NOTE 6 ACQUISITIONS

2014 Acquisition

On October 1, 2014, the Partnership acquired the remaining 30 percent interest in Bison from a subsidiary of TransCanada. The total purchase price of the 2014 Acquisition was $215 million plus purchase price adjustments of $2 million. The acquisition of Bison was financed through combinations of (i) net proceeds from the ATM Program (refer to Note 9), and (ii) short-term financing (refer to Note 7).

Prior to this transaction, the remaining 30 percent interest held by a subsidiary of TransCanada was reflected as non-controlling interest in the Partnership's consolidated financial statements. The 2014 Acquisition of this already-consolidated entity was accounted as a transaction between entities under common control, similar to a pooling of interests, whereby the acquired interest was recorded at TransCanada's carrying value and the total excess purchase price paid was recorded as a reduction in Partners' Equity.

The purchase price was allocated as follows:

(millions of dollars)

Total cash consideration		217
TransCanada's carrying value of non-controlling interest at October 1, 2014		188

Excess purchase price		29

The excess purchase price of $29 million was recorded as a reduction in Partners' Equity.

2013 Acquisition

On July 1, 2013, the Partnership acquired a 45 percent membership interest in each of GTN and Bison from subsidiaries of TransCanada, increasing the Partnership's ownership in each GTN and Bison to 70 percent. The total purchase price of the 2013 Acquisition was $1,050 million plus purchase price adjustments. The purchase price consisted of (i) $750 million for the GTN membership interest (less $146 million, which reflected 45 percent of GTN's outstanding debt at the time of the 2013 Acquisition), (ii) $300 million for the membership interest in Bison, (iii) $17 million in working capital adjustments and (iv) Carty Lateral consideration of $25 million (see below).

The resulting $921 million (after working capital adjustments) paid by the Partnership was financed through a combination of (i) a public offering of 8,855,000 common units at $43.85 per common unit resulting in net proceeds of $373 million (refer to note 9), (ii) borrowing of $500 million in term loans (refer to note 7), (iii) a capital contribution from the General Partner of $8 million which was required to maintain the General Partner's effective two percent general partner interest in the Partnership (refer to note 9), and (iv) a draw on the Partnership's existing $500 million Senior Credit Facility and cash on hand.

Pursuant to the acquisition agreement between the Partnership and TransCanada relating to the Partnership's acquisition of an additional 45 percent membership interest in GTN, the Partnership agreed to make an additional payment of $25 million to TransCanada if Portland General Electric Company executes a firm transportation service agreement by December 31, 2014 containing agreed terms and relating to transportation on GTN's proposed Carty Lateral. On December 11, 2013, Portland General Electric Company executed this firm transportation service agreement relating to transportation on GTN's proposed Carty Lateral. As a result, the Partnership paid an additional $25 million on April 11, 2014. This amount was included in accounts payable to affiliates as of December 31, 2013.

The 2013 Acquisition was accounted for as a transaction between entities under common control, similar to a pooling of interests, whereby the assets and liabilities of GTN and Bison were recorded at TransCanada's carrying value and the Partnership's historical financial information, except net income per common unit, was recast to consolidate GTN and Bison for all periods presented.

The purchase price was recorded as follows:

(millions of dollars)

Current assets	67
Property, plant and equipment, net	1,792
Other assets	1
Current liabilities	(20	)
Other liabilities	(21	)
Long-term debt	(325	)

	1,494
Non-controlling interest	(448	)
Carrying value of pre-existing 25% interest in each of GTN and Bison	(374	)

Carrying value of acquired 45% interest in each of GTN and Bison	672
Excess purchase price over net assets acquired (includes Carty Lateral consideration)	274

Total cash consideration including $25 million Carty Lateral consideration	946

As the fair market value for the additional 45 percent interests in each of GTN and Bison was greater than the acquired net assets of GTN and Bison by $262 million and $12 million, respectively, the total excess purchase price of $274 million was recorded in Partners' Equity, including the Carty Lateral consideration. The retrospective consolidation of GTN and Bison increased net income attributable to controlling interests by $26 million for the year ended December 31, 2013 and by $55 million for the year ended December 31, 2012. These amounts are however excluded from equity attributable to controlling interests and did not impact historical net income per common unit as the pre-acquisition earnings was allocated to TransCanada (refer to Note 12).