with deemed 
generation.                                                                 

 
TransCanada's Loss from Bruce A increased $39 million to a loss of
$54 million in fourth quarter 2012 compared to the same period in
2011. This increase was primarily due to lower volumes and higher
operating costs resulting from higher outage days. These increases
were partially offset by incremental volumes and earnings from Units
1 and 2 which were returned to service on October 22 and October 31,
respectively.  
Both Units 1 and 2 operated at reduced output levels following their
return to service and, in late November 2012, Bruce Power took Unit 1
offline for an approximate 30 day planned maintenance outage. Bruce
Power expects the availability percentages for Units 1 and 2 to
increase over time; however, these units have not operated for an
extended period of time and may experience slightly higher forced
loss rates and reduced availability percentages in 2013.  
TransCanada's Equity Income from Bruce B increased $32 million to $46
million in fourth quarter 2012 compared to the same period in 2011.
The increase was primarily due to higher volumes and lower operating
costs resulting from fewer planned outage days and lower lease
expense.   
Under a contract with the Ontario Power Authority (OPA), all output
from Bruce A in fourth quarter 2012 was sold at a fixed price of
$68.23 per MWh (before recovery of fuel costs from the OPA) compared
to $66.33 per MWh in fourth quarter 2011. Also under a contract with
the OPA, all output from the Bruce B units was subject to a floor
price of $51.62 per MWh in fourth quarter 2012 compared to $50.18 per
MWh in fourth quarter 2011. Both the Bruce A and Bruce B contract
prices are adjusted annually for inflation on April 1.   
Amounts received under the Bruce B floor price mechanism within a
calendar year are subject to repayment if the monthly average spot
price exceeds the floor price. No amounts recorded in revenues were
subject to repayment in 2012 or 2011.  
The Bruce A Unit 4 outage, which commenced on August 2, 2012, is
expected to be completed in first quarter 2013. Planned maintenance
on Bruce B units is scheduled to occur in the first half of 2013.  
The overall plant availability percentage in 2013 is expected to be
approximately 90 per cent for Bruce A and high 80's for Bruce B. The
Unit 4 outage, which began on August 2, 2012, is expected to be
completed in late first quarter 2013. Planned maintenance on Bruce B
units is scheduled to occur during the first half of 2013.  


 
U.S. Power                                                                  
                                                                            
U.S. Power Comparable EBIT(1)(2)                                            
                                                                            
                                    Three months ended           Year ended 
(unaudited)                                December 31          December 31 
(millions of U.S. dollars)              2012      2011       2012      2011 
============================================================================
                                                                            
Revenues                                                                    
 Power(3)                                353       208      1,189     1,139 
 Capacity                                 53        44        234       227 
 Other(4)                                 22        26         51        80 
                                   -----------------------------------------
                                         428       278      1,474     1,446 
Commodity purchases resold              (217)     (119)      (765)     (618)
Plant operating costs and other(4)      (149)     (115)      (452)     (514)
General, administrative and support                                         
 costs                                   (14)      (12)       (48)      (41)
                                   -----------------------------------------
Comparable EBITDA(1)                      48        32        209       273 
Depreciation and amortization            (31)      (28)      (121)     (109)
                                   -----------------------------------------
Comparable EBIT(1)                        17         4         88       164 
                                   =========================================
                                                                            
(1) Refer to the Non-GAAP Measures section of this news release for further 
discussion of Comparable EBITDA and Comparable EBIT.                        
(2) Certain comparative figures have been reclassified to conform with the  
financial statement presentation adopted for the current period.            
(3) The realized gains and losses from financial derivatives used to        
purchase and sell power, natural gas and fuel oil to manage U.S. Power's    
assets are presented on a net basis in Power Revenues.                      
(4) Includes revenues and costs related to a third-party service agreement  
at Ravenswood, the activity level of which decreased in 2012.               
                                                                            
                                                                            
U.S. Power Operating Statistics                                             
                                                                            
                                 Three months ended              Year ended 
                                        December 31             December 31 
(unaudited)                        2012        2011        2012        2011 
============================================================================
                                                                            
Physical Sales Volumes (GWh)                                                
Supply                                                                      
 Generation                       2,276       1,511       7,567       6,880 
 Purchased                        2,550       1,241       9,408       6,018 
                            ------------------------------------------------
                                  4,826       2,752      16,975      12,898 
                            ================================================
                                                                            
Plant Availability(1)                81%         83%         85%         87%
                            ================================================
                                                                            
                                                                            
(1) Plant availability represents the percentage of time in a period that   
the plant is available to generate power regardless of whether it is        
running.                                                                    

  
U.S. Power's Comparable EBITDA of US$48 million for the three months
ended December 31, 2012 increased US$16 million compared to the same
period in 2011. The increase was primarily due to higher generation
volumes and higher realized power and capacity prices in New York,
partially offset by lower earnings from the U.S. hydro facilities due
to reduced water flows, as well as lower capacity prices and higher
load serving costs in New England.  
Physical sales volumes for the three months ended December 31, 2012
have increased compared to the same period in 2011 largely due to
higher purchased volumes to serve increased sales to wholesale,
commercial and industrial customers in the PJM and New England
markets. Generation volumes at Ravenswood were higher as the plant
ran at higher than normal levels both during and following Superstorm
Sandy when damage at several other third party power and transmission
facilities reduced power supply in the area. This increase was
partially offset by lower hydro volumes.  
U.S. Power's Power Revenue of US$353 million for the three months
ended December 31, 2012 increased US$145 million compared to the same
period in 2011. The increase was primarily due to higher sales
volumes in addition to higher realized power prices.  
Capacity Revenue of US$53 million for the three months ended December
31, 2012 increased US$9 million compared to the same period in 2011
due to higher realized capacity prices in New York, partially offset
by lower capacity prices in New England.  
Commodity Purchases Resold of US$217 million for the three months
ended December 31, 2012 increased US$98 million compared to the same
period in 2011 due to higher volumes of physical power purchased for
resale under power sales commitments to wholesale, commercial and
industrial customers, higher load serving costs, and higher prices
paid for power purchased.  
Plant Operating Costs and Other, which includes fuel gas consumed in
generation, of US$149 million for the three months ended December 31,
2012 increased US$34 million compared to the same period in 2011,
primarily due to higher generation volumes at the Ravenswood
facility.   
As at December 31, 2012, approximately 2,600 GWh or 34 per cent and
1,000 GWh or 13 per cent of U.S. Power's planned generation is
contracted for 2013 and 2014, respectively. Planned generation
fluctuates depending on hydrology, wind conditions, commodity prices
and the resulting dispatch of the assets. Power sales fluctuate based
on customer usage. 
Natural Gas Storage  
Natural Gas Storage's Comparable EBITDA of $20 million for the three
months ended December 31, 2012 was comparable to the same period in
2011.  


 
Other Income Statement Items                                                
                                                                            
Comparable Interest Expense                                                 
                                                                            
                                     Three months ended          Year ended 
(unaudited)                                 December 31         December 31 
(millions of dollars)                    2012      2011      2012      2011 
============================================================================
                                                                            
Interest on long-term debt(2)                                               
 Canadian dollar-denominated              128       125       513       490 
 U.S. dollar-denominated                  186       185       740       734 
 Foreign exchange                          (1)        4         -        (7)
                                    ----------------------------------------
                                          313       314     1,253     1,217 
                                                                            
Other interest and amortization             9         8        23        24 
Capitalized inte
rest                      (76)      (71)     (300)     (302)
                                    ----------------------------------------
Comparable Interest Expense(1)            246       251       976       939 
                                    ========================================
                                                                            
(1) Refer to the Non-GAAP Measures section in this news release for further 
discussion of Comparable Interest Expense.                                  
(2) Includes interest on Junior Subordinated Notes.                         

 
Comparable Interest Expense of $246 million for the three months
ended December 31, 2012 decreased $5 million compared to the same
period in 2011. The decrease primarily reflected higher capitalized
interest for the Gulf Coast Project partially offset by reduced
capitalized interest for the Company's investment in Bruce Power as a
result of placing refurbished units in service.   
Comparable Interest Income and Other of $20 million for the three
months ended December 31, 2012 increased $12 million compared to the
same period in 2011. The increase in fourth quarter reflected
realized gains in 2012 compared to losses in 2011 on derivatives used
to manage the Company's net exposure to foreign exchange rate
fluctuations on U.S. dollar-denominated income. 


 
Condensed Consolidated Statement of Income                                  
                                                                            
(unaudited)                          Three months ended          Year ended 
(millions of dollars except per             December 31         December 31 
 share amounts)                          2012      2011      2012      2011 
============================================================================
                                                                            
Revenues                                                                    
Natural Gas Pipelines                   1,087     1,137     4,264     4,244 
Oil Pipelines                             270       252     1,039       827 
Energy                                    732       626     2,704     2,768 
                                    ----------------------------------------
                                        2,089     2,015     8,007     7,839 
                                                                            
Income from Equity Investments             61        87       257       415 
                                    ----------------------------------------
                                                                            
Operating and Other Expenses                                                
Plant operating costs and other           731       712     2,577     2,358 
Commodity purchases resold                291       209     1,049       991 
Property taxes                             88        83       434       410 
Depreciation and amortization             343       341     1,375     1,328 
                                    ----------------------------------------
                                        1,453     1,345     5,435     5,087 
                                    ----------------------------------------
                                                                            
Financial Charges/(Income)                                                  
Interest expense                          246       251       976       937 
Interest income and other                 (15)      (43)      (85)      (55)
                                    ----------------------------------------
                                          231       208       891       882 
                                    ----------------------------------------
                                                                            
Income before Income Taxes                466       549     1,938     2,285 
                                    ----------
------------------------------
                                                                            
Income Taxes Expense                                                        
Current                                    80        13       181       210 
Deferred                                   38       113       285       365 
                                    ----------------------------------------
                                          118       126       466       575 
                                    ----------------------------------------
                                                                            
Net Income                                348       423     1,472     1,710 
                                                                            
Net Income Attributable to Non-                                             
 Controlling Interests                     28        33       118       129 
                                    ----------------------------------------
Net Income Attributable to                                                  
 Controlling Interests                    320       390     1,354     1,581 
Preferred Share Dividends                  14        14        55        55 
                                    ----------------------------------------
Net Income Attributable to Common                                           
 Shares                                   306       376     1,299     1,526 
                                    ========================================
                                                                            
Net Income per Common Share                                                 
Basic                               $    0.43 $    0.53 $    1.84 $    2.17 
                                    ========================================
Diluted                             $    0.43 $    0.53 $    1.84 $    2.17 
                                    ========================================
                                                                            
Dividends Declared per Common Share $    0.44 $    0.42 $    1.76 $    1.68 
                                    ========================================
Weighted Average Number of Common                                           
 Shares (millions)                                                          
Basic                                     705       703       705       702 
                                    ========================================
Diluted                                   705       704       706       703 
                                    ========================================
                                                                            
                                                                            
Condensed Consolidated Statement of Cash Flows                              
                                                                            
                                     Three months ended          Year ended 
(unaudited)                                 December 31         December 31 
(millions of dollars)                    2012      2011      2012      2011 
============================================================================
                                                                            
Cash Generated From Operations                                              
Net income                                348       423     1,472     1,710 
Depreciation and amortization             343       341     1,375     1,328 
Deferred income taxes                      38       113       285       365 
Income from equity investments            (61)      (87)     (257)     (415)
Distributed earnings received from                                          
 equity investments                       124        86       376       393 
Employee post-retirement benefits                                           
 funding lower than/(in excess of)                                          
 expense                                   22        (6)        9        (2)
Other                                       4       (33)       24        72 
Decrease in operating working                                               
 capital                                  207        90       287       235 
                                    ----------------------------------------
Net cash provided by operations         1,025       927     3,571     3,686 
                                    ----------------------------------------
                                                                            
Investing Activities                                                        
Capital expenditures                   (1,040)     (920)   (2,595)   (2,513)
Equity investments                        (95)     (182)     (652)     (633)
Acquisitions, net of cash acquired       (214)        -      (214)        - 
Deferred amounts and other                123       (41)      205        92 
                                    ----------------------------------------
Net cash used in investing                                                  
 activities                            (1,226)   (1,143)   (3,256)   (3,054)
                                    ----------------------------------------
                                                                            
Financing Activities                                                        
Dividends on common and preferred                                           
 shares                                  (325)     (310)   (1,281)   (1,016)
Distributions paid to non-                                                  
 controlling interests                    (34)      (44)     (135)     (131)
Notes payable issued/(repaid), net        790        33       449      (224)
Long-term debt issued, net of issue                                         
 costs                                      3     1,049     1,491     1,622 
Repayment of long-term debt              (198)     (326)     (980)   (1,272)
Common shares issued, net of issue                                          
 costs                                     18        19        53        58 
Partnership units issued, net of                                            
 issue costs                                -         -         -       321 
                                    ----------------------------------------
Net cash provided by/(used in)                                              
 financing activities                     254       421      (403)    (642) 
                                    ----------------------------------------
                                                                            
Effect of Foreign Exchange Rate                                             
 Changes on Cash and Cash                                                   
 Equivalents                                4        (8)      (15)        4 
                                    ----------------------------------------
                                                                            
Increase/(Decrease) in Cash and Cash                                        
 Equivalents                               57       197      (103)       (6)
                                                                            
Cash and Cash Equivalents                                                   
Beginning of period                       494       457       654       660 
                                    ----------------------------------------
                                                                            
Cash and Cash Equivalents                                                   
End of period                             551       654       551       654 
                                    ========================================
                                                
                            
                                                                            
Condensed Consolidated Balance Sheet                                        
                                                                            
December 31                                                                 
(unaudited)(millions of dollars)                       2012            2011 
============================================================================
                                                                            
ASSETS                                                                      
Current Assets                                                              
Cash and cash equivalents                               551             654 
Accounts receivable                                   1,052           1,094 
Inventories                                             224             248 
Other                                                   997           1,114 
                                            --------------------------------
                                                      2,824           3,110 
Plant, Property and Equipment, net of                                       
 accumulated depreciation of $16,540 and                                    
 $15,406, respectively                               33,713          32,467 
Equity Investments                                    5,366           5,077 
Goodwill                                              3,458           3,534 
Regulatory Assets                                     1,629           1,684 
Intangible and Other Assets                           1,343           1,466 
                                            --------------------------------
                                                                            
                                                     48,333          47,338 
                                            ================================
                                                                            
LIABILITIES                                                                 
Current Liabilities                                                         
Notes payable                                         2,275           1,863 
Accounts payable and other                            2,344           2,359 
Accrued interest                                        368             365 
Current portion of long-term debt                       894             935 
                                            --------------------------------
                                                      5,881           5,522 
Regulatory Liabilities                                  268             297 
Other Long-Term Liabilities                             882             929 
Deferred Income Tax Liabilities                       3,953           3,591 
Long-Term Debt                                       18,019          17,724 
Junior Subordinated Notes                               994           1,016 
                                            --------------------------------
                                                     29,997          29,079 
                                            --------------------------------
EQUITY                                                                      
Common shares, no par value                          12,069          12,011 
Issued and outstanding:                                                     
December 31, 2012 - 705 million shares                                      
December 31, 2011 - 704 million shares                                      
Preferred shares                                      1,224           1,224 
Additional paid-in capital                              379             380 
Retained earnings                                     4,687           4,628 
Accumulated other comprehensive loss                 (1,448)         (1,449)
                                            --------------------------------
Controlling Interests                                16,911          16,794 
Non-controlling interests                             1,425           1,465 
                                            --------------------------------
                                                     18,336          18,259 
                                            --------------------------------
                                                                            
                                                     48,333          47,338 
                                            ================================

 
Segmented Information 


 
                                                                            
Three months ended                                                          
 December 31                                                                
(unaudited)        Natural Gas          Oil                                 
(millions of         Pipelines Pipelines(1)    Energy Corporate       Total 
 dollars)           2012  2011 2012    2011 2012 2011 2012 2011  2012  2011 
============================================================================
                                                                            
Revenues           1,087 1,137  270     252  732  626    -    - 2,089 2,015 
Income from equity                                                          
 investments          37    42    -       -   24   45    -    -    61    87 
Plant operating                                                             
 costs and other    (373) (406) (88)    (66)(238)(211) (32) (29) (731) (712)
Commodity purchases                                                         
 resold                -     -    -       - (291)(209)   -    -  (291) (209)
Property taxes       (61)  (58) (10)     (7) (17) (18)   -    -   (88)  (83)
Depreciation and                                                            
 amortization       (236) (235) (36)    (35) (68) (67)  (3)  (4) (343) (341)
                   ---------------------------------------------------------
                     454   480  136     144  142  166  (35) (33)  697   757 
                   =============================================            
Interest expense                                                 (246) (251)
Interest income and                                                         
 other                                                             15    43 
                                                                ------------
Income before income taxes                                        466   549 
Income taxes expense                                             (118) (126)
                                                                ------------
Net Income                                                        348   423 
Net Income Attributable to Non-Controlling                                  
 Interests                                                        (28)  (33)
                                                                ------------
Net Income Attributable to Controlling                                      
 Interests                                                        320   390 
Preferred Share Dividends                                         (14)  (14)
                                                                ------------
Net Income Attributable to Common Shares                          306   376 
                                                                ============
                                                                            
                                                                            
Year ended                                                                  
 December 3
1                       Oil                                      
(unaudited)    Natural Gas   Pipelines                                      
(millions of     Pipelines         (1)       Energy Corporate         Total 
 dollars)      2012   2011  2012  2011   2012  2011 2012 2011   2012   2011 
============================================================================
                                                                            
Revenues      4,264  4,244 1,039   827  2,704 2,768    -    -  8,007  7,839 
Income from                                                                 
 equity                                                                     
 investments    157    159     -     -    100   256    -    -    257    415 
Plant                                                                       
 operating                                                                  
 costs and                                                                  
 other       (1,365)(1,221) (296) (209)  (819) (842) (97) (86)(2,577)(2,358)
Commodity                                                                   
 purchases                                                                  
 resold           -      -     -     - (1,049) (991)   -    - (1,049)  (991)
Property                                                                    
 taxes         (315)  (307)  (45)  (31)   (74)  (72)   -    -   (434)  (410)
Depreciation                                                                
 and                                                                        
 amortization  (933)  (923) (145) (130)  (283) (261) (14) (14)(1,375)(1,328)
             ---------------------------------------------------------------
              1,808  1,952   553   457    579   858 (111)(100) 2,829  3,167 
             =================================================              
Interest                                                                    
 expense                                                        (976)  (937)
Interest                                                                    
 income and                                                                 
 other                                                            85     55 
                                                              --------------
Income before income taxes                                     1,938  2,285 
Income taxes expense                                            (466)  (575)
                                                              --------------
Net Income                                                     1,472  1,710 
Net Income Attributable to Non-                                             
 Controlling Interests                                          (118)  (129)
                                                              --------------
Net Income Attributable to Controlling                                      
 Interests                                                     1,354  1,581 
Preferred Share Dividends                                        (55)   (55)
                                                              --------------
Net Income Attributable to Common                                           
 Shares                                                        1,299  1,526 
                                                              ==============
                                                                            
(1) Commencing in February 2011, TransCanada began recording earnings       
    related to the Keystone Pipeline System.                                

Contacts:
TransCanada
Media Enquiries:
Shawn Howard/Grady Semmens
403.920.7859 or 800.608.7859 
TransCanada
Investor & Analyst Enquiries:
David Moneta/Lee Evans
403.920.7911 or 800.361.6522
www.transcanada.com
 
 
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