NOTE 9 – JUNIOR SUBORDINATED DEBENTURES AND PREFERRED SECURITIES December 31  (millions of dollars) Maturity Dates 2001 2000 Junior Subordinated Debentures 8.75% Issue  (2001 and 2000 – US$160 million) 2045 218 218 Preferred Securities 8.25% and 8.50% Issues  (2001 – US$12 million; 2000 – US$17 million) 2047 19 25 237 243 December 31 Number Redemption 2001  2000 of Shares Dividend Rate Price (millions (millions (thousands) Per Share Per Share of dollars) of dollars) CUMULATIVE FIRST PREFERRED SHARES Series U 4,000 $2.80 $50.00 195 195 Series Y 4,000 $2.80 $50.00 194 194 389 389 Number of Amount Shares (millions  (thousands) of dollars) Outstanding at January 1, 1999 463,708 4,331 Issued for cash or cash equivalent Under the dividend reinvestment and share purchase plan 10,254 195 Exercise of options 569 9 Outstanding at December 31, 1999 474,531 4,535 Issued for cash or cash equivalent Exercise of options 382 5 Outstanding at December 31, 2000 474,913 4,540 Issued for cash or cash equivalent Exercise of options 1,718 24 Outstanding at December 31, 2001 476,631 4,564 NOTE 11 – COMMON SHARES NOTE 10 – PREFERRED SHARES Preferred Securities The foreign exchange differential on the principal amount of the Junior Subordinated Debentures and 8.25 per cent Preferred Securities, which are Canadian Mainline financings, will be recovered through the tollmaking process. The Junior Subordinated Debentures are redeemable at par by the Company. The Company may elect to defer interest payments on the Junior Subordinated Debentures. Interest and deferred interest, if any, are payable in cash. The US$460 million 8.25 per cent Preferred Securities are redeemable by the Company at par at any time on or after October 8, 2003, and in certain circumstances, prior to that date. The Company may elect to defer interest payments on the Preferred Securities and settle the deferred interest in either cash or common shares. Since the deferred interest may be settled through the issuance of common shares at the option of the Company, the Preferred Securities are classified into their respective debt and equity components. The equity component of the Preferred Securities is $675 million at December 31, 2001 (2000 – $969 million). On November 7, 2001, the Company redeemed the US$200 million 8.50 per cent Preferred Securities, including accrued and unpaid interest to the redemption date, without premium or penalty. Junior Subordinated Debentures The authorized number of preferred shares issuable in series is unlimited. All of the cumulative first preferred shares are without par value. During 2000, the Company redeemed $328 million of preferred shares. On or after October 15, 2013, for the Series U shares, and on or after March 5, 2014, for the Series Y shares, the Company may redeem the shares at $50 per share. TRANSCANADA 54 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS