Exhibit 99.2
 CAMECO CORPORATION
 2008 CONSOLIDATED FINANCIAL STATEMENTS




---



##### 



REPORT OF MANAGEMENTS ACCOUNTABILITY
      Original signed by Gerald W. Grandey
    
    Original signed by O. Kim GoheenPresident and Chief Executive Officer
    
    Senior Vice-President and Chief Financial OfficerFebruary 12, 2009
    
    February 12, 2009
 1




---



##### 



AUDITORS REPORT
 To the Shareholders of Cameco Corporation
    Original signed by KPMG LLP
 Chartered Accountants
Saskatoon, Canada
  2




---



##### 



Consolidated Balance Sheets
 As at December 31($Cdn thousands)
    
    2008
    
    
    2007AssetsCurrent assetsCash and cash equivalents
    
    
    $269,176
    
    
    
    $131,932Accounts receivable
    
    
    568,340
    
    
    
    347,097Inventories [note 4]
    
    
    470,649
    
    
    
    428,502Supplies and prepaid expenses
    
    
    301,937
    
    
    
    210,464Current portion of long-term receivables,
investments and other [note 7]
    
    
    49,836
    
    
    
    164,1641,659,938
    
    
    
    1,282,159Property, plant and equipment [note 5]
    
    
    4,416,293
    
    
    
    3,437,450Intangible assets and goodwill [note 6]
    
    
    283,344
    
    
    
    255,484Long-term receivables, investments and other [note 7]
    
    
    628,972
    
    
    
    387,304Long-term inventory [note 4]
    
    
    22,054
    
    
    
    8,985Total assets
    
    $
    7,010,601
    
    
    $
    5,371,382Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable and accrued liabilities
    
    
    $580,903
    
    
    
    $541,283Short-term debt [notes 8, 22]
    
    
    89,817
    
    
    
    Dividends payable
    
    
    21,943
    
    
    
    17,220Current portion of long-term debt [note 9]
    
    
    10,175
    
    
    
    8,816Current portion of other liabilities [note 11]
    
    
    117,222
    
    
    
    32,492Future income taxes [note 16]
    
    
    68,857
    
    
    
    84,653888,917
    
    
    
    684,464Long-term debt [note 9]
    
    
    1,212,982
    
    
    
    717,130Provision for reclamation [note 10]
    
    
    353,344
    
    
    
    284,673Other liabilities [note 11]
    
    
    179,880
    
    
    
    258,511Future income taxes [note 16]
    
    
    81,352
    
    
    
    246,9362,716,475
    
    
    
    2,191,714Minority interest
    
    
    779,203
    
    
    
    435,807Shareholders equityShare capital
    
    
    1,062,714
    
    
    
    819,268Contributed surplus
    
    
    131,858
    
    
    
    119,531Retained earnings
    
    
    2,153,315
    
    
    
    1,779,629Accumulated other comprehensive income
    
    
    167,036
    
    
    
    25,4333,514,923
    
    
    
    2,743,861Total liabilities and shareholders equity
    
    $
    7,010,601
    
    
    $
    5,371,382
   Approved by the board of directors
Original signed by Gerald W. Grandey and Nancy E. Hopkins
 3




---



##### 



Consolidated Statements of Earnings
 For the years ended December 31($Cdn thousands, except per share amounts)
    
    2008
    
    
    2007Revenue fromProducts and services
    
    $
    2,859,158
    
    
    $
    2,309,741ExpensesProducts and services sold (i)
    
    
    1,517,760
    
    
    
    1,211,664Depreciation, depletion and reclamation
    
    
    293,315
    
    
    
    225,539Administration
    
    
    115,791
    
    
    
    127,229Exploration
    
    
    78,258
    
    
    
    66,813Research and development
    
    
    4,998
    
    
    
    3,609Interest and other [note 13]
    
    
    300,394
    
    
    
    (32,673
    )Cigar Lake remediation
    
    
    11,369
    
    
    
    29,403Restructuring of gold business [note 23]
    
    
    17,200
    
    
    
    113,000Stock option plan amendment [note 20]
    
    
    
    
    
    
    94,175Gain on sale of assets [note 14]
    
    
    (4,097
    )
    
    
    (4,028
    )2,334,988
    
    
    
    1,834,731Earnings from operations
    
    
    524,170
    
    
    
    475,010Other expense [note 15]
    
    
    (39,273
    )
    
    
    (9,078
    )Earnings before income taxes and minority interest
    
    
    484,897
    
    
    
    465,932Income tax (recovery) expense [note 16]
    
    
    (24,755
    )
    
    
    29,468Minority interest
    
    
    59,535
    
    
    
    20,352Net earnings
    
    
    $450,117
    
    
    
    $416,112Basic earnings per common share [note 26]
    
    
    $1.29
    
    
    
    $1.18Diluted earnings per common share [note 26]
    
    
    $1.28
    
    
    
    $1.13(i) Excludes depreciation, depletion and reclamation expenses of:
    
    
    $284,456
    
    
    
    $217,398
  4




---



##### 



Consolidated Statements of Shareholders Equity
 For the years ended December 31($Cdn thousands)
    
    2008
    
    
    2007Share capitalBalance at beginning of year
    
    
    $819,268
    
    
    
    $812,769Shares repurchased [note 12]
    
    
    
    
    
    
    (22,750
    )Stock option plan
    
    
    1,011
    
    
    
    29,249Debenture conversions [note 9]
    
    
    242,435
    
    
    
    Balance at end of year
    
    
    1,062,714
    
    
    
    819,268Contributed surplusBalance at beginning of year
    
    
    119,531
    
    
    
    540,173Shares repurchased [note 12]
    
    
    
    
    
    
    (406,577
    )Stock option plan amendment [note 20]
    
    
    25,987
    
    
    
    (21,875
    )Stock-based compensation
    
    
    16,821
    
    
    
    13,770Options exercised
    
    
    (40
    )
    
    
    (5,960
    )Debenture conversions [note 9]
    
    
    (30,441
    )
    
    
    Balance at end of year
    
    
    131,858
    
    
    
    119,531Retained earningsBalance at beginning of year
    
    
    1,779,629
    
    
    
    1,433,549Change in accounting policy  inventory [note 3(a)(iii)]
    
    
    8,787
    
    
    
    Net earnings
    
    
    450,117
    
    
    
    416,112Dividends on common shares
    
    
    (85,218
    )
    
    
    (70,032
    )Balance at end of year
    
    
    2,153,315
    
    
    
    1,779,629Accumulated other comprehensive income (loss)Balance at beginning of year
    
    
    25,433
    
    
    
    (927
    )Other comprehensive income
    
    
    141,603
    
    
    
    26,360Balance at end of year
    
    
    167,036
    
    
    
    25,433Total retained earnings and accumulated other comprehensive income
    
    
    2,320,351
    
    
    
    1,805,062Shareholders equity at end of year
    
    $
    3,514,923
    
    
    $
    2,743,861
  5




---



##### 



Consolidated Statements of Comprehensive Income
 For the years ended December 31($Cdn thousands)
    
    2008
    
    
    2007Net earnings
    
    
    $450,117
    
    
    
    $416,112Other comprehensive income (loss), net of taxes [note 16]Unrealized foreign currency translation gains (losses)
    
    
    217,577
    
    
    
    (111,169
    )Gains on derivatives designated as cash flow hedges
    
    
    23,976
    
    
    
    206,215Gains on derivatives designated as cash flow hedges
transferred to net earnings
    
    
    (105,056
    )
    
    
    (62,320
    )Unrealized losses on available-for-sale securities
    
    
    (14,271
    )
    
    
    (6,366
    )Losses on available-for-sale securities transferred to net earnings
    
    
    19,377
    
    
    
    Other comprehensive income
    
    
    141,603
    
    
    
    26,360Total comprehensive income
    
    
    $591,720
    
    
    
    $442,472
 Consolidated Statement of Accumulated Other Comprehensive Income
 CurrencyTranslation
    
    
    Cash Flow
    
    
    Available-For-($Cdn thousands)(net of related income taxes)[note 16]
    
    Adjustment
    
    
    Hedges
    
    
    Sale Assets
    
    
    TotalBalance at December 31, 2006
    
    
    $(39,766
    )
    
    $
    
    
    
    $
    
    
    
    
    $(39,766
    )Transition adjustment resulting from adopting
new financial instruments standards
    
    
    
    
    
    
    38,839
    
    
    
    
    
    
    
    38,839Change in unrealized foreign currency translation
gains (losses)
    
    
    (111,169
    )
    
    
    
    
    
    
    
    
    
    
    (111,169
    )Change in gains on derivatives designated as cash
flow hedges
    
    
    
    
    
    
    206,215
    
    
    
    
    
    
    
    206,215Change in gains on derivatives designated as cash
flow hedges transferred to net earnings
    
    
    
    
    
    
    (62,320
    )
    
    
    
    
    
    
    (62,320
    )Change in unrealized losses on available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    (6,366
    )
    
    
    (6,366
    )Balance at December 31, 2007
    
    $
    (150,935
    )
    
    
    $182,734
    
    
    
    $(6,366
    )
    
    
    $25,433Change in unrealized foreign currency translation
gains (losses)
    
    
    217,577
    
    
    
    
    
    
    
    
    
    
    
    217,577Change in gains on derivatives designated as cash
flow hedges
    
    
    
    
    
    
    23,976
    
    
    
    
    
    
    
    23,976Change in gains on derivatives designated as cash
flow hedges transferred to net earnings
    
    
    
    
    
    
    (105,056
    )
    
    
    
    
    
    
    (105,056
    )Change in unrealized losses on available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    (14,271
    )
    
    
    (14,271
    )Change in losses on available-for-sale securities
transferred to net earnings
    
    
    
    
    
    
    
    
    
    
    19,377
    
    
    
    19,377Balance at December 31, 2008
    
    
    $66,642
    
    
    
    $101,654
    
    
    
    $(1,260
    )
    
    
    $167,036
  6




---



##### 



Consolidated Statements of Cash Flows
 For the years ended December 31($Cdn thousands)
    
    2008
    
    
    2007Operating activitiesNet earnings
    
    
    $450,117
    
    
    
    $416,112Items not requiring (providing) cash:Depreciation, depletion and reclamation
    
    
    293,315
    
    
    
    225,539Provision for future taxes [note 16]
    
    
    (142,196
    )
    
    
    (134,129
    )Deferred gains
    
    
    (112,361
    )
    
    
    (18,441
    )Unrealized losses (gains) on derivatives
    
    
    156,098
    
    
    
    (50,032
    )Unrealized foreign exchange losses
    
    
    71,241
    
    
    
    Stock-based compensation [note 20]
    
    
    16,821
    
    
    
    13,770Gain on sale of assets [note 14]
    
    
    (4,097
    )
    
    
    (4,028
    )Equity in loss from associated companies [note 15]
    
    
    9,706
    
    
    
    6,439Other income [note 15]
    
    
    (425
    )
    
    
    (536
    )Writedown of investments [notes 7, 15]
    
    
    29,992
    
    
    
    Restructuring of gold business [note 23]
    
    
    17,200
    
    
    
    113,000Stock option plan amendment [note 20]
    
    
    
    
    
    
    94,175Minority interest
    
    
    59,535
    
    
    
    20,352Other operating items [note 17]
    
    
    (136,679
    )
    
    
    118,505Cash provided by operations
    
    
    708,267
    
    
    
    800,726Investing activitiesAdditions to property, plant and equipment
    
    
    (629,151
    )
    
    
    (494,473
    )Acquisitions, net of cash [note 22]
    
    
    (503,157
    )
    
    
    Increase in long-term receivables, investments and other
    
    
    (49,518
    )
    
    
    (38,167
    )Proceeds on sale of property, plant and equipment
    
    
    37,093
    
    
    
    5,824Cash used in investing
    
    
    (1,144,733
    )
    
    
    (526,816
    )Financing activitiesDecrease in debt
    
    
    (20,593
    )
    
    
    (7,900
    )Increase in debt
    
    
    640,089
    
    
    
    43,815Issue of shares
    
    
    972
    
    
    
    23,289Shares repurchased [note 12]
    
    
    
    
    
    
    (429,327
    )Dividends
    
    
    (80,495
    )
    
    
    (66,906
    )Cash provided by (used in) financing
    
    
    539,973
    
    
    
    (437,029
    )Increase (decrease) in cash during the year
    
    
    103,507
    
    
    
    (163,119
    )Exchange rate changes on foreign currency cash balances
    
    
    33,737
    
    
    
    (39,038
    )Cash and cash equivalents at beginning of year
    
    
    131,932
    
    
    
    334,089Cash and cash equivalents at end of year
    
    
    $269,176
    
    
    
    $131,932Cash and cash equivalents comprised of:Cash
    
    
    $173,155
    
    
    
    $89,438Cash equivalents
    
    
    96,021
    
    
    
    42,494$269,176
    
    
    
    $131,932Supplemental cash flow disclosureInterest paid
    
    
    $52,272
    
    
    
    $47,691Income taxes paid
    
    
    $136,284
    
    
    
    $154,748
 7




---



##### 



Notes to Consolidated Financial Statements
   1. Cameco Corporation
  2. Significant Accounting Policies
 (a)
    
    Consolidation PrinciplesThe consolidated financial statements include the accounts of Cameco and its subsidiaries.
Interests in joint ventures are accounted for by the proportionate consolidation method. Under this
method, Cameco includes in its accounts its proportionate share of assets, liabilities, revenues
and expenses.The consolidated financial statements are prepared by management in accordance with Canadian
generally accepted accounting principles. Management makes various estimates and assumptions in
determining the reported amounts of assets and liabilities, revenues and expenses for each year
presented, and in the disclosure of commitments and contingencies. The most significant estimates
are related to the lives and recoverability of mineral properties, provisions for decommissioning
and reclamation of assets, future income taxes, financial instruments and mineral reserves. Actual
results could differ from these estimates. This summary of significant accounting policies is a
description of the accounting methods and practices that have been used in the preparation of these
consolidated financial statements and is presented to assist the reader in interpreting the
statements contained herein.(b)
    
    Cash and cash equivalentsCash and cash equivalents consists of balances with financial institutions and investments in
money market instruments, which have a term to maturity of three months or less at time of
purchase.(c)
    
    InventoriesInventories of broken ore, uranium concentrates, refined and converted products and gold are
valued at the lower of average cost and net realizable value. Average cost includes direct
materials, direct labour, operational overhead expenses and depreciation, depletion and
reclamation.(d)
    
    SuppliesConsumable supplies and spares are valued at the lower of cost or replacement value.(e)
    
    InvestmentsInvestments in associated companies over which Cameco has the ability to exercise significant
influence are accounted for by the equity method. Under this method, Cameco includes in earnings
its share of earnings or losses of the associated company. Portfolio investments are classified as
available-for-sale and are carried at fair value in the consolidated balance sheets with unrealized
gains and losses reported in other comprehensive income (OCI). Realized gains and losses, as well
as other-than-temporary declines in value, are recorded in the consolidated statements of earnings.
 8




---



##### 



(f)
    
    Property, Plant and EquipmentAssets are carried at cost. Costs of additions and improvements are capitalized. When assets
are retired or sold, the resulting gains or losses are reflected in current earnings. Maintenance
and repair expenditures are charged to cost of production.The decision to develop a mine property within a project area is based on an assessment of the
commercial viability of the property, the availability of financing and the existence of markets
for the product. Once the decision to proceed to development is made, development and other
expenditures relating to the project area are deferred and carried at cost with the intention that
these will be depleted by charges against earnings from future mining operations. No depreciation
or depletion is charged against the property until commercial production commences. After a mine
property has been brought into commercial production, costs of any additional work on that property
are expensed as incurred, except for large development programs, which will be deferred and
depleted over the remaining life of the related assets.The carrying values of non-producing
properties are periodically assessed by management and if management determines that the carrying
values cannot be recovered, the unrecoverable amounts are written off against current earnings.Cameco reviews the carrying values of its property, plant and equipment when changes in
circumstances indicate that those carrying values may not be recoverable. Estimated future net cash
flows are calculated using estimated recoverable reserves, estimated future commodity prices and
the expected future operating and capital costs. An impairment loss is recognized when the carrying
value of an asset held for use exceeds the sum of undiscounted future net cash flows. An impairment
loss is measured as the amount by which the assets carrying amount exceeds its fair value.Interest is capitalized on expenditures related to development projects actively being
prepared for their intended use. Capitalization is discontinued when the asset enters commercial
operation or development ceases.Fuel services assets, mine buildings, equipment and mineral
properties are depreciated or depleted according to the unit-of-production method. This method
allocates the costs of these assets to each accounting period. For fuel services, the amount of
depreciation is measured by the portion of the facilities total estimated lifetime production that
is produced in that period. For mining, the amount of depreciation or depletion is measured by the
portion of the mines proven and probable reserves which are recovered during the period.Nuclear generating plants are depreciated according to the straight-line method based on the
lower of useful life and remaining lease term.Other assets are depreciated according to the straight-line method based on estimated useful
lives, which generally range from three to 10 years.(g)
    
    Intangible Assets and GoodwillIntangible assets acquired in a business combination are recorded at their fair values.
Finite-lived intangible assets are amortized over the estimated production profile of the business
unit to which they relate. The carrying values of intangible assets are periodically assessed by
management and if management determines that the carrying values cannot be recovered, the
unrecoverable amount is charged to earnings in the current period.Acquisitions are accounted for using the purchase method whereby acquired assets and
liabilities are recorded at fair value as of the date of acquisition. The excess of the purchase
price over such fair value is recorded as goodwill. Goodwill is assigned to assets and is not
amortized. Cameco tests goodwill for possible impairment on an annual basis and at any other time
if an event occurs or circumstances change that would more likely than not reduce the fair value of
a reporting unit below its carrying amount. In the event the carrying value of a reporting unit was
to exceed its estimated fair value, Cameco would compare the implied fair value of the reporting
units goodwill to its carrying amount. Any excess of the carrying value over the fair value is
charged to earnings.
 9




---



##### 



(h)
    
    Future Income TaxesFuture income taxes are recognized for the future income tax consequences attributable to
differences between the carrying values of assets and liabilities and their respective income tax
bases. Future income tax assets and liabilities are measured using enacted or substantively enacted
income tax rates expected to apply to taxable income in the years in which temporary differences
are expected to be recovered or settled. The effect on future income tax assets and liabilities of
a change in rates is included in earnings in the period, which includes the enactment date. Future
income tax assets are recorded in the financial statements and a valuation allowance is provided,
if necessary, to reduce the future income tax asset to an amount that is more likely than not to be
realized. Accrued interest and penalties for uncertain tax positions are recognized in the period
in which uncertainties are identified.(i)
    
    Research and Development and Exploration CostsExpenditures for research and technology related to the products, processes and expenditures
for geological exploration programs are charged against earnings as incurred.(j)
    
    Environmental Protection and Asset Retirement ObligationsThe fair value of the liability for an asset retirement obligation is recognized in the period
incurred. The fair value, discounted using the companys credit adjusted risk free rate, is added
to the carrying amount of the associated asset and depreciated over the assets useful life. The
liability is accreted over time, using the companys credit adjusted risk free rate, through
periodic charges to earnings and it is reduced by actual costs of decommissioning and reclamation.
Camecos estimates of reclamation costs could change as a result of changes in regulatory
requirements, reclamation plans, cost estimates and timing of estimated expenditures. Costs related
to ongoing environmental programs are charged against earnings as incurred.(k)
    
    Employee Future BenefitsCameco accrues its obligations under employee benefit plans. The cost of pensions and other
retirement benefits earned by employees is actuarially determined using the projected benefit
method pro-rated on service and managements best estimate of expected plan investment performance,
salary escalation, retirement ages of employees and expected health care costs. For the purpose of
calculating the expected return on plan assets, those assets are measured at fair value. Cameco
measures the plan assets and the accrued benefit obligations on December 31 each year.On both the Cameco-specific and BPLP-specific defined benefit pension plans, past service
costs arising from plan amendments are amortized on a straight-line basis over the expected average
remaining service life of the plan participants. Net actuarial gains, which exceed 10% of the
greater of the accrued
benefit obligation and the fair value of plan assets, are amortized on a straight-line basis over
the expected average remaining service life of the plan participants.On the Cameco-specific retirement benefit plans that do not vest or accumulate, past service
costs arising from plan amendments, and net actuarial gains and losses, are recognized in the
period they arise. Conversely, the BPLP-specific amounts are amortized on a straight-line basis
over the expected average remaining service life of the plan participants.(l)
    
    Stock-Based CompensationCameco has five stock-based compensation plans that are described in note 20. These encompass
a stock option plan, an employee share ownership plan, a performance share unit plan, a deferred
share unit plan and a phantom stock option plan. In calculating compensation expense, Cameco
includes an estimate for forfeitures that is based on historic trends.Options granted under the
stock option plan for which the holder cannot elect cash settlement are accounted for using the
fair value method. Under this method, the compensation cost of options granted is measured at
estimated fair value at the grant date and recognized over the shorter of the period to eligible
retirement or the vesting period. Options that may be settled in cash are accounted for as
liabilities and are carried at their intrinsic value. The intrinsic value of the liability is
marked to market each period and is amortized to expense over the shorter of, the period to
eligible retirement, or the vesting period. Effective November 10, 2008, the stock option plan was
amended to eliminate the alternative to settle in cash.Deferred share units, performance share units and phantom stock options are amortized over the
shorter of the period to eligible retirement or the vesting period and re-measured at each
reporting period, until settlement, using the quoted market value. Camecos contributions under the
employee share ownership plan are expensed during the year of contribution. Shares purchased with
company contributions and with dividends paid on such shares, become unrestricted on January 1 of
the second plan year following the date on which such shares were purchased.
 10




---



##### 



(m)
    
    Revenue RecognitionCameco supplies uranium concentrates and uranium conversion services to utility customers.Cameco
recognizes revenue on the sale of its nuclear products when evidenced by a contract that
indicates the product, pricing and delivery terms, delivery occurs, the related revenue is fixed
or determinable and collection is reasonably assured.Cameco has three types of sales arrangements with its customers in its uranium and fuel services
businesses. These arrangements include uranium supply, toll conversion services and conversion
supply (converted uranium), which is a combination of uranium supply and toll conversion
services.Uranium SupplyIn a uranium supply arrangement, Cameco is contractually obligated to provide uranium
concentrates to its customers. Cameco-owned uranium is physically delivered to conversion
facilities (Converters) where the Converter will credit Camecos account for the volume of
accepted uranium. Based on delivery terms in a sales contract with its customer, Cameco instructs
the Converter to transfer title of a contractually-specified quantity of uranium to the
customers account at the Converters facility. At this point, Cameco invoices the customer and
recognizes revenue for the uranium supply.Toll Conversion ServicesIn a toll conversion arrangement, Cameco is contractually obligated to convert customer-owned
uranium to a chemical state suitable for enrichment. The customer delivers uranium to Camecos
conversion facilities. Once conversion is complete, Cameco physically delivers converted uranium
to enrichment facilities (Enrichers) where the Enricher will credit Camecos account for the
volume of accepted processed uranium. Based on delivery terms in a sales contract with its
customer, Cameco instructs the Enricher to transfer title of a contractually-specified quantity
of converted uranium to the customers account at the Enrichers facility. At this point, Cameco
invoices the customer and recognizes revenue for the toll conversion services.Conversion SupplyIn a conversion supply arrangement, Cameco is contractually obligated to provide uranium
concentrates and conversion services to its customers. Cameco-owned uranium is converted and
physically delivered to an Enricher as described in the toll conversion services arrangement.
Based on delivery terms in a sales contract with its customer, Cameco instructs the Enricher to
transfer title of a contractually-specified quantity of converted uranium to the customers
account at the Enrichers facility. At this point, Cameco invoices the customer and recognizes
revenue for both the uranium supplied and the conversion service provided. It is rare for Cameco
to enter into back-to-back arrangements for uranium supply and
toll conversion services. However, in the event that a customer requires such an arrangement,
revenue from uranium supply is deferred until the toll conversion service has been rendered.Revenue from deliveries to counterparties with whom Cameco has arranged a standby product loan
facility (up to the limit of the loan facilities) and the related cost of sales are deferred
until the loan arrangements have been terminated, or if drawn upon, when the loans are repaid and
that portion of the facility is terminated.Revenue on the sale of gold is recorded when title passes, delivery is effected and there is
reasonable assurance with respect to measurement and collectability.Electricity sales are recognized at the time of generation, and delivery to the purchasing
utility is metered at the point of interconnection with the transmission system. Revenues are
recognized on an accrual basis, which includes an estimate of the value of electricity produced
during the period but not yet billed.(n)
    
    Amortization of Financing CostsFor financial instruments that are measured at amortized cost, the effective interest method of
amortization is used for any debt discounts and issue expenses. Unamortized costs are classified
with their related financial liability.(o)
    
    Foreign Currency TranslationMonetary assets and liabilities denominated in foreign currencies are translated into Canadian
dollars at year-end rates of exchange. Revenue and expense transactions denominated in foreign
currencies are translated into Canadian dollars at rates in effect at the time of the
transactions. The applicable exchange gains and losses arising on these transactions are
reflected in earnings.The United States dollar is considered the functional currency of most of Camecos uranium and
gold operations outside of Canada. The financial statements of these operations are translated
into Canadian dollars using the current rate
 11




---



##### 



method whereby all assets and liabilities are translated at the year-end rate of exchange and
all revenue and expense items are translated at the average rate of exchange prevailing during
the year. Exchange gains and losses arising from this translation, representing the net
unrealized foreign currency translation gain (loss) on Camecos net investment in these foreign
operations, are recorded in the foreign currency translation adjustments component of
accumulated other comprehensive income (AOCI). Exchange gains or losses arising from the
translation of foreign debt designated as hedges of a net investment in foreign operations are
also recorded in the foreign currency translation adjustments component of accumulated other
comprehensive income. These adjustments are not included in earnings until realized through a
reduction in Camecos net investment in such operations.(p)
    
    Derivative Financial Instruments and Hedging TransactionsFinancial Assets and Financial LiabilitiesAll financial assets and liabilities are carried at fair value in the consolidated balance
sheets, except for items classified in the following categories, which are carried at amortized
cost: loans and receivables, held-to-maturity securities and financial liabilities not
held-for-trading. Realized and unrealized gains and losses on financial assets and liabilities
that are held-for-trading are recorded in the consolidated statements of earnings. Unrealized
gains and losses on financial assets that are available-for-sale are reported in OCI until
realized, at which time they are recorded in the consolidated statements of earnings.Hedge Accounting and DerivativesDerivative financial and commodity instruments are employed by Cameco to reduce exposure to
fluctuations in foreign currency exchange rates, interest rates and commodity prices. All
derivative instruments are recorded at fair value in the consolidated balance sheets, except
for those designated as hedging instruments.The purpose of hedging transactions is to modify Camecos exposure to one or more risks by
creating an offset between changes in the fair value of, or the cash inflows attributable to,
the hedged item and the hedging item. Hedge accounting ensures that the offsetting gains,
losses, revenues and expenses are recognized to net earnings in the same period or periods.
When hedge accounting is appropriate, the hedging relationship is designated as a fair value
hedge, a cash flow hedge, or a foreign currency risk hedge related to a net investment in a
self-sustaining foreign operation.At the inception of a hedging relationship, Cameco formally documents all relationships between
hedging instruments and hedged items, as well as its risk management objective and strategy for
undertaking various hedge transactions. The process includes linking all derivatives to
specific assets
and liabilities on the balance sheet or to specific firm commitments or forecasted
transactions. Cameco also formally assesses, both at the inception and on an ongoing basis,
whether the derivatives that are used in hedging transactions are highly effective in
offsetting changes in fair values or cash flows of hedged items.For fair value hedges, changes in the fair value of the derivatives and corresponding changes
in fair value of the hedged items attributed to the risk being hedged are recognized in the
consolidated statements of earnings. For cash flow hedges, the effective portion of the changes
in the fair values of the derivative instruments are recorded in OCI until the hedged items are
recognized in the consolidated statements of earnings. Derivative instruments that do not
qualify for hedge accounting, or are not designated as hedging instruments, are
marked-to-market and the resulting net gains or losses are recognized in interest and other in
the consolidated statements of earnings.Derivatives may be embedded in other financial instruments (the host instrument). Embedded
derivatives are treated as separate derivatives when their economic characteristics and risks
are not clearly and closely related to those of the host instrument, the terms of the embedded
derivative are the same as those of a stand-alone derivative, and the combined contract is not
held-for-trading or designated at fair value. These embedded derivatives are measured at fair
value with subsequent changes recognized in gains or losses on derivatives within interest and
other on the consolidated statements of earnings.(q)
    
    Earnings Per ShareEarnings per share are calculated using the weighted average number of common shares
outstanding.The calculation of diluted earnings per share assumes that outstanding options and warrants
which are dilutive to earnings per share are exercised and the proceeds are used to repurchase
shares of the company at the average market price of the shares for the period. The effect is
to increase the number of shares used to calculate diluted earnings per share.
 12




---



##### 



3. Accounting Standards
 (a)
    
    Changes in Accounting Policies
 (i)
    
    Capital DisclosuresOn January 1, 2008, Cameco adopted the standard issued by the Canadian Institute of
Chartered Accountants (CICA) relating to capital disclosures. The standard requires
disclosure of Camecos objectives, policies and processes for managing capital,
quantitative data about what Cameco regards as capital and whether Cameco has complied
with any capital requirements and, if it has not complied, the consequences of such
non-compliance. 
Camecos capital structure reflects our vision and the environment in
which we operate. We seek growth through development and expansion of existing assets
and by acquisition. Our capital resources are managed to support achievement of our
goals. The overall objectives for managing capital remained unchanged in 2008 from the
prior comparative period.Camecos management considers its capital structure to consist of long-term debt,
short-term debt (net of cash and cash equivalents), minority interest and shareholders
equity.The capital structure at December 31, 2008 was as follows:
 (Thousands)
    
    2008Long-term debt
    
    $
    1,223,157Short-term debt
    
    
    89,817Cash and cash equivalents
    
    
    (269,176
    )Net debt
    
    
    1,043,798Minority interest
    
    
    779,203Shareholders equity
    
    
    3,514,923Total equity
    
    
    4,294,126Total capital
    
    $
    5,337,924
 Cameco is bound by certain covenants in its general credit facilities. These covenants place
restrictions on total debt, including guarantees, and set minimum levels for net worth. As of
December 31, 2008, Cameco met these requirements.(ii)
    
    Financial InstrumentsOn January 1, 2008, Cameco adopted CICA Handbook Sections 3862, Financial Instruments 
Disclosures and 3863, Financial Instruments  Presentation. These sections replaced Handbook
Section 3861, Financial Instruments  Disclosures and Presentation. They enhance the users
ability to evaluate the significance of financial instruments to an entity, related exposures
and the management
of these risks. There was no financial impact to previously reported financial statements as a
result of the implementation of these new standards.Risk Management OverviewCameco is exposed in varying degrees to a variety of financial instrument related risks.
Management and the board of directors, both separately and together, discuss the principal
risks of our businesses. The board sets policies for the implementation of systems to manage,
monitor and mitigate identifiable risks. Camecos risk management objective in relation to
these instruments is to protect and minimize volatility in cash flow.Market RiskCameco engages in various business activities which expose the company to market risk from
changes in commodity prices and foreign currency exchange rates. As part of its overall risk
management strategy, Cameco uses derivatives to manage some of its exposures to market risk
that result from these activities.Derivative instruments may include financial and physical forward contracts. Such contracts may
be used to establish a fixed price for a commodity, an interest-bearing obligation or a cash
flow denominated in a foreign currency. Market risks are monitored regularly against defined
risk limits and tolerances.Camecos actual exposure to these market risks is constantly changing as the companys
portfolios of foreign currency and commodity contracts change. Changes in fair value or cash
flows based on market variable fluctuations cannot be extrapolated as the relationship between
the change in the market variable and the change in fair value or cash flow may not be linear.
 13




---



##### 



(a)
    
    Commodity Price RiskAs a significant producer and supplier of uranium, nuclear fuel processing, gold and
electricity, Cameco bears significant exposure to changes in prices for these products. A
substantial change in prices will affect the companys net earnings and operating cash flows.
Prices for Camecos products are volatile and are influenced by numerous factors beyond the
companys control, such as supply and demand fundamentals, geopolitical events and, in the case
of electricity prices, weather.Camecos sales contracting strategy focuses on reducing the volatility in future earnings and
cash flow, while providing both protection against decreases in market price and retention of
exposure to future market price increases. Centerra policy currently prohibits the hedging of
gold. To mitigate the risks associated with the fluctuations in the market price for uranium
products, Cameco seeks to maintain a portfolio of uranium product sales contracts with a
variety of delivery dates and pricing mechanisms that provide a degree of protection from
pricing volatility. To mitigate risks associated with fluctuations in the market price for
electricity, BPLP enters into various energy and sales related contracts that qualify as cash
flow hedges. At December 31, 2008, the effect of a $1/TWh increase in the market price for
electricity would be a decrease of $288,000 in net earnings, and a decrease in other
comprehensive income of $4,889,000.(b)
    
    Foreign Exchange RiskThe relationship between the Canadian and US dollars affects financial results of the uranium
business as well as the fuel services business.Sales of uranium and fuel services are routinely denominated in US dollars while production
costs are largely denominated in Canadian dollars. Cameco attempts to provide some protection
against exchange rate fluctuations by planned hedging activity designed to smooth volatility.
Cameco also has a natural hedge against US currency fluctuations because a portion of its
annual cash outlays, including purchases of uranium and fuel services, is denominated in US
dollars. At December 31, 2008, the effect of a $0.01 increase in the US to Canadian dollar
exchange rate on our portfolio of currency hedges and other USD denominated exposures would be
a decrease of $7,100,000 in net earnings.(c)
    
    Counterparty Credit RiskCamecos sales of uranium product, conversion and fuel manufacturing services expose the
company to the risk of non-payment. Counterparty credit risk is associated with the ability of
counterparties to satisfy their contractual obligations to Cameco, including both payment and
performance.Cameco manages this risk by monitoring the credit worthiness of our customers and seeking
pre-payment or other forms of payment security from customers with an unacceptable level of
credit risk.Camecos maximum counterparty credit exposure at the balance sheet date consists primarily of
the carrying amount of financial assets such as accounts receivable and short-term investments.
At December 31, 2008, there were no significant concentrations of credit risk and no amounts
were held as collateral.(d)
    
    Liquidity RiskFinancial liquidity represents Camecos ability to fund future operating activities and
investments. Cameco ensures that there is sufficient capital in order to meet short-term
business requirements, after taking into account cash flows from operations and the companys
holdings of cash and cash equivalents. The company believes that these sources will be
sufficient to cover the likely short-term and long-term cash requirements.
 14




---



##### 



The tables below outline the maturity dates for Camecos non-derivative financial liabilities
including principal and interest as at December 31, 2008:
 Due in less
    
    
    Due in
    
    
    Due in
    
    
    Due after(Millions)
    
    Total
    
    
    than 1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 yearsLong-term debt
    
    
    $1,042
    
    
    
    $
    
    
    
    $442
    
    
    
    $302
    
    
    
    $298BPLP lease
    
    
    181
    
    
    
    10
    
    
    
    25
    
    
    
    31
    
    
    
    115Short-term debt
    
    
    90
    
    
    
    90
    
    
    
    
    
    
    
    
    
    
    
    Total contractual repayments
    
    
    $1,313
    
    
    
    $100
    
    
    
    $467
    
    
    
    $333
    
    
    
    $413
 Due in less
    
    
    Due in
    
    
    Due in
    
    
    Due after(Millions)
    
    Total
    
    
    than 1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 yearsInterest on long-term debt
    
    
    $142
    
    
    
    $33
    
    
    
    $46
    
    
    
    $35
    
    
    
    $28Interest on BPLP lease
    
    
    81
    
    
    
    13
    
    
    
    24
    
    
    
    20
    
    
    
    24Interest on short-term debt
    
    
    3
    
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    Total interest payments
    
    
    $226
    
    
    
    $49
    
    
    
    $70
    
    
    
    $55
    
    
    
    $52
 (iii)
    
    InventoriesOn January 1, 2008, Cameco adopted the new Canadian standard, Handbook Section 3031,
Inventories, which supersedes Handbook Section 3030 and converges with the International
Accounting Standard Boards recently amended standard IAS 2, Inventories. This Section
provides more extensive guidance on the determination of cost, including allocation of
overhead; narrows the permitted cost formulas; allows for the write-up of subsequent
increases in net realizable value of previously impaired inventory; and expands the
disclosure requirements to increase transparency. Upon adoption of the standard, the
company assigned a value of $20,400,000 (US) to previously unvalued gold ore stockpiles at
Centerra, its 52.7% owned subsidiary. This amount, with accompanying adjustments to income
taxes and minority interest, has been recognized as at January 1, 2008 with a corresponding
adjustment of $8,787,000 (Cdn) to retained earnings. Prior periods have not been restated.(iv)
    
    Hedge AccountingEffective August 1, 2008, Cameco voluntarily de-designated its foreign currency forward
sales contracts as hedges of anticipated cash inflows. Accordingly, all subsequent changes
in the fair value of these contracts have been recorded in earnings rather than in other
comprehensive income. Mark-to-market gains and losses arising prior to August 1, 2008 will
be recognized in net earnings at the time when the previously hedged transactions occur.
 (b)
    
    Future Changes in Accounting Policy
 (i)
    
    International Financial Reporting Standards (IFRS)The Accounting Standards Board (AcSB) has announced that Canadian publicly accountable
enterprises will be required to adopt IFRS effective January 1, 2011. Although IFRS employs
a conceptual framework that is similar to Canadian GAAP, there are significant differences
in recognition, measurement and disclosure. Cameco has undertaken a project to assess the
potential impacts of the transition to IFRS and has developed a detailed project plan to
ensure compliance with the new standards.Cameco has completed the initial phase of the implementation project including the detailed
diagnostic analysis which included a high-level impact assessment to identify key areas
that may be impacted by the adoption of IFRS. This analysis resulted in the prioritization
of areas to be evaluated in the next phase of the project plan, component evaluation. This
phase, which is currently in progress, includes the analysis of accounting policy
alternatives available under IFRS as well as the determination of changes required to
existing information systems and business processes. Cameco continues to assess the impact
of the conversion on internal controls over financial reporting and disclosure controls and
procedures and will continue to invest in training and resources throughout the transition
period to facilitate a timely conversion. Cameco is currently assessing the impact of the
adoption of IFRS on our results of operations, financial position and financial statement
disclosures.
 15




---



##### 



(ii)
    
    Goodwill and Intangible AssetsEffective January 1, 2009, Cameco will adopt the new Canadian standard, Handbook Section 3064,
Goodwill and Intangible Assets, which replaces Handbook Section 3062, Goodwill and Other
Intangible Assets and Section 3450, Research and Development Costs. The standard introduces
guidance for the recognition, measurement and disclosure of goodwill and intangible assets,
including internally generated intangible assets. The standard also harmonizes Canadian
standards with IFRS and applies to annual and interim financial statements for fiscal years
beginning on or after October 1, 2008. Cameco is assessing the impact of the new standard on its
consolidated financial statements.(iii)
    
    Noncontrolling Interests in Consolidated Financial StatementsEffective January 1, 2009, Cameco will adopt the new Canadian standard, Handbook Section 1602,
Noncontrolling Interests in Consolidated Financial Statements. This section specifies that
noncontrolling interests be treated as a separate component of equity, not as a liability or
other item outside of equity. Section 1602 is effective for periods beginning on or after
January 1, 2011 and will be applied prospectively to all noncontrolling interests, including any
that arose before the effective date. Cameco does not expect the adoption of this standard will
have a material impact on its consolidated financial statements.(iv)
    
    Consolidated Financial StatementsEffective January 1, 2009, Cameco will adopt the new Canadian standard, Handbook Section 1601,
Consolidated Financial Statements,which replaces the existing standard. This section
establishes the standards for preparing consolidated financial statements and is effective for
periods beginning on or after January 1, 2011. Cameco does not expect the adoption of this
standard will have a material impact on its consolidated financial statements.(v)
    
    Business CombinationsEffective January 1, 2009, Cameco will adopt the new Canadian standard, Handbook Section 1582,
Business Combinations. This section specifies a number of changes including: an expanded
definition of a business, a requirement to measure all business acquisitions at fair value, a
requirement to measure noncontrolling interests at fair value and a requirement to recognize
acquisition-related costs as expenses. Section 1582 applies prospectively to business
combinations occurring on or after January 1, 2011.
 4.
    
    Inventories
 2008
    
    
    2007UraniumConcentrate
    
    $
    287,079
    
    
    $
    291,071Broken ore
    
    
    21,396
    
    
    
    8,313308,475
    
    
    
    299,384Fuel Services
    
    
    89,635
    
    
    
    93,788GoldFinished
    
    
    18,662
    
    
    
    10,986Stockpile
    
    
    75,931
    
    
    
    33,32994,593
    
    
    
    44,315Total
    
    $
    492,703
    
    
    $
    437,487Less: Non-current portion [note 3(a)(iii)]
    
    
    (22,054
    )
    
    
    (8,985
    )Net
    
    $
    470,649
    
    
    $
    428,502
  16




---



##### 



5.
    
    Property, Plant and Equipment
 Accumulated
DepreciationCost
    
    
    and Depletion
    
    
    2008 Net
    
    
    2007 NetUraniumMining
    
    $
    3,490,181
    
    
    $
    1,690,296
    
    
    $
    1,799,885
    
    
    $
    1,415,498Non-producing
    
    
    1,325,532
    
    
    
    
    
    
    
    1,325,532
    
    
    
    888,872Fuel Services
    
    
    474,725
    
    
    
    195,334
    
    
    
    279,391
    
    
    
    222,892ElectricityAssets under capital lease
    
    
    164,290
    
    
    
    71,070
    
    
    
    93,220
    
    
    
    102,540Other
    
    
    551,133
    
    
    
    184,129
    
    
    
    367,004
    
    
    
    397,693GoldMining
    
    
    1,263,798
    
    
    
    786,708
    
    
    
    477,090
    
    
    
    365,294Non-producing
    
    
    6,551
    
    
    
    
    
    
    
    6,551
    
    
    
    4,676Other
    
    
    107,269
    
    
    
    39,649
    
    
    
    67,620
    
    
    
    39,985Total
    
    $
    7,383,479
    
    
    $
    2,967,186
    
    
    $
    4,416,293
    
    
    $
    3,437,450
 6.
    
    Intangible Assets and Goodwill
 AccumulatedCost
    
    
    Depreciation
    
    
    2008 Net
    
    
    2007 NetIntangible assets
    
    $
    118,819
    
    
    
    $17,377
    
    
    $
    101,442
    
    
    $
    108,712Goodwill
    
    
    181,902
    
    
    
    N/A
    
    
    
    181,902
    
    
    
    146,772Total
    
    $
    300,721
    
    
    
    $17,377
    
    
    $
    283,344
    
    
    $
    255,484
    17




---



##### 



7.
    
    Long-Term Receivables, Investments and Other
 2008
    
    
    2007BPLP [note 19]Capital lease receivable from Bruce A L.P.
    
    
    $97,044
    
    
    
    $97,328Derivatives [note 25]
    
    
    75,994
    
    
    
    75,788Receivable from Ontario Power Generation (OPG)
    
    
    
    
    
    
    2,907Accrued pension benefit asset [note 21]
    
    
    6,061
    
    
    
    5,864Kumtor Gold Company (KGC)Reclamation trust fund
    
    
    6,219
    
    
    
    4,795Equity accounted investmentsGlobal Laser Enrichment LLC (privately held) [note 22]
    
    
    240,018
    
    
    
    Govi High Power Exploration Inc. (privately held) [note 22]
    
    
    34,442
    
    
    
    UNOR Inc. (market value $1,088)
    
    
    1,088
    
    
    
    7,790UEX Corporation (market value $25,783)
    
    
    6,714
    
    
    
    14,153Huron Wind (privately held)
    
    
    4,623
    
    
    
    2,174Minergia S.A.C. (privately held)
    
    
    534
    
    
    
    683Available-for-sale securitiesWestern Uranium Corporation (market value $3,296)
    
    
    3,296
    
    
    
    13,351Cue Resources Ltd. (market value $422)
    
    
    422
    
    
    
    6,751Derivatives [note 25]
    
    
    5,793
    
    
    
    168,641Deferred chargesCost of sales [note 11]
    
    
    6,414
    
    
    
    54,943Advances receivable from Inkai JV LLP
    
    
    126,130
    
    
    
    47,045Accrued pension benefit asset [note 21]
    
    
    4,815
    
    
    
    5,874Other
    
    
    59,201
    
    
    
    43,381678,808
    
    
    
    551,468Less current portion
    
    
    (49,836
    )
    
    
    (164,164
    )Net
    
    
    $628,972
    
    
    
    $387,304
 During 2008, the investments in Western Uranium Corporation, Cue Resources Ltd. and UNOR Inc.
were determined to be impaired and charges of $17,092,000, $6,479,000 and $6,421,000
respectively were recognized during the year [note 15].BPLP leases the Bruce A nuclear generating plants and other property, plant and equipment to
Bruce A L.P. under a sublease agreement. Future minimum base rent sublease payments under the
capital lease receivable are imputed using a 7.5% discount rate.Through an unsecured shareholder loan, Cameco has agreed to fund the development of the Inkai
project. The limit of the loan facility is $300,000,000 (US) and advances under the facility
bear interest at a rate of LIBOR plus 2%. At December 31, 2008, $257,000,000 (US) of principal
and interest was outstanding (2007  $119,000,000 (US)), of which 40% represents the joint
venture partners share. Of the cash available for distribution each year, 80% is to be used to
repay the loan until it is repaid in full.8.
    
    Short-Term DebtIn 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) [note 22]. The promissory note is
payable on demand and bears interest at market rates.In February 2009, Cameco concluded an arrangement for a $100,000,000 unsecured revolving credit
facility, maturing February 5, 2010, and extendable for two additional 364-day terms upon mutual
agreement with the lender. There is no amount outstanding under this credit agreement.
 18




---



##### 



9. Long-Term Debt
 2008
    
    
    2007Debentures
    
    
    $298,177
    
    
    $
    297,905Convertible debentures
    
    
    
    
    
    
    205,575Capital lease obligation  BPLP
    
    
    180,784
    
    
    
    189,600Commercial paper and bank debt
    
    
    744,196
    
    
    
    32,8661,223,157
    
    
    
    725,946Less current portion
    
    
    (10,175
    )
    
    
    (8,816
    )Net
    
    $
    1,212,982
    
    
    $
    717,130
      19




---



##### 



2009
    
    
    $10,1752010
    
    
    453,2882011
    
    
    13,2722012
    
    
    317,4522013
    
    
    16,325Thereafter
    
    
    412,645Total
    
    
    $1,223,157
 Standby Product Loan Facilities
 3 8 6
  3 8 6
 3 8
 20




---



##### 



10.
    
    Provision for ReclamationCamecos estimates of future asset retirement obligations are based on reclamation standards
that satisfy regulatory requirements. Elements of uncertainty in estimating these amounts
include potential changes in regulatory requirements, decommissioning and reclamation
alternatives and amounts to be recovered from other parties.Cameco estimates total future decommissioning and reclamation costs for its operating assets to
be $556,288,000. These estimates are reviewed by Cameco technical personnel as required by
regulatory agencies or more frequently as circumstances warrant. In connection with future
decommissioning and reclamation costs, Cameco has provided financial assurances of $428,077,000
in the form of letters of credit to satisfy current regulatory requirements.Under the BPLP lease agreement, OPG, as the owner of the Bruce nuclear plants, is responsible to
decommission the Bruce facility and to provide funding and meet other requirements that the
Canadian Nuclear Safety Commission (CNSC) may require of BPLP as licensed operator of the Bruce
facility. OPG is also responsible to manage radioactive waste associated with decommissioning of
the Bruce nuclear plants.Following is a reconciliation of the total liability for asset retirement obligations:
 2008
    
    
    2007Balance, beginning of year
    
    $
    284,673
    
    
    $
    228,496Changes in estimates
    
    
    40,300
    
    
    
    59,487Liabilities settled
    
    
    (5,787
    )
    
    
    (6,034
    )Accretion expense
    
    
    16,979
    
    
    
    14,768Impact of foreign exchange
    
    
    17,179
    
    
    
    (12,044
    )Balance, end of year
    
    $
    353,344
    
    
    $
    284,673
  (i)
    
    Total undiscounted amount of the estimated cash flows  $556,288,000.(ii)
    
    Expected timing of payment of the cash flows  timing is based on life of mine plans. The
majority of expenditures are expected to occur after 2014.(iii)
    
    Discount rates  5.25% to 7.50% for operations in North America and 8.00% to 9.00% for
operations in Central Asia.
  2008
    
    
    2007Uranium
    
    $
    213,500
    
    
    $
    166,725Fuel Services
    
    
    99,644
    
    
    
    97,329Gold
    
    
    40,200
    
    
    
    20,619Total
    
    $
    353,344
    
    
    $
    284,673
 21




---



##### 



11.
    
    Other Liabilities
 2008
    
    
    2007Deferred sales [note 7]
    
    
    $31,511
    
    
    $
    113,461Derivatives [note 25]
    
    
    119,869
    
    
    
    21,619Accrued post-retirement benefit liability [note 21]
    
    
    11,842
    
    
    
    13,143Zircatec acquisition holdback
    
    
    2,000
    
    
    
    10,000BPLPAccrued post-retirement benefit liability [note 21]
    
    
    117,038
    
    
    
    104,046Derivatives [note 25]
    
    
    534
    
    
    
    1,057Other
    
    
    14,308
    
    
    
    27,677297,102
    
    
    
    291,003Less current portion
    
    
    (117,222
    )
    
    
    (32,492
    )Net
    
    
    $179,880
    
    
    $
    258,511
 12.
    
    Share CapitalAuthorized share capital:
 
 (a)
    
    Common Shares
 Number Issued (Number of Shares)
    
    2008
    
    
    2007Beginning of year
    
    
    344,398,698
    
    
    
    352,292,632Issued:Shares repurchased
    
    
    
    
    
    
    (9,575,300
    )Stock option plan [note 20]
    
    
    115,640
    
    
    
    1,681,366Debenture conversions [note 9]
    
    
    21,204,585
    
    
    
    Issued share capital
    
    
    365,718,923
    
    
    
    344,398,698
 (b)
    
    Class B ShareOne Class B share issued during 1988 and assigned $1 of share capital, entitles the shareholder
to vote separately as a class in respect of any proposal to locate the head office of Cameco to
a place not in the province of Saskatchewan.(c)
    
    Share Repurchase ProgramOn September 6, 2007, Cameco announced an open market share repurchase program for cancellation
of up to 17,700,000 of its common shares, representing 5% of its common shares then outstanding. This
repurchase program was authorized to be in effect until September 10, 2008. In 2007, a total of
9,575,300 shares were repurchased under this program at a cost of $429,327,000 at an average
share price of $44.84. The excess of the repurchase cost of these shares over their book value,
amounting to $406,577,000, has been charged to contributed surplus. During 2008, no additional
shares were repurchased.
 22




---



##### 



13.
    
    Interest and Other
 2008
    
    
    2007Interest on long-term debt
    
    
    $51,950
    
    
    
    $42,743Interest on short-term debt
    
    
    1,377
    
    
    
    Foreign exchange losses
    
    
    83,006
    
    
    
    20,955Losses (gains) on derivatives
    
    
    202,651
    
    
    
    (53,606
    )Other charges
    
    
    12,498
    
    
    
    13,922Interest income
    
    
    (11,903
    )
    
    
    (25,960
    )Capitalized interest
    
    
    (39,185
    )
    
    
    (30,727
    )Net
    
    
    $300,394
    
    
    
    $(32,673
    )
 14.
    
    Gain on Sale of Assets
 2008
    
    
    2007Sale of geological data
    
    
    $(927
    )
    
    
    $(5,317
    )Other
    
    
    (3,170
    )
    
    
    1,289Net
    
    
    $(4,097
    )
    
    
    $(4,028
    )
 15.
    
    Other Expense
 2008
    
    
    2007Writedown of investments [note 7]
    
    $
    (29,992
    )
    
    
    $Equity in loss from associated companies
    
    
    (9,706
    )
    
    
    (6,439
    )Claim settlement
    
    
    
    
    
    
    (3,175
    )Other
    
    
    425
    
    
    
    536Net
    
    $
    (39,273
    )
    
    
    $(9,078
    )
 23




---



##### 



16.
    
    Income TaxesThe significant components of future income tax assets and liabilities at December 31 are as
follows:
 2008
    
    
    2007AssetsProperty, plant and equipment
    
    
    $291,874
    
    
    
    $201,560Provision for reclamation
    
    
    93,349
    
    
    
    78,335Foreign exploration and development
    
    
    56,535
    
    
    
    46,389Other
    
    
    68,731
    
    
    
    65,060Future income tax assets before valuation allowance
    
    
    510,489
    
    
    
    391,344Valuation allowance
    
    
    (128,064
    )
    
    
    (113,092
    )Future income tax assets, net of valuation allowance
    
    
    $382,425
    
    
    
    $278,252LiabilitiesProperty, plant and equipment
    
    
    $420,559
    
    
    
    $473,734Inventories
    
    
    31,914
    
    
    
    19,601Long-term investments and other
    
    
    80,161
    
    
    
    116,506Future income tax liabilities
    
    
    $532,634
    
    
    
    $609,841Net future income tax liabilities
    
    
    $150,209
    
    
    
    $331,589Less current portion
    
    
    (68,857
    )
    
    
    (84,653
    )$81,352
    
    
    
    $246,936
  2008
    
    
    2007Earnings before income taxes and minority interest
    
    
    $484,897
    
    
    
    $465,932Combined federal and provincial tax rate
    
    
    32.3%
    
    
    
    35.7%Computed income tax expense
    
    
    156,622
    
    
    
    166,338Increase (decrease) in taxes resulting from:Reduction in income tax rates
    
    
    
    
    
    
    (18,036
    )Provincial royalties and other taxes
    
    
    1,988
    
    
    
    1,240Federal and provincial resource allowance
    
    
    
    
    
    
    (492
    )Manufacturing and processing deduction
    
    
    (771
    )
    
    
    (5,112
    )Difference between Canadian rate and rates
applicable to subsidiaries in other countries
    
    
    (198,642
    )
    
    
    (187,328
    )Restructuring of gold business
    
    
    (37,053
    )
    
    
    40,156Change in valuation allowance
    
    
    14,972
    
    
    
    (4,827
    )Capital and other taxes
    
    
    
    
    
    
    1,938Stock-based compensation plans
    
    
    13,707
    
    
    
    (306
    )Other permanent differences
    
    
    24,422
    
    
    
    35,897Income tax (recovery) expense
    
    
    $(24,755
    )
    
    
    $29,468
 24




---



##### 



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. In December 2008, CRA issued a notice of reassessment, which increased Camecos 2003
Canadian taxable income by approximately $43,000,000 (which does not
result in any cash taxes becoming
payable for that year). Cameco believes it is likely that CRA will reassess Camecos tax returns
for the years 2004 through 2008 on a similar basis.Late in 2008, CRAs Transfer Pricing Review Committee decided not to impose a penalty for 2003
based on the documentation that had been submitted by Cameco.Having regard to advice from its external advisors, Camecos opinion is that CRAs position is
incorrect, and Cameco intends to contest CRAs position. However, to reflect the uncertainties of
CRAs appeals process and litigation, Cameco has decided to increase its reserve for uncertain tax
positions and recognize an income tax expense of $15,000,000 in 2008 for the years 2003 through
2008. No provisions for penalties or interest have been recorded. We do not expect any cash taxes
to be payable due to availability of elective deductions and tax loss carryforwards. While the
resolution of this matter may result in liabilities that are higher or lower than the reserve,
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 2008 could be material to Camecos financial position, results of operations or cash flows
in the year(s) of resolution.In 2007, the federal government introduced amendments to the Canadian Income Tax Act that provide
for a 4% reduction in the general corporate income tax rate. The federal tax rate will decline in 2012
from 19% to 15%. This legislation was substantively enacted in 2007. Under Canadian accounting
rules, the cumulative effect of a change in income tax legislation on future income tax assets and
liabilities is included in a companys financial statements in the period of substantive enactment.
Accordingly, Cameco reduced its balance sheet provision for future income taxes and recognized a
non-cash income tax adjustment of $25,400,000 in 2007.
 2008
    
    
    2007Earnings before income taxes and minority interestCanada
    
    
    $(389,608
    )
    
    
    $(297,519
    )Foreign
    
    
    874,505
    
    
    
    763,451$484,897
    
    
    
    $465,932Current income taxesCanada
    
    
    $44,752
    
    
    
    $99,066Foreign
    
    
    72,689
    
    
    
    64,531$117,441
    
    
    
    $163,597Future income taxes (recovery)Canada
    
    
    $(138,798
    )
    
    
    $(126,303
    )Foreign
    
    
    (3,398
    )
    
    
    (7,826
    )$(142,196
    )
    
    
    $(134,129
    )Income tax (recovery) expense
    
    
    $(24,755
    )
    
    
    $29,468
 25




---



##### 



2008
    
    
    2007(Losses) gains on derivatives designated as cash flow hedges
    
    
    $(6,773
    )
    
    
    $92,860Gains on derivatives designated as cash flow hedges transferred to net earnings
    
    
    (38,415
    )
    
    
    (28,104
    )Unrealized losses on assets available-for-sale
    
    
    (2,072
    )
    
    
    (1,152
    )Losses on assets available-for-sale transferred to net earnings
    
    
    3,024
    
    
    
    Total income tax (recovery) expense included in OCI
    
    
    $(44,236
    )
    
    
    $63,604
 Accumulated other comprehensive income included on the consolidated statements of shareholders
equity and the consolidated statement of accumulated other comprehensive income is presented net of
income taxes. The following income tax amounts are included in each component of accumulated other
comprehensive income:
 2008
    
    
    2007Gains on derivatives designated as cash flow hedges
    
    
    $103,259
    
    
    
    $110,032Gains on derivatives designated as cash flow hedges transferred to net earnings
    
    
    (66,519
    )
    
    
    (28,104
    )Unrealized losses on assets available-for-sale
    
    
    (3,224
    )
    
    
    (1,152
    )Losses on assets available-for-sale transferred to net earnings
    
    
    3,024
    
    
    
    Total income tax expense included in AOCI
    
    
    $36,540
    
    
    
    $80,776
 17.
    
    Statements of Cash FlowsOther Operating Items
 2008
    
    
    2007Changes in non-cash working capital:Accounts receivable
    
    
    $(143,266
    )
    
    
    $103,118Inventories
    
    
    10,718
    
    
    
    (61,810
    )Supplies and prepaid expenses
    
    
    (62,352
    )
    
    
    (35,631
    )Accounts payable and accrued liabilities
    
    
    22,941
    
    
    
    27,677Hedge position settlements
    
    
    52,152
    
    
    
    67,948Other
    
    
    (16,872
    )
    
    
    17,203Total
    
    
    $(136,679
    )
    
    
    $118,505
 26




---



##### 



18.
    
    Uranium Joint VenturesCameco conducts a portion of its exploration, development, mining and milling activities
through joint ventures. Camecos significant uranium joint venture interests are comprised of:
 Producing:McArthur River
    
    
    69.81
    %Key Lake
    
    
    83.33
    %Inkai
    
    
    60.00
    %Non-producing:Cigar Lake
    
    
    50.03
    %
 Uranium joint ventures allocate uranium production to each joint venture participant and the
joint venture participant derives revenue directly from the sale of such product. Mining and
milling expenses incurred by the joint venture are included in the cost of inventory. At
December 31, 2008, Camecos share of property, plant and equipment in these joint ventures
amounted to $2,233,000,000 (2007  $2,037,000,000) [note 5].19.
    
    Investment in BPLPCameco holds a 31.6% interest in the BPLP partnership, which is governed by an agreement that
provides for joint control of the strategic operating, investing and financing activities among
the three major partners. Cameco proportionately consolidates its 31.6% interest in BPLP.Fuel Supply AgreementsCameco 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. During 2008, sales of
uranium and conversion services to BPLP amounted to $58,611,000 (2007  $49,608,000),
approximately 2.0% (2007  2.1%) of Camecos total revenue. At December 31, 2008, amounts
receivable under these agreements totaled $11,131,000 (2007  $4,550,000).The following schedules reflect Camecos 31.6% proportionate interest in the balance sheets,
statements of earnings and statements of cash flows of the BPLP partnership.Balance Sheets
 (Millions)
    
    2008
    
    
    2007Current assets
    
    
    $190
    
    
    
    $159Property, plant and equipment
    
    
    403
    
    
    
    411Long-term receivables and investments
    
    
    156
    
    
    
    181$749
    
    
    
    $751Current liabilities
    
    
    $110
    
    
    
    $97Long-term liabilities
    
    
    304
    
    
    
    370414
    
    
    
    467Equity
    
    
    335
    
    
    
    284$749
    
    
    
    $751
 27




---



##### 



Statements of Earnings
 (Millions)
    
    2008
    
    
    2007Revenue
    
    
    $445
    
    
    
    $417Operating costs
    
    
    285
    
    
    
    278Earnings before interest and taxes
    
    
    160
    
    
    
    139Interest
    
    
    13
    
    
    
    Earnings before taxes
    
    
    $147
    
    
    
    $139Statements of Cash Flows
 (Millions)
    
    2008
    
    
    2007Cash provided by operations
    
    
    $173
    
    
    
    $159Cash provided by (used in) investing
    
    
    4
    
    
    
    (35
    )Cash used in financing
    
    
    (178
    )
    
    
    (126
    )
 20.
    
    Stock-Based Compensation PlansStock Option PlanCameco 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 granted
prior to 1999 expire 10 years from the date of the grant of the option. 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 24,126,719 shares have been issued.Stock option transactions for the respective years were as follows:
 (Number of Options)
    
    2008
    
    
    2007Beginning of year
    
    
    6,422,592
    
    
    
    7,390,053Options granted
    
    
    1,154,015
    
    
    
    976,475Options exercised [note 12]
    
    
    (330,852
    )
    
    
    (1,794,515
    )Options forfeited
    
    
    (125,200
    )
    
    
    (149,421
    )End of year
    
    
    7,120,555
    
    
    
    6,422,592Exercisable
    
    
    4,957,129
    
    
    
    3,696,479
 28




---



##### 



Weighted average exercise prices were as follows:
 2008
    
    
    2007Beginning of year
    
    
    $25.40
    
    
    
    $19.92Options granted
    
    
    38.82
    
    
    
    46.82Options exercised
    
    
    11.62
    
    
    
    13.34Options forfeited
    
    
    38.77
    
    
    
    39.32End of year
    
    
    $27.98
    
    
    
    $25.40Exercisable
    
    
    $22.08
    
    
    
    $16.46
 Total options outstanding and exercisable at December 31, 2008 were as follows:
 2008
    
    Options Outstanding
    
    
    Options ExercisableWeighted
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Average
    
    
    
    
    
    
    AverageRemaining
    
    
    Exercisable
    
    
    
    
    
    
    ExercisableOption Price Per Share
    
    Number
    
    
    Life
    
    
    Price
    
    
    Number
    
    
    Price$4.80 - 12.00
    
    
    2,219,160
    
    
    
    3
    
    
    
    $8.10
    
    
    
    2,219,160
    
    
    
    $8.1012.01 - 28.05
    
    
    1,599,842
    
    
    
    5
    
    
    
    26.97
    
    
    
    1,599,842
    
    
    
    26.9728.06 - 54.50
    
    
    3,301,553
    
    
    
    7
    
    
    
    41.83
    
    
    
    1,138,127
    
    
    
    42.487,120,555
    
    
    
    
    
    
    
    
    
    
    
    4,957,129
 The foregoing options have expiry dates ranging from February 21, 2009 to March 2, 2018.On July 27, 2007, Camecos board of directors approved an amendment to the companys stock option
program introducing a cash settlement feature for the exercise of employee stock options. The cash
settlement feature allowed option holders to elect to receive an amount in cash equal to the
intrinsic value, being the excess market price of the common share over the exercise price of the
option, instead of exercising the option and acquiring common shares. All outstanding stock options
were subsequently classified as liabilities and carried at their intrinsic value. The intrinsic
value of the liability was marked to market each period and amortized to expense over the shorter
of the period to eligible retirement or the vesting period. The impact of the reclassification of
the stock options at July 27, 2007 was an increase in liabilities of $116,050,000, a decrease in
contributed surplus of $21,875,000 and a decrease to earnings of $94,175,000. In addition, a future
tax recovery of $35,225,000 was recorded.Effective November 10, 2008, the stock option plan was amended to eliminate the alternative to
settle in cash. As a result of the amendment all outstanding options are classified as equity and
the fair value determined using the Black-Scholes option-pricing model. The impact of the
reclassification of the stock options at November 10, 2008, was a decrease in liabilities of
$25,987,000 with a corresponding increase in contributed surplus.For the year ended December 31, 2008, Cameco has recorded a net recovery of $48,625,000 (2007
recovery  $4,868,000), related to options that vested during the year. These amounts are exclusive
of the earnings impact recorded upon adoption of the cash settlement feature on July 27, 2007.
 29




---



##### 



The fair value of the options granted each year was determined using the Black-Scholes
option-pricing model with the following weighted average assumptions:
 2008
    
    
    2007Number of options granted
    
    
    1,154,015
    
    
    
    976,475Average strike price
    
    
    $38.82
    
    
    
    $46.82Expected dividend
    
    
    $0.24
    
    
    
    $0.20Expected volatility
    
    
    39%
    
    
    
    36%Risk-free interest rate
    
    
    2.9%
    
    
    
    4.0%Expected life of option
    
    3.5 years
    
    3.5 yearsExpected forfeitures
    
    
    15%
    
    
    
    15%Weighted average grant date fair values
    
    
    $11.90
    
    
    
    $14.30
 Executive Performance Share Unit (PSU), Deferred Share Unit (DSU), and Other PlansCommencing in 2005, Cameco provides each plan participant an annual grant of PSUs in an amount
determined by the board. Each PSU represents one phantom common share that entitles the participant
to a payment of one Cameco common share purchased on the open market, or cash at the boards
discretion, at the end of each three-year period if certain performance and vesting criteria have
been met. The final value of the PSUs will be based on the value of Cameco common shares at the end
of the three-year period and the number of PSUs that ultimately vest. Vesting of PSUs at the end of
the three-year period will be based on total shareholder return over the three years, Camecos
ability to meet its annual cash flow from operations targets and whether the participating
executive remains employed by Cameco at the end of the three-year vesting period. As of December
31, 2008, the total PSUs held by the participants was 179,810 
(2007  152,196).Cameco offers a deferred share unit plan to non-employee directors. A DSU is a notional unit that
reflects the market value of a single common share of Cameco. 60% of each directors annual
retainer is paid in DSUs. In addition, on an annual basis directors can elect to receive the
remaining 40% of their annual retainer and any additional fees in the form of DSUs. Each DSU fully
vests upon award. The DSUs will be redeemed for cash upon a director leaving the board. The
redemption amount will be based upon the weighted average of the closing prices of the common
shares of Cameco on the TSX for the last 20 trading days prior to the redemption date multiplied by
the number of DSUs held by the director. As of December 31, 2008, the total DSUs held by
participating directors was 380,890 
(2007  329,908).Cameco makes annual grants of bonuses to eligible non-North American employees in the form of
phantom stock options. Employees receive the equivalent value of shares in cash when exercised.
Options granted under the phantom stock option plan have an award value equal to 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.
As of December 31, 2008, the number of options held by
participating employees was 332,749 (2007  339,072) with exercise prices ranging from $4.81 to $46.88 per share (2007  $4.81 to $46.88) and a
weighted average exercise price of $26.41 (2007  $39.56).Commencing in 2007, Cameco created an employee share ownership plan whereby both employee and
company contributions are used to purchase shares on the open market for employees. The companys
contributions are expensed during the year of contribution. Under the plan, all employees have the
opportunity to participate in the program to a maximum of 6% of eligible earnings each year with
Cameco matching the first 3% of employee-paid shares by 50%. Cameco contributes $1,000 of shares
annually to each employee that is enrolled in the plan. At December 31, 2008, there were 3,067
participants in the plan (2007  2,637). The total number of shares purchased in 2008 on behalf of
participants, including the company contribution, was 287,847 shares
(2007  159,761). In 2008, the
companys contributions totaled $4,513,000 (2007  $3,716,000).
 30




---



##### 



Cameco has recognized the following expenses (recoveries) under these plans:
 2008
    
    
    2007Performance share units
    
    
    $(112
    )
    
    
    $4,288Deferred share units
    
    
    (6,252
    )
    
    
    (2,606
    )Phantom stock options
    
    
    (3,505
    )
    
    
    (1,410
    )Employee share ownership plan
    
    
    4,513
    
    
    
    3,716
 At December 31, 2008, a liability of $11,200,000 (2007  $23,630,000) was included in the
balance sheet to recognize accrued but unpaid expenses for these plans.21.
    
    Pension and Other Post-Retirement BenefitsCameco maintains both defined benefit and defined contribution plans providing pension and
post-retirement benefits to substantially all of its employees.Under the defined pension benefit plans, Cameco provides benefits to retirees based on their
length of service and final average earnings. The non-pension post-retirement plan covers such
benefits as group life and supplemental health insurance to eligible employees and their
dependents. The costs related to the non-pension post-retirement plans are charged to earnings
in the period during which the employment services are rendered. However, these future
obligations are not funded.The effective date for the most recent valuations for funding purposes on the pension benefit
plans is January 1, 2006. The next planned effective date for valuation for funding purposes of
the pension benefit plans is set to be January 1, 2009. The status of the defined plans is as
follows:
 (a)
    
    Accrued Benefit Obligation
 Pension Benefit Plans
    
    
    Other Benefit Plans2008
    
    
    2007
    
    
    2008
    
    
    2007Balance at beginning of year
    
    
    $28,441
    
    
    
    $23,272
    
    
    
    $13,143
    
    
    
    $12,166Current service cost
    
    
    1,198
    
    
    
    1,027
    
    
    
    504
    
    
    
    510Interest cost
    
    
    1,569
    
    
    
    1,259
    
    
    
    629
    
    
    
    606Actuarial (gain) loss
    
    
    (5,310
    )
    
    
    3,502
    
    
    
    (1,785
    )
    
    
    (370
    )Plan amendments
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    3,838Plan curtailments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,990
    )Benefits paid
    
    
    (2,318
    )
    
    
    (619
    )
    
    
    (701
    )
    
    
    (617
    )$23,580
    
    
    
    $28,441
    
    
    
    $11,842
    
    
    
    $13,143
 (b)
    
    Plan Assets
 Pension Benefit Plans2008
    
    
    2007Fair value at beginning of year
    
    
    $23,864
    
    
    
    $24,412Actual return on plan assets
    
    
    (3,039
    )
    
    
    (8
    )Employer contributions
    
    
    59
    
    
    
    55Benefits paid
    
    
    (595
    )
    
    
    (595
    )Fair value at end of year
    
    
    $20,289
    
    
    
    $23,864
 31




---



##### 



Plan assets consist of:
 Pension Benefit Plans2008
    
    
    2007Asset Category (i)Equity securities
    
    
    35
    %
    
    
    44
    %Fixed income
    
    
    9
    %
    
    
    11
    %Other (ii)
    
    
    56
    %
    
    
    45
    %Total
    
    
    100
    %
    
    
    100
    %
 
 (i)
    
    The defined benefit plan assets contain no material amounts of related party assets at
December 31, 2008 and 2007 respectively.(ii)
    
    Relates to the value of the refundable tax account held by the Canada Revenue Agency. The
refundable total is approximately equal to half of the sum of the realized investment income
plus employer contributions less half of the benefits paid by the plan. (c)
    
    Funded Status Reconciliation
 Pension Benefit Plans
    
    
    Other Benefit Plans2008
    
    
    2007
    
    
    2008
    
    
    2007Fair value of plan assets
    
    $
    20,289
    
    
    $
    23,864
    
    
    
    $
    
    
    
    $Accrued benefit obligation
    
    
    23,580
    
    
    
    28,441
    
    
    
    11,842
    
    
    
    13,143Funded status of plans  deficit
    
    
    (3,291
    )
    
    
    (4,577
    )
    
    
    (11,842
    )
    
    
    (13,143
    )Unamortized net actuarial loss
    
    
    8,106
    
    
    
    10,451
    
    
    
    
    
    
    
    Accrued benefit asset (liability) [notes 7, 11]
    
    
    $4,815
    
    
    
    $5,874
    
    
    
    $(11,842
    )
    
    
    $(13,143
    )
 (d)
    
    Net Pension Expense
 2008
    
    
    2007Current service cost
    
    
    $1,198
    
    
    
    $1,027Interest cost
    
    
    1,569
    
    
    
    1,259Actual return on plan assets
    
    
    3,039
    
    
    
    8Actuarial (gain) loss
    
    
    (5,310
    )
    
    
    3,502Balance prior to adjustments to recognize the long-term
nature of employee future benefit costs
    
    
    496
    
    
    
    5,796Difference between actual and expected return on plan assets
    
    
    (3,859
    )
    
    
    (820
    )Difference between actuarial loss recognized for year and actual
actuarial (gain) loss on accrued benefit obligation for year
    
    
    6,158
    
    
    
    (3,088
    )Amortization of transitional obligation
    
    
    
    
    
    
    240Defined benefit pension expense
    
    
    2,795
    
    
    
    2,128Defined contribution pension expense
    
    
    13,005
    
    
    
    10,905Net pension expense
    
    
    $15,800
    
    
    
    $13,033
 32




---



##### 



2008
    
    
    2007Significant assumptions at December 31Discount rate
    
    
    7.0%
    
    
    
    5.5%Rate of compensation increase
    
    
    4.5%
    
    
    
    5.5%Long-term rate of return on assets
    
    
    6.0%
    
    
    
    6.5%
 (e)
    
    Other Post-Retirement Benefit (Recovery) Expense
 2008
    
    
    2007Current service cost
    
    
    $504
    
    
    
    $510Interest cost
    
    
    629
    
    
    
    606Actuarial gain
    
    
    (1,785
    )
    
    
    (370
    )Plan amendment costs
    
    
    52
    
    
    
    3,838Plan curtailment gain
    
    
    
    
    
    
    (2,990
    )Other post-retirement benefit (recovery) expense
    
    
    $(600
    )
    
    
    $1,594
 2008
    
    
    2007Significant assumptions at December 31Discount rate
    
    
    7.0%
    
    
    
    5.5%Initial health care cost trend rate
    
    
    8.0%
    
    
    
    9.0%Cost trend rate declines to
    
    
    6.0%
    
    
    
    6.0%Year the rate reaches its final level
    
    
    2011
    
    
    
    2011
 (f)
    
    Pension and Other Post-Retirement Benefits Cash Payments
 2008
    
    
    2007Employer contributions to funded pension plans
    
    
    $59
    
    
    
    $55Benefits paid for unfunded benefit plans
    
    
    2,425
    
    
    
    641Cash contributions to defined contribution plans
    
    
    13,005
    
    
    
    10,905Total cash payments for employee future benefits
    
    
    $15,489
    
    
    
    $11,601
 Benefits paid by the funded pension plan were $595,000 for 2008 (2007  $595,000). Camecos
expected contributions for the year ended December 31, 2009 are approximately $64,000 for the
pension benefit plans.The following are estimated future benefit payments, which reflect expected future service:
 Pension Benefit Plans
    
    Other Benefit Plans2009
    
    
    $922
    
    
    
    $4532010
    
    
    1,315
    
    
    
    4852011
    
    
    1,313
    
    
    
    5782012
    
    
    1,325
    
    
    
    6622013
    
    
    1,394
    
    
    
    7892014 to 2018
    
    
    11,591
    
    
    
    4,947
 33




---



##### 



BPLPBPLP has a funded registered pension plan and an unfunded supplemental pension plan. The funded
plan is a contributory, defined benefit plan covering all employees up to the limits imposed by the
Income Tax Act. The supplemental pension plan is a non-contributory, defined benefit plan covering
all employees with respect to benefits that exceed the limits under the Income Tax Act. These plans
are based on years of service and final average salary.BPLP also has other post-retirement benefit and other post-employment benefit plans that provide
for group life insurance, health care and long-term disability benefits. These plans are
non-contributory.The effective date for the most recent valuations for funding purposes on the pension benefit plans
is January 1, 2008. The next planned effective date for valuation for funding purposes of the
pension benefit plans is set to be January 1, 2009. The status of Camecos proportionate share
(31.6%) of the defined plans is as follows:
 (a)
    
    Funded Status Reconciliation
 Pension Benefit Plans
    
    
    Other Benefit Plans2008
    
    
    2007
    
    
    2008
    
    
    2007Fair value of plan assets
    
    $
    546,755
    
    
    $
    618,096
    
    
    
    $
    
    
    
    $Accrued benefit obligation
    
    
    617,259
    
    
    
    816,574
    
    
    
    112,355
    
    
    
    137,421Funded status of plans  deficit
    
    
    (70,504
    )
    
    
    (198,478
    )
    
    
    (112,355
    )
    
    
    (137,421
    )Unrecognized prior service cost
    
    
    
    
    
    
    
    
    
    
    2,881
    
    
    
    3,331Unamortized net actuarial loss (gain)
    
    
    76,565
    
    
    
    204,342
    
    
    
    (7,564
    )
    
    
    30,044Accrued benefit asset (liability) [notes 7, 11]
    
    
    $6,061
    
    
    
    $5,864
    
    
    $
    (117,038
    )
    
    $
    (104,046
    )
 (b)
    
    Pension Asset Categories
 Asset Allocation

    
    Target Allocation2008
    
    
    2007
    
    
    2008
    
    
    2007Asset Category (i)Equity securities
    
    
    56
    %
    
    
    57
    %
    
    
    60
    %
    
    
    60
    %Fixed income
    
    
    42
    %
    
    
    42
    %
    
    
    40
    %
    
    
    40
    %Cash
    
    
    2
    %
    
    
    1
    %
    
    
    
    
    
    
    Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 The assets of the pension plan are managed on a going concern basis subject to legislative
restrictions. The plans investment policy is to maximize returns within an acceptable risk
tolerance. Pension assets are invested in a diversified manner with consideration given to the
demographics of the plan participants. Rebalancing will take place on a monthly basis if outside of
3% of the target asset allocation.
  34




---



##### 



(c)
    
    Net Pension Expense
 2008
    
    
    2007Current service cost
    
    
    $27,599
    
    
    
    $29,093Interest cost
    
    
    43,375
    
    
    
    40,658Actual return on plan assets
    
    
    78,229
    
    
    
    2,215Actuarial gain
    
    
    (238,037
    )
    
    
    (34,978
    )Balance prior to adjustments to recognize the long-term
nature of employee future benefit costs
    
    
    (88,834
    )
    
    
    36,988Difference between actual and expected return on plan assets
    
    
    (121,493
    )
    
    
    (44,632
    )Difference between actuarial loss recognized and actual actuarial
gain on accrued benefit obligation for year
    
    
    249,271
    
    
    
    46,544Net pension expense
    
    
    $38,944
    
    
    
    $38,900
 2008
    
    
    2007Significant assumptions at December 31Discount rate
    
    
    6.8
    %
    
    
    5.3
    %Rate of compensation increase
    
    
    6.0
    %
    
    
    6.3
    %Long-term rate of return on assets
    
    
    7.0
    %
    
    
    7.0
    %
 (d)
    
    Other Benefit Plans Expense
 2008
    
    
    2007Current service cost
    
    
    $7,007
    
    
    
    $8,423Interest cost
    
    
    7,308
    
    
    
    7,272Plan amendments
    
    
    
    
    
    
    (1,829
    )Actuarial gain
    
    
    (36,228
    )
    
    
    (15,939
    )Balance prior to adjustments to recognize the long-term nature of employee
future benefit costs
    
    
    (21,913
    )
    
    
    (2,073
    )Difference between amortization of past service costs and actual plan
amendments for year
    
    
    450
    
    
    
    2,526Difference between actuarial loss recognized and actual actuarial gain on
accrued benefit obligation for year
    
    
    37,608
    
    
    
    18,991Other benefit plans expense
    
    
    $16,145
    
    
    
    $19,444
 2008
    
    
    2007Significant assumptions at December 31Discount rate
    
    
    6.4%
    
    
    
    5.1%Rate of compensation increase
    
    
    3.5%
    
    
    
    3.5%Initial health care cost trend rate
    
    
    9.5%
    
    
    
    10.0%Cost trend rate declines to
    
    
    5.0%
    
    
    
    5.0%Year the rate reaches its final level
    
    
    2019
    
    
    
    2019
 35




---



##### 



(e)
    
    Pension and Other Post-Retirement Benefits Cash Payments
 2008
    
    
    2007Employer contributions to funded pension plans
    
    
    $37,604
    
    
    
    $31,284Benefits paid for unfunded benefit plans
    
    
    3,815
    
    
    
    2,458Total cash payments for employee future benefits
    
    
    $41,419
    
    
    
    $33,742
 Benefits paid by the funded pension plan were $37,015,000 for 2008 (2007  $22,600,000). BPLPs
expected contributions for the year ended December 31, 2009 are approximately $63,055,000 for the
pension benefit plans. 
The following are estimated future benefit payments, which reflect expected
future service:
 Pension Benefit Plans
    
    Other Benefit Plans2009
    
    
    $38,921
    
    
    
    $4,0932010
    
    
    42,558
    
    
    
    4,6792011
    
    
    46,285
    
    
    
    5,3212012
    
    
    50,218
    
    
    
    5,9642013
    
    
    54,262
    
    
    
    6,6072014 to 2018
    
    
    329,429
    
    
    
    42,346
 22.
    
    Acquisitions
 (a)
    
    Acquisition of Interest in GE-Hitachi Global Laser Enrichment LLC (GLE)Effective June 19, 2008, Cameco, through a wholly owned subsidiary acquired a 24.0%
interest in GLE at an initial cost of $123,848,000 (US). In addition, a promissory note in
the amount of $73,344,000 (US) was issued in support of future development of the business.
The remainder of GLE is owned indirectly by General Electric Company (51%) and Hitachi Ltd.
(25%). GLE is in the process of developing uranium enrichment technology. The investment in
GLE extends Camecos involvement in the front end of the nuclear fuel cycle. The promissory
note is payable on demand and bears interest at market rates. The purchase price was
financed with cash and debt. The equity method is being used to account for this
investment.The purchase price allocation of Camecos 24.0% investment is as follows:
 Cash
    
    
    $46,415Notes receivable
    
    
    27,488Property, plant & equipment
    
    
    8,289Intangible assets
    
    
    115,485Net liabilities
    
    
    (603
    )Equity interest acquired
    
    $
    197,074Financed by:Bank debt
    
    $
    123,774Promissory note
    
    
    73,300$
    197,074
 The amount allocated to the investment in GLE includes an excess purchase price of approximately
$110,517,000 over Camecos incremental share of the book value of the underlying net assets of the
business. The values assigned to assets will be amortized to income over their estimated lives.
 36




---



##### 



(b)
    
    Acquisition of Interest in Kintyre Uranium Exploration Project (Kintyre)Effective August 11, 2008, a venture comprised of a wholly owned Cameco subsidiary (70%) and
Mitsubishi Development Pty Ltd. (30%) acquired a 100% interest in the Kintyre uranium
exploration project in the East Pilbara region of Western Australia from Rio Tinto for a total
cost of $495,000,000 (US). Cameco will operate the project and is funding its share of the
purchase price through existing credit facilities. Kintyre is an advanced exploration project
located in Western Australia about 1,250 kilometres northeast of Perth.The values assigned to the net assets acquired were as follows:
 Property, plant & equipment
    
    
    $501,287Minority interest
    
    
    (150,386
    )Net assets acquired
    
    
    $350,901Financed by:Bank debt
    
    
    $350,901
 (c)
    
    Acquisition of Interest in Govi High Power Exploration Inc. (GoviEx)Effective August 22, 2008, Cameco, through a wholly owned subsidiary, acquired a 10.88%
interest in GoviEx at an initial cost of $28,125,000 (US). GoviEx is a closely held exploration
company formed in 2006 with uranium exploration properties in Niger, Africa. The company holds
about 2,300 square kilometres of exploration property in the region around Arlit, Niger, which
has been extensively explored since the 1960s. GoviEx field teams are analyzing historical data
and have begun a drilling program to confirm and expand historical resource estimates and to
provide data that conforms to current Canadian standards. GoviEx also holds about 2,400 square
kilometres near Agadez, Niger. This area is in the early stages of exploration. The strategic
alliance will also effectively provide Cameco with access to all of GoviExs initiatives in
other African countries. The equity method is being used to account for this interest.Cameco can acquire another approximate 10% interest in GoviEx for $31,250,000 (US) following
completion of a due diligence review. If Cameco opts to increase its ownership in GoviEx after
completion of due diligence, it secures additional ownership and governance rights. These
include the right for Cameco to increase its ownership interest up to a maximum of
approximately 48% over the next four years by exercise of warrants issued by GoviEx and options
granted on shares held by the principal shareholders of GoviEx. Increasing ownership to 48%
would cost Cameco between $145,000,000 (US) and $212,500,000 (US) depending upon timing of the
exercise. Future decisions by Cameco to increase its ownership in GoviEx will be guided by
achievement of certain technical milestones agreed to by the parties.The purchase price allocation of Camecos 10.88% investment is as follows:
 Current assets
    
    
    $4,179Property, plant & equipment
    
    
    30,719Current liabilities
    
    
    (212
    )Future income taxes
    
    
    (6,204
    )Equity interest acquired
    
    
    $28,482Financed by:Bank debt
    
    
    $28,482
 The amount allocated to the investment in GoviEx includes an excess purchase price of approximately
$22,977,000 over Camecos incremental share of the book value of the underlying assets related to
the GoviEx mineral exploration rights. This amount will be amortized to income on a unit of
production basis upon commencement of mining operations.
 37




---



##### 



23.
    
    Restructuring of the Gold BusinessDuring the first quarter of 2007, the Parliament of the Kyrgyz Republic accepted in the first
reading and returned to committee for further deliberation draft legislation that, among other
things, challenges the legal validity of Kumtor Gold Company (Kumtor) agreements with the
Kyrgyz Republic, proposes recovery of additional taxes on amounts relating to past activities,
and provides for the transfer of gold deposits (including Kumtor) to a state-owned entity. If
the law is enacted, there would be a substantial risk of harm to Centerras rights and
therefore the value of Camecos investment in Centerra.
As a result, Cameco and Centerra entered into discussions with the Kyrgyz Government. These
discussions resulted in the signing of two agreements, both dated August 30, 2007, between the
Government of the Kyrgyz Republic and, respectively, Cameco and Centerra. Under the terms of
the agreements, the Kyrgyz Government and Kyrgyzaltyn JSC, a joint stock company owned by the
Kyrgyz Government, agreed to support Centerras continuing long-term development of the Kumtor
project and to facilitate eventual divestiture of Camecos interest in Centerra. In return, the
Kyrgyz Government would have received 32,305,238 shares (22,305,238 net from Cameco and
10,000,000 treasury shares from Centerra) upon closing of the definitive legal agreements. Of
these, 15,000,000 shares would have been received immediately with 17,305,238 shares held in
escrow to be released within four years subject to a number of conditions, including the
approval by the Parliament of the Kyrgyz Republic.
These agreements were originally to expire on October 31, 2007, but the parties subsequently
agreed to extend the deadline for closing the transactions to June 1, 2008. This deadline has
now passed and the agreements have expired. However, the conditions that gave rise to these
agreements still exist and Cameco believes the number of Centerra shares that would have been
transferred to the Kyrgyz Government is indicative of the ultimate cost to remedy those
conditions.
During the year ended December 31, 2008, Cameco increased its estimated pre-tax loss on the
transactions by $17,200,000 (2007  $113,000,000), as a result of the increase in the carrying
value in its investment in Centerra since December 31, 2007.
 24.
    
    Commitments and Contingencies
 (a)
    
    On February 12, 2004, Cameco, Cameco Bruce Holdings II Inc., BPC Generation Infrastructure
Trust and TransCanada Pipelines Limited (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 and a schedule has been set
for the next steps in the proceeding. The Consortium served its claim on October 21, 2008.
In addition to the $64,558,200 in damages sought in the notice of claim, the claim seeks an
additional $189,130,000 for the likely reduction in the useful lives of the steam
generators, including lost revenues resulting from future outages to effect repairs or
replacement. BE served its answer and counter-statement on December 22, 2008 and the
Consortium served its reply and answer to counter-statement on January 22, 2009.


Following the close of pleadings the parties will exchange documents and conduct oral
discoveries. The schedule provides for the completion of oral discoveries by May 15, 2009.
The hearing has been scheduled from September 14 to October 2, 2009.In anticipation of this claim, BE issued on February 10, 2006, and then served on Ontario
Power Generation Inc. (OPG) and Bruce Power LP 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. This
action is in abeyance pending further developments on the Unit 8 steam generator
arbitration.
 38




---



##### 



(b)
    
    Annual supplemental rents of $26,000,000 (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, the supplemental rent reduces to $13,000,000 per operating reactor. In accordance
with the Sublease Agreement, Bruce A L.P. 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
2004 to 2018:
 i)
    
    Licensing assurances to Canadian Nuclear Safety Commission of up to
$133,300,000. At December 31, 2008,
Camecos actual exposure under these assurances was $23,700,000.ii)
    
    Guarantees to
customers under power sales agreements of up to $38,300,000. Cameco did not have any actual
exposure under these guarantees at December 31, 2008.iii)
    
    Termination payments to OPG pursuant
to the lease agreement of $58,300,000. The fair value of these guarantees is nominal.
 (d)
    
    Camecos North American workforce includes about 3,100 employees, of which approximately 900
(29%) belong to three separate labour unions. Collective agreements for two of the three unions,
representing about 625 employees, are set to expire in 2009.(e)
    
    At December 31, 2008, Camecos purchase commitments, the majority of which are fixed price
uranium and conversion purchase arrangements, were as follows:
 (Millions (US))2009
    
    
    $1442010
    
    
    1362011
    
    
    1532012
    
    
    1442013
    
    
    294Thereafter
    
    
    75Total
    
    
    $946
 25.
    
    Financial InstrumentsThe majority of revenues at Cameco are derived from the sale of uranium products, electricity
through its investment in BPLP, and gold through its investment in Centerra. Camecos uranium
product financial results are closely related to the long and short-term market price of
uranium sales and conversion services. Prices fluctuate and can be affected by demand for
nuclear power, worldwide production and uranium levels, and political and economic conditions
in uranium producing and consuming countries. BPLPs revenue from electricity is affected by
changes in electricity prices associated with an open spot market for electricity in Ontario.
Centerras gold revenue is largely dependent on the market price of gold, which can be affected
by political and economic factors, industry activity and the policies of central banks with
respect to their level of gold held as reserves. Financial results for Cameco are also impacted
by changes in foreign currency exchange rates and other operating risks. Finally, certain
financial assets are subject to credit risks including cash and securities, accounts
receivable, and commodity and currency instruments.To mitigate risks associated with certain financial assets, Cameco will hold positions with a
variety of large creditworthy institutions. Sales of uranium products, with short payment
terms, are made to customers that management believes are creditworthy.To mitigate risks associated with foreign currency on its sale of uranium products, Cameco
enters into forward sales contracts to establish a price for future delivery of the foreign
currency.To mitigate risks associated with the fluctuations in the market price for uranium products,
Cameco seeks to maintain a portfolio of uranium product sales contracts with a variety of
delivery dates and pricing mechanisms that provide a degree of protection from price
volatility. To mitigate risks associated with the fluctuations in the market price for
electricity, BPLP enters into various energy and sales related contracts that qualify as cash
flow hedges. These instruments have terms ranging from 2009 to 2014. At December 31, 2008, the
mark-to-market gain on BPLPs sales contracts was $71,100,000.
 39




---



##### 



Except as otherwise disclosed, the fair market value of Camecos financial assets and liabilities
approximates the carrying amount as a result of the short-term nature of the instruments, or the
variable interest rate associated with the instruments, or the fixed interest rate of the
instruments being similar to market rates.CurrencyAt December 31, 2008, Cameco had $975,000,000 (US) in forward contracts at an average exchange rate
of $1.12 and 35,500,000 at an average exchange rate of $1.30. The foreign currency contracts are
scheduled for use as follows:
 (Millions)
    
    US
    
    
    Rate
    
    
    Cdn
    
    
    Euro
    
    
    Rate
    
    
    US2009
    
    
    $535
    
    
    
    1.14
    
    
    
    $610
    
    
    
    22
    
    
    
    1.30
    
    
    
    $292010
    
    
    335
    
    
    
    1.07
    
    
    
    358
    
    
    
    8
    
    
    
    1.29
    
    
    
    102011
    
    
    105
    
    
    
    1.11
    
    
    
    117
    
    
    
    6
    
    
    
    1.27
    
    
    
    8Total
    
    
    $975
    
    
    
    1.12
    
    
    
    $1,085
    
    
    
    36
    
    
    
    1.30
    
    
    
    $47
 These positions consist entirely of forward sales contracts. The average exchange rate reflects the
original spot prices at the time the contracts were entered into and includes forward points. The
realized exchange rate will depend on the forward premium (discount) that is earned (paid) as
contracts are utilized. As of December 31, 2008 all forward contracts mature in 2009.DerivativesThe following table summarizes the fair value of derivatives and classification on the balance
sheet:
 As at December 31, 2008Cameco
    
    
    BPLP
    
    
    TotalNon-hedge derivatives:Embedded derivatives  sales contracts
    
    
    (8,951
    )
    
    $
    4,344
    
    
    
    $(4,607
    )Foreign currency contracts
    
    
    (105,125
    )
    
    
    
    
    
    
    (105,125
    )Cash flow hedges:Energy and sales contracts
    
    
    
    
    
    
    71,116
    
    
    
    71,116Net
    
    $
    (114,076
    )
    
    $
    75,460
    
    
    
    $(38,616
    )Classification:Current portion of long-term receivables, investments
and other [note 7]
    
    
    $5,793
    
    
    $
    43,654
    
    
    
    $49,447Long-term receivables, investments and other [note 7]
    
    
    
    
    
    
    32,340
    
    
    
    32,340Current portion of other liabilities [note 11]
    
    
    (110,918
    )
    
    
    (73
    )
    
    
    (110,991
    )Other liabilities [note 11]
    
    
    (8,951
    )
    
    
    (461
    )
    
    
    (9,412
    )Net
    
    $
    (114,076
    )
    
    $
    75,460
    
    
    $
    (38,616
    )
 40




---



##### 



As at December 31, 2007Cameco
    
    
    BPLP
    
    
    TotalNon-hedge derivatives:Embedded derivatives  sales contracts
    
    
    $7,318
    
    
    
    $7,185
    
    
    
    $14,503Foreign currency contracts
    
    
    14,834
    
    
    
    
    
    
    
    14,834Cash flow hedges:Foreign currency contracts
    
    
    124,870
    
    
    
    
    
    
    
    124,870Energy and sales contracts
    
    
    
    
    
    
    67,546
    
    
    
    67,546Net
    
    
    $147,022
    
    
    
    $74,731
    
    
    
    $221,753Classification:Current portion of long-term receivables, investments
and other [note 7]
    
    
    $125,101
    
    
    
    $35,839
    
    
    
    $160,940Long-term receivables, investments and other [note 7]
    
    
    43,540
    
    
    
    39,949
    
    
    
    83,489Current portion of other liabilities [note 11]
    
    
    (17,213
    )
    
    
    (448
    )
    
    
    (17,661
    )Other liabilities [note 11]
    
    
    (4,406
    )
    
    
    (609
    )
    
    
    (5,015
    )Net
    
    
    $147,022
    
    
    
    $74,731
    
    
    
    $221,753
 The following table summarizes different components of the
(gains) and losses on derivatives:
 For the year ended December 31, 2008Cameco
    
    
    BPLP
    
    
    TotalNon-hedge derivatives:Embedded derivatives  sales contracts
    
    
    $18,052
    
    
    
    $2,841
    
    
    
    $20,893Foreign currency contracts
    
    
    179,673
    
    
    
    
    
    
    
    179,673Interest rate contracts
    
    
    906
    
    
    
    
    
    
    
    906Cash flow hedges:Energy and sales contracts
    
    
    
    
    
    
    (1,031
    )
    
    
    (1,031
    )Ongoing hedge inefficiency
    
    
    2,210
    
    
    
    
    
    
    
    2,210Net
    
    
    $200,841
    
    
    
    $1,810
    
    
    
    $202,651
 For the year ended December 31, 2007Cameco
    
    
    BPLP
    
    
    TotalNon-hedge derivatives:Embedded derivatives  sales contracts
    
    
    $(634
    )
    
    
    $
    
    
    
    $(634
    )Foreign currency contracts
    
    
    (14,107
    )
    
    
    
    
    
    
    (14,107
    )Energy and sales contracts
    
    
    
    
    
    
    (7,183
    )
    
    
    (7,183
    )Cash flow hedges:Energy and sales contracts
    
    
    
    
    
    
    (7,616
    )
    
    
    (7,616
    )Ongoing hedge inefficiency
    
    
    (6,252
    )
    
    
    
    
    
    
    (6,252
    )Ineligible for hedge accounting
    
    
    (17,814
    )
    
    
    
    
    
    
    (17,814
    )Net
    
    
    $(38,807
    )
    
    
    $(14,799
    )
    
    
    $(53,606
    )
 Over the next twelve months, based on current exchange rates, Cameco expects an estimated
$37,822,000 of pre-tax gains from the foreign currency cash flow hedges to be reclassified through
other comprehensive income to net earnings. The maximum length of time Cameco hedges its exposure
to the variability in future cash flows related to foreign currency on anticipated transactions is
five years.
 41




---



##### 



Over the next twelve months, based on current prices, Cameco expects an estimated $41,858,000 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
anticipated transactions is five years.26.
    
    Per Share AmountsPer share amounts have been calculated based on the weighted average number of common shares
outstanding during the year. The weighted average number of paid shares outstanding in 2008 was
350,130,431 (2007  351,175,226).
 2008
    
    
    2007Basic earnings per share computationNet earnings
    
    
    $450,117
    
    
    
    $416,112Weighted average common shares outstanding
    
    
    350,130
    
    
    
    351,175Basic earnings per common share
    
    
    $1.29
    
    
    
    $1.18Diluted earnings per share computationNet earnings
    
    
    $450,117
    
    
    
    $416,112Dilutive effect of:Convertible debentures
    
    
    
    
    
    
    9,624Net earnings, assuming dilution
    
    
    $450,117
    
    
    
    $425,736Weighted average common shares outstanding
    
    
    350,130
    
    
    
    351,175Dilutive effect of:Convertible debentures
    
    
    
    
    
    
    21,209Stock options
    
    
    1,982
    
    
    
    4,487Weighted average common shares outstanding, assuming dilution
    
    
    352,112
    
    
    
    376,871Diluted earnings per common share
    
    
    $1.28
    
    
    
    $1.13
 42




---



##### 



27.
    
    Segmented InformationCameco has four reportable segments: uranium, fuel services, electricity and gold. 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. The gold segment involves the exploration for, mining,
milling and sale of gold.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
 2008Fuel
    
    
    
    
    
    
    
    
    
    Inter-(Millions)
    
    Uranium
    
    Services
    
    Electricity
    
    Gold
    
    Segment
    
    TotalRevenue
    
    
    $1,512.4
    
    
    
    $251.7
    
    
    
    $445.3
    
    
    
    $676.6
    
    
    
    $(26.8
    )
    
    
    $2,859.2ExpensesProducts and services sold
    
    
    712.0
    
    
    
    217.5
    
    
    
    245.5
    
    
    
    371.3
    
    
    
    (28.5
    )
    
    
    1,517.8Depreciation, depletion and reclamation
    
    
    135.1
    
    
    
    26.6
    
    
    
    46.0
    
    
    
    86.6
    
    
    
    (1.0
    )
    
    
    293.3Exploration
    
    
    53.3
    
    
    
    
    
    
    
    
    
    
    
    25.0
    
    
    
    
    
    
    
    78.3Other
    
    
    37.9
    
    
    
    2.0
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39.9Cigar Lake remediation
    
    
    11.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.4Restructuring costs [note 23]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17.2
    
    
    
    
    
    
    
    17.2Gain on sale of assets
    
    
    (4.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4.1
    )Non-segmented expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420.6Earnings before income taxes
and minority interest
    
    
    566.8
    
    
    
    5.6
    
    
    
    153.8
    
    
    
    176.5
    
    
    
    2.7
    
    
    
    484.8Income tax recovery
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24.8
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    59.5Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $450.1Assets
    
    
    $4,599.2
    
    
    
    $311.3
    
    
    
    $826.1
    
    
    
    $990.7
    
    
    
    $
    
    
    
    $6,727.3Intangibles
    
    
    $
    
    
    
    $101.4
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $101.4Goodwill
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $181.9
    
    
    
    $
    
    
    
    $181.9Capital expenditures for the year
    
    
    $421.1
    
    
    
    $77.2
    
    
    
    $32.8
    
    
    
    $98.1
    
    
    
    $
    
    
    
    $629.2
 43




---



##### 



2007Fuel
    
    
    
    
    
    
    
    
    
    Inter-(Millions)
    
    Uranium
    
    Services
    
    Electricity
    
    Gold
    
    Segment
    
    TotalRevenue
    
    
    $1,269.4
    
    
    
    $238.6
    
    
    
    $417.8
    
    
    
    $404.9
    
    
    
    $(21.0
    )
    
    
    $2,309.7ExpensesProducts and services sold
    
    
    516.3
    
    
    
    237.8
    
    
    
    233.0
    
    
    
    246.0
    
    
    
    (21.4
    )
    
    
    1,211.7Depreciation, depletion and reclamation
    
    
    104.7
    
    
    
    24.1
    
    
    
    45.8
    
    
    
    50.9
    
    
    
    
    
    
    
    225.5Exploration
    
    
    46.0
    
    
    
    
    
    
    
    
    
    
    
    20.8
    
    
    
    
    
    
    
    66.8Other
    
    
    6.4
    
    
    
    
    
    
    
    
    
    
    
    3.2
    
    
    
    
    
    
    
    9.6Cigar Lake remediation
    
    
    29.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29.4Restructuring costs [note 23]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113.0
    
    
    
    
    
    
    
    113.0Loss (gain) on sale of assets
    
    
    (5.8
    )
    
    
    
    
    
    
    1.8
    
    
    
    
    
    
    
    
    
    
    
    (4.0
    )Non-segmented expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    191.7Earnings (loss) before income taxes
and minority interest
    
    
    572.4
    
    
    
    (23.3
    )
    
    
    137.2
    
    
    
    (29.0
    )
    
    
    0.4
    
    
    
    466.0Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29.5Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20.4Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $416.1Assets
    
    
    $3,383.8
    
    
    
    $272.2
    
    
    
    $821.3
    
    
    
    $638.6
    
    
    
    $
    
    
    
    $5,115.9Intangibles
    
    
    $
    
    
    
    $108.7
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $108.7Goodwill
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $146.8
    
    
    
    $
    
    
    
    $146.8Capital expenditures for the year
    
    
    $304.9
    
    
    
    $26.3
    
    
    
    $30.9
    
    
    
    $132.4
    
    
    
    $
    
    
    
    $494.5
 (b)
    
    Geographic Segments
 (Millions)
    
    2008
    
    
    2007Revenue from products and servicesCanada  domestic
    
    
    $589.7
    
    
    
    $610.7 export
    
    
    291.3
    
    
    
    258.8United States
    
    
    1,301.5
    
    
    
    1,035.3Kyrgyzstan
    
    
    502.9
    
    
    
    225.0Mongolia
    
    
    173.8
    
    
    
    179.9$2,859.2
    
    
    
    $2,309.7AssetsCanada
    
    
    $4,145.3
    
    
    
    $3,891.2United States
    
    
    798.2
    
    
    
    242.5Kyrgyzstan
    
    
    721.6
    
    
    
    577.7Australia
    
    
    505.1
    
    
    
    2.8Mongolia
    
    
    431.1
    
    
    
    247.6Europe
    
    
    194.9
    
    
    
    275.8Kazakhstan
    
    
    214.4
    
    
    
    133.8$7,010.6
    
    
    
    $5,371.4
 44




---



##### 



(c)
    
    Major CustomersCameco relies on a small number of customers to purchase a significant portion of its uranium
concentrates and uranium conversion services. During 2008, revenues from one customer of
Camecos uranium and fuel services segments represented approximately $106,799,000 (2007 
$179,175,000), about 6% (2007  12%) of Camecos total revenues from these segments. As
customers are relatively few in number, accounts receivable from any individual customer may
periodically exceed 10% of accounts receivable depending on delivery schedules.During 2008, electricity revenues from one customer of BPLP represented approximately 4%
(2007  6%) of BPLPs total revenues.
 28.
    
    Comparative FiguresCertain prior year balances have been reclassified to conform to the current financial statement
presentation.
 45