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CALGARY, ALBERTA -- (Marketwired) -- 02/20/14 -- TransCanada Corporation (TRP) (NYSE: TRP) (TransCanada or the Company) today announced comparable earnings for fourth quarter 2013 of $410 million or $0.58 per share compared to $318 million or $0.45 per share for the same period in 2012. For the year ended December 31, 2013, comparable earnings were $1.6 billion or $2.24 per share compared to $1.3 billion or $1.89 per share in 2012. Net income attributable to common shares for fourth quarter 2013 was $420 million or $0.59 per share compared to $306 million or $0.43 per share in fourth quarter 2012. For the year ended December 31, 2013, net income attributable to common shares was $1.7 billion or $2.42 per share compared to $1.3 billion or $1.84 per share in 2012. TransCanada's Board of Directors also declared a quarterly dividend of $0.48 per common share for the quarter ending March 31, 2014, equivalent to $1.92 per common share on an annualized basis, an increase of four per cent. This is the fourteenth consecutive year the Board of Directors has raised the dividend.

"Our diverse portfolio of critical energy infrastructure assets generated strong earnings and cash flow in 2013," said Russ Girling, TransCanada's president and chief executive officer. "Comparable earnings increased 19 per cent to $1.6 billion and funds generated from operations were up 22 per cent to $4 billion. The strong year over year results reflect a return to an eight unit site at Bruce Power, higher Western Power (WPEC) volumes, an increase in New York capacity prices, growth in our NGTL System, and a higher Canadian Mainline return on equity."

During 2013 we also captured an additional $19 billion of commercially secured growth opportunities. They include the Prince Rupert Gas Transmission project that would move natural gas to Canada's West Coast for liquefaction and shipment to Asian markets, further expansion of the NGTL System, the Heartland and TC Terminals crude oil infrastructure projects in Alberta, and the Energy East Pipeline project which, in addition to new build, would include the conversion of a portion of our existing Canadian Mainline from natural gas to crude oil service and link growing crude oil production in Western Canada to refineries and export terminals in Eastern Canada.

"We now have a $38 billion portfolio of commercially secured projects backed by long-term contracts," added Girling. "Looking forward, we will remain focused on obtaining the necessary approvals and constructing this high-quality portfolio of energy infrastructure assets that are expected to generate significant growth in earnings and cash flow as they are placed into service over the remainder of the decade."

On January 22, 2014, we reached a significant milestone in advancing our unprecedented capital program when the approximate US$2.6 billion Gulf Coast Project began delivering crude oil from Cushing, Oklahoma to refineries on the U.S. Gulf Coast. This vital piece of infrastructure extends our existing Keystone Pipeline System which has safely delivered more than 550 million barrels of oil from Western Canada to key refining markets in the U.S. Midwest since it commenced operations in 2010.

Fourth Quarter and Year-End Highlights

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


--  Fourth quarter financial results
    --  Net income attributable to common shares of $420 million or $0.59
        per share
    --  Comparable earnings of $410 million or $0.58 per share
    --  Comparable earnings before interest, taxes, depreciation and
        amortization (EBITDA) of $1.3 billion
    --  Funds generated from operations of $1.1 billion
--  For the year ended December 31, 2013
    --  Net income attributable to common shares of $1.7 billion or $2.42
        per share
    --  Comparable earnings of $1.6 billion or $2.24 per share
    --  Comparable EBITDA of $4.9 billion
    --  Funds generated from operations of $4.0 billion
--  Announced an increase in the quarterly common share dividend of four per
    cent to $0.48 per share for the quarter ending March 31, 2014
--  Placed the US$2.6 billion Gulf Coast Project into service on January 22,
    2014
--  Received the U.S. Department of State (DOS) Final Supplemental
    Environmental Impact Statement (FSEIS) for the Keystone XL Pipeline on
    January 31, 2014
--  Acquired our fourth Ontario Solar facility for $62 million on December
    31, 2013
--  Signed a Heads of Agreement (HOA) with the State of Alaska and North
    Slope producers to advance the proposed Alaska LNG Project in January
    2014
--  Reached an agreement in January 2014 to sell Cancarb Limited (Cancarb)
    and its related power generation facility for aggregate gross proceeds
    of $190 million

Comparable earnings for fourth quarter 2013 were $410 million or $0.58 per share compared to $318 million or $0.45 per share for the same period in 2012. Higher earnings from the Canadian Mainline, the NGTL System, Keystone, and Bruce Power were partially offset by lower contributions from U.S. Natural Gas Pipelines and Western Power.

Comparable earnings for the year ended December 31, 2013 were $1.584 billion or $2.24 per share compared to $1.330 billion or $1.89 per share in 2012. Higher earnings from the Canadian Mainline, the NGTL System, Keystone, Bruce Power, U.S. Power, and Western Power were partially offset by lower contributions from U.S. Natural Gas Pipelines.

Notable recent developments in Oil Pipelines, Natural Gas Pipelines, Energy and Corporate include:

Oil Pipelines:


--  Gulf Coast Project: On January 22, 2014 crude oil transportation service
    commenced on the 780 kilometre (km) (485 mile) 36-inch pipeline which
    extends from Cushing, Oklahoma to Nederland, Texas. The pipeline, which
    is expected to have an average capacity of 520,000 barrels per day
    (bbl/d) in its first year of operation, will play a critical role in
    connecting growing North American crude oil production with the
    continent's largest refining centre in the U.S. Gulf Coast.

    Construction continues on the US$400 million 77 km (48 mile) Houston
    Lateral pipeline and terminal to transport crude oil to Houston, Texas
    refineries. We anticipate the capacity of the lateral will be similar to
    that of the Gulf Coast Project and the terminal is expected to have
    initial storage capacity for 700,000 barrels of crude oil. The pipeline
    and terminal are expected to be completed in mid-2015.


--  Keystone XL: On January 31, 2014, the DOS released its FSEIS for the
    Keystone XL Pipeline. The results included in the report were consistent
    with previous environmental reviews of Keystone XL. The FSEIS concluded
    Keystone XL is "unlikely to significantly impact the rate of extraction
    in the oil sands" and that all other alternatives to Keystone XL are
    less efficient methods of transporting crude oil, and would result in
    significantly more greenhouse gas emissions, oil spills and risks to
    public safety. The report initiated the National Interest Determination
    period of up to 90 days which involves consultation with other
    governmental agencies and provides an opportunity for public comment.

    On February 19, 2014, a Nebraska district court ruled that the state
    Public Service Commission, rather than Governor Dave Heineman, has the
    authority to approve an alternative route through Nebraska for the
    Keystone XL Pipeline.  We are disappointed and disagree with the
    decision of the Nebraska district court and will now analyze the
    judgment and decide what next steps may be taken. Nebraska's Attorney
    General has filed an appeal.

    We anticipate the pipeline, which will extend from Hardisty, Alberta to
    Steele City, Nebraska, to be in service approximately two years
    following the receipt of the Presidential Permit. The US$5.4 billion
    cost estimate will increase depending on the timing and conditions of
    the permit. As of December 31, 2013, we have invested US$2.2 billion in
    the project.


--  Energy East Pipeline: We have begun Aboriginal and stakeholder
    engagement and associated field work as part of our initial design and
    planning. We intend to file the necessary regulatory applications in
    mid-2014 for approvals to construct and operate the pipeline project and
    terminal facilities.

    The 1.1 million bbl/d Energy East Pipeline project received
    approximately 900,000 bbl/d of firm, long-term contracts during a
    binding open season to transport crude oil from Western Canada to
    eastern refineries and export terminals. The project is estimated to
    cost approximately $12 billion, excluding the transfer value of Canadian
    Mainline natural gas assets. Subject to regulatory approvals, it is
    anticipated to commence deliveries to Quebec in 2018 with service to New
    Brunswick expected to follow in late 2018.


--  Northern Courier Pipeline: In October 2013, Suncor Energy announced that
    the Fort Hills Energy Limited Partnership is proceeding with the Fort
    Hills oil sands mining project and expects to begin producing crude oil
    in 2017. Our Northern Courier Pipeline project, which is expected to be
    completed in advance of mine start-up and cost approximately $800
    million, will transport bitumen and diluent between the Fort Hills mine
    site and Suncor Energy's terminal located north of Fort McMurray,
    Alberta.

    We filed a permit application for the project with the Alberta Energy
    Regulator (AER) after completing the required Aboriginal and stakeholder
    engagement and associated field work.


--  Heartland Pipeline and TC Terminals: In October 2013, we filed a permit
    application with the AER for the Heartland Pipeline, after completing
    the required Aboriginal and stakeholder engagement and associated field
    work. In February 2014, the application for the TC Terminals facility
    was approved by the AER.

    The projects will include a 200 km (125 mile) crude oil pipeline
    connecting the Edmonton/Heartland, Alberta market region to facilities
    in Hardisty, Alberta, and a terminal facility in the Heartland
    industrial area north of Edmonton. We anticipate the pipeline could
    transport up to 900,000 bbl/d, while the terminal is expected to have
    storage capacity for up to 1.9 million barrels of crude oil. These
    projects together have a combined cost estimated at $900 million and are
    expected to be in service in 2016.

Natural Gas Pipelines:


--  Canadian Mainline: In July 2013, we implemented the National Energy
    Board's (NEB) decision on our Canadian Mainline Restructuring Proposal
    application. The NEB decision introduced several new elements that were
    not part of our application, including fixing tolls for contracted
    capacity outside the time frame that was applied for and the ability to
    price discretionary services at market rates. Having secured additional
    firm transportation service contracts since July 2013, along with the
    ability to price discretionary services, allowed us to realize our net
    revenue requirement in 2013, which included a return on equity of 11.50
    per cent on 40 per cent equity.

    In December 2013, we filed for NEB approval of a settlement reached with
    three eastern Canadian local natural gas distribution customers. The
    settlement is intended to provide a stable, long-term solution to meet
    demand growth in the Eastern Triangle and address anticipated lower
    demand for transportation service on the remainder of the system while
    providing a reasonable opportunity to recover our costs. Under the
    settlement, the base return on equity would be set at 10.10 per cent on
    40 per cent equity. After a $20 million (after tax) annual contribution
    from 2015 to 2020 and various incentive mechanisms, the return on equity
    could range from 8.70 to 11.50 per cent.

    The Mainline is expected to operate under the current NEB tolling
    framework in 2014. The settlement, if approved, will address tolls from
    2015 through 2020 with certain aspects of tolling to be applied through
    2030, and resolve tolls for 2014.

    On January 31, 2014, shippers on the Canadian Mainline elected to renew
    approximately 2.5 billion cubic feet a day of their contracts through
    November 2016.


--  NGTL System Expansion: In addition to completing and placing into
    service approximately $730 million of pipeline projects in 2013 to
    expand and extend the NGTL System, the NEB approved approximately $290
    million of additional expansions that are currently in various stages of
    development or construction, but not yet in-service.

    On November 8, 2013, we filed an application with the NEB to construct
    and operate the North Montney Project, which is an extension and
    expansion of the NGTL System to receive and transport natural gas from
    the North Montney area of British Columbia and underpinned by long-term
    contracts. The estimated capital cost of the project is $1.7 billion and
    it consists of approximately 300 km (186 miles) of pipeline.


--  NGTL System Rate Settlement: On November 1, 2013, the NEB approved our
    NGTL System 2013-2014 settlement and final 2013 rates as filed. The
    settlement fixes the allowed return on equity at 10.10 per cent on 40
    per cent deemed common equity, establishes an increase in the composite
    depreciation rate to 3.05 per cent and 3.12 per cent for 2013 and 2014,
    respectively, and fixes the operations, maintenance and administration
    costs for 2013 at $190 million and 2014 at $198 million with any
    variance to our account.


--  Tamazunchale Pipeline Extension Project: Construction is proceeding on
    the US$500 million Tamazunchale Pipeline Extension Project although
    delays have occurred due to a significant number of archeological finds
    along the pipeline route. It is expected these finds and the related
    impact on construction will move the project's scheduled in-service date
    to second quarter 2014. As these types of finds are not uncommon in
    significant infrastructure projects in Mexico, contractual relief for
    such delays is provided. We continue to work with local, state and
    federal authorities to minimize and mitigate ground disturbance at the
    specific sites as well as to minimize impact to the scheduled in-service
    date.


--  ANR Lebanon Lateral Reversal Project: Following a successful binding
    open season which concluded in October 2013, we have executed firm
    transportation contracts for 350 million cubic feet per day at maximum
    tariff rates for 10 years on the ANR Lebanon Lateral Reversal Project,
    which will entail modifications to existing facilities. The facility
    modifications are expected to be completed in first quarter 2014.
    Contracted volumes will increase over the course of 2014 generating
    incremental earnings. The project will substantially increase our
    ability to receive gas on ANR's southeast mainline from the
    Utica/Marcellus shale plays.


--  Great Lakes Rate Settlement: In November 2013, we received Federal
    Energy Regulatory Commission (FERC) approval for a rate settlement with
    shippers on Great Lakes Gas Transmission. Commencing November 1, 2013,
    maximum recourse rates increased by approximately 21 per cent resulting
    in a modest increase in the portion of Great Lakes' revenue derived from
    recourse rate contracts. The settlement includes a 17 month moratorium
    through March 31, 2015 and requires Great Lakes to have new rates in
    effect by January 1, 2018.


--  Alaska LNG Project: On January 14, 2014, the State of Alaska,
    TransCanada, the three major Alaska North Slope (ANS) gas producers, and
    the Alaska Gasline Development Corporation signed a HOA relating to a
    gas pipeline and liquefied natural gas project to bring ANS natural gas
    resources to market. Under the HOA and a related Memorandum of
    Understanding, the State of Alaska and TransCanada have agreed that an
    LNG export project, rather than a pipeline to Alberta, is currently the
    best opportunity to commercialize ANS gas resources, and that our
    license under the Alaska Gasline Inducement Act will be amicably
    terminated. The HOA seeks to establish a transparent set of principles
    and a roadmap outlining how all six parties will work together to
    advance the Alaska LNG Project. It is anticipated that two years of
    front end engineering will be completed before further commitments to
    commercialize the project will be made.

Energy:


--  Sundance A: Units 1 and 2 returned to service in September and October
    2013, respectively. The operator shut down both units in December 2010
    under a claim of force majeure and was ordered by an arbitration panel
    in July 2012 to rebuild them. Combined, the units are capable of
    generating 560 megawatts (MW).


--  Ravenswood: Capacity prices in the New York City Zone J market, where
    Ravenswood operates, are established through a series of forward
    auctions and utilize a demand curve administered price for purposes of
    setting the monthly spot price. The demand curve, among other inputs,
    uses assumptions with respect to the expected cost of the most likely
    peaking generation technology applicable to new entrants into the
    market. On January 28, 2014, the FERC accepted a new rate for the demand
    curve that was filed by the New York Independent System Operator as part
    of its triennial Demand Curve Reset (DCR) process. The filing changed
    the generation technology used in the DCR versus that used during the
    last reset process. We do not expect this change to impact capacity
    prices in 2014, however, this new assumption does have the potential to
    negatively affect New York City capacity prices in 2015 and 2016.


--  Ontario Solar: In late 2011, we agreed to buy nine Ontario solar
    facilities (combined capacity of 86 MW) from Canadian Solar Solutions
    Inc. for approximately $500 million. On December 31, 2013, we completed
    the acquisition of our fourth facility for $62 million which has a
    capacity of 10 MW. We expect the acquisition of the remaining five
    facilities to close in 2014, subject to regulatory approvals and
    satisfactory completion of the related construction activities. All
    power produced by the facilities is sold under 20-year power purchase
    arrangements with the Ontario Power Authority.


--  Cancarb:  In January 2014, we reached an agreement to sell Cancarb and
    its related power generation facility for $190 million, subject to
    closing adjustments. The sale is expected to close late in first quarter
    2014.


--  Bruce Power: On January 31, 2014, Cameco announced it had agreed to sell
    its 31.6 per cent limited partnership interest in Bruce B to BPC
    Generation Infrastructure Trust. We are considering our option to
    increase our Bruce B ownership percentage.

Corporate:


--  Common Dividend: Our Board of Directors declared a quarterly dividend of
    $0.48 per share for the quarter ending March 31, 2014 on TransCanada's
    outstanding common shares. The quarterly amount is equivalent to $1.92
    per common share on an annualized basis and represents a four per cent
    increase over the previous amount.


--  Financing Activity:


    --  In October 2013, we redeemed all four million outstanding
        TransCanada PipeLines Limited (TCPL) 5.60 per cent Cumulative
        Redeemable First Preferred Shares Series U at a price of $50 per
        share plus $0.5907 of accrued and unpaid dividends. The total face
        value of the outstanding Series U Shares was $200 million and they
        carried an aggregate of $11 million in annualized dividends.

    --  In October 2013, we issued US$625 million of senior notes maturing
        on October 16, 2023, bearing interest at 3.75 per cent, and US$625
        million of senior notes maturing on October 16, 2043, bearing
        interest at 5.00 per cent.

        In January 2014, we completed a public offering of 18 million Series
        9 Cumulative Redeemable First Preferred Shares. The Series 9 shares
        were issued at a price of $25 per share, resulting in gross proceeds
        of $450 million. The initial dividend rate is fixed to October 30,
        2019 at $1.0625 per share per annum paid quarterly.

        The net proceeds of these offerings will be used for general
        corporate purposes and to reduce short-term indebtedness, which was
        used to fund a portion of our capital program and for general
        corporate purposes.


    --  Also in January 2014, we announced that we will redeem all four
        million outstanding TCPL 5.60 per cent Cumulative Redeemable First
        Preferred Shares Series Y at a price of $50 per share plus $0.2455
        of accrued and unpaid dividends on March 5, 2014. The total face
        value of the outstanding Series Y Shares is $200 million and they
        carry an aggregate of $11 million in annualized dividends.


--  Management Changes: Effective February 28, 2014, Greg Lohnes, Executive
    Vice-President, Operations and Major Projects and Sean McMaster,
    Executive Vice-President, Stakeholder Relations, General Counsel and
    Chief Compliance Officer will retire from the Company.

    Effective March 1, 2014, Alex Pourbaix is appointed Executive Vice-
    President and President, Development; Paul Miller is appointed Executive
    Vice-President and President, Liquids Pipelines; Bill Taylor is
    appointed Executive Vice-President and President, Energy; James Baggs is
    appointed Executive Vice-President, Operations and Engineering; and
    Kristine Delkus is appointed Executive Vice-President, General Counsel
    and Chief Compliance Officer.

Teleconference - Audio and Slide Presentation:

We will hold a teleconference and webcast on Thursday, February 20, 2014 to discuss our fourth quarter 2013 financial results. Russ Girling, TransCanada 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 12 p.m. (MT) / 2 p.m. (ET).

Analysts, members of the media and other interested parties are invited to participate by calling 866.226.1792 or 416.340.2216 (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 midnight (ET) on February 27, 2014. Please call 800.408.3053 or 905.694.9451 and enter pass code 6573719.

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 more than 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 or http://blog.transcanada.com.

FOURTH QUARTER 2013 AND FINANCIAL HIGHLIGHTS

Comparable EBITDA, comparable earnings, comparable earnings per common share and funds generated from operations are all non-GAAP measures. See the non-GAAP measures section for more information.


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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $, except
 per share amounts)                       2013       2012     2013      2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Revenue                                  2,332      2,089    8,797     8,007
Comparable EBITDA                        1,291      1,052    4,859     4,245
Net income attributable to common
 shares                                    420        306    1,712     1,299
  per common share - basic               $0.59      $0.43    $2.42     $1.84
Comparable earnings                        410        318    1,584     1,330
  per common share                       $0.58      $0.45    $2.24     $1.89
Operating cash flow
Funds generated from operations          1,083        818    4,000     3,284
(Increase)/decrease in operating
 working capital                           (74)       207     (326)      287
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Net cash provided by operations          1,009      1,025    3,674     3,571
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Investing activities
Capital expenditures                     1,431      1,040    4,461     2,595
Equity investments                          62         95      163       652
Acquisitions                                62        214      216       214
Dividends Declared
per common share                          0.46       0.44     1.84      1.76
per Series 1 preferred share              0.29       0.29     1.15      1.15
per Series 3 preferred share              0.25       0.25     1.00      1.00
per Series 5 preferred share              0.28       0.28     1.10      1.10
per Series 7 preferred share(1)           0.25          -     0.91         -
Basic common shares outstanding
 (millions)
Average for the period                     707        705      707       705
End of period                              707        705      707       705
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1   Issued March 4, 2013.

FORWARD-LOOKING INFORMATION

We disclose forward-looking information to help current and potential investors understand management's assessment of our future plans and financial outlook, and our future prospects overall.

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

Forward-looking statements in this news release may include information about the following, among other things:


--  anticipated business prospects
--  our financial and operational performance, including the performance of
    our subsidiaries
--  expectations or projections about strategies and goals for growth and
    expansion
--  expected cash flows and future financing options available to us
--  expected costs for planned projects, including projects under
    construction and in development
--  expected schedules for planned projects (including anticipated
    construction and completion dates)
--  expected regulatory processes and outcomes
--  expected impact of regulatory 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 accounting changes, 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 assumptions, risks or uncertainties related to our business or events that happen after the date of this news release.

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

Assumptions


--  inflation rates, commodity prices and capacity prices
--  timing of financings and hedging
--  regulatory decisions and outcomes
--  foreign exchange rates
--  interest rates
--  tax rates
--  planned and unplanned outages and the use of our 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


--  our ability to successfully implement our strategic initiatives
--  whether our strategic initiatives will yield the expected benefits
--  the operating performance of our pipeline and energy assets
--  amount of capacity sold and rates achieved in our pipeline businesses
--  the availability and price of energy commodities
--  the amount of capacity payments and revenues we receive from our energy
    business
--  regulatory decisions and outcomes
--  outcomes of legal proceedings, including arbitration
--  performance of our 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
--  costs for labour, equipment and materials
--  access to capital markets
--  interest and foreign exchange rates
--  weather
--  cyber security
--  technological developments
--  economic conditions in North America as well as globally.

You can read more about these factors and others in reports we have filed with Canadian securities regulators and the SEC (SCUR), including the MD&A in our 2012 Annual Report.

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

FOR MORE INFORMATION

You can find more information about TransCanada in our annual information form and other disclosure documents, which are available on SEDAR (www.sedar.com).

NON-GAAP MEASURES

We use the following non-GAAP measures:


--  EBITDA
--  EBIT
--  funds generated from operations
--  comparable earnings
--  comparable earnings per common share
--  comparable EBITDA
--  comparable EBIT
--  comparable depreciation and amortization
--  comparable interest expense
--  comparable interest income and other
--  comparable income tax expense.

These measures do not have any standardized meaning as prescribed by GAAP and therefore are unlikely to be comparable to similar measures presented by other entities.

EBITDA and EBIT

We use EBITDA as an approximate measure of our pre-tax operating cash flow. It measures our earnings before deducting interest and other financial charges, income tax, depreciation and amortization, net income attributable to non-controlling interests and preferred share dividends, and includes income from equity investments. EBIT measures our earnings from ongoing operations and is an effective measure of our performance and an effective tool for evaluating trends in each segment. It is calculated in the same way as EBITDA, less depreciation and amortization.

Funds generated from operations

Funds generated from operations includes net cash provided by operations before changes in operating working capital. We believe it is an effective measure of our consolidated operating cash flow because it does not include fluctuations from working capital balances, which do not necessarily reflect underlying operations in the same period.

Comparable measures

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


----------------------------------------------------------------------------
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Comparable measure                    Original measure
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comparable earnings                   net income attributable to common
                                      shares
comparable earnings per common share  net income per common share
comparable EBITDA                     EBITDA
comparable EBIT                       EBIT
comparable depreciation and           depreciation and amortization
 amortization
comparable interest expense           interest expense
comparable interest income and other  interest income and other
comparable income tax expense         income tax expense/(recovery)
----------------------------------------------------------------------------

Our decision not to include a specific item is subjective and made after careful consideration. These may include:


--  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
--  impact of regulatory or arbitration decisions relating to prior year
    earnings
--  write-downs of assets and investments.

We calculate comparable earnings by excluding the unrealized gains and losses from changes in fair value of certain derivatives used to reduce our exposure to certain financial commodity price risks. These derivatives provide effective economic hedges, but do not meet the criteria for hedge accounting. As a result, the changes in fair value are recorded in net income. As these amounts do not accurately reflect the gains and losses that will be realized at settlement, we do not consider them part of our underlying operations.


Reconciliation of non-GAAP measures

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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $, except
 per share amounts)                       2013      2012      2013     2012
----------------------------------------------------------------------------
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EBITDA                                   1,320     1,040     4,958    4,224
Non-comparable risk management
 activities affecting EBITDA               (29)       12       (44)      21
NEB decision - 2012                          -         -       (55)       -
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Comparable EBITDA                        1,291     1,052     4,859    4,245
Comparable depreciation and
 amortization                             (396)     (343)   (1,472)  (1,375)
----------------------------------------------------------------------------
Comparable EBIT                            895       709     3,387    2,870
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Other income statement items
Comparable interest expense               (240)     (246)     (984)    (976)
Comparable interest income and other        10        20        42       86
Comparable income tax expense             (198)     (123)     (662)    (477)
Net income attributable to non-
 controlling interests                     (38)      (28)     (125)    (118)
Preferred share dividends                  (19)      (14)      (74)     (55)
----------------------------------------------------------------------------
Comparable earnings                        410       318     1,584    1,330
Specific items (net of tax):
  NEB decision - 2012                        -         -        84        -
  Part VI.I income tax adjustment            -         -        25        -
  Sundance A PPA arbitration decision
   - 2011                                    -         -         -      (15)
  Risk management activities(1)             10       (12)       19      (16)
----------------------------------------------------------------------------
Net income attributable to common
 shares                                    420       306     1,712    1,299
----------------------------------------------------------------------------
Comparable depreciation and
 amortization                             (396)     (343)   (1,472)  (1,375)
Specific item:
  NEB decision - 2012                        -         -       (13)       -
----------------------------------------------------------------------------
Depreciation and amortization             (396)     (343)   (1,485)  (1,375)
----------------------------------------------------------------------------
Comparable interest expense               (240)     (246)     (984)    (976)
Specific item:
  NEB decision - 2012                        -         -        (1)       -
----------------------------------------------------------------------------
Interest expense                          (240)     (246)     (985)    (976)
----------------------------------------------------------------------------
Comparable interest income and other        10        20        42       86
Specific items:
  NEB decision - 2012                        -         -         1        -
  Risk management activities(1)             (9)       (5)       (9)      (1)
----------------------------------------------------------------------------
Interest income and other                    1        15        34       85
----------------------------------------------------------------------------
Comparable income tax expense             (198)     (123)     (662)    (477)
Specific items:
  NEB decision - 2012                        -         -        42        -
  Part VI.I income tax adjustment            -         -        25        -
  Income taxes attributable to
   Sundance A PPA arbitration
   decision - 2011                           -         -         -        5
  Risk management activities(1)            (10)        5       (16)       6
----------------------------------------------------------------------------
Income tax expense                        (208)     (118)     (611)    (466)
----------------------------------------------------------------------------
Comparable earnings per common share     $0.58     $0.45     $2.24    $1.89
Specific items (net of tax):
  NEB decision - 2012                        -         -      0.12        -
  Part VI.I income tax adjustment            -         -      0.04        -
  Sundance A PPA arbitration decision
   - 2011                                    -         -         -    (0.02)
  Risk management activities(1)           0.01     (0.02)     0.02    (0.03)
----------------------------------------------------------------------------
Net income per common share              $0.59     $0.43     $2.42    $1.84
----------------------------------------------------------------------------
----------------------------------------------------------------------------

  --------------------------------------------------------------------------
  --------------------------------------------------------------------------
                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
1 (unaudited - millions of $)             2013      2012      2013     2012
  --------------------------------------------------------------------------
  --------------------------------------------------------------------------

  Canadian Power                            (2)       (6)       (4)       4
  U.S. Power                                36        (5)       50       (1)
  Natural Gas Storage                       (5)       (1)       (2)     (24)
  Foreign exchange                          (9)       (5)       (9)      (1)
  Income tax attributable to risk
   management activities                   (10)        5       (16)       6
  --------------------------------------------------------------------------
  Total gains/(losses) from risk
   management activities                    10       (12)       19      (16)
  --------------------------------------------------------------------------
  --------------------------------------------------------------------------

Comparable EBITDA and Comparable EBIT by business segment

----------------------------------------------------------------------------
----------------------------------------------------------------------------
three months ended December      Natural
 31, 2013                            Gas       Oil
(unaudited - millions of $)    Pipelines Pipelines  Energy Corporate   Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Comparable EBITDA                   778       198     346       (31)  1,291
Comparable depreciation and
 amortization                      (280)      (38)    (74)       (4)   (396)
----------------------------------------------------------------------------
Comparable EBIT                     498       160     272       (35)    895
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
three months ended December      Natural
 31, 2012                            Gas       Oil
(unaudited - millions of $)    Pipelines Pipelines  Energy Corporate   Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Comparable EBITDA                   690       172     222       (32)  1,052
Comparable depreciation and
 amortization                      (236)      (36)    (68)       (3)   (343)
----------------------------------------------------------------------------
Comparable EBIT                     454       136     154       (35)    709
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                 Natural
year ended December 31, 2013         Gas       Oil
(unaudited - millions of $)    Pipelines Pipelines  Energy Corporate   Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Comparable EBITDA                 2,852       752   1,363      (108)  4,859
Comparable depreciation and
 amortization                    (1,013)     (149)   (294)      (16) (1,472)
----------------------------------------------------------------------------
Comparable EBIT                   1,839       603   1,069      (124)  3,387
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                 Natural
year ended December 31, 2012         Gas       Oil
(unaudited - millions of $)    Pipelines Pipelines  Energy Corporate   Total
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Comparable EBITDA                 2,741       698     903       (97)  4,245
Comparable depreciation and
 amortization                      (933)     (145)   (283)      (14) (1,375)
----------------------------------------------------------------------------
Comparable EBIT                   1,808       553     620      (111)  2,870
----------------------------------------------------------------------------
----------------------------------------------------------------------------

RESULTS - FOURTH QUARTER 2013

Net income attributable to common shares was $420 million this quarter compared to $306 million in fourth quarter 2012.

Comparable earnings this quarter were $92 million or $0.13 per share higher than fourth quarter 2012.

This was primarily the result of:


--  higher equity income from Bruce Power reflecting incremental earnings
    from Unit 4 due to fewer planned outage days and return to service of
    Units 1 and 2
--  higher earnings from the Canadian Mainline due to the higher rate of
    return on common equity (ROE) of 11.50 per cent in 2013 compared to 8.08
    per cent in 2012 due to the NEB decision on the Canadian Mainline
    Restructuring Proposal (NEB decision)
--  higher earnings from the NGTL System because of a higher average
    investment base associated with 2012 and 2013 capital expenditures and
    the impact of the 2013-2014 NGTL Settlement approved by the NEB in
    November 2013 which included a higher ROE and incentive earnings
--  higher earnings from the Keystone Pipeline System primarily due to
    higher volumes.

These increases were partly offset by:


--  lower contribution from U.S. natural gas pipelines due to lower
    transportation revenue at ANR as well as reduced earnings from GTN and
    Bison due to the reduction of our effective ownership from 83 per cent
    to 50 per cent, effective in July 2013
--  lower earnings from Western Power primarily due to lower realized power
    prices.

RESULTS - ANNUAL

Comparable earnings in 2013 were $254 million higher than in 2012, an increase of $0.35 per share.

The increase in comparable earnings was the result of:


--  higher equity income from Bruce Power due to incremental earnings from
    Units 1 and 2 and lower planned outage days at Unit 4
--  higher earnings from the Canadian Mainline reflecting a higher ROE of
    11.50 per cent in 2013 compared to 8.08 per cent in 2012 due to the NEB
    decision
--  higher earnings from U.S. Power because of higher capacity prices in New
    York and higher realized power prices
--  higher earnings from the NGTL System reflecting a higher investment base
    and the impact of the 2013-2014 NGTL Settlement approved by the NEB in
    November 2013
--  higher earnings from the Keystone Pipeline System primarily due to
    higher volumes
--  higher earnings from Western Power because of higher purchased volumes
    under the power purchase arrangements (PPA).

These increases were partly offset by lower contributions from U.S. natural gas pipelines because of lower earnings contributions at ANR and Great Lakes.

Net income attributable to common shares was $1,712 million in 2013 compared to $1,299 million in 2012.

Net income includes comparable earnings discussed above as well as other specific items which are excluded from comparable earnings. The following specific items were recognized in net income in 2013 and 2012:


--  $84 million of net income in 2013 related to 2012 from the NEB decision
--  $25 million favourable tax adjustment in 2013 due to the enactment of
    Canadian Federal tax legislation relating to Part VI.I tax
--  $15 million after-tax charge ($20 million pre-tax) in 2012 related to
    the Sundance A PPA arbitration decision. This charge was recorded in
    second quarter 2012 but related to amounts originally recorded in fourth
    quarter 2011
--  the impact of certain risk management activities each year.

NATURAL GAS PIPELINES

Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $)               2013      2012      2013     2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Canadian Pipelines
Canadian Mainline                          305       250     1,121      994
NGTL System                                261       195       846      749
Foothills                                   28        30       114      120
Other Canadian (TQM(1), Ventures LP)         6         7        26       29
----------------------------------------------------------------------------
Canadian Pipelines - comparable
 EBITDA                                    600       482     2,107    1,892
Comparable depreciation and
 amortization                             (225)     (182)     (790)    (715)
----------------------------------------------------------------------------
Canadian Pipelines - comparable EBIT       375       300     1,317    1,177

U.S. and International Pipelines
 (US$)
ANR                                         33        63       188      254
GTN(2)                                      11        28        76      112
Great Lakes(3)                              10        11        34       62
TC PipeLines, LP(1,4)                       21        17        72       74
Other U.S. pipelines (Iroquois(1),
 Bison(2), Portland(5))                     26        32       107      111
International (Gas
 Pacifico/INNERGY(1), Guadalajara(6),
 Tamazunchale, TransGas(1))                 25        27       106      112
General, administrative and support
 costs                                      (3)       (4)      (10)      (8)
Non-controlling interests(7)                60        39       186      161
----------------------------------------------------------------------------
U.S. and International Pipelines -
 comparable EBITDA                         183       213       759      878
Comparable depreciation and
 amortization                              (53)      (54)     (217)    (218)
----------------------------------------------------------------------------
U.S. and International Pipelines -
 comparable EBIT                           130       159       542      660
Foreign exchange impact                      7        (1)       15        -
----------------------------------------------------------------------------
U.S. and International Pipelines -
 comparable EBIT (Cdn$)                    137       158       557      660
Business Development comparable
 EBITDA and EBIT                           (14)       (4)      (35)     (29)
----------------------------------------------------------------------------
Natural Gas Pipelines - comparable
 EBIT                                      498       454     1,839    1,808
----------------------------------------------------------------------------
----------------------------------------------------------------------------

----------------------------------------------------------------------------
Summary
----------------------------------------------------------------------------
Natural Gas Pipelines - comparable
 EBITDA                                    778       690     2,852    2,741
Comparable depreciation and
 amortization                             (280)     (236)   (1,013)    (933)
----------------------------------------------------------------------------
Natural Gas Pipelines - comparable
 EBIT                                      498       454     1,839    1,808
----------------------------------------------------------------------------
----------------------------------------------------------------------------

1 Results from TQM, Northern Border, Iroquois, TransGas and Gas
  Pacifico/INNERGY reflect our share of equity income from these
  investments.
2 Effective July 1, 2013, represents our 30 per cent direct ownership
  interest. Prior to July 1, 2013, our direct ownership interest was 75 per
  cent.
3 Represents our 53.6 per cent direct ownership interest. The remaining 46.4
  per cent is held by TC PipeLines, LP.
4 Effective May 22, 2013, our ownership interest in TC PipeLines, LP
  decreased from 33.3 per cent to 28.9 per cent. On July 1, 2013, we sold 45
  per cent of GTN and Bison to TC PipeLines, LP. The following table shows
  our ownership interest in TC PipeLines,LP and our ownership of GTN, Bison,
  and Great Lakes through our ownership interest in TC PipeLines, LP for the
  periods presented.

  --------------------------------------------------------------------------
  --------------------------------------------------------------------------
                                                Ownership percentage as of
                                              ------------------------------
                                              ------------------------------
                                                July 1,  May 22,  January 1,
                                                   2013     2013        2012
  --------------------------------------------------------------------------
  --------------------------------------------------------------------------

  TC PipeLines, LP                                 28.9     28.9        33.3
  Effective ownership through TC PipeLines,
   LP:
    GTN/Bison                                      20.2      7.2         8.3
    Great Lakes                                    13.4     13.4        15.5
  --------------------------------------------------------------------------

5 Represents our 61.7 per cent ownership interest.
6 Included as of June 2011.
7 Comparable EBITDA for the portions of TC PipeLines, LP and Portland we do
  not own.

NET INCOME - WHOLLY OWNED CANADIAN PIPELINES

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $)                2013      2012      2013     2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Canadian Mainline - net income               76        47       361      187
Canadian Mainline - comparable
 earnings                                    76        47       277      187
NGTL System                                  72        55       243      208
Foothills                                     5         4        18       19
----------------------------------------------------------------------------

OPERATING STATISTICS - WHOLLY OWNED PIPELINES

----------------------------------------------------------------------------
----------------------------------------------------------------------------
                              Canadian
year ended December 31       Mainline(1)    NGTL System(2)       ANR(3)
                          ---------------- ---------------- ----------------
                          ---------------- ---------------- ----------------
(unaudited)                   2013    2012     2013    2012     2013    2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Average investment base
 (millions of $)             5,841   5,737    5,938   5,501      n/a     n/a
Delivery volumes (Bcf):
  Total                      1,339   1,551    3,683   3,645    1,566   1,620
  Average per day              3.7     4.2     10.1    10.0      4.3     4.4
----------------------------------------------------------------------------

1 Canadian Mainline's throughput volumes represent physical deliveries to
  domestic and export markets. Physical receipts originating at the Alberta
  border and in Saskatchewan for the twelve months ended December 31, 2013
  were 803 Bcf (2012 - 859 Bcf). Average per day was 2.2 Bcf (2012 - 2.3
  Bcf).
2 Field receipt volumes for the NGTL System for the twelve months ended
  December 31, 2013 were 3,680 Bcf (2012 - 3,660 Bcf). Average per day was
  10.1 Bcf (2012 - 10.0 Bcf).
3 Under its current rates, which are approved by the FERC, changes in
  average investment base do not affect results.

CANADIAN PIPELINES

Comparable EBITDA and net income for our rate-regulated Canadian Pipelines are primarily affected by our approved ROE, our investment base, the level of deemed common equity and incentive earnings. Changes in depreciation, financial charges and taxes also impact comparable EBITDA and EBIT but do not have a significant impact on net income as they are almost entirely recovered in revenue on a flow-through basis.

Canadian Mainline's comparable earnings increased by $29 million for the three months ended December 31, 2013 compared to the same period in 2012 because of the impact of the NEB decision. Among other items, the NEB approved an ROE of 11.50 per cent on 40 per cent deemed common equity for the years 2012 through to 2017 compared to the last approved ROE of 8.08 per cent on deemed common equity of 40 per cent that was used to record earnings in 2012, as well as an incentive mechanism based on total net revenues. The increase in comparable earnings is mainly due to the higher ROE plus incentive earnings.

Net income for the NGTL System increased by $17 million for the three months ended December 31, 2013 compared to the same period in 2012 because of the impact of the 2013-2014 NGTL Settlement which included higher ROE and incentive earnings and a higher average investment base associated with 2012 and 2013 capital expenditures. The 2013-2014 NGTL Settlement, approved by the NEB in November 2013, included an ROE of 10.10 per cent on 40 per cent deemed common equity compared to an ROE of 9.70 per cent on 40 per cent deemed common equity in 2012. The 2013-2014 NGTL Settlement also included annual fixed amounts for certain OM&A costs.

U.S. PIPELINES AND INTERNATIONAL

EBITDA for our U.S. operations is generally affected by contracted volume levels, volumes delivered and the rates charged, as well as by the cost of providing services, including OM&A and property taxes.

ANR is also affected by the level of contracting and the determination of rates driven by the market value of our services for its storage capacity, storage related transportation services, and incidental commodity sales. ANR's pipeline and storage volumes and revenues are generally higher in the winter months because of the seasonal nature of its business.

Comparable EBITDA for the U.S. and International Pipelines decreased US$30 million for the three months ended December 31, 2013 compared to the same period in 2012. This was the net effect of:


--  lower transportation and storage revenues at ANR
--  higher OM&A and costs relating to services provided by other pipelines
    at ANR
--  lower contributions from GTN and Bison as a result of a reduction of our
    effective ownership in each pipeline from 83 per cent in 2012 to 50 per
    cent, effective July 1, 2013
--  higher contributions from Portland due to higher short term revenues.

COMPARABLE DEPRECIATION AND AMORTIZATION

Comparable depreciation and amortization increased $44 million for the three months ended December 31, 2013 compared to the same period in 2012 mainly due to a 2013 true-up for the higher composite depreciation rate in the 2013-2014 NGTL Settlement approved in November 2013, higher investment base on the NGTL System, and the impact of the NEB decision.

OIL PIPELINES

Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $)               2013      2012      2013     2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Keystone Pipeline System                   200       180       766      712
Oil Pipelines Business Development          (2)       (8)      (14)     (14)
----------------------------------------------------------------------------
Oil Pipelines - comparable EBITDA          198       172       752      698
Comparable depreciation and
 amortization                              (38)      (36)     (149)    (145)
----------------------------------------------------------------------------
Oil Pipelines - comparable EBIT            160       136       603      553
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Comparable EBIT denominated as
 follows:
Canadian dollars                            53        44       201      191
U.S. dollars                               102        94       389      363
Foreign exchange impact                      5        (2)       13       (1)
----------------------------------------------------------------------------
                                           160       136       603      553
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Comparable EBITDA from our Keystone Pipeline System is generated primarily by providing pipeline capacity to shippers in exchange for fixed monthly payments that are not linked to actual throughput volumes. Uncontracted capacity is offered to the market on a spot basis and provides opportunities to generate incremental earnings.

Comparable EBITDA for the Keystone Pipeline System increased by $20 million for the three months ended December 31, 2013 compared to the same period in 2012, primarily because of higher volumes.

BUSINESS DEVELOPMENT

Business development expenses for the three months ended December 31, 2013 were $6 million lower than the same period in 2012 due to greater capitalization of oil pipeline development project costs in fourth quarter 2013.

ENERGY

Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $)               2013      2012      2013     2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Canadian Power
Western Power                               60        84       380      335
Eastern Power(1)                            99        94       347      345
Bruce Power                                115        (8)      310       14
General, administrative and support
 costs                                     (17)      (14)      (50)     (48)
----------------------------------------------------------------------------
Canadian Power - comparable EBITDA(2)      257       156       987      646
Comparable depreciation and
 amortization                              (43)      (35)     (172)    (152)
----------------------------------------------------------------------------
Canadian Power - comparable EBIT(2)        214       121       815      494
U.S. Power (US$)
Northeast Power                             79        62       370      257
General, administrative and support
 costs                                     (14)      (14)      (47)     (48)
----------------------------------------------------------------------------
U.S. Power - comparable EBITDA              65        48       323      209
Comparable depreciation and
 amortization                              (27)      (31)     (107)    (121)
----------------------------------------------------------------------------
U.S. Power - comparable EBIT                38        17       216       88
Foreign exchange impact                      2         -         7        -
----------------------------------------------------------------------------
U.S. Power - comparable EBIT (Cdn$)         40        17       223       88
----------------------------------------------------------------------------
Natural Gas Storage and other
Natural Gas Storage and other               30        23        73       77
General, administrative and support
 costs                                      (3)       (3)      (10)     (10)
----------------------------------------------------------------------------
Natural Gas Storage and other -
 comparable EBITDA(2)                       27        20        63       67
Comparable depreciation and
 amortization                               (3)       (2)      (12)     (10)
----------------------------------------------------------------------------
Natural Gas Storage and other -
 comparable EBIT(2)                         24        18        51       57
Business Development comparable
 EBITDA and EBIT                            (6)       (2)      (20)     (19)
----------------------------------------------------------------------------
Energy - comparable EBIT(2)                272       154     1,069      620
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Summary
Energy - comparable EBITDA(2)              346       222     1,363      903
Comparable depreciation and
 amortization                              (74)      (68)     (294)    (283)
----------------------------------------------------------------------------
Energy - comparable EBIT(2)                272       154     1,069      620
----------------------------------------------------------------------------
----------------------------------------------------------------------------

1 Includes the acquisition of four Ontario Solar facilities in 2013 and
  Cartier phase two of Gros-Morne starting in November 2012.
2 Includes our share of equity income from our equity accounted for
  investments in ASTC Power Partnership, Portlands Energy, Bruce Power and
  CrossAlta up to December 2012. In December 2012, we acquired the remaining
  40 per cent interest in CrossAlta, bringing our ownership interest to 100
  per cent and commenced consolidating their operations.

Comparable EBITDA for Energy increased by $124 million for the three months ended December 31, 2013 compared to the same period in 2012. The increase was the net effect of:


--  higher equity income from Bruce Power mainly because of incremental
    earnings from Unit 4 due to fewer planned outage days and the return to
    service of Units 1 and 2
--  higher earnings from U.S. Power mainly because of higher capacity prices
    in New York offset by lower volumes, primarily at the Ravenswood
    facility
--  lower earnings from Western Power mainly because of lower realized power
    prices partly offset by the return to service of Sundance A Unit 1 in
    early September 2013 and Unit 2 in early October 2013.

CANADIAN POWER

Western and Eastern Power(1)

Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $)               2013      2012      2013     2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Revenue
Western Power                              168       158       609      640
Eastern Power(1)                           104       106       400      415
Other(2)                                    34        25       108       91
----------------------------------------------------------------------------
                                           306       289     1,117    1,146
Income from equity investments(3)           15        23       141       68
----------------------------------------------------------------------------
Commodity purchases resold
Western power                              (92)      (74)     (277)    (281)
Other(4)                                    (2)       (2)       (6)      (5)
----------------------------------------------------------------------------
                                           (94)      (76)     (283)    (286)
----------------------------------------------------------------------------
Plant operating costs and other            (68)      (58)     (248)    (218)
Sundance A PPA arbitration decision -
 2012                                        -         -         -      (30)
General, administrative and support
 costs                                     (17)      (14)      (50)     (48)
----------------------------------------------------------------------------
Comparable EBITDA                          142       164       677      632
Comparable depreciation and
 amortization                              (43)      (35)     (172)    (152)
----------------------------------------------------------------------------
Comparable EBIT                             99       129       505      480
----------------------------------------------------------------------------

Breakdown of comparable EBITDA
Western Power                               60        84       380      335
Eastern Power                               99        94       347      345
General, administrative and support
 costs                                     (17)      (14)      (50)     (48)
----------------------------------------------------------------------------
Comparable EBITDA                          142       164       677      632
----------------------------------------------------------------------------
----------------------------------------------------------------------------

1 Includes the acquisition of four Ontario Solar facilities in 2013 and
  Cartier phase two of Gros-Morne starting in November 2012.
2 Includes sale of excess natural gas purchased for generation and sales of
  thermal carbon black.
3 Includes our share of equity income from our investments in ASTC Power
  Partnership, which holds the Sundance B PPA, and Portlands Energy.
4 Includes the cost of excess natural gas not used in operations.

Sales volumes and plant availability(1,2)

Includes our share of volumes from our equity investments.


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited)                               2013      2012      2013     2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Sales volumes (GWh)
Supply
  Generation
    Western Power                          691       714     2,728    2,691
    Eastern Power(1)                       854       908     3,822    4,384
  Purchased
    Sundance A & B and Sheerness
     PPAs(2)                             2,771     2,017     8,223    6,906
    Other purchases                         12         -        13       46
----------------------------------------------------------------------------
                                         4,328     3,639    14,786   14,027
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Sales
  Contracted
    Western Power                        2,372     2,192     7,864    8,240
    Eastern Power(1)                       854       908     3,822    4,384
  Spot
    Western Power                        1,102       539     3,100    1,403
----------------------------------------------------------------------------
                                         4,328     3,639    14,786   14,027
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Plant availability(3)
Western Power(4)                            96%       97%       95%      96%
Eastern Power(1,5)                          90%       93%       90%      90%
----------------------------------------------------------------------------

1 Includes the acquisition of four Ontario Solar facilities in 2013 and
  Cartier phase two of Gros-Morne starting in November 2012.
2 Includes our 50 per cent ownership of Sundance B volumes through the ASTC
  Power Partnership. Sundance A Unit 1 returned to service in early
  September 2013 and Unit 2 returned to service in early October 2013.
3 The percentage of time in a period that the plant is available to generate
  power, regardless of whether it is running.
4 Does not include facilities that provide power to us under PPAs.
5 Does not include Becancour because power generation has been suspended
  since 2008.

Western Power

Western Power's comparable EBITDA decreased by $24 million for the three months ended December 31, 2013 compared to the same period in 2012 due to the net effect of:


--  lower realized power prices
--  incremental earnings from the return to service of Sundance A Unit 1 in
    early September 2013 and Unit 2 in early October 2013.

Average spot market power prices in Alberta decreased by 39 per cent to $48 per MWh for the three months ended December 31, 2013 compared to the same period in 2012. This decrease was the result of changes in the Alberta power supply and demand balance reflecting the return of Sundance A Units 1 and 2, significantly fewer coal plant outages and higher wind output in fourth quarter 2013 compared to fourth quarter 2012. Realized power prices on power sales can be higher or lower than spot market power prices in any given period, as a result of contracting activities.

Approximately 68 per cent of Western Power sales volumes were sold under contract this quarter compared to 80 per cent in fourth quarter 2012. To reduce exposure to spot market prices in Alberta, Western Power enters into fixed price forward sales to secure future revenue and a portion of our power is retained to be sold in the spot market or under shorter-term forward arrangements. The amount sold forward will vary depending on market conditions and market liquidity and has historically ranged between 25 to 75 per cent of expected future production with a higher proportion being hedged in the near term periods. Such forward sales may be completed with medium and large industrial and commercial companies and other market participants and will affect our average realized price (versus spot price) in future periods.

Eastern Power

Eastern Power's comparable EBITDA increased by $5 million for the three months ended December 31, 2013 compared to the same period in 2012 mainly due to higher earnings at Becancour and the acquisition of four Ontario Solar facilities in 2013.

BRUCE POWER

Our proportionate share.


----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $ unless
 noted otherwise)                         2013      2012      2013     2012
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Income/(loss) from equity
 investments(1)
Bruce A                                     70       (54)      202     (149)
Bruce B                                     45        46       108      163
----------------------------------------------------------------------------
                                           115        (8)      310       14
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Comprised of:
  Revenues                                 342       228     1,258      763
  Operating expenses                      (145)     (165)     (618)    (567)
  Depreciation and other                   (82)      (71)     (330)    (182)
----------------------------------------------------------------------------
                                           115        (8)      310       14
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Bruce Power - Other information
Plant availability(2)
  Bruce A(3)                                90%       52%       82%      54%
  Bruce B                                   98%      100%       89%      95%
  Combined Bruce Power                      94%       79%       86%      81%
Planned outage days
  Bruce A                                    -       123       123      336
  Bruce B                                    -         -       140       46
Unplanned outage days
  Bruce A                                   18        11        63       18
  Bruce B                                    7         -        20       25
Sales volumes (GWh)(1)
  Bruce A(3)                             2,907     1,609    10,033    4,194
  Bruce B                                2,177     2,278     7,824    8,475
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                                         5,084     3,887    17,857   12,669
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Realized sales price per MWh(4)
  Bruce A                                  $71       $68       $70      $68
  Bruce B                                  $54       $54       $54      $55
  Combined Bruce Power                     $62       $57       $62      $57
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1 Represents our 48.9 per cent ownership interest in Bruce A and 31.6 per
  cent ownership interest in Bruce B. Sales volumes exclude deemed
  generation.
2 The percentage of time the plant was available to generate power,
  regardless of whether it was running.
3 Plant availability and sales volumes for 2013 and 2012 include the
  incremental impact of Units 1 and 2 which were returned to service in
  October 2012.
4 Calculated based on actual and deemed generation. Bruce B realized sales
  prices per MWh includes revenues under the floor price mechanism and
  revenues from contract settlements.

Equity income from Bruce A increased by $124 million for the three months ended December 31, 2013 compared to the same period in 2012. The increase was mainly due to:


--  incremental earnings from Unit 4 due to the planned life extension
    outage which began in third quarter 2012 and was completed in April 2013
--  incremental earnings from Units 1 and 2 which returned to service in
    October 2012
--  higher realized prices.

Under the contract with the OPA, all of the output from Bruce A is sold at a fixed price per MWh. The fixed price is adjusted annually on April 1 for inflation and other provisions under the OPA contract. Bruce A also recovers fuel costs from the OPA.


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Bruce A Fixed price                                                  Per MWh
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April 1, 2013 - March 31, 2014                                        $70.99
April 1, 2012 - March 31, 2013                                        $68.23
April 1, 2011 - March 31, 2012                                        $66.33

Under the same contract, all output from Bruce B is subject to a floor price adjusted annually for inflation on April 1.


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Bruce B Floor price                                                  Per MWh
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April 1, 2013 - March 31, 2014                                        $52.34
April 1, 2012 - March 31, 2013                                        $51.62
April 1, 2011 - March 31, 2012                                        $50.18

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. Bruce Power has not had to repay any amounts in the past three years.

Bruce B also enters into fixed-price contracts under which it receives or pays the difference between the contract price and the spot price.

The overall plant availability percentage in 2014 is expected to be in the high 80s for both Bruce A and Bruce B. Planned maintenance on a Bruce A unit is scheduled to occur in the first half of 2014. Planned maintenance on two Bruce B units is scheduled to occur in first and fourth quarters 2014.

U.S. POWER

Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.


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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of US$)              2013      2012      2013     2012
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Revenue
Power(1)                                   333       353     1,484    1,189
Capacity                                    78        53       295      234
Other(2)                                     5        22        56       51
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                                           416       428     1,835    1,474
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Commodity purchases resold                (251)     (217)   (1,003)    (765)
Plant operating costs and other(2)         (86)     (149)     (462)    (452)
General, administrative and support
 costs                                     (14)      (14)      (47)     (48)
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Comparable EBITDA                           65        48       323      209
Comparable depreciation and
 amortization                              (27)      (31)     (107)    (121)
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Comparable EBIT                             38        17       216       88
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1 The realized gains and losses from financial derivatives used to buy and
  sell power, natural gas and fuel oil to manage U.S. Power's assets are
  presented on a net basis in power revenues.
2 Includes revenues and costs related to a third party service agreement at
  Ravenswood.

Sales volumes and plant availability


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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited)                                2013      2012      2013     2012
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Physical sales volumes (GWh)
Supply
  Generation                             1,152     2,276     6,173    7,567
  Purchased                              2,259     2,550     9,001    9,408
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                                         3,411     4,826    15,174   16,975
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Plant availability(1,2)                     71%       81%       84%      85%
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1 The percentage of time the plant was available to generate power,
  regardless of whether it was running.
2 Plant availability decreased in the three months ended December 31, 2013
  due to the impact of planned outages at Ravenswood.

U.S. Power's comparable EBITDA was US$17 million higher for the three months ended December 31, 2013 compared to the same period in 2012. The increase was the net effect of:


--  higher realized capacity prices in New York
--  higher realized power prices in New England offset by the impact of
    higher fuel costs
--  lower generation, primarily at the Ravenswood facility.

Spot capacity prices in New York City were approximately 91 per cent higher in fourth quarter 2013 compared to the same period in 2012. This increase in spot capacity prices and the impact of hedging activities resulted in higher realized prices in New York.

Commodity prices in U.S. Power were higher in 2013 as natural gas prices recovered from low levels in 2012. Higher natural gas prices and fuel transportation constraints in the Northeast United States were factors that contributed to ISO power prices in New England increasing by approximately 33 per cent in fourth quarter 2013 compared to the same period in 2012. Revenue, commodity purchases resold, and plant operating costs and other, which includes fuel gas consumed in generation, were impacted by this increase in commodity prices.

Physical sales volumes in the three months ended December 31, 2013 decreased compared to the same period in 2012. Generation volumes decreased primarily due to lower generation at the Ravenswood facility in fourth quarter 2013 compared to fourth quarter 2012, when Ravenswood ran at higher than normal levels during and following Superstorm Sandy when damage at several other power and transmission facilities reduced power supply in New York City. Purchased volumes were lower in fourth quarter 2013 compared to the same period in 2012 as volumes purchased to serve the commercial and industrial customers in the New England market decreased, partially offset by higher volumes in the PJM market. Both Revenue and Plant operating costs and other were impacted by these lower volumes.

As at December 31, 2013, approximately 4,300 GWh or 53 per cent of U.S. Power's planned generation is contracted for 2014, and 1,800 GWh or 24 per cent for 2015. 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 AND OTHER

Comparable EBITDA and comparable EBIT are non-GAAP measures. See non-GAAP measures section for more information.


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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $)                2013      2012      2013     2012
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Natural Gas Storage and other(1)            30        23        73       77
General, administrative and support
 costs                                      (3)       (3)      (10)     (10)
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Comparable EBITDA                           27        20        63       67
Comparable depreciation and
 amortization                               (3)       (2)      (12)     (10)
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Comparable EBIT                             24        18        51       57
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1 Includes our share of equity income from our investment in CrossAlta up to
  December 18, 2012. In December 2012, we acquired the remaining 40 per cent
  interest in CrossAlta, bringing our ownership interest to 100 per cent and
  commenced consolidating their operations.

Comparable EBITDA increased by $7 million for the three months ended December 31, 2013 compared to the same period in 2012 mainly due to higher volumes at higher realized natural gas storage spreads and incremental earnings from CrossAlta resulting from the acquisition of the remaining 40 per cent interest in December 2012.

OTHER INCOME STATEMENT ITEMS


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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $)                2013      2012      2013     2012
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Comparable interest expense                240       246       984      976
Comparable interest income and other       (10)      (20)      (42)     (86)
Comparable income tax expense              198       123       662      477
Net income attributable to non-
 controlling interests                      38        28       125      118
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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of $)                2013      2012      2013     2012
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Comparable interest on long-term debt
 (including interest on junior
 subordinated notes)
Canadian dollar-denominated                123       128       495      513
U.S. dollar-denominated (US$)              205       186       766      740
Foreign exchange                             7        (1)       20        -
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                                           335       313     1,281    1,253
Other interest and amortization
 (recovery)/expense                         (3)        9       (10)      23
Capitalized interest                       (92)      (76)     (287)    (300)
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Comparable interest expense                240       246       984      976
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Comparable interest expense was $6 million lower for the three months ended December 31, 2013 compared to the same period in 2012 because of:


--  higher capitalized interest primarily for the Gulf Coast project and
    Mexican projects partially offset by the refurbished units at Bruce
    Power being placed in service
--  higher interest expense due to debt issues of US$1.25 billion in October
    2013, US$500 million in July 2013, $750 million in July 2013, US$750
    million in January 2013, a TC Pipelines, LP debt issue of US$500 million
    in July 2013 and higher foreign exchange on interest expense related to
    U.S. denominated debt, partially offset by Canadian and U.S. dollar-
    denominated debt maturities.

Comparable income tax expense was $75 million higher for the three months ended December 31, 2013 compared to the same period in 2012. The increase was mainly the result of higher pre-tax earnings in 2013 compared to 2012 combined with changes in the proportion of income earned between Canadian and foreign jurisdictions.

Net income attributable to non-controlling interests was $10 million higher for the three months ended December 31, 2013 compared to the same period in 2012. The increase is because of the sale of a 45 percent interest in each of GTN LLC and Bison to TC PipeLines, LP in July 2013.


                 CONDENSED CONSOLIDATED STATEMENT OF INCOME

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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of Canadian $
 except per share amounts)                 2013      2012      2013     2012
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Revenues
Natural gas pipelines                    1,226     1,087     4,497    4,264
Oil pipelines                              294       270     1,124    1,039
Energy                                     812       732     3,176    2,704
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                                         2,332     2,089     8,797    8,007
Income from Equity Investments             174        61       597      257
Operating and Other Expenses
Plant operating costs and other            735       731     2,674    2,577
Commodity purchases resold                 359       291     1,317    1,049
Property taxes                              92        88       445      434
Depreciation and amortization              396       343     1,485    1,375
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                                         1,582     1,453     5,921    5,435
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Financial Charges/(Income)
Interest expense                           240       246       985      976
Interest income and other                   (1)      (15)      (34)     (85)
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                                           239       231       951      891
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Income before Income Taxes                 685       466     2,522    1,938
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Income Tax Expense
Current                                      3        80        43      181
Deferred                                   205        38       568      285
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                                           208       118       611      466
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Net Income                                 477       348     1,911    1,472
Net income attributable to non-
 controlling interests                      38        28       125      118
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Net Income Attributable to
 Controlling Interests                     439       320     1,786    1,354
Preferred share dividends                   19        14        74       55
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Net Income Attributable to Common
 Shares                                    420       306     1,712    1,299
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Net Income per Common Share
Basic and diluted                        $0.59     $0.43     $2.42    $1.84
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Dividends Declared per Common Share      $0.46     $0.44     $1.84    $1.76
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Weighted Average Number of Common
 Shares (millions)
Basic                                      707       705       707      705
Diluted                                    708       705       708      706
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               CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

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                                      three months ended      year ended
                                          December 31         December 31
                                     -------------------- ------------------
                                     -------------------- ------------------
(unaudited - millions of Canadian $)       2013      2012      2013     2012
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Cash Generated from Operations
Net income                                 477       348     1,911    1,472
Depreciation and amortization              396       343     1,485    1,375
Deferred income taxes                      205        38       568      285
Income from equity investments            (174)      (61)     (597)    (257)
Distributed earnings received from
 equity investments                        178       124       605      376
Employee post-retirement benefits
 funding lower than expense                 17        22        50        9
Other                                      (16)        4       (22)      24
(Increase)/decrease in operating
 working capital                           (74)      207      (326)     287
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Net cash provided by operations          1,009     1,025     3,674    3,571
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Investing Activities
Capital expenditures                    (1,431)   (1,040)   (4,461)  (2,595)
Equity investments                         (62)      (95)     (163)    (652)
Acquisitions, net of cash acquired         (62)     (214)     (216)    (214)
Deferred amounts and other                 (13)      123      (280)     205
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Net cash used in investing activities   (1,568)   (1,226)   (5,120)  (3,256)
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Financing Activities
Dividends on common and preferred
 shares                                   (344)     (325)   (1,356)  (1,281)
Distributions paid to non-controlling
 interests                                 (52)      (34)     (166)    (135)
Notes payable issued/(repaid), net         126       790      (492)     449
Long-term debt issued, net of issue
 costs                                   1,336         3     4,253    1,491
Repayment of long-term debt                (56)     (198)   (1,286)    (980)
Common shares issued                        13        18        72       53
Preferred shares issued, net of issue
 costs                                       -         -       585        -
Partnership units of subsidiary
 issued, net of issue costs                  -         -       384        -
Preferred shares of subsidiary
 redeemed                                 (200)        -      (200)       -
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Net cash provided by/(used in)
 financing activities                      823       254     1,794     (403)
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Effect of Foreign Exchange Rate
 Changes on Cash and Cash Equivalents       18         4        28      (15)
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Increase/(Decrease) in Cash and Cash
 Equivalents                               282        57       376     (103)
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Cash and Cash Equivalents
Beginning of period                        645       494       551      654
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Cash and Cash Equivalents
End of period                              927       551       927      551
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                    CONDENSED CONSOLIDATED BALANCE SHEET

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                                                     December 31 December 31
(unaudited - millions of Canadian $)                        2013        2012
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ASSETS
Current Assets
Cash and cash equivalents                                   927         551
Accounts receivable                                       1,122       1,052
Inventories                                                 251         224
Other                                                       847         997
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                                                          3,147       2,824
Plant, Property and Equipment, net of accumulated
 depreciation of $17,851 and $16,540, respectively       37,606      33,713
Equity Investments                                        5,759       5,366
Regulatory Assets                                         1,735       1,629
Goodwill                                                  3,696       3,458
Intangible and Other Assets                               1,955       1,406
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                                                         53,898      48,396
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LIABILITIES
Current Liabilities
Notes payable                                             1,842       2,275
Accounts payable and other                                2,155       2,344
Accrued interest                                            388         368
Current portion of long-term debt                           973         894
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                                                          5,358       5,881
Regulatory Liabilities                                      229         268
Other Long-Term Liabilities                                 656         882
Deferred Income Tax Liabilities                           4,564       4,016
Long-Term Debt                                           21,892      18,019
Junior Subordinated Notes                                 1,063         994
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                                                         33,762      30,060
EQUITY
Common shares, no par value                              12,149      12,069
  Issued and outstanding:   December 31, 2013 - 707
                            million shares
                            December 31, 2012 - 705
                            million shares
Preferred shares                                          1,813       1,224
Additional paid-in capital                                  401         379
Retained earnings                                         5,096       4,687
Accumulated other comprehensive loss                       (934)     (1,448)
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Controlling Interests                                    18,525      16,911
Non-controlling interests                                 1,611       1,425
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                                                         20,136      18,336
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                                                         53,898      48,396
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SEGMENTED INFORMATION

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three months
 ended December Natural Gas     Oil
 31              Pipelines   Pipelines     Energy    Corporate     Total
                ----------- ----------- ----------- ----------- ------------
                ----------- ----------- ----------- ----------- ------------
(unaudited -
 millions of
 Canadian $)     2013  2012  2013  2012  2013  2012  2013  2012  2013  2012
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Revenues        1,226 1,087   294   270   812   732     -     - 2,332 2,089
Income from
 equity
 investments       40    37     -     -   134    24     -     -   174    61
Plant operating
 costs and other (423) (373)  (86)  (88) (195) (238)  (31)  (32) (735) (731)
Commodity
 purchases
 resold             -     -     -     -  (359) (291)    -     -  (359) (291)
Property taxes    (65)  (61)  (10)  (10)  (17)  (17)    -     -   (92)  (88)
Depreciation and
 amortization    (280) (236)  (38)  (36)  (74)  (68)   (4)   (3) (396) (343)
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                  498   454   160   136   301   142   (35)  (35)  924   697
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Interest expense                                                 (240) (246)
Interest income and other                                           1    15
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Income before income taxes                                        685   466
Income tax expense                                               (208) (118)
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Net Income                                                        477   348
Net Income Attributable to Non-Controlling Interests              (38)  (28)
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Net Income Attributable to Controlling Interests                  439   320
Preferred Share Dividends                                         (19)  (14)
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Net Income Attributable to Common Shares                          420   306
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year ended
 December  Natural Gas      Oil
 31         Pipelines    Pipelines      Energy     Corporate       Total
          ------------- ----------- ------------- ----------- --------------
          ------------- ----------- ------------- ----------- --------------
(unaudited
 -
 millions
 of
 Canadian
 $)         2013   2012  2013  2012   2013   2012  2013  2012   2013    2012
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Revenues   4,497  4,264 1,124 1,039  3,176  2,704     -     -  8,797   8,007
Income
 from
 equity
 invest-
 ments       145    157     -     -    452    100     -     -    597     257
Plant
 operating
 costs and
 other    (1,405)(1,365) (328) (296)  (833)  (819) (108)  (97)(2,674)(2,577)
Commodity
 purchases
 resold        -      -     -     - (1,317)(1,049)    -     - (1,317)(1,049)
Property
 taxes      (329)  (315)  (44)  (45)   (72)   (74)    -     -   (445)  (434)
Deprecia-
 tion and
 amortiza-
 tion     (1,027)  (933) (149) (145)  (293)  (283)  (16)  (14)(1,485)(1,375)
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           1,881  1,808   603   553  1,113    579  (124) (111) 3,473   2,829
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Interest expense                                                (985)  (976)
Interest income and other                                         34      85
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Income before income taxes                                     2,522   1,938
Income tax expense                                              (611)  (466)
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Net Income                                                     1,911   1,472
Net Income Attributable to Non-Controlling Interests            (125)  (118)
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Net Income Attributable to Controlling Interests               1,786   1,354
Preferred Share Dividends                                       (74)    (55)
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Net Income Attributable to Common Shares                       1,712   1,299
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Contacts:
TransCanada Media Enquiries:
Shawn Howard/Grady Semmens/Davis Sheremata
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

Source: TRANSCANADA

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