Exhibit 99.3

EX-99.3 4 d253986dex993.htm EXHIBIT 99.3 Exhibit 99.3

Exhibit 99.3

CAMECO CORPORATION

2011 CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(unaudited)

November 4, 2011

Cameco Corporation

Consolidated Statements of Earnings

(Unaudited)

($Cdn Thousands, except per share amounts)


			Three Months Ended						Nine Months Ended
	Note		Sep 30/11			Sep 30/10			Sep 30/11			Sep 30/10
Revenue from products and services			$	526,952		$	419,475		$	1,406,917		$	1,450,245
Cost of products and services sold				284,519			203,239			821,301			758,302
Depreciation, depletion and amortization				63,420			60,389			162,291			172,641

Cost of sales				347,939			263,628			983,592			930,943

Gross profit				179,013			155,847			423,325			519,302
Administration				38,089			40,122			106,056			100,011
Exploration				35,619			35,430			70,577			68,340
Research and development				2,071			1,033			3,797			2,654
Cigar Lake remediation				576			6,622			4,113			14,460
Loss (gain) on sale of assets				418			(481	)		1,113			(297	)

Earnings from operations				102,240			73,121			237,669			334,134
Finance costs		11		(16,385	)		(22,808	)		(55,946	)		(66,443	)
Gains (losses) on derivatives		16		(75,804	)		39,119			(40,216	)		22,049
Finance income				5,922			5,416			19,037			13,587
Share of loss from equity-accounted investees				(1,443	)		(1,624	)		(5,573	)		(4,397	)
Other income (expense)				(1,036	)		(408	)		3,053			2,159

Earnings before income taxes				13,494			92,816			158,024			301,089
Income tax recovery		12		(21,711	)		(1,045	)		(18,777	)		(3,126	)

Net earnings			$	35,205		$	93,861		$	176,801		$	304,215

Net earnings (loss) attributable to:
Equity holders			$	39,452		$	97,513		$	185,590		$	310,850
Non-controlling interest				(4,247	)		(3,652	)		(8,789	)		(6,635	)

Net earnings			$	35,205		$	93,861		$	176,801		$	304,215

Earnings per common share attributable to equity holders
Basic		17	$	0.10		$	0.25		$	0.47		$	0.79

Diluted		17	$	0.10		$	0.25		$	0.47		$	0.79

See accompanying notes to condensed consolidated interim financial statements.

Cameco Corporation

Consolidated Statements of Comprehensive Income

(Unaudited)

($Cdn Thousands)


			Three Months Ended						Nine Months Ended
	Note		Sep 30/11			Sep 30/10			Sep 30/11			Sep 30/10
Net earnings			$	35,205		$	93,861		$	176,801		$	304,215
Other comprehensive income (loss), net of taxes		12
Exchange differences on translation of foreign operations				51,339			30,572			39,900			22,150
Gains on derivatives designated as cash flow hedges				544			1,826			3,666			12,130
Gains on derivatives designated as cash flow hedges transferred to net earnings				(4,062	)		(14,760	)		(15,294	)		(51,278	)
Unrealized gains on available-for-sale securities				60			139			744			1,072
Losses (gains) on available-for-sale securities transferred to net earnings				(8	)		15			(1,848	)		(2,614	)
Defined benefit plan actuarial losses		7		(109,897	)		(167,536	)		(109,897	)		(167,536	)

Other comprehensive loss, net of taxes				(62,024	)		(149,744	)		(82,729	)		(186,076	)

Total comprehensive income (loss)				($26,819	)		($55,883	)	$	94,072		$	118,139

Other comprehensive income (loss) attributable to:
Equity holders			$	(58,411	)	$	(166,447	)	$	(81,757	)	$	(195,647	)
Non-controlling interest				(3,613	)		16,703			(972	)		9,571

Other comprehensive loss for the period			$	(62,024	)	$	(149,744	)	$	(82,729	)	$	(186,076	)

Total comprehensive income (loss) attributable to:
Equity holders			$	(18,959	)	$	(68,934	)	$	103,833		$	115,203
Non-controlling interest				(7,860	)		13,051			(9,761	)		2,936

Total comprehensive income (loss) for the period				($26,819	)		($55,883	)	$	94,072		$	118,139

See accompanying notes to condensed consolidated interim financial statements.

Cameco Corporation

Consolidated Statements of Financial Position

(Unaudited)

($Cdn Thousands)


			As At
	Note		Sep 30/11		Dec 31/10
Assets
Current assets
Cash and cash equivalents			$	542,771	$	376,621
Short-term investments				651,177		883,032
Accounts receivable				286,547		448,479
Current tax assets				37,172		42,190
Inventories		5		689,852		533,090
Supplies and prepaid expenses				202,802		190,079
Current portion of long-term receivables and other		6		39,190		91,447

Total current assets				2,449,511		2,564,938

Property, plant and equipment				4,221,914		3,954,647
Intangible assets				100,582		94,270
Long-term receivables, investments and other		6		309,449		342,675
Investments in equity-accounted investees				216,809		220,430
Deferred tax assets				78,944		25,594

Total non-current assets				4,927,698		4,637,616

Total assets			$	7,377,209	$	7,202,554

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities			$	359,189	$	362,467
Current tax liabilities				19,831		35,042
Short-term debt				91,049		85,588
Dividends payable				39,471		27,605
Current portion of finance lease obligation				14,410		13,177
Current portion of other liabilities		7		129,999		53,192
Current portion of provisions				17,280		19,394

Total current liabilities				671,229		596,465

Long-term debt				796,223		794,483
Finance lease obligation				134,806		145,834
Other liabilities		7		536,997		405,477
Provisions				368,122		365,573
Deferred tax liabilities				—		26,270

Total non-current liabilities				1,836,148		1,737,637

Shareholders’ equity
Share capital				1,841,839		1,833,257
Contributed surplus				150,892		142,376
Retained earnings				2,643,773		2,690,184
Other components of equity				52,636		24,496

Total shareholders’ equity attributable to equity holders				4,689,140		4,690,313
Non-controlling interest				180,692		178,139

Total shareholders’ equity				4,869,832		4,868,452

Total liabilities and shareholders’ equity			$	7,377,209	$	7,202,554

Commitments and contingencies [notes 12,15]

See accompanying notes to condensed consolidated interim financial statements.

Cameco Corporation

Consolidated Statements of Changes in Equity

(Unaudited)

($Cdn Thousands)


	Attributable to equity holders																				Non- Controlling Interest			Total Equity
	Share Capital		Contributed Surplus			Retained Earnings			Foreign Currency Translation			Cash Flow Hedges			Available-For- Sale Assets			Total			Non- Controlling Interest			Total Equity
Balance at January 1, 2011	$	1,833,257	$	142,376		$	2,690,184		$	(7,603	)	$	30,306		$	1,793		$	4,690,313		$	178,139		$	4,868,452
Net earnings		—		—			185,590			—			—			—			185,590			(8,789	)		176,801
Total other comprehensive income		—		—			(109,897	)		40,872			(11,628	)		(1,104	)		(81,757	)		(972	)		(82,729	)

Total comprehensive income for the period		—		—			75,693			40,872			(11,628	)		(1,104	)		103,833			(9,761	)		94,072

Stock-based compensation		—		14,520			—			—			—			—			14,520			—			14,520
Share options exercised		8,582		(6,004	)		—			—			—			—			2,578			—			2,578
Dividends		—		—			(118,413	)		—			—			—			(118,413	)		—			(118,413	)
Change in ownership interests in subsidiaries		—		—			(3,691	)		—			—			—			(3,691	)		3,883			192
Transactions with owners - contributed equity		—		—			—			—			—			—			—			8,431			8,431

Balance at September 30, 2011	$	1,841,839	$	150,892		$	2,643,773		$	33,269		$	18,678		$	689		$	4,689,140		$	180,692		$	4,869,832

Balance at January 1, 2010		1,809,861		131,577			2,392,940			—			89,457			2,225			4,426,060			164,040			4,590,100
Net earnings		—		—			310,850			—			—			—			310,850			(6,635	)		304,215
Total other comprehensive income		—		—			(167,536	)		12,579			(39,148	)		(1,542	)		(195,647	)		9,571			(186,076	)

Total comprehensive income for the period		—		—			143,314			12,579			(39,148	)		(1,542	)		115,203			2,936			118,139

Stock-based compensation		—		7,645			—			—			—			—			7,645			—			7,645
Share options exercised		6,333		(1,067	)		—			—			—			—			5,266			—			5,266
Dividends		—		—			(82,561	)		—			—			—			(82,561	)		—			(82,561	)
Transactions with owners - contributed equity		—		—			—			—			—			—			—			7,156			7,156

Balance at September 30, 2010	$	1,816,194	$	138,155		$	2,453,693		$	12,579		$	50,309		$	683		$	4,471,613		$	174,132		$	4,645,745

See accompanying notes to condensed consolidated interim financial statements.

Cameco Corporation

Consolidated Statements of Cash Flows

(Unaudited)

($Cdn Thousands)


			Three Months Ended						Nine Months Ended
	Note		Sep 30/11			Sep 30/10			Sep 30/11			Sep 30/10
Operating activities
Net earnings			$	35,205		$	93,861		$	176,801		$	304,215
Adjustments for:
Depreciation, depletion and amortization				63,420			60,389			162,291			172,641
Deferred charges				(927	)		(6,534	)		(9,113	)		(24,436	)
Unrealized losses (gains) on derivatives				91,363			(31,552	)		101,219			64,640
Share-based compensation		14		3,200			1,323			14,520			7,645
Loss (gain) on sale of assets				418			(481	)		1,113			(297	)
Finance costs		11		16,385			22,808			55,946			66,443
Finance income				(5,922	)		(5,416	)		(19,037	)		(13,587	)
Share of loss from equity-accounted investees				1,443			1,624			5,573			4,397
Other expense (income)				1,036			408			(3,053	)		(2,159	)
Income tax recovery		12		(21,711	)		(1,045	)		(18,777	)		(3,126	)
Interest received				6,658			2,767			16,347			7,387
Income taxes paid				(6,101	)		(841	)		(54,129	)		(57,828	)
Income taxes refunded				24,706			7,326			24,706			10,245
Other operating items		13		(19,512	)		(149,140	)		22,462			(123,899	)

Net cash provided by (used in) operations				189,661			(4,503	)		476,869			412,281

Investing activities
Additions to property, plant and equipment				(179,465	)		(109,233	)		(443,342	)		(303,595	)
Change in short-term investments				222,075			53,759			232,821			(714,271	)
Decrease (increase) in long-term receivables, investments and other				11,882			(3,079	)		39,376			(15,312	)
Proceeds from sale of property, plant and equipment				29			481			61			5,946

Net cash provided by (used in) investing				54,521			(58,072	)		(171,084	)		(1,027,232	)

Financing activities
Increase in debt				7,883			—			3,459			—
Decrease in debt				(3,350	)		(1,674	)		(9,796	)		(11,186	)
Interest paid				(24,064	)		(24,322	)		(51,152	)		(51,835	)
Contributions from non-controlling interest				3,154			3,008			9,605			7,646
Proceeds from issuance of shares, stock option plan				58			2,999			6,996			5,266
Dividends paid				(39,472	)		(27,512	)		(106,547	)		(78,590	)

Net cash used in financing				(55,791	)		(47,501	)		(147,435	)		(128,699	)

Increase (decrease) in cash during the period				188,391			(110,076	)		158,350			(743,650	)
Exchange rate changes on foreign currency cash balances				8,249			(1,327	)		7,800			(3,942	)
Cash and cash equivalents at beginning of period				346,131			465,040			376,621			1,101,229

Cash and cash equivalents at end of period			$	542,771		$	353,637		$	542,771		$	353,637

Cash and cash equivalents is comprised of:
Cash									$	59,521		$	68,798
Cash equivalents										483,250			284,839

									$	542,771		$	353,637

See accompanying notes to condensed consolidated interim financial statements.

Cameco Corporation

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

($Cdn thousands except per share amounts and as noted)

1.	Cameco Corporation

Cameco Corporation is incorporated under the Canada Business Corporations Act. The address of its registered office is 2121 11^th Street West, Saskatoon, Saskatchewan, S7M 1J3. The condensed consolidated interim financial statements as at and for the period ended September 30, 2011 comprise Cameco Corporation and its subsidiaries (collectively, the “Company” or “Cameco”) and the Company’s interest in associates and joint ventures. The Company is primarily engaged in the exploration for and the development, mining, refining, conversion and fabrication of uranium for sale as fuel for generating electricity in nuclear power reactors in Canada and other countries. Cameco has a 31.6% interest in Bruce Power L.P. (BPLP), which operates the four Bruce B nuclear reactors in Ontario.

2.	Significant Accounting Policies

(a)

Statement of Compliance

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting. These condensed consolidated interim financial statements are for part of the period covered by the first annual financial statements prepared under International Financial Reporting Standards (“IFRS”) and IFRS 1, First-time Adoption of International Financial Reporting Standards (“IFRS 1”), has been applied. The condensed consolidated interim financial statements do not include all of the information required for full annual financial statements. These condensed consolidated interim financial statements have been prepared in accordance with the accounting policies the Company expects to adopt in its December 31, 2011 financial statements. Those accounting policies are based on the IFRS and IFRS Interpretations Committee (“IFRIC”) interpretations that the Company expects to be applicable at that time.

The Company’s consolidated financial statements for the year ended December 31, 2010 were previously prepared in accordance with Canadian generally accepted accounting principles (“GAAP”). Accordingly, the comparative figures for 2010 were recast and an explanation of how the transition from Canadian GAAP to IFRS has affected the financial statements of the Company is provided in note 3. Certain disclosures in addition to the minimum disclosure requirements under IAS 34 were added in order to highlight the changes from the Company’s 2010 annual consolidated financial statements prepared in accordance with Canadian GAAP. In 2012 and beyond, the Company may not provide the same amount of disclosure in the condensed consolidated interim financial statements as the reader will be able to rely on the annual consolidated financial statements which will be prepared in accordance with IFRS.

These condensed consolidated interim financial statements were authorized for issuance by the Company’s Board of Directors on November 4, 2011.

(b)

Basis of Presentation

These condensed consolidated interim financial statements are presented in Canadian dollars, which is the Company’s functional currency. All financial information presented in Canadian dollars has been rounded to the nearest thousand except where otherwise noted.

The condensed consolidated interim financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position: derivative financial instruments are measured at fair value, available-for-sale financial assets are measured at fair value, liabilities for cash-settled share-based payment arrangements are measured at fair value and the defined benefit asset is recognized as the net total of the plan assets.

The preparation of the condensed consolidated interim financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may vary from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Company’s accounting policies and key sources of estimation uncertainty are expected to be the same as those to be applied in the first annual IFRS financial statements.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in note 6 of the March 31, 2011 condensed consolidated interim financial statements.

Since the Company’s consolidated financial statements for the year ended December 31, 2010 were previously prepared in accordance with GAAP, a summary of significant accounting policies was disclosed in note 2 of the March 31, 2011 condensed consolidated interim financial statements. The summary of accounting policies is a description of the accounting methods and practices that have been used in the preparation of these condensed consolidated interim financial statements and is presented to assist the reader in interpreting the statements contained herein. These accounting policies have been applied consistently to all entities within the consolidated group and to all periods presented in these condensed consolidated interim financial statements.

3.	Explanation of Transition to IFRS

As stated in note 2(a), these condensed consolidated interim financial statements have been prepared in accordance with IFRS. The accounting policies set out in note 2 of the March 31, 2011 condensed consolidated interim financial statements have been applied for all periods presented in the condensed consolidated interim financial statements for the period ended September 30, 2011.

In preparing its opening IFRS statement of financial position, the Company has adjusted amounts previously reported in financial statements prepared in accordance with Canadian GAAP. An explanation of how the transition from Canadian GAAP to IFRS has affected the Company’s financial statements is set out in the following tables and the notes that accompany the tables.

Elected IFRS 1 exemptions applicable to the presentation of the internal opening IFRS financial position

Cameco has elected and applied the following IFRS 1 exemptions:

(i)

Borrowing costs – IFRS 1 provides the option to apply IAS 23, Borrowing Costs (“IAS 23”), prospectively from the transition date to IFRS (January 1, 2010), or from a particular pre-transition date elected by the first time adopter. Borrowing costs may be capitalized on qualifying assets for which the commencement date for capitalization was on or after the date selected. The Company elected to apply IAS 23 prospectively from the date of transition to IFRS. Based on this election, Cameco expensed the borrowing costs capitalized before January 1, 2010 under Canadian GAAP and will capitalize borrowing costs incurred on qualifying assets for which the commencement date for capitalization is subsequent to January 1, 2010.

(ii)

Decommissioning liabilities – The application of IFRIC 1, Changes in Existing Decommissioning, Restoration and Similar Liabilities (“IFRIC 1”), would require the Company to recalculate, retrospectively, the effect of each change in its reclamation provision prior to the date of transition, along with the impact on the related assets and depreciation. IFRS 1 provides the option to instead measure the liability and related depreciation effects as at the date of transition to IFRS. Cameco has elected to apply this exemption and calculated the impact on the statement of financial position as of January 1, 2010.

(iii)

Employee benefits – IAS 19, Employee Benefits (“IAS 19”), requires extensive disclosures in respect of defined benefit plans. IFRS 1 provides an optional exemption that permits the first-time adopter to elect to provide these disclosures prospectively from the date of transition. The Company has elected to apply this exemption and will provide the full disclosures required by IAS 19 in its first annual consolidated financial statements prepared under IFRS.

(iv)

Share-based compensation – IFRS 2, Share-Based Payments (“IFRS 2”), encourages application of its provisions to liabilities arising from cash-settled transactions that were settled before the transition date but only requires application to those transactions that will be settled after the transition date. The Company elected to apply IFRS 2 only to liabilities arising from share-based compensation transactions that existed at January 1, 2010.

(v)

Business combinations – The application of IFRS 3, Business Combinations (“IFRS 3”), requires the restatement of all past business combinations in accordance with IFRS 3. IFRS 1 provides the option to apply IFRS 3 prospectively from the transition date, or from a particular pre-transition date elected by the Company. The Company elected to not restate any past business combinations and to apply IFRS 3 prospectively from the transition date.

(vi)

Cumulative translation differences – IAS 21, The Effects of Changes in Foreign Exchange Rates, would require the Company to calculate currency translation differences retrospectively, from the date a subsidiary or associate was formed or acquired. IFRS 1 provides the option of resetting cumulative translations gains and losses to zero at the transition date. The Company elected to reset cumulative translations losses to zero through opening retained earnings at the transition date.

Reconciliation of Equity at September 30, 2010


	Cdn GAAP		Sep 30, 2010 effect of transition			IFRS
Assets
Current assets
Cash and cash equivalents	$	353,637	$	—		$	353,637
Short-term investments		916,787		—			916,787
Accounts receivable (a)		357,570		727			358,297
Inventories (b),(d)		514,230		(9,957	)		504,273
Supplies and prepaid expenses (a)		171,249		1,043			172,292
Current portion of long-term receivables and other		86,492		—			86,492

Total current assets		2,399,965		(8,187	)		2,391,778

Property, plant and equipment (a),(c),(d),(e),(k)		4,245,743		(383,299	)		3,862,444
Intangible assets		95,218		—			95,218
Long-term receivables, investments, other (a),(f),(g)		670,399		(282,651	)		387,748
Investments in equity-accounted investees (f),(h)		—		222,139			222,139
Deferred tax assets (p),(q),(r)		34,801		44,175			78,976

Total non-current assets		5,046,161		(399,636	)		4,646,525

Total assets	$	7,446,126	$	(407,823	)	$	7,038,303

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities (a),(i)	$	351,496	$	(22,695	)	$	328,801
Current tax liabilities		30,765		786			31,551
Short-term debt		83,746		—			83,746
Dividends payable		27,542		—			27,542
Current portion of finance lease obligation		12,766		—			12,766
Current portion of other liabilities (a)		46,730		23,479			70,209
Current portion of provisions (a),(b),(j),(k),(l)		—		16,859			16,859
Deferred tax liabilities (p),(q),(r)		35,418		(35,418	)		—

Total current liabilities		588,463		(16,989	)		571,474

Long-term debt		791,001		—			791,001
Finance lease obligation		152,533		—			152,533
Provision for reclamation (j)		261,686		(261,686	)		—
Other liabilities (a),(g),(j)		251,822		247,656			499,478
Provisions (a),(b),(j),(k),(l)		—		339,053			339,053
Deferred tax liabilities (p),(q),(r)		172,000		(132,981	)		39,019

Total non-current liabilities		1,629,042		192,042			1,821,084

Minority interest (o)		174,132		(174,132	)		—
Shareholders’ equity
Share capital (m)		1,518,794		297,400			1,816,194
Contributed surplus		138,155		—			138,155
Retained earnings (s)		3,384,154		(930,461	)		2,453,693
Other components of equity (b),(d),(g),(h),(k),(n),(p),(r)		13,386		50,185			63,571

Total shareholders’ equity attributable to equity holders		5,054,489		(582,876	)		4,471,613
Non-controlling interest (o)		—		174,132			174,132

Total shareholders’ equity		5,054,489		(408,744	)		4,645,745

Total liabilities and shareholders’ equity	$	7,446,126	$	(407,823	)	$	7,038,303

Reconciliation of Total Comprehensive Income for 2010


	Three Months Ended September 30, 2010									Nine Months Ended September 30, 2010
	Cdn GAAP			effect of transition			IFRS			Cdn GAAP			effect of transition			IFRS
Revenue from products and services	$	419,475		$	—		$	419,475		$	1,450,245		$	—		$	1,450,245
Products and services sold (a),(l)		203,857			(618	)		203,239			770,600			(12,298	)		758,302
Depreciation, depletion and amortization (a),(b),(c),(d),(e),(k)		63,338			(2,949	)		60,389			180,869			(8,228	)		172,641

Cost of sales		267,195			(3,567	)		263,628			951,469			(20,526	)		930,943

Gross profit		152,280			3,567			155,847			498,776			20,526			519,302
Administration (g),(i)		40,205			(83	)		40,122			101,258			(1,247	)		100,011
Exploration		35,430			—			35,430			68,340			—			68,340
Research and development		1,033			—			1,033			2,654			—			2,654
Cigar Lake remediation		6,622			—			6,622			14,460			—			14,460
Gain on sale of assets		(481	)		—			(481	)		(297	)		—			(297	)

Earnings from operations		69,471			3,650			73,121			312,361			21,773			334,134
Finance costs (b),(c),(l)		(7,310	)		(15,498	)		(22,808	)		(20,890	)		(45,553	)		(66,443	)
Gains on derivatives		39,099			20			39,119			22,049			—			22,049
Finance income		5,416			—			5,416			13,587			—			13,587
Share of loss from equity-accounted investees (h)		(4,483	)		2,859			(1,624	)		(12,954	)		8,557			(4,397	)
Other income (expense)		(408	)		—			(408	)		2,159			—			2,159

Earnings before income taxes		101,785			(8,969	)		92,816			316,312			(15,223	)		301,089
Income tax expense (recovery) (p),(q),(r)		7,824			(8,869	)		(1,045	)		14,738			(17,864	)		(3,126	)

Net earnings	$	93,961		$	(100	)	$	93,861		$	301,574		$	2,641		$	304,215

Net earnings (loss) attributable to:
Equity holders	$	97,613		$	(100	)	$	97,513		$	308,209		$	2,641		$	310,850
Non-controlling interest		(3,652	)		—			(3,652	)		(6,635	)		—			(6,635	)

Net earnings	$	93,961		$	(100	)	$	93,861		$	301,574		$	2,641		$	304,215

Basic earnings per common share	$	0.25		$	—		$	0.25		$	0.78		$	—		$	0.79

Diluted earnings per common share	$	0.25		$	—		$	0.25		$	0.78		$	—		$	0.79

Net earnings	$	93,961		$	(100	)	$	93,861		$	301,574		$	2,641		$	304,215
Other comprehensive income (loss), net of taxes
Exchange differences on translation of foreign currency operations		31,078			(506	)		30,572			22,363			(213	)		22,150
Gains (losses) on derivatives designated as cash flow hedges		1,826			—			1,826			12,130			—			12,130
Gains on derivatives designated as cash flow hedges transferred to net earnings		(14,760	)		—			(14,760	)		(51,278	)		—			(51,278	)
Unrealized gains on available-for-sale securities		139			—			139			1,072			—			1,072
Gains on available-for-sale securities transferred to net earnings		15			—			15			(2,614	)		—			(2,614	)
Defined benefit plan actuarial losses (a),(g),(p)		—			(167,536	)		(167,536	)		—			(167,536	)		(167,536	)

Other comprehensive income (loss), net of taxes		18,298			(168,042	)		(149,744	)		(18,327	)		(167,749	)		(186,076	)

Total comprehensive income (loss), net of taxes	$	112,259		$	(168,142	)	$	(55,883	)	$	283,247		$	(165,108	)	$	118,139

Total comprehensive income (loss) attributable to:
Equity holders	$	99,208		$	(168,142	)	$	(68,934	)	$	280,311		$	(165,108	)	$	115,203
Non-controlling interest		13,051			—			13,051			2,936			—			2,936

Total comprehensive income	$	112,259		$	(168,142	)	$	(55,883	)	$	283,247		$	(165,108	)	$	118,139

Notes to the reconciliations

The impact on deferred tax of the adjustments described below is set out in note (p).

As a result of BPLP also transitioning to IFRS, Cameco has recorded its share of BPLP’s IFRS transition adjustments. BPLP’s transition adjustments relate largely to the recognition of previously unrecognized actuarial losses, as well as adjustments for changes in amounts eligible for capitalization, componentization of property, plant and equipment and the recognition of additional provisions as required under IFRS.

(i)

BPLP’s policy choice under IFRS for defined benefit plans is to recognize all actuarial gains and losses in other comprehensive income. As a result of this policy choice, for all defined benefit plans existing at January 1, 2010, BPLP has recognized in retained earnings all cumulative actuarial losses. Cameco’s share of this adjustment was a decrease to retained earnings of $136,954,000. During 2010 the actuarial valuations for the pension plans were updated to reflect current market conditions and an actuarial loss was recorded. Cameco’s share of this adjustment was a decrease to other comprehensive income of $223,380,000.

In 2005, BPLP sublet the four Bruce A reactors to a newly-formed partnership (the Bruce A Limited Partnership or “BALP”). BPLP continues to be responsible for the overall management of the site, including employment of the full workforce. BPLP and BALP entered into a services and cost sharing agreement to achieve an equitable allocation of certain operating costs, including employee pension and other post-retirement costs.

As a result of being the employer of record, BPLP has legal liability for the pension and other post-retirement benefit plans and is required to recognize the entire amount of any actuarial gains and losses in other comprehensive income. These costs are shared with BALP through the services and cost sharing agreement with amounts recovered from BALP classified in earnings rather than other comprehensive income.

(ii)

Unlike Canadian GAAP, IFRS requires the cost of major inspections and overhauls to be recognized in the carrying amount of property, plant and equipment. It also requires that components of an item of property, plant and equipment with different useful lives be accounted for and depreciated separately.

(iii)

Under IFRS, unlike Canadian GAAP, provisions are required to be made when a constructive obligation exists. IFRS also varies from Canadian GAAP in its requirements for certain accruals to be made.

The effects of the IFRS transition adjustments were as follows:


Consolidated Statements of Financial Position	Sep 30/10
Accounts receivable (iii)	$	727
Supplies and prepaid expenses (iii)		1,043
Long-term receivables, investments and other (i)		(84,214	)
Property, plant and equipment (ii)		8,753
Accounts payable and accrued liabilities (iii)		23,164
Current portion of of other liabilities		(23,479	)
Provisions (iii)		(3,318	)
Other liabilities (i),(iii)		(275,457	)
Retained earnings (i),(ii),(iii)		352,781


Consolidated Statements of Earnings and Comprehensive Income	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Products and services sold (i),(ii),(iii)	$	(618	)	$	(12,298	)
Depreciation, depletion and amortization (ii)		2,368			6,230
Finance costs		480			—
Gains on derivatives		(20	)		—
Defined benefit plan actuarial losses (i)		223,380			223,380

Under IFRS, and similar to Canadian GAAP, changes to a decommissioning liability to recognize the passage of time (unwinding of the discount or accretion) are required to be recorded. Under Canadian GAAP, the accretion was recorded as an operating cost and allocated to inventory while under IFRS, the unwinding of the discount is required to be reflected as a finance cost and does not qualify for capitalization. The effect was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Inventories	$	(10,321	)
Provisions		3,209
Retained earnings		7,157
Other components of equity (foreign currency translation)		(45	)


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Depreciation, depletion and amortization	$	(4,439	)	$	(10,798	)
Finance costs		3,192			9,568

Cameco has elected, under IFRS 1, not to apply IAS 23 retrospectively to borrowing costs incurred on the construction of qualifying assets that commenced prior to January 1, 2010. Accordingly, Cameco has derecognized all borrowing costs that had been previously capitalized under Canadian GAAP through a charge to retained earnings. In addition, based on this election, borrowing costs incurred subsequent to the date of transition on qualifying assets where the construction of the asset commenced prior to January 1, 2010 are being expensed as incurred. The effect was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Property, plant and equipment	$	(366,149	)
Retained earnings		366,149


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Depreciation, depletion and amortization	$	(958	)	$	(2,670	)
Finance costs		11,501			35,009

IFRS requires the reversal of any previously recorded impairment losses where circumstances have changed such that the impairments have been reduced. The reversal of impairment losses was prohibited under Canadian GAAP. In 2000, as a result of depressed uranium prices, Cameco recorded a write-down relating to certain in situ recovery mine assets located in the United States. The amount of the write-down was determined based on estimated future net cash flows and uranium price forecasts. As a result of the strengthening of uranium prices since 2000, Cameco reassessed these previously impaired assets and based on their value in use, determined that a portion of these previous write-downs should be reversed. The reversal of these impairment losses has been recognized in cost of sales in the statements of earnings and the effect was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Property, plant and equipment	$	33,033
Inventory		364
Retained earnings		(33,912	)
Other components of equity (foreign currency translation)		515


Consolidated Statements of Earnings	Three Months Ended Sep 30/10		Nine Months Ended Sep 30/10
Depreciation, depletion and amortization	$	404	$	688

IFRS specifically precludes the inclusion of general overhead and administration expenses in the cost of an item of property, plant and equipment. Cameco reviewed the composition of its items of property, plant and equipment to assess whether the costs included related specifically to the construction of the asset, or whether they were general in nature and determined that certain costs should be expensed under IFRS. The effect of removing these costs from property, plant and equipment was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Property, plant and equipment	$	(7,205	)
Retained earnings		7,205


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Depreciation, depletion and amortization	$	(109	)	$	(321	)

Under IFRS, investments in equity-accounted investees are presented in the consolidated statements of financial position as a separate line item. Previously under Canadian GAAP, these investments were included in long-term receivables, investments and other. The effect of this reclassification was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Investments in equity-accounted investees	$	195,261
Long-term receivables, investments and other		(195,261	)

Cameco’s policy choice under IFRS for defined benefit plans is to recognize all actuarial gains and losses in other comprehensive income. As a result of this policy choice, for all defined benefit plans existing at January 1, 2010, the Company has recognized in retained earnings $14,404,000 of cumulative actuarial losses. The effect was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Long-term receivables, investments and other	$	(3,176	)
Other liabilities		(10,327	)
Retained earnings		13,519
Other components of equity (foreign currency translation)		(16	)


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Administration	$	(295	)	$	(885	)

Under IFRS, in-process research and development (“IPR&D”) that meets the definition of an intangible asset is capitalized with amortization commencing when the asset is ready for use (i.e., when development is complete). Under Canadian GAAP, amortization of IPR&D capitalized as an intangible asset was commenced immediately, with the amortization period extending from the date of initial recognition to the date the completed asset will be available for use in commercial production. Cameco had been amortizing IPR&D related to the acquisition of its interest in equity-accounted investee GE-Hitachi Global Laser Enrichment LLC, a development-stage entity. Under IFRS, this amortization does not begin until development is complete. The effect of reversing this previously recognized amortization was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Investments in equity-accounted investees	$	26,878
Retained earnings		(27,248	)
Other components of equity (foreign currency translation)		370


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Share of loss from equity-accounted investees	$	(2,859	)	$	(8,557	)

i)	Cameco has granted cash-settled phantom stock options to eligible non-North American employees. The Company applied IFRS 2 to its unsettled share-based compensation arrangements at January 1, 2010.

Cameco accounted for these share-based compensation arrangements at intrinsic value under Canadian GAAP. The related liability has been adjusted to reflect the fair value of the outstanding cash-settled phantom stock options to be consistent with the Company’s accounting policies under IFRS. The effect of accounting for cash-settled share-based compensation transactions at fair value was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Accounts payable and accrued liabilities	$	(469	)
Retained earnings		469


Consolidated Statements of Earnings	Three Months Ended Sep 30/10		Nine Months Ended Sep 30/10
Administration	$	212	$	(362	)

Under IFRS, decommissioning liabilities and waste provisions are presented in the consolidated statements of financial position as part of provisions. Previously under Canadian GAAP, these obligations were presented separately as provision for reclamation and other liabilities. The effect of this reclassification was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Provision for reclamation	$	261,686
Provisions		(299,814	)
Other liabilities		38,128

Cameco has elected, under IFRS 1, not to retrospectively recalculate, under IFRIC 1, the effect of each change in its reclamation provision prior to January 1, 2010. Instead, the liability and related assets and depreciation were measured as at the date of transition. Accordingly, Cameco has recalculated the provision and estimated the amount that would have been adjusted to the cost of the related asset by discounting the liability at the date of transition back to the date when the liability first arose, using its best estimate of the historical risk free rate that would have applied over the intervening period. In addition, the Company has calculated the accumulated depreciation on that amount as at the date of transition to IFRS based on the current estimate of the useful life of the asset.

The effect of the IFRS transition adjustments was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Property, plant and equipment	$	(51,731	)
Provisions		(56,785	)
Retained earnings		108,892
Other components of equity (foreign currency translation)		(376	)


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Depreciation, depletion and amortization	$	(216	)	$	(1,358	)

IFRS requires that provisions such as those for environmental costs be recognized when it is probable that a restoration expense will be incurred and the associated costs can be reliably estimated. Where the liability will not be settled for a number of years, the amount recognized is the present value of the estimated future expenditure. Under IFRS, provisions for waste removal are measured initially at their present value using risk adjusted cash flows, with changes to the liability due to the passage of time (accretion) recorded as a finance cost. Under Canadian GAAP, discounting to reflect the time value of money is allowed, but not required. In the fuel services conversion processes, a certain amount of waste material is generated. Under Canadian GAAP, provisions for waste removal were measured using undiscounted estimated cash flows and recognized as an expense and a corresponding liability. The effect of discounting the provision upon transition to IFRS was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Provisions	$	796
Retained earnings		(796	)


Consolidated Statements of Earnings	Three Months Ended Sep 30/10		Nine Months Ended Sep 30/10
Finance costs	$	325	$	977

Under IFRS, convertible debentures that contain a cash settlement feature are accounted for as a hybrid instrument with a debt component and a separate derivative representing the conversion option. The debt component is classified as a financial liability and accounted for at amortized cost using the effective interest rate method, while the conversion option is accounted for as a derivative and recorded at fair value with changes in fair value recorded in earnings.

Under Canadian GAAP, certain convertible debentures that contained a cash settlement feature were accounted for as a compound instrument with both a debt and equity component. Consistent with IFRS, the debt component was accounted for at amortized cost using the effective interest rate method; however, the conversion option was accounted for as an equity instrument with any changes in value not recognized.

The effect of accounting for the conversion option as a derivative at fair value was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Retained earnings	$	297,400
Share capital		(297,400	)

n)	In accordance with IFRS 1, Cameco has elected to deem all foreign currency translation differences that existed at the date of transition to IFRS in respect of all foreign entities to be zero at the date of transition.

The effect was to increase foreign currency translation (other components of equity) and to decrease retained earnings by $50,398,000 at September 30, 2010.

In addition to the above, cash flow hedging reserves of $50,308,000 as at September 30, 2010 and available-for-sale assets reserves of $683,000 at September 30, 2010 have been reclassified from accumulated other comprehensive income under Canadian GAAP to their respective reserve accounts within other components of equity under IFRS.

Under IFRS, non-controlling interests are presented in the consolidated statement of financial position as equity but are presented separately from the parent shareholders’ equity. Under Canadian GAAP, non-controlling interests were classified between total liabilities and equity and referred to as minority interest.

p)	The foregoing changes decreased (increased) the deferred tax amounts as follows:


Consolidated Statements of Financial Position	Sep 30/10
BPLP transition adjustments (a)	$	88,181
Decommissioning liabilities - discounting (k)		30,655
Decommissioning liabilities - accretion (b)		2,242
Provision for waste (l)		(210	)
Borrowing costs (c)		96,700
Impairment reversal (d)		(11,930	)
Capitalized overhead (e)		1,903
IPR&D (h)		(9,407	)
Share-based compensation (i)		92
Employee benefits (g)		3,649

	$	201,875

In addition, other components of equity of $(172,000) as at September 30, 2010 have been adjusted to reflect the impact of foreign currency translation on the deferred tax balance.

The adjustments described above impacted income tax expense (recovery) on the consolidated statements of earnings as follows:


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
BPLP transition adjustments (a)	$	(545	)	$	1,525
Decommissioning liabilities - discounting (k)		35			289
Decommissioning liabilities - accretion (b)		381			280
Provision for waste (l)		(86	)		(258	)
Borrowing costs (c)		(2,784	)		(8,541	)
Capitalized overhead (e)		29			85
IPR&D (h)		1,001			2,995
Share-based compensation (i)		(39	)		44
Employee benefits (g)		80			240

Income tax recovery	$	(1,928	)	$	(3,341	)

The adjustment to other comprehensive income relating to actuarial losses in BPLP is net of taxes of $55,844,000

Under IFRS, a deferred tax liability (asset) is recognized for the difference in tax bases between jurisdictions as a result of an intra-group transfer of assets and consequently, the deferred tax is computed using the tax rate applicable to the purchaser. Under Canadian GAAP, a deferred tax liability (asset) was not recognized for the difference in tax bases between jurisdictions. Any taxes paid or recovered by the transferor were recognized as an asset or liability once the profit or loss was recognized by the consolidated entity. The IFRS adjustment is related to product sold by Cameco to subsidiaries and held in inventory at the transition date. The effect was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Deferred tax liabilities	$	13,635
Retained earnings		(13,635	)


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Income tax recovery	$	(6,882	)	$	(14,175	)

Under IFRS, a deferred tax liability (asset) is recognized for exchange gains and losses related to foreign non-monetary assets and liabilities that are remeasured into the functional currency using historical exchange rates for tax purposes. Under Canadian GAAP, a deferred tax liability (asset) is not recognized for a temporary difference between the historical exchange rate and the current exchange rate translations of non-monetary assets and liabilities. The effect was as follows:


Consolidated Statements of Financial Position	Sep 30/10
Current tax liability	$	(786	)
Deferred tax liabilities		(2,936	)
Retained earnings		3,785
Other components of equity (foreign currency translation)		(63	)


Consolidated Statements of Earnings	Three Months Ended Sep 30/10			Nine Months Ended Sep 30/10
Income tax recovery	$	(59	)	$	(348	)

s)	The above changes increased (decreased) retained earnings as follows:


	Sep 30/10
BPLP transition adjustments (a)	$	(352,781	)
Decommissioning liabilities - accretion (b)		(7,157	)
Borrowing costs (c)		(366,149	)
Impairment reversal (d)		33,912
Capitalized overhead (e)		(7,205	)
Employee benefits (g)		(13,519	)
In-process research and development (h)		27,248
Share-based compensation (i)		(469	)
Decommissioning liabilities - discounting (k)		(108,892	)
Provision for waste - discounting (l)		796
Convertible debentures (m)		(297,400	)
Other components of equity (n)		(50,398	)
Deferred tax liability (p)		201,703
Deferred tax liabilities - intra-group transfer (q)		13,635
Deferred tax liabilities - foreign non-monetary assets (r)		(3,785	)

	$	(930,461	)

Explanation of material adjustments to the cash flow statement for 2010

Consistent with the Company’s accounting policy election under IAS 7, Statement of Cash Flows, interest paid has been reclassified as a financing activity. Under Canadian GAAP, it had been capitalized and included with additions to property, plant and equipment as an investing activity. The amounts reclassified were $24,322,000 for the three months ended September 30, 2010 and $51,835,000 for the nine months ended September 30, 2010.

There are no other material differences between the cash flow statement presented under IFRS and the cash flow statement presented under Canadian GAAP.

4.	Accounting Standards

(a)

New Standards and Interpretations not yet Adopted

The following standards and amendments to existing standards have been published but are not effective for the year ended December 31, 2011, and have not been applied in preparing these condensed consolidated interim financial statements:

(i)

Financial Instruments

In October 2010, the International Accounting Standards Board (“IASB”) issued IFRS 9, Financial Instruments (“IFRS 9”). This standard is effective for periods beginning on or after January 1, 2013 and is part of a wider project to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 replaces the current multiple classification and measurement models for financial assets and liabilities with a single model that has only two classification categories: amortized cost and fair value. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset or liability. The guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply. Cameco is assessing the impact of this new standard on its financial statements.

(ii)

Consolidated Financial Statements

In May 2011, the IASB issued IFRS 10, Consolidated Financial Statements (“IFRS 10”). This standard is effective for periods beginning on or after January 1, 2013 and establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 defines the principle of control and establishes control as the basis for determining which entities are consolidated in the consolidated financial statements. Cameco is assessing the impact of this new standard on its financial statements.

(iii)

Joint Arrangements

In May 2011, the IASB issued IFRS 11, Joint Arrangements (“IFRS 11”). This standard is effective for periods beginning on or after January 1, 2013 and establishes principles for financial reporting by parties to a joint arrangement. IFRS 11 requires a party to assess the rights and obligations arising from an arrangement in determining whether an arrangement is either a joint venture or a joint operation. Joint ventures are to be accounted for using the equity method while joint operations will continue to be accounted for using proportionate consolidation. Cameco is assessing the impact of this new standard on its financial statements.

(iv)

Disclosure of Interests in Other Entities

In May 2011, the IASB issued IFRS 12, Disclosure of Interests in Other Entities (“IFRS 12”). This standard is effective for periods beginning on or after January 1, 2013 and applies to entities that have an interest in a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. IFRS 12 integrates and makes consistent the disclosure requirements for a reporting entity’s interest in other entities and presents those requirements in a single standard. Cameco is assessing the impact of this new standard on its financial statements.

(v)

Fair Value Measurement

In May 2011, the IASB issued IFRS 13, Fair Value Measurement (“IFRS 13”). This standard is effective for periods beginning on or after January 1, 2013 and provides additional guidance where IFRS requires fair value to be used. IFRS 13 defines fair value, sets out in a single standard a framework for measuring fair value and establishes the required disclosures about fair value measurements. Cameco is assessing the impact of this new standard on its financial statements.

(vi)

Employee Benefits

In June 2011, the IASB issued an amended version of IAS 19, Employee Benefits (“IAS 19”). This amendment is effective for periods beginning on or after January 1, 2013 and eliminates the ‘corridor method’ of accounting for defined benefit plans. Revised IAS 19 also streamlines the presentation of changes in assets and liabilities arising from defined benefit plans, and enhances the disclosure requirements for defined benefit plans. Cameco is assessing the impact of this revised standard on its financial statements.

(vii)

Presentation of Other Comprehensive Income

In June 2011, the IASB issued an amended version of IAS 1, Presentation of Financial Statements (“IAS 1”). This amendment is effective for periods beginning on or after January 1, 2012 and requires companies preparing financial statements in accordance with IFRS to group together items within OCI that may be reclassified to the profit or loss section of the statement of earnings. Revised IAS 1 also reaffirms existing requirements that items in OCI and profit or loss should be presented as either a single statement or two consecutive statements. Cameco is assessing the impact of this revised standard on its financial statements.

5.	Inventories


	Sep 30/11		Dec 31/10
Uranium
Concentrate	$	500,962	$	385,242
Broken ore		41,028		12,138

		541,990		397,380
Fuel Services		147,862		135,710

Total	$	689,852	$	533,090

6.	Long-Term Receivables, Investments and Other


	Sep 30/11			Dec 31/10
BPLP
Capital lease receivable from BALP ^(a)	$	88,764		$	91,608
Derivatives [note 16]		52,194			77,831
Available-for-sale securities
Western Uranium Corporation		—			6,033
GoviEx Uranium (privately held)		22,040			23,017
Derivatives [note 16]		10,961			50,011
Advances receivable from Inkai JV LLP [note 21]		90,103			125,072
Other		84,577			60,550

		348,639			434,122
Less current portion		(39,190	)		(91,447	)

Net	$	309,449		$	342,675

^(a)	BPLP leases the Bruce A nuclear generating plants and other property, plant and equipment to BALP under a sublease agreement. Future minimum base rent sublease payments under the capital lease receivable are imputed using a 7.5% discount rate.

7.	Other Liabilities


	Sep 30/11			Dec 31/10
Deferred sales	$	38,011		$	17,004
Derivatives [note 16]		62,952			5,273
Accrued pension and post-retirement benefit liability		22,215			21,738
BPLP
Accrued pension and post-retirement benefit liability ^(a)		518,505			375,430
Derivatives [note 16]		18,443			29,954
Other		6,870			9,270

		666,996			458,669
Less current portion		(129,999	)		(53,192	)

Total	$	536,997		$	405,477

^(a)	During the quarter the actuarial valuations for our pension plans were updated to reflect current market conditions. As a result, for the three and nine months ended September 30, 2011, Cameco has recorded an actuarial loss of $146,529,000 (2010 – $223,380,000), on a pre-tax basis (Note 12).

8.	Long-Term Debt

At September 30, 2011, Cameco had a $500,000,000 unsecured revolving credit facility that was available until November 30, 2012. In addition to direct borowings under the facility, up to $100,000,000 could have been used for the issuance of letters of credit and, to the extent necessary, up to $400,000,000 could have been allocated to provide liquidity support for the company’s commercial paper program. The facility ranked equally with all of Cameco’s other senior debt. At September 30, 2011, there were no amounts outstanding under this credit facility (2010 – nil).

On November 1, 2011, Cameco amended and extended the term of our $500,000,000 unsecured revolving credit facility that was maturing November 30, 2012. This credit facility was increased to $1,250,000,000 and now matures on November 1, 2016. Upon mutual agreement, the facility can be extended for an additional year on the anniversary date. In addition to direct borrowings under the facility, up to $100,000,000 can be used for the issuance of letters of credit and, to the extent necessary, it may be used to provide liquidity support for the company’s commercial paper program. The facility ranks equally with all of our other senior debt. As of November 4, 2011 there were no amounts outstanding under this facility. The agreement provides the ability to increase the revolving credit facility above $1,250,000,000 by no less than increments of $50,000,000, up to a total of $1,750,000,000.

On November 1, 2011, Cameco cancelled our $100 million unsecured revolving credit facility that was maturing February 4, 2012.

9.	Share Capital

(a)

At September 30, 2011, there were 394,714,883 common shares outstanding.

(b)

Options in respect of 8,647,291 shares are outstanding under the stock option plan and are exercisable up to 2019. For the quarter ended September 30, 2011, 3,800 options were exercised resulting in the issuance of shares (2010 – 432,652). For the nine months ended September 30, 2011, 363,840 options were exercised resulting in the issuance of shares (2010 – 619,844).

10.

Employee Benefit Expense

The following employee benefit expenses are included in cost of products and services sold, administration, exploration and research and development.


	Three Months Ended					Nine Months Ended
	Sep 30/11			Sep 30/10		Sep 30/11			Sep 30/10
Wages and salaries	$	127,199		$	112,637	$	366,044		$	335,727
Statutory and company benefits		17,352			17,273		63,847			60,690
Equity-settled share-based compensation		4,179			3,752		11,848			10,593
Expenses related to defined benefit plans		6,722			4,945		18,642			14,834
Contributions to defined contribution plans		4,550			4,428		18,250			13,306
Cash-settled share-based compensation		(2,740	)		2,516		(9,985	)		(3,099	)

Total	$	157,262		$	145,551	$	468,646		$	432,051

11.

Finance Costs


	Three Months Ended					Nine Months Ended
	Sep 30/11			Sep 30/10		Sep 30/11			Sep 30/10
Interest on long-term debt	$	14,463		$	14,874	$	42,793		$	43,035
Unwinding of discount on provisions		3,240			3,517		9,978			10,544
Other charges		83			2,071		2,223			6,729
Foreign exchange losses (gains)		(1,844	)		1,792		(527	)		4,677
Interest on short-term debt		443			554		1,479			1,458

Total	$	16,385		$	22,808	$	55,946		$	66,443

12.

Income Taxes


	Three Months Ended						Nine Months Ended
	Sep 30/11			Sep 30/10			Sep 30/11			Sep 30/10
Earnings (loss) before income taxes
Canada	$	(185,682	)	$	(6,789	)	$	(260,300	)	$	(64,818	)
Foreign		199,176			99,605			418,324			365,907

	$	13,494		$	92,816		$	158,024		$	301,089

Current income taxes (recovery)
Canada	$	(10,422	)	$	3,219		$	(10,847	)	$	29,382
Foreign		9,866			5,698			27,002			19,437

	$	(556	)	$	8,917		$	16,155		$	48,819
Deferred income taxes (recovery)
Canada	$	(25,676	)	$	(10,999	)	$	(42,433	)	$	(57,879	)
Foreign		4,521			1,037			7,501			5,934

	$	(21,155	)	$	(9,962	)	$	(34,932	)	$	(51,945	)

Income tax recovery	$	(21,711	)	$	(1,045	)	$	(18,777	)	$	(3,126	)

In 2008, as part of the ongoing annual audits of Cameco’s Canadian tax returns, Canada Revenue Agency (CRA) disputed the transfer pricing methodology used by Cameco and its wholly owned Swiss subsidiary, Cameco Europe Ltd. (CEL), in respect of sale and purchase agreements for uranium products. From December 2008 to date, CRA issued notices of reassessment for the taxation years 2003, 2004 and 2005, which have increased Cameco’s income for Canadian income tax purposes by approximately $43,000,000, $108,000,000 and $197,000,000 respectively. No reassessment received to date has resulted in more than a nominal amount of cash taxes becoming payable due to the availability of elective deductions and tax loss carrybacks. Cameco believes it is likely that CRA will reassess Cameco’s tax returns for subsequent years on a similar basis.

CRA’s Transfer Pricing Review Committee has not imposed a transfer pricing penalty for any year reassessed to date.

Having regard to advice from its external advisors, Cameco’s opinion is that CRA’s position is incorrect, and Cameco is contesting CRA’s position. However, to reflect the uncertainties of CRA’s appeals process and litigation, Cameco has recorded a cumulative tax provision related to this matter for the years 2003 through the current period in the amount of $31,000,000. No provisions for penalties or interest have been recorded. Cameco does not expect more than a nominal amount of cash taxes to be payable due to the availability of elective deductions and tax loss carryovers. While the resolution of this matter may result in liabilities that are higher or lower than the cumulative tax provision recorded, management believes that the ultimate resolution will not be material to Cameco’s financial position, results of operations or liquidity over the period. However, an unfavourable outcome for the years 2003 to 2010 could be material to Cameco’s financial position, results of operations or cash flows in the year(s) of resolution.

Further to Cameco’s decision to contest CRA’s reassessments, Cameco is pursuing its appeal rights under the Income Tax Act.

Other comprehensive income included on the consolidated statements of comprehensive income and the consolidated statements of changes in equity is presented net of income taxes. The following income tax amounts are included in each component of other comprehensive income:

For the three months ended September 30, 2011


	Before tax			Income tax recovery (expense)			Net of tax
Exchange differences on translation of foreign operations	$	51,339		$	—		$	51,339
Gains on derivatives designated as cash flow hedges		725			(181	)		544
Gains on derivatives designated as cash flow hedges transferred to net earnings		(5,531	)		1,469			(4,062	)
Unrealized gains on assets available-for-sale		69			(9	)		60
Gains on assets available-for-sale transferred to net earnings		(9	)		1			(8	)
Defined benefit plan actuarial losses		(146,529	)		36,632			(109,897	)

	$	(99,936	)	$	37,912		$	(62,024	)

For the three months ended September 30, 2010


	Before tax			Income tax recovery (expense)			Net of tax
Exchange differences on translation of foreign operations	$	30,572		$	—		$	30,572
Gains on derivatives designated as cash flow hedges		2,485			(659	)		1,826
Gains on derivatives designated as cash flow hedges transferred to net earnings		(20,768	)		6,008			(14,760	)
Unrealized gains on assets available-for-sale		168			(29	)		139
Losses on assets available-for-sale transferred to net earnings		18			(3	)		15
Defined benefit plan actuarial losses		(223,380	)		55,844			(167,536	)

	$	(210,905	)	$	61,161		$	(149,744	)

For the nine months ended September 30, 2011

		000000000			000000000			000000000
	Before tax			Income tax recovery (expense)			Net of tax
Exchange differences on translation of foreign operations	$	39,900		$	—		$	39,900
Gains on derivatives designated as cash flow hedges		4,998			(1,332	)		3,666
Gains on derivatives designated as cash flow hedges transferred to net earnings		(20,872	)		5,578			(15,294	)
Unrealized gains on assets available-for-sale		860			(116	)		744
Gains on assets available-for-sale transferred to net earnings		(2,129	)		281			(1,848	)
Defined benefit plan actuarial losses		(146,529	)		36,632			(109,897	)

	$	(123,772	)	$	41,043		$	(82,729	)

For the nine months ended September 30, 2010


	Before tax			Income tax recovery (expense)			Net of tax
Exchange differences on translation of foreign operations	$	22,150		$	—		$	22,150
Gains on derivatives designated as cash flow hedges		14,925			(2,795	)		12,130
Gains on derivatives designated as cash flow hedges transferred to net earnings		(72,430	)		21,152			(51,278	)
Unrealized gains on assets available-for-sale		1,233			(161	)		1,072
Gains on assets available-for-sale transferred to net earnings		(3,023	)		409			(2,614	)
Defined benefit plan actuarial losses		(223,380	)		55,844			(167,536	)

	$	(260,525	)	$	74,449		$	(186,076	)

13.

Statements of Cash Flows

Other Operating Items


	Three Months Ended						Nine Months Ended
	Sep 30/11			Sep 30/10			Sep 30/11			Sep 30/10
Changes in non-cash working capital:
Accounts receivable	$	(61,100	)	$	(87,975	)	$	169,059		$	97,509
Inventories		(548	)		(65,884	)		(117,127	)		(50,914	)
Supplies and prepaid expenses		(8,509	)		(10,818	)		(12,540	)		(3,329	)
Accounts payable and accrued liabilities		40,241			29,096			1,574			(146,198	)
Other		10,404			(13,559	)		(18,504	)		(20,967	)

Total	$	(19,512	)	$	(149,140	)	$	22,462		$	(123,899	)

14.

Stock Option Plan

The Company has established a stock option plan under which options to purchase common shares may be granted to officers and other employees of Cameco. Options granted under the stock option plan have an exercise price of not less than the closing price quoted on the TSX for the common shares of Cameco on the trading day prior to the date on which the option is granted. The options vest over three years and expire eight years from the date granted. Options have not been awarded to directors since 2003 and the plan has been amended to preclude the issue of options to directors.

The aggregate number of common shares that may be issued pursuant to the Cameco stock option plan shall not exceed 43,017,198, of which 26,456,279 shares have been issued.

Cameco records compensation expense with an offsetting credit to contributed surplus to reflect the estimated fair value of stock options granted to employees. For the quarter ended September 30, 2011, the amount recorded was $2,349,000 (2010 – $1,324,000). For the nine months ended September 30, 2011, the amount recorded was $11,970,000 (2010 – $7,645,000).

The fair value of the options granted each year was determined using the Black-Scholes option-pricing model with the following weighted average assumptions:


	Nine Months Ended
	Sep 30/11			Sep 30/10
Number of options granted		1,630,069			1,515,945
Average strike price	$	39.10		$	28.90
Expected dividend	$	0.40		$	0.28
Expected volatility		39	%		36	%
Risk-free interest rate		2.5	%		2.1	%
Expected life of option		4.5 years			4.2 years
Expected forfeitures		15	%		15	%
Weighted average grant date fair values	$	12.57		$	8.46

15.

Commitments and Contingencies

(a)

On February 12, 2004, Cameco, Cameco Bruce Holdings II Inc., BPC Generation Infrastructure Trust (“BPC”) and TransCanada Pipelines Limited (“TransCanada”) (collectively, the “Consortium”), sent a notice of claim to British Energy Limited and British Energy International Holdings Limited (collectively, “BE”) requesting, amongst other things, indemnification for breach of a representation and warranty contained in the February 14, 2003, Amended and Restated Master Purchase Agreement. The alleged breach is that the Unit 8 steam generators were not “in good condition, repair and proper working order, having regard to their use and age.” This defect was discovered during a planned outage conducted just after closing. As a result of this defect, the planned outage had to be significantly extended. The Consortium has claimed damages in the amount of $64,558,200 being 79.8% of the $80,900,000 of damages actually incurred, plus an unspecified amount to take into account the reduced operating life of the steam generators. By agreement of the parties, an arbitrator has been appointed to arbitrate the claims.

The Consortium served its claim on October 21, 2008, and has amended it as required, most recently on August 7, 2009. BE served its answer and counter-statement on December 22, 2008, most recently amended on March 25, 2010, and the Consortium served its reply and answer to counter-statement on January 22, 2009, most recently amended on August 7, 2009.

The Unit 8 steam generators require on-going monitoring and maintenance as a result of the defect. In addition to the $64,558,200 in damages sought in the notice of claim, the claim seeks an additional $4,900,000 spent on inspection, monitoring and maintenance of Unit 8, and $31,900,000 in costs for future monitoring and maintenance, as well as repair costs and lost revenue due to anticipated unplanned outages as a consequence of the defect in Unit 8. The initial claim had also sought damages for the early replacement of the Unit 8 steam generators due to the defect shortening their useful operating lives. However, subsequent inspection data and analysis of the condition of the Unit 8 steam generators indicates that they will continue to function until the end of the Consortium’s lease of the Bruce Power facility in 2018, as was expected at the time the MPA was entered into. The claim for early replacement was thus abandoned via an amendment to the claim on August 7, 2009. The arbitration hearing was completed on November 23, 2010 and final oral arguments were heard July 19 through 21, 2011 and a decision is pending.

In anticipation of this claim, BE issued on February 10, 2006, and then served on Ontario Power Generation Inc. (“OPG”) and BPLP a Statement of Claim. This Statement of Claim seeks damages for any amounts that BE is found liable to pay to the Consortium in connection with the Unit 8 steam generator arbitration described above, damages in the amount of $500,000,000, costs and pre and post judgment interest amongst other things. Further proceedings in this action are on hold pending completion of the arbitration hearing.

(b)

Annual supplemental rents of $30,000,000 (subject to CPI) per operating reactor are payable by BPLP to OPG. Should the hourly annual average price of electricity in Ontario fall below $30 per megawatt hour for any calendar year, the supplemental rent reduces to $12,000,000 per operating reactor. In accordance with the Sublease Agreement, BALP will participate in its share of any adjustments to the supplemental rent.

(c)

Cameco, TransCanada and BPC have assumed the obligations to provide financial guarantees on behalf of BPLP. Cameco has provided the following financial assurances, with varying terms that range from 2011 to 2018:

Guarantees to customers under power sales agreements of up to $19,000,000. At September 30, 2011, Cameco’s actual exposure under these agreements was $13,300,000.

ii)

Termination payments to OPG pursuant to the lease agreement of $58,300,000. The fair value of these guarantees is nominal.

(d)

Under a supply contract with the Ontario Power Authority (“OPA”), BPLP is entitled to receive payments from the OPA during periods when the market price for electricity in Ontario is lower than the floor price defined under the agreement during a calendar year. On July 6, 2009, BPLP and the OPA amended the supply contract such that beginning in 2009, the annual payments received will not be subject to repayment in future years. Previously, the payments received under the agreement were subject to repayment during the entire term of the contract, dependent on the spot price in future periods. BPLP’s entitlement to receive these payments remains in effect until December 31, 2019 but the generation that is subject to these payments starts to decrease in 2016, reflecting the original estimated lives for the Bruce B units. During 2011, BPLP recorded $351,000,000 under this agreement which was recognized as revenue with Cameco’s share being $110,900,000.

16.

Derivatives

The following tables summarize the fair value of derivatives and classification on the statements of financial position:

As at September 30, 2011


	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives - sales contracts	$	(2,057	)	$	9,794		$	7,737
Foreign currency contracts		(56,983	)		—			(56,983	)
Interest rate contracts		7,049			—			7,049
Cash flow hedges:
Energy and sales contracts		—			23,957			23,957

Net	$	(51,991	)	$	33,751		$	(18,240	)

Classification:
Current portion of long-term receivables, investments and other [note 6]	$	2,587		$	36,602		$	39,189
Long-term receivables, investments and other [note 6]		8,374			15,592			23,966
Current portion of other liabilities [note 7]		(59,569	)		(14,198	)		(73,767	)
Other liabilities [note 7]		(3,383	)		(4,245	)		(7,628	)

Net	$	(51,991	)	$	33,751		$	(18,240	)

As at December 31, 2010

		000000000			000000000			000000000
	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives - sales contracts	$	(3,864	)	$	18,877		$	15,013
Foreign currency contracts		47,144			—			47,144
Interest rate contracts		1,458			—			1,458
Cash flow hedges:
Energy and sales contracts		—			29,000			29,000

Net	$	44,738		$	47,877		$	92,615

Classification:
Current portion of long-term receivables, investments and other [note 6]	$	46,629		$	44,505		$	91,134
Long-term receivables, investments and other [note 6]		3,382			33,326			36,708
Current portion of other liabilities [note 7]		(377	)		(20,662	)		(21,039	)
Other liabilities [note 7]		(4,896	)		(9,292	)		(14,188	)

Net	$	44,738		$	47,877		$	92,615

The following tables summarize different components of the gains (losses) on derivatives:

For the three months ended September 30, 2011

		000000000			000000000			000000000
	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives - sales contracts	$	697		$	(1,884	)	$	(1,187	)
Foreign currency contracts		(79,999	)		—			(79,999	)
Interest rate contracts		6,009			—			6,009
Cash flow hedges:
Energy and sales contracts		—			(627	)		(627	)

Net	$	(73,293	)	$	(2,511	)	$	(75,804	)

For the three months ended September 30, 2010

		000000000		000000000			000000000
	Cameco		BPLP			Total
Non-hedge derivatives:
Embedded derivatives - sales contracts	$	2,599	$	(3,315	)	$	(716	)
Foreign currency contracts		36,940		—			36,940
Interest rate contracts		3,234		—			3,234
Cash flow hedges:
Energy and sales contracts		—		(339	)		(339	)

Net	$	42,773	$	(3,654	)	$	39,119

For the nine months ended September 30, 2011

		0000000			0000000			0000000
	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives - sales contracts	$	2,069		$	(1,746	)	$	323
Foreign currency contracts		(46,339	)		—			(46,339	)
Interest rate contracts		7,882			—			7,882
Cash flow hedges:
Energy and sales contracts		—			(2,082	)		(2,082	)

Net	$	(36,388	)	$	(3,828	)	$	(40,216	)

For the nine months ended September 30, 2010

		0000000			0000000			0000000
	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives - sales contracts	$	(637	)	$	(2,932	)	$	(3,569	)
Foreign currency contracts		22,999			—			22,999
Interest rate contracts		4,582			—			4,582
Cash flow hedges:
Energy and sales contracts		—			(1,963	)		(1,963	)

Net	$	26,944		$	(4,895	)	$	22,049

Over the next 12 months, based on current exchange rates, Cameco expects an estimated $18,025,000 of pre-tax gains from BPLP’s various energy and sales related cash flow hedges to be reclassified through other comprehensive income to net earnings. The maximum length of time BPLP is hedging its exposure to the variability in future cash flows related to electricity prices on future transactions is six years.

17.

Earnings Per Share

Per share amounts have been calculated based on the weighted average number of common shares outstanding during the period. The weighted average number of paid shares outstanding in 2011 was 394,642,475 (2010 – 392,987,679).


	Three Months Ended				Nine Months Ended
	Sep 30/11		Sep 30/10		Sep 30/11		Sep 30/10
Basic earnings per share computation
Net earnings attributable to equity holders	$	39,452	$	97,513	$	185,590	$	310,850
Weighted average common shares outstanding		394,712		393,100		394,642		392,988

Basic earnings per common share	$	0.10	$	0.25	$	0.47	$	0.79

Diluted earnings per share computation
Net earnings attributable to equity holders	$	39,452	$	97,513	$	185,590	$	310,850

Weighted average common shares outstanding		394,712		393,100		394,642		392,988
Dilutive effect of stock options		474		1,483		994		1,645

Weighted average common shares outstanding, assuming dilution		395,186		394,583		395,636		394,633

Diluted earnings per common share	$	0.10	$	0.25	$	0.47	$	0.79

18.

Segmented Information

Cameco has three reportable segments: uranium, fuel services and electricity. The uranium segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate. The fuel services segment involves the refining, conversion and fabrication of uranium concentrate and the purchase and sale of conversion services. The electricity segment involves the generation and sale of electricity.

Cameco’s reportable segments are strategic business units with different products, processes and marketing strategies.

Accounting policies used in each segment are consistent with the policies outlined in the summary of significant accounting policies.

(a)

Business Segments

For the three months ended September 30, 2011


	Uranium		Fuel Services		Electricity		Other			Total
Revenue	$	331,500	$	80,563	$	114,266	$	623		$	526,952
Expenses
Products and services sold		164,704		64,816		54,926		73			284,519
Depreciation, depletion and amortization		34,279		6,089		18,455		4,597			63,420

Cost of sales		198,983		70,905		73,381		4,670			347,939

Gross profit (loss)		132,517		9,658		40,885		(4,047	)		179,013
Exploration		35,619		—		—		—			35,619
Cigar Lake remediation		576		—		—		—			576
Loss on sale of assets		418		—		—		—			418
Share of loss from equity-accounted investees		686		757		—		—			1,443
Other expense		1,036		—		—		—			1,036
Non-segmented expenses											126,427

Earnings (loss) before income taxes		94,182		8,901		40,885		(4,047	)		13,494
Income tax recovery											(21,711	)

Net earnings										$	35,205

For the three months ended September 30, 2010

		00000000			00000000		00000000		00000000			00000000
	Uranium			Fuel Services		Electricity		Other			Total
Revenue	$	239,655		$	64,278	$	114,866	$	676		$	419,475
Expenses
Products and services sold		97,798			47,965		57,388		88			203,239
Depreciation, depletion and amortization		33,742			5,426		16,600		4,621			60,389

Cost of sales		131,540			53,391		73,988		4,709			263,628

Gross profit (loss)		108,115			10,887		40,878		(4,033	)		155,847
Exploration		35,430			—		—		—			35,430
Cigar Lake remediation		6,622			—		—		—			6,622
Gain on sale of assets		(481	)		—		—		—			(481	)
Share of loss from equity-accounted investees		875			749		—		—			1,624
Other expense		408			—		—		—			408
Non-segmented expenses												19,428

Earnings (loss) before income taxes		65,261			10,138		40,878		(4,033	)		92,816
Income tax recovery												(1,045	)

Net earnings											$	93,861

For the nine months ended September 30, 2011

		00000000			00000000		00000000		00000000			00000000
				Fuel
	Uranium			Services		Electricity		Other			Total
Revenue	$	885,068		$	199,478	$	320,898	$	1,473		$	1,406,917
Expenses
Products and services sold		487,495			153,904		179,755		147			821,301
Depreciation, depletion and amortization		79,077			16,528		53,013		13,673			162,291

Cost of sales		566,572			170,432		232,768		13,820			983,592

Gross profit (loss)		318,496			29,046		88,130		(12,347	)		423,325
Exploration		70,577			—		—		—			70,577
Cigar Lake remediation		4,113			—		—		—			4,113
Loss on sale of assets		1,113			—		—		—			1,113
Share of loss from equity-accounted investees		3,665			1,908		—		—			5,573
Other income		(3,053	)		—		—		—			(3,053	)
Non-segmented expenses												186,978

Earnings (loss) before income taxes		242,081			27,138		88,130		(12,347	)		158,024
Income tax recovery												(18,777	)

Net earnings											$	176,801

For the nine months ended September 30, 2010


				Fuel
	Uranium			Services		Electricity		Other			Total
Revenue	$	900,560		$	195,214	$	352,688	$	1,783		$	1,450,245
Expenses
Products and services sold		460,374			131,361		166,342		225			758,302
Depreciation, depletion and amortization		97,666			12,160		48,271		14,544			172,641

Cost of sales		558,040			143,521		214,613		14,769			930,943

Gross profit (loss)		342,520			51,693		138,075		(12,986	)		519,302
Exploration		68,340			—		—		—			68,340
Cigar Lake remediation		14,460			—		—		—			14,460
Gain on sale of assets		(297	)		—		—		—			(297	)
Share of loss from equity-accounted investees		2,181			2,216		—		—			4,397
Other income		(2,159	)		—		—		—			(2,159	)
Non-segmented expenses												133,472

Earnings (loss) before income taxes		259,995			49,477		138,075		(12,986	)		301,089
Income tax recovery												(3,126	)

Net earnings											$	304,215

19.

Talvivaara Agreement

On February 7, 2011, Cameco signed two agreements with Talvivaara Mining Company Plc. to buy uranium produced at the Sotkamo nickel-zinc mine in Finland. Under the first agreement with Talvivaara, Cameco will provide an up-front payment, to a maximum of $60,000,000 (US) to cover certain construction costs. This amount will be repaid through deliveries of uranium concentrate. Once the full amount has been repaid, Cameco will continue to purchase the uranium concentrates produced at the Sotkamo mine through a second agreement which provides for the purchase of uranium using a pricing formula that references market prices at the time of delivery. The second agreement expires on December 31, 2027.

20.

Hathor Offer

On August 30, 2011, Cameco made an all-cash offer to acquire all the outstanding shares of Hathor Exploration Ltd. (Hathor) for a price of $3.75 per share in a transaction which values the fully diluted share capital of Hathor at approximately $520,000,000. On October 19, 2011, Hathor announced that it had entered into an agreement with Rio Tinto pursuant to which Rio Tinto will make an offer for all of the common shares of Hathor. On October 31, 2011, Cameco announced the extension of the expiry date of our offer to November 14, 2011.

21.

Related Parties

The shares of Cameco are widely held and no shareholder, resident in Canada, is allowed to own more than 25% of the Company’s outstanding common shares, either individually or together with associates. A non-resident of Canada is not allowed to own more than 15%.

Transactions with Key Management Personnel

Key management personnel are those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel of the Company include executive officers, vice-presidents, other senior managers and members of the board of directors.

In addition to their salaries, Cameco also provides non-cash benefits to executive officers and vice-presidents, and contributes to pension plans on their behalf. Senior management and directors also participate in the Company’s share-based compensation plans (see note 22 of the 2010 consolidated financial statements).

Executive officers are subject to terms of notice ranging from three to six months. Upon resignation at the Company’s request, they are entitled to termination benefits up to the lesser of 24 months or the period remaining until age 65. The termination benefits include gross salary plus the target short-term incentive bonus for the year in which termination occurs.

Compensation for key management personnel was comprised of:


	Three Months Ended				Nine Months Ended
	Sep 30/11		Sep 30/10		Sep 30/11		Sep 30/10
Short-term employee benefits	$	7,109	$	6,004	$	19,029	$	17,592
Post-employment benefits		1,139		1,440		3,534		4,245
Share-based compensation		2,022		1,447		7,496		5,774

	$	10,270	$	8,891	$	30,059	$	27,611

Certain key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. As noted below, one of these entities transacted with the Company in the reporting period. The terms and conditions of the transactions were on an arm’s length basis.

Cameco purchases a significant amount of goods and services for its Saskatchewan mining operations from northern Saskatchewan suppliers to support economic development in the region. One such supplier is Points Athabasca Contracting Ltd. and the president of the company became a member of the board of directors of Cameco during 2009. In 2011, Cameco paid Points Athabasca Contracting Ltd. $46,900,000 (2010 – $19,000,000) for construction and contracting services. The transactions were conducted in the normal course of business and were accounted for at the exchange amount. Accounts payable include a balance of $3,700,000 (2010 – $1,100,000).

Other Related Party Transactions


	Transaction Value Three Months Ended						Transaction Value Nine Months Ended						Balance Outstanding As at
	Sep 30/11			Sep 30/10			Sep 30/11			Sep 30/10			Sep 30/11		Sep 30/10
Sale of goods and services
Jointly Controlled Entities
Bruce Power L.P.	$	6,530		$	11,730		$	20,804		$	28,591		$	10,816	$	29,814
Other
Jointly Controlled Entities
Interest income (Inkai)		522			956			1,725			2,619			90,103		148,834
Associates
Interest expense		(444	)		(555	)		(1,479	)		(1,458	)		83,205		80,369

Cameco has entered into fuel supply agreements with BPLP for the procurement of fabricated fuel. Under these agreements, Cameco will supply uranium, conversion services and fabrication services. Contract terms are at market rates and on normal trade terms.

Through an unsecured shareholder loan, Cameco has agreed to fund the development of the Inkai project. The limit of the loan facility is $370,000,000 (US) and advances under the facility bear interest at a rate of LIBOR plus 2%. At September 30, 2011, $216,822,000 (US) of principal and interest was outstanding (December 31, 2010 - $314,378,000 (US)).

In 2008, a promissory note in the amount of $73,344,000 (US) was issued to finance the acquisition of GE-Hitachi Global Laser Enrichment LLC (GLE) The promissory note is payable on demand and bears interest at market rates. At September 30, 2011, $80,090,000 (US) of principal and interest was outstanding (December 31, 2010 - $78,579,000 (US)).

22.

Comparative Figures

Certain prior period balances have been reclassified to conform to the current financial statement presentation.