Notes

Notes

1. Description of TransCanada's Business
2. Accounting Policies
3. Accounting Changes
4. Segmented Information
5. Plant, Property and Equipment
6. Goodwill
7. Intangibles and Other Assets
8. Joint Venture Investments
9. Acquisitions and Dispositions
10. Long-Term Debt
11. Long-Term Debt of Joint Ventures
12. Junior Subordinated Notes
13. Deferred Amounts
14. Rate Regulated Businesses
15. Non-Controlling Interests
16. Common Shares
17. Preferred Shares
18. Risk Management and Financial Instruments
19. Income Taxes
20. Notes Payable
21. Asset Retirement Obligations
22. Employee Future Benefits
23. Changes In Operating Working Capital
24. Commitments, Contingencies and Guarantees
25. Subsequent Events

Note 1: Description of TransCanada's Business

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TransCanada Corporation (TransCanada or the Company) is a leading North American energy company. TransCanada operates in two business segments, Pipelines and Energy, each of which offers different products and services.

Pipelines

The Pipelines segment consists primarily of the Company's investments in regulated pipelines and regulated natural gas storage facilities. Through its Pipelines segment, TransCanada owns and operates:

  • a natural gas transmission system extending from the Alberta/Saskatchewan border east into Québec (Canadian Mainline);
  • a natural gas transmission system in Alberta (Alberta System);
  • a natural gas transmission system extending from producing fields located primarily in Texas, Oklahoma, the Gulf of Mexico and Louisiana to markets located primarily in Wisconsin, Michigan, Illinois, Ohio and Indiana, and to regulated natural gas storage facilities in Michigan (ANR);
  • a natural gas transmission system extending from the British Columbia (B.C.)/Idaho border to the Oregon/California border (GTN);
  • a natural gas transmission system extending from central Alberta to the B.C./Idaho border and to the Saskatchewan/Montana border (Foothills);
  • natural gas transmission systems in Alberta that supply natural gas to the oil sands region of northern Alberta and to a petrochemical complex at Joffre, Alberta (Ventures LP); and
  • a natural gas transmission system in Mexico extending from Naranjos, Veracruz to Tamazunchale, San Luis Potosi (Tamazunchale).

Through its Pipelines segment, TransCanada operates and has ownership interests in pipeline systems as follows:

  • a 53.6 per cent direct ownership interest in a natural gas transmission system that connects to the Canadian Mainline and serves markets in Eastern Canada and the northeastern and midwestern United States (U.S.) (Great Lakes);
  • a 61.7 per cent interest in a natural gas transmission system that extends from a point near East Hereford, Québec to the northeastern U.S. (Portland);
  • a 50 per cent interest in a natural gas transmission system that connects with the Canadian Mainline and transports natural gas in Québec, from Montreal to the Portland system and to Québec City (TQM); and
  • a 38.2 per cent interest in TC PipeLines, LP (PipeLines LP), whose ownership interests in pipelines operated by TransCanada are as follows:
    • a 46.4 per cent interest in Great Lakes, in which TransCanada has a combined 71.3 per cent effective ownership interest through PipeLines LP and a direct interest described above;
    • a 50 per cent interest in a natural gas transmission system extending from a point near Monchy, Saskatchewan, to the U.S. Midwest (Northern Border), in which TransCanada has a 19.1 per cent effective ownership interest through PipeLines LP;
    • a 100 per cent interest in a natural gas transmission system extending from Arizona to Baja California, at the Mexico/California border (North Baja), in which TransCanada has a 38.2 per cent effective ownership interest through PipeLines LP; and
    • a 100 per cent interest in a natural gas transmission system extending from Malin, Oregon to Wadsworth, Nevada (Tuscarora), in which TransCanada has a 38.2 per cent effective ownership interest through PipeLines LP.

TransCanada does not operate but has ownership interests in pipelines and natural gas marketing activities as follows:

  • a 44.5 per cent interest in a natural gas transmission system that connects with the Canadian Mainline near Waddington, New York, and delivers natural gas to customers in the northeastern U.S. (Iroquois);
  • a 46.5 per cent interest in a natural gas transmission system extending from Mariquita to Cali in Colombia (TransGas); and
  • a 30 per cent interest in a natural gas transmission system extending from Loma de la Lata, Argentina to Concepción, Chile (Gas Pacifico), and in an industrial natural gas marketing company based in Concepción (INNERGY).

TransCanada is constructing pipelines or developing pipeline projects, which it expects to operate, including the following:

  • a pipeline under construction that will transport crude oil from Hardisty, Alberta, to U.S. markets at Wood River and Patoka in Illinois, and at Cushing, Oklahoma, and a development project to expand the pipeline and extend it to the Gulf Coast (Keystone);
  • a pipeline under construction that will transport natural gas from Wyoming to Northern Border in North Dakota (Bison); and
  • a pipeline under construction in Mexico that will transport natural gas from Manzanillo to Guadalajara (Guadalajara).

Energy

The Energy segment consists primarily of the Company's investments in electrical power generation plants and non-regulated natural gas storage facilities. Through its Energy segment, the Company owns and operates:

  • natural gas-fired cogeneration plants in Alberta at Carseland, Redwater, Bear Creek and MacKay River;
  • a waste-heat fuelled power plant at the Cancarb thermal carbon black facility in Medicine Hat, Alberta (Cancarb);
  • a natural gas and oil-fired generating facility in Queens, New York, consisting of multiple units employing steam turbine, combined-cycle and combustion turbine technology (Ravenswood);
  • hydroelectric generation assets located in New Hampshire, Vermont and Massachusetts (TC Hydro);
  • a natural gas-fired, combined-cycle plant in Burrillville, Rhode Island (Ocean State Power);
  • a natural gas-fired cogeneration plant near Trois-Rivières, Québec (Bécancour);
  • a natural gas-fired cogeneration plant near Saint John, New Brunswick (Grandview);
  • a natural gas storage facility near Edson, Alberta (Edson); and
  • the first phase of a two-phase wind power project located in Kibby and Skinner Townships in northwestern Franklin County, Maine (Kibby Wind).

TransCanada does not operate but through its Energy segment has ownership interests in power generation plants and non-regulated natural gas storage facilities as follows:

  • a 48.8 per cent partnership interest and a 31.6 per cent partnership interest in the nuclear power generation facilities of Bruce A and Bruce B (collectively Bruce Power), respectively, located near Tiverton, Ontario;
  • a 62 per cent interest in the Baie-des-Sables, Anse-à-Valleau and Carleton wind farms, three of five planned wind farms in Gaspé, Québec (Cartier Wind);
  • a 60 per cent interest in an underground natural gas storage facility near Crossfield, Alberta (CrossAlta); and
  • a 50 per cent interest in a natural gas-fired, combined-cycle cogeneration plant in Toronto, Ontario (Portlands Energy).

TransCanada also has long-term power purchase arrangements (PPA) in place for:

  • 100 per cent of the production of the Sundance A power facilities and, through a partnership, 50 per cent of the production of the Sundance B power facilities near Wabamun, Alberta; and
  • 756 megawatts (MW) of the generating capacity from the Sheerness power facility near Hanna, Alberta.

TransCanada has interests in the following Energy projects under construction or development:

  • a natural gas-fired, combined-cycle power plant under construction near Toronto, Ontario (Halton Hills);
  • a natural gas-fired, simple-cycle peaking power plant under construction in Coolidge, Arizona (Coolidge);
  • the second phase of the two-phase Kibby Wind power project under construction;
  • a 62 per cent interest in the Gros-Morne and Montagne-Sèche wind farms under construction, the fourth and fifth wind farms in Cartier Wind; and
  • a natural gas-fired, combined-cycle power plant in development near Oakville, Ontario (Oakville).