6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 Under
the Securities Exchange Act of 1934

For the month of February, 2011

Cameco Corporation

(Commission file No. 1-14228)

2121-11th Street West
Saskatoon, Saskatchewan, Canada S7M 1J3
(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F o       Form 40-F þ

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o       No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

Exhibit Index

Exhibit No.		Description	Page No.
	1.	Press Release dated February 11, 2011 announcing financial results for the period ended December 31, 2010
	2.	2010 Consolidated Financial Statements
	3.	Reconciliation to United States GAAP relating to the 2010 Consolidated Financial Statements

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 14, 2011	Cameco Corporation
	By:	/s/ “Gary M. S. Chad”
		Gary M. S. Chad
		Senior Vice-President, Governance, Law and Corporate Secretary

Page 2

EX-1

Exhibit 1

TSX: CCO
NYSE: CCJ website: cameco.com
currency: Cdn (unless noted)

2121 — 11th Street West, Saskatoon, Saskatchewan, S7M 1J3 Canada
Tel: (306) 956-6200 Fax: (306) 956-6201

Cameco reports fourth quarter and 2010 financial results

• best safety performance in our history

• uranium production 10% higher than 2009

• continued to ramp up production at Inkai and exceeded 2009 production

• completed dewatering the underground at Cigar Lake

• extended Rabbit Lake’s expected mine life by two years to 2017

Saskatoon, Saskatchewan, Canada, February 11, 2011 . . . . . . . . . . . . .

Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated financial and operating results for the fourth quarter ended December 31, 2010 and for the year.

“Cameco had an excellent year in 2010,” said CEO Jerry Grandey. “We increased production, lowered uranium unit costs, and substantially raised our dividend. We also achieved the best safety record in our history.

“The market ended the year very strongly, as China signed significant long-term uranium purchasing agreements and several countries indicated their intentions to build more nuclear reactors. Our company is well-positioned to prosper from the growing need for clean energy now and in the future. We remain committed to our strategy of doubling production to 40 million pounds by 2018.”

	Three months ended							Year ended
Highlights	December 31							December 31
($ millions except per share amounts)	2010		2009		change			2010		2009		change
Revenue		673		659		2	%		2,124		2,315		(8	%)
Gross profit		245		206		19	%		744		750		(1	%)
Net earnings		207		598		(65	%)		515		1,099		(53	%)
$  per common share (basic)		0.52		1.52		(66	%)		1.31		2.83		(54	%)
$  per common share (diluted)		0.52		1.52		(66	%)		1.30		2.82		(54	%)
Adjusted net earnings (non-GAAP, see page 8)		191		170		12	%		496		528		(6	%)
$  per common share (adjusted and diluted)		0.48		0.43		12	%		1.25		1.35		(7	%)
Cash provided by operations (after working capital changes)		120		188		(36	%)		507		690		(27	%)

Full year

Net earnings for the year were $515 million ($1.30 per share diluted) compared to $1,099 million ($2.82 per share diluted) in 2009. In addition to the items noted below, our net earnings were impacted by the one time gain on the sale of our interest in Centerra Gold Inc. (Centerra) at the end of 2009 and lower unrealized gains on financial instruments this year.

On an adjusted basis, our earnings for the year were $496 million ($1.25 per share adjusted and diluted) compared to $528 million ($1.35 per share adjusted and diluted) (non-GAAP, see page 8). The 6% decrease resulted from:

• lower profits in our electricity business relating to lower realized selling prices

• higher exploration expenses

• higher income taxes

• partially offset by improved profits from our uranium business relating to lower cost of sales

See 2010 financial results by segment for more detailed discussion.

Fourth quarter

Our net earnings this quarter were $207 million ($0.52 per share diluted), a decrease of $391 million compared to $598 million ($1.52 per share diluted) in 2009. We had a $374 million net gain in the fourth quarter of 2009 related to the sale of our interest in Centerra.

On an adjusted basis, our earnings this quarter were $191 million ($0.48 per share diluted) compared to $170 million ($0.43 per share diluted) (non-GAAP, see page 8) in the fourth quarter of 2009. The 12% increase in adjusted net earnings was from higher profits in our uranium segment relating to a higher average realized selling price and a lower unit cost of sales, partially offset by lower profits in the electricity business due to a lower realized price.

See 2010 financial results by segment for more detailed discussion.

The 2010 annual financial statements have been audited, however 2009 and 2010 fourth quarter financial information presented is unaudited. You can find a copy of our 2010 audited financial statements on our website at cameco.com. Our 2010 annual management’s discussion and analysis will be posted on our website on Monday, February 14, 2011.

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Outlook for 2011

Over the next several years, we expect to invest significantly in expanding production at existing mines and advancing projects as we pursue our growth strategy. The projects are at various stages of development, from exploration and evaluation to construction.

We expect our existing cash balances and operating cash flows will meet our anticipated capital requirements without the need for significant additional funding. Cash balances will decline gradually as we use the funds in our business and pursue our growth plans.

Our outlook for 2011 reflects the growth expenditures necessary to help us achieve our strategy. We do not provide an outlook for the items in the table that are marked with a dash.

2011 Financial outlook¹

	Consolidated		Uranium		Fuel services		Electricity
Production		—		21.9 million lbs		15 to 16 million kgU		—
Sales volume		—		31 to 33 million lbs	Increase 10% to 15%			—
Capacity factor		—		—		—		89%
Revenue compared to 2010	Increase 10% to 15%		Increase 15% to 20%2		Increase 5% to 10%		Decrease 10% to 15%
Unit cost of product sold (including DDR)		—	Increase 0% to 5%3		Increase 2% to 5%		Increase 10% to 15%
Direct administration costs compared to 20104	Increase 15% to 20%			—		—		—
Exploration costs compared to 2010		—	Decrease 5% to 10%			—		—
Tax rate	Recovery of 0% to 5%			—		—		—
Capital expenditures	$575 million5			—		—	$80 million

1	Commencing January 1, 2011, we will be reporting our financial results in accordance with International Financial Reporting Standards (IFRS). The information in our 2011 financial outlook has been prepared in accordance with IFRS and our policy choices thereunder to date. Further information on our transition to IFRS is contained in our 2010 annual management’s discussion and analysis.
2	Based on a uranium spot price of $73.00 (US) per pound (the Ux spot price as of February 7, 2011), a long-term price indicator of $73.00 (US) per pound (the Ux long-term indicator on January 31, 2011) and an exchange rate of $1.00 (US) for $1.00 (Cdn).
3	This increase is based on the unit cost of sale for produced material. If we decide to make discretionary purchases in 2011 then we expect the overall unit cost of product sold to increase further.
4	Direct administration costs do not include stock-based compensation expenses.
5	Does not include our share of capital expenditures at Bruce Power Limited Partnership (BPLP).

Consolidated outlook

We expect consolidated revenue to be 10% to 15% higher in 2011 due to:

• higher sales volumes in the uranium and fuel services businesses

• increases in realized prices in the uranium and fuel services businesses

• partially offset by lower realized prices for electricity

We expect administration costs (not including stock-based compensation) to be about 15% to 20% higher than they were in 2010 due to planned higher spending in support of our growth strategy.

We expect exploration expenses to be about 5% to 10% lower than they were in 2010 due to a reduction in evaluation activities at the Kintyre project as we near the completion of the pre-feasibility stage.

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Uranium outlook

We expect to produce 21.9 million pounds of U₃O₈ in 2011.

Based on the contracts we have in place, we expect to sell between 31 million and 33 million pounds of U₃O₈ in 2011. We expect the unit cost of sales to be 0% to 5% higher than in 2010. This increase is based on the unit cost of sale for produced material. If we decide to make discretionary purchases in 2011 then we expect the overall unit cost of product sold to increase further.

Based on current spot prices, revenue should be about 15% to 20% higher than it was in 2010 as a result of increases in expected realized prices and sales volumes in 2011.

Our customers choose when in the year to receive deliveries of uranium and fuel services products, so our quarterly delivery patterns, and therefore our sales volumes and revenue, can vary significantly. We expect the trend in delivery patterns in 2011 to be somewhat different than in 2010, with deliveries heavily weighted to the second half of the year. We expect the fourth quarter to account for about one third of our 2011 sales volumes.

Price sensitivity analysis: uranium

The table below is not a forecast of prices we expect to receive. The prices we actually realize will be different from the prices shown in the table.

It is designed to indicate how the portfolio of long-term contracts we had in place on December 31, 2010 would respond to different spot prices. In other words, we would realize these prices only if the contract portfolio remained the same as it was on December 31, 2010, and none of the assumptions we list below change.

Expected realized uranium price sensitivity under various spot price assumptions

(rounded to the nearest $1.00)

($US/lb U3O8)
Spot prices	$20		$40		$60		$80		$100		$120		$140
2011		38		41		47		52		57		63		68
2012		36		40		50		58		68		77		86
2013		43		45		54		63		73		82		90
2014		44		47		55		64		74		83		91
2015		40		45		55		65		75		85		94

The table illustrates the mix of long-term contracts in our December 31, 2010 portfolio, and is consistent with our contracting strategy. It has been updated to reflect deliveries made and contracts entered into up to December 31, 2010.

Our portfolio includes a mix of fixed-price and market-price contracts, which we target at a 40:60 ratio. We signed many of our current contracts in 2003 to 2005, when market prices were low ($11 to $31 (US)). Those that are fixed at lower prices or have low ceiling prices will yield prices that are lower than current market prices. These older contracts are beginning to expire, and we are starting to deliver into more favourably priced contracts.

Our portfolio is affected by more than just the spot price. We made the following assumptions (which are not forecasts) to create the table:

Sales

• sales volume on average of 32 million pounds per year

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Deliveries

• customers take the maximum quantity allowed under each contract (unless they have already provided a delivery notice indicating they will take less)

• we defer a portion of deliveries under existing contracts for 2011 and 2012

Prices

• the average long-term price indicator is the same as the average spot price for the entire year (a simplified approach for this purpose only). Since 1996, the long-term price indicator has averaged 13% higher than the spot price. This differential has varied significantly. Assuming the long-term price is at a premium to spot, the prices in the table will be higher.

• we deliver all volumes that we don’t have contracts for at the spot price for each scenario

Inflation

• is 2.0% per year

Cameco’s share of production — annual forecast to 2015

We have geographically diversified sources of production. We expect to produce about 125 million pounds of U₃O₈ over the next five years from the properties listed below. Our strategy is to double our annual production to 40 million pounds by 2018, which we expect will come from our operating properties, development projects and projects under evaluation.

Current forecast
(million lbs U3O8)	2011		2012		2013		2014		2015
McArthur River/Key Lake		13.1		13.1		13.1		13.1		13.1
Rabbit Lake		3.6		3.6		3.6		3.6		3.6
US ISR		2.5		3.1		3.1		3.7		3.8
Inkai		2.7		3.1		3.1		3.1		3.1
Cigar Lake		—		—		1.0		2.0		5.6
Total		21.9		22.9		23.9		25.5		29.2

In 2013, production at McArthur River may be lower as we transition to mining upper zone 4.

In 2010, Inkai received approval in principle to produce 3.9 million pounds per year (100% basis) and is seeking final approval with an amendment to the resource use contract.

Our 2011 and future annual production targets assume Inkai receives the government approvals and support of our partner, Kazatomprom. More specifically, it must:

• obtain final approval to produce at an annual rate of 3.9 million pounds (our share 2.3 million pounds)

• obtain the necessary permits and approvals to produce at an annual rate of 5.2 million pounds (our share 3.1 million pounds)

• ramp up production to an annual rate of 5.2 million pounds this year

We expect Inkai to receive all of the necessary permits and approvals to meet its 2011 and future annual production targets and we anticipate it will be able to ramp up production this year as noted above.

There is no certainty, however, that Inkai will receive these permits or approvals or that it will be able to ramp up production this year. If Inkai does not, or if the permits and approvals are delayed, Inkai may be unable to achieve its 2011 and future annual production targets.

-5-

This forecast is forward-looking information. It is based on the assumptions and subject to the material risks discussed on page 15, and specifically on the assumptions and risks listed here. Actual production may be significantly different from this forecast.

Assumptions

• we achieve our forecast production for each operation, which requires, among other things, that our mining plans succeed, processing plants are available and function as designed, we have sufficient tailings capacity and our mineral reserve estimates are accurate

• we obtain or maintain the necessary permits and approvals from government authorities

• our production is not disrupted or reduced as a result of natural phenomena, labour disputes, political risks, blockades or other acts of social activism, shortage or lack of supplies critical to production, equipment failures or other development and operation risks

Material risks that could cause actual results to differ materially

• we do not achieve forecast production levels for each operation because of a change in our mining plans, processing plants are not available or do not function as designed, lack of tailings capacity or for other reasons

• we cannot obtain or maintain necessary permits or government approvals

• natural phenomena, labour disputes, political risks, shortage or lack of supplies critical to production, blockages or other acts of social activism, equipment failures or other development and operation risks disrupt or reduce our production

Fuel services outlook

We expect total production to be between 15 million and 16 million kgU in 2011.

We expect the average realized price for our fuel services products to decline by 2% to 5%, sales volumes to increase by 10% to 15% and revenue to be 5% to 10% higher.

Electricity outlook

We expect the average capacity factor for the four Bruce B reactors to be 89% in 2011, and actual output to be about 2% lower than it was in 2010. The 2011 realized price for electricity is projected to be about 5% to 10% lower than 2010 as BPLP has fewer financial contracts in place for 2011. At December 31, 2010, BPLP had about 7.5 TWh under financial contracts, which is equivalent to about 30% of Bruce B generation at its planned capacity factor. We expect that revenue will decline by 10% to 15% as a result.

We expect the average unit cost (net of cost recoveries) to be 10% to 15% higher in 2011, and total operating costs to rise by about 5% to 10%, mainly due to higher costs for planned outages and maintaining the workforce.

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Capital spending

(Cameco’s share in $ millions)	2010 plan			2010 actual		2011 plan
Growth capital
Cigar Lake		111			90		176
Inkai		4			5		9
McArthur River		—			—		14
Millennium		—			—		6
US ISR		—			—		13
Total growth capital		115			95		218
Sustaining capital
McArthur River/Key Lake		220			165		169
US ISR		53			45		38
Rabbit Lake		56			49		85
Inkai		18			5		19
Fuel services		29			20		32
Other		9			8		14
Total sustaining capital		385			292		357
Capitalized interest		52			48		—
Total uranium & fuel services		552	1		435		575
Electricity (our 31.6% share of BPLP)		41			35		80

¹ We updated our 2010 capital cost estimate in the Q2 MD&A to $510 million and in the Q3 MD&A to $475 million.

Capital expenditures were 21% below our 2010 plan mainly as a result of reduced activity at our Saskatchewan uranium operations. We do not expect this reduction in capital expenditures in 2010 will impact our plans to double annual uranium production by 2018. The variance at Cigar Lake was due mainly to the clean-up and remediation of the underground workings taking longer than originally expected and the revision to project schedules as a result of the decision to proceed with surface freezing. The variance at McArthur River was due mainly to a change in the mine development plans and postponement of some capital projects that were not critical to production. The variance at Key Lake was mainly a result of delays in the construction of the acid and oxygen plants and deferring some of the other Key Lake revitalization projects.

We expect total capital expenditures for uranium and fuel services to be 32% higher in 2011, as a result of higher spending for:

• growth capital at Cigar Lake

• sustaining capital at Rabbit Lake

For the next several years, we expect our capital expenditures will be similar to 2011.

Sensitivity analysis

At December 31, 2010, every one-cent change in the value of the Canadian dollar versus the US dollar would change our 2010 net earnings by about $9 million (Cdn). This sensitivity is based on an exchange rate of $1.00 (US) for $0.99 (Cdn).

-7-

For 2011:

• a change of $5 (US) per pound in each of the Ux spot price ($73.00 (US) per pound on February 7, 2011) and the Ux long-term price indicator ($73.00 (US) per pound on January 31, 2011) would change revenue by $34 million and net earnings by $26 million.

• a change of $5 in the electricity spot price would change our 2011 net earnings by $2 million, based on the assumption that the spot price will remain below the floor price provided for under BPLP’s agreement with the Ontario Power Authority (OPA).

Non-GAAP measures

We use adjusted net earnings, a non-GAAP measure, as a more meaningful way to compare our financial performance from period to period. Adjusted net earnings is our GAAP-based net earnings, adjusted for earnings from discontinued operations and unrealized mark-to-market gains and losses on our financial instruments, which we believe do not reflect underlying performance.

Adjusted net earnings is non-standard supplemental information, and not a substitute for financial information prepared according to GAAP. Other companies may calculate this measure differently. The table below reconciles adjusted net earnings with our net earnings.

	Three months ended						Year ended
	December 31						December 31
($ millions)	2010			2009			2010			2009
Net earnings (GAAP measure)		207			598			515			1,099
Adjustments (after tax)
Earnings from discontinued operations		—			(424	)1		—			(382	)1
Unrealized gains on financial instruments		(16	)		(4	)		(19	)		(189	)
Adjusted net earnings (non-GAAP measure)		191			170			496			528

¹ We have changed our method for determining adjusted earnings to exclude all amounts related to our investment in Centerra. Previously, we had included our share of operating income from Centerra in our adjusted earnings measure.

2010 financial results by segment

Uranium

	Three months ended							Year ended
	December 31							December 31
Highlights	2010		2009		change			2010		2009		change
Production volume (million lbs)		6.4		6.7		(4	)%		22.8		20.8		10	%
Sales volume (million lbs)		9.1		10.0		(9	)%		29.6		33.9		(13	)%
Average spot price ($US/lb)		58.29		45.96		27	%		46.83		46.06		2	%
Average realized price
($US/lb)		48.50		40.64		19	%		43.63		38.25		14	%
($Cdn/lb)		50.10		43.51		15	%		45.81		45.12		2	%
Average unit cost of sales ($Cdn/lb U3O8) (including DDR)		29.89		30.29		(1	)%		28.40		30.59		(7	)%
Revenue ($ millions)		461		443		4	%		1,374		1,551		(11	)%
Gross profit ($ millions)		181		132		37	%		503		488		3	%
Gross profit (%)		39		30		30	%		37		31		19	%

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Fourth quarter

Production volumes this quarter were 4% lower than in the fourth quarter of 2009 due to lower output at Rabbit Lake.

Uranium revenues were up 4% due to a 15% increase in the realized selling price, partially offset by a 9% decline in sales volumes.

Realized prices were higher due to higher prices under market-related and fixed-price sales contracts.

Total cash cost of sales (excluding DDR) decreased by 12% to $233 million ($25.30 per pound U₃O₈). This was mainly the result of the following:

• the 9% decline in sales volume

• average unit costs for produced uranium were 26% higher

• average unit costs for purchased uranium were 14% lower due to fewer purchases at spot prices

The net effect was a $49 million increase in gross profit for the quarter.

Full year

Production volumes in 2010 were 10% higher than in 2009 due to higher production at McArthur River/Key Lake and the continued rampup of production at Inkai.

Uranium revenues this year were down 11% compared to 2009, due to a 13% decline in sales volumes.

Sales volumes in 2010 were 13% lower than 2009 due to some customers deferring deliveries under contracts until 2011. In addition, given the discretionary nature of spot market demand and the low level of spot market prices during the first three quarters of 2010, we intentionally reduced our spot market sales for the year.

Our realized prices this year in US dollars were 14% higher than 2009 mainly due to higher prices under fixed-price sales contracts. Our Canadian dollar selling price, however, was only slightly higher than 2009 as it was impacted by a less favourable exchange rate. Our exchange rate averaged $1.05 compared to $1.18 in 2009.

Total cash cost of sales (excluding DDR) decreased by 23% this year, to $699 million ($23.32 per pound U₃O₈). This was mainly the result of the following:

• the 13% decline in sales volume

• average unit costs for produced uranium were 6% lower

• average unit costs for purchased uranium were 17% lower due to fewer purchases at spot prices

• a lower proportion of sales of purchased uranium, which carries a higher cash cost

The net effect was a $15 million increase in gross profit for the year.

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The following table shows our cash cost of sales per unit (excluding DDR) for produced and purchased material, including royalty charges on produced material, and the quantity of produced and purchased uranium sold.

	Unit cash cost of sale							Quantity sold
Three months ended	($Cdn/lb U3O8)							(million lbs)
December 31	2010		2009		change			2010		2009		change
Produced		22.30		17.73		4.57			5.5		5.1		0.4
Purchased		29.93		34.72		(4.79	)		3.6		4.9		(1.3	)
Total		25.30		26.19		(0.89	)		9.1		10.0		(0.9	)

Full year ended
December 31	2010		2009		change			2010		2009		change
Produced		22.45		23.86		(1.41	)		20.0		20.9		(0.9	)
Purchased		25.11		30.22		(5.11	)		9.6		13.0		(3.4	)
Total		23.32		26.33		(3.01	)		29.6		33.9		(4.3	)

Fuel services results

(includes results for UF₆, UO₂ and fuel fabrication)

	Three months ended							Year ended
	December 31							December 31
Highlights	2010		2009		change			2010		2009		change
Production volume (million lbs)		3.9		3.9		—			15.4		12.3		25	%
Sales volume (million lbs)		6.3		6.0		5	%		17.0		14.9		14	%
Realized price ($Cdn/kgU)		14.59		14.89		(2	)%		16.86		17.84		(5	)%
Average unit cost of sales ($Cdn/lb U3O8) (including DDR)		12.87		12.43		4	%		13.39		14.47		(7	)%
Revenue ($ millions)		93		91		2	%		301		276		9	%
Gross profit ($ millions)		11		13		(15	)%		60		50		20	%
Gross profit (%)		12		14		(14	)%		20		18		11	%

Fourth quarter

Total revenue increased by 2% due to a 5% increase in sales volumes.

Our Canadian dollar realized price for UF₆ was similar to the prior year but was affected by a less favourable exchange rate. Our exchange rate averaged $1.03 in the fourth quarter compared to $1.06 in 2009.

The total cost of products and services sold (including DDR) increased by 5% ($82 million compared to $78 million in the fourth quarter of 2009) due to the increase in sales volume. The average unit cost of sales was 4% higher due to increased sales of fuel fabrication, which carries a higher unit cost than other fuel services products.

The net effect was a $2 million decrease in gross profit.

- 10 -

Full year

The Port Hope UF₆ conversion plant operated for a full year in 2010, increasing production volumes by 25% over 2009. In 2009, the facility was shutdown for the first five months of the year.

Total revenue increased by 9% due to a 14% increase in sales volumes.

Our Canadian dollar realized price for UF₆ was affected by a less favourable exchange rate. Our exchange rate averaged $1.05 in 2010 compared to $1.18 in 2009.

The total cost of products and services sold (including DDR) increased by 6% ($241 million compared to $226 million in 2009) due to the increase in sales volume. The average unit cost of sales was 7% lower due to lower costs for purchased material and the return to operational status of the UF₆ facility.

The net effect was a $10 million increase in gross profit.

Electricity results

Fourth quarter

Total electricity revenue decreased 7% as higher actual output was offset by a lower realized price. Realized prices reflect spot sales, revenue recognized under BPLP’s agreement with the OPA, and financial contract revenue. BPLP recognized revenue of $114 million this quarter under its agreement with the OPA, compared to $137 million in the fourth quarter of 2009. The equivalent of about 45% of BPLP’s output was sold under financial contracts this quarter, compared to 54% in the fourth quarter of 2009.

The capacity factor was 91% this quarter, up from 89% in the fourth quarter of 2009. Operating costs were $221 million compared to $218 million in 2009.

The result was an 18% decrease in our share of earnings before taxes.

BPLP distributed $120 million to the partners in the fourth quarter. Our share was $38 million. The partners have agreed that BPLP will distribute excess cash monthly, and will make separate cash calls for major capital projects.

Full year

BPLP’s results in 2010 are largely the result of lower revenues, which were 8% lower than 2009 due to a 9% decrease in realized electricity prices. BPLP recognized revenue of $339 million under the agreement with the OPA during the year, compared to $514 million in 2009. The equivalent of about 42% of BPLP’s output was sold under financial contracts in 2010, compared to 57% in 2009.

The capacity factor was 91% in 2010. Operating costs were $930 million this year compared to $905 million in 2009.

The net effect was a decrease in our share of earnings before taxes of 26%.

BPLP distributed $525 million to the partners in 2010. Our share was $166 million.

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Operations and development project updates

Uranium — production overview

	Three months ended				Year ended
Cameco’s share	December 31				December 31
(million lbs U3O8)	2010		2009		2010		2009		2010 plan
McArthur River/Key Lake		4.0		4.0		13.9		13.3		13.1
Rabbit Lake		1.3		1.4		3.8		3.8		3.6
Smith Ranch-Highland		0.4		0.5		1.8		1.8		1.8
Crow Butte		0.2		0.2		0.7		0.8		0.7
Inkai		0.5		0.6		2.6		1.1		2.3
Total		6.4		6.7		22.8		20.8		21.5	1

¹ We updated our 2010 plan in our Q3 MD&A to 22 million pounds.

McArthur River/Key Lake

Our share of production for the year was 6% higher than our target of 13.1 million pounds U₃O₈, and a 5% increase over 2009. In 2009, we also exceeded our production target.

Our strong performance at both McArthur River and Key Lake allowed us to realize benefits under the production flexibility amendments to the McArthur River and Key Lake operating licences.

We developed a second raisebore chamber in zone 2, panel 5. This is expected to improve production efficiency in the future.

In lower zone 4, we completed the transition to this zone and began production during the fourth quarter.

Rabbit Lake

Production this year was the same as in 2009.

We added mineral reserves, extending the estimated mine life by two years to 2017. We have completed surface exploration drilling near the mine and have found new mineralization. In 2012, we are planning to start an underground drilling program to further evaluate this mineralization.

Inkai

Our share of production this year was significantly higher due to successful wellfield performance and the processing of uranium in inventory at the end of 2009. Production was 13% higher than our plan at the beginning of the year due to the completion of the processing facilities and a stable acid supply.

Inkai received state commissioning approval for the main processing plant, allowing full processing of uranium concentrate on site. The plant operated at production rates very close to design capacity for several months due to strong wellfield performance.

Inkai received approval in principle to:

• increase annual production from blocks 1 and 2 to 3.9 million pounds of U₃O₈ (100% basis)

• amend the block 3 licence to provide for a five-year appraisal period to carry out delineation drilling, construction and operation of a test leach facility, and to complete a feasibility study

Inkai is in the process of finalizing the approval process with an amendment to its resource use contract.

- 12 -

Inkai continued delineation drilling throughout the year on block 3 and began planning for engineering and construction of a test plant facility.

Cigar Lake

During 2010, we:

• completed dewatering the underground development

• substantially completed clean up, inspection, assessment and securing of the underground development areas

• we prepared the ground around shaft 2 for freezing in preparation to resume shaft sinking

• began implementing a surface freeze strategy we expect will shorten the rampup period for the project by bringing forward uranium production into the early years and improve mining costs and project economics

• increased installed pumping capacity to design standards

• completed backfilling of the 420 and 465 metre levels

• resumed underground development in the south end of the mine

• completed the 2010 surface drilling program

In 2011, we expect to:

• finish restoring all remaining underground mine systems, infrastructure and underground development areas

• complete the work to secure the mine

• resume underground construction

• complete the sinking of shaft 2

• complete the surface ore loadout facilities

• procure additional equipment for the jet boring system

• work to obtain regulatory approval of the environmental assessment that will allow the release of treated water directly to Seru Bay of Waterbury Lake

• work to obtain regulatory approval for the Cigar Lake mine plan

Later in 2011, we plan to issue a new technical report for Cigar Lake to reflect developments during 2010, including our decision to proceed with the surface freeze strategy. In the report, we will update our estimates including our capital cost estimate and production rampup schedule.

We continue to target initial production to begin in mid-2013.

Fuel services

Fuel services production totalled 15.4 million kgU in 2010, in line with our target of 15 million to 16 million kgU. Production was 25% higher than in 2009 due to the routine operation of the Port Hope UF₆ plant, which did not operate for most of the first half of 2009.

- 13 -

Qualified persons

The technical and scientific information discussed in this document for our material properties (McArthur River/Key Lake, Inkai and Cigar Lake) was prepared under the supervision of the following individuals who are qualified persons for the purposes of NI 43-101:

McArthur River/Key Lake

• Alain G. Mainville, director, mineral resources management, Cameco

• David Bronkhorst, vice-president, Saskatchewan mining south, Cameco

• Greg Murdock, technical superintendent, McArthur River, Cameco

• Lorne D. Schwartz, chief metallurgist, major projects — technical services, Cameco

• Les Yesnik, general manager, Key Lake, Cameco

Inkai

• Alain G. Mainville, director, mineral resources management, Cameco

Cigar Lake

• Alain G. Mainville, director, mineral resources management, Cameco

• C. Scott Bishop, principal mine engineer, major projects — technical services, Cameco

• Grant J.H. Goddard, vice-president, Saskatchewan mining north, Cameco

• Lorne D. Schwartz, chief metallurgist, major projects — technical services, Cameco

About forward-looking information

This document includes statements and information about our expectations for the future.

When we discuss our strategy, plans and 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 forward-looking 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, expect, plan, intend, predict, goal, target, project, potential, 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’ve listed below, 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 below. We recommend you also review our current annual information form and annual MD&A, which include 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.

- 14 -

Examples of forward-looking information in this document

• outlook for each of our operating segments for 2011 and our consolidated outlook for the year

• our expectation that existing cash balances and operating cash flows will meet our anticipated capital requirements without the need for significant additional funding

• our uranium price sensitivity analysis

• production at our uranium operations from 2011 to 2015 and our target of doubling annual production to 40 million pounds by 2018

• our 2011 capital spending plan and our expectation that for the next several years capital expenditures will be similar to 2011

• our expectation that our reduction in capital expenditures in 2010 will not impact our plans to double annual uranium production by 2018

• our mid-2013 target for initial production from Cigar Lake, the expected benefits of our surface freeze strategy and our 2011 Cigar Lake plans

Material risks

• actual sales volumes or market prices for any of our products or services are lower than we expect for any reason, including changes in market prices or loss of market share to a competitor

• we are adversely affected by changes in foreign currency exchange rates, interest rates or tax rates

• production costs are higher than planned, or necessary supplies are not available, or not available on commercially reasonable terms

• our estimates of production, purchases, costs, decommissioning or reclamation expenses, or our tax expense estimates, prove to be inaccurate

• we are unable to enforce our legal rights under our existing agreements, permits or licences, or are subject to litigation or arbitration that has an adverse outcome

• there are defects in, or challenges to, title to our properties

• our mineral reserve and resource estimates are inaccurate, or we face unexpected or challenging geological, hydrological or mining conditions

• we are affected by environmental, safety and regulatory risks, including increased regulatory burdens or delays

• we cannot obtain or maintain necessary permits or approvals from government authorities

• we are affected by political risks in a developing country where we operate

• we are affected by terrorism, sabotage, blockades, accident or a deterioration in political support for, or demand for, nuclear energy

• there are changes to government regulations or policies, including tax and trade laws and policies

• our uranium and conversion suppliers fail to fulfil delivery commitments

• delay or lack of success in remediating and developing Cigar Lake

• we are affected by natural phenomena, including inclement weather, fire, flood and earthquakes

• our operations are disrupted due to problems with our own or our customers’ facilities, the unavailability of reagents, equipment, operating parts and supplies critical to production, lack of tailings capacity, labour shortages, labour relations issues, strikes or lockouts, underground floods, cave-ins, tailings dam failures, and other developments and operating risks

Material assumptions

• sales and purchase volumes and prices for uranium, fuel services and electricity

• expected production costs

• expected spot prices and realized prices for uranium, and other factors discussed on page 4, Price sensitivity analysis: uranium

• tax rates, foreign currency exchange rates and interest rates

• decommissioning and reclamation expenses

• mineral reserve and resource estimates

• the geological, hydrological and other conditions at our mines

• our Cigar Lake remediation and development plans succeed

• our ability to continue to supply our products and services in the expected quantities and at the expected times

• our ability to comply with current and future environmental, safety and other regulatory requirements, and to obtain and maintain required regulatory approvals

• our operations are not significantly disrupted as a result of political instability, nationalization, terrorism, sabotage, blockades, breakdown, natural disasters, governmental or political actions, litigation or arbitration proceedings, the unavailability of reagents, equipment, operating parts and supplies critical to production, labour shortages, labour relations issues, strikes or lockouts, underground floods, cave in, tailings dam failure, lack of tailings capacity, or other development or operating risks

- 15 -

Quarterly dividend notice

We announced today that our board of directors approved a quarterly dividend of $0.10 per share on the outstanding common shares of the corporation that is payable on April 15, 2011, to shareholders of record at the close of business on March 31, 2011.

Conference call

We invite you to join our fourth quarter conference call on Monday, February 14, 2011 at 11:00 a.m. Eastern.

The call will be open to all investors and the media. To join the call, please dial (800) 769-8320 or (416) 695-6616 (Canada and US). An operator will put your call through. A live audio feed of the conference call will be available from a link at cameco.com. See the link on our home page on the day of the call.

A recorded version of the proceedings will be available:

• on our website, cameco.com, shortly after the call

• on post view until midnight, Eastern, Monday, March 14, 2011 by calling (800) 408-3053 or (905) 694-9451 (Passcode 4257148 #)

Additional information

Our 2010 annual management’s discussion and analysis, annual audited financial statements, reconciliation to United States GAAP and annual information form will be available shortly on SEDAR at sedar.com, on EDGAR at sec.gov/edgar.shtml and on our website at cameco.com.

Profile

We are one of the world’s largest uranium producers, a significant supplier of conversion services and one of two Candu fuel manufacturers in Canada. Our competitive position is based on our controlling ownership of the world’s largest high-grade reserves and low-cost operations. Our uranium products are used to generate clean electricity in nuclear power plants around the world, including Ontario where we are a limited partner in North America’s largest nuclear electricity generating facility. We also explore for uranium in the Americas, Australia and Asia. Our shares trade on the Toronto and New York stock exchanges. Our head office is in Saskatoon, Saskatchewan.

As used in this news release, the terms we, us, our and Cameco mean Cameco Corporation and its subsidiaries and affiliates unless stated otherwise.

- End -

Investor inquiries:	Bob Lillie	(306) 956-6639
Media inquiries:	Lyle Krahn	(306) 956-6316

- 16 -

EX-2

Exhibit 2

CAMECO CORPORATION

2010 CONSOLIDATED FINANCIAL STATEMENTS

February 11, 2011

REPORT OF MANAGEMENT’S ACCOUNTABILITY

The accompanying consolidated financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles. Management is responsible for ensuring that these statements, which include amounts based upon estimates and judgment, are consistent with other information and operating data contained in the annual financial review and reflect the corporation’s business transactions and financial position.

Management is also responsible for the information disclosed in the management’s discussion and analysis including responsibility for the existence of appropriate information systems, procedures and controls to ensure that the information used internally by management and disclosed externally is complete and reliable in all material respects.

In addition, management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. The internal control system includes an internal audit function and a code of conduct and ethics, which is communicated to all levels in the organization and requires all employees to maintain high standards in their conduct of the corporation’s affairs. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and that the company’s assets are appropriately accounted for and adequately safeguarded. Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting based on the criteria established in “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the company’s system of internal control over financial reporting was effective as at December 31, 2010.

KPMG LLP has audited the consolidated financial statements in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States).

The board of directors annually appoints an audit committee comprised of directors who are not employees of the corporation. This committee meets regularly with management, the internal auditor and the shareholders’ auditors to review significant accounting, reporting and internal control matters. Both the internal and shareholders’ auditors have unrestricted access to the audit committee. The audit committee reviews the financial statements, the report of the shareholders’ auditors, and management’s discussion and analysis and submits its report to the board of directors for formal approval.

Original signed by Gerald W. Grandey	Original signed by O. Kim Goheen
Chief Executive Officer	Senior Vice-President and Chief Financial Officer
February 11, 2011	February 11, 2011

1

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of Cameco Corporation

We have audited the accompanying consolidated financial statements of Cameco Corporation (“the Corporation”), which comprise the consolidated balance sheets as at December 31, 2010 and 2009, the consolidated statements of earnings, shareholders’ equity, comprehensive income, accumulated other comprehensive income and cash flows for the years then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Corporation’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Cameco Corporation as at December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles.

Original signed by KPMG LLP

Chartered Accountants
Saskatoon, Canada
February 11, 2011

2

Consolidated Balance Sheets

As at December 31
($Cdn thousands)	2010			2009
Assets
Current assets
Cash and cash equivalents	$	376,621		$	1,101,229
Short-term investments [note 5]		883,032			202,836
Accounts receivable		447,404			446,722
Income taxes receivable		42,190			—
Inventories [note 6]		542,526			453,224
Supplies and prepaid expenses		190,079			169,005
Current portion of long-term receivables, investments and other [note 9]		91,447			154,725
		2,573,299			2,527,741
Property, plant and equipment [note 7]		4,337,809			4,068,103
Intangible assets [note 8]		94,270			97,713
Long-term receivables, investments and other [note 9]		628,824			667,287
Future income tax assets [note 18]		37,166			33,017
Total assets	$	7,671,368		$	7,393,861
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	$	399,035		$	503,521
Income taxes payable		35,042			31,143
Short-term debt [notes 10]		72,948			76,762
Dividends payable		27,605			23,570
Current portion of long-term debt [note 11]		13,177			11,629
Current portion of other liabilities [note 13]		28,228			29,297
Future income taxes [note 18]		28,674			87,135
		604,709			763,057
Long-term debt [note 11]		940,317			952,853
Provision for reclamation [note 12]		279,653			258,277
Other liabilities [note 13]		244,179			244,433
Future income taxes [note 18]		208,044			167,373
		2,276,902			2,385,993
Minority interest		178,139			164,040
Shareholders’ equity
Share capital [note 14]		1,535,857			1,512,461
Contributed surplus		142,376			131,577
Retained earnings		3,563,089			3,158,506
Accumulated other comprehensive income		(24,995	)		41,284
		5,216,327			4,843,828
Total liabilities and shareholders’ equity	$	7,671,368		$	7,393,861

Commitments and contingencies [notes 12,18,25]
Subsequent event [note 29]

See accompanying notes to consolidated financial statements.


Approved by the board of directors
Original signed by Gerald W. Grandey and John H. Clappison

3

Consolidated Statements of Earnings

For the years ended December 31
($Cdn thousands, except per share amounts)	2010			2009
Revenue from
Products and services	$	2,123,655		$	2,314,985
Expenses
Products and services sold		1,127,879			1,324,278
Depreciation, depletion and reclamation		251,547			240,643
Administration		155,810			135,558
Exploration		95,796			49,061
Research and development		4,794			630
Interest and other [note 15]		3,474			(12,470	)
Gains on derivatives [note 26]		(75,183	)		(243,804	)
Cigar Lake remediation		16,633			17,884
Loss (gain) on sale of assets [note 16]		107			(566	)
		1,580,857			1,511,214
Earnings from continuing operations		542,798			803,771
Other expense [note 17]		(11,150	)		(36,912	)
Earnings before income taxes and minority interest		531,648			766,859
Income tax expense [note 18]		27,251			52,897
Minority interest		(10,352	)		(3,035	)
Earnings from continuing operations	$	514,749		$	716,997
Earnings from discontinued operations [note 24]		—			382,425
Net earnings	$	514,749		$	1,099,422
Net earnings per share [note 27]
Basic
Continuing operations	$	1.31		$	1.84
Discontinued operations		—			0.99
Total basic earnings per share	$	1.31		$	2.83
Diluted
Continuing operations	$	1.30		$	1.84
Discontinued operations		—			0.98
Total diluted earnings per share	$	1.30		$	2.82

See accompanying notes to consolidated financial statements.

4

Consolidated Statements of Shareholders’ Equity

For the years ended December 31
($Cdn thousands)	2010			2009
Share capital
Balance at beginning of year	$	1,512,461		$	1,062,714
Stock option plan		23,396			4,215
Equity issuance [note 14]		—			445,532
Balance at end of year		1,535,857			1,512,461
Contributed surplus
Balance at beginning of year		131,577			131,858
Stock-based compensation		16,086			641
Options exercised		(5,287	)		(922	)
Balance at end of year		142,376			131,577
Retained earnings
Balance at beginning of year		3,158,506			2,153,315
Net earnings		514,749			1,099,422
Dividends on common shares		(110,166	)		(94,231	)
Balance at end of year		3,563,089			3,158,506
Accumulated other comprehensive income (loss)
Balance at beginning of year		41,284			165,736
Other comprehensive loss		(66,279	)		(124,452	)
Balance at end of year		(24,995	)		41,284
Total retained earnings and accumulated other comprehensive income (loss)		3,538,094			3,199,790
Shareholders’ equity at end of year	$	5,216,327		$	4,843,828

See accompanying notes to consolidated financial statements.

5

Consolidated Statements of Comprehensive Income

For the years ended December 31
($Cdn thousands)	2010			2009
Net earnings	$	514,749		$	1,099,422
Other comprehensive income (loss), net of taxes [note 18]
Unrealized foreign currency translation losses		(6,696	)		(115,739	)
Gains on derivatives designated as cash flow hedges		12,035			101,162
Gains on derivatives designated as cash flow hedges transferred to net earnings		(71,186	)		(113,360	)
Unrealized gains on available-for-sale securities		2,125			3,011
(Gains) losses on available-for-sale securities transferred to net earnings		(2,557	)		474
Other comprehensive loss		(66,279	)		(124,452	)
Total comprehensive income	$	448,470		$	974,970

Consolidated Statement of Accumulated Other Comprehensive Income (Loss)

	Currency
	Translation			Cash Flow			Available-For-
($Cdn thousands)(net of related income taxes)[note 18]	Adjustment			Hedges			Sale Assets			Total
Balance at December 31, 2008	$	65,342		$	101,654		$	(1,260	)	$	165,736
Unrealized foreign currency translation losses		(115,739	)		—			—			(115,739	)
Gains on derivatives designated as cash flow hedges		—			101,162			—			101,162
Gains on derivatives designated as cash flow hedges transferred to net earnings		—			(113,360	)		—			(113,360	)
Unrealized gains on available-for-sale securities		—			—			3,011			3,011
Losses on available-for-sale securities transferred to net earnings		—			—			474			474
Balance at December 31, 2009	$	(50,397	)	$	89,456		$	2,225		$	41,284
Unrealized foreign currency translation losses		(6,696	)		—			—			(6,696	)
Gains on derivatives designated as cash flow hedges		—			12,035			—			12,035
Gains on derivatives designated as cash flow hedges transferred to net earnings		—			(71,186	)		—			(71,186	)
Unrealized gains on available-for-sale securities		—			—			2,125			2,125
Gains on available-for-sale securities transferred to net earnings		—			—			(2,557	)		(2,557	)
Balance at December 31, 2010	$	(57,093	)	$	30,305		$	1,793		$	(24,995	)

See accompanying notes to consolidated financial statements.

6

Consolidated Statements of Cash Flows

For the years ended December 31
($Cdn thousands)	2010			2009
Operating activities
Net earnings	$	514,749		$	1,099,422
Items not requiring (providing) cash:
Depreciation, depletion and reclamation		251,547			240,643
Provision for future taxes [note 18]		612			2,237
Deferred gains		(33,369	)		(41,254	)
Unrealized (gains) losses on derivatives		25,561			(180,260	)
Stock-based compensation [note 22]		16,086			2,772
Loss (gain) on sale of assets [note 16]		107			(566	)
Equity in loss from associated companies [note 17]		16,413			29,811
Other expense (income) [note 17]		(5,263	)		7,101
Discontinued operations [note 24]		—			(382,425	)
Minority interest		(10,352	)		(3,035	)
Other operating items [note 19]		(268,993	)		(84,333	)
Cash provided by operations		507,098			690,113
Investing activities
Additions to property, plant and equipment		(470,277	)		(392,719	)
Purchase of short-term investments [note 5]		(680,346	)		(202,850	)
Decrease (increase) in long-term receivables, investments and other		9,453			(40,258	)
Proceeds on sale of property, plant and equipment		1,437			3,647
Cash used in investing (continuing operations)		(1,139,733	)		(632,180	)
Cash provided by investing (discontinued operations) [note 24]		—			871,300
Cash provided by (used in) investing		(1,139,733	)		239,120
Financing activities
Decrease in debt		(11,629	)		(726,460	)
Increase in debt		1,896			—
Issue of debentures, net of issue costs [note 11]		—			495,272
Issue of shares, net of issue costs [note 14]		—			440,150
Contributions from minority interests		9,811			—
Issue of shares, stock option plan		18,109			1,292
Dividends		(106,132	)		(92,603	)
Cash provided by (used in) financing		(87,945	)		117,651
Increase (decrease) in cash during the year		(720,580	)		1,046,884
Exchange rate changes on foreign currency cash balances		(4,028	)		(9,877	)
Cash and cash equivalents at beginning of year		1,101,229			64,222
Cash and cash equivalents at end of year	$	376,621		$	1,101,229
Cash and cash equivalents comprised of:
Cash	$	100,752		$	56,009
Cash equivalents		275,869			1,045,220
	$	376,621		$	1,101,229
Supplemental cash flow disclosure
Interest paid	$	53,859		$	35,267
Income taxes paid	$	63,226		$	57,093

See accompanying notes to consolidated financial statements.

7

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

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

1.	Cameco Corporation
	Cameco Corporation is incorporated under the Canada Business Corporations Act. Cameco Corporation and its subsidiaries (collectively, Cameco or the company) are 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. The company 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)	Consolidation Principles
	The 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 Equivalents
	Cash and cash equivalents consist 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 Investments
	Short-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)	Inventories
	Inventories 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)	Supplies
	Consumable supplies and spares are valued at the lower of cost or replacement value.
(f)	Investments
	Investments 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 OCI. Realized gains and losses, as well as other-than-temporary declines in value, are recorded in the consolidated statements of earnings.

8

(g)	Property, Plant and Equipment
	Assets 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 costs will be depleted over the proven and probable reserves using the units-of-production method. 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 lives 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 units-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 Assets
	Intangible 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 Taxes
	Future 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.

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(j)	Research and Development and Exploration Costs
	Expenditures for research and technology related to the products and processes are charged against earnings as incurred. Exploration expenditures including drilling and related costs are charged against earnings as incurred up until the point at which it is determined that the costs are economically recoverable. Any further exploration expenditures are capitalized once economic recoverability has been established.
(k)	Environmental Protection and Asset Retirement Obligations
	The 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 Benefits
	Cameco 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 Compensation
	Cameco 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 Recognition
	Cameco 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, when 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 Supply
	In 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 Services
	In 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 Supply
	In 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 Costs
	For 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 Translation
	Monetary 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.

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	The United States (US) 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 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 AOCI. 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 Transactions
	Financial Assets and Financial Liabilities
	All 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 Derivatives
	Derivative 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 Share
	Earnings 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.

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3. Accounting Standards

(a)	Future Changes in Accounting Policies
	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.

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 Overview
	Cameco 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 Risk
	Cameco 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 Risk
	As 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, 2010, the effect of a $1/MWh increase in the market price for electricity would be a decrease of $175,000 in net earnings, and a decrease in other comprehensive income of $850,000 for 2010.

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(b)	Foreign Exchange Risk
	The 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, 2010, the effect of a $0.01 increase in the US to Canadian dollar exchange rate on our portfolio of currency hedges and other US denominated exposures would have been a decrease of $9,200,000 in net earnings for 2010.
(c)	Counterparty Credit Risk
	Cameco’s sales of uranium product, conversion and fuel manufacturing services expose the company to the risk of non-payment. Counterparty credit risk is associated with the ability of counterparties to satisfy their contractual obligations to Cameco, including both payment and performance.
	Cameco manages this risk by monitoring the credit worthiness of our customers and seeking pre-payment or other forms of payment security from customers with an unacceptable level of credit risk.
	Cameco’s maximum counterparty credit exposure at the balance sheet date consists primarily of the carrying amount of financial assets such as accounts receivable and short-term investments. At December 31, 2010, there were no significant concentrations of credit risk and no amounts were held as collateral.
(d)	Liquidity Risk
	Financial 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, 2010:

			Due in less		Due in		Due in		Due after
(Millions)	Total		than 1 year		1-3 years		3-5 years		5 years
Long-term debt	$	794	$	—	$	—	$	298	$	496
BPLP lease		159		13		31		39		76
Short-term debt		73		73		—		—		—
Total contractual repayments	$	1,026	$	86	$	31	$	337	$	572

			Due in less		Due in		Due in		Due after
(Millions)	Total		than 1 year		1-3 years		3-5 years		5 years
Interest on long-term debt	$	312	$	42	$	85	$	81	$	104
Interest on BPLP lease		55		11		20		15		9
Interest on short-term debt		2		2		—		—		—
Total interest payments	$	369	$	55	$	105	$	96	$	113

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(e)	Interest Rate Risk
	During the year, Cameco entered into interest rate swap arrangements whereby fixed rate payments in relation to part of the $300,000,000 Series C debenture were swapped for variable rate payments. The notional amount under the swap arrangements is $135,000,000. Concurrently, Cameco has entered into interest rate cap arrangements at a notional amount of $135,000,000 million that are effective March 18, 2013 and terminate on March 16, 2015. These interest rate cap arrangements, when effective, will limit Cameco’s interest rate exposure to 5% plus an average margin of 1.81%.
	At December 31, 2010, the effect of a 1% increase in the three-month bankers acceptance rate would be a decrease in net earnings of $3,570,000.

Capital Management

Cameco’s capital structure reflects our vision and the environment in which we operate. We seek growth through development and expansion of existing assets and by acquisition. Our capital resources are managed to support achievement of our goals. The overall objectives for managing capital remained unchanged in 2010 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, 2010 was as follows:

(Thousands)	2010			2009
Long-term debt	$	953,494		$	964,482
Short-term debt		72,948			76,762
Cash and cash equivalents		(376,621	)		(1,101,229	)
Short-term investments		(883,032	)		(202,836	)
Net debt		(233,211	)		(262,821	)
Minority interest		178,139			164,040
Shareholders’ equity		5,216,327			4,843,828
Total equity		5,394,466			5,007,868
Total capital	$	5,161,255		$	4,745,047

	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, 2010, Cameco met these requirements.
5.	Short-Term Investments
	In 2010, Cameco purchased money market instruments with terms to maturity between three and 12 months. The fair values of marketable securities held at December 31, 2010 were $883,032,000 (2009 — $202,836,000).
6.	Inventories

	2010		2009
Uranium
Concentrate	$	392,613	$	310,893
Broken ore		12,264		18,125
		404,877		329,018
Fuel Services		137,649		124,206
Total	$	542,526	$	453,224

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7. Property, Plant and Equipment

			Accumulated
			Depreciation
	Cost		and Depletion		2010 Net		2009 Net
Uranium
Mining	$	3,562,849	$	1,657,227	$	1,905,622	$	1,801,379
Non-producing		1,674,131		—		1,674,131		1,476,409
Fuel Services		507,221		233,973		273,248		279,313
Electricity
Assets under capital lease		164,288		89,744		74,544		83,866
Other		610,826		257,945		352,881		361,377
Other		125,178		67,795		57,383		65,759
Total	$	6,644,493	$	2,306,684	$	4,337,809	$	4,068,103

8. Intangible Assets

			Accumulated
	Cost		Depreciation		2010 Net		2009 Net
Intangible assets	$	118,819	$	24,549	$	94,270	$	97,713

The intangible asset value relates to intellectual property associated with Cameco Fuel Manufacturing and is being amortized on a units-of-production basis.

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9. Long-Term Receivables, Investments and Other

	2010			2009
Bruce B L.P. (BPLP) [note 21]
Capital lease receivable from Bruce A L.P. (BALP) (i)	$	91,608		$	94,895
Derivatives [note 26]		77,831			141,949
Accrued pension benefit asset [note 23]		88,268			54,864
Equity accounted investments
Global Laser Enrichment LLC (Cameco’s interest 24%) (privately held)		162,718			185,716
UNOR Inc.		—			935
UEX Corporation (market value $103,186)		9,998			6,052
Huron Wind (privately held)		3,913			4,002
Minergia S.A.C. (privately held)		8,337			4,551
UFP Investments Inc. (privately held)		6,784			2,617
Available-for-sale securities
Western Uranium Corporation (market value $6,033)		6,033			4,637
GoviEx Uranium (privately held)		23,017			25,214
Derivatives [note 26]		50,011			68,432
Deferred charges
Cost of sales [note 13]		—			14,415
Advances receivable from Inkai JV LLP (ii)		125,072			141,149
Accrued pension benefit asset [note 23]		6,142			8,264
Other		60,539			64,320
		720,271			822,012
Less current portion		(91,447	)		(154,725	)
Net	$	628,824		$	667,287

(i)	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.
(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, 2010, $314,000,000 (US) of principal and interest was outstanding (2009 — $337,000,000 (US)), of which 40% represents the joint venture partner’s share.

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). The promissory note is payable on demand and bears interest at a market rate of 2.72%.
	In February 2009, Cameco concluded an arrangement for a $100,000,000 unsecured revolving credit facility. The original maturity date of the facility was February 5, 2010, however, in November 2010, upon mutual agreement with the lender, this facility was further extended to February 4, 2012. There are no longer any extensions available under this facility and there is no amount outstanding.

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11. Long-Term Debt

	2010			2009
Debentures	$	794,483		$	793,842
Capital lease obligation — BPLP		159,011			170,640
		953,494			964,482
Less current portion		(13,177	)		(11,629	)
Net	$	940,317		$	952,853

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. 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, 2010, there were no amounts outstanding under this credit facility (2009 — nil). Cameco may also borrow directly in the commercial paper market. There was no commercial paper outstanding at December 31, 2010 (2009 — nil). These amounts, when drawn, are classified as long-term debt.

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, 2010, Cameco was in compliance with covenants and does not expect its operating and investing activities in 2011 to be constrained by them.

Cameco has $554,934,000 ($400,882,000 and $154,889,000 (US)) in letter of credit facilities. The majority of the outstanding letters of credit at December 31, 2010 relate to future decommissioning and reclamation liabilities [note 12] and amounted to $549,533,000 ($395,818,000 and $153,987,000 (US)) (2009 — $592,215,000 ($396,427,000 and $187,071,000 (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, 2013, as well as $270,000,000 (Cameco’s share $83,320,000) in letter of credit facilities. As at December 31, 2010, BPLP had $45,000,000 (Cameco’s share $14,220,000) outstanding under the revolving credit facility (2009 — $35,000,000 (Cameco’s share $11,060,000)) and $270,000,000 (Cameco’s share $85,320,000) outstanding under the letter of credit facilities (2009 — $184,000,000 (Cameco’s share $58,144,000)).

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The table below represents currently scheduled maturities of long-term debt and capital lease obligations over the next five years.

2011	$	13,177
2012		14,852
2013		16,337
2014		18,233
2015		319,040
Thereafter		571,855
Total	$	953,494

	Standby Product Loan Facilities
	Cameco had arranged for a standby product loan facility with one of its customers. The arrangement, which was finalized in 2008, allowed 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% 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 5%. Any borrowings were repayable in kind.
	On September 13, 2010, Cameco gave notice of termination to the counterparty of the product loan agreement. The loan facility was terminated on October 15, 2010.
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 $465,709,000. 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 $548,933,000 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:

	2010			2009
Balance, beginning of year	$	258,277		$	276,431
Changes in estimates		20,201			(17,125	)
Liabilities settled		(12,542	)		(4,599	)
Accretion expense		17,208			17,828
Impact of foreign exchange		(3,491	)		(14,258	)
Balance, end of year	$	279,653		$	258,277

19

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 — $465,709,000.
(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 – 5.00% to 7.50%.

The asset retirement obligations liability relates to the following segments:

	2010		2009
Uranium	$	211,927	$	192,544
Fuel Services		67,726		65,733
Total	$	279,653	$	258,277

13. Other Liabilities

	2010			2009
Deferred sales [note 9]	$	17,004		$	24,982
Derivatives [note 26]		5,273			4,137
Accrued post-retirement benefit liability [note 23]		13,355			12,019
Pensions [note 23]		659			491
BPLP
Accrued post-retirement benefit liability [note 23]		138,533			125,402
Pensions [note 23]		20,699			18,251
Derivatives [note 26]		29,954			36,820
Provision for waste disposal		37,660			38,619
Other		9,270			13,009
		272,407			273,730
Less current portion		(28,228	)		(29,297	)
Net	$	244,179		$	244,433

14.	Share Capital
	Authorized share capital:

Unlimited number of first preferred shares

Unlimited number of second preferred shares

Unlimited number of voting common shares, and

One Class B share

(a) Common Shares

Number Issued(Number of Shares)	2010		2009
Beginning of year		392,838,733		365,718,923
Issued:
Equity issuance		—		26,666,400
Stock option plan [note 22]		1,512,310		453,410
Issued share capital		394,351,043		392,838,733

(b)	Class B Share
	One 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.

20

(c)	Share Issuance
	On 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.

15. Interest and Other

	2010			2009
Interest on long-term debt	$	47,877		$	38,377
Interest on short-term debt		2,005			2,366
Foreign exchange (gains) losses		6,626			(21,086	)
Other charges		8,597			11,302
Interest income		(13,910	)		(6,614	)
Capitalized interest		(47,721	)		(36,815	)
Net	$	3,474		$	(12,470	)

16. Loss (Gain) on Sale of Assets

	2010			2009
Sale of geological data	$	(1,107	)	$	(3,674	)
Other		1,214			3,108
Net	$	107		$	(566	)

17. Other Expense

	2010			2009
Equity in loss of associated companies	$	(16,413	)	$	(29,811	)
Other		5,263			(7,101	)
Net	$	(11,150	)	$	(36,912	)

In 2010, the equity in loss of associated companies includes a charge of $11,363,000 for the amortization of in-process research and development associated with the investment in GLE (2009 — $18,295,000).

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18. Income Taxes

The significant components of future income tax assets and liabilities at December 31 are as follows:

	2010			2009
Assets
Provision for reclamation	$	92,198		$	89,996
Foreign exploration and development		47,230			40,221
Income tax losses carried forward		41,625			100,783
Other		46,617			31,185
Future income tax assets before valuation allowance		227,670			262,185
Valuation allowance		(63,843	)		(57,398	)
Future income tax assets, net of valuation allowance	$	163,827		$	204,787
Liabilities
Property, plant and equipment	$	292,631		$	338,645
Inventories		24,264			5,618
Long-term investments and other		46,484			82,015
Future income tax liabilities	$	363,379		$	426,278
Net future income tax liabilities	$	199,552		$	221,491

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:

	2010			2009
Earnings before income taxes and minority interest	$	531,648		$	766,859
Combined federal and provincial tax rate		30.2	%		31.4	%
Computed income tax expense		160,558			240,794
Increase (decrease) in taxes resulting from:
Reduction in income tax rates		(29,508	)		(10,983	)
Manufacturing and processing deduction		(3,846	)		(3,211	)
Difference between Canadian rate and rates applicable to subsidiaries in other countries		(126,222	)		(175,969	)
Change in valuation allowance		13,499			18,125
Capital and other taxes		1,409			1,824
Stock-based compensation plans		2,696			1,371
Other permanent differences		8,665			(19,054	)
Income tax expense	$	27,251		$	52,897

22

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 income for Canadian income tax purposes by approximately $43,000,000. Additional reassessments for 2003 were issued by CRA in 2009 and 2010, both to similar effect. In December 2009, CRA issued a notice of reassessment for the 2004 taxation year, which increased Cameco’s 2004 income by approximately $108,000,000. Another reassessment for 2004 was issued by CRA on May 13, 2010 to similar effect. In December 2010, CRA issued a notice of reassessment for the 2005 taxation year, which increased Cameco’s 2005 taxable income by approximately $197,000,000. 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 the years 2006 through 2010 on a similar basis.

CRA’s Transfer Pricing Review Committee is scheduled to meet in late February, 2011, to decide whether to impose a penalty for 2005. Given that the Transfer Pricing Review Committee did not impose a transfer pricing penalty for 2003 or 2004, we do not expect that a penalty will be imposed for 2005.

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 2010 in the amount of $27,000,000. No provisions for penalties or interest have been recorded. We do not expect more than a nominal amount of cash taxes to be payable due to 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 2010 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, a Notice of Appeal for the 2003 taxation year was filed with the Tax Court of Canada on July 22, 2009, and amended on January 26, 2011, and the litigation process is proceeding. In connection with CRA’s 2004 reassessment, Cameco is contesting the reassessment and pursuing its appeal rights under the Income Tax Act. A Notice of Appeal for the 2004 taxation year was filed with the Tax Court of Canada on November 10, 2010. Cameco intends to object to the 2005 reassessment and pursue its appeal rights under the Income Tax Act.

	2010			2009
Earnings (loss) before income taxes and minority interest
Canada	$	(27,641	)	$	109,534
Foreign		559,289			657,325
	$	531,648		$	766,859
Current income taxes (recovery)
Canada	$	(12,280	)	$	17,109
Foreign		38,919			33,551
	$	26,639		$	50,660
Future income taxes (recovery)
Canada	$	7,105		$	3,885
Foreign		(6,493	)		(1,648	)
	$	612		$	2,237
Income tax expense	$	27,251		$	52,897

For 2010, earnings from discontinued operations [note 24] included a net income tax expense of nil, (2009 – recovery of $94,600,000).

23

At December 31, 2010, loss carry forwards of $136,000,000 (2009 — $380,000,000) are available to reduce taxable income. These losses expire as follows:

Date of expiry	Canada		US		Other		Total
2011		—	$	158		—	$	158
2013		—		1,722		—		1,722
2019		—		—		7,255		7,255
2029		—		17,463		—		17,463
2030		441		10,546		—		10,987
no expiry		—		—		98,657		98,657
	$	441	$	29,889	$	105,912	$	136,242

Included in the table above is $101,000,000 (2009 — $94,000,000) of temporary differences related to loss carry forwards where no future benefit is realized.

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:

	2010			2009
Gains on derivatives designated as cash flow hedges	$	2,977		$	48,368
Gains on derivatives designated as cash flow hedges transferred to net earnings		(29,400	)		(48,121	)
Unrealized gains on assets available-for-sale		330			466
(Gains) losses on assets available-for-sale transferred to net earnings		(399	)		80
Total income tax expense (recovery) included in OCI	$	(26,492	)	$	793

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:

	2010		2009
Gains on derivatives designated as cash flow hedges	$	10,564	$	36,987
Gains on assets available-for-sale		277		346
Total income tax expense included in AOCI	$	10,841	$	37,333

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19.	Statements of Cash Flows
	Other Operating Items

	2010			2009
Changes in non-cash working capital:
Accounts receivable	$	(1,566	)	$	34,556
Inventories		(74,899	)		(74,938	)
Supplies and prepaid expenses		(21,229	)		(27,838	)
Accounts payable and accrued liabilities		(141,748	)		30,784
Other		(29,551	)		(46,897	)
Total	$	(268,993	)	$	(84,333	)

20.	Uranium Joint Ventures
	Cameco conducts a portion of its exploration, development, mining and milling activities through joint ventures. Cameco proportionately consolidates its ownership interest in these assets. The McArthur River, Key Lake and Cigar Lake 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.
	The participants in the Inkai joint venture purchase uranium from Inkai and, in turn, derive revenue directly from the sale of such product to third party customers. On proportionate consolidation of Inkai, Cameco eliminates revenues and cost of sales recorded by Inkai related to sales by Inkai directly to Cameco. After elimination of these related party sales for the period, there are no revenues and expenses resulting from proportionate consolidation of Inkai and accordingly, a statement showing revenues and expenses from Inkai has not been provided.
	The following table outlines Cameco’s proportionate interest of the assets and liabilities of each joint venture:

	Ownership			2010		2009
Total Assets
McArthur River		69.81	%	$	963,510	$	923,786
Key Lake		83.33	%		469,156		401,604
Cigar Lake		50.03	%		1,022,770		874,661
Inkai		60.00	%		233,884		255,932
				$	2,689,320	$	2,455,983
Total Liabilities
McArthur River		69.81	%	$	31,960	$	25,183
Key Lake		83.33	%		73,345		65,706
Cigar Lake		50.03	%		22,208		14,076
Inkai		60.00	%		11,341		8,627
				$	138,854	$	113,592

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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 Agreements
	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. During 2010, sales of uranium and conversion services to BPLP amounted to $80,211,000 (2009 — $84,909,000), approximately 3.8% (2009 – 3.7%) of Cameco’s total revenue. At December 31, 2010, amounts receivable under these agreements totaled $19,667,000 (2009 — $11,505,000).
	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)	2010		2009
Current assets	$	207	$	252
Property, plant and equipment		373		390
Long-term receivables and investments		213		207
	$	793	$	849
Current liabilities	$	125	$	129
Long-term liabilities		314		320
		439		449
Equity		354		400
	$	793	$	849

Statements of Earnings

(Millions)	2010		2009
Revenue	$	477	$	518
Operating costs		294		286
Earnings before interest and taxes		183		232
Interest		11		1
Earnings before taxes	$	172	$	231

Statements of Cash Flows

(Millions)	2010			2009
Cash provided by operations	$	203		$	238
Cash used in investing		(32	)		(36	)
Cash used in financing		(172	)		(200	)

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22.	Stock-Based Compensation Plans
	Stock Option Plan
	Cameco 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 26,092,439 shares have been issued.
	Stock option transactions for the respective years were as follows:

(Number of Options)	2010			2009
Beginning of year		7,939,833			7,120,555
Options granted		1,515,945			1,381,039
Options exercised [note 14]		(1,512,310	)		(453,410	)
Options forfeited		(391,089	)		(108,351	)
End of year		7,552,379			7,939,833
Exercisable		4,814,761			5,550,148

Weighted average exercise prices were as follows:

	2010		2009
Beginning of year	$	27.42	$	27.98
Options granted		28.90		19.41
Options exercised		12.75		9.79
Options forfeited		35.05		35.68
End of year	$	30.26	$	27.42
Exercisable	$	32.02	$	26.84

Total options outstanding and exercisable at December 31, 2010 were as follows:

2010			Options Outstanding				Options Exercisable
			Weighted		Weighted				Weighted
			Average		Average				Average
			Remaining		Exercisable				Exercisable
Option Price Per Share	Number		Life		Price		Number		Price
$5.75 - 13.49		788,200		2	$	9.72		788,200	$	9.72
13.50 - 32.99		3,755,092		6		25.33		1,381,999		25.25
33.00 - 55.00		3,009,087		5		41.78		2,644,562		42.19
		7,552,379						4,814,761

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The foregoing options have expiry dates ranging from March 9, 2011 to March 2, 2018.

Non-vested stock option transactions for the respective years were as follows:

(Number of Options)	2010			2009
Beginning of year		2,389,685			2,163,426
Options granted		1,515,945			1,381,039
Options forfeited		(91,439	)		(75,039	)
Options vested		(1,076,573	)		(1,079,741	)
End of year		2,737,618			2,389,685

For the year ended December 31, 2010, Cameco has recorded a net expense of $8,931,000 (2009 - $4,372,000), related to options that vested during the year.

The fair value of the options granted each year was determined using the Black-Scholes option-pricing model with the following weighted average assumptions:

	2010			2009
Number of options granted		1,515,945			1,381,039
Average strike price	$	28.90		$	19.41
Expected dividend	$	0.28		$	0.24
Expected volatility		36	%		36	%
Risk-free interest rate		2.1	%		1.6	%
Expected life of option	4.0 years			4.0 years
Expected forfeitures		15	%		15	%
Weighted average grant date fair values	$	8.46		$	5.23

Executive Performance Share Unit (PSU), Deferred Share Unit (DSU), and Other Plans

Commencing 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, 2010, the total PSUs held by the participants was 395,360 (2009 – 233,710). In 2010, Cameco recognized an expense of $3,679,000 in relation to PSUs (2009 - $3,347,000).

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 25%, 50%, 75% or 100% of the remaining 40% of their annual retainer and any additional fees in the form of DSUs. If a director meets their ownership requirements, the director may elect to take 25%, 50%, 75% or 100% of their annual retainer and any fees in cash, with the balance, if any, to be paid in 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, 2010, the total DSUs held by participating directors was 354,276 (2009 – 373,921).

28

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, 2010, the number of options held by participating employees was 242,051 (2009 –267,148) with exercise prices ranging from $5.88 to $46.88 per share (2009 - $5.88 to $46.88) and a weighted average exercise price of $30.00 (2009 — $30.61).

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, 2010, there were 3,496 participants in the plan (2009 – 3,306). The total number of shares purchased in 2010 on behalf of participants, including the company contribution, was 214,795 shares (2009 – 281,207). In 2010, the company’s contributions totaled $6,608,000 (2009 — $5,166,000).

Cameco has recognized the following expenses under these plans:

	2010		2009
Deferred share units		1,971		4,930
Phantom stock options		979		1,531
Employee share ownership plan		6,608		5,166

At December 31, 2010, a liability of $16,798,000 (2009 — $14,962,000) was included in the balance sheet to recognize accrued but unpaid expenses for these plans.

29

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 dependants. 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 Plans
	2010			2009			2010			2009
Balance at beginning of year	$	30,840		$	23,580		$	12,019		$	11,842
Current service cost		1,330			915			553			435
Interest cost		1,905			1,683			664			730
Actuarial loss (gain)		3,535			5,647			720			(442	)
Foreign exchange		(81	)		(238	)		—			—
Benefits paid		(2,011	)		(747	)		(601	)		(546	)
	$	35,518		$	30,840		$	13,355		$	12,019

(b) Plan Assets

	Pension Benefit Plans
	2010			2009
Fair value at beginning of year	$	24,209		$	20,289
Actual return on plan assets		3,739			(708	)
Employer contributions		1,158			5,335
Benefits paid		(1,971	)		(707	)
Fair value at end of year	$	27,135		$	24,209

30

Plan assets consist of:

	Pension Benefit Plans
	2010			2009
Asset Category (i)
Equity securities		26	%		28	%
Fixed income		22	%		23	%
Other (ii)		52	%		49	%
Total		100	%		100	%

(i)	The defined benefit plan assets contain no material amounts of related party assets at December 31, 2010 and 2009 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 Plans
	2010			2009			2010			2009
Fair value of plan assets	$	27,135		$	24,209		$	—		$	—
Accrued benefit obligation		35,518			30,840			13,355			12,019
Funded status of plans — deficit		(8,383	)		(6,631	)		(13,355	)		(12,019	)
Unamortized net actuarial loss		13,866			14,404			—			—
Accrued benefit asset (liability)	$	5,483		$	7,773		$	(13,355	)	$	(12,019	)
Amounts included in:
Long-term receivables, investments and other [note 9]		6,142			8,264			—			—
Other liabilities [note 13]		(659	)		(491	)		(13,355	)		(12,019	)
Accrued benefit asset (liability)	$	5,483		$	7,773		$	(13,355	)	$	(12,019	)

(d) Net Pension Expense

	2010			2009
Current service cost	$	1,330		$	915
Interest cost		1,905			1,683
Actual return on plan assets		(3,739	)		708
Actuarial loss		3,535			5,647
Balance prior to adjustments to recognize the long-term nature of employee future benefit costs		3,031			8,953
Difference between actual and expected return on plan assets		2,961			(1,494	)
Difference between actuarial loss recognized for year and actual actuarial loss on accrued benefit obligation for year		(2,472	)		(4,974	)
Defined benefit pension expense		3,520			2,485
Defined contribution pension expense		14,649			13,506
Net pension expense	$	18,169		$	15,991

31

	2010			2009
Significant assumptions at December 31
Discount rate		5.5	%		6.0	%
Rate of compensation increase		4.5	%		4.5	%
Long-term rate of return on assets		5.9	%		5.9	%

(e) Other Post-Retirement Benefit Expense

	2010		2009
Current service cost	$	553	$	435
Interest cost		664		730
Actuarial loss (gain)		720		(442	)
Other post-retirement benefit expense	$	1,937	$	723

	2010			2009
Significant assumptions at December 31
Discount rate		5.5	%		6.0	%
Health care cost trend rate		9.0	%		9.0	%

(f) Pension and Other Post-Retirement Benefits Cash Payments

	2010		2009
Employer contributions to funded pension plans	$	1,158	$	5,335
Benefits paid for unfunded benefit plans		640		585
Cash contributions to defined contribution plans		14,649		13,506
Total cash payments for employee future benefits	$	16,447	$	19,426

Benefits paid by the funded pension plan were $1,971,000 for 2010 (2009 — $707,000). Cameco’s expected contributions for the year ended December 31, 2011 are approximately $252,044 for the pension benefit plans.

The following are estimated future benefit payments, which reflect expected future service:

	Pension Benefit Plans		Other Benefit Plans
2011	$	8,376	$	699
2012		1,421		736
2013		1,471		815
2014		1,546		822
2015		1,854		806
2016 to 2020		10,683		4,294

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BPLP

BPLP 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, 2010. The next planned effective date for valuation for funding purposes of the pension benefit plans is set to be January 1, 2011. The status of Cameco’s proportionate share (31.6%) of the defined plans is as follows:

(a) Accrued Benefit Obligation

	Pension Benefit Plans						Other Benefit Plans
	2010			2009			2010			2009
Balance at beginning of year	$	711,636		$	617,259		$	151,826		$	112,355
Current service cost		18,329			14,944			7,422			4,910
Interest cost		42,478			41,061			8,960			7,284
Actuarial loss		139,143			65,018			17,291			31,127
Plan participants’ contributions		6,630			6,244			—			—
Benefits paid		(30,797	)		(32,890	)		(4,488	)		(3,850	)
	$	887,419		$	711,636		$	181,011		$	151,826

(b) Plan Assets

	Pension Benefit Plans
	2010			2009
Fair value at beginning of year	$	635,293		$	546,755
Actual return on plan assets		55,288			65,486
Employer contributions		50,906			49,698
Plan participants’ contributions		6,630			6,244
Benefits paid		(30,797	)		(32,890	)
Fair value at end of year	$	717,320		$	635,293

Plan assets consist of:

	Asset Allocation						Target Allocation
	2010			2009			2010			2009
Asset Category (i)
Equity securities		59	%		60	%		60	%		60	%
Fixed income		39	%		38	%		40	%		40	%
Cash		2	%		2	%		—			—
Total		100	%		100	%		100	%		100	%

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	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, 2010.
(c)	Funded Status Reconciliation

	Pension Benefit Plans						Other Benefit Plans
	2010			2009			2010			2009
Fair value of plan assets	$	717,320		$	635,293		$	—		$	—
Accrued benefit obligation		887,419			711,636			181,011			151,826
Funded status of plans — deficit		(170,099	)		(76,343	)		(181,011	)		(151,826	)
Unrecognized prior service cost		—			—			1,981			2,431
Unamortized net actuarial loss		237,668			112,956			40,497			23,993
Accrued benefit asset (liability)	$	67,569		$	36,613		$	(138,533	)	$	(125,402	)
Amounts included in:
Long-term receivables, investments and other [note 9]		88,268			54,864			—			—
Other liabilities [note 13]		(20,699	)		(18,251	)		(138,533	)		(125,402	)
Accrued benefit asset (liability)	$	67,569		$	36,613		$	(138,533	)	$	(125,402	)

(d) Net Pension Expense

	2010			2009
Current service cost	$	18,329		$	14,944
Interest cost		42,478			41,061
Actual return on plan assets		(55,288	)		(65,486	)
Actuarial loss		139,143			65,018
Balance prior to adjustments to recognize the long-term nature of employee future benefit costs		144,662			55,537
Difference between actual and expected return on plan assets		10,798			27,286
Difference between actuarial loss recognized and actual actuarial loss on accrued benefit obligation for year		(135,509	)		(63,678	)
Net pension expense	$	19,951		$	19,145

	2010			2009
Significant assumptions at December 31
Discount rate		5.3	%		6.0	%
Rate of compensation increase		3.5	%		5.5	%
Long-term rate of return on assets		7.0	%		7.0	%

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(e) Other Benefit Plans Expense

	2010			2009
Current service cost	$	7,422		$	4,910
Interest cost		8,960			7,284
Actuarial loss		17,291			31,127
Balance prior to adjustments to recognize the long-term nature of employee future benefit costs		33,673			43,321
Difference between amortization of past service costs and actual plan amendments for year		450			450
Difference between actuarial loss (gain) recognized and actual actuarial loss on accrued benefit obligation for year		(16,504	)		(31,556	)
Other benefit plans expense	$	17,619		$	12,215

	2010			2009
Significant assumptions at December 31
Discount rate		5.1	%		5.8	%
Rate of compensation increase		3.5	%		3.5	%
Initial health care cost trend rate		9.5	%		10.0	%
Cost trend rate declines to		5.0	%		5.0	%
Year the rate reaches its final level		2019			2019

(f) Pension and Other Post-Retirement Benefits Cash Payments

	2010		2009
Employer contributions to funded pension plans	$	49,938	$	45,890
Benefits paid for unfunded benefit plans		4,814		4,209
Total cash payments for employee future benefits	$	54,752	$	50,099

Benefits paid by the funded pension plan were $30,472,000 for 2010 (2009 — $32,531,000). BPLP’s expected contributions for the year ended December 31, 2011 are approximately $86,148,000 for the pension benefit plans.

The following are estimated future benefit payments, which reflect expected future service:

	Pension Benefit Plans		Other Benefit Plans
2011	$	39,637	$	5,473
2012		43,334		6,013
2013		47,201		6,575
2014		51,134		7,117
2015		54,858		7,613
2016 to 2020		330,163		46,407

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24.	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. (Centerra)
	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 Transfer
	In 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.
(c)	Financial Results of Discontinued Operations
	The 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)	2010		2009
Sale of Centerra		—	$	374.2
Kyrgyz share transfer		—		(45.9	)
Operating earnings		—		54.1
Earnings from discontinued operations		—	$	382.4

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The following table presents the components of the operating results of Centerra:

(Millions)	2010		2009
Revenue		—	$	770.2
Expenses
Products and services sold		—		440.4
Depreciation, depletion and reclamation		—		122.4
Exploration		—		28.5
Other		—		37.3
Earnings before income taxes and minority interest		—		141.6
Income tax expense		—		33.4
Minority interest		—		54.1
Operating earnings		—	$	54.1

25. 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 March 25, 2010, 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 arbitration hearing was completed on November 23, 2010 and final oral arguments are scheduled for June 1, 2011.
	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. Further proceedings in this action are on hold pending completion of the arbitration hearing.
(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, the supplemental rent reduces to $12,000,000 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.

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(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 2011 to 2018:

i)	Guarantees to customers under power sales agreements of up to $35,300,000. At December 31, 2010, Cameco’s actual exposure under these guarantees was $24,000,000.
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 2010, BPLP recorded $339,000,000 under this agreement which was recognized as revenue with Cameco’s share being $107,000,000. Of the amount recorded, BPLP currently expects to repay $4,000,000.

(e) Cameco’s North American workforce includes about 3,300 employees, of which approximately 900 (27%) belong to three separate labour unions.

(f) At December 31, 2010, Cameco’s purchase commitments, the majority of which are fixed price uranium and conversion purchase arrangements, were as follows:

	(Millions (US))
2011	$	267
2012		226
2013		397
2014		114
2015		60
Thereafter		6
Total	$	1,070

26.	Financial Instruments
	The 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.

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Cameco is exposed to interest rate risk through its interest rate swap contracts whereby fixed rate payments on a notional amount of $135,000,000 of the Series C senior unsecured debentures were swapped for variable rate payments. The swaps terminate on March 16, 2015. Under the terms of the swaps, Cameco makes interest payments based on three-month bankers acceptance rate plus an average margin of 1.81% and receives fixed interest payments of 4.7%. To mitigate this risk, Cameco entered into interest rate cap arrangements, effective March 18, 2013, whereby the three-month bankers acceptance rate was capped at 5.0% such that total variable payments will not exceed, on average 6.81%. At December 31, 2010, the mark-to-market gain on Cameco’s interest rate swaps and caps less premiums paid was $1,458,000.

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 2011 to 2016. At December 31, 2010, the mark-to-market gain on BPLP’s sales contracts was $29,000,000.

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:

Level 1 – Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2 – Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3 – Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

When the inputs used to measure fair value fall within more than one level of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measure in its entirety.

Except as otherwise disclosed, the fair market value of Cameco’s financial assets and liabilities approximates the carrying amount as a result of the short-term nature of the instruments, or the variable interest rate associated with the instruments, or the fixed interest rate of the instruments being similar to market rates.

The fair values of Cameco’s privately held available-for-sale securities, as described in note 9, have not been disclosed because of the unavailability of a quoted market price in an active market. Cameco does not currently have plans to dispose of any of these investments.

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	The following tables present Cameco’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis.
As at December 31, 2010

Description	Total			Level 1		Level 2			Level 3
Derivative instrument assets	$	127,842		$	—	$	122,786		$	5,056
Available-for-sale securities [notes 5, 9]		889,065			889,065		—			—
Derivative instrument liabilities		(35,227	)		—		(35,227	)		—
Net	$	981,680		$	889,065	$	87,559		$	5,056

As at December 31, 2009

Description	Total			Level 1		Level 2			Level 3
Derivative instrument assets	$	210,381		$	—	$	197,381		$	13,000
Available-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

The fair value of a financial instrument is the amount at which the financial instrument could be exchanged in an arm’s-length transaction between knowledgeable and willing parties under no compulsion to act. Fair values of identical instruments traded in active markets are determined by reference to last quoted prices, in the most advantageous active market for that instrument. In the absence of an active market, we determine fair values based on quoted prices for instruments with similar characteristics and risk profiles. Fair values of financial instruments determined using valuation models require the use of inputs. In determining those inputs, we look primarily to external, readily observable market inputs, when available, including factors such as interest rate yield curves, currency rates, and price and rate volatilities, as applicable. In some circumstances, we use input parameters that are not based on observable market data. In these cases, we may adjust model values to reflect the valuation uncertainty in order to determine what the fair value would be based on the assumptions that market participants would use in pricing the financial instrument. These adjustments are made in order to determine the fair value of the instruments.

We make valuation adjustments for the credit risk of our derivative portfolios in order to arrive at their fair values. These adjustments take into account the creditworthiness of our counterparties.

Equity-accounted investments and financial instruments classified as available-for-sale comprise actively traded debt and equity securities and are carried at fair value based on available quoted prices.

There were no significant transfers between level 1 and level 2 of the fair value hierarchy. Transfers into level 3 are comprised of BPLP derivative financial instruments with contract terms extending beyond 36 months. Due to the decline in electricity prices as a result of the recession, the liquidity in the market has been significantly reduced, resulting in a lack of an active market and observable market inputs beyond 36 months.

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Derivatives

The following tables summarize the fair value of derivatives and classification on the balance sheet:

As at December 31, 2010

	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives — sales contracts	$	(3,864	)	$	18,877		$	15,013
Foreign currency contracts		47,144			—			47,144
Interest rate contracts		1,458			—			1,458
Cash flow hedges:
Energy and sales contracts		—			29,000			29,000
Net	$	44,738		$	47,877		$	92,615
Classification:
Current portion of long-term receivables, investments and other [note 9]	$	46,629		$	44,505		$	91,134
Long-term receivables, investments and other [note 9]		3,382			33,326			36,708
Current portion of other liabilities [note 13]		(377	)		(20,662	)		(21,039	)
Other liabilities [note 13]		(4,896	)		(9,292	)		(14,188	)
Net	$	44,738		$	47,877		$	92,615

As at December 31, 2009

	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives — sales contracts	$	(2,736	)	$	9,082		$	6,346
Foreign currency contracts		67,031			—			67,031
Cash flow hedges:
Energy and sales contracts		—			96,047			96,047
Net	$	64,295		$	105,129		$	169,424
Classification:
Current portion of long-term receivables, investments and other [note 9]	$	66,972		$	87,439		$	154,411
Long-term receivables, investments and other [note 9]		1,460			54,510			55,970
Current 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

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

For the year ended December 31, 2010

	Cameco			BPLP		Total
Non-hedge derivatives:
Embedded derivatives — sales contracts	$	1,623		$	2,785	$	4,408
Foreign currency contracts		(80,107	)		—		(80,107	)
Interest rate contracts		(2,482	)		—		(2,482	)
Cash flow hedges:
Energy and sales contracts		—			2,998		2,998
Net	$	(80,966	)	$	5,783	$	(75,183	)

For the year ended December 31, 2009

	Cameco			BPLP			Total
Non-hedge derivatives:
Embedded derivatives — sales contracts	$	(4,764	)	$	(4,737	)	$	(9,501	)
Foreign currency contracts		(234,066	)		—			(234,066	)
Interest rate contracts		401			—			401
Cash flow hedges:
Energy and sales contracts		—			(638	)		(638	)
Net	$	(238,429	)	$	(5,375	)	$	(243,804	)

Over the next 12 months, based on current exchange rates, Cameco expects an estimated $5,573,000 of pre-tax gains from the foreign currency cash flow hedges to be reclassified through other comprehensive income to net earnings. The maximum length of time Cameco hedges its exposure to the variability in future cash flows related to foreign currency on anticipated transactions is five years.

Over the next 12 months, based on current prices, Cameco expects an estimated $18,012,000 of pre-tax gains from BPLP’s various energy and sales related cash flow hedges to be reclassified through other comprehensive income to net earnings. The maximum length of time BPLP is hedging its exposure to the variability in future cash flows related to electricity prices on anticipated transactions is six years.

Currency

At December 31, 2010, Cameco had $1,317,500,000 (US) in forward contracts at an average exchange rate of $1.03 and €93,000,000 at an average exchange rate of $1.35. The foreign currency contracts are scheduled for use as follows:

(Millions)	US		Rate		Cdn		Euro		Rate		US
2011	$	890		1.03	$	917	€	45		1.35	$	61
2012		363		1.04		378		46		1.35		62
2013		65		1.03		67		—		—		—
Thereafter		—		—		—		2		1.34		3
Total	$	1,318		1.03	$	1,362	€	93		1.35	$	126

These positions consist entirely of forward sales contracts. The average exchange rate reflects the current forward contract price. Of these amounts, $1,252,500,000 of the US-denominated contracts and $93,000,000 of the Euro-denominated contracts mature in 2011. The remaining $65,000,000 in US-denominated contracts matures in 2012.

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27. Per Share Amounts

Per 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 2010 was 393,168,523 (2009 — 387,955,503).

	2010		2009
Basic earnings per share computation
Net earnings	$	514,749	$	1,099,422
Weighted average common shares outstanding		393,169		387,956
Basic earnings per common share	$	1.31	$	2.83
Diluted earnings per share computation
Net earnings	$	514,749	$	1,099,422
Weighted average common shares outstanding		393,169		387,956
Dilutive effect of stock options		1,850		1,977
Weighted average common shares outstanding, assuming dilution		395,019		389,933
Diluted earnings per common share	$	1.30	$	2.82

28. 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 summary of significant accounting policies.

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(a)	Business Segments
	2010

				Fuel				Inter-
(Millions)	Uranium			Services		Electricity		Segment			Total
Revenue	$	1,373.7		$	300.6	$	476.7	$	(27.3	)	$	2,123.7
Expenses
Products and services sold		698.5			213.6		246.4		(30.6	)		1,127.9
Depreciation, depletion and reclamation		171.8			26.9		52.5		0.3			251.5
Exploration		95.8			—		—		—			95.8
Other		(2.8	)		14.3		—		—			11.5
Cigar Lake remediation		16.6			—		—		—			16.6
Loss on sale of assets		0.1			—		—		—			0.1
Non-segmented expenses												88.7
												.
Earnings before income taxes and minority interest		393.7			45.8		177.8		3.0			531.6
Income tax expense												27.3
Minority interest												(10.4	)
Net earnings											$	514.7
Assets	$	6,317.4		$	395.9	$	863.8	$	—		$	7,577.1
Intangibles	$	—		$	94.3	$	—	$	—		$	94.3
Capital expenditures for the year	$	415.2		$	20.2	$	34.9	$	—		$	470.3

2009

				Fuel				Inter-
(Millions)	Uranium			Services		Electricity		Segment			Total
Revenue	$	1,551.3		$	276.3	$	518.3	$	(30.9	)	$	2,315.0
Expenses
Products and services sold		901.4			203.9		243.5		(24.5	)		1,324.3
Depreciation, depletion and reclamation		161.9			22.8		55.6		0.3			240.6
Exploration		49.1			—		—		—			49.1
Other		15.9			21.3		—		—			37.2
Cigar Lake remediation		17.9			—		—		—			17.9
Gain 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	)		766.9
Income tax expense												52.9
Minority interest												(3.0	)
Net earnings from continuing operations											$	717.0
Assets	$	5,989.7		$	383.9	$	922.6	$	—		$	7,296.2
Intangibles	$	—		$	97.7	$	—	$	—		$	97.7
Capital expenditures for the year	$	333.3		$	20.7	$	38.7	$	—		$	392.7

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(b) Geographic Segments

(Millions)	2010		2009
Revenue from products and services
Canada — domestic	$	689.0	$	739.2
— export		102.9		194.9
United States		1,331.8		1,380.9
	$	2,123.7	$	2,315.0
Assets
Canada	$	5,819.8	$	5,774.5
United States		670.77		695.9
Australia		607.9		553.1
Europe		342.8		139.0
Kazakhstan		230.1		231.4
	$	7,671.4	$	7,393.9

(c)	Major Customers
	Cameco relies on a small number of customers to purchase a significant portion of its uranium concentrates and uranium conversion services. During 2010, revenues from one customer of Cameco’s uranium and fuel services segments represented approximately $125,657,000 (2009 — $252,699,000), about 8% (2009 — 14%) 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 2010, electricity revenues from one customer of BPLP represented approximately 7% (2009 — 5%) of BPLP’s total revenues.

29. Talvivaara Agreement

On February 7, 2011, Cameco signed two agreements with Talvivaara Mining Company Plc. to buy uranium produced at the Sotkamo nickel-zinc mine in Finland. Under the first agreement with Talvivaara, Cameco will provide an up-front payment, to a maximum of $60,000,000 (US) to cover certain construction costs. This amount will be repaid through deliveries of uranium concentrate. Once the full amount has been repaid, Cameco will continue to purchase the uranium concentrates produced at the Sotkamo mine through a second agreement which provides for the purchase of uranium using a pricing formula that references market prices at the time of delivery. The second agreement expires on December 31, 2027.

30. Related Party Transactions

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 2010, Cameco paid Points Athabasca Contracting Ltd. $38,000,000 (2009 — $30,800,000) 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 $2,290,000 (2009 — $230,000) resulting from these transactions.

31. Comparative Figures

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

45

EX-3

Exhibit 3

CAMECO CORPORATION

RECONCILIATION TO UNITED STATES GAAP

December 31, 2010

KPMG LLP	Telephone	(306) 934-6200
Chartered Accountants	Fax	(306) 934-6233
600-128 4th Avenue South	Internet	www.kpmg.ca
Saskatoon Saskatchewan S7K 1M8
Canada

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board Directors of Cameco Corporation

We have audited the accompanying consolidated balance sheets of Cameco Corporation (the “Corporation”) as at December 31, 2010 and 2009 and the related consolidated statements of earnings, shareholders’ equity, comprehensive income, accumulated other comprehensive income and cash flows for each of the years in the two-year period ended December 31, 2010. These consolidated financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Corporation as of December 31, 2010 and December 31, 2009 and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2010 and 2009 in conformity with Canadian generally accepted accounting principles.

Our audits were made for the purpose of forming an opinion on the basic consolidated financial statements taken as a whole. The supplementary information included in Exhibit 99.7 entitled “Reconciliation to United States GAAP” is presented for purposes of additional analysis and requirements under securities legislation. Such supplementary information has been subjected to the auditing procedures applied in the audits of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Corporation’s internal control over financial reporting as of December 31, 2010, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 11, 2011 expressed an unqualified opinion on the effectiveness of the Corporation’s internal control over financial reporting.

Chartered Accountants

Saskatoon, Canada
February 11, 2011

Reconciliation to United States GAAP

The consolidated financial statements of Cameco are expressed in Canadian dollars in accordance with Canadian generally accepted accounting principles (Canadian GAAP). The following adjustments and disclosures would be required in order to present these consolidated financial statements in accordance with accounting principles generally accepted in the United States (US GAAP).

(a) Reconciliation of earnings under Canadian GAAP to earnings determined under US GAAP:

	2010			2009
Earnings from continuing operations under Canadian GAAP	$	514,749		$	716,997
Add (deduct) adjustments for [d]:
Pre-operating costs (i)		1,512			1,512
Stock-based compensation (iii)		(1,261	)		(3,044	)
In-process research and development (viii)		11,363			18,294
Depreciation, depletion and reclamation (ix)		1,359			—
Income tax effect of adjustments		(2,558	)		(2,881	)
Minority interest in loss under Canadian GAAP1		(10,352	)		(3,035	)
Earnings from continuing operations under US GAAP		514,812			727,843
Earnings from discontinued operations under Canadian GAAP		—			382,425
Add adjustment for:
Earnings from discontinued operations [e]		—			100,419
Earnings from discontinued operations under US GAAP		—			482,844
Net earnings under US GAAP	$	514,812		$	1,210,687
Less net loss attributable to non-controlling interests1
Continuing operations		10,352			3,035
Discontinued operations [e]		—			(61,433	)
		10,352			(58,398	)
Net earnings attributable to common shareholders under US GAAP	$	525,164		$	1,152,289
Other comprehensive income:
Comprehensive income under Canadian GAAP	$	448,470		$	974,970
Adjustments to net earnings attributable to common shareholders under US GAAP		10,415			52,867
Add (deduct) adjustments for [d]:
Unamortized actuarial gain (iv)		(75,016	)		(37,006	)
Unamortized actuarial gain transferred to net earnings (iv)		(29,905	)		(27,712	)
Foreign currency translation adjustments (viii)		2,807			4,412
Comprehensive income under US GAAP	$	356,771		$	967,531
Net earnings per share under US GAAP
Basic
Continuing operations	$	1.35		$	1.87
Discontinued operations		—			1.08
	$	1.35		$	2.95
Diluted
Continuing operations	$	1.35		$	1.87
Discontinued operations		—			1.07
	$	1.35		$	2.94

¹ As required by US GAAP, the company has reclassified its non-controlling interests on the statements of earnings and balance sheets.

1

(b) Comparison of balance sheet items determined in accordance with Canadian GAAP to balance sheet items determined in accordance with US GAAP:

(i) Balance Sheets

	2010						2009
	Canadian			US			Canadian			US
	GAAP			GAAP			GAAP			GAAP
Current assets [d(v)]	$	2,531,110		$	2,339,809		$	2,527,741		$	2,258,854
Property, plant and equipment [d(v)]		4,337,809			3,822,298			4,068,103			3,531,905
Intangible assets		94,270			94,270			97,713			97,713
Long-term receivables, investments and other [d(v)(viii)]		628,824			486,545			667,287			718,079
Total assets	$	7,592,013		$	6,742,922		$	7,360,844		$	6,606,551
Current liabilities [d(v)]	$	562,521		$	460,273		$	763,057		$	657,266
Long-term debt [d(v)]		940,317			794,483			952,853			793,842
Provision for reclamation		317,313			317,313			296,896			296,896
Other liabilities [d(v)]		206,519			90,604			205,814			79,289
Deferred income taxes		170,878			46,721			134,356			41,890
		2,197,548			1,709,394			2,352,976			1,869,183
Minority interest		178,139			—			164,040			—
Shareholders’ equity
Share capital [d(vi)]		1,535,857			1,522,927			1,512,461			1,499,531
Contributed surplus		142,376			136,183			131,577			124,123
Non-controlling interest1		—			178,139			—			164,040
Retained earnings		3,563,089			3,439,090			3,158,506			3,024,092
Accumulated other comprehensive income
- net actuarial loss [d(iv)]		—			(10,142	)		—			(10,538	)
- equity investment net actuarial loss [d(iv)]		—			(216,437	)		—			(110,785	)
- equity investment prior service cost [d(iv)]		—			(1,435	)		—			(1,772	)
- cumulative translation account [d(ii)(viii)]		(57,095	)		(46,896	)		(50,398	)		(43,005	)
- hedges and derivative instruments		47,600			47,600			109,308			109,308
- available-for-sale securities		(15,501	)		(15,501	)		(17,626	)		(17,626	)
Total accumulated other comprehensive income		(24,996	)		(242,811	)		41,284			(74,418	)
Total shareholders’ equity		5,216,326			5,033,528			4,843,828			4,737,368
Total liabilities and shareholders’ equity	$	7,592,013		$	6,742,922		$	7,360,844		$	6,606,551

¹ As required by US GAAP, the company has reclassified its non-controlling interests on the statements of earnings and balance sheets.

2

(ii) Components of accounts payable and accrued liabilities are as follows:

Accounts payable	$	311,173	$	228,437	$	438,012	$	339,390
Taxes and royalties payable		3,869		35,626		50,386		91,143
Accrued liabilities		76,844		76,844		46,266		46,266
Total accounts payable and accrued liabilities	$	391,886	$	340,907	$	534,664	$	476,799

(c) The effects of these adjustments would result in the consolidated statements of cash flows reporting the following under US GAAP:

	2010			2009
Cash provided by operations	$	464,628		$	660,757
Cash (used in) provided by investing		(1,107,501	)		255,837
Cash (used in) provided by financing		(76,316	)		127,795

Included within the cash (used in) provided by investing activities for 2010 is $nil (2009 - $871,300,000) related to the disposition of the interest in Centerra Gold Inc. (Centerra). There are no cash flows from discontinued operations contained within cash provided by operations or financing activities.

(d) A description of certain significant differences between Canadian GAAP and US GAAP follows:

(i)	Pre-Operating Costs
	Under Canadian GAAP, pre-operating costs incurred during the commissioning phase of a new project are deferred until commercial production levels are achieved, subject to time limitations. Under US GAAP, such costs are expensed as incurred. McArthur River commercial production commenced March 1, 2000 for US GAAP and November 1, 2000 for Canadian GAAP. Differences in capitalized costs are amortized over the estimated lives of the assets to which they relate.
(ii)	Cumulative Translation Account
	Prior to 2007, under US GAAP, exchange gains and losses of any foreign currency debt designated as hedges of net investments in subsidiaries were included in comprehensive income. Cumulative amounts were included in accumulated other comprehensive income on the balance sheet. Adjustments from prior years related to this difference amount to $12,639,000.
(iii)	Stock-Based Compensation
	In 2007, Cameco amended its stock option program, introducing a cash settlement feature for the exercise of employee stock options. Under Canadian GAAP, options that include a cash settlement feature are classified as liabilities and carried at their intrinsic value. The intrinsic value is marked to market each period with an offsetting adjustment to expense. Under US GAAP, the liabilities are required to be measured at their fair value each period with an offsetting adjustment to expense. For US GAAP purposes, the fair value of the options was determined using the Black-Scholes option-pricing model. As a result of the difference, compensation expense for US GAAP purposes for 2007 was reduced by $76,126,000.
	In November 2008, Cameco amended its stock option program, removing the cash settlement feature for the exercise of employee stock options. Under both Canadian and US GAAP, options that do not include a cash settlement feature are classified as equity and measured at their grant date fair value. The Black-Scholes option-pricing model was used to determine the fair value of the options as at the date of amendment. It was determined that compensation expense previously recorded under Canadian GAAP was in excess of the fair value of the outstanding options. Thus, no charges or recoveries were recorded under Canadian GAAP as a result of this amendment. The expense recorded under US GAAP, while the cash settlement option was in effect, was lower than the grant date fair value of the outstanding options. The reversal of the recovery of stock compensation costs as a result of the use of the intrinsic value model under Canadian GAAP at a time when Cameco’s share price was declining results in an increase expense for US GAAP purposes of $1,261,000 in 2010 (2009 — $3,044,000). The cumulative Canadian-US GAAP difference for stock-based compensation expense is $7,454,000, of which

3

	$2,202,000 is a permanent difference. The remaining $5,252,000 is a temporary difference and future expenses under US GAAP will be increased by that amount.
	As of December 31, 2010, Cameco had stock-based compensation costs relating to unvested stock option awards that have not yet been recognized in the amount of $3,898,000 (2009 — $3,186,000), net of estimated forfeitures. The compensation cost will be recognized on a straight-line basis over the remaining vesting periods of the awards.
(iv)	Pension and Other Post-Retirement Benefits
	Under US GAAP, an entity is required to recognize the funded status of a benefit plan in the balance sheet and to recognize the existing unrecognized net gains and losses, unrecognized prior service costs, and unrecognized net transition assets in other comprehensive income. There is no similar requirement under Canadian GAAP.
	For the Cameco benefit plan, a gain of $396,000 was included in other comprehensive income (2009 — a loss of $4,635,000). For the BPLP benefit plan, a loss of $105,575,000 was included in other comprehensive income (2009 — a loss of $50,624,000).
	The rate used to discount pension and other post-retirement benefit plan obligations was based on the AA high quality Canadian corporate bond yield curve at December 31, 2010, as developed by third party actuaries. The estimated future cash flows for the pension and other post-retirement obligations were matched to the corresponding spot rates on this yield curve to derive a representative single discount rate.
	In 2009, the Ontario provincial government enacted amendments that provided for a reduction in the general corporate income tax rate for business operating in the province of Ontario. The cumulative effect on the income tax liability related to the 2009 adjustments to other comprehensive income for pension and other post-retirement benefits was an increase of $9,460,000.
(v)	Investment in Bruce Power L.P. (BPLP)
	Under Canadian GAAP, Cameco accounts for its interest in BPLP by the proportionate consolidation method. Under US GAAP, Cameco is required to equity account for its investment and record in earnings its proportionate share of their net earnings measured in accordance with US GAAP.
(vi)	Convertible Debentures
	Under US GAAP, convertible debentures are to be classified entirely as debt rather than equity. Due to the difference, accretion related to the equity component of convertible debentures for Canadian GAAP has been reversed for US GAAP purposes. Since all interest related to the debentures was being capitalized under both US and Canadian GAAP, the adjustments affected only the balance sheet. The convertible debentures were converted to common shares in October 2008. In comparison to Canadian GAAP, the cumulative differences on the US GAAP balance sheet were to decrease share capital by $12,930,000 and property, plant and equipment by $12,930,000.
(vii)	Income Taxes
	A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

	2010			2009
Balance, beginning of year	$	43,087		$	34,487
Additions based on tax positions related to the current year		2,600			3,369
Additions for tax positions of prior years		5,000			10,295
Reductions for tax positions of prior years		(8,086	)		(5,064	)
Balance, end of year	$	42,601		$	43,087

All of the tax benefits included in the table would, if recognized, impact the effective income tax rate. It is Cameco’s policy to classify interest and penalties associated with unrecognized tax benefits, if any, in income tax expense. For the years ended December 31, 2009 and 2010, there were no amounts accrued for penalties or interest expense.

Cameco and its subsidiaries file tax returns in several jurisdictions. At December 31, 2010, the significant jurisdictions and the tax years subject to examination by tax authorities were as follows:

4

	Years
Canada	2006 — present
United States	2007 — present
Kazakhstan	2008 — present
Switzerland	2009 — present
Barbados	2002 — present

(viii)	Investment in GE-Hitachi Global Laser Enrichment LLC (GLE)
	Effective June 19, 2008, Cameco acquired a 24% interest in GLE. In total, $94,727,000 of the purchase price has been allocated to in-process research and development (IPR&D). Under Canadian GAAP, IPR&D is capitalized and amortized over the period until the project commences commercial production. Under Canadian GAAP, these expenditures are being amortized over a period of 8.5 years, with all amounts amortized by December 31, 2016. Under US GAAP, any portion of the purchase price allocated to research and development activities for which there is no alternative future use must be expensed on the acquisition date. Under US GAAP, the expense for 2010 has been decreased by $11,363,000 (2009 — $18,294,000). As a result, the carrying value of the investment is lower under US GAAP which causes a foreign currency translation difference in the amount of $2,439,000 (2009 — $5,245,000), which has been recorded in the cumulative translation account.
(ix)	Inkai Pre-Bankable Feasibility
	Under Canadian GAAP, costs incurred prior to the completion of a bankable feasibility study were deferred until commercial production levels are achieved. Under US GAAP, such costs are expensed as incurred. Differences in capitalized costs are amortized over the estimated lives of the assets to which they relate.

(e)	Sale of Centerra Gold Inc. (Centerra)
	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, for Canadian GAAP purposes, 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. For US GAAP purposes, Cameco recorded an incremental gain on disposition of $30,816,000 which represents the remaining book value of Centerra’s net assets under US GAAP.
	The assets and liabilities related to the 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.
	Financial Results of Discontinued Operations
	The 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 US GAAP adjustments related to the discontinued operations amounts:

	2010		2009
Sale of Centerra	$	—	$	30,816
Operating earnings		—		69,603
Earnings from discontinued operations	$	—	$	100,419

The incremental gain of $30,816,000 was comprised of amounts related to unamortized stripping costs ($12,819,000), previously unvalued gold ore stockpiles ($8,787,000), future income tax assets acquired on acquisition of Centerra ($1,964,000), and previously recognized differences in the cumulative translation account ($7,246,000). Cameco has made an immaterial adjustment to the 2009 US GAAP reconciliation to reflect the realization of the cumulative translation account related to the gain on sale of Centerra. As a result, earnings from discontinued operations and net earnings attributable to common shareholders under US GAAP have increased by $7,246,000 for 2009.

5

The following table presents the components of the US GAAP adjustments related to the operating results of Centerra:

	2010		2009
Stripping costs	$	—	$	18,929
Income tax (expense) recovery		—		(3,426	)
Reclassification of non-controlling interest		—		54,100
Operating earnings	$	—	$	69,603

Under Canadian GAAP, stripping costs incurred during the production phase by mining companies to remove overburden and other mine waste materials in order to access mineral deposits, can be either expensed or capitalized given the specifics of the situation. Under US GAAP, stripping costs are deemed to be variable production costs that should be included in the costs of the inventory produced during the period that the stripping costs are incurred. No stripping costs were incurred in 2009 and capitalized at Centerra’s mines under Canadian GAAP. Under US GAAP, adjustments were made to expense these amounts. Differences in capitalized costs are amortized over the estimated lives of the assets to which they relate. In 2009, an adjustment was made to reduce the amount of depreciation charged to earnings by $18,929,000. A charge for non-controlling interest in the amount of $7,333,000 is included in the net loss attributable to non-controlling interests.

As required by US GAAP, the company has reclassified its non-controlling interests on the statements of earnings and balance sheets. Accordingly, minority interest of $54,100,000 included in discontinued operations under Canadian GAAP has been reclassified as net loss attributable to non-controlling interest.

6