MANAGEMENT ’ SDISCU S SIONAN DANAL YSIS CONSOLIDATED RESULTS-AT-A-GLANCE Year ended December 31 (millions of dollars except per share amounts) 2001 2000 1999 Net Income/(Loss) Applicable to Common Shares Net earnings before unusual items 670 592 515 Unusual items – 58 (61) Net earnings from continuing operations 670 650 454 Net (loss)/income from discontinued operations (67) 61 (534) 603 711 (80) Net Income/(Loss) Per Share – Basic and Diluted Net earnings per share before unusual items $ 1.41 $ 1.25 $ 1.07 Unusual items per share – 0.12 (0.13) Net earnings per share from continuing operations 1.41 1.37 0.94 Net (loss)/income per share from discontinued operations (0.14) 0.13 (1.13) $ 1.27 $ 1.50 $ (0.19) Net income applicable to common shares for the year ended December 31, 2001 was $603 million or $1.27 per share after reflecting a net loss from discontinued operations of $67 million or $0.14 per share. This compares to net income of $711 million or $1.50 per share in 2000, which included net income from discontinued operations of $61 million or $0.13 per share, and a net loss of $80 million or $0.19 per share in 1999, which included a net loss from discontinued operations of $534 million or $1.13 per share. TransCanada’s net earnings before unusual items for the year ended December 31, 2001 were $670 million or $1.41 per share compared to $592 million or $1.25 per share for 2000 and $515 million or $1.07 per share in 1999. Higher earnings from the Power business, as well as reduced financial and preferred equity charges due to lower net debt balances and preferred securities and preferred share redemptions were the primary contributors to the increase over 2000 and 1999 results. Lower earnings from the Transmission business in 2001 partially offset the improved results from the other segments. Also reflected in the 2001 results are the benefits from the company’s continued commitment to cost reductions. As a result of initiatives undertaken throughout TransCanada’s  businesses, the company achieved annual pre-tax operating cost savings of approximately $55 million in 2001, $60 million in 2000 and $95 million in 1999. The cost savings were primarily delivered by TransCanada’s Transmission business and have been shared between its customers and shareholders. Net earnings from continuing operations in 2001, after unusual items, were $670 million compared to  $650 million and $454 million in 2000 and 1999, respectively. There were no unusual items reported in 2001. The $58 million of unusual items included in the 2000 net earnings from continuing operations consisted of gains on the sale of assets amounting to $30 million, after tax, or $0.06 per share, and tax recoveries of $28 million or $0.06 per share, reflecting the impact of tax law and income tax rate changes in the February 2000 and October 2000 Federal budgets. The $61 million of unusual items included in the 1999 net earnings from continuing operations consisted of restructuring and other costs of $108 million, after tax, or $0.23 per share, partially offset by a  $47 million, after tax, or $0.10 per share gain on the sale of a portion of TransCanada’s investment in Northern Border Pipeline Company (Northern Border). TransCanada’s results in 2001 reflect the plan approved by the Board of Directors in July 2001 to dispose of the Gas Marketing business which is included in discontinued operations. All prior period comparative results have been restated to reflect Gas Marketing as discontinued operations. The 2001 net loss from discontinued operations of $67 million is comprised of a positive $20 million after-tax adjustment to the provision for loss on discontinued operations originally recorded in 1999 relating to the December 1999 divestiture plan (December Plan) and an $87 million after-tax charge relating to Gas Marketing. TRANSCANADA 16