STRENGTH & STABILITY

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Dividends We increased the quarterly dividend on our outstanding common shares by nine per cent to $0.565 per common share for the quarter ending March 31, 2016 which equates to an annual dividend of $2.26 per common share and reflects our commitment to grow our common share dividend at an average annual rate of eight to ten per cent through 2020. This is the 16th consecutive year we have increased the dividend on our common shares. Dividends declared per common share Dividend reinvestment plan Under our dividend reinvestment plan (DRP), eligible holders of TransCanada common or preferred shares can reinvest their dividends and make optional cash payments to buy additional TransCanada common shares on the open market. Quarterly dividend on our common shares $0.565 per common share (for the quarter ending March 31, 2016) Annual dividends on our preferred shares 1 Series 1 $0.8165 2 Series 2 $0.6045 3 Series 3 $0.538 4 Series 4 $0.4445 3 Series 5 $0.56575 5 Series 6 $0.50925 6 Series 7 $1.00 Series 9 $1.0625 Series 11 $0.95 1 2 3 4 5 6 Annual dividend based on applicable annual or quarterly floating rate as of February 10, 2016. Dividend rate changed in December 2014. Floating quarterly dividend rate resets each quarter. See the Financial condition section for more information. Series 3 preferred shares dividend rate changed in June 2015. Series 5 preferred shares dividend rate changed in February 2016. Series 6 preferred shares were issued February 1, 2016. Cash dividends year ended December 31 (millions of $) 2015 2014 2013 Common shares 1,446 1,345 1,285 Preferred shares 92 94 71 26 TransCanada Management's discussion and analysis 2015
OUTLOOK Earnings We anticipate our 2016 earnings, after excluding specific items, to be higher than 2015 mainly due to the following: • Expected earnings from Topolobampo and Mazatlan Pipeline projects coming into service • Positive impact of a stronger U.S. dollar on U.S. denominated earnings • Increase in the average investment base for the NGTL System • Higher earnings associated with incremental contracts from ANR • Cost savings achieved as a result of corporate restructuring • Consistent earnings in Energy with higher earnings in U.S. Power, relatively consistent earnings in Western Power and Bruce Power and slightly lower earnings in Eastern Power. Partially offset by: • Reduced capitalized interest due to the Keystone XL Pipeline project Presidential permit denial • Lower anticipated earnings from the Keystone Pipeline System based on expiring short-term contracts for Cushing Marketlink. Natural Gas Pipelines Earnings from the Natural Gas Pipelines segment are affected by regulatory decisions and the timing of these decisions. Earnings are also impacted by market conditions, which drive the level of demand and the rates we secure for our services. Canadian Mainline earnings are anticipated to be lower in 2016 due to a declining investment base. These lower earnings are expected to be largely offset by growth in the NGTL System investment base as we continue to invest in connecting new natural gas supply and respond to growing demand in the northeastern B.C. and Alberta markets. U.S. and International Gas Pipelines earnings in 2016 are expected to be higher than 2015 as we pursue opportunities for continued growth in end use markets for natural gas and evaluate our commercial and operational positions in ANR and Great Lakes in response to positive developments in supply fundamentals in those market areas. On January 29th, 2016, ANR filed a Section 4 Rate Case with the FERC to increase its base rates. We anticipate that the proposed rates, which are subject to customer refund and pending final FERC approval, will take effect in third quarter 2016. Mexico Pipeline earnings are expected to be higher in 2016 as the Topolobampo and Mazatlan Pipeline projects come into service in late 2016. Liquids Pipelines With the exception of the Keystone XL impairment impact, our 2016 earnings are expected to be slightly lower than our 2015 earnings due to short term contract expiration and market conditions related to the lower crude oil price environment. Energy Earnings in the Energy segment are generally maximized by maintaining and optimizing the operations of our power plants and through various marketing activities. Although a significant portion of Energy’s output is sold under long-term contracts, output that is sold under shorter-term arrangements or at spot prices will continue to be affected by fluctuations in commodity prices. Overall we expect Energy earnings in 2016 to be consistent with 2015. Western Power earnings in 2016 are anticipated to be consistent with 2015 as a result of a well-supplied Alberta power market, slower demand growth and lower natural gas prices. Negative pressure on earnings in 2016 is expected due to the increase in the government imposed emissions reductions targets and higher per tonne GHG emissions costs. Eastern Power earnings in 2016 are expected to be slightly lower as a result of the lower contractual earnings at Bécancour and reduced earnings from the sale of unused natural gas transportation. Bruce Power equity income in 2016 is expected to be consistent with 2015 results. The net impact of the additional ownership interest obtained in Bruce Power in 2015 is anticipated to be largely offset by the increased planned maintenance activity in 2016. U.S. Power results in 2016 are expected to be higher than 2015 due to the net impact of the additional earnings from the acquisition of the Ironwood natural gas fired, combined cycle power plant and lower marketing margins reflecting the return to normalized levels of costs and decreased volatility of forward natural gas and power prices in the New England market. Natural Gas Storage earnings are expected to be higher as a modest recovery of seasonal spreads is expected to occur in 2016. TransCanada Management's discussion and analysis 2015 27
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 and 26: Comparable earnings Comparable earn
Page 27: Funds used in investing activities
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
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U.S. Power capacity payments A sign
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OTHER INCOME STATEMENT ITEMS The fo
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Net income attributable to non-cont
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The decrease in equity in 2015 was
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Net cash used in investing activiti
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Junior subordinated notes issued (m
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In December 2014, Series 1 sharehol
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Long-term debt At the end of 2015,
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GUARANTEES Bruce Power We and our p
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Risk and Description Impact Monitor
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Greenhouse gas emissions regulation
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Derivatives designated as a net inv
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CRITICAL ACCOUNTING ESTIMATES When
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We base these valuations on our pro
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Balance sheet presentation of deriv
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Reporting discontinued operations I
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year ended December 31 (millions of
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QUARTERLY RESULTS Selected quarterl
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FOURTH QUARTER 2015 HIGHLIGHTS Cons
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Comparable EBITDA and comparable EB
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Comparable EBITDA for Energy decrea
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Management's report on Internal Con
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Report of Independent Registered Pu
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Consolidated statement of comprehen
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Consolidated balance sheet at Decem
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Notes to consolidated financial sta
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Cash and Cash Equivalents The Compa
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Canadian income taxes are not provi
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The recognition of gains and losses
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4. SEGMENTED INFORMATION year ended
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year ended December 31, 2013 (milli
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5. OTHER CURRENT ASSETS at December
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Liquids Pipelines Keystone Pipeline
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Summarized Financial Information of
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Other U.S. Natural Gas Pipelines GT
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Allowance for Funds Used During Con
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At December 31, 2015, the Company's
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The above deferred tax amounts have
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16. LONG-TERM DEBT 2015 2014 Outsta
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Long-Term Debt Retired The Company
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18. NON-CONTROLLING INTERESTS The C
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Stock Options Number of Options Wei
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20. PREFERRED SHARES at December 31
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The changes in AOCI by component ar
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The most recent actuarial valuation
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Pension plan assets are managed on
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The significant weighted average ac
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Commodity Price Risk The Company is
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Balance Sheet Presentation of Non-D
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The balance sheet classification of
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2 3 Reported within Revenues on the
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The fair value of the Company's der
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$216 million. The Company's total i
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28. SUBSEQUENT EVENTS Portland Natu
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Five year financial highlights (mil
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Investor information STOCK EXCHANGE
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Shareholder assistance If you are a
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Corporate governance Please refer t
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Our annual report is online, visit
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STRENGTH & STABILITY

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