TransCanada Continues to Report Strong Performance

Calgary, Alberta - (TSE: TRP) (NYSE: TRP) Oct. 29, 2002

Third Quarter 2002 Highlights:

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

  • TransCanada PipeLines Limited's net income applicable to common shares from continuing operations (net earnings) and net income applicable to common shares for the third quarter 2002 were $175 million or $0.37 per share -- an increase of 10 per cent over net earnings of $159 million ($0.33 per share) for the same period in 2001.
  • Year-to-date 2002 net earnings were $567 million or $1.19 per share compared to $520 million or $1.09 per share for the comparable period in 2001. The results for the nine months ended September 30, 2002 include after-tax net earnings of $30 million or $0.06 per share representing the impact of the National Energy Board's decision on TransCanada's Fair Return Application for the period January 1, 2001 to September 30, 2002 and $7 million relating to TransCanada's proportionate share of a favourable ruling for Great Lakes Gas Transmission Limited Partnership with respect to Minnesota use tax paid in prior years. Effective September 30, 2002, the company adopted accrual accounting for energy trading contracts, changing from its previous policy of mark-to-market accounting for these contracts. This accounting change has been applied retroactively with restatement of prior periods.
  • Net income applicable to common shares for the nine months ended September 30, 2002 was $567 million or $1.19 per share compared to $433 million or $0.90 per share for the same period in 2001. The year-to-date 2001 results included a net loss from discontinued operations of $87 million or $0.19 per share, related to the Gas Marketing business, the disposition of which was substantially completed in 2001.
  • Funds generated from continuing operations for the third quarter 2002 were $463 million, an increase of $14 million compared to the same period last year. On a year-to-date basis, funds generated from continuing operations were $1,395 million compared to $1,263 million in 2001, an increase of 10 per cent.
  • TransCanada invested $201 million in its core businesses in the third quarter 2002 to further its growth strategies in pipelines and power.
  • In September 2002, TransCanada filed an application with the National Energy Board (NEB) for tolls on its Canadian Mainline natural gas transmission system. TransCanada requested the tolls be effective January 1, 2003 upon expiry of currently approved tolls. TransCanada has also filed a request with the NEB for a review and variance of its RH-4-2001 Decision on TransCanada's Fair Return application. In the 2003 tolls application, TransCanada requested the NEB approve a fair return for 2003 that reflects its decision on the review and variance application.
  • TransCanada's Board of Directors today declared a quarterly dividend of $0.25 per share for the quarter ended December 31, 2002 on the outstanding common shares. This is the 156th consecutive quarterly dividend on TransCanada's common shares and is payable on January 31, 2003 to shareholders of record at the close of business on December 31, 2002. The Board also declared regular dividends on TransCanada's preferred shares. 
  • For the nine months ended September 30, 2002:
      • Deliveries of natural gas on the Alberta System averaged 11.3 billion cubic feet per day (Bcf/d) (2001 - 11.1 Bcf/d)
      • Field receipts volumes for the Alberta System were 11.3 Bcf/d (2001 - 11.5 Bcf/d)
      • Canadian Mainline deliveries averaged 7.1 Bcf/d (2001 - 6.8 Bcf/d)
      • Canadian Mainline deliveries originating at the Alberta border and in Saskatchewan were 6.1 Bcf/d (2001 - 5.8 Bcf/d)
      • The BC System delivered an average of 1.0 Bcf/d (2001 - 1.1 Bcf/d)

"We are pleased to report continued solid earnings for the third quarter," said Hal Kvisle, TransCanada's chief executive officer. "Our positive earnings, cash flow and strong balance sheet are a direct result of our commitment to operational excellence and our low risk, asset-based approach to conducting business."

In the third quarter 2002, TransCanada furthered its strategy of growing and optimizing its power assets by signing an agreement with an affiliate of El Paso Corporation for the acquisition of the 300-megawatt (MW) ManChief power plant near Brush, Colorado. TransCanada expects to complete the approximately US$127 million transaction (subject to post-closing adjustments) in the fourth quarter 2002.

"The ManChief acquisition will bring the amount of power TransCanada owns, controls or has under construction to more than 2,550 megawatts," said Mr. Kvisle. "The entire capacity of the plant is sold under long-term tolling contracts and will be immediately accretive to earnings."

Also in the third quarter 2002, TransCanada acquired a general partnership interest in Northern Border Partners, L.P. for $19 million. As a result of this transaction, TransCanada is entitled to a 17.5 per cent vote on the partnership policy committee of Northern Border Partners, L.P., which owns 70 per cent of Northern Border Pipeline Company.

"Our management role in Northern Border Partners will contribute to TransCanada's ability to bring northern natural gas to the growing North American marketplace," said Mr. Kvisle. "The Northern Border Pipeline transports gas from the Montana-Saskatchewan border to markets in the midwestern United States. In our view, it is a preferred route to move gas from the North to markets in the future."

He concluded, "Over the past two years, we have consistently applied a disciplined and steady approach to the management and growth of our pipeline and power businesses. As a result, TransCanada continues to improve its strong financial position and deliver solid results to its shareholders - a significant accomplishment during a volatile time for the energy industry.

"There are numerous opportunities in the North American marketplace in both pipelines and power generation. We are in the enviable position of having the financial capacity to act when the time is right," he said. "However, as we have stated before, we will be prudent and continue to approach each opportunity with a focus on enhancing and maximizing shareholder value while
maintaining our financial integrity."

Conference Call

TransCanada will hold a teleconference today at 1:00 p.m. (Mountain) / 3:00 p.m. (Eastern) to discuss the third quarter 2002 financial results and general developments and issues concerning the company. Analysts, members of the media and other interested parties wanting to participate in the call should dial 1-800-273-9672 or 416-695-5806 (Toronto area) at least 10 minutes prior to the start of the call. No pass code is required. A live audio web cast of the teleconference will also be available on TransCanada's web site at

The conference will begin with a short address by members of TransCanada's executive management, followed by a question and answer period for investment analysts. A question and answer period for members of the media will immediately follow.

A replay of the teleconference will be available two hours after the conclusion of the call until midnight, November 5, 2002 by dialing 1-800-408-3053 or 416-695-5800 (Toronto area) and entering passcode 1291106. The web cast will be archived and available for replay.

About TransCanada

TransCanada is a leading North American energy company. It is focused on natural gas transmission and power services with employees who are expert in these businesses. The company's network of approximately 38,000 kilometres of pipeline transports the majority of western Canada's natural gas production to the fastest growing markets in Canada and the United States. TransCanada owns, controls or is constructing a total of approximately 2,250 megawatts of power -- an amount of power that can meet the needs of more than two million average households. The company's common shares trade under the symbol TRP on the Toronto and New York stock exchanges.


For further information, please contact:

Media Inquiries:
Glenn Herchak / Kurt Kadatz
(403) 920-7877

Investor & Analyst Inquiries:
David Moneta / Debbie Persad
(403) 920-7911
Toll free (888) 887-7717

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