SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
11-K
|
þ
|
ANNUAL REPORT PURSUANT TO
SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended December 31, 2008.
OR
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the transition period from __________ to __________
Commission
File No. 1-31690
|
A.
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Full
title of the plan and the address of the plan, if different from that of
the issuer named below:
|
Non
Union Plan #46840 – TransCanada 401(k) and Savings Plan
TransCanada
USA Services Inc., 13710 FNB Parkway,
Omaha,
Nebraska 68154-5200
|
B.
|
Name
of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
|
TransCanada
Corporation
450
– 1 Street S.W., Calgary, Alberta, T2P 5H1, Canada
NON
UNION PLAN #46840 – TRANSCANADA 401(K) AND SAVINGS PLAN
TABLE
OF CONTENTS
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REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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1
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FINANCIAL
STATEMENTS
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2
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||
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Statements
of Net Assets Available for Benefits as of December 31, 2008 and
2007
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|||
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Statement
of Changes in Net Assets Available for Benefits for the Year Ended
December 31, 2008
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||
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Notes
to Financial Statements
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|||
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SUPPLEMENTAL
SCHEDULE
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9
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||
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Schedule
H, Part IV, Line 4i
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|||
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Schedule
of Assets (Held at End of Year) as of December 31, 2008
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|||
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SIGNATURE
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|||
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EXHIBIT
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|||
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The
following exhibit is filed herewith:
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|||
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Exhibit
23.1 Consent of Independent Registered Public Accounting Firm
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|||
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NOTE:
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|||
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All
other schedules required by Section 2520.103-10 of the Department of
Labor’s Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 have been omitted because
they are not applicable.
|
|||
TRANSCANADA
401(K) AND SAVINGS PLAN
FINANCIAL
STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER
31, 2008 AND 2007
AND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Report
of Independent Registered Public Accounting Firm
Plan
Administrator
TransCanada
401(k) and Savings Plan
We have
audited the accompanying statements of net assets available for plan benefits of
the TransCanada 401(k) and Savings Plan (the Plan) as of December 31, 2008 and
2007, and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 2008. These financial
statements are the responsibility of the Plan’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Plan was not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Plan’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly in all
material respects, the net assets available for plan benefits of the TransCanada
401(k) and Savings Plan as of December 31, 2008 and 2007, and the changes in net
assets available for plan benefits for the year ended December 31, 2008 in
conformity with accounting principles generally accepted in the United
States.
Our
audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of
assets held at end of year as of December 31, 2008 is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor’s Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is
the responsibility of the Plan’s management. The supplemental
schedule has been subjected to the auditing procedures applied in the audit of
the 2008 basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Eide Bailly LLP
Greenwood
Village, Colorado
June 29,
2009
Page 1
TRANSCANADA
401(K) AND SAVINGS PLAN
STATEMENTS
OF NET ASSETS AVAILABLE FOR BENEFITS
|
December
31 (dollars)
|
2008
|
2007
|
|||
|
Assets
|
|||||
|
Investments
|
|||||
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Investments at fair value (Note
3)
|
52,033,338
|
53,542,137
|
|||
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Participant loans
|
2,221,944
|
1,918,272
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|||
|
54,255,282
|
55,460,409
|
||||
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Employer
contribution receivable
|
325,246
|
3,181,796
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|||
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Net
Assets Available for Benefits
|
54,580,528
|
58,642,205
|
The
accompanying notes to the financial statements are an integral part of these
statements.
Page 2
TRANSCANADA
401(K) AND SAVINGS PLAN
STATEMENT
OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
|
Year
ended December 31 (dollars)
|
2008
|
|
|
Additions
|
||
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Contributions:
|
||
|
Employee
contributions
|
12,222,230
|
|
|
Employer
contributions
|
7,225,751
|
|
|
19,447,981
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||
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Transfers (Note 6)
|
2,179,390
|
|
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Interest and dividend
income
|
2,180,180
|
|
|
Total
Additions
|
23,807,551
|
|
|
Deductions
|
||
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Net decrease in fair value of
investments (Note 3)
|
24,432,612
|
|
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Payment of plan
benefits
|
3,422,638
|
|
|
Administrative
expenses
|
13,978
|
|
|
Total
Deductions
|
27,869,228
|
|
|
Decrease
in Net Assets Available for Benefits
|
(4,061,677)
|
|
|
Net
Assets Available for Benefits
|
||
|
Beginning of Year
|
58,642,205
|
|
|
End of Year
|
54,580,528
|
The
accompanying notes to the financial statements are an integral part of these
statements.
Page 3
TRANSCANADA
401(K) AND SAVINGS PLAN
NOTES
TO FINANCIAL STATEMENTS
NOTE
1: DESCRIPTION OF PLAN
The
following description of the TransCanada 401(k) and Savings Plan (the Plan)
provides only general information. Participants and all others should
refer to the Plan document for a more complete description of the Plan’s
provisions.
The Plan
is a defined contribution plan for retirement benefits. Any employee of
TransCanada USA Services Inc. (TCUSA or the Company) or its subsidiaries that
has attained the age of 21 and is not covered by a collective bargaining
agreement may participate. The Plan excludes non-resident persons with no income
from a United States source and non-resident persons who have been non-residents
for a period of not less than 183 days. The Plan is subject to the
provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
On August
26, 2008, TransCanada Corporation (TransCanada), parent company of TCUSA,
acquired the Ravenswood power generating facility (Ravenswood) from National
Grid plc (National Grid). Historically, Ravenswood non-union employees had
participated in the KeySpan Energy 401(k) Plan for Management Employees
sponsored by National Grid. As of the acquisition date, Ravenswood
employees experienced a benefit event under their previous benefit plan. The
employees were provided a one-time option to transfer their outstanding loan
balances and associated account balances. These transfers occurred on October 2,
2008. Employees who did not take advantage of this option may
transfer their account balances at any time.
The Board
of Directors of TCUSA has appointed Fidelity Management Trust Company (Fidelity
or the Trustee) as custodian and trustee of the Plan’s assets.
Vesting
Participants
are immediately vested in their contributions (including rollovers), employer
contributions, and any earnings thereon.
Payment
of Benefits
Participants
are eligible to request a distribution of their vested amounts upon retirement,
death, total and permanent disability, severance of employment with the Company
or, in very limited circumstances, in the event of financial
hardship. Distributions are made in the form of a lump-sum payment or
a rollover to another qualified account.
A
participant’s normal retirement age is 65, however, a participant may elect to
withdraw all or a portion of their contributions after the age of 59½, subject
to certain conditions. A participant may receive pension benefits
commencing on or after age 55 provided they have terminated their employment
with the Company.
Participants
may elect to withdraw all or a portion of their vested matching and profit
sharing contributions that have been in their account for at least 24 months and
after they have at least 60 months of participation in the Plan.
Page 4
Forfeitures
As
participants are immediately 100 per cent vested in their account balance, there
are no forfeitures.
Employee
and Employer Contributions
Each
year, participants may voluntarily agree to contribute up to the lesser of 60
per cent of their compensation, as defined by the Plan document, and $15,500,
subject to certain limitations under the Internal Revenue Code (the
Code). In addition, employees may contribute up to 100 per cent of
bonuses paid by the Company. The Company will match 100 per cent of each
participant’s contributions up to five per cent of the participant’s
compensation. The Company may make annual discretionary profit
sharing contributions in an amount to be determined at year end by TCUSA’s Board
of Directors.
Effective
January 1, 2008, TCUSA Services Inc.’s defined benefit retirement plan (the
Retirement Plan) was changed to allow employees with less than ten years of
continuous service the choice to participate in the Retirement Plan, or elect to
receive a seven per cent company contribution to the Plan. On an
annual basis, until they attain ten years of continuous service, employees who
choose the Plan may elect to participate in the Retirement Plan. Once the
employee attains ten years of continuous service, the employee is automatically
and permanently enrolled in the Retirement Plan. The information
presented in these financial statements does not include information related to
the Retirement Plan.
Participant
Accounts
Each
participant’s account is credited with the participant’s contribution and an
allocation of the Company’s contribution and Plan earnings. Earnings
are allocated by the fund based on the ratio of a participant’s account invested
in a particular fund to all participants’ investments in that
fund. Plan expenses are generally paid by the Company, which is the
Plan sponsor. Affected participant accounts are charged expenses
related to participant loans.
Participants
are responsible for investment decisions relating to the investment of assets in
their account. The Trustee carries out all investing transactions on
behalf of the participant.
Participant
Loans
Participants
may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to
the lesser of $50,000 or 50 per cent of their vested account balance, reduced by
the highest outstanding loan balance in their account during the prior twelve
month period. Loan terms range from one to five years for general
loans or up to 15 years for the purchase of a primary residence. The
loans are secured by the balance in the participant’s account and bear interest,
at a reasonable interest rate, as determined by the Plan Administrator, based on
prevailing market interest rates at the time. Interest rates remain fixed
throughout the duration of the loan. The interest rate on loans
outstanding at December 31, 2008 ranged from 4.25 per cent to 9.25 per cent
(2007 – 5.00 per cent to 9.50 per cent). Principal and interest are
paid through payroll deductions.
Investments
in TransCanada Corporation
Effective
January 1, 2008, stock of TransCanada was available to participants in the Plan.
A participant’s portfolio may consist of up to ten per cent of TransCanada
stock.
Page 5
Administrative
Expenses
The
Company is the Plan Administrator and is responsible for filing all required
reports on behalf of the Plan. The Company provides or pays for
certain accounting, legal, and management services on behalf of the Plan. The
Company incurred $27,950 of expenses on behalf of the Plan in the year ending
December 31, 2008. The Company has not charged the Plan for these
expenses or services.
Plan
Termination
Although
it has not expressed any intent to do so, with approval from its Board of
Directors, the Company has the right under the Plan to discontinue contributions
at any time and to terminate the Plan subject to the provisions of
ERISA.
NOTE
2: SUMMARY OF ACCOUNTING POLICIES
Changes
in Accounting Policies for 2008
The Plan
adopted the provisions of Statement of Financial Accounting Standards No. 157,
“Fair Value Measurements” (FAS 157) for its assets measured at fair value on a
recurring basis, effective January 1, 2008. Fair value is defined as
the price that would be received to sell an asset or paid to transfer a
liability (i.e., the ‘exit price’) in an orderly transaction between market
participants at the measurement date.
The
Plan’s financial assets that are recorded at fair value on a recurring basis are
categorized as Level I based upon a fair value hierarchy in accordance with FAS
157. Fair values of assets included in Level I are determined by
reference to quoted prices in active markets for identical assets and
liabilities. There is no current period disclosure required under FAS 157 for
items measured at fair value on a non-recurring basis.
Assets
measured at fair value on a recurring basis are categorized in accordance with
FAS 157 as follows:
|
December
31, 2008 (dollars)
|
Quoted
prices in active markets
(Level
I)
|
Significant
other observable inputs (Level II)
|
Significant
unobservable inputs
(Level
III)
|
Total
|
||||||||||||
|
Mutual
funds
|
51,660,455 | - | - | 51,660,455 | ||||||||||||
|
Common
stock
and other
|
372,883 | - | - | 372,883 | ||||||||||||
| Participant loans | - | - | 2,221,944 | 2,221,944 | ||||||||||||
|
Total
Investments
|
52,033,338 | - | 2,221,944 | 54,255,282 | ||||||||||||
The following table presents a summary of changes in the fair value of the
Plan's Level III assets:
| December 31 (dollars) |
2008
|
|||
| Participant Loans | ||||
| Beginning balance at January 1, 2008 | 1,918,272 | |||
| Purchases, sales, issuances and settlements (net) | 303,672 | |||
| Ending balance at December 31, 2008 | 2,221,944 | |||
Basis
of Presentation
The
financial statements of the Plan are prepared on a going concern basis and do
not purport to reflect the financial status of the Plan if it were terminated on
the valuation date. These financial statements present the aggregate
financial position of the Plan and provide no information about the portion of
assets attributable to any individual member or group of members. Amounts are
stated in U.S. dollars unless otherwise indicated.
Page 6
The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, and changes therein, and
disclosure of contingent assets and liabilities. Actual results could
differ from these estimates.
Basis
of Accounting
These
financial statements are prepared using the accrual basis of
accounting.
Investment
Valuation and Income Recognition
The
Plan’s investments are stated at fair value. The fair value of shares is
determined by quoted prices in active markets using the closing sale price on
the last day of the Plan year.
Interest
income is recorded on the accrual basis; dividends are recorded on the
ex-dividend date.
Net
increase or decrease in fair value of investments consists of: (1)
the net change in unrealized appreciation or depreciation on investments held
during the year and (2) the realized gains or losses recognized on the sale of
investments during the year.
Purchases
and sales of securities are recorded on trade-date basis. Gains and
losses on sales of these securities are reported on an average-cost
basis.
Participant
loans are valued at the outstanding balances, which approximate fair
value.
Contributions
and Payment of Benefits
Contributions
are recorded in the period in which they become obligations of the
Company. Benefits are recorded when paid.
Concentration
of Risk
The
Plan’s exposure to credit loss in the event of nonperformance of investments
managed by the Trustee is limited to the carrying value of such
instruments. The Plan’s concentrations of credit risk, interest rate
risk and market risk are dictated by the Plan’s provisions as well as those of
ERISA and the participants’ investment preference.
NOTE
3: INVESTMENTS
The Plan
utilizes various investment instruments, including common stock funds and mutual
funds. Investment securities, in general, are exposed to various
risks, such as interest rate, credit and overall market
volatility. Due to the level of risk associated with certain
investment securities and the level of uncertainty related to changes in value
of these investments, it is reasonably possible that changes in the values of
investment securities may occur in the near term and that such changes could
materially affect participant account balances and the amounts reported in the
financial statements.
Page 7
The
following is a summary of investments which represented five per cent or more of
the Plan’s Net Assets Available for Benefits:
|
December
31 (dollars)
|
2008
|
2007
|
|||
|
Fidelity
Retirement Money Market Fund
|
6,407,816
|
* *
|
|||
|
Fidelity
Diversified International Fund
|
5,930,660
|
8,727,279
|
|||
|
Fidelity
U.S. Bond Index Fund
|
4,094,943
|
* *
|
|||
|
Fidelity
Equity Income Fund
|
3,497,184
|
4,924,288
|
|||
|
Fidelity
Freedom 2020 Fund ®
|
3,351,955
|
3,685,300
|
|||
|
Baron
Asset Fund
|
3,330,223
|
4,548,245
|
|||
|
Artisan
Mid Cap Value Fund
|
2,977,990
|
2,824,343
|
* Investment
represents less than five per cent of the Plan’s net assets.
Net
Decrease in Fair Value of Investments
Net
decrease in fair value of investments by major category (including investments
purchased, sold and held during the year) as determined by quoted market prices
was as follows:
|
December
31 (dollars)
|
2008
|
|
|
Mutual
funds
|
24,322,207
|
|
|
Common
stock and other
|
110,405
|
|
|
Net
Decrease in Fair Value of Investments
|
24,432,612
|
NOTE
4: INCOME TAXES
The Plan
is a prototype plan designed by the Trustee. The Internal Revenue Service has
determined and informed the Company by a letter dated October 9, 2003 that the
Plan and related trust are designed in accordance with applicable sections of
the Code. Although the Plan has been amended since receiving the
determination letter, the plan administrator and the Plan’s tax counsel believe
that the Plan is designed and is currently being operated in compliance with the
applicable requirements of the Code. The Plan is exempt from federal
income taxes. Accordingly, no provision for federal income taxes has
been made in the accompanying financial statements.
NOTE
5: PARTY-IN-INTEREST AND RELATED PARTY TRANSACTIONS
Certain
Plan investments are shares of mutual funds managed by Fidelity, the Trustee as
defined by the Plan. Therefore these transactions qualify as party-in-interest.
The expenses incurred on behalf of the Plan by the Company are disclosed in Note
1.
At
December 31, 2008, Plan investments included $371,740 (2007 – nil) of
TransCanada common stock and $1,143 (2007 – nil) in a TransCanada stock purchase
account.
NOTE
6: TRANSFERS
Transfers
relate to participant accounts that are transferred into the Plan for reasons
other than a benefit event. The transfers in 2008 relate primarily to
employee accounts transferred into the Plan as a result of the Company’s
acquisition of Great Lakes Transmission Limited Partnership (Great Lakes) in
2007. Transfers also include accounts related to employees who are no
longer covered by a collective bargaining agreement.
Page 8
TRANSCANADA
401(K) AND SAVINGS PLAN
EIN #: 98-0460263
PLAN
#: 001
FORM
5500 SCHEDULE H, PART IV, LINE 4i – SCHEDULE OF ASSETS (HELD AT END OF
YEAR)
AS
OF DECEMBER 31, 2008
|
(a)
|
(b)
Identity
of Issuer, Borrower,
Lessor
or Similar Party
|
(c)
Description
of Investment
|
(e)
Current
Value
(US
dollars)
|
||||
|
*
|
Fidelity
Retirement Money Market Portfolio
|
Mutual
Fund
|
6,407,816
|
||||
|
*
|
Fidelity
Diversified International Fund
|
Mutual
Fund
|
5,930,660
|
||||
|
*
|
Fidelity
U.S. Bond Index Fund
|
Mutual
Fund
|
4,094,943
|
||||
|
*
|
Fidelity
Equity Income Fund
|
Mutual
Fund
|
3,497,184
|
||||
|
*
|
Fidelity
Freedom 2020 Fund®
|
Mutual
Fund
|
3,351,955
|
||||
|
Baron
Asset Fund
|
Mutual
Fund
|
3,330,223
|
|||||
|
Artisan
Mid Cap Value Fund
|
Mutual
Fund
|
2,977,990
|
|||||
|
*
|
Fidelity
Export & Multinational Fund
|
Mutual
Fund
|
2,230,642
|
||||
|
*
|
Spartan
® U.S. Equity Index Fund
|
Mutual
Fund
|
2,083,311
|
||||
|
*
|
Fidelity
Dividend Growth Fund
|
Mutual
Fund
|
2,042,121
|
||||
|
*
|
Fidelity
Freedom 2030 Fund®
|
Mutual
Fund
|
1,927,881
|
||||
|
*
|
Fidelity
Freedom 2015 Fund
|
Mutual
Fund
|
1,922,909
|
||||
|
*
|
Fidelity
Inflation Protected Bond Fund
|
Mutual
Fund
|
1,726,073
|
||||
|
*
|
Fidelity
Freedom 2025 Fund
|
Mutual
Fund
|
1,482,757
|
||||
|
*
|
Fidelity
Fund
|
Mutual
Fund
|
1,437,573
|
||||
|
RS
Partners A
|
Mutual
Fund
|
1,339,578
|
|||||
|
*
|
Fidelity
Freedom 2035 Fund
|
Mutual
Fund
|
1,337,891
|
||||
|
*
|
Fidelity
Freedom 2010 Fund®
|
Mutual
Fund
|
1,320,211
|
||||
|
*
|
Fidelity
Aggressive Growth Fund
|
Mutual
Fund
|
1,236,382
|
||||
|
Hartford
Growth Y
|
Mutual
Fund
|
662,820
|
|||||
|
*
|
Fidelity
Freedom 2040 Fund®
|
Mutual
Fund
|
476,650
|
||||
|
*
|
Fidelity
Freedom 2050 Fund
|
Mutual
Fund
|
240,431
|
||||
|
*
|
Fidelity
Freedom 2000 Fund®
|
Mutual
Fund
|
229,205
|
||||
|
*
|
Fidelity
Freedom Income Fund®
|
Mutual
Fund
|
184,294
|
||||
|
*
|
Fidelity
Freedom 2045 Fund
|
Mutual
Fund
|
111,844
|
||||
|
*
|
Fidelity
Freedom 2005 Fund
|
Mutual
Fund
|
77,111
|
||||
|
Total
Mutual Funds
|
51,660,455
|
||||||
| * |
TransCanada
Corporation
|
Common
Stock
|
371,740
|
||||
| * |
TransCanada
Corporation
|
Stock
Purchase Account
|
1,143
|
||||
|
Participant
loans
|
Interest
rates ranging from 4.25% to 9.25% maturing through 2023
|
2,221,944
|
|||||
|
Total
Investments
|
54,255,282
|
* Represents
a party-in-interest (Note 5).
See accompanying report of
independent registered public accounting firm.
Page 9
SIGNATURES
The Plan. Pursuant
to the requirements of the Securities Exchange Act of 1934, TransCanada USA
Services Inc., as Plan Administrator, has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated:
June 29, 2009
|
Non
Union Plan #46840–TransCanada 401(k) and
Savings Plan
|
|||
|
By:
|
/s/ Wendy L. Hanrahan |
|
|
|
Wendy
L. Hanrahan
Vice-President
TransCanada
USA Services Inc., the Plan
Administrator
|
|||
|
|
EXHIBIT
INDEX
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm to incorporation by
reference in Form S-8.
|
Exhibit
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Plan
Administrator
TransCanada
401(k) and Savings Plan
We
consent to the incorporation by reference in the Registration Statement (No.
333-151736) on Form S-8 of TransCanada Corporation of our report dated
June 29, 2009 relating to the statements of net assets available for plan
benefits of the TransCananada 401(k) and Savings Plan as of December 31, 2008
and 2007, and the related statement of changes in net assets available for plan
benefits for the year ended December 31, 2008, and the related supplemental
schedule as of December 31, 2008, which report appears in the December 31, 2008
Annual Report on Form 11-K of the TransCanada 401(k) and Savings
Plan.
&
#160;
&
#160; /s/ Eide Bailly
LLP
Greenwood
Village, Colorado
June
29, 2009