Cameco (CCJ) 6-K Cameco reports third quarter financial results

Exhibit 99.3

Cameco Corporation

Consolidated Statements of Earnings

(Unaudited)

($Cdn Thousands, except per share amounts)

						(Recast -						(Recast -
						note 3(b))						note 3(b))
			Three Months Ended						Nine Months Ended
	Note		Sep 30/12			Sep 30/11			Sep 30/12			Sep 30/11
Revenue from products and services			$	408,397		$	526,952		$	1,363,079		$	1,413,758
Cost of products and services sold				218,131			284,519			770,670			828,142
Depreciation and amortization				55,576			63,376			176,406			162,163
Cost of sales				273,707			347,895			947,076			990,305
Gross profit				134,690			179,057			416,003			423,453
Administration				38,735			38,091			124,164			106,073
Exploration				34,547			31,720			75,404			62,206
Research and development				2,181			2,071			6,159			3,797
Loss (gain) on sale of assets				512			418			(1,637	)		1,113
Earnings from operations				58,715			106,757			211,913			250,264
Finance costs		8		(29,716	)		(16,385	)		(64,735	)		(55,946	)
Gains (losses) on derivatives		13		53,038			(75,804	)		54,612			(40,216	)
Finance income				4,746			5,922			16,535			19,037
Share of loss from equity-accounted investees				(1,962	)		(1,443	)		(4,733	)		(5,573	)
Other expense				—			(1,614	)		(25,745	)		(1,061	)
Earnings before income taxes				84,821			17,433			187,847			166,505
Income tax expense (recovery)		9		3,250			(21,711	)		(32,559	)		(18,777	)
Net earnings			$	81,571		$	39,144		$	220,406		$	185,282
Net earnings (loss) attributable to:
Equity holders			$	81,775		$	39,452		$	221,390		$	185,590
Non-controlling interest				(204	)		(308	)		(984	)		(308	)
Net earnings			$	81,571		$	39,144		$	220,406		$	185,282
Earnings per common share attributable to equity holders
Basic		14	$	0.21		$	0.10		$	0.56		$	0.47
Diluted		14	$	0.21		$	0.10		$	0.56		$	0.47

See accompanying notes to condensed consolidated interim financial statements.

1

Cameco Corporation

Consolidated Statements of Comprehensive Income

(Unaudited)

($Cdn Thousands)

						(Recast -						(Recast -
						note 3(b))						note 3(b))
			Three Months Ended						Nine Months Ended
	Note		Sep 30/12			Sep 30/11			Sep 30/12			Sep 30/11
Net earnings			$	81,571		$	39,144		$	220,406		$	185,282
Other comprehensive income (loss), net of taxes		9
Exchange differences on translation of foreign operations				(33,089	)		55,268			(36,194	)		40,885
Gains (losses) on derivatives designated as cash flow hedges				(1,778	)		544			3,911			3,666
Gains on derivatives designated as cash flow hedges transferred to net earnings				(4,108	)		(4,062	)		(15,941	)		(15,294	)
Unrealized gains (losses) on available-for-sale assets				70			60			(20	)		744
Gains on available-for-sale assets transferred to net earnings				(92	)		(8	)		(130	)		(1,848	)
Defined benefit plan actuarial losses				(105,133	)		(109,897	)		(105,133	)		(109,897	)
Other comprehensive loss, net of taxes				(144,130	)		(58,095	)		(153,507	)		(81,744	)
Total comprehensive income (loss)			$	(62,559	)	$	(18,951	)	$	66,899		$	103,538
Other comprehensive income (loss) attributable to:
Equity holders			$	(144,089	)	$	(58,416	)	$	(153,377	)	$	(82,065	)
Non-controlling interest				(41	)		321			(130	)		321
Other comprehensive loss for the period			$	(144,130	)	$	(58,095	)	$	(153,507	)	$	(81,744	)
Total comprehensive income (loss) attributable to:
Equity holders			$	(62,314	)	$	(18,964	)	$	68,013		$	103,525
Non-controlling interest				(245	)		13			(1,114	)		13
Total comprehensive income (loss) for the period			$	(62,559	)	$	(18,951	)	$	66,899		$	103,538

See accompanying notes to condensed consolidated interim financial statements.

2

Cameco Corporation

Consolidated Statements of Financial Position

(Unaudited)

($Cdn Thousands)

						(Recast -
						note 3(b))
			As At
	Note		Sep 30/12			Dec 31/11
Assets
Current assets
Cash and cash equivalents			$	465,536		$	398,084
Short-term investments				198,432			804,141
Accounts receivable				319,801			611,815
Current tax assets				28,049			31,388
Inventories		4		718,820			493,875
Supplies and prepaid expenses				215,233			182,037
Current portion of long-term receivables, investments and other		5		91,042			62,433
Total current assets				2,036,913			2,583,773
Property, plant and equipment				4,780,329			4,349,492
Intangible assets				95,484			98,954
Long-term receivables, investments and other		5		304,263			283,818
Investments in equity-accounted investees				211,639			220,226
Deferred tax assets				170,582			81,392
Total non-current assets				5,562,297			5,033,882
Total assets			$	7,599,210		$	7,617,655
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities			$	446,047		$	455,499
Current tax liabilities				17,733			39,330
Short-term debt				62,972			97,830
Dividends payable				39,535			39,475
Current portion of finance lease obligation				15,958			14,852
Current portion of other liabilities		6		18,032			50,495
Current portion of provisions				14,416			14,857
Total current liabilities				614,693			712,338
Long-term debt				795,655			795,144
Finance lease obligation				118,879			130,982
Other liabilities		6		665,985			528,264
Provisions				507,396			519,625
Deferred tax liabilities				7,864			8,165
Total non-current liabilities				2,095,779			1,982,180
Shareholders’ equity
Share capital				1,851,474			1,842,289
Contributed surplus				165,156			155,757
Retained earnings				2,872,638			2,874,973
Other components of equity				(1,669	)		46,575
Total shareholders’ equity attributable to equity holders				4,887,599			4,919,594
Non-controlling interest				1,139			3,543
Total shareholders’ equity				4,888,738			4,923,137
Total liabilities and shareholders’ equity			$	7,599,210		$	7,617,655

Commitments and contingencies [notes 9,12]

See accompanying notes to condensed consolidated interim financial statements.

3

Cameco Corporation

Consolidated Statements of Changes in Equity

(Unaudited)

($Cdn Thousands)

																					(Recast -
																					note 3(b))
	Attributable to equity holders
									Foreign												Non-
	Share		Contributed			Retained			Currency			Cash Flow			Available-For-						Controlling			Total
	Capital		Surplus			Earnings			Translation			Hedges			Sale Assets			Total			Interest			Equity
Balance at January 1, 2012	$	1,842,289	$	155,757		$	2,874,973		$	26,867		$	19,560		$	148		$	4,919,594		$	3,543		$	4,923,137
Net earnings		—		—			221,390			—			—			—			221,390			(984	)		220,406
Total other comprehensive loss		—		—			(105,133	)		(36,064	)		(12,030	)		(150	)		(153,377	)		(130	)		(153,507	)
Total comprehensive income for the period		—		—			116,257			(36,064	)		(12,030	)		(150	)		68,013			(1,114	)		66,899
Share-based compensation		—		13,747			—			—			—			—			13,747			—			13,747
Share options exercised		9,185		(4,348	)		—			—			—			—			4,837			—			4,837
Dividends		—		—			(118,592	)		—			—			—			(118,592	)		—			(118,592	)
Change in ownership interests in subsidiary		—		—			—			—			—			—			—			(1,290	)		(1,290	)
Balance at September 30, 2012	$	1,851,474	$	165,156		$	2,872,638		$	(9,197	)	$	7,530		$	(2	)	$	4,887,599		$	1,139		$	4,888,738
Balance at January 1, 2011		1,833,257		142,376			2,690,184			(7,276	)		30,306			1,793			4,690,640			—			4,690,640
Net earnings		—		—			185,590			—			—			—			185,590			(308	)		185,282
Total other comprehensive income (loss)		—		—			(109,897	)		40,564			(11,628	)		(1,104	)		(82,065	)		321			(81,744	)
Total comprehensive income for the period		—		—			75,693			40,564			(11,628	)		(1,104	)		103,525			13			103,538
Share-based compensation		—		14,520			—			—			—			—			14,520			—			14,520
Share options exercised		8,582		(6,004	)		—			—			—			—			2,578			—			2,578
Dividends		—		—			(118,413	)		—			—			—			(118,413	)		—			(118,413	)
Change in ownership interests in subsidiary		—		—			(3,691	)		—			—			—			(3,691	)		3,884			193
Balance at September 30, 2011	$	1,841,839	$	150,892		$	2,643,773		$	33,288		$	18,678		$	689		$	4,689,159		$	3,897		$	4,693,056

See accompanying notes to condensed consolidated interim financial statements.

4

Cameco Corporation

Consolidated Statements of Cash Flows

(Unaudited)

($Cdn Thousands)

						(Recast -						(Recast -
						note 3(b))						note 3(b))
			Three Months Ended						Nine Months Ended
	Note		Sep 30/12			Sep 30/11			Sep 30/12			Sep 30/11
Operating activities
Net earnings			$	81,571		$	39,144		$	220,406		$	185,282
Adjustments for:
Depreciation and amortization				55,576			63,376			176,406			162,163
Deferred charges				4,788			(927	)		(10,852	)		(9,113	)
Unrealized losses (gains) on derivatives				(48,991	)		91,363			(52,267	)		101,219
Share-based compensation		11		3,821			3,200			13,747			14,520
Loss (gain) on sale of assets				512			418			(1,637	)		1,113
Finance costs		8		29,716			16,385			64,735			55,946
Finance income				(4,746	)		(5,922	)		(16,535	)		(19,037	)
Share of loss from equity-accounted investees				1,962			1,443			4,733			5,573
Other income (expense)				—			1,037			(3,796	)		(3,053	)
Income tax expense (recovery)		9		3,250			(21,711	)		(32,559	)		(18,777	)
Interest received				6,011			6,658			18,241			16,347
Income taxes paid				(2,000	)		(6,246	)		(55,329	)		(54,129	)
Income taxes refunded				4,383			24,706			17,546			24,706
Other operating items		10		(92,140	)		(20,555	)		18,547			23,831
Net cash provided by operations				43,713			192,369			361,386			486,591
Investing activities
Additions to property, plant and equipment				(212,692	)		(179,454	)		(664,193	)		(443,293	)
Decrease in short-term investments				382,764			222,075			605,534			232,821
Decrease (increase) in long-term receivables, investments and other				(467	)		11,882			(30,419	)		39,376
Proceeds from sale of property, plant and equipment				25			29			3,124			61
Net cash provided by (used in) investing				169,630			54,532			(85,954	)		(171,035	)
Financing activities
Increase in debt				2,690			4,533			—			3,459
Decrease in debt				—			—			(43,946	)		(9,796	)
Interest paid				(24,470	)		(24,064	)		(51,452	)		(51,152	)
Proceeds from issuance of shares, stock option plan				693			58			6,997			6,996
Dividends paid				(39,531	)		(39,472	)		(118,531	)		(106,547	)
Net cash used in financing				(60,618	)		(58,945	)		(206,932	)		(157,040	)
Increase in cash during the period				152,725			187,956			68,500			158,516
Exchange rate changes on foreign currency cash balances				(817	)		8,249			(1,048	)		7,800
Cash and cash equivalents at beginning of period				313,628			345,491			398,084			375,380
Cash and cash equivalents at end of period			$	465,536		$	541,696		$	465,536		$	541,696
Cash and cash equivalents is comprised of:
Cash									$	60,550		$	58,446
Cash equivalents										404,986			483,250
									$	465,536		$	541,696

See accompanying notes to condensed consolidated interim financial statements.

5

Cameco Corporation

Notes to Condensed Consolidated Interim Financial Statements

(Unaudited)

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

1. Cameco Corporation

Cameco Corporation is incorporated under the Canada Business Corporations Act. The address of its registered office is 2121 11^th Street West, Saskatoon, Saskatchewan, S7M 1J3. The condensed consolidated interim financial statements as at and for the period ended September 30, 2012 comprise Cameco Corporation and its subsidiaries (collectively, the “Company” or “Cameco”) and the Company’s interest in associates and joint ventures. The Company is primarily engaged in the exploration for and the development, mining, refining, conversion and fabrication of uranium for sale as fuel for generating electricity in nuclear power reactors in Canada and other countries. Cameco has a 31.6% interest in Bruce Power L.P. (“BPLP”), which operates the four Bruce B nuclear reactors in Ontario.

2. Significant Accounting Policies

(a) Statement of Compliance

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34,Interim Financial Reporting. The condensed consolidated interim financial statements do not include all of the information required for full annual financial statements and should be read in conjunction with Cameco’s annual consolidated financial statements as at and for the year ended December 31, 2011.

These condensed consolidated interim financial statements were authorized for issuance by the Company’s board of directors on October 31, 2012.

(b) Basis of Presentation

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

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

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

In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Company’s accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2011.

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

3. Accounting Changes

(a) New Standards and Interpretations not yet Adopted

The Company has not yet adopted the standards and amendments to existing standards that have been issued. The standards and amendments, unless otherwise stated, are effective for periods beginning on or after January 1, 2013. Cameco is assessing the impact of the following standards and amendments on its financial statements:

(i) Financial Instruments

In October 2010, the International Accounting Standards Board (“IASB”) issued IFRS 9,Financial Instruments(“IFRS 9”). This standard is part of a wider project to replace IAS 39,Financial Instruments: Recognition and Measurement(“IAS 39”). IFRS 9 replaces the current multiple classification and measurement models for financial assets and liabilities with a single model that has only two classification categories: amortized cost and fair value. The basis of classification depends on the entity’s business model and the contractual cash flow

6

characteristics of the financial asset or liability. The guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply.

(ii) Consolidated Financial Statements

In May 2011, the IASB issued IFRS 10,Consolidated Financial Statements(“IFRS 10”). This standard establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 defines the principle of control and establishes control as the basis for determining which entities are consolidated in the consolidated financial statements.

(iii) Joint Arrangements

In May 2011, the IASB issued IFRS 11,Joint Arrangements (“IFRS 11”). This standard establishes principles for financial reporting by parties to a joint arrangement. IFRS 11 requires a party to assess the rights and obligations arising from an arrangement in determining whether an arrangement is either a joint venture or a joint operation. Joint ventures are to be accounted for using the equity method while joint operations will continue to be accounted for using proportionate consolidation.

(iv) Disclosure of Interests in Other Entities

In May 2011, the IASB issued IFRS 12,Disclosure of Interests in Other Entities (“IFRS 12”). This standard applies to entities that have an interest in a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. IFRS 12 integrates and makes consistent the disclosure requirements for a reporting entity’s interest in other entities and presents those requirements in a single standard.

(v) Fair Value Measurement

In May 2011, the IASB issued IFRS 13,Fair Value Measurement (“IFRS 13”). This standard provides additional guidance where IFRS requires fair value to be used. IFRS 13 defines fair value, sets out in a single standard a framework for measuring fair value and establishes the required disclosures about fair value measurements.

(vi) Employee Benefits

In June 2011, the IASB issued an amended version of IAS 19,Employee Benefits (“IAS 19”). This amendment eliminates the ‘corridor method’ of accounting for defined benefit plans. Revised IAS 19 also streamlines the presentation of changes in assets and liabilities arising from defined benefit plans, and enhances the disclosure requirements for defined benefit plans.

(vii) Presentation of Other Comprehensive Income (“OCI”)

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

(viii) Financial Assets and Financial Liabilities

In December 2011, the IASB issued amendments to IAS 32,Financial Instruments: Presentation (“IAS 32”) and IFRS 7,Financial Instruments: Disclosures (“IFRS 7”). The amendments are effective for periods beginning on or after January 1, 2013 for IFRS 7 and January 1, 2014 for IAS 32 and are to be applied retrospectively. These amendments clarify matters regarding offsetting financial assets and financial liabilities as well as related disclosure requirements.

7

(b) Accounting for Kintyre

In August 2008, Cameco acquired a 70% interest in the Kintyre exploration project in Australia. The Company previously consolidated its investment in Kintyre on the basis that it was able to exercise control over the asset. In the second quarter of 2012, the Company reconsidered the accounting treatment applied to Kintyre and concluded that consolidation of the investment was not appropriate and only Cameco’s interest in the assets and liabilities of Kintyre should be recognized. Accordingly, the non-controlling interest in the assets, liabilities and expenses has been removed from the financial statements. The change in accounting has been applied retrospectively and the comparative statements for 2011 have been recast. There was no impact on retained earnings or net earnings attributable to equity holders for any of the recast periods. The most significant changes relate to a reduction of property, plant and equipment of $182,615,000 and a reduction of the non-controlling interest on the statement of changes in financial position of $182,395,000.

4. Inventories

	Sep 30/12		Dec 31/11
Uranium
Concentrate	$	524,304	$	361,481
Broken ore		39,553		14,310
		563,857		375,791
Fuel Services		154,963		118,084
Total	$	718,820	$	493,875

5. Long-Term Receivables, Investments and Other

	Sep 30/12			Dec 31/11
BPLP
Capital lease receivable from Bruce A Limited Partnership (“BALP”)(a)	$	83,140		$	87,785
Derivatives [note 13]		28,287			54,010
Available-for-sale securities
GoviEx Uranium (privately held)		20,367			21,057
Derivatives [note 13]		48,144			17,392
Advances receivable from Inkai JV LLP [note 16]		96,332			78,058
Investment tax credits		66,699			54,038
Other		52,336			33,911
		395,305			346,251
Less current portion		(91,042	)		(62,433	)
Net	$	304,263		$	283,818

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

8

6. Other Liabilities

	Sep 30/12			Dec 31/11
BPLP
Accrued pension and post-retirement benefit liability	$	617,472		$	468,363
Derivatives [note 13]		11,270			19,439
Ontario Power Generation (“OPG”) loan		2,907			4,045
Deferred sales		10,175			13,739
Derivatives [note 13]		5,400			28,499
Accrued pension and post-retirement benefit liability		30,345			38,050
Other		6,448			6,624
		684,017			578,759
Less current portion		(18,032	)		(50,495	)
Total	$	665,985		$	528,264

7. Share Capital

(a) At September 30, 2012, there were 395,349,044 common shares outstanding.

(b) Options in respect of 9,639,467 shares are outstanding under the stock option plan and are exercisable up to 2019. For the quarter ended September 30, 2012, 35,766 options were exercised resulting in the issuance of shares (2011 – 3,800). For the nine months ended September 30, 2012, 603,621 options were exercised resulting in the issuance of shares (2011 – 363,840).

8. Finance Costs

	Three Months Ended					Nine Months Ended
	Sep 30/12		Sep 30/11			Sep 30/12		Sep 30/11
Interest on long-term debt	$	14,439	$	14,305		$	40,272	$	42,447
Unwinding of discount on provisions		3,396		3,240			10,172		9,978
Other charges		1,546		83			5,590		2,223
Foreign exchange losses (gains)		10,017		(1,844	)		7,271		(527	)
Interest on short-term debt		318		601			1,430		1,825
Total	$	29,716	$	16,385		$	64,735	$	55,946

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9. Income Taxes

	Three Months Ended						Nine Months Ended
	Sep 30/12			Sep 30/11			Sep 30/12			Sep 30/11
Earnings (loss) before income taxes
Canada	$	(1,557	)	$	(185,682	)	$	(165,901	)	$	(260,300	)
Foreign		86,378			203,115			353,748			426,805
	$	84,821		$	17,433		$	187,847		$	166,505
Current income taxes (recovery)
Canada	$	(1,841	)	$	(10,422	)	$	(1,307	)	$	(10,847	)
Foreign		5,713			9,866			19,936			27,002
	$	3,872		$	(556	)	$	18,629		$	16,155
Deferred income taxes (recovery)
Canada	$	4,829		$	(25,676	)	$	(40,578	)	$	(42,433	)
Foreign		(5,451	)		4,521			(10,610	)		7,501
	$	(622	)	$	(21,155	)	$	(51,188	)	$	(34,932	)
Income tax expense (recovery)	$	3,250		$	(21,711	)	$	(32,559	)	$	(18,777	)

In 2008, as part of the ongoing annual audits of Cameco’s Canadian tax returns, Canada Revenue Agency (“CRA”) disputed the transfer pricing methodology used by Cameco and its wholly owned Swiss subsidiary, Cameco Europe Ltd. (“CEL”), in respect of sale and purchase agreements for uranium products. From December 2008 to date, CRA issued notices of reassessment for the taxation years 2003, 2004, 2005 and 2006, which have increased Cameco’s income for Canadian income tax purposes by approximately $43,000,000, $108,000,000, $197,000,000 and $243,000,000 respectively. No reassessment received to date has resulted in more than a nominal amount of cash taxes becoming payable due to the availability of elective deductions and tax loss carrybacks. Cameco believes it is likely that CRA will reassess Cameco’s tax returns for subsequent years on a similar basis.

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

Having regard to advice from its external advisors, Cameco’s opinion is that CRA’s position is incorrect, and Cameco is contesting CRA’s position. However, to reflect the uncertainties of CRA’s appeals process and litigation, Cameco has recorded a cumulative tax provision related to this matter for the years 2003 through the current period in the amount of $60,000,000. No provisions for penalties or interest have been recorded. Cameco does not expect more than a nominal amount of cash taxes to be payable due to the availability of elective deductions and tax loss carryovers. While the resolution of this matter may result in liabilities that are higher or lower than the 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 2012 could be material to Cameco’s financial position, results of operations or cash flows in the year(s) of resolution.

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

10

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

For the three months ended September 30, 2012

	Before tax			Income tax recovery (expense)			Net of tax
Exchange differences on translation of foreign operations	$	(33,089	)	$	—		$	(33,089	)
Losses on derivatives designated as cash flow hedges		(2,370	)		592			(1,778	)
Gains on derivatives designated as cash flow hedges transferred to net earnings		(5,477	)		1,369			(4,108	)
Unrealized gains on available-for-sale assets		81			(11	)		70
Gains on available-for-sale assets transferred to net earnings		(106	)		14			(92	)
Defined benefit plan actuarial losses		(140,178	)		35,045			(105,133	)
	$	(181,139	)	$	37,009		$	(144,130	)

For the three months ended September 30, 2011

	Before tax			Income tax recovery (expense)			Net of tax
Exchange differences on translation of foreign operations	$	55,268		$	—		$	55,268
Gains on derivatives designated as cash flow hedges		725			(181	)		544
Gains on derivatives designated as cash flow hedges transferred to net earnings		(5,531	)		1,469			(4,062	)
Unrealized gains on available-for-sale assets		69			(9	)		60
Gains on available-for-sale assets transferred to net earnings		(9	)		1			(8	)
Defined benefit plan actuarial losses		(146,529	)		36,632			(109,897	)
	$	(96,007	)	$	37,912		$	(58,095	)

For the nine months ended September 30, 2012

	Before tax			Income tax recovery (expense)			Net of tax
Exchange differences on translation of foreign operations	$	(36,194	)	$	—		$	(36,194	)
Gains on derivatives designated as cash flow hedges		5,214			(1,303	)		3,911
Gains on derivatives designated as cash flow hedges transferred to net earnings		(21,254	)		5,313			(15,941	)
Unrealized losses on available-for-sale assets		(25	)		5			(20	)
Gains on available-for-sale assets transferred to net earnings		(150	)		20			(130	)
Defined benefit plan actuarial losses		(140,178	)		35,045			(105,133	)
	$	(192,587	)	$	39,080		$	(153,507	)

11

For the nine months ended September 30, 2011

	Before tax			Income tax recovery (expense)			Net of tax
Exchange differences on translation of foreign operations	$	40,885		$	—		$	40,885
Gains on derivatives designated as cash flow hedges		4,998			(1,332	)		3,666
Gains on derivatives designated as cash flow hedges transferred to net earnings		(20,872	)		5,578			(15,294	)
Unrealized gains on available-for-sale assets		860			(116	)		744
Gains on available-for-sale assets transferred to net earnings		(2,129	)		281			(1,848	)
Defined benefit plan actuarial losses		(146,529	)		36,632			(109,897	)
	$	(122,787	)	$	41,043		$	(81,744	)

10. Statements of Cash Flows

Other Operating Items

	Three Months Ended						Nine Months Ended
	Sep 30/12			Sep 30/11			Sep 30/12			Sep 30/11
Changes in non-cash working capital:
Accounts receivable	$	(3,059	)	$	(60,949	)	$	292,043		$	168,701
Inventories		(130,183	)		(548	)		(193,221	)		(117,127	)
Supplies and prepaid expenses		(17,438	)		(8,509	)		(33,633	)		(12,549	)
Accounts payable and accrued liabilities		60,339			40,465			(10,131	)		600
Other		(1,799	)		8,986			(36,511	)		(15,794	)
Total	$	(92,140	)	$	(20,555	)	$	18,547		$	23,831

11. Share-Based Compensation Plans

The Company has the following equity-settled plans:

(a) Stock Option Plan

The Company has established a stock option plan under which options to purchase common shares may be granted to 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.

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 27,090,440 shares have been issued.

(b) Executive Performance Share Unit (“PSU”)

The Company has established a PSU plan whereby it 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.

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(c) Executive Restricted Share Unit (“RSU”)

In 2011, the Company established an RSU plan whereby it provides each plan participant a grant of RSUs in an amount determined by the board. Each RSU 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. The final value of the RSUs will be based on the value of Cameco common shares at the end of the three-year vesting period.

Cameco records compensation expense with an offsetting credit to contributed surplus to reflect the estimated fair value of the equity-settled share-based compensation plans granted to employees.

	Three Months Ended				Nine Months Ended
	Sep 30/12		Sep 30/11		Sep 30/12		Sep 30/11
Stock option plan	$	2,605	$	2,350	$	11,661	$	11,970
Performance share unit		1,068		850		1,641		2,550
Restricted share unit		148		—		445		—
Total	$	3,821	$	3,200	$	13,747	$	14,520

The fair value of the units granted through the PSU plan was determined based on Monte Carlo simulation. The fair value of all other share-based payment plans was measured based on the Black-Scholes option-pricing model. Expected volatility is estimated by considering historic average share price volatility. The inputs used in the measurement of the fair values at grant date were as follows:

	Stock Option
	Plan			PSUs
Number of options granted		2,097,573			178,640
Average strike price	$	21.14			—
Expected dividend	$	0.40		$	0.40
Expected volatility		47	%		36	%
Risk-free interest rate		1.4	%		1.4	%
Expected life of option		4.3 years			3 years
Expected forfeitures		10	%		0	%
Weighted average grant date fair values	$	7.21		$	20.05

In addition to these inputs, other features of the PSU grant were incorporated into the measurement of fair value. The market condition based on total shareholder return was incorporated by utilizing a Monte Carlo simulation. The non-market criteria relating to realized selling prices, production targets and cost control have been incorporated into the valuation at grant date by reviewing prior history and corporate budgets.

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12. Commitments and Contingencies

(a) On May 16, 2012, Cameco, Cameco Bruce Holdings II Inc., BPC Generation Infrastructure Trust (“BPC”) and TransCanada Pipelines Limited (“TransCanada”) (collectively, the “Consortium”) received an arbitration award against British Energy Limited and British Energy International Holdings Limited (collectively, “BE”) ruling in favour of the Consortium on the issues of repair costs and lost revenue for breach of a representation and warranty contained in the February 14, 2003 Amended and Restated Master Purchase Agreement under which the Consortium acquired BE’s interest in BPLP. The Consortium and BE are in discussions over the quantification of the damages under the arbitrators award. If these issues are not resolved, they will be referred back to the arbitrator for a final decision. The Company recorded an estimate of the expected net proceeds.

In connection with this arbitration, BE issued on February 10, 2006, and then served on OPG and BPLP a Statement of Claim. This Statement of Claim seeks damages for any amounts that BE is found liable to pay to the Consortium in connection with the Unit 8 steam generator arbitration described above, additional damages in the amount of $500,000,000, costs and pre and post judgment interest amongst other things. Further proceedings in this action are on hold pending final disposition of the arbitration award.

(b) Annual supplemental rents of $30,000,000 (subject to CPI) per operating reactor are payable by BPLP to OPG. Should the hourly annual average price of electricity in Ontario fall below $30 per megawatt hour for any calendar year, the supplemental rent reduces to $12,000,000 per operating reactor. During 2012, BPLP recognized an amount receivable of $58,000,000 and a related reduction to lease expense, with Cameco’s share being $18,300,000.

(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 2012 to 2018:

i) Guarantees to customers under power sales agreements of up to $4,300,000. At September 30, 2012, Cameco’s actual exposure under these agreements was $300,000.

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

(d) Under a supply contract with the Ontario Power Authority (“OPA”), BPLP is entitled to receive payments from the OPA during periods when the market price for electricity in Ontario is lower than the floor price defined under the agreement during a calendar year. On July 6, 2009, BPLP and the OPA amended the supply contract such that beginning in 2009, the annual payments received will not be subject to repayment in future years. Previously, the payments received under the agreement were subject to repayment during the entire term of the contract, dependent on the spot price in future periods. BPLP’s entitlement to receive these payments remains in effect until December 31, 2019 but the generation that is subject to these payments starts to decrease in 2016, reflecting the original estimated lives for the Bruce B units. During 2012, BPLP recorded $575,000,000 under this agreement which was recognized as revenue with Cameco’s share being $181,700,000.

14

13. Derivatives

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

As at September 30, 2012

	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives—sales contracts	$	64		$	5,523		$	5,587
Foreign currency contracts		38,544			—			38,544
Interest rate contracts		4,136			—			4,136
Cash flow hedges:
Energy and sales contracts		—			11,494			11,494
Net	$	42,744		$	17,017		$	59,761
Classification:
Current portion of long-term receivables, investments and other [note 5]	$	42,462		$	22,410		$	64,872
Long-term receivables, investments and other [note 5]		5,682			5,877			11,559
Current portion of other liabilities [note 6]		(3,918	)		(9,365	)		(13,283	)
Other liabilities [note 6]		(1,482	)		(1,905	)		(3,387	)
Net	$	42,744		$	17,017		$	59,761

As at December 31, 2011

	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives—sales contracts	$	(639	)	$	8,033		$	7,394
Foreign currency contracts		(17,633	)		—			(17,633	)
Interest rate contracts		7,165			—			7,165
Cash flow hedges:
Energy and sales contracts		—			26,538			26,538
Net	$	(11,107	)	$	34,571		$	23,464
Classification:
Current portion of long-term receivables, investments and other [note 5]	$	8,922		$	42,088		$	51,010
Long-term receivables, investments and other [note 5]		8,470			11,922			20,392
Current portion of other liabilities [note 6]		(26,555	)		(16,913	)		(43,468	)
Other liabilities [note 6]		(1,944	)		(2,526	)		(4,470	)
Net	$	(11,107	)	$	34,571		$	23,464

15

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

For the three months ended September 30, 2012

	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives—sales contracts	$	(63	)	$	(1,573	)	$	(1,636	)
Foreign currency contracts		55,248			—			55,248
Interest rate contracts		(215	)		—			(215	)
Cash flow hedges:
Energy and sales contracts		—			(359	)		(359	)
Net	$	54,970		$	(1,932	)	$	53,038

For the three months ended September 30, 2011

	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives—sales contracts	$	697		$	(1,884	)	$	(1,187	)
Foreign currency contracts		(79,999	)		—			(79,999	)
Interest rate contracts		6,009			—			6,009
Cash flow hedges:
Energy and sales contracts		—			(627	)		(627	)
Net	$	(73,293	)	$	(2,511	)	$	(75,804	)

For the nine months ended September 30, 2012

	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives—sales contracts	$	62		$	20		$	82
Foreign currency contracts		56,682			—		$	56,682
Interest rate contracts		(619	)		—		$	(619	)
Cash flow hedges:
Energy and sales contracts		—			(1,533	)	$	(1,533	)
Net	$	56,125		$	(1,513	)	$	54,612

For the nine months ended September 30, 2011

	Cameco				BPLP			Total
Non-hedge derivatives:
Embedded derivatives—sales contracts	$	2,069			$	(1,746	)	$	323
Foreign currency contracts		(46,339	)			—			(46,339	)
Interest rate contracts		7,882		��		—			7,882
Cash flow hedges:
Energy and sales contracts		—				(2,082	)		(2,082	)
Net	$	(36,388	)		$	(3,828	)	$	(40,216	)

16

Over the next 12 months, based on current exchange rates, Cameco expects an estimated $9,100,000 of pre-tax gains from BPLP’s various energy and sales related cash flow hedges to be reclassified through other comprehensive income to net earnings. The maximum length of time BPLP is hedging its exposure to the variability in future cash flows related to electricity prices on future transactions is six years.

14. Earnings Per Share

Per share amounts have been calculated based on the weighted average number of common shares outstanding during the period. The weighted average number of paid shares outstanding in 2012 was 395,195,455 (2011 – 394,642,475).

	Three Months Ended				Nine Months Ended
	Sep 30/12		Sep 30/11		Sep 30/12		Sep 30/11
Basic earnings per share computation
Net earnings attributable to equity holders	$	81,775	$	39,452	$	221,390	$	185,590
		395,341		394,712		395,195		394,642
Basic earnings per common share	$	0.21	$	0.10	$	0.56	$	0.47
Diluted earnings per share computation
Net earnings attributable to equity holders	$	81,775	$	39,452	$	221,390	$	185,590
Weighted average common shares outstanding		395,341		394,712		395,195		394,642
Dilutive effect of stock options		162		474		604		994
Weighted average common shares outstanding, assuming dilution		395,503		395,186		395,799		395,636
Diluted earnings per common share	$	0.21	$	0.10	$	0.56	$	0.47

17

15. Segmented Information

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

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

Accounting policies used in each segment are consistent with the policies outlined in the most recent annual consolidated financial statements. Segment revenues, expenses and results include transactions between segments incurred in the ordinary course of business. These transactions are priced on an arm’s length basis and are eliminated on consolidation.

(a) Business Segments

For the three months ended September 30, 2012

	Uranium		Fuel Services		Electricity		Other			Total
Revenue	$	230,754	$	55,659	$	121,439	$	545		$	408,397
Expenses
Cost of products and services sold		121,764		48,574		47,720		73			218,131
Depreciation and amortization		25,701		4,538		20,106		5,231			55,576
Cost of sales		147,465		53,112		67,826		5,304			273,707
Gross profit (loss)		83,289		2,547		53,613		(4,759	)		134,690
Exploration		34,547		—		—		—			34,547
Loss on sale of assets		512		—		—		—			512
Share of loss from equity-accounted investees		1,173		789		—		—			1,962
Non-segmented expenses											12,848
Earnings (loss) before income taxes		47,057		1,758		53,613		(4,759	)		84,821
Income tax expense											3,250
Net earnings											$81,571

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For the three months ended September 30, 2011

			Fuel
	Uranium		Services		Electricity		Other			Total
Revenue	$	331,500	$	80,563	$	114,266	$	623		$	526,952
Expenses
Cost of products and services sold		164,704		64,816		54,926		73			284,519
Depreciation and amortization		34,278		6,089		18,455		4,554			63,376
Cost of sales		198,982		70,905		73,381		4,627			347,895
Gross profit (loss)		132,518		9,658		40,885		(4,004	)		179,057
Exploration		31,720		—		—		—			31,720
Loss on sale of assets		418		—		—		—			418
Share of loss from equity-accounted investees		686		757		—		—			1,443
Other expense		1,614		—		—		—			1,614
Non-segmented expenses											126,429
Earnings (loss) before income taxes		98,080		8,901		40,885		(4,004	)		17,433
Income tax recovery											(21,711	)
Net earnings										$	39,144

For the nine months ended September 30, 2012

				Fuel
	Uranium			Services		Electricity		Other			Total
Revenue	$	837,335		$	178,111	$	345,957	$	1,676		$	1,363,079
Expenses
Cost of products and services sold		480,582			140,811		149,058		219			770,670
Depreciation and amortization		89,520			14,645		59,053		13,188			176,406
Cost of sales		570,102			155,456		208,111		13,407			947,076
Gross profit (loss)		267,233			22,655		137,846		(11,731	)		416,003
Exploration		75,404			—		—		—			75,404
Gain on sale of assets		(1,637	)		—		—		—			(1,637	)
Share of loss from equity-accounted investees		2,449			2,284		—		—			4,733
Other expense		35,745			—		—		—			35,745
Non-segmented expenses												113,911
Earnings (loss) before income taxes		155,272			20,371		137,846		(11,731	)		187,847
Income tax recovery												(32,559	)
Net earnings											$	220,406

19

For the nine months ended September 30, 2011

			Fuel
	Uranium		Services		Electricity		Other			Total
Revenue	$	885,069	$	199,418	$	320,898	$	8,373		$	1,413,758
Expenses
Cost of products and services sold		487,495		153,904		179,755		6,988			828,142
Depreciation and amortization		79,077		16,528		53,013		13,545			162,163
Cost of sales		566,572		170,432		232,768		20,533			990,305
Gross profit (loss)		318,497		28,986		88,130		(12,160	)		423,453
Exploration		62,206		—		—		—			62,206
Loss on sale of assets		1,113		—		—		—			1,113
Share of loss from equity-accounted investees		3,665		1,908		—		—			5,573
Other expense		1,061		—		—		—			1,061
Non-segmented expenses											186,995
Earnings (loss) before income taxes		250,452		27,078		88,130		(12,160	)		166,505
Income tax recovery											(18,777	)
Net earnings										$	185,282

16. Related Parties

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

Transactions with Key Management Personnel

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

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

Cameco purchases a significant amount of goods and services for its Saskatchewan mining operations from northern Saskatchewan suppliers to support economic development in the region. One such supplier is Points Athabasca Contracting Ltd. and the president of the company became a member of the board of directors of Cameco during 2009. In 2012, Cameco paid Points Athabasca Contracting Ltd. $32,200,000 (2011—$46,900,000) 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 $400,000 (2011—$3,700,000).

20

Other Related Party Transactions

	Transaction Value						Transaction Value						Balance Outstanding
	Three Months Ended						Nine Months Ended						As at
	Sep 30/12			Sep 30/11			Sep 30/12			Sep 30/11			Sep 30/12			Sep 30/11
Sale of goods and services
Jointly Controlled Entities
BPLP(a)	$	20,271		$	10,527		$	58,838		$	32,744		$	13,580		$	10,816
Other
Jointly Controlled Entities
Interest income (Inkai)(a)		600			522			1,671			1,725			96,332			90,103
Associates
Interest expense		(135	)		(444	)		(806	)		(1,479	)		(49,187	)		(83,205	)

^(a)  Disclosures in respect of transactions with jointly controlled entities represent the amount of such transactions which do not eliminate on proportionate consolidation.

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

Through an unsecured shareholder loan, Cameco has agreed to fund the development of the Inkai project. The limit on the advances of the loan facility is currently $258,150,000 (US) and it bears interest at a rate of LIBOR plus 2%. At September 30, 2012, $244,800,000 (US) of principal and interest was outstanding (December 31, 2011—$191,900,000 (US)). At September 30, 2012 the remaining funds available for advance under the facility was $14,200,000 (US) (December 31, 2011—$14,200,000 (US)).

In 2008, a promissory note in the amount of $73,344,000 (US) was issued to finance the acquisition of GE-Hitachi Global Laser Enrichment LLC (“GLE”). The promissory note is payable on demand and bears interest at market rates. At September 30, 2012, $50,000,000 (US) of principal and interest was outstanding (December 31, 2011—$72,200,000 (US)).

17. NUKEM Energy GmbH (“NUKEM”)

On May 14, 2012, Cameco entered into an agreement with Advent International (“Advent”) to purchase NUKEM, one of the world’s leading traders and brokers of nuclear fuel products and services, for cash proceeds of $136,000,000 (US) and the assumption of their debt. The agreement includes provisions that would provide Advent with a share of NUKEM’s future earnings under certain conditions until the end of 2014. The agreement is subject to regulatory approvals and is expected to close in the fourth quarter of 2012.

18. Millennium Project Agreement

On June 11, 2012, Cameco acquired a 27.94% interest in the Millennium project from AREVA Resources Canada Inc. (“AREVA”) for $150,000,000, increasing its ownership to 69.9%. The remaining 30.1% is owned by JCU (Canada) Exploration Co. The Millennium project is a proposed uranium mine located in the Athabasca Basin of northern Saskatchewan. The terms of the purchase agreement provides AREVA with a 4% royalty on revenue from 27.94% of any production that exceeds 63,000,000 pounds U₃O₈ from this project.

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19. Yeelirrie Uranium Project

On August 26, 2012, Cameco entered into an agreement with BHP Billiton to purchase the Yeelirrie uranium project in Western Australia for $430,000,000 (US). The Yeelirrie uranium project is a near-surface calcrete-style deposit, amenable to open pit mining techniques. The agreement is subject to regulatory approvals and is expected to close by the end of 2012. Upon closing, stamp duty of approximately $22,000,000 (US) will be payable by Cameco to the government of Western Australia.

20. Comparative Figures

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

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