EX-99.2 3 d520454dex992.htm EX-99.2

Exhibit 99.2

Interim Condensed Consolidated Financial Statements of

CGI INC.

For the three and nine months ended June 30, 2023 and 2022

(unaudited)

Interim Consolidated Statements of Earnings

For the three and nine months ended June 30

(in thousands of Canadian dollars, except per share data) (unaudited)

|  |  |  | Three months ended June 30 |  |  | Nine months ended June 30 |
|  | Notes |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Revenue |  | 9 |  |  | 3,623,428 |  |  |  | 3,258,638 |  |  |  | 10,789,024 |  |  |  | 9,619,980 |
Operating expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Costs of services, selling and administrative |  |  |  |  | 3,037,083 |  |  |  | 2,738,041 |  |  |  | 9,050,008 |  |  |  | 8,054,424 |
Acquisition-related and integration costs |  | 7c |  |  | 13,032 |  |  |  | 8,014 |  |  |  | 53,401 |  |  |  | 12,879 |
Net finance costs |  | 6 |  |  | 12,808 |  |  |  | 22,887 |  |  |  | 46,315 |  |  |  | 71,004 |
Foreign exchange loss (gain) |  |  |  |  | 1,524 |  |  |  | 727 |  |  |  | (686 | ) |  |  | 616 |
|  |  |  |  | 3,064,447 |  |  |  | 2,769,669 |  |  |  | 9,149,038 |  |  |  | 8,138,923 |
Earnings before income taxes |  |  |  |  | 558,981 |  |  |  | 488,969 |  |  |  | 1,639,986 |  |  |  | 1,481,057 |
Income tax expense |  |  |  |  | 144,002 |  |  |  | 124,625 |  |  |  | 423,213 |  |  |  | 377,277 |
Net earnings |  |  |  |  | 414,979 |  |  |  | 364,344 |  |  |  | 1,216,773 |  |  |  | 1,103,780 |
Earnings per share |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings per share |  | 5c |  |  | 1.78 |  |  |  | 1.53 |  |  |  | 5.18 |  |  |  | 4.59 |
Diluted earnings per share |  | 5c |  |  | 1.75 |  |  |  | 1.51 |  |  |  | 5.11 |  |  |  | 4.53 |

See Notes to the Interim Condensed Consolidated Financial Statements.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 1

Interim Consolidated Statements of Comprehensive Income

For the three and nine months ended June 30

(in thousands of Canadian dollars) (unaudited)

|  | Three months ended June 30 |  |  | Nine months ended June 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Net earnings |  |  | 414,979 |  |  |  | 364,344 |  |  |  | 1,216,773 |  |  |  | 1,103,780 |
Items that will be reclassified subsequently to net earnings (net of income taxes): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net unrealized (losses) gains on translating financial statements of foreign operations |  |  | (211,361 | ) |  |  | (126,313 | ) |  |  | 211,936 |  |  |  | (491,618 | )
Net gains (losses) on cross-currency swaps and on translating long-term debt designated as hedges of net investments in foreign operations |  |  | 49,624 |  |  |  | (3,354 | ) |  |  | (31,341 | ) |  |  | 69,993 |
Deferred (costs) gains of hedging on cross-currency swaps |  |  | (12,876 | ) |  |  | 5,680 |  |  |  | (4,106 | ) |  |  | (1,285 | )
Net unrealized (losses) gains on cash flow hedges |  |  | (2,559 | ) |  |  | 4,644 |  |  |  | (19,206 | ) |  |  | 15,611 |
Net unrealized (losses) gains on financial assets at fair value through other comprehensive income |  |  | (738 | ) |  |  | (1,616 | ) |  |  | 647 |  |  |  | (5,605 | )
Items that will not be reclassified subsequently to net earnings (net of income taxes): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net remeasurement (losses) gains on defined benefit plans |  |  | (12,231 | ) |  |  | 37,653 |  |  |  | (13,712 | ) |  |  | 71,871 |
Other comprehensive (loss) income |  |  | (190,141 | ) |  |  | (83,306 | ) |  |  | 144,218 |  |  |  | (341,033 | )
Comprehensive income |  |  | 224,838 |  |  |  | 281,038 |  |  |  | 1,360,991 |  |  |  | 762,747 |

See Notes to the Interim Condensed Consolidated Financial Statements.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 2

Interim Consolidated Balance Sheets

(in thousands of Canadian dollars) (unaudited)

|  | Notes |  |  | As at June 30, 2023 |  |  |  | As at September 30, 2022 |
|  |  |  |  | $ |  |  |  | $ |
Assets |  |  |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | 8c and 10 |  |  | 1,468,832 |  |  |  | 966,458 |
Accounts receivable |  |  |  |  | 1,509,057 |  |  |  | 1,363,545 |
Work in progress |  |  |  |  | 1,238,748 |  |  |  | 1,191,844 |
Current financial assets |  | 10 |  |  | 47,063 |  |  |  | 33,858 |
Prepaid expenses and other current assets |  |  |  |  | 195,835 |  |  |  | 189,366 |
Income taxes |  |  |  |  | 4,482 |  |  |  | 5,137 |
Total current assets before funds held for clients |  |  |  |  | 4,464,017 |  |  |  | 3,750,208 |
Funds held for clients |  |  |  |  | 669,215 |  |  |  | 598,839 |
Total current assets |  |  |  |  | 5,133,232 |  |  |  | 4,349,047 |
Property, plant and equipment |  |  |  |  | 394,010 |  |  |  | 369,608 |
Right-of-use assets |  |  |  |  | 490,713 |  |  |  | 535,121 |
Contract costs |  |  |  |  | 295,823 |  |  |  | 261,612 |
Intangible assets |  |  |  |  | 604,869 |  |  |  | 615,959 |
Other long-term assets |  |  |  |  | 129,379 |  |  |  | 139,666 |
Long-term financial assets |  |  |  |  | 192,818 |  |  |  | 337,156 |
Deferred tax assets |  |  |  |  | 133,789 |  |  |  | 85,795 |
Goodwill |  |  |  |  | 8,705,513 |  |  |  | 8,481,456 |
|  |  |  |  | 16,080,146 |  |  |  | 15,175,420 |
Liabilities |  |  |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued liabilities |  |  |  |  | 906,306 |  |  |  | 1,016,407 |
Accrued compensation and employee-related liabilities |  |  |  |  | 1,101,234 |  |  |  | 1,130,726 |
Current portion of long-term debt |  |  |  |  | 738,871 |  |  |  | 93,447 |
Current portion of lease liabilities |  |  |  |  | 149,007 |  |  |  | 157,944 |
Provisions |  |  |  |  | 25,520 |  |  |  | 33,103 |
Deferred revenue |  |  |  |  | 531,444 |  |  |  | 453,579 |
Income taxes |  |  |  |  | 310,372 |  |  |  | 153,984 |
Current derivative financial instruments |  | 10 |  |  | 7,776 |  |  |  | 5,710 |
Total current liabilities before clients’ funds obligations |  |  |  |  | 3,770,530 |  |  |  | 3,044,900 |
Clients’ funds obligations |  |  |  |  | 674,021 |  |  |  | 604,431 |
Total current liabilities |  |  |  |  | 4,444,551 |  |  |  | 3,649,331 |
Long-term debt |  |  |  |  | 2,373,544 |  |  |  | 3,173,587 |
Long-term lease liabilities |  |  |  |  | 504,454 |  |  |  | 551,257 |
Long-term provisions |  |  |  |  | 18,797 |  |  |  | 17,482 |
Other long-term liabilities |  |  |  |  | 247,360 |  |  |  | 192,108 |
Long-term derivative financial instruments |  | 10 |  |  | 7,220 |  |  |  | 6,480 |
Deferred tax liabilities |  |  |  |  | 81,251 |  |  |  | 157,406 |
Retirement benefits obligations |  |  |  |  | 171,720 |  |  |  | 155,045 |
|  |  |  |  | 7,848,897 |  |  |  | 7,902,696 |
Equity |  |  |  |  |  |  |  |  |  |
Retained earnings |  |  |  |  | 6,228,460 |  |  |  | 5,425,005 |
Accumulated other comprehensive income |  | 4 |  |  | 183,964 |  |  |  | 39,746 |
Capital stock |  | 5a |  |  | 1,482,117 |  |  |  | 1,493,169 |
Contributed surplus |  |  |  |  | 336,708 |  |  |  | 314,804 |
|  |  |  |  | 8,231,249 |  |  |  | 7,272,724 |
|  |  |  |  | 16,080,146 |  |  |  | 15,175,420 |

See Notes to the Interim Condensed Consolidated Financial Statements.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 3

Interim Consolidated Statements of Changes in Equity

For the nine months ended June 30

(in thousands of Canadian dollars) (unaudited)

|  | Notes |  |  | Retained earnings |  |  | Accumulated other comprehensive income |  |  | Capital stock |  |  | Contributed surplus |  |  | Total equity |
|  |  |  |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Balance as at September 30, 2022 |  |  |  |  |  |  | 5,425,005 |  |  |  | 39,746 |  |  |  | 1,493,169 |  |  |  | 314,804 |  |  |  | 7,272,724 |
Net earnings |  |  |  |  |  |  | 1,216,773 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,216,773 |
Other comprehensive income |  |  |  |  |  |  | — |  |  |  | 144,218 |  |  |  | — |  |  |  | — |  |  |  | 144,218 |
Comprehensive income |  |  |  |  |  |  | 1,216,773 |  |  |  | 144,218 |  |  |  | — |  |  |  | — |  |  |  | 1,360,991 |
Share-based payment costs |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 45,734 |  |  |  | 45,734 |
Income tax impact associated with stock options |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 15,999 |  |  |  | 15,999 |
Exercise of stock options |  |  | 5a |  |  |  | — |  |  |  | — |  |  |  | 90,991 |  |  |  | (15,202 | ) |  |  | 75,789 |
Exercise of performance share units |  |  | 5a |  |  |  | (2,880 | ) |  |  | — |  |  |  | 13,657 |  |  |  | (24,627 | ) |  |  | (13,850 | )
Purchase for cancellation of Class A subordinate voting shares |  |  | 5a |  |  |  | (411,714 | ) |  |  | — |  |  |  | (41,348 | ) |  |  | — |  |  |  | (453,062 | )
Unrealized commitment to purchase Class A subordinate voting shares |  |  |  |  |  |  | 1,276 |  |  |  | — |  |  |  | 103 |  |  |  | — |  |  |  | 1,379 |
Purchase of Class A subordinate voting shares held in trusts |  |  | 5a |  |  |  | — |  |  |  | — |  |  |  | (74,455 | ) |  |  | — |  |  |  | (74,455 | )
Balance as at June 30, 2023 |  |  |  |  |  |  | 6,228,460 |  |  |  | 183,964 |  |  |  | 1,482,117 |  |  |  | 336,708 |  |  |  | 8,231,249 |
|  | Notes |  |  | Retained earnings |  |  | Accumulated other comprehensive income (loss) |  |  | Capital stock |  |  | Contributed surplus |  |  | Total equity |
|  |  |  |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Balance as at September 30, 2021 |  |  |  |  |  |  | 4,732,229 |  |  |  | 331,580 |  |  |  | 1,632,705 |  |  |  | 289,718 |  |  |  | 6,986,232 |
Net earnings |  |  |  |  |  |  | 1,103,780 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,103,780 |
Other comprehensive loss |  |  |  |  |  |  | — |  |  |  | (341,033 | ) |  |  | — |  |  |  | — |  |  |  | (341,033 | )
Comprehensive income (loss) |  |  |  |  |  |  | 1,103,780 |  |  |  | (341,033 | ) |  |  | — |  |  |  | — |  |  |  | 762,747 |
Share-based payment costs |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 36,597 |  |  |  | 36,597 |
Income tax impact associated with stock options |  |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (780 | ) |  |  | (780 | )
Exercise of stock options |  |  | 5a |  |  |  | — |  |  |  | — |  |  |  | 36,039 |  |  |  | (6,127 | ) |  |  | 29,912 |
Exercise of performance share units |  |  | 5a |  |  |  | — |  |  |  | — |  |  |  | 15,821 |  |  |  | (15,821 | ) |  |  | — |
Purchase for cancellation of Class A subordinate voting shares |  |  | 5a |  |  |  | (652,233 | ) |  |  | — |  |  |  | (111,830 | ) |  |  | — |  |  |  | (764,063 | )
Purchase of Class A subordinate voting shares held in trusts |  |  | 5a |  |  |  | — |  |  |  | — |  |  |  | (70,303 | ) |  |  | — |  |  |  | (70,303 | )
Balance as at June 30, 2022 |  |  |  |  |  |  | 5,183,776 |  |  |  | (9,453 | ) |  |  | 1,502,432 |  |  |  | 303,587 |  |  |  | 6,980,342 |

See Notes to the Interim Condensed Consolidated Financial Statements.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 4

Interim Consolidated Statements of Cash Flows

For the three and nine months ended June 30

(in thousands of Canadian dollars) (unaudited)

|  |  |  |  | Three months ended June 30 |  |  | Nine months ended June 30 |
|  | Notes |  |  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  |  |  |  | $ |  |  | $ |  |  | $ |  |  | $ |
Operating activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earnings |  |  |  |  |  |  | 414,979 |  |  |  | 364,344 |  |  |  | 1,216,773 |  |  |  | 1,103,780 |
Adjustments for: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization, depreciation and impairment |  |  |  |  |  |  | 126,271 |  |  |  | 116,577 |  |  |  | 381,551 |  |  |  | 353,602 |
Deferred income tax (recovery) expense |  |  |  |  |  |  | (27,840 | ) |  |  | 4,222 |  |  |  | (92,503 | ) |  |  | (5,242 | )
Foreign exchange loss (gain) |  |  |  |  |  |  | 1,218 |  |  |  | (1,396 | ) |  |  | (537 | ) |  |  | (4,105 | )
Share-based payment costs |  |  |  |  |  |  | 12,540 |  |  |  | 11,581 |  |  |  | 45,734 |  |  |  | 36,597 |
Gain on leases termination |  |  |  |  |  |  | (26 | ) |  |  | (2,333 | ) |  |  | (3,065 | ) |  |  | (4,595 | )
Net change in non-cash working capital items and others |  |  | 8a |  |  |  | (118,032 | ) |  |  | (73,812 | ) |  |  | (64,438 | ) |  |  | (103,900 | )
Cash provided by operating activities |  |  |  |  |  |  | 409,110 |  |  |  | 419,183 |  |  |  | 1,483,515 |  |  |  | 1,376,137 |
Investing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net change in short-term investments |  |  |  |  |  |  | (78,326 | ) |  |  | (1,102 | ) |  |  | (76,857 | ) |  |  | (3,208 | )
Business acquisitions (considering bank overdraft assumed and cash acquired) |  |  | 7b |  |  |  | (9,041 | ) |  |  | (414,389 | ) |  |  | (13,039 | ) |  |  | (572,407 | )
Loan receivable |  |  |  |  |  |  | 1,701 |  |  |  | — |  |  |  | (17,600 | ) |  |  | — |
Purchase of property, plant and equipment |  |  |  |  |  |  | (37,597 | ) |  |  | (42,307 | ) |  |  | (125,314 | ) |  |  | (117,893 | )
Proceeds from sale of property, plant and equipment |  |  |  |  |  |  | — |  |  |  | 3,790 |  |  |  | — |  |  |  | 3,790 |
Additions to contract costs |  |  |  |  |  |  | (26,233 | ) |  |  | (19,814 | ) |  |  | (77,497 | ) |  |  | (60,293 | )
Additions to intangible assets |  |  |  |  |  |  | (37,673 | ) |  |  | (39,721 | ) |  |  | (99,235 | ) |  |  | (96,871 | )
Purchase of long-term investments |  |  |  |  |  |  | (5,275 | ) |  |  | (1,234 | ) |  |  | (93,275 | ) |  |  | (10,053 | )
Proceeds from sale of long-term investments |  |  |  |  |  |  | 13,631 |  |  |  | 20,996 |  |  |  | 33,961 |  |  |  | 32,099 |
Cash used in investing activities |  |  |  |  |  |  | (178,813 | ) |  |  | (493,781 | ) |  |  | (468,856 | ) |  |  | (824,836 | )
Financing activities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase of long-term debt |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 948 |  |  |  | — |
Repayment of long-term debt |  |  |  |  |  |  | (3,041 | ) |  |  | (3,342 | ) |  |  | (8,830 | ) |  |  | (334,187 | )
Payment of lease liabilities |  |  |  |  |  |  | (39,203 | ) |  |  | (39,747 | ) |  |  | (117,498 | ) |  |  | (112,922 | )
Repayment of debt assumed from business acquisitions |  |  |  |  |  |  | — |  |  |  | (24,358 | ) |  |  | (56,994 | ) |  |  | (108,916 | )
Withholding taxes remitted on the net settlement of performance share units |  |  | 5a |  |  |  | (166 | ) |  |  | — |  |  |  | (13,850 | ) |  |  | — |
Purchase of Class A subordinate voting shares held in trusts |  |  | 5a |  |  |  | — |  |  |  | — |  |  |  | (74,455 | ) |  |  | (70,303 | )
Purchase and cancellation of Class A subordinate voting shares |  |  | 5a |  |  |  | (53,062 | ) |  |  | (113,550 | ) |  |  | (463,353 | ) |  |  | (780,465 | )
Issuance of Class A subordinate voting shares |  |  | 5a |  |  |  | 17,496 |  |  |  | 8,925 |  |  |  | 75,789 |  |  |  | 29,916 |
Net change in client funds obligations |  |  |  |  |  |  | (35,630 | ) |  |  | 14,712 |  |  |  | 69,478 |  |  |  | 100,774 |
Cash used in financing activities |  |  |  |  |  |  | (113,606 | ) |  |  | (157,360 | ) |  |  | (588,765 | ) |  |  | (1,276,103 | )
Effect of foreign exchange rate changes on cash, cash equivalents and cash included in funds held for clients |  |  |  |  |  |  | (34,536 | ) |  |  | (11,486 | ) |  |  | 8,773 |  |  |  | (75,651 | )
Net increase (decrease) in cash, cash equivalents and cash included in funds held for clients |  |  |  |  |  |  | 82,155 |  |  |  | (243,444 | ) |  |  | 434,667 |  |  |  | (800,453 | )
Cash, cash equivalents and cash included in funds held for clients, beginning of period |  |  |  |  |  |  | 1,823,696 |  |  |  | 1,598,722 |  |  |  | 1,471,184 |  |  |  | 2,155,731 |
Cash, cash equivalents and cash included in funds held for clients, end of period |  |  |  |  |  |  | 1,905,851 |  |  |  | 1,355,278 |  |  |  | 1,905,851 |  |  |  | 1,355,278 |
Cash composition: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  | 1,468,832 |  |  |  | 779,623 |  |  |  | 1,468,832 |  |  |  | 779,623 |
Cash included in funds held for clients |  |  |  |  |  |  | 437,019 |  |  |  | 575,655 |  |  |  | 437,019 |  |  |  | 575,655 |

See Notes to the Interim Condensed Consolidated Financial Statements.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 5

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

1. | Description of business

CGI Inc. (the Company), directly or through its subsidiaries, provides managed information technology (IT) and business process services, business, and strategic IT consulting and systems integration services, as well as the sale of software solutions to help clients effectively realize their strategies and create added value. The Company was incorporated under Part IA of the Companies Act (Québec), predecessor to the Business Corporations Act (Québec) which came into force on February 14, 2011 and its Class A subordinate voting shares are publicly traded. The executive and registered office of the Company is situated at 1350 René-Lévesque Blvd. West, Montréal, Québec, Canada, H3G 1T4.

2. | Basis of preparation

These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB). In addition, the interim condensed consolidated financial statements have been prepared in accordance with the accounting policies set out in Note 3, Summary of significant accounting policies, of the Company’s consolidated financial statements for the year ended September 30, 2022 which were consistently applied to all periods presented, except for the new accounting standard amendments adopted on October 1, 2022, and on May 23, 2023, as described below in Note 3, Accounting policies.

These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended September 30, 2022.

The Company’s interim condensed consolidated financial statements for the three and nine months ended June 30, 2023 and 2022 were authorized for issue by the Board of Directors on July 25, 2023.

3. | Accounting policies

ADOPTION OF ACCOUNTING STANDARD

The following standard amendments have been adopted by the Company on October 1, 2022:

Onerous contracts – Cost of Fulfilling a Contract - Amendments to IAS 37

In May, 2020, the IASB amended IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The standard amendments clarify that for assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental cost of fulfilling that contract and an allocation of other costs that relates directly to fulfilling the contract.

The implementation of these standard amendments resulted in no significant impact on the Company’s interim condensed consolidated financial statements.

The following standard amendments have been adopted by the Company during the three months ended June 30, 2023:

International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12

On May 23, 2023, the IASB issued standard amendments to IAS 12 Income Taxes, to address the Pillar Two model rules for domestic implementation of a 15% global minimum tax. The standard introduces a temporary recognition exception in relation to accounting and disclosure for deferred taxes, which was immediately applied, arising from the implementation of the international tax reform. Remaining target disclosure requirements for affected entities such as current tax expense (income) related to Pillar Two income taxes, as well as, qualitative and quantitative information about an entity’s exposure to Pillar Two income taxes will only be effective as for the interim reporting period ended March 31, 2024.

As no new legislation to implement the minimum tax was enacted or substantively enacted as at June 30, 2023 in any jurisdiction in which the Company operates and no related deferred taxes were recognized at that date, the application of the new standard amendments had no impact on the Company’s interim condensed consolidated statement. The new disclosures requirements will be introduced in the Company’s interim consolidated financial statements for the three and six months ended March 31, 2024.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 6

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

3. | Accounting policies (continued)

FUTURE ACCOUNTING STANDARD CHANGES

The following standard amendments have been issued and will be effective on October 1, 2023 for the Company, with earlier application permitted. The Company is currently evaluating the impact of these standard amendments on its consolidated financial statements.

Classification of Liabilities as Current or Non-current – Amendments to IAS 1

In January, 2020, the IASB amended IAS 1 Presentation of Financial Statements. The standard amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period and which only impact the presentation of liabilities in the balance sheet. The classification is unaffected by expectations about whether the Company will exercise its right to defer settlement of a liability.

Disclosure of Accounting Policy Information – Amendments to IAS 1 and IFRS Practice Statement 2

In February, 2021, the IASB amended IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements to require the Company to disclose its material accounting policy information rather than its significant accounting policies.

Definition of Accounting Estimates – Amendments to IAS 8

In February, 2021, the IASB amended IAS 8 Accounting Policies, Changes in Accounting estimates and Errors to introduce a definition of accounting estimates and to help entities distinguish changes in accounting policies from changes in accounting estimates. This distinction is important because changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

In May, 2021, the IASB amended IAS 12 Income Taxes, to narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.

The following standard amendments have been issued and will be effective as of October 1, 2024 for the Company, with earlier application permitted. The Company is currently evaluating the impact of these standard amendments on its consolidated financial statements.

Information about long-term debt with covenants – Amendments to IAS 1

In October, 2022, the IASB issued standard amendments to IAS 1 Presentation of Financial Statements that aim to improve the information companies provide about long-term debt with covenants. These standard amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, these standard amendments require a company to disclose information about these covenants in the notes to the financial statements.

Supplier finance arrangements - Amendments to IAS 7 and IFRS 7

In May, 2023, the IASB amended IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to introduce new disclosure requirements to enhance the transparency on supplier finance arrangements and their impact on the Company’s liabilities, cashflows and liquidity exposure. The new disclosure requirements will include information such as terms and conditions, the carrying amount of liabilities, the range of payment due dates, non-cash changes and liquidity risk information around supplier finance arrangements.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 7

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

4. | Accumulated other comprehensive income

|  | As at June 30, 2023 |  |  | As at September 30, 2022 |
|  |  | $ |  |  |  | $ |
Items that will be reclassified subsequently to net earnings: |  |  |  |  |  |  |  |
Net unrealized gains on translating financial statements of foreign operations, net of accumulated income tax expense of $44,559 ($45,419 as at September 30, 2022) |  |  | 503,468 |  |  |  | 291,532 |
Net losses on cross-currency swaps and on translating long-term debt designated as hedges of net investments in foreign operations, net of accumulated income tax recovery of $48,723 ($43,936 as at September 30, 2022) |  |  | (303,031 | ) |  |  | (271,690 | )
Deferred gains of hedging on cross-currency swaps, net of accumulated income tax expense of $3,430 ($4,664 as at September 30, 2022) |  |  | 24,168 |  |  |  | 28,274 |
Net unrealized gains on cash flow hedges, net of accumulated income tax expense of $3,838 ($10,398 as at September 30, 2022) |  |  | 11,068 |  |  |  | 30,274 |
Net unrealized losses on financial assets at fair value through other comprehensive income, net of accumulated income tax recovery of $1,199 ($1,367 as at September 30, 2022) |  |  | (3,425 | ) |  |  | (4,072 | )
Items that will not be reclassified subsequently to net earnings: |  |  |  |  |  |  |  |
Net remeasurement losses on defined benefit plans, net of accumulated income tax recovery of $17,626 ($12,095 as at September 30, 2022) |  |  | (48,284 | ) |  |  | (34,572 | )
|  |  | 183,964 |  |  |  | 39,746 |

For the nine months ended June 30, 2023, $12,746,000 of the net unrealized gains on cash flow hedges, net of income tax expense of $4,568,000, previously recognized in other comprehensive income, were reclassified in the consolidated statements of earnings ($1,846,000 and $253,000, respectively, were reclassified for the nine months ended June 30, 2022).

For the nine months ended June 30, 2023, $9,239,000 of the deferred gains of hedging on cross-currency swaps, net of income tax expense of $1,411,000, were also reclassified in the consolidated statements of earnings ($8,035,000 and $2,898,000, respectively, were reclassified for the nine months ended June 30, 2022).

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 8

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

5. | Capital stock, share-based payments and earnings per share

a) | Capital stock

|  | Class A subordinate voting shares |  |  | Class B multiple voting shares |  |  | Total |
|  | Number |  |  | Carrying value |  |  | Number |  |  | Carrying value |  |  | Number |  |  | Carrying value |
|  |  |  |  |  |  | $ |  |  |  |  |  |  |  | $ |  |  |  |  |  |  |  | $ |
As at September 30, 2022 |  |  | 211,302,549 |  |  |  | 1,456,275 |  |  |  | 26,445,706 |  |  |  | 36,894 |  |  |  | 237,748,255 |  |  |  | 1,493,169 |
Release of shares held in trusts1 |  |  | — |  |  |  | 13,657 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 13,657 |
Purchased and held in trusts1 |  |  | — |  |  |  | (74,455 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (74,455 | )
Issued upon exercise of stock options2 |  |  | 1,430,251 |  |  |  | 90,991 |  |  |  | — |  |  |  | — |  |  |  | 1,430,251 |  |  |  | 90,991 |
Purchased and cancelled3 |  |  | (3,835,196 | ) |  |  | (41,245 | ) |  |  | — |  |  |  | — |  |  |  | (3,835,196 | ) |  |  | (41,245 | )
As at June 30, 2023 |  |  | 208,897,604 |  |  |  | 1,445,223 |  |  |  | 26,445,706 |  |  |  | 36,894 |  |  |  | 235,343,310 |  |  |  | 1,482,117 |

1 | During the nine months ended June 30, 2023, 171,735 shares held in trust were released (237,294 during the nine months ended June 30, 2022) with a recorded value of $13,657,000 ($15,821,000 during the nine months ended June 30, 2022) that was removed from contributed surplus.

| During the nine months ended June 30, 2023, the Company settled the withholding tax obligations of the employees under the performance share unit (PSU) plans for a cash payment of $13,850,000 (nil during the nine months ended June 30, 2022).

| During the nine months ended June 30, 2023, the trustees, in accordance with the terms of the PSU plans and Trust Agreements, purchased 640,052 Class A subordinate voting shares of the Company on the open market (643,629 during the nine months ended June 30, 2022) for a cash consideration of $74,455,000 ($70,303,000 during the nine months ended June 30, 2022).

| As at June 30, 2023, 2,310,026 Class A subordinate voting shares were held in trusts under the PSU plans (1,841,955 as at June 30, 2022 and 1,841,709 as at September 30, 2022).

2 | The carrying value of Class A subordinate voting shares includes $15,202,000 which corresponds to a reduction in contributed surplus representing the value of accumulated compensation costs associated with the stock options exercised during the nine months ended June 30, 2023 ($6,127,000 during the nine months ended June 30, 2022).

3 | On January 31, 2023, the Company’s Board of Directors authorized, and subsequently received the regulatory approval from the Toronto Stock Exchange (TSX), for the renewal of the Normal Course Issuer Bid (NCIB) for the purchase for cancellation of up to 18,769,394 Class A subordinate voting shares on the open market through the TSX, the New York Stock Exchange (NYSE) and/or alternative trading systems or otherwise pursuant to exemption orders issued by securities regulators. The Class A subordinate voting shares are available for purchase for cancellation commencing on February 6, 2023 until no later than February 5, 2024, or on such earlier date when the Company has either acquired the maximum number of Class A subordinate voting shares allowable under the NCIB or elects to terminate the bid.

| During the nine months ended June 30, 2023, the Company purchased for cancellation 390,100 Class A subordinate voting shares (3,431,566 during the nine months ended June 30, 2022) under the current NCIB for a cash consideration of $53,062,000 ($364,063,000 for nine months ended June 30, 2022) and the excess of the purchase price over the carrying value in the amount of $49,923,097 ($337,121,000 for the nine months ended June 20, 2022) was charged to retained earnings.

| In addition, during the nine months ended June 30, 2023, the Company purchased for cancellation 3,344,996 Class A subordinate voting shares under the current NCIB from the Caisse de dépôt et placement du Québec for a total cash consideration of $400,000,000 (3,968,159 and $400,000,000, respectively during the nine months ended June 30, 2022). The excess of the purchase price over the carrying value in the amount of $361,791,000 was charged to retained earnings ($315,112,000 during the nine months ended June 30, 2022). The purchase was made pursuant to an exemption order issued by the Autorité des marchés financiers and is considered within the annual aggregate limit that the Company is entitled to purchase under its current NCIB.

| During the nine months ended June 30, 2023, the Company also paid for and cancelled 100,100 Class A subordinate voting shares under its previous NCIB, with a carrying value of $778,000 and for a total cash consideration of $10,291,000, which were purchased, or committed to be purchased, but not cancelled as at September 30, 2022.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 9

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

5. | Capital stock, share-based payments and earnings per share (continued)

b) | Share-based payments

i) | Performance share units (PSUs)

During the nine months ended June 30, 2023, 899,511 PSUs were granted, 293,772 were exercised and 146,530 were forfeited. The PSUs granted in the period had a weighted average grant date fair value of $112.49 per unit.

ii) | Stock options

During the nine months ended June 30, 2023, 1,430,251 stock options were exercised (Note 5a) and 18,673 were forfeited.

c) | Earnings per share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended June 30:

|  |  |  |  |  |  |  |  |  |  |  |  |  | Three months ended June 30 |
|  | 2023 |  |  | 2022 |
|  |  | Net earnings |  |  |  | Weighted average number of shares outstanding1 |  |  |  | Earnings per share |  |  |  | Net earnings |  |  |  | Weighted average number of shares outstanding1 |  |  |  | Earnings per share |
|  |  | $ |  |  |  |  |  |  |  | $ |  |  |  | $ |  |  |  |  |  |  |  | $ |
Basic |  |  | 414,979 |  |  |  | 233,075,350 |  |  |  | 1.78 |  |  |  | 364,344 |  |  |  | 237,436,642 |  |  |  | 1.53 |
Net effect of dilutive stock options and PSUs2 |  |  |  |  |  |  | 3,808,084 |  |  |  |  |  |  |  |  |  |  |  | 3,366,038 |  |  |  |  |
Diluted |  |  | 414,979 |  |  |  | 236,883,434 |  |  |  | 1.75 |  |  |  | 364,344 |  |  |  | 240,802,680 |  |  |  | 1.51 |
|  |  |  |  |  |  | Nine months ended June 30 |
|  |  | 2023 |  |  |  | 2022 |
|  |  | Net earnings |  |  |  | Weighted average number of shares outstanding1 |  |  |  | Earnings per share |  |  |  | Net earnings |  |  |  | Weighted average number of shares outstanding1 |  |  |  | Earnings per share |
|  |  | $ |  |  |  |  |  |  |  | $ |  |  |  | $ |  |  |  |  |  |  |  | $ |
Basic |  |  | 1,216,773 |  |  |  | 234,752,090 |  |  |  | 5.18 |  |  |  | 1,103,780 |  |  |  | 240,239,796 |  |  |  | 4.59 |
Net effect of dilutive stock options and PSUs2 |  |  |  |  |  |  | 3,591,429 |  |  |  |  |  |  |  |  |  |  |  | 3,604,791 |  |  |  |  |
Diluted |  |  | 1,216,773 |  |  |  | 238,343,519 |  |  |  | 5.11 |  |  |  | 1,103,780 |  |  |  | 243,844,587 |  |  |  | 4.53 |

1 | During the three months ended June 30, 2023, 390,100 Class A subordinate voting shares purchased for cancellation and 2,310,026 Class A subordinate voting shares held in trusts were excluded from the calculation of the weighted average number of shares outstanding as of the date of the transaction (1,120,800 and 1,841,955, respectively during the three months ended June 30, 2022). During the nine months ended June 30, 2023, 3,835,196 Class A subordinate voting shares purchased for cancellation and 2,310,026 Class A subordinate voting shares held in trusts were excluded from the calculation of the weighted average number of shares outstanding as of the date of the transaction (7,549,725 and 1,841,955, respectively during the nine months ended June 30, 2022).

2 | The calculation of the diluted earnings per share excluded nil stock options for the three and nine months ended June 30, 2023 (1,092,129 and 312,984 stock options, respectively, during the three and nine months ended June 30, 2022, as they were anti-dilutive).

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 10

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

6. | Net finance costs

|  | Three months ended June 30 |  |  | Nine months ended June 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Interest on long-term debt |  |  | 12,878 |  |  |  | 13,673 |  |  |  | 40,572 |  |  |  | 43,768 |
Interest on lease liabilities |  |  | 7,276 |  |  |  | 6,559 |  |  |  | 21,749 |  |  |  | 20,722 |
Net interest costs (income) on net defined benefit obligations or assets |  |  | 1,102 |  |  |  | (83 | ) |  |  | 3,263 |  |  |  | 1,251 |
Other finance costs |  |  | 2,846 |  |  |  | 3,419 |  |  |  | 6,903 |  |  |  | 6,930 |
Finance costs |  |  | 24,102 |  |  |  | 23,568 |  |  |  | 72,487 |  |  |  | 72,671 |
Finance income |  |  | (11,294 | ) |  |  | (681 | ) |  |  | (26,172 | ) |  |  | (1,667 | )
|  |  | 12,808 |  |  |  | 22,887 |  |  |  | 46,315 |  |  |  | 71,004 |

7. | Investments in subsidiaries

a) | Acquisitions and disposals

There were no significant acquisitions or disposals during the three and nine months ended June 30, 2023.

b) | Business acquisitions realized in the prior fiscal year

During the three months ended June 30, 2023, the Company finalized the fair value assessment of assets acquired and liabilities assumed for Umanis SA with adjustments resulting in an increase in goodwill of $19,060,000 mainly due to a decrease in intangible assets and other long-term assets. Also, the Company finalized the assessment for Harwell Management with no significant adjustments.

During the nine months ended June 30, 2023, the Company finalized the fair value assessment of assets acquired and liabilities assumed for Unico Computer Systems Pty Ltd with no significant adjustments.

During the three and nine months ended June 30, 2023, the Company paid $9,041,000 and $13,039,000, respectively, related to acquisitions realized in prior fiscal years.

c) | Acquisition-related and integration costs

During the three and nine months ended June 30, 2023, the Company incurred $13,032,000 and $53,401,000, respectively, of integration costs, which mainly include costs of redundancy of employments of $7,842,000 and $23,226,000, respectively, and costs of vacating lease premises of $2,062,000 and $11,173,000, respectively.

During the three and nine months ended June 30, 2022, the Company incurred $8,014,000 and $12,879,000, respectively, of acquisition-related and integration costs. These amounts included acquisition-related costs of $2,483,000 and $2,753,000, respectively, mainly consisting of professional fees incurred for the acquisitions, as well as integration costs of $5,531,000 and $10,126,000, respectively. These integration costs included costs of redundancy of employments of $939,000 and $3,054,000, respectively.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 11

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

8. | Supplementary cash flow information

a) | Net change in non-cash working capital items and others is as follows for the three and nine months ended June 30:

|  | Three months ended June 30 |  |  | Nine months ended June 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Accounts receivable |  |  | (58,357 | ) |  |  | (53,772 | ) |  |  | (117,847 | ) |  |  | (94,739 | )
Work in progress |  |  | (15,009 | ) |  |  | (1,876 | ) |  |  | (22,652 | ) |  |  | (93,379 | )
Prepaid expenses and other assets |  |  | (3,395 | ) |  |  | (20,652 | ) |  |  | 4,096 |  |  |  | (19,990 | )
Long-term financial assets |  |  | (6,425 | ) |  |  | 8,887 |  |  |  | (12,228 | ) |  |  | 10,787 |
Accounts payable and accrued liabilities |  |  | (18,583 | ) |  |  | 38,837 |  |  |  | (130,615 | ) |  |  | 94,254 |
Accrued compensation and employee-related liabilities |  |  | 50,532 |  |  |  | 88,970 |  |  |  | (54,904 | ) |  |  | 18,095 |
Deferred revenue |  |  | (106,259 | ) |  |  | (79,609 | ) |  |  | 93,011 |  |  |  | 57,112 |
Income taxes |  |  | 37,518 |  |  |  | (24,195 | ) |  |  | 165,859 |  |  |  | 23,907 |
Provisions |  |  | (5,758 | ) |  |  | (14,710 | ) |  |  | (9,484 | ) |  |  | (44,774 | )
Long-term liabilities |  |  | 5,454 |  |  |  | (17,934 | ) |  |  | 17,907 |  |  |  | (59,466 | )
Derivative financial instruments |  |  | (421 | ) |  |  | 878 |  |  |  | (629 | ) |  |  | (109 | )
Retirement benefits obligations |  |  | 2,671 |  |  |  | 1,364 |  |  |  | 3,048 |  |  |  | 4,402 |
|  |  | (118,032 | ) |  |  | (73,812 | ) |  |  | (64,438 | ) |  |  | (103,900 | )

b) | Net interest (received) paid and income taxes paid are classified within operating activities and are as follows for the three and nine months ended June 30:

|  | Three months ended June 30 |  |  | Nine months ended June 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Net interest (received) paid |  |  | (757 | ) |  |  | 11,021 |  |  |  | 28,517 |  |  |  | 59,961 |
Income taxes paid |  |  | 133,533 |  |  |  | 122,113 |  |  |  | 333,904 |  |  |  | 308,109 |

c) | Cash and cash equivalents consisted of unrestricted cash as at June 30, 2023 and September 30, 2022.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 12

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

9. | Segmented information

The following tables present information on the Company’s operations which are managed through the following nine operating segments: Western and Southern Europe (primarily France, Spain and Portugal); United States (U.S.) Commercial and State Government; Canada; U.S. Federal; Scandinavia and Central Europe (Germany, Sweden and Norway); United Kingdom (U.K.) and Australia; Finland, Poland and Baltics; Northwest and Central-East Europe (primarily Netherlands, Denmark and Czech Republic); and Asia Pacific Global Delivery Centers of Excellence (mainly India and Philippines) (Asia Pacific).

The operating segments reflect the management structure and the way that the chief operating decision-maker, who is the President and Chief Executive Officer of the Company, evaluates the business. The following tables present information on the Company’s operations based on its management structure. For the nine months period ended June 30, 2022, the Company has restated the segmented information to conform to the latest segmented information structure effective since April 1, 2022.

|  |  |  |  | For the three months ended June 30, 2023 |
|  | Western and Southern Europe |  |  | U.S. Commercial and State Government |  |  | Canada |  |  | U.S. Federal |  |  | Scandinavia and Central Europe |  |  | U.K. and Australia |  |  | Finland, Poland and Baltics |  |  | Northwest and Central- East Europe |  |  | Asia Pacific |  |  | Eliminations |  |  | Total |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Segment revenue |  |  | 656,796 |  |  |  | 569,829 |  |  |  | 518,792 |  |  |  | 492,371 |  |  |  | 416,672 |  |  |  | 381,513 |  |  |  | 211,245 |  |  |  | 193,594 |  |  |  | 232,100 |  |  |  | (49,484 | ) |  |  | 3,623,428 |
Segment earnings before acquisition-related and integration costs, net finance costs and income tax expense1 |  |  | 80,778 |  |  |  | 98,365 |  |  |  | 115,843 |  |  |  | 87,125 |  |  |  | 29,027 |  |  |  | 55,526 |  |  |  | 22,740 |  |  |  | 23,158 |  |  |  | 72,259 |  |  |  | — |  |  |  | 584,821 |
Acquisition-related and integration costs (Note 7c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (13,032 | )
Net finance costs (Note 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (12,808 | )
Earnings before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 558,981 |

1 | Total amortization and depreciation of $126,066,000 included in the Western and Southern Europe, U.S. Commercial and State Government, Canada, U.S. Federal, Scandinavia and Central Europe, U.K. and Australia, Finland, Poland and Baltics, Northwest and Central-East Europe and Asia Pacific segments is $20,072,000, $21,760,000, $14,122,000, $14,531,000, $22,150,000, $9,330,000, $9,974,000, $7,901,000 and $6,226,000, respectively, for the three months ended June 30, 2023.

|  |  |  |  |  |  |  | For the three months ended June 30, 2022 |
|  | Western and Southern Europe |  |  | U.S. Commercial and State Government |  |  | Canada |  |  | U.S. Federal |  |  | Scandinavia and Central Europe |  |  | U.K. and Australia |  |  | Finland, Poland and Baltics |  |  | Northwest and Central- East Europe |  |  | Asia Pacific |  |  | Eliminations |  |  | Total |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Segment revenue |  |  | 553,470 |  |  |  | 528,046 |  |  |  | 524,511 |  |  |  | 432,667 |  |  |  | 388,071 |  |  |  | 317,559 |  |  |  | 181,960 |  |  |  | 171,632 |  |  |  | 207,901 |  |  |  | (47,179 | ) |  |  | 3,258,638 |
Segment earnings before acquisition-related and integration costs, net finance costs and income tax expense1 |  |  | 70,107 |  |  |  | 75,637 |  |  |  | 113,617 |  |  |  | 78,553 |  |  |  | 31,082 |  |  |  | 42,359 |  |  |  | 22,529 |  |  |  | 22,098 |  |  |  | 63,888 |  |  |  | — |  |  |  | 519,870 |
Acquisition-related and integration costs (Note 7c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (8,014 | )
Net finance costs (Note 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (22,887 | )
Earnings before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 488,969 |

1 | Total amortization and depreciation of $113,902,000 included in the Western and Southern Europe, U.S. Commercial and State Government, Canada, U.S. Federal, Scandinavia and Central Europe, U.K. and Australia, Finland, Poland and Baltics, Northwest and Central-East Europe and Asia Pacific segments is $14,878,000, $17,644,000, $13,751,000, $12,460,000, $21,591,000, $11,309,000, $8,410,000, $7,728,000 and $6,131,000, respectively, for the three months ended June 30, 2022.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 13

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

9. | Segmented information (continued)

|  |  |  |  | For the nine months ended June 30, 2023 |
|  | Western and Southern Europe |  |  | U.S. Commercial and State Government |  |  | Canada |  |  | U.S. Federal |  |  | Scandinavia and Central Europe |  |  | U.K. and Australia |  |  | Finland, Poland and Baltics |  |  | Northwest and Central- East Europe |  |  | Asia Pacific |  |  | Eliminations |  |  | Total |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Segment revenue |  |  | 1,999,398 |  |  |  | 1,710,729 |  |  |  | 1,555,308 |  |  |  | 1,445,425 |  |  |  | 1,256,750 |  |  |  | 1,079,789 |  |  |  | 635,149 |  |  |  | 568,800 |  |  |  | 682,921 |  |  |  | (145,245 | ) |  |  | 10,789,024 |
Segment earnings before acquisition-related and integration costs, net finance costs and income tax expense1 |  |  | 277,510 |  |  |  | 244,782 |  |  |  | 350,117 |  |  |  | 232,135 |  |  |  | 106,634 |  |  |  | 155,879 |  |  |  | 83,200 |  |  |  | 75,400 |  |  |  | 214,045 |  |  |  | — |  |  |  | 1,739,702 |
Acquisition-related and integration costs (Note 7c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (53,401 | )
Net finance costs (Note 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (46,315 | )
Earnings before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,639,986 |
1Total amortization and depreciation of $378,951,000 included in the Western and Southern Europe, U.S. Commercial and State Government, Canada, U.S. Federal, Scandinavia and Central Europe, U.K. and Australia, Finland, Poland and Baltics, Northwest and Central-East Europe and Asia Pacific segments is $65,112,000, $62,214,000, $40,802,000, $44,441,000, $67,523,000, $28,334,000, $28,555,000, $23,255,000 and $18,715,000, respectively, for the nine months ended June 30, 2023. |
|  |  |  |  | For the nine months ended June 30, 2022 |
|  | Western and Southern Europe |  |  | U.S. Commercial and State Government |  |  | Canada |  |  | U.S. Federal |  |  | Scandinavia and Central Europe |  |  | U.K. and Australia |  |  | Finland, Poland and Baltics |  |  | Northwest and Central- East Europe |  |  | Asia Pacific |  |  | Eliminations |  |  | Total |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Segment revenue |  |  | 1,604,597 |  |  |  | 1,518,160 |  |  |  | 1,485,331 |  |  |  | 1,287,808 |  |  |  | 1,205,715 |  |  |  | 959,682 |  |  |  | 564,548 |  |  |  | 537,105 |  |  |  | 585,348 |  |  |  | (128,314 | ) |  |  | 9,619,980 |
Segment earnings before acquisition-related and integration costs, net finance costs and income tax expense1 |  |  | 233,817 |  |  |  | 219,391 |  |  |  | 341,201 |  |  |  | 208,396 |  |  |  | 94,999 |  |  |  | 146,954 |  |  |  | 70,515 |  |  |  | 69,192 |  |  |  | 180,475 |  |  |  | — |  |  |  | 1,564,940 |
Acquisition-related and integration costs (Note 7c) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (12,879 | )
Net finance costs (Note 6) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (71,004 | )
Earnings before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,481,057 |

1 | Total amortization and depreciation of $350,514,000 included in the Western and Southern Europe, U.S. Commercial and State Government, Canada, U.S. Federal, Scandinavia and Central Europe, U.K. and Australia, Finland, Poland and Baltics, Northwest and Central-East Europe and Asia Pacific segments is $43,299,000, $51,531,000, $43,973,000, $39,757,000, $69,717,000, $31,091,000, $25,290,000, $26,807,000 and $19,049,000, respectively, for the nine months ended June 30, 2022. Amortization includes an impairment in Northwest and Central-East Europe for $2,131,000 related to a business solution. The asset was no longer expected to generate future economic benefits.

The accounting policies of each operating segment are the same as those described in Note 3, Summary of significant accounting policies, of the Company’s consolidated financial statements for the year ended September 30, 2022. Intersegment revenue is priced as if the revenue was from third parties.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 14

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

9. | Segmented information (continued)

GEOGRAPHIC INFORMATION

The following table provides external revenue information based on the client’s location which is different from the revenue presented under operating segments, due to the intersegment revenue, for the three and nine months ended June 30:

|  | Three months ended June 30 |  |  | Nine months ended June 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Western and Southern Europe |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
France |  |  | 572,172 |  |  |  | 475,589 |  |  |  | 1,748,780 |  |  |  | 1,370,839 |
Spain |  |  | 29,333 |  |  |  | 28,756 |  |  |  | 88,575 |  |  |  | 89,819 |
Portugal |  |  | 30,729 |  |  |  | 25,840 |  |  |  | 88,181 |  |  |  | 79,379 |
Others |  |  | 14,403 |  |  |  | 12,314 |  |  |  | 41,695 |  |  |  | 36,825 |
|  |  | 646,637 |  |  |  | 542,499 |  |  |  | 1,967,231 |  |  |  | 1,576,862 |
U.S.1 |  |  | 1,117,689 |  |  |  | 1,002,559 |  |  |  | 3,302,976 |  |  |  | 2,919,548 |
Canada |  |  | 560,674 |  |  |  | 568,057 |  |  |  | 1,681,664 |  |  |  | 1,605,944 |
Scandinavia and Central Europe |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Germany |  |  | 235,227 |  |  |  | 196,213 |  |  |  | 688,563 |  |  |  | 603,440 |
Sweden |  |  | 176,758 |  |  |  | 175,468 |  |  |  | 541,531 |  |  |  | 552,196 |
Norway |  |  | 27,953 |  |  |  | 37,662 |  |  |  | 97,791 |  |  |  | 112,603 |
|  |  | 439,938 |  |  |  | 409,343 |  |  |  | 1,327,885 |  |  |  | 1,268,239 |
U.K. and Australia |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.K. |  |  | 410,521 |  |  |  | 342,941 |  |  |  | 1,175,960 |  |  |  | 1,040,920 |
Australia |  |  | 20,986 |  |  |  | 21,128 |  |  |  | 65,454 |  |  |  | 54,854 |
|  |  | 431,507 |  |  |  | 364,069 |  |  |  | 1,241,414 |  |  |  | 1,095,774 |
Finland, Poland and Baltics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Finland |  |  | 208,526 |  |  |  | 181,745 |  |  |  | 627,708 |  |  |  | 563,444 |
Others |  |  | 13,328 |  |  |  | 9,180 |  |  |  | 34,896 |  |  |  | 26,904 |
|  |  | 221,854 |  |  |  | 190,925 |  |  |  | 662,604 |  |  |  | 590,348 |
Northwest and Central-East Europe |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Netherlands |  |  | 145,511 |  |  |  | 123,300 |  |  |  | 425,111 |  |  |  | 378,749 |
Denmark |  |  | 24,516 |  |  |  | 27,249 |  |  |  | 75,831 |  |  |  | 90,709 |
Czech Republic |  |  | 18,915 |  |  |  | 13,826 |  |  |  | 53,962 |  |  |  | 40,439 |
Others |  |  | 15,144 |  |  |  | 15,616 |  |  |  | 47,679 |  |  |  | 49,919 |
|  |  | 204,086 |  |  |  | 179,991 |  |  |  | 602,583 |  |  |  | 559,816 |
Asia Pacific |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Others |  |  | 1,043 |  |  |  | 1,195 |  |  |  | 2,667 |  |  |  | 3,449 |
|  |  | 1,043 |  |  |  | 1,195 |  |  |  | 2,667 |  |  |  | 3,449 |
|  |  | 3,623,428 |  |  |  | 3,258,638 |  |  |  | 10,789,024 |  |  |  | 9,619,980 |

1 | External revenue included in the U.S. Commercial and State Government and U.S. Federal operating segments was $623,462,000 and $494,227,000, respectively, for the three months ended June 30, 2023 ($567,964,000 and $434,595,000, respectively, for the three months ended June 30, 2022). In addition, external revenue included in the U.S. Commercial and State Government and U.S. Federal operating segments was $1,851,292,000 and $1,451,684,000, respectively, for the nine months ended June 30, 2023 ($1,623,829,000 and $1,295,719,000, respectively, for the nine months ended June 30, 2022).

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 15

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

9. | Segmented information (continued)

INFORMATION ABOUT SERVICES

The following table provides revenue information based on services provided by the Company for the three and nine months ended June 30:

|  | Three months ended June 30 |  |  | Nine months ended June 30 |
|  | 2023 |  |  | 2022 |  |  | 2023 |  |  | 2022 |
|  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |
Managed IT and business process services |  |  | 1,950,289 |  |  |  | 1,743,395 |  |  |  | 5,745,818 |  |  |  | 5,212,616 |
Business and strategic IT consulting and systems integration |  |  | 1,673,139 |  |  |  | 1,515,243 |  |  |  | 5,043,206 |  |  |  | 4,407,364 |
|  |  | 3,623,428 |  |  |  | 3,258,638 |  |  |  | 10,789,024 |  |  |  | 9,619,980 |

MAJOR CLIENT INFORMATION

Contracts with the U.S. federal government and its various agencies, included within the U.S. Federal operating segment, accounted for $488,159,000 and 13.5% of revenues for the three months ended June 30, 2023 ($417,063,000 and 12.8% for the three months ended June 30, 2022) and $1,434,179,000 and 13.3% of revenues for the nine months ended June 30, 2023 ($1,247,606,000 and 13.0% for the nine months ended June 30, 2022).

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 16

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

10. | Financial instruments

FAIR VALUE

All financial instruments are initially measured at their fair value and are subsequently classified either at amortized cost, at fair value through earnings or at fair value through other comprehensive income.

The Company has made the following classifications:

Amortized cost

Trade accounts receivable, long-term receivables within long-term financial assets, short-term investments included in funds held for clients, accounts payable and accrued liabilities, accrued compensation and employee-related liabilities, long-term debt and clients’ funds obligations.

Fair value through earnings (FVTE)

Cash, cash equivalents, cash included in funds held for clients, derivative financial instruments and deferred compensation plan assets within long-term financial assets.

Fair value through other comprehensive income (FVOCI)

Short-term investments included in current financial assets, long-term bonds included in funds held for clients and long-term investments within long-term financial assets.

FAIR VALUE HIERARCHY

Fair value measurements recognized in the consolidated balance sheet are classified in accordance with the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included in Level 1, but that are observable for the asset or liability, either directly or indirectly; and

Level 3: inputs for the asset or liability that are not based on observable market data.

FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Valuation techniques used to value financial instruments are as follows:

| - | The fair value of the senior U.S. unsecured notes (2014 U.S. Senior Notes), the 5 and 10 year senior U.S. unsecured notes (2021 U.S. Senior Notes), the 7 year senior unsecured notes (2021 CAD Senior Notes), the unsecured committed revolving credit facility, the unsecured committed term loan credit facility and the other long-term debt is estimated by discounting expected cash flows at rates currently offered to the Company for debts of the same remaining maturities and conditions;

| - | The fair value of long-term bonds included in funds held for clients and in long-term investments is determined by discounting the future cash flows using observable inputs, such as interest rate yield curves or credit spreads, or according to similar transactions on an arm’s-length basis;

| - | The fair value of foreign currency forward contracts is determined using forward exchange rates at the end of the reporting period;

| - | The fair value of cross-currency swaps and interest rate swaps is determined based on market data (primarily yield curves, exchange rates and interest rates) to calculate the present value of all estimated cash flows;

| - | The fair value of cash, cash equivalents, cash included in funds held for clients and short-term investments included in current financial assets is determined using observable quotes; and

| - | The fair value of deferred compensation plan assets within long-term financial assets is based on observable price quotations and net assets values at the reporting date.

There were no changes in valuation techniques during the nine months ended June 30, 2023.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 17

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

10. | Financial instruments (continued)

FAIR VALUE MEASUREMENTS (CONTINUED)

The following table presents the financial liabilities included in the long-term debt measured at amortized cost categorized using the fair value hierarchy:

|  |  |  | As at June 30, 2023 |  |  | As at September 30, 2022 |
|  | Level |  | Carrying amount |  |  | Fair value |  |  | Carrying amount |  |  | Fair value |
|  |  |  | $ |  |  | $ |  |  | $ |  |  | $ |
2014 U.S. Senior Notes |  | Level 2 |  |  | 529,478 |  |  |  | 518,890 |  |  |  | 550,177 |  |  |  | 539,752 |
2021 U.S. Senior Notes |  | Level 2 |  |  | 1,312,073 |  |  |  | 1,118,996 |  |  |  | 1,361,974 |  |  |  | 1,127,739 |
2021 CAD Senior Notes |  | Level 2 |  |  | 596,380 |  |  |  | 512,270 |  |  |  | 595,900 |  |  |  | 503,227 |
Other long-term debt |  | Level 2 |  |  | 12,769 |  |  |  | 12,319 |  |  |  | 71,278 |  |  |  | 68,991 |
|  |  |  |  | 2,450,700 |  |  |  | 2,162,475 |  |  |  | 2,579,329 |  |  |  | 2,239,709 |

For the remaining financial assets and liabilities measured at amortized cost, the carrying values approximate the fair values of the financial instruments given their short term maturity.

As a result of the interbank offered rates (IBORs) reform and the related expiry of the USD London Interbank Offered Rate (Libor) rate effective June 30, 2023, the Company renegotiated the unsecured committed term loan credit facility and the related cross-currency interest rate swaps (the hedging instruments) both expiring in December 2023 to transition to the 1 month Secured Overnight Financing Rate (SOFR) rate from the 1 month USD Libor rate. The change in rate resulted in no significant impact on the Company’s interim condensed consolidated financial statements for the three months ended June 30, 2023.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 18

Notes to the Interim Condensed Consolidated Financial Statements

For the three and nine months ended June 30, 2023 and 2022

(tabular amounts only are in thousands of Canadian dollars, except per share data) (unaudited)

10. | Financial instruments (continued)

FAIR VALUE MEASUREMENTS (CONTINUED)

The following table presents financial assets and liabilities measured at fair value categorized using the fair value hierarchy:

|  | Level |  | As at June 30, 2023 |  |  | As at September 30, 2022 |
|  |  |  |  | $ |  |  |  | $ |
Financial assets |  |  |  |  |  |  |  |  |  |
FVTE |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | Level 2 |  |  | 1,468,832 |  |  |  | 966,458 |
Cash included in funds held for clients |  | Level 2 |  |  | 437,019 |  |  |  | 504,726 |
Deferred compensation plan assets |  | Level 1 |  |  | 88,350 |  |  |  | 71,863 |
|  |  |  |  | 1,994,201 |  |  |  | 1,543,047 |
Derivative financial instruments designated as hedging instruments |  |  |  |  |  |  |  |  |  |
Current derivative financial instruments included in current financial assets |  | Level 2 |  |  |  |  |  |  |  |
Cross-currency swaps |  |  |  |  | 35,603 |  |  |  | 8,740 |
Foreign currency forward contracts |  |  |  |  | 8,400 |  |  |  | 18,934 |
Long-term derivative financial instruments |  | Level 2 |  |  |  |  |  |  |  |
Cross-currency swaps |  |  |  |  | 57,075 |  |  |  | 222,246 |
Foreign currency forward contracts |  |  |  |  | 4,479 |  |  |  | 15,631 |
|  |  |  |  | 105,557 |  |  |  | 265,551 |
FVOCI |  |  |  |  |  |  |  |  |  |
Short-term investments included in current financial assets |  | Level 2 |  |  | 3,060 |  |  |  | 6,184 |
Long-term bonds included in funds held for clients |  | Level 2 |  |  | 152,196 |  |  |  | 94,113 |
Long-term investments |  | Level 2 |  |  | 19,507 |  |  |  | 16,826 |
|  |  |  |  | 174,763 |  |  |  | 117,123 |
Financial liabilities |  |  |  |  |  |  |  |  |  |
Derivative financial instruments designated as hedging instruments |  |  |  |  |  |  |  |  |  |
Current derivative financial instruments |  | Level 2 |  |  |  |  |  |  |  |
Cross-currency swaps |  |  |  |  | 5,036 |  |  |  | — |
Foreign currency forward contracts |  |  |  |  | 2,740 |  |  |  | 5,710 |
Long-term derivative financial instruments |  | Level 2 |  |  |  |  |  |  |  |
Cross-currency swaps |  |  |  |  | 4,094 |  |  |  | 1,685 |
Foreign currency forward contracts |  |  |  |  | 3,126 |  |  |  | 4,795 |
|  |  |  |  | 14,996 |  |  |  | 12,190 |

There were no transfers between Level 1 and Level 2 during the nine months ended June 30, 2023.

CGI Inc. – Interim Condensed Consolidated Financial Statements for the three and nine months ended June 30, 2023 and 2022 |  | 19