STRENGTH & STABILITY

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Cash flows Funds generated from operations Funds generated from operations were six per cent higher in 2015 compared to 2014 primarily due to higher comparable earnings, as described above. Comparable distributable cash flow Comparable distributable cash flow per share Comparable distributable cash flow and comparable distributable cash flow per common share increased in 2015 compared to 2014 primarily due to higher comparable earnings, as described above. See the Financial condition section for more information on the calculation of comparable distributable cash flow. 24 TransCanada Management's discussion and analysis 2015
Funds used in investing activities Capital spending 1 year ended December 31 (millions of $) 2015 2014 2013 Natural Gas Pipelines 2,699 2,136 2,021 Liquids Pipelines 1,290 1,949 2,529 Energy 376 206 152 Corporate 64 46 50 4,429 4,337 4,752 1 Capital spending includes capital expenditures, maintenance capital expenditures and capital projects in development. Capital spending We invested $4.4 billion in capital projects in 2015 as part of our ongoing growth program which is a key part of our strategy to optimize the value of our existing assets and develop new, complementary assets in high demand areas that are expected to generate stable, predictable earnings and cash flow and to maximize returns to shareholders for years to come. Contributions to equity investments and acquisitions In 2015, we made contributions of $493 million to our equity investments primarily related to the construction of Grand Rapids and we spent $236 million to increase our ownership in Bruce Power. Balance sheet We continue to maintain a solid balance sheet while growing our total assets by $10.6 billion since 2013. At December 31, 2015, common equity represented 30 per cent (38 per cent in 2014) of our capital structure, after giving effect to the various 2015 specific items outlined on pages 20 and 21. See page 83 for more information about our capital structure. Common shares repurchased On November 19, 2015, we announced that the Toronto Stock Exchange (TSX) approved our normal course issuer bid (NCIB), which allows for the repurchase and cancellation of up to 21.3 million of our common shares, representing three per cent of our issued and outstanding common shares, between November 23, 2015 and November 22, 2016, at prevailing market prices plus brokerage fees, or such other prices as may be permitted by the TSX. As of February 10, 2016, we repurchased 7.1 million common shares at an weighted-average price per common share of $43.36 for a total cost of $307 million. TransCanada Management's discussion and analysis 2015 25
Page 1 and 2: STRENGTH & STABILITY 2015 Annual Re
Page 3 and 4: WHAT WE STRIVE FOR OUR VISION To be
Page 5 and 6: A SOLID FOUNDATION DEAR FELLOW SHAR
Page 7 and 8: In December 2015, we entered into a
Page 9 and 10: Management's discussion and analysi
Page 11 and 12: Risks and uncertainties • our abi
Page 13 and 14: Comparable measures We calculate th
Page 15 and 16: TransCanada Management's discussion
Page 17 and 18: as at February 5, 2016 Common share
Page 19 and 20: CAPITAL PROGRAM We are developing q
Page 21 and 22: 2015 FINANCIAL HIGHLIGHTS We use ce
Page 23 and 24: • a $34 million adjustment to inc
Page 25: Comparable earnings Comparable earn
Page 29 and 30: OUTLOOK Earnings We anticipate our
Page 31 and 32: Natural Gas Pipelines Our natural g
Page 33 and 34: We are the operator of all of the f
Page 35 and 36: RESULTS The following is a reconcil
Page 37 and 38: 8 Pipelines. In November 2014, we s
Page 39 and 40: OUTLOOK Earnings Canadian Pipelines
Page 41 and 42: at risk for the difference in expec
Page 43 and 44: More competition Changes in supply
Page 45 and 46: The Eastern Mainline Project is con
Page 47 and 48: BUSINESS RISKS The following are ri
Page 49 and 50: Liquids Pipelines Our existing liqu
Page 51 and 52: We are the operator of all of the f
Page 53 and 54: Comparable depreciation and amortiz
Page 55 and 56: U.S. shale oil supply growth origin
Page 57 and 58: Energy East Pipeline In April 2015,
Page 59 and 60: Energy Our Energy business includes
Page 61 and 62: We are the operator of all of our E
Page 63 and 64: RESULTS The following is a reconcil
Page 65 and 66: OUTLOOK Earnings We expect 2016 ear
Page 67 and 68: UNDERSTANDING THE ENERGY BUSINESS O
Page 69 and 70: Western and Eastern Power results C
Page 71 and 72: Average spot market power prices in
Page 73 and 74: Bruce Power results Results reflect
Page 75 and 76: U.S. Power results Comparable EBITD
Page 77 and 78:
withdrawal season. By matching purc
Page 79 and 80:
U.S. Power capacity payments A sign
Page 81 and 82:
OTHER INCOME STATEMENT ITEMS The fo
Page 83 and 84:
Net income attributable to non-cont
Page 85 and 86:
The decrease in equity in 2015 was
Page 87 and 88:
Net cash used in investing activiti
Page 89 and 90:
Junior subordinated notes issued (m
Page 91 and 92:
In December 2014, Series 1 sharehol
Page 93 and 94:
Long-term debt At the end of 2015,
Page 95 and 96:
GUARANTEES Bruce Power We and our p
Page 97 and 98:
Risk and Description Impact Monitor
Page 99 and 100:
Greenhouse gas emissions regulation
Page 101 and 102:
Derivatives designated as a net inv
Page 103 and 104:
CRITICAL ACCOUNTING ESTIMATES When
Page 105 and 106:
We base these valuations on our pro
Page 107 and 108:
Balance sheet presentation of deriv
Page 109 and 110:
Reporting discontinued operations I
Page 111 and 112:
year ended December 31 (millions of
Page 113 and 114:
QUARTERLY RESULTS Selected quarterl
Page 115 and 116:
FOURTH QUARTER 2015 HIGHLIGHTS Cons
Page 117 and 118:
Comparable EBITDA and comparable EB
Page 119 and 120:
Comparable EBITDA for Energy decrea
Page 121 and 122:
Management's report on Internal Con
Page 123 and 124:
Report of Independent Registered Pu
Page 125 and 126:
Consolidated statement of comprehen
Page 127 and 128:
Consolidated balance sheet at Decem
Page 129 and 130:
Notes to consolidated financial sta
Page 131 and 132:
Cash and Cash Equivalents The Compa
Page 133 and 134:
Canadian income taxes are not provi
Page 135 and 136:
The recognition of gains and losses
Page 137 and 138:
4. SEGMENTED INFORMATION year ended
Page 139 and 140:
year ended December 31, 2013 (milli
Page 141 and 142:
5. OTHER CURRENT ASSETS at December
Page 143 and 144:
Liquids Pipelines Keystone Pipeline
Page 145 and 146:
Summarized Financial Information of
Page 147 and 148:
Other U.S. Natural Gas Pipelines GT
Page 149 and 150:
Allowance for Funds Used During Con
Page 151 and 152:
At December 31, 2015, the Company's
Page 153 and 154:
The above deferred tax amounts have
Page 155 and 156:
16. LONG-TERM DEBT 2015 2014 Outsta
Page 157 and 158:
Long-Term Debt Retired The Company
Page 159 and 160:
18. NON-CONTROLLING INTERESTS The C
Page 161 and 162:
Stock Options Number of Options Wei
Page 163 and 164:
20. PREFERRED SHARES at December 31
Page 165 and 166:
The changes in AOCI by component ar
Page 167 and 168:
The most recent actuarial valuation
Page 169 and 170:
Pension plan assets are managed on
Page 171 and 172:
The significant weighted average ac
Page 173 and 174:
Commodity Price Risk The Company is
Page 175 and 176:
Balance Sheet Presentation of Non-D
Page 177 and 178:
The balance sheet classification of
Page 179 and 180:
2 3 Reported within Revenues on the
Page 181 and 182:
The fair value of the Company's der
Page 183 and 184:
$216 million. The Company's total i
Page 185 and 186:
28. SUBSEQUENT EVENTS Portland Natu
Page 187 and 188:
Five year financial highlights (mil
Page 189 and 190:
Investor information STOCK EXCHANGE
Page 191 and 192:
Shareholder assistance If you are a
Page 193 and 194:
Corporate governance Please refer t
Page 195:
Our annual report is online, visit
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