EXHIBIT 99.2
 CAMECO CORPORATION
 2009 CONSOLIDATED FINANCIAL STATEMENTS




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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 23, 2010
    
    February 23, 2010
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AUDITORS REPORT
 To the Shareholders of Cameco Corporation
    Original signed by KPMG LLP
 
  2




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Consolidated Balance Sheets
 (Recastnote 25)As at December 31($Cdn thousands)
    
    2009
    
    
    2008| |AssetsCurrent assetsCash and cash equivalents
    
    
    $1,101,229
    
    
    
    $64,222Short-term investments [note 5]
    
    
    202,836
    
    
    
    Accounts receivable
    
    
    453,622
    
    
    
    522,504Inventories [note 6]
    
    
    453,224
    
    
    
    398,110Supplies and prepaid expenses
    
    
    162,105
    
    
    
    143,020Current portion of long-term receivables, investments and other [note 9]
    
    
    154,725
    
    
    
    49,836Assets of discontinued operations [note 25]
    
    
    
    
    
    
    1,176,0562,527,741
    
    
    
    2,353,748Property, plant and equipment [note 7]
    
    
    4,068,103
    
    
    
    3,932,658Intangible assets [note 8]
    
    
    97,713
    
    
    
    101,442Long-term receivables, investments and other [note 9]
    
    
    648,545
    
    
    
    622,753Total assets
    
    
    $7,342,102
    
    
    
    $7,010,601Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable and accrued liabilities
    
    
    $534,664
    
    
    
    $514,710Short-term debt [notes 10, 24]
    
    
    76,762
    
    
    
    89,817Dividends payable
    
    
    23,570
    
    
    
    21,943Current portion of long-term debt [note 11]
    
    
    11,629
    
    
    
    10,175Current portion of other liabilities [note 13]
    
    
    29,297
    
    
    
    117,222Future income taxes [note 18]
    
    
    87,135
    
    
    
    68,857Liabilities of discontinued operations [note 25]
    
    
    
    
    
    
    743,323763,057
    
    
    
    1,566,047Long-term debt [note 11]
    
    
    952,853
    
    
    
    1,212,982Provision for reclamation [note 12]
    
    
    296,896
    
    
    
    313,203Other liabilities [note 13]
    
    
    187,072
    
    
    
    179,880Future income taxes [note 18]
    
    
    134,356
    
    
    
    83,8482,334,234
    
    
    
    3,355,960Minority interest
    
    
    164,040
    
    
    
    141,018Shareholders equityShare capital
    
    
    1,512,461
    
    
    
    1,062,714Contributed surplus
    
    
    131,577
    
    
    
    131,858Retained earnings
    
    
    3,158,506
    
    
    
    2,153,315Accumulated other comprehensive income
    
    
    41,284
    
    
    
    165,7364,843,828
    
    
    
    3,513,623Total liabilities and shareholders equity
    
    
    $7,342,102
    
    
    
    $7,010,601
   Approved by the board of directors
Original signed by Gerald W. Grandey and John H. Clappison
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Consolidated Statements of Earnings
 (Recastnote 25)For the years ended December 31($Cdn thousands, except per share amounts)
    
    2009
    
    
    2008Revenue fromProducts and services
    
    
    $2,314,985
    
    
    
    $2,182,553ExpensesProducts and services sold (i)
    
    
    1,324,278
    
    
    
    1,146,462Depreciation, depletion and reclamation
    
    
    240,643
    
    
    
    207,453Administration
    
    
    135,558
    
    
    
    86,392Exploration
    
    
    49,061
    
    
    
    53,224Research and development
    
    
    630
    
    
    
    4,998Interest and other [note 15]
    
    
    (12,470
    )
    
    
    93,281(Gains) losses on derivatives [note 27]
    
    
    (243,804
    )
    
    
    202,651Cigar Lake remediation
    
    
    17,884
    
    
    
    11,369Gain on sale of assets [note 16]
    
    
    (566
    )
    
    
    (4,097
    )1,511,214
    
    
    
    1,801,733Earnings from continuing operations
    
    
    803,771
    
    
    
    380,820Other expense [note 17]
    
    
    (36,912
    )
    
    
    (39,273
    )Earnings before income taxes and minority interest
    
    
    766,859
    
    
    
    341,547Income tax expense (recovery) [note 18]
    
    
    52,897
    
    
    
    (24,357
    )Minority interest
    
    
    (3,035
    )
    
    
    (245
    )Earnings from continuing operations
    
    
    $716,997
    
    
    
    $366,149Earnings from discontinued operations [note 25]
    
    
    382,425
    
    
    
    83,968Net earnings
    
    
    $1,099,422
    
    
    
    $450,117Net earnings per share [note 28]BasicContinuing operations
    
    
    $1.84
    
    
    
    $1.05Discontinued operations
    
    
    0.99
    
    
    
    0.24Total basic earnings per share
    
    
    $2.83
    
    
    
    $1.29DilutedContinuing operations
    
    
    $1.84
    
    
    
    $1.04Discontinued operations
    
    
    0.98
    
    
    
    0.24Total diluted earnings per share
    
    
    $2.82
    
    
    
    $1.28(i)   Excludes depreciation, depletion and reclamation expenses of:
    
    
    $228,317
    
    
    
    $198,594
  4




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Consolidated Statements of Shareholders Equity
 (Recastnote 25)For the years ended December 31($Cdn thousands)
    
    2009
    
    
    2008Share capitalBalance at beginning of year
    
    
    $1,062,714
    
    
    
    $819,268Stock option plan
    
    
    4,215
    
    
    
    1,011Debenture conversions [note 11]
    
    
    
    
    
    
    242,435Equity issuance [note 14]
    
    
    445,532
    
    
    
    Balance at end of year
    
    
    1,512,461
    
    
    
    1,062,714Contributed surplusBalance at beginning of year
    
    
    131,858
    
    
    
    119,531Stock option plan amendment [note 22]
    
    
    
    
    
    
    25,987Stock-based compensation
    
    
    641
    
    
    
    16,821Options exercised
    
    
    (922
    )
    
    
    (40
    )Debenture conversions [note 11]
    
    
    
    
    
    
    (30,441
    )Balance at end of year
    
    
    131,577
    
    
    
    131,858Retained earningsBalance at beginning of year
    
    
    2,153,315
    
    
    
    1,788,416Net earnings
    
    
    1,099,422
    
    
    
    450,117Dividends on common shares
    
    
    (94,231
    )
    
    
    (85,218
    )Balance at end of year
    
    
    3,158,506
    
    
    
    2,153,315Accumulated other comprehensive income (loss)Balance at beginning of year
    
    
    165,736
    
    
    
    104,021Other comprehensive income
    
    
    (124,452
    )
    
    
    61,715Balance at end of year
    
    
    41,284
    
    
    
    165,736Total retained earnings and accumulated other comprehensive income
    
    
    3,199,790
    
    
    
    2,319,051Shareholders equity at end of year
    
    
    $4,843,828
    
    
    
    $3,513,623
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Consolidated Statements of Comprehensive Income
 (Recastnote 25)For the years ended December 31($Cdn thousands)
    
    2009
    
    
    2008Net earnings
    
    
    $1,099,422
    
    
    
    $450,117Other comprehensive income (loss), net of taxes [note 18]Unrealized foreign currency translation (losses) gains
    
    
    (115,739
    )
    
    
    137,689Gains on derivatives designated as cash flow hedges
    
    
    101,162
    
    
    
    23,976Gains on derivatives designated as cash flow hedges transferred to net earnings
    
    
    (113,360
    )
    
    
    (105,056
    )Unrealized gains (losses) on available-for-sale securities
    
    
    3,011
    
    
    
    (14,271
    )Losses on available-for-sale securities transferred to net earnings
    
    
    474
    
    
    
    19,377Other comprehensive income
    
    
    (124,452
    )
    
    
    61,715Total comprehensive income
    
    
    $974,970
    
    
    
    $511,832
 Consolidated Statement of Accumulated Other Comprehensive Income
 CurrencyTranslation
    
    
    Cash Flow
    
    
    Available-For-($Cdn thousands)(net of related income taxes)[note 18]
    
    Adjustment
    
    
    Hedges
    
    
    Sale Assets
    
    
    TotalBalance at December 31, 2007
    
    
    $(72,347
    )
    
    
    $182,734
    
    
    
    $(6,366
    )
    
    
    $104,021Unrealized foreign currency translation gains
    
    
    137,689
    
    
    
    
    
    
    
    
    
    
    
    137,689Gains on derivatives designated as cash flow hedges
    
    
    
    
    
    
    23,976
    
    
    
    
    
    
    
    23,976Gains on derivatives designated as cash flow
hedges transferred to net earnings
    
    
    
    
    
    
    (105,056
    )
    
    
    
    
    
    
    (105,056
    )Unrealized losses on available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    (14,271
    )
    
    
    (14,271
    )Losses on available-for-sale securities
transferred to net earnings
    
    
    
    
    
    
    
    
    
    
    19,377
    
    
    
    19,377Balance at December 31, 2008
    
    
    $65,342
    
    
    
    $101,654
    
    
    
    $(1,260
    )
    
    
    $165,736Unrealized foreign currency translation losses
    
    
    (115,739
    )
    
    
    
    
    
    
    
    
    
    
    (115,739
    )Gains on derivatives designated as cash flow hedges
    
    
    
    
    
    
    101,162
    
    
    
    
    
    
    
    101,162Gains on derivatives designated as cash flow
hedges transferred to net earnings
    
    
    
    
    
    
    (113,360
    )
    
    
    
    
    
    
    (113,360
    )Unrealized gains on available-for-sale securities
    
    
    
    
    
    
    
    
    
    
    3,011
    
    
    
    3,011Losses on available-for-sale securities
transferred to net earnings
    
    
    
    
    
    
    
    
    
    
    474
    
    
    
    474Balance at December 31, 2009
    
    
    $(50,397
    )
    
    
    $89,456
    
    
    
    $2,225
    
    
    
    $41,284
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Consolidated Statements of Cash Flows
 (Recastnote 25)For the years ended December 31($Cdn thousands)
    
    2009
    
    
    2008Operating activitiesNet earnings
    
    
    $1,099,422
    
    
    
    $450,117Items not requiring (providing) cash:Depreciation, depletion and reclamation
    
    
    240,643
    
    
    
    207,453Provision for future taxes [note 18]
    
    
    2,237
    
    
    
    (117,461
    )Deferred gains
    
    
    (41,254
    )
    
    
    (112,361
    )Unrealized (gains) losses on derivatives
    
    
    (180,260
    )
    
    
    156,098Unrealized foreign exchange losses
    
    
    
    
    
    
    71,241Stock-based compensation [note 22]
    
    
    2,772
    
    
    
    14,574Gain on sale of assets [note 16]
    
    
    (566
    )
    
    
    (4,097
    )Equity in loss from associated companies [note 17]
    
    
    29,811
    
    
    
    9,706Other expense (income) [note 17]
    
    
    7,101
    
    
    
    (425
    )Writedown of investments [notes 9, 17]
    
    
    
    
    
    
    29,992Discontinued operations [note 25]
    
    
    (382,425
    )
    
    
    (83,968
    )Minority interest
    
    
    (3,035
    )
    
    
    (245
    )Other operating items [note 19]
    
    
    (84,333
    )
    
    
    (91,036
    )Cash provided by operations
    
    
    690,113
    
    
    
    529,588Investing activitiesAdditions to property, plant and equipment
    
    
    (392,719
    )
    
    
    (531,061
    )Acquisitions, net of cash [note 24]
    
    
    
    
    
    
    (503,157
    )Purchase of short-term investments [note 5]
    
    
    (202,850
    )
    
    
    Increase in long-term receivables, investments and other
    
    
    (40,258
    )
    
    
    (49,518
    )Proceeds on sale of property, plant and equipment
    
    
    3,647
    
    
    
    37,093Cash used in investing (continuing operations)
    
    
    (632,180
    )
    
    
    (1,046,643
    )Cash provided by investing (discontinued operations) [note 25]
    
    
    871,300
    
    
    
    Cash provided by (used in) investing
    
    
    239,120
    
    
    
    (1,046,643
    )Financing activitiesDecrease in debt
    
    
    (726,460
    )
    
    
    (10,712
    )Increase in debt
    
    
    
    
    
    
    640,089Issue of debentures, net of issue costs [note 11]
    
    
    495,272
    
    
    
    Issue of shares, net of issue costs [note 14]
    
    
    440,150
    
    
    
    Issue of shares, stock option plan
    
    
    1,292
    
    
    
    972Dividends
    
    
    (92,603
    )
    
    
    (80,495
    )Cash provided by financing
    
    
    117,651
    
    
    
    549,854Increase in cash during the year
    
    
    1,046,884
    
    
    
    32,799Exchange rate changes on foreign currency cash balances
    
    
    (9,877
    )
    
    
    3,737Cash and cash equivalents at beginning of year
    
    
    64,222
    
    
    
    27,686Cash and cash equivalents at end of year
    
    
    $1,101,229
    
    
    
    $64,222Cash and cash equivalents comprised of:Cash
    
    
    $56,009
    
    
    
    $61,429Cash equivalents
    
    
    1,045,220
    
    
    
    2,793$1,101,229
    
    
    
    $64,222Supplemental cash flow disclosureInterest paid
    
    
    $35,267
    
    
    
    $52,272Income taxes paid
    
    
    $57,093
    
    
    
    $117,788
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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)
    
    Short-term investmentsShort-term investments consist of short-term money market instruments with terms to maturity
at the date of acquisition of between three and 12 months. The short-term 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.(d)
    
    InventoriesInventories of broken ore, uranium concentrates and refined and converted products 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. Net realizable value for finished products is considered to be the estimated
selling price in the ordinary course of business, less the estimated costs of completion and
selling expenses.(e)
    
    SuppliesConsumable supplies and spares are valued at the lower of cost or replacement value.(f)
    
    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.
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(g)
    
    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.(h)
    
    Intangible AssetsIntangible 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.(i)
    
    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.(j)
    
    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.
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(k)
    
    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.(l)
    
    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.(m)
    
    Stock-Based CompensationCameco has five stock-based compensation plans that are described in note 22. 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 and performance share unit plans 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.Deferred 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.
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(n)
    
    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.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.(o)
    
    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.(p)
    
    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 operations
outside of Canada. The financial statements of these operations are translated into Canadian
dollars using the current rate 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
 11




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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.(q)
    
    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 on 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
on the consolidated statements of earnings.(r)
    
    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




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3. Accounting Standards
 (a)
    
    Changes in Accounting Policies
 (i)
    
    Goodwill and Intangible AssetsEffective January 1, 2009, Cameco adopted 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. There was no material
impact to previously reported financial statements as a result of the implementation of
the new standard.(ii)
    
    Financial Instruments  DisclosuresEffective October 1, 2009, Cameco adopted the amendments to Handbook Section 3862,
Financial Instruments  Disclosures. The amendments harmonize Canadian standards with
IFRS and provide for enhanced disclosures on liquidity risk and require new disclosures
on fair value measurements of financial instruments.
 (b)
    
    Future Changes in Accounting Policy
 (i)
    
    International Financial Reporting Standards (IFRS)In February 2008, the Accounting Standards Board announced that Canadian publicly
accountable enterprises will be required to adopt IFRS effective January 1, 2011. As a
result, Cameco will publish its first consolidated financial statements, prepared in
accordance with IFRS, for the quarter ending March 31, 2011. We will also provide
comparative data on an IFRS basis, including an opening balance sheet as at January 1,
2010.(ii)
    
    Business CombinationsCICA Handbook Section 1582, Business Combinations is effective for business combinations
with an acquisition date after January 1, 2011. This standard 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 non-controlling interests
at fair value and a requirement to recognize acquisition-related costs as expenses.(iii)
    
    Consolidated Financial StatementsCICA Handbook Section 1601, Consolidated Financial Statements,which replaces the
existing standard, is effective for periods beginning on or after January 1, 2011. This
section establishes the standards for preparing consolidated financial statements.(iv)
    
    Non-controlling Interests in Consolidated Financial StatementsCICA Handbook Section 1602, Non-controlling Interests in Consolidated Financial
Statements is effective for periods beginning on or after January 1, 2011. This section
specifies that non-controlling interests be treated as a separate component of equity,
not as a liability or other item outside of equity. Section 1602 will be applied
prospectively to all non-controlling interests, including any that arose before the
effective date.
 13




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4. Financial Risk Management
 This note presents information about various risks that Cameco is exposed to from its
use of financial instruments, its objectives, policies and processes for measuring and managing
risk, and the companys management of capital. Further quantitative disclosures are included
throughout these consolidated financial statements.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.The types of risk exposure and the way in which such exposure is managed are as follows:
 (a)
    
    Commodity Price RiskAs a significant producer and supplier of uranium, nuclear fuel processing 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. 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, 2009, the effect
of a $1/MWh increase in the market price for electricity would be an increase of $778,000 in
net earnings, and a decrease in other comprehensive income of $3,450,000 for 2009.(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, 2009, 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 have been a decrease of $11,000,000 in net earnings for 2009.(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.
 14




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##### 



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, 2009, 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.The tables below outline the maturity dates for Camecos non-derivative financial liabilities
including principal and interest as at December 31, 2009:
 Due in less
    
    
    Due in
    
    
    Due in
    
    
    Due after(Millions)
    
    Total
    
    
    than 1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 yearsLong-term debt
    
    
    $794
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $794BPLP lease
    
    
    171
    
    
    
    12
    
    
    
    28
    
    
    
    35
    
    
    
    96Short-term debt
    
    
    77
    
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    Total contractual repayments
    
    
    $1,042
    
    
    
    $89
    
    
    
    $28
    
    
    
    $35
    
    
    
    $890
 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
    
    
    $358
    
    
    
    $42
    
    
    
    $85
    
    
    
    $85
    
    
    
    $146Interest on BPLP lease
    
    
    67
    
    
    
    12
    
    
    
    22
    
    
    
    17
    
    
    
    16Interest on short-term debt
    
    
    2
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    Total interest payments
    
    
    $427
    
    
    
    $56
    
    
    
    $107
    
    
    
    $102
    
    
    
    $162
 Capital ManagementCameco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 2009 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, 2009 was as follows:
 (Thousands)
    
    2009
    
    
    2008Long-term debt
    
    
    $964,482
    
    
    
    $1,223,157Short-term debt
    
    
    76,762
    
    
    
    89,817Cash and cash equivalents
    
    
    (1,101,229
    )
    
    
    (64,222
    )Short-term investments
    
    
    (202,836
    )
    
    
    Net debt
    
    
    (262,821
    )
    
    
    1,248,752Minority interest
    
    
    164,040
    
    
    
    141,018Shareholders equity
    
    
    4,843,828
    
    
    
    3,513,623Total equity
    
    
    5,007,868
    
    
    
    3,654,641Total capital
    
    
    $4,745,047
    
    
    
    $4,903,393
 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, 2009, Cameco met these requirements.
 15




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5. Short-Term Investments
 In 2009, Cameco purchased money market instruments with terms to maturity between three and 12
months. The fair values of marketable securities held at December 31, 2009 were $202,836,000
(2008  nil).
 6. Inventories
 2009
    
    
    2008UraniumConcentrate
    
    
    $310,893
    
    
    
    $287,079Broken ore
    
    
    18,125
    
    
    
    21,396329,018
    
    
    
    308,475Fuel Services
    
    
    124,206
    
    
    
    89,635Total
    
    
    $453,224
    
    
    
    $398,110
 7. Property, Plant and Equipment
 AccumulatedDepreciationCost
    
    
    and Depletion
    
    
    2009 Net
    
    
    2008 NetUraniumMining
    
    
    $3,308,418
    
    
    
    $1,507,039
    
    
    
    $1,801,379
    
    
    
    $1,799,885Non-producing
    
    
    1,476,409
    
    
    
    
    
    
    
    1,476,409
    
    
    
    1,325,532Fuel Services
    
    
    491,921
    
    
    
    212,608
    
    
    
    279,313
    
    
    
    279,391ElectricityAssets under capital lease
    
    
    164,288
    
    
    
    80,422
    
    
    
    83,866
    
    
    
    93,220Other
    
    
    586,368
    
    
    
    224,991
    
    
    
    361,377
    
    
    
    367,004Other
    
    
    117,897
    
    
    
    52,138
    
    
    
    65,759
    
    
    
    67,626Total
    
    
    $6,145,301
    
    
    
    $2,077,198
    
    
    
    $4,068,103
    
    
    
    $3,932,658
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8. Intangible Assets and Goodwill
 AccumulatedCost
    
    
    Depreciation
    
    
    2009 Net
    
    
    2008 NetIntangible assets
    
    
    $118,819
    
    
    
    $21,106
    
    
    
    $97,713
    
    
    
    $101,442
 The intangible asset value relates to intellectual property associated with Cameco Fuel
Manufacturing and is being amortized on a units-of-production basis.
 9. Long-Term Receivables, Investments and Other
 2009
    
    
    2008BPLP [note 21]Capital lease receivable from BPLP (i)
    
    
    $94,895
    
    
    
    $97,044Derivatives [note 27]
    
    
    141,949
    
    
    
    75,994Accrued pension benefit asset [note 23]
    
    
    36,613
    
    
    
    6,061Equity accounted investmentsGlobal Laser Enrichment LLC (privately held) [note 24]
    
    
    185,716
    
    
    
    240,018UNOR Inc. (market value $952)
    
    
    935
    
    
    
    1,088UEX Corporation (market value $45,909)
    
    
    6,052
    
    
    
    6,714Huron Wind (privately held)
    
    
    4,002
    
    
    
    4,623Minergia S.A.C. (privately held)
    
    
    4,551
    
    
    
    534UFP Investments Inc. (privately held)
    
    
    2,617
    
    
    
    Available-for-sale securitiesWestern Uranium Corporation (market value $4,637)
    
    
    4,637
    
    
    
    3,296GoviEx Uranium (privately held) [note 24]
    
    
    25,214
    
    
    
    34,442Derivatives [note 27]
    
    
    68,432
    
    
    
    5,793Deferred chargesCost of sales [note 13]
    
    
    14,415
    
    
    
    6,414Advances receivable from Inkai JV LLP (ii)
    
    
    141,149
    
    
    
    126,130Accrued pension benefit asset [note 23]
    
    
    7,773
    
    
    
    4,815Other
    
    
    64,320
    
    
    
    59,623803,270
    
    
    
    672,589Less current portion
    
    
    (154,725
    )
    
    
    (49,836
    )Net
    
    
    $648,545
    
    
    
    $622,753
 (i)
    
    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.(ii)
    
    Through an unsecured shareholder loan, Cameco has agreed to fund the development
of the Inkai project. The limit of the loan facility is $370,000,000 (US) and advances
under the facility bear interest at a rate of LIBOR plus 2%. At December 31, 2009,
$337,000,000 (US) of principal and interest was outstanding (2008  $257,000,000 (US)), of
which 40% represents the joint venture partners share. As management does not anticipate
repayment in the next 12 months, it has classified this loan as long term. 17




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10. Short-Term Debt
 In 2008, a promissory note in the amount of $73,344,000 (US) was issued to finance the
acquisition of GE Hitachi Global Laser Enrichment LLC (GLE) [note 24]. 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. In December 2009, this facility was extended to February
4, 2011, and is extendable for one additional 364-day term upon mutual agreement with the
lender. There is no amount outstanding under this facility.
 11. Long-Term Debt
 2009
    
    
    2008Debentures
    
    
    $793,842
    
    
    
    $298,177Capital lease obligation  BPLP
    
    
    170,640
    
    
    
    180,784Commercial paper and bank debt
    
    
    
    
    
    
    744,196964,482
    
    
    
    1,223,157Less current portion
    
    
    (11,629
    )
    
    
    (10,175
    )Net
    
    
    $952,853
    
    
    
    $1,212,982
 On September 25, 2003, the company issued unsecured convertible debentures in the amount of
$230,000,000. The debentures bore interest at 5% per annum, were to mature on October 1, 2013,
and at the holders option were convertible into common shares of Cameco. The debentures were
redeemable by the company beginning October 1, 2008, at a redemption price of par plus accrued
and unpaid interest. The fair value of the conversion option associated with the convertible
debentures on the date of issuance was $30,473,000, resulting in an effective interest rate of
7.21%. The amount was reflected as contributed surplus. The conversion price was $10.83 per
share, a rate of approximately 92.3 common shares per $1,000 of convertible debentures.
Interest was payable semi-annually in arrears on April 1 and October 1. On August 14, 2008,
Cameco gave notice of its intention to redeem all of these debentures on October 1, 2008. As a
result of debenture conversions and redemptions, 21,204,585 shares were issued during 2008 [note
14].Cameco has $300,000,000 outstanding in senior unsecured debentures (Series C). These debentures
bear interest at a rate of 4.7% per annum (effective interest rate of 4.79%) and mature
September 16, 2015.On September 2, 2009, Cameco issued debentures in the amount of $500,000,000. The debentures
bear interest at 5.67% per annum (effective interest rate of 5.80%) and mature on September 2,
2019. The proceeds of the issue after deducting expenses were $495,300,000.Cameco has a $500,000,000 unsecured revolving credit facility that is available until November
30, 2012. This facility can be extended for an additional year on the 2010 and 2011 anniversary
dates, upon mutual agreement with the lenders. In addition to direct borrowings under the
facility, up to $100,000,000 can be used for the issuance of letters of credit and, to the
extent necessary, up to $400,000,000 may be allocated to provide liquidity support for the
companys commercial paper program. The facility ranks equally with all of Camecos other
senior debt. At December 31, 2009 there were no amounts outstanding under this credit facility
(2008  $149,800,000, bearing interest at an average rate of 1.7%). Cameco may also borrow
directly in the commercial paper market. There was no commercial paper outstanding at December
31, 2009 (2008  $152,800,000, bearing interest at an average rate of 2.7%). These amounts,
when drawn, are classified as long-term debt.In 2008, Cameco arranged for a $470,000,000, 364-day unsecured revolving credit facility,
extendable for up to two additional 364-day terms upon mutual agreement with the lenders. The
facility ranks equally with all of Camecos other senior debt. At December 31, 2008, there was
$29,885,000 (Cdn) and $336,200,000 (US) outstanding under this credit facility, bearing interest
at 2.30% and 2.58% respectively. Borrowings under this short-term facility were incurred to
finance acquisitions [note 24]. In September 2009, this credit facility was terminated.Cameco is bound by certain covenants in its revolving credit facilities. The significant
financial covenants require a funded debt to tangible net worth ratio equal to or less than 1:1
and a tangible net worth greater than $1,250,000,000. Non-compliance with any of these
covenants could result in accelerated payment and termination of the revolving credit facility.
At December 31, 2009, Cameco was in compliance with covenants and does not expect its operating
and investing activities in 2010 to be constrained by them.
 18




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Cameco has $597,062,000 ($400,933,000 and $187,397,000 (US)) in letter of credit facilities.
The majority of the outstanding letters of credit at December 31, 2009 relate to future
decommissioning and reclamation liabilities [note 12] and
amounted to $592,215,000 ($396,427,000 and $187,071,000 (US)) (2008  $428,910,000 ($294,650,000
and $109,640,000 (US)).BPLP holds a long-term lease with OPG to operate the Bruce nuclear power facility. The term of
the lease, which expires in 2018, is 18 years with an option to extend the lease for up to an
additional 25 years. The interest rate associated with the lease is 7.5%.BPLP has a $200,000,000 (Camecos share $63,200,000) revolving credit facility that is available
until July 30, 2011, as well as $184,000,000 (Camecos share $58,144,000) in letter of credit
facilities. As at December 31, 2009, BPLP had $35,000,000 (Camecos share $11,060,000)
outstanding under the revolving credit facility and $184,000,000 (Camecos share $58,144,000)
outstanding under the letter of credit facilities.The table below represents currently scheduled maturities of long-term debt over the next five
years.
 2010
    
    
    $11,6292011
    
    
    13,1772012
    
    
    14,8522013
    
    
    16,3372014
    
    
    18,233Thereafter
    
    
    890,254Total
    
    
    $964,482
 Standby Product Loan FacilitiesCameco had arranged for a standby product loan facility with one of its customers. The
arrangement, which was finalized in 2006, allowed Cameco to borrow up to 2,600,000 pounds
U3O8 equivalent over the period 2006 to 2008 with repayment in 2008 and
2009. Of this material, up to 1,000,000 kilograms of uranium could have been borrowed in the
form of UF6. Under the loan facility, standby fees of 2.25% were payable based on
the market value of the facility, and interest was payable on the market value of any amounts
drawn at a rate of 4.0%. Any borrowings would have been secured by letters of credit and
payable in kind.On January 29, 2008, Cameco gave notice of termination to the counterparty of the product loan
arrangement. The loan facility was terminated on April 1, 2008 and the associated letter of
credit facilities were cancelled on January 31, 2008. Cameco recognized previously deferred
revenues and costs in its earnings during 2008.On April 1, 2008, Cameco arranged for a standby product loan facility with one of its customers.
The arrangement allows Cameco to borrow up to 2,400,000 pounds U3O8
equivalent over the period 2008 to 2011 with repayment during 2012 to 2014. Under the loan
facility, standby fees of 2% are payable based on the market value of the facility, and interest
is payable on the market value of any amounts drawn at a rate of 5%. Any borrowings are payable
in kind. As at December 31, 2009, Cameco did not have any loan amounts outstanding under the
facility.
 19




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##### 



12. Provision for Reclamation
 Cameco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 $495,112,000. 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 $591,548,000
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:
 2009
    
    
    2008Balance, beginning of year
    
    
    $313,203
    
    
    
    $264,055Changes in estimates
    
    
    (13,614
    )
    
    
    26,308Liabilities settled
    
    
    (6,263
    )
    
    
    (4,663
    )Accretion expense
    
    
    17,828
    
    
    
    15,260Impact of foreign exchange
    
    
    (14,258
    )
    
    
    12,243Balance, end of year
    
    
    $296,896
    
    
    
    $313,203
 Following is a summary of the key assumptions on which the carrying amount of the asset
retirement obligations is based:
 (i)
    
    Total undiscounted amount of the estimated cash flows  $495,112,000.(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 2016.(iii)
    
    Discount rates  5.25% to 7.50% for operations in North America and 9.00% for
operations in Central Asia.
 The asset retirement obligations liability relates to the following segments:
 2009
    
    
    2008Uranium
    
    
    $192,544
    
    
    
    $213,559Fuel Services
    
    
    104,352
    
    
    
    99,644Total
    
    
    $296,896
    
    
    
    $313,203
 20




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##### 



13. Other Liabilities
 2009
    
    
    2008Deferred sales [note 9]
    
    
    $24,982
    
    
    
    $31,511Derivatives [note 27]
    
    
    4,137
    
    
    
    119,869Accrued post-retirement benefit liability [note 23]
    
    
    12,019
    
    
    
    11,842Zircatec acquisition holdback
    
    
    
    
    
    
    2,000BPLPAccrued post-retirement benefit liability [note 23]
    
    
    125,402
    
    
    
    117,038Derivatives [note 27]
    
    
    36,820
    
    
    
    534Other
    
    
    13,009
    
    
    
    14,308216,369
    
    
    
    297,102Less current portion
    
    
    (29,297
    )
    
    
    (117,222
    )Net
    
    
    $187,072
    
    
    
    $179,880
 14. Share Capital
 Authorized share capital:
 
 (a)
    
    Common Shares
 Number Issued(Number of Shares)
    
    2009
    
    
    2008Beginning of year
    
    
    365,718,923
    
    
    
    344,398,698Issued:Equity issuance
    
    
    26,666,400
    
    
    
    Stock option plan [note 22]
    
    
    453,410
    
    
    
    115,640Debenture conversions [note 11]
    
    
    
    
    
    
    21,204,585Issued share capital
    
    
    392,838,733
    
    
    
    365,718,923
 (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 IssuanceOn March 5, 2009, Cameco issued 26,666,400 common shares pursuant to a public offering for a
total consideration of $459,995,000. The proceeds of the issue after deducting expenses were
$445,532,000. Excluding the deferred tax recoveries, our net cash proceeds amounted to
$440,150,000 in 2009.
 21




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##### 



15. Interest and Other
 2009
    
    
    2008Interest on long-term debt
    
    
    $38,377
    
    
    
    $51,950Interest on short-term debt
    
    
    2,366
    
    
    
    1,377Foreign exchange (gains) losses
    
    
    (21,086
    )
    
    
    83,006Other charges
    
    
    11,302
    
    
    
    12,498Interest income
    
    
    (6,614
    )
    
    
    (16,365
    )Capitalized interest
    
    
    (36,815
    )
    
    
    (39,185
    )Net
    
    
    $(12,470
    )
    
    
    $93,281
 16. Gain on Sale of Assets
 2009
    
    
    2008Sale of geological data
    
    
    $(3,674
    )
    
    
    $(927
    )Other
    
    
    3,108
    
    
    
    (3,170
    )Net
    
    
    $(566
    )
    
    
    $(4,097
    )
 17. Other Expense
 2009
    
    
    2008Writedown of investments [note 9]
    
    
    $
    
    
    
    $(29,992
    )Equity in loss of associated companies
    
    
    (29,811
    )
    
    
    (9,706
    )Other
    
    
    (7,101
    )
    
    
    425Net
    
    
    $(36,912
    )
    
    
    $(39,273
    )
 In 2009 the equity in loss of associated companies includes a charge of $18,295,000 for the
amortization of in-process research and development associated with the investment in GLE (2008
  $1,991,000). 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 9].
 22




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##### 



18. Income Taxes
 The significant components of future income tax assets and liabilities at December 31 are as
follows:
 2009
    
    
    2008AssetsProvision for reclamation
    
    
    $89,996
    
    
    
    $92,345Foreign exploration and development
    
    
    40,221
    
    
    
    30,769Income tax losses carried forward
    
    
    100,783
    
    
    
    210,454Other
    
    
    31,185
    
    
    
    68,256Future income tax assets before valuation allowance
    
    
    262,185
    
    
    
    401,824Valuation allowance
    
    
    (57,398
    )
    
    
    (104,307
    )Future income tax assets, net of valuation allowance
    
    
    $204,787
    
    
    
    $297,517LiabilitiesProperty, plant and equipment
    
    
    $338,645
    
    
    
    $339,549Inventories
    
    
    5,618
    
    
    
    30,567Long-term investments and other
    
    
    82,015
    
    
    
    80,106Future income tax liabilities
    
    
    $426,278
    
    
    
    $450,222Net future income tax liabilities
    
    
    $221,491
    
    
    
    $152,705Less current portion
    
    
    (87,135
    )
    
    
    (68,857
    )$134,356
    
    
    
    $83,848
 The provision for income taxes differs from the amount computed by applying the combined
expected federal and provincial income tax rate to earnings before income taxes. The reasons
for these differences are as follows:
 2009
    
    
    2008Earnings before income taxes and minority interest
    
    
    $766,859
    
    
    
    $341,547Combined federal and provincial tax rate
    
    
    31.4
    %
    
    
    32.3
    %Computed income tax expense
    
    
    240,794
    
    
    
    110,320Increase (decrease) in taxes resulting from:Reduction in income tax rates
    
    
    (10,983
    )
    
    
    Provincial royalties and other taxes
    
    
    
    
    
    
    1,988Manufacturing and processing deduction
    
    
    (3,211
    )
    
    
    (771
    )Difference between Canadian rate and rates
applicable to subsidiaries in other countries
    
    
    (175,969
    )
    
    
    (176,659
    )Restructuring of gold business
    
    
    
    
    
    
    (37,053
    )Change in valuation allowance
    
    
    18,125
    
    
    
    6,154Capital and other taxes
    
    
    1,824
    
    
    
    Stock-based compensation plans
    
    
    1,371
    
    
    
    13,105Other permanent differences
    
    
    (19,054
    )
    
    
    58,559Income tax expense (recovery)
    
    
    $52,897
    
    
    
    $(24,357
    )
 23




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##### 



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 (this reassessment was superseded by a
reassessment issued in February 2009 and neither reassessment resulted in more than a nominal
amount of cash taxes becoming payable for that year). In December 2009, CRA issued a notice of
reassessment for the 2004 tax return, which increased Camecos 2004 Canadian taxable income by
approximately $108,000,000 (which, again, did not result in more than a nominal amount of cash
taxes becoming payable for that year). Cameco believes it is likely that CRA will reassess
Camecos tax returns for the years 2005 through 2009 on a similar basis.Late in 2009, CRAs Transfer Pricing Review Committee decided not to impose a penalty for 2004
based on the documentation that had been submitted by Cameco. This followed the same decision
by the Transfer Pricing Review Committee late in 2008 for the 2003 notice of reassessment.Having regard to advice from its external advisors, Camecos opinion is that CRAs position is
incorrect, and Cameco is contesting CRAs position. However, to reflect the uncertainties of
CRAs appeals process and litigation, Cameco has decided to increase its reserve for uncertain
tax positions and recognize an income tax expense of $9,000,000 in 2009 bringing the cumulative
tax provision related to this matter for the years 2003 through 2009 to $24,000,000. 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 2009 could be material to Camecos financial position, results of
operations or cash flows in the year(s) of resolution.Further to Camecos decision to contest CRAs 2003 reassessment, a Notice of Appeal was filed
with the Tax Court of Canada on July 22, 2009 and the litigation process is proceeding. Cameco
expects to file a Notice of Appeal for the 2004 reassessment in 2010.
 2009
    
    
    2008Earnings before income taxes and minority interestCanada
    
    
    $109,534
    
    
    
    (378,584
    )Foreign
    
    
    657,325
    
    
    
    720,131$766,859
    
    
    
    $341,547Current income taxesCanada
    
    
    $17,109
    
    
    
    $44,752Foreign
    
    
    33,551
    
    
    
    48,352$50,660
    
    
    
    $93,104Future income taxes (recovery)Canada
    
    
    $3,885
    
    
    
    (101,746
    )Foreign
    
    
    (1,648
    )
    
    
    (15,715
    )$2,237
    
    
    
    (117,461
    )Income tax expense (recovery)
    
    
    $52,897
    
    
    
    $(24,357
    )
 For 2009, earnings from discontinued operations (note 25) included a net income tax expense of
$94,600,000 (2008  recovery of $400,000).
 24




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##### 



Other comprehensive income included on the consolidated statements of shareholders equity and
the consolidated statements of comprehensive income is presented net of income taxes. The
following income tax amounts are included in each component of other comprehensive income:
 2009
    
    
    2008Gains (losses) on derivatives designated as cash flow hedges
    
    
    $48,368
    
    
    
    $(6,773
    )Gains on derivatives designated as cash flow hedges transferred to net earnings
    
    
    (48,121
    )
    
    
    (38,415
    )Unrealized gains (losses) on assets available-for-sale
    
    
    466
    
    
    
    (2,072
    )Losses on assets available-for-sale transferred to net earnings
    
    
    80
    
    
    
    3,024Total income tax expense (recovery) included in OCI
    
    
    $793
    
    
    
    $(44,236
    )
 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:
 2009
    
    
    2008Gains on derivatives designated as cash flow hedges
    
    
    $36,987
    
    
    
    $36,740Gains (losses) on assets available-for-sale
    
    
    346
    
    
    
    (200
    )Total income tax expense included in AOCI
    
    
    $37,333
    
    
    
    $36,540
 19. Statements of Cash Flows
 Other Operating Items
 2009
    
    
    2008Changes in non-cash working capital:Accounts receivable
    
    
    $34,556
    
    
    
    $(122,239
    )Inventories
    
    
    (74,938
    )
    
    
    21,694Supplies and prepaid expenses
    
    
    (27,838
    )
    
    
    (33,137
    )Accounts payable and accrued liabilities
    
    
    30,784
    
    
    
    10,393Hedge position settlements
    
    
    
    
    
    
    52,152Other
    
    
    (46,897
    )
    
    
    (19,899
    )Total
    
    
    $(84,333
    )
    
    
    $(91,036
    )
 25




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##### 



20. Uranium Joint Ventures
 Cameco 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, 2009, Camecos share of property, plant and equipment in these joint ventures
amounted to $2,345,000,000 (2008  $2,233,000,000) [note 7].
 21. Investment in BPLP
 Cameco holds a 31.6% interest in BPLP, 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 2009, sales of
uranium and conversion services to BPLP amounted to $84,909,000 (2008  $58,611,000),
approximately 3.7% (2008  2.7%) of Camecos total revenue. At December 31, 2009, amounts
receivable under these agreements totaled $11,505,000 (2008  $11,131,000).The following schedules reflect Camecos 31.6% proportionate interest in the balance sheets,
statements of earnings and statements of cash flows of BPLP.Balance Sheets
 (Millions)
    
    2009
    
    
    2008Current assets
    
    
    $252
    
    
    
    $190Property, plant and equipment
    
    
    390
    
    
    
    403Long-term receivables and investments
    
    
    207
    
    
    
    156$849
    
    
    
    $749Current liabilities
    
    
    $129
    
    
    
    $110Long-term liabilities
    
    
    320
    
    
    
    304449
    
    
    
    414Equity
    
    
    400
    
    
    
    335$849
    
    
    
    $749
 26




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##### 



Statements of Earnings
 (Millions)
    
    2009
    
    
    2008Revenue
    
    
    $518
    
    
    
    $445Operating costs
    
    
    286
    
    
    
    285Earnings before interest and taxes
    
    
    232
    
    
    
    160Interest
    
    
    1
    
    
    
    13Earnings before taxes
    
    
    $231
    
    
    
    $147
 Statements of Cash Flows
 (Millions)
    
    2009
    
    
    2008Cash provided by operations
    
    
    $238
    
    
    
    $173Cash (used in) provided by investing
    
    
    (36
    )
    
    
    4Cash used in financing
    
    
    (200
    )
    
    
    (178
    )
 22. Stock-Based Compensation Plans
 Stock 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 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 24,580,129 shares have been issued.Stock option transactions for the respective years were as follows:
 (Number of Options)
    
    2009
    
    
    2008Beginning of year
    
    
    7,120,555
    
    
    
    6,422,592Options granted
    
    
    1,381,039
    
    
    
    1,154,015Options exercised [note 14]
    
    
    (453,410
    )
    
    
    (330,852
    )Options forfeited
    
    
    (108,351
    )
    
    
    (125,200
    )End of year
    
    
    7,939,833
    
    
    
    7,120,555Exercisable
    
    
    5,550,148
    
    
    
    4,957,129
 27




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##### 



Weighted average exercise prices were as follows:
 2009
    
    
    2008Beginning of year
    
    
    $27.98
    
    
    
    $25.40Options granted
    
    
    19.41
    
    
    
    38.82Options exercised
    
    
    9.79
    
    
    
    11.62Options forfeited
    
    
    35.68
    
    
    
    38.77End of year
    
    
    $27.42
    
    
    
    $27.98Exercisable
    
    
    $26.84
    
    
    
    $22.08
 Total options outstanding and exercisable at December 31, 2009 were as follows:
 2009
    
    Options Outstanding
    
    Options ExercisableWeighted
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Average
    
    
    
    
    
    
    AverageRemaining
    
    
    Exercisable
    
    
    
    
    
    
    ExercisableOption Price Per Share
    
    Number
    
    
    Life
    
    
    Price
    
    
    Number
    
    
    Price$5.75  13.49
    
    
    1,824,320
    
    
    
    2
    
    

    $8.28
    
    
    
    1,824,320
    
    

        $8.2813.50  32.99
    
    
    2,892,581
    
    
    
    6
    
    
    
    23.42
    
    
    
    1,533,352
    
    
    
    26.9933.00  55.00
    
    
    3,222,932
    
    
    
    6
    
    
    
    41.84
    
    
    
    2,192,476
    
    
    
    42.187,939,833
    
    
    
    
    
    
    
    
    
    
    
    5,550,148
 The foregoing options have expiry dates ranging from February 25, 2010 to March 2, 2018.Non-vested stock option transactions for the respective years were as follows:
 (Number of Options)
    
    2009
    
    
    2008Beginning of year
    
    
    2,163,426
    
    
    
    2,726,113Options granted
    
    
    1,381,039
    
    
    
    1,154,015Options forfeited
    
    
    (75,039
    )
    
    
    (93,823
    )Options vested
    
    
    (1,079,741
    )
    
    
    (1,622,879
    )End of year
    
    
    2,389,685
    
    
    
    2,163,426
 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.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, 2009, Cameco has recorded a net expense of $4,372,000 (2008
recovery  $50,870,000), related to options that vested during the year.
 28




---



##### 



The fair value of the options granted each year was determined using the Black-Scholes
option-pricing model with the following weighted average assumptions:
 2009
    
    
    2008Number of options granted
    
    
    1,381,039
    
    
    
    1,154,015Average strike price
    
    
    $19.41
    
    
    
    $38.82Expected dividend
    
    
    $0.24
    
    
    
    $0.24Expected volatility
    
    
    36%
    
    
    
    39%Risk-free interest rate
    
    
    1.6%
    
    
    
    2.9%Expected life of option
    
    4.0 years
    
    3.5 yearsExpected forfeitures
    
    
    15%
    
    
    
    15%Weighted average grant date fair values
    
    
    $5.23
    
    
    
    $11.90
 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, 2009, the total PSUs held by the participants was 233,710 (2008 
179,810).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, 2009, the total DSUs
held by participating directors was 373,921 (2008  380,890).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, 2009, the number of options held by participating employees
was 267,148 (2008  277,549) with exercise prices ranging from $5.88 to $46.88 per share (2008
  $4.81 to $46.88) and a weighted average exercise price of $30.61 (2008  $29.97).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, 2009, there were 3,306 participants in the plan (2008  3,067). The total number
of shares purchased in 2009 on behalf of participants, including the company contribution, was
281,207 shares (2008  287,847). In 2009, the companys contributions totaled $5,166,000 (2008
  $4,513,000).
 29




---



##### 



Cameco has recognized the following expenses (recoveries) under these plans:
 2009
    
    
    2008Performance share units
    
    
    $3,347
    
    
    
    $(112
    )Deferred share units
    
    
    4,930
    
    
    
    (6,252
    )Phantom stock options
    
    
    1,531
    
    
    
    (2,390
    )Employee share ownership plan
    
    
    5,166
    
    
    
    4,513
 At December 31, 2009, a liability of $18,467,000 (2008  $10,507,000) was included in the
balance sheet to recognize accrued but unpaid expenses for these plans.
 23. Pension and Other Post-Retirement Benefits
 Cameco 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, 2009. The next planned effective date for valuation for funding purposes of
the pension benefit plans is set to be January 1, 2012. The status of the defined plans is as
follows:
 (a)
    
    Accrued Benefit Obligation
 Pension Benefit Plans
    
    
    Other Benefit Plans2009
    
    
    2008
    
    
    2009
    
    
    2008Balance at beginning of year
    
    
    $23,580
    
    
    
    $28,441
    
    
    
    $11,842
    
    
    
    $13,143Current service cost
    
    
    915
    
    
    
    1,198
    
    
    
    435
    
    
    
    504Interest cost
    
    
    1,683
    
    
    
    1,569
    
    
    
    730
    
    
    
    629Actuarial loss (gain)
    
    
    5,647
    
    
    
    (5,410
    )
    
    
    (442
    )
    
    
    (1,785
    )Plan amendments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52Foreign exchange
    
    
    (238
    )
    
    
    100
    
    
    
    
    
    
    
    Benefits paid
    
    
    (747
    )
    
    
    (2,318
    )
    
    
    (546
    )
    
    
    (701
    )$30,840
    
    
    
    $23,580
    
    
    
    $12,019
    
    
    
    $11,842
 (b)
    
    Plan Assets
 Pension Benefit Plans2009
    
    
    2008Fair value at beginning of year
    
    
    $20,289
    
    
    
    $23,864Actual return on plan assets
    
    
    (708
    )
    
    
    (3,039
    )Employer contributions
    
    
    5,335
    
    
    
    59Benefits paid
    
    
    (707
    )
    
    
    (595
    )Fair value at end of year
    
    
    $24,209
    
    
    
    $20,289
 30




---



##### 



Plan assets consist of:
 Pension Benefit Plans2009
    
    
    2008Asset Category (i)Equity securities
    
    
    28
    %
    
    
    35
    %Fixed income
    
    
    23
    %
    
    
    9
    %Other (ii)
    
    
    49
    %
    
    
    56
    %Total
    
    
    100
    %
    
    
    100
    %
 (i)
    
    The defined benefit plan assets contain no material amounts of related party
assets at December 31, 2009 and 2008 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 Plans2009
    
    
    2008
    
    
    2009
    
    
    2008Fair value of plan assets
    
    
    $24,209
    
    
    
    $20,289
    
    
    
    $
    
    
    
    $Accrued benefit obligation
    
    
    30,840
    
    
    
    23,580
    
    
    
    12,019
    
    
    
    11,842Funded status of plans  deficit
    
    
    (6,631
    )
    
    
    (3,291
    )
    
    
    (12,019
    )
    
    
    (11,842
    )Unamortized net actuarial loss
    
    
    14,404
    
    
    
    8,106
    
    
    
    
    
    
    
    Accrued benefit asset (liability) [notes 9, 13]
    
    
    $7,773
    
    
    
    $4,815
    
    
    
    $(12,019
    )
    
    
    $(11,842
    )
 (d)
    
    Net Pension Expense
 2009
    
    
    2008Current service cost
    
    
    $915
    
    
    
    $1,198Interest cost
    
    
    1,683
    
    
    
    1,569Actual return on plan assets
    
    
    708
    
    
    
    3,039Actuarial loss (gain)
    
    
    5,647
    
    
    
    (5,410
    )Balance prior to adjustments to recognize the long-termnature of employee future benefit costs
    
    
    8,953
    
    
    
    396Difference between actual and expected return on plan assets
    
    
    (1,494
    )
    
    
    (3,859
    )Difference between actuarial loss recognized for year and actual
actuarial loss (gain) on accrued benefit obligation for year
    
    
    (4,974
    )
    
    
    6,258Defined benefit pension expense
    
    
    2,485
    
    
    
    2,795Defined contribution pension expense
    
    
    13,506
    
    
    
    13,005Net pension expense
    
    
    $15,991
    
    
    
    $15,800
 31




---



##### 



2009
    
    
    2008Significant assumptions at December 31Discount rate
    
    
    6.0%
    
    
    
    7.0%Rate of compensation increase
    
    
    4.5%
    
    
    
    4.5%Long-term rate of return on assets
    
    
    5.9%
    
    
    
    6.0%
 (e)
    
    Other Post-Retirement Benefit Expense (Recovery)
 2009
    
    
    2008Current service cost
    
    
    $435
    
    
    
    $504Interest cost
    
    
    730
    
    
    
    629Actuarial gain
    
    
    (442
    )
    
    
    (1,785
    )Plan amendment costs
    
    
    
    
    
    
    52Other post-retirement benefit expense (recovery)
    
    
    $723
    
    
    
    $(600
    )
 2009
    
    
    2008Significant assumptions at December 31Discount rate
    
    
    6.0%
    
    
    
    7.0%Initial health care cost trend rate
    
    
    9.0%
    
    
    
    8.0%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
 2009
    
    
    2008Employer contributions to funded pension plans
    
    
    $5,335
    
    
    
    $59Benefits paid for unfunded benefit plans
    
    
    585
    
    
    
    2,425Cash contributions to defined contribution plans
    
    
    13,506
    
    
    
    13,005Total cash payments for employee future benefits
    
    
    $19,426
    
    
    
    $15,489
 Benefits paid by the funded pension plan were $707,000 for 2009 (2008  $595,000). Camecos
expected contributions for the year ended December 31, 2010 are approximately $288,820 for
the pension benefit plans.The following are estimated future benefit payments, which reflect expected future service:
 Pension Benefit Plans
    
    
    Other Benefit Plans2010
    
    
    $809
    
    
    
    $6172011
    
    
    1,357
    
    
    
    7102012
    
    
    1,370
    
    
    
    7512013
    
    
    1,457
    
    
    
    8412014
    
    
    1,862
    
    
    
    8442015 to 2019
    
    
    12,817
    
    
    
    4,166
 32




---



##### 



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, 2009. The next planned effective date for valuation for funding purposes of
the pension benefit plans is set to be January 1, 2010. 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 Plans2009
    
    
    2008
    
    
    2009
    
    
    2008Fair value of plan assets
    
    
    $635,293
    
    
    
    $546,755
    
    
    
    $
    
    
    
    $Accrued benefit obligation
    
    
    711,636
    
    
    
    617,259
    
    
    
    151,826
    
    
    
    112,355Funded status of plans  deficit
    
    
    (76,343
    )
    
    
    (70,504
    )
    
    
    (151,826
    )
    
    
    (112,355
    )Unrecognized prior service cost
    
    
    
    
    
    
    
    
    
    
    2,431
    
    
    
    2,881Unamortized net actuarial loss (gain)
    
    
    112,956
    
    
    
    76,565
    
    
    
    23,993
    
    
    
    (7,564
    )Accrued benefit asset (liability) [notes 9, 13]
    
    
    $36,613
    
    
    
    $6,061
    
    
    
    $(125,402
    )
    
    
    $(117,038
    )
 (b)
    
    Pension Asset Categories
 Asset Allocation
    
    
    
    Target Allocation2009
    
    
    2008
    
    
    2009
    
    
    2008Asset Category (i)Equity securities
    
    
    60
    %
    
    
    56
    %
    
    
    60
    %
    
    
    60
    %Fixed income
    
    
    38
    %
    
    
    42
    %
    
    
    40
    %
    
    
    40
    %Cash
    
    
    2
    %
    
    
    2
    %
    
    
    
    
    
    
    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.(i) The defined benefit plan assets contain no material amounts of related party assets at
December 31, 2009.
 33




---



##### 



(c)
    
    Net Pension Expense
 2009
    
    
    2008Current service cost
    
    
    $16,562
    
    
    
    $27,599Interest cost
    
    
    41,061
    
    
    
    43,375Actual return on plan assets
    
    
    (65,486
    )
    
    
    78,229Actuarial loss (gain)
    
    
    65,018
    
    
    
    (238,037
    )Balance prior to adjustments to recognize the long-term
nature of employee future benefit costs
    
    
    57,155
    
    
    
    (88,834
    )Difference between actual and expected return on plan assets
    
    
    27,286
    
    
    
    (121,493
    )Difference between actuarial loss recognized and actual actuarialloss (gain) on accrued benefit obligation for year
    
    
    (63,677
    )
    
    
    249,271Net pension expense
    
    
    $20,764
    
    
    
    $38,944
 2009
    
    
    2008Significant assumptions at December 31Discount rate
    
    
    6.0%
    
    
    
    6.8%Rate of compensation increase
    
    
    5.5%
    
    
    
    6.0%Long-term rate of return on assets
    
    
    7.0%
    
    
    
    7.0%
 (d)
    
    Other Benefit Plans Expense
 2009
    
    
    2008Current service cost
    
    
    $4,454
    
    
    
    $7,007Interest cost
    
    
    7,284
    
    
    
    7,308Actuarial loss (gain)
    
    
    31,127
    
    
    
    (36,228
    )Balance prior to adjustments to recognize the long-term nature of employee
future benefit costs
    
    
    42,865
    
    
    
    (21,913
    )Difference between amortization of past service costs and actual plan
amendments for year
    
    
    450
    
    
    
    450Difference between actuarial (gain) loss recognized and actual actuarial
loss (gain) on accrued benefit obligation for year
    
    
    (31,556
    )
    
    
    37,608Other benefit plans expense
    
    
    $11,759
    
    
    
    $16,145
 2009
    
    
    2008Significant assumptions at December 31Discount rate
    
    
    5.8%
    
    
    
    6.4%Rate of compensation increase
    
    
    3.5%
    
    
    
    3.5%Initial health care cost trend rate
    
    
    10.0%
    
    
    
    9.5%Cost trend rate declines to
    
    
    5.0%
    
    
    
    5.0%Year the rate reaches its final level
    
    
    2019
    
    
    
    2019
 34




---



##### 



(e)
    
    Pension and Other Post-Retirement Benefits Cash Payments
 2009
    
    
    2008Employer contributions to funded pension plans
    
    
    $48,980
    
    
    
    $37,604Benefits paid for unfunded benefit plans
    
    
    4,209
    
    
    
    3,815Total cash payments for employee future benefits
    
    
    $53,189
    
    
    
    $41,419
 Benefits paid by the funded pension plan were $32,531,000 for 2009 (2008  $37,015,000).
BPLPs expected contributions for the year ended December 31, 2010 are approximately
$56,771,000 for the pension benefit plans.The following are estimated future benefit payments, which reflect expected future service:
 Pension Benefit Plans
    
    
    Other Benefit Plans2010
    
    
    $39,924
    
    
    
    $4,9892011
    
    
    43,146
    
    
    
    5,4382012
    
    
    46,583
    
    
    
    5,9652013
    
    
    50,119
    
    
    
    6,5132014
    
    
    53,682
    
    
    
    7,0782015 to 2019
    
    
    317,914
    
    
    
    43,343
 24. Acquisitions
 (a)
    
    Acquisition of Interest in GE-Hitachi Global Laser Enrichment LLC (GLE)On 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 was 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.
 35




---



##### 



(b)
    
    Acquisition of Interest in Kintyre Uranium Exploration Project (Kintyre)On 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). 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 GoviEx Uranium (GoviEx)On August 22, 2008, Cameco, through a wholly owned subsidiary, acquired a 12% 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 equity method was
being used to account for this interest until June 2009.Cameco had an option to acquire an additional 10% interest in GoviEx for $31,250,000 (US)
following completion of a due diligence review. Cameco elected not to proceed with the
additional investment and it was determined in June 2009, that Cameco no longer had the
ability to exert significant influence over the operations of GoviEx. The use of the equity
method of accounting was discontinued and the investment in GoviEx is now accounted for as an
available-for-sale security.
 25. Restructuring of the Gold Business
 The assets and liabilities related to discontinued operations have been reclassified as assets
or liabilities of discontinued operations on the consolidated balance sheets. Operating results
related to the discontinued operations have been included in earnings from discontinued
operations on the consolidated statements of earnings. Comparative period balances have been
restated.
 (a)
    
    Sale of Centerra Gold Inc.On December 30, 2009, Cameco completed a public offering of 88,618,472 common shares of
Centerra for net proceeds of approximately $871,000,000 and recorded a net gain of
$374,000,000. Concurrent with this offering, Cameco transferred an additional 25,300,000
common shares of Centerra to Kyrgyzaltyn pursuant to the agreement that Cameco entered into
with the Government of the Kyrgyz Republic on April 24, 2009. As a result of the closing of
the public offering, and the transfer of the Centerra common shares to Kyrgyzaltyn, Cameco
has disposed of its entire interest in Centerra.(b)
    
    Kyrgyz Share TransferIn 2007, the Parliament of the Kyrgyz Republic challenged the legal validity of Kumtor Gold
Company (Kumtor) agreements with the Kyrgyz Republic. As a result, Cameco and Centerra
entered into discussions with Kyrgyzaltyn culminating in the signing of two agreements in
August 2007 providing for the transfer of a certain number of Centerra shares to Kyrgyzaltyn,
subject to certain conditions. These agreements, however, were never ratified by the Kyrgyz
parliament.On April 24, 2009, Cameco, Centerra, the Kyrgyz Government and other parties signed a new
agreement to resolve all the issues related to the Kumtor mine. On April 30, 2009, the
Kyrgyz parliament ratified the agreement and enacted legislation authorizing implementation
of the agreement. On June 11, 2009, closing occurred and Centerra issued 18,232,615 treasury
 shares to Kyrgyzaltyn and Cameco transferred 25,300,000 shares of its 113,918,000 Centerra
common shares to a custodian, to be held in escrow, for ultimate release to Kyrgyzaltyn,
subject to certain conditions. Cameco retained its voting rights over these shares while they
were held in escrow. As a result of the public offering concluded on December 30, 2009,
Cameco released the shares held in escrow to Kyrgyzaltyn.The total amount of the after-tax loss related to this agreement is $179,000,000, of which an
expense of $46,000,000 was recorded in 2009, a recovery of $20,000,000 in 2008 and an expense
of $153,000,000 in 2007.
 36




---



##### 



(c)
    
    Financial Results of Discontinued OperationsThe results of the operations of Centerra are presented under discontinued operations on
the consolidated statements of earnings. The following table presents the components of the
discontinued operations amounts, net of future income tax expenses [note 18]:
 (Millions)
    
    2009
    
    
    2008Sale of Centerra
    
    
    $374.2
    
    
    
    $Kyrgyz share transfer
    
    
    (45.9
    )
    
    
    19.9Operating earnings
    
    
    54.1
    
    
    
    64.1Earnings from discontinued operations
    
    
    $382.4
    
    
    
    $84.0
 The following table presents the components of the operating results of Centerra:
 (Millions)
    
    2009
    
    
    2008Revenue
    
    
    $770.2
    
    
    
    $676.6ExpensesProducts and services sold
    
    
    440.4
    
    
    
    371.3Depreciation, depletion and reclamation
    
    
    122.4
    
    
    
    85.9Exploration
    
    
    28.5
    
    
    
    25.0Other
    
    
    37.3
    
    
    
    33.9Earnings before income taxes and minority interest
    
    
    141.6
    
    
    
    160.5Income tax expense
    
    
    33.4
    
    
    
    36.6Minority interest
    
    
    54.1
    
    
    
    59.8Operating earnings
    
    
    $54.1
    
    
    
    $64.1
 37




---



##### 



28.
    
    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 to arbitrate the claims and a schedule has been set for the next steps in the
proceeding.The Consortium served its claim on October 21, 2008, and has amended it as required, most
recently on August 7, 2009. BE served its answer and counter-statement on December 22, 2008,
most recently amended on July 8, 2009, and the Consortium served its reply and answer to
counter-statement on January 22, 2009, most recently amended on August 7, 2009.The Unit 8 steam generators require on-going monitoring and maintenance as a result of the
defect. In addition to the $64,558,200 in damages sought in the notice of claim, the claim
seeks an additional $4,900,000 spent on inspection, monitoring and maintenance of Unit 8, and
$31,900,000 in costs for future monitoring and maintenance, as well as repair costs and lost
revenue due to anticipated unplanned outages as a consequence of the defect in Unit 8. The
initial claim had also sought damages for the early replacement of the Unit 8 steam
generators due to the defect shortening their useful operating lives. However, recent
inspection data and analysis of the condition of the Unit 8 steam generators now indicates
that they will continue to function until the end of the Consortiums lease of the Bruce
Power facility in 2018, as was expected at the time the MPA was entered into. The claim for
early replacement was thus abandoned via an amendment to the claim on August 7, 2009. The
parties have completed oral discoveries and are currently in the process of completing
answers to undertakings given during discoveries. The hearing is scheduled to take place in
April and May 2010.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.(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, 2009, Camecos actual exposure under these assurances was nil.ii)
    
    Guarantees to customers under power sales agreements of up to $35,300,000. At
December 31, 2009, Camecos actual exposure under these guarantees was $28,300,000.iii)
    
    Termination payments to OPG pursuant to the lease agreement of $58,300,000.The fair value of these guarantees is nominal.
 (d)
    
    Under a supply contract with the Ontario Power Authority (OPA), BPLP is entitled to
receive payments from the OPA during periods when the market price for electricity in
Ontario is lower than the floor price defined under the agreement during a calendar year.
On July 6, 2009, BPLP and the OPA amended the supply contract such that beginning in 2009,
the annual payments received will not be subject to repayment in future years. Previously,
the payments received under the agreement were subject to repayment during the entire term
of the contract, dependent on the spot price in future periods. The agreement remains in
effect until the earlier of December 31, 2019 or one year after the shutdown of the BPLP
units. During 2009, BPLP became entitled to $526,000,000 under this agreement and
currently expects to repay $12,000,000. The remaining $514,000,000 was recognized as
revenue with Camecos share being $162,000,000.
 38




---



##### 



(e)
    
    Camecos North American workforce includes about 3,000 employees, of which
approximately 850 (28%) belong to three separate labour unions. A collective agreement for
one of the three unions, representing about 250 employees, is set to expire in 2010.(f)
    
    At December 31, 2009, Camecos purchase commitments, the majority of which are fixed
price uranium and conversion purchase arrangements, were as follows:
 (Millions (US))2010
    
    
    $1342011
    
    
    1502012
    
    
    1692013
    
    
    3262014
    
    
    27Thereafter
    
    
    34Total
    
    
    $840
 27.
    
    Financial InstrumentsThe majority of revenues at Cameco are derived from the sale of uranium products, and
electricity through its investment in BPLP. 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. 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 2010 to 2015. At December 31, 2009, the mark-to-market gain
on BPLPs sales contracts was $96,000,000.All financial instruments measured at fair value are categorized into one of three hierarchy
levels, described below, for disclosure purposes. Each level is based on the transparency of
the inputs used to measure the fair values of assets and liabilities:
      39




---



##### 



As at December 31, 2009Description
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Derivative instrument assets
    
    
    $210,381
    
    
    
    $
    
    
    
    $197,381
    
    
    
    $13,000Available-for-sale securities [notes 5, 9]
    
    
    207,473
    
    
    
    207,473
    
    
    
    
    
    
    
    Derivative instrument liabilities
    
    
    (40,957
    )
    
    
    
    
    
    
    (39,957
    )
    
    
    (1,000
    )Net
    
    
    $376,897
    
    
    
    $207,473
    
    
    
    $157,424
    
    
    
    $12,000
 As at December 31, 2008Description
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Derivative instrument assets
    
    
    $81,787
    
    
    
    $
    
    
    
    $81,787
    
    
    
    $Available-for-sale securities [note 9]
    
    
    3,718
    
    
    
    3,718
    
    
    
    
    
    
    
    Derivative instrument liabilities
    
    
    (120,403
    )
    
    
    
    
    
    
    (120,403
    )
    
    
    Net
    
    
    $(34,898
    )
    
    
    $3,718
    
    
    
    $(38,616
    )
    
    
    $
     40




---



##### 



Derivatives
  As at December 31, 2009Cameco
    
    
    BPLP
    
    
    TotalNon-hedge derivatives:Embedded derivatives  sales contracts
    
    
    $(2,736
    )
    
    
    $9,082
    
    
    
    $6,346Foreign currency contracts
    
    
    67,031
    
    
    
    
    
    
    
    67,031Cash flow hedges:Energy and sales contracts
    
    
    
    
    
    
    96,047
    
    
    
    96,047Net
    
    
    $64,295
    
    
    
    $105,129
    
    
    
    $169,424Classification:Current portion of long-term receivables, investments and other [note 9]
    
    
    $66,972
    
    
    
    $87,439
    
    
    
    $154,411Long-term receivables, investments and other [note 9]
    
    
    1,460
    
    
    
    54,510
    
    
    
    55,970Current portion of other liabilities [note 13]
    
    
    (445
    )
    
    
    (19,595
    )
    
    
    (20,040
    )Other liabilities [note 13]
    
    
    (3,692
    )
    
    
    (17,225
    )
    
    
    (20,917
    )Net
    
    
    $64,295
    
    
    
    $105,129
    
    
    
    $169,424
 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 9]
    
    
    $5,793
    
    
    
    $43,654
    
    
    
    $49,447Long-term receivables, investments and other [note 9]
    
    
    
    
    
    
    32,340
    
    
    
    32,340Current portion of other liabilities [note 13]
    
    
    (110,918
    )
    
    
    (73
    )
    
    
    (110,991
    )Other liabilities [note 13]
    
    
    (8,951
    )
    
    
    (461
    )
    
    
    (9,412
    )Net
    
    
    $(114,076
    )
    
    
    $75,460
    
    
    
    $(38,616
    )
 41




---



##### 



For the year ended December 31, 2009Cameco
    
    
    BPLP
    
    
    TotalNon-hedge derivatives:Embedded derivatives  sales contracts
    
    
    $(4,764
    )
    
    
    $(4,737
    )
    
    
    $(9,501
    )Foreign currency contracts
    
    
    (234,066
    )
    
    
    
    
    
    
    (234,066
    )Interest rate contracts
    
    
    401
    
    
    
    
    
    
    
    401Cash flow hedges:Energy and sales contracts
    
    
    
    
    
    
    (638
    )
    
    
    (638
    )Net
    
    
    $(238,429
    )
    
    
    $(5,375
    )
    
    
    $(243,804
    )
 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
   Currency
  (Millions)
    
    US
    
    
    Rate
    
    
    Cdn
    
    
    Euro
    
    
    Rate
    
    
    US2010
    
    
    $880
    
    
    
    1.08
    
    
    
    $950
    
    
    
    13
    
    
    
    1.45
    
    
    
    $192011
    
    
    475
    
    
    
    1.12
    
    
    
    532
    
    
    
    16
    
    
    
    1.47
    
    
    
    242012
    
    
    135
    
    
    
    1.06
    
    
    
    143
    
    
    
    5
    
    
    
    1.46
    
    
    
    7Total
    
    
    $1,490
    
    
    
    1.09
    
    
    
    $1,625
    
    
    
    34
    
    
    
    1.46
    
    
    
    $50
  42




---



##### 



28.
    
    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 2009 was
387,955,503 (2008  350,130,431).
 2009
    
    
    2008Basic earnings per share computationNet earnings
    
    
    $1,099,422
    
    
    
    $450,117Weighted average common shares outstanding
    
    
    387,956
    
    
    
    350,130Basic earnings per common share
    
    
    $2.83
    
    
    
    $1.29Diluted earnings per share computationNet earnings
    
    
    $1,099,422
    
    
    
    $450,117Weighted average common shares outstanding
    
    
    387,956
    
    
    
    350,130Dilutive effect of stock options
    
    
    1,977
    
    
    
    1,982Weighted average common shares outstanding, assuming dilution
    
    
    389,933
    
    
    
    352,112Diluted earnings per common share
    
    
    $2.82
    
    
    
    $1.28
 29.
    
    Segmented InformationCameco has three reportable segments: uranium, fuel services and electricity. The uranium
segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate.
The fuel services segment involves the refining, conversion and fabrication of uranium
concentrate and the purchase and sale of conversion services. The electricity segment involves
the generation and sale of electricity.Camecos reportable segments are strategic business units with different products, processes and
marketing strategies.Accounting policies used in each segment are consistent with the policies outlined in the
summary of significant accounting policies.
 
 43




---



##### 



(a)
    
    Business Segments
 2009Fuel
    
    
    
    
    
    
    Inter-(Millions)
    
    Uranium
    
    
    Services
    
    
    Electricity
    
    
    Segment
    
    
    TotalRevenue
    
    
    $1,551.3
    
    
    
    $276.3
    
    
    
    $518.3
    
    
    
    $(30.9
    )
    
    
    $2,315.0ExpensesProducts and services sold
    
    
    901.4
    
    
    
    203.9
    
    
    
    243.5
    
    
    
    (24.5
    )
    
    
    1,324.3Depreciation, depletion and reclamation
    
    
    161.9
    
    
    
    22.8
    
    
    
    55.6
    
    
    
    0.3
    
    
    
    240.6Exploration
    
    
    49.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    49.1Other
    
    
    15.9
    
    
    
    21.3
    
    
    
    
    
    
    
    
    
    
    
    37.2Cigar Lake remediation
    
    
    17.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17.9Gain on sale of assets
    
    
    (0.6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.6
    )Non-segmented expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (120.4
    )Earnings (loss) before income taxes
and minority interest
    
    
    405.7
    
    
    
    28.3
    
    
    
    219.2
    
    
    
    (6.7
    )
    
    
    766.9Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52.9Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3.0
    )Net earnings from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $717.0Assets
    
    
    $5,956.1
    
    
    
    $383.9
    
    
    
    $904.4
    
    
    
    $
    
    
    
    $7,244.4Intangibles
    
    
    $
    
    
    
    $97.7
    
    
    
    $
    
    
    
    $
    
    
    
    $97.7Capital expenditures for the year
    
    
    $333.3
    
    
    
    $20.7
    
    
    
    $38.7
    
    
    
    $
    
    
    
    $392.7
 2008 (Recast)Fuel
    
    
    
    
    
    
    Inter-(Millions)
    
    Uranium
    
    
    Services
    
    
    Electricity
    
    
    Segment
    
    
    TotalRevenue
    
    
    $1,512.4
    
    
    
    $251.7
    
    
    
    $445.3
    
    
    
    $(26.8
    )
    
    
    $2,182.6ExpensesProducts and services sold
    
    
    712.0
    
    
    
    217.5
    
    
    
    245.5
    
    
    
    (28.5
    )
    
    
    1,146.5Depreciation, depletion and reclamation
    
    
    135.9
    
    
    
    26.6
    
    
    
    46.0
    
    
    
    (1.0
    )
    
    
    207.5Exploration
    
    
    53.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53.2Other
    
    
    37.9
    
    
    
    2.0
    
    
    
    
    
    
    
    
    
    
    
    39.9Cigar Lake remediation
    
    
    11.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.4Gain on sale of assets
    
    
    (4.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4.1
    )Non-segmented expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    386.7Earnings before income taxes
and minority interest
    
    
    566.1
    
    
    
    5.6
    
    
    
    153.8
    
    
    
    2.7
    
    
    
    341.5Income tax recovery
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24.4
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.2
    )Net earnings from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $366.1Assets
    
    
    $4,595.7
    
    
    
    $311.3
    
    
    
    $826.1
    
    
    
    $
    
    
    
    $5,733.1Intangibles
    
    
    $
    
    
    
    $101.4
    
    
    
    $
    
    
    
    $
    
    
    
    $101.4Capital expenditures for the year
    
    
    $421.1
    
    
    
    $77.2
    
    
    
    $32.8
    
    
    
    $
    
    
    
    $531.1
 44




---



##### 



(b)
    
    Geographic Segments
 (Millions)
    
    2009
    
    
    2008Revenue from products and servicesCanada   domestic
    
    $739.2
    
    
    
    $589.7 export
    
    
    194.9
    
    
    
    291.3United States
    
    
    1,380.9
    
    
    
    1,301.6$2,315.0
    
    
    
    $2,182.6AssetsCanada
    
    
    $5,755.7
    
    
    
    $4,121.9United States
    
    
    662.9
    
    
    
    798.2Australia
    
    
    553.1
    
    
    
    505.1Europe
    
    
    139.0
    
    
    
    194.9Kazakhstan
    
    
    231.4
    
    
    
    214.4$7,342.1
    
    
    
    $5,834.5
 (c)
    
    Major CustomersCameco relies on a small number of customers to purchase a significant portion of its uranium
concentrates and uranium conversion services. During 2009, revenues from one customer of
Camecos uranium and fuel services segments represented approximately $252,699,000 (2008 
$106,799,000), about 14% (2008  6%) 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 2009, electricity revenues from one customer of BPLP represented approximately 5%
(2008  4%) of BPLPs total revenues.
 30.
    
    Related Party TransactionsCameco purchases a significant amount of goods and services for its Saskatchewan mining
operations from northern Saskatchewan suppliers to support economic development in the region.
One such supplier is Points Athabasca Contracting Ltd. and the president of the company became a
member of the board of directors at Cameco during 2009. In 2009, Cameco paid Points Athabasca
Contracting $30,800,000 (2008  $38,500,000) for construction and contracting services. The
transactions were conducted in the normal course of business and were accounted for at the
exchange amount. Accounts payable include a balance of $230,000 (2008  $940,000) resulting
from these transactions.31.
    
    Comparative FiguresCertain prior year balances have been reclassified to conform to the current financial statement
presentation.
 45