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CCO.TO ·

See Financial results by segment on page 7 for more detailed discussion. FIRST NINE MONTHS Net earnings in the first nine months of the year were $75 million ($0.19 per share diluted) compared to earnings of $113 million ($0.28 per share diluted) in the first nine months of 2014. In addition to the

Financials

partially offset by:

  • higher gross profit from our fuel services and NUKE M segments

See Financial results by segment on page 7 for more detailed discussion.

FIRST NINE MONTHS

Net earnings in the first nine months of the year were $75 million ($0.19 per share diluted) compared to earnings of $113 million ($0.28 per share diluted) in the first nine months of 2014. In addition to the items noted below, our net earnings were affected by mark-to-market losses on foreign exchange derivatives. Our 2014 earnings also included a gain on the sale of our interest in BPLP of $127 million, the impairment of our investment in GE-Hitachi Global Laser Enrichment of $184 million and the impairment of our investment in GoviEx Uranium Inc. of $12 million.

On an adjusted basis, our earnings for the first nine months of this year were $193 million ($0.49 per share diluted) compared to earnings of $207 million ($0.52 per share diluted) (non-IFRS measure, see page 4) for the first nine months of 2014. Key variances include:

  • lower gross profit from our uranium segment
  • higher administration costs
  • a favourable settlement of $28 million with respect to a dispute regarding a long-term supply contract with a utility customer recorded in the second quarter of 2014
  • lower tax recovery

partially offset by:

  • higher gross profit from our fuel services and NUKEM segments
  • lower losses from equity accounted investments

Our 2014 adjusted net earnings were also impacted by:

  • an early termination fee of $18 million incurred in 2014 as a result of the cancellation of our toll conversion agreement with Springfields Fuels Ltd., which was to expire in 2016
  • settlement costs of $12 million with respect to the early redemption our Series C debentures recorded in 2014

See Financial results by segment on page 7 for more detailed discussion.

Uranium market update In the third quarter, there was no significant change to the market in terms of contract volumes or price. Quantities transacted in the spot market were at normal levels, and spot prices remained in the mid-$30s (US). This is in keeping with the rest of the year so far, and is, we believe, simply a function of the currently over-supplied market.

Reactor restarts in Japan remain an important driver of market sentiment in the short term, and the first of these were finally realized: Kyushu’s Sendai unit 1 restarted in August and unit 2 in mid-October. Three additional reactors have been approved by the regulator to restart, and twenty more applications await decisions. We remain confident that a significant number of units will be restarted in Japan over time, though the regulatory approval process and restart schedules are clearly hard to predict.

Longer term, strong fundamentals underpin a positive outlook for the industry. The 65 reactors under construction today and additional units planned over the next decade means increasing uranium demand as those reactors come online. As future supply continues to be negatively affected by current depressed market conditions, we expect to see a shift from the currently over-supplied market we are experiencing today to a demand-driven market that requires more primary supply. Demand growth combined with the timing, development and execution of new supply projects and the continued performance of existing supply, will determine the pace of that shift.

___________________ Caution about forward-looking information relating to our uranium market update This discussion of our expectations for the nuclear industry, including its growth profile, future global uranium supply and demand is forward-looking information that is based upon the assumptions and subject to the material risks discussed under the heading Caution about forward-looking information beginning on page 12.

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Caution about forward-looking information This document includes statements and information about our expectations for the future. When we discuss our strategy, plans, future financial and operating performance, or other things that have not yet taken place, we are making statements considered to be forward-looking information or forward-looking statements under Canadian and United States securities laws. We refer to them in this document as forwardlooking information.

Key things to understand about the forward-looking information in this document:

• It typically includes words and phrases about the future, such as: anticipate, believe, estimate, expect, plan, will, intend, goal, target, forecast, project, strategy and outlook (see examples below).

• It represents our current views, and can change significantly.

  • It is based on a number of material assumptions, including those we have listed on pages 12 and 13, which may prove to be incorrect.
  • Actual results and events may be significantly different from what we currently expect, due to the risks associated with our business. We list a number of these material risks on page 12. We recommend you also review our annual information form, first quarter, second quarter and third quarter MD&A, and annual MD&A, which includes a discussion of other material risks that could cause actual results to differ significantly from our current expectations.

• Forward-looking information is designed to help you understand management’s current views of our near and longer term prospects, and it may not be appropriate for other purposes. We will not necessarily update this information unless we are required to by securities laws.

Examples of forward-looking information in this document

  • • our expectations for uranium deliveries in the fourth quarter our expectations about 2015 and future global uranium supply and demand including the discussion under the • our future plans and expectations for each of our uranium heading Uranium market update operating properties and fuel services operating sites
  • our consolidated outlook for the year and the outlook for our uranium, fuel services and NUKE M segments for 2015

Material risks

  • actual sales volumes or market prices for any of our products • we are affected by terrorism, sabotage, blockades, civil or services are lower than we expect for any reason, unrest, social or political activism, accident or a deterioration including changes in market prices or loss of market share to in political support for, or demand for, nuclear energy a competitor • we are impacted by changes in the regulation or public

• we are adversely affected by changes in foreign currency perception of the safety of nuclear power plants, which exchange rates, interest rates or tax rates adversely affect the construction of new plants, the our production costs are higher than planned, or necessary relicensing of existing plants and the demand for uranium • supplies are not available, or not available on commercially • there are changes to government regulations or policies that reasonable terms adversely affect us, including tax and trade laws and policies

  • our estimates of production, purchases, costs, • our uranium suppliers fail to fulfil delivery commitments decommissioning or reclamation expenses, or our tax • our McArthur R iver development, mining or production plans expense estimates, prove to be inaccurate are delayed or do not succeed for any reason
  • • our Cigar Lake development, mining or production plans are we are unable to enforce our legal rights under our existing agreements, permits or licences delayed or do not succeed, including as a result of any

• we are subject to litigation or arbitration that has an adverse difficulties with the jet boring mining method or freezing the outcome, including lack of success in our disputes with tax deposit to meet production targets, or any difficulties with the authorities McClean Lake mill modifications or expansion or milling of

  • we are unsuccessful in our dispute with CR A and this results Cigar Lake ore • in significantly higher cash taxes, interest charges and we are affected by natural phenomena, including inclement penalties than the amount of our cumulative tax provision weather, fire, flood and earthquakes
  • • there are defects in, or challenges to, title to our properties our operations are disrupted due to problems with our own or
  • our mineral reserve and resource estimates are not reliable, our suppliers’, our customers’ facilities, the unavailability of or we face unexpected or challenging geological, reagents, equipment, operating parts and supplies critical to hydrological or mining conditions production, equipment failure, lack of tailings capacity, labour we are affected by environmental, safety and regulatory shortages, labour relations issues, strikes or lockouts,

• underground floods, cave-ins, ground movements, tailings risks, including increased regulatory burdens or delays we cannot obtain or maintain necessary permits or approvals dam failures, transportation disruptions or accidents, or other • development and operating risks from government authorities

  • we are affected by political risks
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