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HIGH-END BUSINESS AND IT CONSULTING SYSTEMS INTEGRATION TRANSFORMATIONAL OUTSOURCING IP-BASED SERVICES AND SOLUTIONS 2016 Annual Review Your end-to-end partner in digital transformation CGI Experience the commitment

At CGI, we‘re building upon a 40 year history of listening to the needs of our clients, innovating together to create business value, leading the industry to help clients with their digital transformation, and delivering to achieve stakeholders‘ long-term success. This 2016 Annual Review showcases how we serve as our clients‘ partner and expert of choice via our unique proximity model in helping drive forward their end-to-end digital transformation. End-to-end digital transformation: Through our end-to-end services and solutions, we deliver digital strategies and technologies and connect them to legacy systems to help clients transform how they operate and engage with digital customers and citizens. Client proximity: CGI‘s client proximity model fosters deep understanding of clients‘ businesses and strong relationships to provide best-if t digital transformation solutions, supported by our global delivery capabilities and in-depth industry and technology expertise.

DREAM INSPIRED. CLIENT DRIVEN. Since our founding in 1976, we?ve seen computers come out of labs and into our offices, our homes and our pockets. We?ve watched our connected world get smaller and smaller, transcending cultures, languages and borders. We?ve seen bubbles, booms and busts— and, through it all, we?ve helped our clients persevere and grow. Today, we help businesses efficiently and securely move the money that moves the goods that benefit people, communities, countries and continents. We help people save for homes and an education, and provide a safe and secure financial future for their families. We help governments meet the everyday needs of their citizens, supporting a backbone of services that enable healthcare, justice and transportation systems. We help clients maximize the technologies that run their business and then help them change their business by moving through the doors the digital world has opened. We accomplish all this and more through our people. Committed and creative, CGI members understand our clients? business and the technology that drives forward their digital transformation. We are inspired by the CGI Dream. To create an environment in which we enjoy working together and, As owners, contribute to building a company we can be proud of. We are driven to help our clients succeed. Watch the video at cgi.com/driven.

2016 ANNUAL REVIEW WE LISTEN. WE INNOVATE. WE LEAD. WE DELIVER. CONTENTS Built to grow and last Founder and Executive Chairman of the Board Serge Godin and President and Chief Executive Officer George D. Schindler CGI by the numbers Our client commitment To listen To innovate To lead To deliver About CGI Global footprint Leadership team Our strong foundation CGI in our communities

Built to grow and last Serge Godin, George D. Schindler, Founder and Executive Chairman President and Chief Executive Officer of the Board

It‘s an extraordinary time to be in‘business. The digital needs of customers and citizens are bringing about the transformation of commercial and government organizations around the world- and CGI is at the forefront of this change, serving as a leading IT services partner and expert of choice to support our clients‘ journeys. As we look ahead, Serge Godin and George D. Schindler share how CGI is best positioned to help our clients transform to become customer-centric, digital enterprises. George was appointed as the third President and CEO in CGI‘s 40‘year history. How‘does this change affect CGI‘s stakeholders‘ Serge: When I founded CGI in 1976, my objective was to build a company where our professionals, whom we call members, share in the same CGI Dream: ‘To create an environment in which we enjoy working together and, as owners, contribute to building a‘company we can be proud of.‘ From this ambition, we have built a company that operates based on a uniform set of values, policies, frameworks, processes, operational principles and measures, which make up the CGI Management Foundation. This Foundation provides for the consistent, high-quality execution of our commitments to our three stakeholders- clients, members and shareholders- no matter where CGI operates in the world. George becoming CEO does not represent a change but a continuation of CGI‘s ongoing commitment to being the best in the industry- a partner and expert of choice to our clients, a rewarding place in which to build a career for our members, and a long-term profitable investment for our shareholders. With 30‘years of experience, George has successfully managed large operations in IT‘and management consulting. He joined CGI in‘2004 and has led our U.S. business, North‘American operations and, most recently as Chief Operating Officer, all global operations reported to him. I have every confidence that as CEO, George is the right leader at the right time to continue our track record of delivering on our promises to all‘stakeholders. George: I feel deeply privileged to serve as just the third CEO of CGI- and to do so during such a dynamic time in our industry. Our clients are asking for our help as they work to digitally transform to meet the needs of their customers and citizens, and technology plays a central role in supporting them as it moves from being an enabler to a‘driver of this change. Digital transformation offers our stakeholders endless opportunities to grow. I thank Serge and the Board for their confidence, and look forward to continuing to execute CGI‘s Build and Buy profitable growth strategy and taking CGI forward as clients‘ trusted and innovative partner on the digital journey ahead. Another milestone from this year is the publication of the CGI Global 1000, which is an outlook on trends and priorities from more than 1,000‘in-person conversations with business and technology client executives. What did we learn and how do the findings help shape our strategy‘ George: Every year as part of CGI‘s strategic planning process, we meet in person with business and technology executives to discuss the trends influencing their industries and their key strategic initiatives. We analyze the findings to develop CGI insights and a comprehensive global outlook that we then share with each participating executive. This year, given the clear and compounding trends over the years surrounding the digital agenda globally, we published a report for the benefit of all existing and prospective clients. This outlook is then reflected in our strategic plans to ensure we are best positioned to meet client demand and, as a result, drive value for all CGI stakeholders.

“CGI is one of the few global firms with the talent, scale and end-to-end services and solutions necessary to help clients succeed holistically with their digital transformation.” In 2016, our clients across the industries we serve said that digital transformation is no longer just an enabler but a driver of their business. More than 70% of leaders cited the pressures from the rapid rise in influence of digital customers and citizens as their top trend. This represents a significant shift in thinking in terms of how clients run, change and grow their organizations. They must modernize and transform today’s legacy assets and connect them to digital business and operating models. Serge: We are the only IT services company that engages in such a comprehensive process to identify the top trends and priorities that are most significant to our clients. We also engage members and shareholders in the strategic planning process, ensuring they have a voice on how to continually advance our strategic goals. These consultations are reflective of our strong culture in which we continuously refine and evolve our strategy to meet the needs of our three stakeholders. In addition to these consultations, we also conduct ongoing satisfaction assessments of each stakeholder group to measure our performance. This ongoing consultation and measurement with a focus on seeking the best equilibrium between our three stakeholders are what produce the best results over the long term. Why is CGI in the best position to serve as clients digital transformation partner and expert of choice George: Clients have a competitive urgency to become digital in a sustainable way. They realize they need to invest in the digital future and transform their organizations across the people, process and technology areas of their business. CGI is one of the few global firms with the talent, scale and end-to-end services and solutions necessary to help clients succeed holistically. Our client proximity model fosters a deep understanding of clients businesses and strong relationships to build best-fit innovative digital solutions, supported by our global delivery model that brings forward industry and technology expertise. On the Build side of our strategy, we exploit four strategic levers to help them become digital organizations: High-end business and IT consulting with a focus on digital Systems integration to connect legacy assets with digital business and operating models Transformational outsourcing to improve both how they run and change their organizations Intellectual property that acts as a digital business accelerator This is an extraordinary time to be in business, and change will continue to happen faster and more expansively than ever before. CGI has all the capabilities required to help clients create a clear, customer-focused vision; a digital-first culture; and an operating model that will deliver accelerated and ongoing value. Serge: The CGI Management Foundation that I discussed earlier is a differentiator and success factor in helping clients transform. Operational discipline is part of CGI’s DNA, and the Foundation has and will continue to serve as a platform for accelerated growth over the years to come. When a client partners with CGI, they can be assured that our model is focused on providing them with the best value, both in terms of project delivery and in bringing forward innovative services and solutions designed specifically to address their industry and market needs. George: On the Buy side, we focus on both transformational deals to further expand our geographic scale and niche acquisitions to strengthen our local proximity metro markets. Together, these two pillars bolster our industry expertise, services and solutions so we can continuously add new capabilities to best serve our clients and help them succeed in a digital world.

2016 ANNUAL REVIEW This year’s Annual Review is focused on how CGI listens, innovates, leads and delivers. Can you share a few words on why these four attributes are so important George: Today, we partner with clients on their most strategic and visible initiatives, helping to protect, grow, improve, develop and innovate the technology that runs their business. This Annual Review demonstrates how we listen to our stakeholders perspectives, innovate to solve complex challenges and create new opportunities, lead through our industry and domain expertise, and deliver through operational excellence. Reading through this Annual Review provides a demonstration of how CGI helps clients realize the promises of digital transformation. We thank our clients and shareholders for choosing CGI. Our 68,000 members are committed to striving each day to continue earning your trust and loyalty. We look forward to working together with our clients to gain from the opportunities that our digitally connected world will bring us. Now that CGI has been in business for more than four decades, what can clients, members and shareholders expect in the years to come Serge: As George mentions, it is a rewarding time to be in the IT services industry. Our long-term commitment to serving our stakeholders is only accelerating as we support clients with their digital transformation. CGI is an institution built to grow and last. As I look ahead to our next 40 years in business, we will continue to be a consolidator within the industry, always evolving to best serve our stakeholders needs. Our stakeholders can expect to continue to benefit from CGI’s deep commitment to their success, no matter the economic environment and the business and technology trends leading them forward. To all those with whom we have had the privilege of working, thank you. I look forward with great anticipation to the value we will continue to create for all of our stakeholders in the years to come. “Our stakeholders can expect to continue to benefit from CGI’s deep commitment to their success, no matter the economic environment and the business and technology trends leading them forward.”

CGI by the CGI 2016 numbers AR.pdf CGI is a financially strong and growing company. At CGI, financial strength is not an objective, but a duty—a responsibility that each of our professionals takes seriously. In fact, financial strength is one of our core values. It enables us to continuously invest in the best services and solutions that benefit our clients, support our members in their continuous development, and sustain long-term growth and superior returns for our shareholders. Our global reach combined with our proximity model of serving clients from hundreds of metro markets around the world provides the scale and immediacy required to rapidly respond to clients digital transformation needs. Our experts apply deep industry and technology expertise to help clients innovate to deliver great value to their customers and citizens.

Fiscal 2016 year-over-year results 2016 ANNUAL REVIEW Cash flow from Revenue Backlog Bookings Net earnings EPS (diluted) operations $10.7B $20.9B $11.7B $1.1B $3.42 $1.3B 110% up 3.9% up $181.8M of revenue up 9.3% up 12.5% up 3.4% History of profitable growth CGI has experienced significant growth through the disciplined execution of our Build and Buy profitable growth strategy- growth that has been key to fulfilling our vision of being a global world-class information technology and business process services leader helping our clients succeed. Since our initial public offering in 1986, we have provided an average return of 19%. Members: 1,800 Revenue: $ 122M Share price: $ 0.42 Members: 450 Revenue: $22M Share price: $0.41 Members: 68,000 Revenue: $10.7B Share price: $62.49 Members: 25,000 Revenue: $3.5B Share price: $7.32 Global footprint One of the largest IT and business process services companies in the world 68,000 professionals (80% are shareholders) Geographic footprint that accounts for 81% of IT spend worldwide 10 focused industry segments that represent 100% of IT spend worldwide Global delivery capabilities through centers located on 5 continents Offerings High-end business and IT consulting Systems integration Transformational outsourcing 150+ IP-based services and solutions Clients More than 5,000 clients across the globe in the commercial and public sectors 8.9 satisfaction score and 9.1 client loyalty score out of 10 based upon 6,378 signed assessments Strong investment of $350M in the operations, such as in our innovation, cybersecurity, robotics and automation programs, to drive further digital transformation capabilities All figures in Canadian dollars

We listen. Listening is built into CGI’s DNA We invest in listening to our clients, members and shareholders with one purpose in mind- to better understand how we can exceed their expectations and create ongoing value. We’ve learned throughout more than 40 years in business that the input of our stakeholders combined with the insights of our experts enables us to continuously improve to drive their success. For our clients, we invest in annual face-to-face conversations and ongoing client satisfaction assessments to give us a deep understanding of their challenges and opportunities. For our professionals, whom we call members, we conduct an annual consultation to solicit their ideas on how to better serve our clients and grow our business, and also measure their satisfaction throughout each year. For our shareholders, we hold hundreds of meetings and conduct an independent assessment every year to gain their insight for developing our strategy and improving our execution. Continuously and passionately listening to our stakeholders has enabled us to balance their interests and fulfill their needs. Ultimately, it’s been fundamental to helping our clients succeed, providing rewarding careers for our members and delivering superior returns to our shareholders.

2016 ANNUAL REVIEW CLIENTS Digitally transforming for the future- together In today’s digital world, technology has moved beyond its traditional role of enabling business to becoming a driver of business change. At CGI, we use advanced digital technologies and our industry expertise to support clients at every stage of their digital journey. Aligning our investments with clients top trends and priorities In 2016, as part of our annual Voice of Our Clients program, CGI met face-to-face with more than 1,000 business and IT leaders across 10 industries and 20 countries to hear their perspectives on the trends impacting their organizations and the implications these trends have on their businesses. In these in-depth conversations, we discussed their challenges and opportunities, as well as their business and IT priorities, budgets and plans. Each year, CGI incorporates the findings and insights from these conversations into our annual strategic planning process to help refine our thinking, inform our investments and evolve our strategy to better address clients evolving needs. We also share the results with participants to help guide their own strategic planning. This year, we went a step beyond and published the findings and insights in the 2016 2017 edition of the CGI Global 1000. The trends and priorities identified in this outlook reflect the acceleration of digital transformation across the industries we serve. Top 5 global industry trends 71% Rising influence of consumerization 62% Evolution of security from defense to differentiator 51% Relentless regulatory demands 34% Restructuring of industry business models 27% Emergence of IT as a driver of business change Top 5 global business priorities 62% Improve the customer experience/journey 52% Generate customer and business insights for better and faster decision-making 50% Collaborate internally and partner/acquire externally 50% Optimize and modernize to reduce the costs of running the organization (e.g., automation) 50% Protect the organization from cyber and other emerging trends Top 5 global IT priorities 75% Rationalize and modernize IT to reduce the costs of running the organization 56% Generate customer and business insights for better and faster decision-making 55% Protect the organization from cyber and other threats 46% Develop real-time, end-to-end digital processing 44% Adopt new delivery models (e.g., SaaS, PaaS, cloud, outsourcing)

WE LISTEN Commitment to continuous improvement Satisfying clients is our business. CGI’s commitment to client satisfaction and high-quality and innovative delivery is reflected in our high client satisfaction scores. At CGI, client satisfaction is a key indicator of our success and is carefully measured and managed on a continuous basis through a comprehensive Client Satisfaction Assessment Program (CSAP). As part of the CSAP, clients engage in regular in-person discussions with their account managers to discuss the level of satisfaction with the quality and value of services and expertise provided, identify areas for improvement, and promptly address new opportunities. In response, CGI makes ongoing adjustments to ensure service excellence. The collective results of these client satisfaction meetings across CGI lead to an overall report card on CGI’s performance that helps us to better understand our clients expectations and requirements and what more we can do to help clients achieve their digital transformation. 2016 Client Satisfaction Assessment Program (CSAP) highlights Number of CSAP surveys 6,378 Client loyalty 9.1/10 Industry knowledge 8.9/10 Expert of choice 8.9/10 Technology expertise 8.8/10 As a leader in food and pharmaceutical distribution in Quebec and Ontario, it’s important that Metro grows its competitive advantage by continuously driving customers satisfaction and long-term loyalty. CGI listens to and understands our business priorities and has served as our long-term IT services partner in supporting the efficiency of our back-end operations. Given our mutual trust and successful 15-year history, CGI is a natural partner to help execute our digital transformation roadmap. This year, CGI helped with the implementation and the launch of a comprehensive website and e-commerce service that will enable us to best support our customers as they increasingly choose to shop digitally. The partnership between Metro and CGI has enabled us to deliver a leading technological solution that offers a differentiated and streamlined experience. Marc Giroux, Senior Vice-President Metro Montrreal, Canada

MEMBERS 2016 ANNUAL REVIEW CGI’s client-driven talent approach CGI has a 40-year track record of investing in talent. Today, we’re 68,000 members strong, serving clients across the globe from hundreds of locations. At CGI, our talent strategy is 100% client centric. We align our hiring with the needs of our clients, and the process is owned by the business leaders closest to our clients. Key client-centric principles that define and guide our talent strategy include: Client proximity: Our members live and work near clients to provide a high level of accountability and responsiveness. Our local CGI team speaks the clients languages, understands their business, and collaborates to advance their goals. Global expertise: We complement client proximity with the sharing of expertise from CGI members around the world who bring ideas, best practices and solutions to local accounts. We offer best-fit global delivery options, including onsite, onshore, nearshore and offshore delivery. Ownership culture: CGI’s ownership culture is one of our key differentiators. An impressive 80% of members are CGI shareholders, reflecting a strong personal commitment to the company and our clients success. Learning and development: CGI invests in comprehensive learning and development programs through the CGI Leadership Institute to ensure our members build, maintain and increase the skills they need to respond to clients evolving digital needs. Talent integration: We successfully integrate talent into CGI, with half of our members joining the company through acquisitions or large outsourcing engagements. Our proven practices ensure seamless integrations, with significant value-add to our clients businesses. Another key principle is our commitment to listening to members and using their input to shape our strategy, offerings and delivery. This input has proved to be invaluable in aligning our business to client needs and exceeding expectations. CGI is focused on serving as clients partner and expert of choice. This requires the right talent- professionals with the experience and skills to build digital, customer-centric enterprises. At CGI, we invest in recruiting, training and retaining professionals with extensive industry and technology expertise. Through this investment, we help clients accelerate their digital transformation while achieving high client satisfaction and service excellence. We’ll continue to build our team in direct alignment with ensuring our clients success on their digital transformation journeys. Julie Godin Vice-Chair of the Board, Chief Planning and Administration Officer

WE LISTEN Client satisfaction drives member satisfaction CGI Year after year, members rate client satisfaction as key to their own work satisfaction. Through our Member Satisfaction Assessment Program (MSAP), members have the opportunity to provide input related to our client work and suggest ideas for improvement. The program also helps members- through continuous two-way dialogue- to build successful careers by assessing their satisfaction, goals and needs, and ensuring they receive the right support. In addition to the MSAP, CGI conducts an annual Member Consultation that solicits member input on the direction of our company, including how we can better serve clients. In 2016, 74% of members participated in the consultation and provided 51,000 suggestions and observations. As an integral part of our clients day-to-day operations, CGI members are in the best position to identify ways to help clients achieve their business goals. Our members are keen to apply their expertise to help clients implement digital strategies that accelerate their transformation. Their input on how we can continue to drive forward our clients success is applied to our business plans to ensure we’re well positioned to address client needs in the year ahead and beyond. 2016 Member Satisfaction Assessment Program (MSAP) highlights Number of MSAP surveys 45,127 Commitment to the company 8.4/10 Client satisfaction provides 8.6/10 8.3/10 work satisfaction Living the company’s values Every year CGI hosts the Annual Tour to launch our business plans across the company. A key part of our strategic planning process, the global event provides an opportunity for leaders to meet with members to share our strategic priorities and engage in two-way dialogue about our performance and future course. Through this in-person gathering, our members gain a greater understanding of our business and clients, equipping them to help improve our performance and better respond to client needs. The event also ensures alignment on the company’s strategic priorities and understanding of the goals to pursue, as a team, during the coming year. CGI’s Annual Tour: Aligning members with our strategic direction Montrreal, Canada Bordeaux, France 12

SHAREHOLDERS Executing a growth strategy to best serve as clients’ partner of choice In the IT industry, companies come and go. CGI is the exception. Our Build and Buy growth strategy is central to ensuring we satisfy the needs of our clients, offer rewarding careers for our members, and provide a superior return over time for our shareholders. As market conditions increasingly favor consolidation, CGI will continue to execute our strategy to meet client demand for global partners. On the Build side, we invest in our end-to-end digital transformation capabilities, including high-end consulting, systems integration, transformational outsourcing and digital intellectual property (IP), with IP representing 20% of CGI’s revenue. In fiscal 2016, CGI’s book-to-bill ratio was 110%, and 57% of bookings included extensions and renewals, and 43% represented new business. On the Buy side, we focus on large, transformational acquisitions to further expand our geographic presence and critical mass, and small, niche acquisitions that provide deep local relationships, rich industry expertise, and digital transformation skillsets. These opportunities are identified through our client conversations and CGI Global 1000 insights (see pages 9 and 10). This year, we made the following strategic niche acquisitions: JSL, a ?leading Toronto-based consultancy specializing in banking and agile development; Alcyane, a French high-end consulting firm, also specializing in banking; and Collaborative Consulting, a Boston-based consulting firm with a focus on digital solutions, particularly in the areas of financial services and life sciences. Both sides of the strategy complement one another: We build organically to invest on the Build side, while the Buy side drives organic growth by offering clients additional resources and capabilities. CGI is well recognized by the investment community for this strategy, and our financial strength will continue to support CGI’s ability to help clients drive forward their digital transformation. 2016 Shareholder Satisfaction Assessment Program (SSAP) highlights Number of investor meetings 223 M&A execution 8.9/10 Operational discipline 9.4/10 Credibility 8.9/10 Rotterdam, Netherlands Stockholm, Sweden This year’s event- Dream inspired. Client driven.- placed an emphasis on how CGI members are driven to help bring our clients digital transformation dreams to life. The gathering brought together CGI professionals from across our global operations. 37,000 participants | 18 countries | 4 days | 11 global broadcasts Throughout the Annual Tour, members were invited to share stories of how they are collaborating across the globe to bring forward the full strength of CGI’s digital capabilities to benefit our clients. These stories provided further demonstration of how the work we do helps clients satisfy their digital customers and citizens. 13

We innovate. Aligning innovation programs and investments to the needs of our clients CGI is a trusted partner with more than 40 years of experience in delivering innovative, client-inspired business solutions. These solutions accelerate our clients digital transformation and enable them to achieve their goals faster with reduced risk and enduring results. From the creation of a new solution to the ongoing evolution of our top commercial intellectual property (IP), CGI uses the CGI Global 1000 outlook- insights from our annual 1,000 in-person conversations with business and IT leaders- and our day-to-day work with clients to inform our investments. Helping a Swedish biobank benefit from 3D modeling Working in an environment with extreme conditions creates great demands. Every day, we handle several hundred samples stored at minus 80 degrees Celsius. Up to now, there has been no means to meet these conditions and provide support in our daily work. Together with CGI and HoloLens, we see several opportunities that can contribute to the efficiency and management of these important research samples while the working environment for our employees greatly improves. This is a very exciting project for us that also might lead to many new ideas and applications in healthcare and research. Jenny kerblom, Department Head Biobank North, V sterbotten County Council Ume, Sweden 14

TURNING IDEAS INTO OUTCOMES Programs that harness, generate, assess and fund innovation CGI’s Innovation, Creativity and Experimentation (ICE) program is a cross-company initiative that harnesses new solutions to help clients with their digital transformation. Through calls to action, CGI professionals submit ideas to solve a business challenge, and the best ideas are funded to create proofs of concept and demos for clients. Proven solutions are then further developed to become part of the CGI commercial intellectual property (IP) portfolio. To further support client innovation, CGI also runs an On-the-Job Innovation program to harvest ideas from proposals and from those ideas developed while working on a client project. Learn more at cgi.com/innovation. 2016 ANNUAL REVIEW Innovation, Creativity and Experimentation (ICE) program highlights 61 calls to action 2,782 ideas submitted 40 ideas funded In 2016, funded ideas included Automation Genomics as a service offering that supports improved diagnostic decisions and artificial Migration management tool that allows IT infrastructure modernization projects to be intelligence completed with cost and time efficiencies Automated incident response management platform to speed IT and security incident responses through machine learning, analytics and automation technologies Customer Digital retail queue mobile app to enable retailers to digitalize the in-store shopping experience experience, such as finding the least congested checkout, scheduling an appointment with and digital a sales clerk, and self-returning a product insights BIBO (Be-In, Be-Out) charging model to enable train passengers to pay fares on the move Digital municipal services to provide governments with a pre-packaged suite of standardized services offered via SaaS Public services app to alert citizens of nearby public services and enable them to make suggestions or report issues Trusted digital services solution through scalable/adaptive cloud brokerage services to integrate identity, authentication, multilevel electronic/digital signatures, transaction management, certification and safekeeping of reliable original or official electronic records Cybersecurity Car2Car certificate service to enable secure, encrypted communications based on new automotive standards Cybersecurity monitoring to apply data analysis and predictive modeling to improve operational efficiency and effectiveness within clients cyber analytics capability Internet of Asset-finding digital tool to attach iBeacon transmitters to mobile resources to help Things (IoT) hospitals quickly locate equipment and measure equipment performance and intelligent Automated identification technology (AIT) solution to provide data exchange between machines legacy enterprise systems on a secure IoT and SaaS platform Remote monitoring of high-value assets through the research and development of long-range wireless communications Trade finance Automated decision tree for CGI’s trade and transaction reporting services to provide transformation clients with end-to-end regulatory reporting Blockchain for trade finance to store invoice assets and track their status, enabling banks to validate if another bank has already financed them to avoid duplicate financing Digital insights Analytics as a service platform that extracts meaningful data while reducing IT and business process development time Digital collaboration platform that enables organizations to share agreed data without the overhead of changing legacy systems or creating a new data warehouse CGI platform for Microsoft HoloLens to create information boxes that display valuable data and to detect and fix data errors automatically while improving the visualization of tasks

WE INNOVATE ICE PROGRAM SPOTLIGHT Driving savings and increasing productivity in running clients operations Robotics process automation Clients seek solutions that will help them better run, change and grow their businesses as they work to become more digital to meet customer and citizen demands. One way they can achieve this is through robotics process automation- or RPA. In August 2016, CIBC World Markets cited that CGI is well positioned to benefit from this technology in an equity research report titled, Leveraging Robotics And AI To Drive New Opportunities. To support clients and further CGI’s market position, the ICE program funded two RPA ideas that became solutions to automate the filtering, aggregation and identification of IT events and to manage IT and security incident responses. Proofs of concept were run with several clients, demonstrating successful outcomes such as self-healing workflows and service request automation. ? CGI has initiatives such as its central ICE (Innovation, Creativity, Experimentation) programme, plus a central investment committee that all service managers are part of which helps determine the direction. It is investing in digital IP by modernising existing assets (e.g. adding automation around processes, building SaaS solutions, adding BI and IoT capabilities, and paying a lot of attention to visualisation). ? Source: Digital Transitions Supplier Progress: CGI (TechMarketView— ESASViews, February?2016)

POWERING CLIENTS BUSINESSES WITH PROVEN IP Accelerating digital transformation through CGI’s business solutions We offer client-driven intellectual property (IP) solutions that include commercial software applications and digital enablers (reusable frameworks, tools and methodologies) that represent years of continuous investment in capturing our industry and technology expertise. These solutions, which include cloud/SaaS, mobility, IoT, data analytics and cybersecurity capabilities, are at the heart of CGI’s end-to-end offerings, which include business process services delivered by highly skilled professionals to increase our clients efficiency, services and savings. During 2016, we focused on the IP global initiative, which takes proven solutions within a local market and expands their footprint to benefit additional geographies and industries. Through the initiative, more clients benefitted from CGI’s time-tested, repeatable and differentiated IP. In addition, we continued our focus on pulling together robust IP and business architectures to provide clients with comprehensive offerings most critical to addressing their needs, such as: The Protect the Bank offering leverages key CGI IP solutions, such as our HotScan filtering software, with a number of digital enablers (cyber protection, command and control, artificial intelligence, intelligent self-learning and big data) to help banks drive efficiency and effectiveness in protecting against financial crime. The Protect the Payer solution suite draws on our experience in recovering $2.5 billion of improperly paid health claims and combines key CGI IP, such as our data-driven CGI ProperPay solution for claims fraud, waste and abuse, along with our HotScan filtering software and cybersecurity solutions, backed by CGI’s audit services. The Future Cities solution suite supports local governments in building smarter, more sustainable cities through a robust suite of IP services and solutions that support citizen participation, energy management, government administration, health and social services, education, public safety, transformation and tourism, recreation and culture. 17

WE INNOVATE 2016 business solution highlights Portfolio of 150+ mission-critical IP solutions Representative sampling of CGI’s digital IP footprint: CGI Atlas360 is used in 100 locations and 70 countries to provide a cost-efficient, global contact center network via SaaS and omni-channel customer relationship management solutions. Leveraged by clients across industries and geographies, CGI Collections360 is a comprehensive managed services approach to collections and recovery that combines software, business processes and IT services to manage and improve the collections life cycle for commercial and government organizations. CGI Trade360 supports global trade services for more than 33,000 portal users in 90 countries. CGI CommunityCare360 is a patient-centric care management solution used by more than 10,000 clinicians and mobile care workers, increasing time dedicated to in-home patients by up to 65%. With nearly 100 client implementations, Ratabase provides insurance rating and underwriting software across personal and commercial lines of business. CGI Unify360 is an integrated suite of software, services and tools- including a backbone of analytics, automation and robotics- that provides for the unified management of clients hybrid IT environments and enables improved service quality and operational efficiency. Utilities solutions include the Asset Resource Management (ARM) and Pragma solution suites, which provide asset, outage and mobile workforce management for some of the largest electric utilities in the world; Sm@rtering, which enables meter data management (MDM), data collection, network supervision and other smart grid functionalities; and RMS (Renewables Management System) for the supervision, control and analysis of renewable power plants. View more CGI IP at cgi.com/solutions. 18

2016 ANNUAL REVIEW SOLUTION SPOTLIGHT Evolving with the needs of our clients CGI Advantage enterprise resource planning CGI Advantage ERP represents CGI’s largest IP solution, and it continues to grow. Our first client was the City of New York 40 years ago, and today the solution is a digital accelerator for hundreds of state and local government ERP programs in the United States. Listening to our clients, we have continuously evolved CGI Advantage. Its next major release will include further digital transformation functionality, such as an enhanced user experience based on responsive design and the integration of leading data analytics capabilities. As a testament to the solution’s continuous growth and evolution, CGI renews and adds new clients to its expansive user base on an ongoing basis. In September 2016, for example, CGI announced that it had been awarded a contract to maintain and modernize financial management systems for the State of Maine through 2026. CGI will provide managed services and solutions that strengthen cloud security, improve financial management and streamline case workflow for 139 state agencies. The media announcement included this testimonial: The state will benefit from CGI’s innovative private-cloud approach to reduce risk and deliver to our needs. The solution offered us the ability to leverage CGI’s knowledge and experience without the need for us to provide our own infrastructure, security or technical expertise. This approach provides us the greatest level of efficiency and keeps our focus and attention on serving the needs of the state. Doug Cotnoir, State Controller State of Maine Augusta, Maine, United States

WE INNOVATE INNOVATING WITH AND CGI 2016 FOR AR.pdf OUR CLIENTS Sharing best practices through CGI and industry conferences At CGI, client projects make up our shop floor and, through these projects, we innovate together with clients to digitally transform their businesses. At the core of this co-innovation with clients is engaging regularly through our Client Partnership Management Framework and Voice of Our Clients program (see pages 9-10). We also engage through leading user conferences, industry events and more. Here are some example events: CLIENT CONFERENCES CGI Forum: Every year, the CGI Forum brings together CGI Advantage users to share best practices for maximizing their investment in this leading, built-for-government solution. In 2016, 380 clients attended, taking advantage of more than 80 educational sessions. Innovations (Credit Management Conference): Nearly 200 clients attended CGI’s annual Innovations conference in 2016 to learn more about credit and default management trends, best practices and solutions. Key focus areas included operations, fraud prevention, lending and risk management. Ratkaisu: CGI’s business unit in Finland organizes the Ratkaisu (English meaning Solution) event each year to bring together clients and prospects to discuss key trends such as digitalization, cybersecurity, innovation and the customer experience. In 2016, the event- A Digital Journey - brought together more than 1,000 clients, prospects, partners and CGI subject matter experts to discuss innovative ideas for how clients can accelerate their digital transformation. The in-person event also brought the conversation into digital channels, with #Ratkaisu16 being the most popular hashtag in Finland on the day of the event.

INDUSTRY EVENTS 2016 ANNUAL REVIEW HIMSS: CGI participates in HIMSS (Health Information and Management Systems Society)- the health information management industry’s largest annual conference and exhibition. CGI health experts present the latest innovations in health IT. In 2016, they showed clients how CGI can help deliver safer, more cost-effective and personalized care through digital technologies such as next-generation analytics, cybersecurity and cyberprivacy. Sibos: Sibos is attended by thousands of finance leaders from across the globe. Our experts participate in the event each year, hosting educational and networking sessions that cover key trends and related CGI offerings. During the 2016 event, CGI announced our Protect the Bank offering and released two industry-leading studies- the Global Transaction Banking Survey and FinTech Disruption in Financial Services. CGI experts and clients meet at the CGI booth at Sibos 2016 in Geneva, Switzerland. CGI’s Ratkaisu16 conference held in Helsinki, Finland, brought together executives from Finland’s commercial and government organizations with CGI leaders and experts to discuss innovative ideas for how clients and prospects can accelerate their digital transformation.

We lead. Bringing legacy and digital together to drive enterprise-wide transformation Our face-to-face interviews with more than 1,000 business and IT leaders in 2016 revealed an accelerated focus on integrating legacy and digital technologies to deliver enterprise-wide change in today’s digital world. CGI applies our industry knowledge and technology expertise to help clients navigate the complexity of digitalization across people, processes and technology and create strategic advantage.

INDUSTRY EXPERTISE Industries are digitally transforming at different paces Sixty percent of business and technology executives as shared in the CGI Global 1000 outlook said their organizations are in the early stages of digital transformation. The CGI Global 1000 outlook explores the findings and insights across our 10 focused industries as organized against the digital transformation S-curve as seen at right. An organization’s climb up the S-curve depends on the market dynamics of its industry and the nature of its business. Organizations within consumer intensive industries are ahead of the pack in terms of their progress, followed by asset-intensive and risk- and investment-intensive industries, respectively. The outlook (see page 47) draws out the similarities and differences of these industries in terms of trends, priorities and plans. In this Annual Review, we share examples of how we are a leading IT services partner to the industries we serve and how we are helping to lead their digital transformation. CGI is helping to lead clients on their digital transformation journeys We understand our clients digital challenges and opportunities, and are working closely with them to define and implement digital strategies and roadmaps. Consumer-intensive industries Banking, communications, retail and consumer services Organizations in consumer-intensive industries are experiencing a high urgency to digitally transform their business models to meet increasing customer demands for new products and services, as well as omni-channel, real-time and personalized service delivery. CGI works with banks, communications service providers (CSPs) and retailers across the globe to help them win the battle for today’s digital customer. Banking We serve 22 of the top 30 banks globally and 23 of the top 25 banks in both North America and Europe. We’ve completed 350+ implementations of our collections, recoveries and loan origination solutions. CGI Trade360 supports global trade finance for 33,000+ portal users in 90+ countries. Nearly $1.6 trillion in assets are managed through CGI’s portfolio management, investment fund and asset management solutions. CGI has been leading global payments infrastructure for over 40 years. We have worked with our top 10 banking clients as their strategic partner for an average of 25 years. Communications We partner with 6 of the world’s top CSPs in support of their billing, order orchestration, revenue assurance or customer care transformation. CGI works closely with Bell Canada to create IT solutions that enhance efficiency, reduce costs and improve the customer experience at Canada’s largest and fastest-growing communications company. We support 18 million+ active machine-to-machine devices globally, helping our clients to grow average revenue per user and diversify revenues. We manage 1 billion+ wireless call detail records every day for leading CSPs through network mediation systems, helping our clients optimize operations through re-engineering and process automation. Retail and consumer services Our 4,300 retail professionals support 700+ clients globally across the retail, wholesale, consumer packaged goods and consumer services sectors. CGI partners with 6 of the largest grocery chains in Europe, delivering omni-channel services and solutions that improve and enhance the customer experience. CGI has partnered with 5 of the world’s top 10 luxury good brands, improving personalization through the better use of data and analytics. Our world-class Retail and Consumer Services Center of Excellence, which incorporates the latest retail technologies and solutions, enables our clients to look into their future and understand the type of differentiated experience they can provide to their end customers. 2016 ANNUAL REVIEW 23 CONSUMER INTENSIVE BUSINESS INTENSIVE RISK & INVESTMENT INTENSIVE Political Urgency

Asset-intensive industries Utilities, manufacturing, transportation Whether keeping the lights on, producing goods or transporting goods from one port to another, companies in asset-intensive industries must make massive operational investments and maintain complex technologies. CGI is helping them to reduce their run costs to free up investment for change through digital technologies, such as robotics, Internet of Things, cloud and mobility. Utilities We partner with 250+ electric, water and gas clients worldwide, as well as 8 of the 10 largest utilities in both Europe and North America. CGI designed and built 12 of the 18 central market systems in the world, with a majority still operated by CGI in multiple countries. Our smart data services for smart metering are deployed by a majority of UK electricity suppliers. CGI’s involvement with high-profile smart grid projects such as Low Carbon London has led to our recognition as a smart grid systems integrator worldwide. Our award-winning Renewables Management System (RMS) solution controls more than 7,000 turbines on 600 wind farms in 9 countries across the globe. Manufacturing We serve 700+ manufacturing clients in a wide range of sectors, including automotive, aerospace, high tech, mining, metals, pulp and paper, and chemicals. Our 2,800+ supply chain experts help clients drive down costs and increase productivity and agility to transform and grow. CGI’s Manufacturing Atlas methodology has helped hundreds of clients optimize manufacturing IT, drive operational excellence and enable greater personalization. For the past 17 years, we have tracked the latest trends in manufacturing execution systems (MES) through our MES product survey, which captures key data from 66 MES suppliers from around the world to help our clients and partners navigate this complex market. A Michelin partner for many years, CGI is working with Michelin to transform and optimize business processes and IT across customer services, including supply chain and logistics, and marketing and sales. Transportation, Post and Logistics We work with 207 clients in the post and logistics, aviation, rail, maritime, and road and regional transit sectors. CGI uses predictive analytics, mobile apps, gamification and sensor technology to help clients, such as Helsingin Bussiliikenne Oy (HelB), a bus operator in Helsinki, the City of Rotterdam and transport provider DHL Express in the Netherlands to reduce fuel consumption and carbon emissions and improve driver safety. CGI is supporting transport and logistics companies by using iBeacon technology to improve operational efficiencies and the customer experience. CGI helped Posti in Finland, for example, become the first in the world to integrate iBeacon technology for indoor parcel tracking, making it easier for customers to pick up and drop off parcels. WE LEAD 24

Using CGI Traffic360, we monitor more than 22,000 kilometers of tolled roads in the Czech Republic, Slovakia and Poland to ensure maximum toll collection. Pro Logistica is a CGI-built, enterprise-wide mobile retail solution used by 28 airlines worldwide that provides flexible mobile retailing functionality for managing onboard sales and stock movement. Our GO Airport Operations Suite offers a comprehensive business and technology platform used by 10 airports in Portugal serving approximately 39 million passengers per year to optimize airport operations management. We offer award-winning customer intelligence solutions, such as our mobile apps instep for train occupancy, My Train for train arrival and Helsinki Journey Planner for trip planning. Transforming legacy systems with digital solutions to drive operational excellence and customer satisfaction We turned to CGI for digital solutions and system integration and maintenance services to help streamline our power grid operations, as well as implement innovative mobile workforce management capabilities across the organization. CGI’s Pragma outage and workforce management solutions have played a key role in our strategy to transform our legacy electric power system into an intelligent, integrated and automated smart grid. Both solutions have enabled us to drive operational excellence, while reducing costs and delivering a higher level of customer engagement and satisfaction. David Thomas, Executive Corporate Technical Consultant, Strategic Systems EPB Chattanooga, Tennessee, United States Helping drive tangible innovation through CGI’s Retail and Consumer Services Center of Excellence In the retail industry, we hear much about technology, at times just for technology’s sake. But what is showcased here, is close— at least as close as possible— to the real in-store customer experience, and this allows us to visualize how clients can use these solutions and how it improves their experience. Medhi Zouari, Chief Digital Officer Auchan Lille, France The customer journey we experienced at the Center of Excellence highlights how technologies can be integrated. I found this extremely interesting. David Haverlant, Chief Information Officer Auchan Lille, France 25 2016 AN NUAL REVIEW

Risk- and investment-intensive industries Government, health, insurance, oil and gas Within risk- and investment-intensive industries, the urgency to digitally transform is driven by regulation and politics, as well as consumer or citizen demands. In addition, competition from new digital players is hindered by heavy regulation and high levels of required investment. Most organizations are in the digital race, but moving at a slower pace than organizations in other industries. CGI is partnering with them for the long term. Government CGI has partnered with 2,000+ national, state, provincial and local governments. CGI solutions have enabled U.S. public sector tax and revenue clients to collect $5 billion+ in additional revenues that otherwise would not have been collected. Our community policing solution, Burgernet, is a great success in the Netherlands, with 1.5 million+ people participating nationwide. CGI is part of the European Space Operations Centre team, which guided Rosetta’s Philae probe to land on a comet. We help clients support NATO’s Smart Defense approach through solutions such as a command and control collaboration portal that is interoperable in all NATO structures. Health Around the world we support 1,000+ health facilities, health plans serving 195 million+ people, and 3 million providers. CGI CommunityCare360 enables mobility and streamlines care delivery by connecting patients, clinicians, home care workers and first responders. It is used by more 10,000 clinicians and mobile care workers, increasing time dedicated to in-home patients by up to 65%. CGI ProperPay for reducing claims fraud, waste and abuse has helped payers recover $2.5 billion in lost payments due to improper claims. 200,000 professionals use our Sovera solution to improve efficiencies in managing 6 billion+ patient records. CGI’s e-CareLogic Integrated Clinical Electronic Records system integrates with various clinical systems within the hospital and across care settings, building a holistic view of patient data. Mypatient is the mobile version of this solution, providing clinicians with access to results on their mobile devices. We support 55 million+ Americans served by Medicare.gov, which has been made more accessible and customer-centric with the help of CGI. Insurance We work with 7 of the top 10 global insurers. CGI’s Ratabase rating and pricing engine has been successfully implemented for more than 100 P&C and life insurers. Ratabase received top honors from Celent in three of its four award categories in 2016, including Customer Base, Depth of Client Services and Breadth of Functionality, as cited in its report, North American Rating Engines: 2016 Property & Casualty ABCD Vendor View. We provide nearly 16 million risk information reports annually to insurers, brokers and agents. WE LEAD 26

We help insurers enter the world of cyber insurance through end-to-end services and solutions. We have worked with our top 30 insurance clients as their strategic partner for an average of 16 years. Oil and gas We are a partner to all oil and gas majors globally, providing services across the value chain, including exploration and production, refining, supply and distribution and B2B/B2C retail. CGI’s Exploration2Revenue (X2R) Business Suite delivers robust solutions for joint venture, land and production management using mobile, digital and cloud technologies. CGI systems process 1.5 billion fuel card transactions and manage $100 billion in fuel card payments per year. 95% of UK oil and gas offshore personnel movements are tracked by CGI’s VantagePoB solution. We are a cloud services provider for 30 upstream operators, managing more than 700 joint ventures. Leveraging transformational outsourcing and digital services to drive forward digital transformation We partnered with CGI in the outsourcing of our life and non-life insurance and administrative application services to boost our operational efficiency and provide even better services to our customers— and, as a result, reduced our application management and development costs and increased productivity. OP also is enhancing the agility of our functions with CGI’s help through the adoption of the scaled agile framework model (SAFe). We chose CGI because of its industry knowledge, scalability and international expertise, in addition to its ability to meet our high standards of service delivery excellence. Our partnership with CGI helps us to continue to take advantage of the new opportunities brought by digitalization so we can continue to be the best financial provider to our customers. Juho Malmberg, Chief Information Officer OP Financial Group Helsinki, Finland Developing a digital system that improves data insights and patient care This system has helped us greatly at Helsinki City Rescue Department as it gives us an effective tool for emergency care situations offering the same standard of service to all our patients. On a single emergency care situation it’s beneficial that the patient’s vital data can be measured by a multi-defibrillator and that together with the data entered by paramedics can be viewed in real time at the treating hospital. This allows the ER doctor in charge to easily get a snapshot of the patient’s situation and hence be fully prepared on arrival of the patient. Merlot Medi is one of the main reasons why our patients’ care has improved in recent years. Kari Porthan, EMS Chief Helsinki City Rescue Department Helsinki, Finland Merlot Medi was developed by CGI with the Hospital District of Helsinki and Uusimaa and Helsinki City Rescue Department. 27 2016 ANNUAL REVIEW

Representative thought leadership PROVIDING INSIGHTS FOR OUR CLIENTS As digital transformation accelerates, CGI provides clients with insights into the latest industry and technology topics most important to their business. Each year, we produce a number of original reports— through our own research and in co-authorship with leading institutions— to capture the current state and the road ahead. These reports, many of which are produced year-over-year, support our clients in informing their priorities and investments. As part of our commitment to being an expert of choice, CGI continuously works to provide thought leadership that addresses common challenges or opportunities facing our clients and proposing sound and successful solutions. Representative research for 2016 includes: Global In 2016, we met in-person with 1,000+ business and technology leaders across 10 industries and 20 countries to discuss trends, challenges and priorities. The resulting insights formed the CGI Global 1000 outlook, which shares the trends impacting clients’ organizations and how they plan to address the challenges and opportunities through their business and technology priorities and plans. CGI surveyed 1,670 bank consumers in 2016 to learn about their digital banking preferences and the implications for our bank clients. The CGI report, FinTech Disruption in Financial Services, confirms that consumers want digital services from their current financial institutions. Since 2012, CGI has partnered with GTNews to conduct a global transaction banking survey that assesses the perspectives of both corporates and their banks. The 2016 Transaction Banking Survey: Report of Survey Insights examines the relationship between corporates and banks, what banks see as their biggest barriers to growth, and how the implementation of the revised Payment Services Directive (PSD2) has had an impact on the industry. CGI’s Data to Diamonds book discusses in detail the transformation of data into value-driving products, services and insights. Authored by CGI’s global digital insight experts, the 2016 edition points the way forward for businesses and government organizations looking to build stronger customer relationships, improve operations and generate new sources of revenue. WE LEAD 28

France The 2016 edition of Barometre is based upon the insights gained from CGI’s Voice of Our Clients program’s face-to-face interviews with our clients in France. It highlights the digital innovations, challenges and priorities of the French market. Nordics For the 2016 CGI Nordic Citizen Survey, CGI surveyed 2,000 people aged 16-30 years across the Nordics to assess their expectations and preferences for digital services in the public sector. The report shares knowledge of these citizens’ digital lives and their willingness to engage with public services, and provides recommendations for how public organizations can make the most of this situation. United Kingdom In the 2016 report, Cyber Security in the Boardroom: UK plc at Risk, CGI, in conjunction with the Centre for Economics and Business Research, surveyed 150 business leaders from the UK’s largest commercial companies. The resulting report offers insight into how UK boardrooms prioritize, govern and invest in cybersecurity. United States The CGI-Governing Institute Guide to Cybersecurity as Risk Management: The Role of Elected Officials helps elected officials effectively combat cyber risks through assessing, identifying, analyzing and managing risks to the government enterprise. It spells out cyber risks and provides information to help public officials fulfill their responsibilities and safeguard their communities. CGI also maintains a series of global and country-level blog channels that cover top industry and technology topics. Discover our latest thinking at cgi.com/blogs. 29 2016 ANNUAL REVIEW

We deliver. Building on a foundation of operational excellence CGI clients want consistency of service wherever they engage us, whenever they engage us. In 2016, we continued our outstanding track record of on-time, within budget delivery as a result of our passion for excellence and alignment with the ISO-certified CGI Management Foundation. This Foundation gives us a common business language, standards and frameworks to conduct all operations consistently across the globe, with a focus on continuous improvement. 30

CASE STUDY California Franchise Tax Board Increasing revenue, transparency and taxpayer service Government agencies are optimizing business processes and modernizing their IT environments to free up resources for transformational programs. A case in point is the California Franchise Tax Board (FTB). As the second largest U.S. tax agency after the Internal Revenue Service, FTB handles 20 million tax returns and 80 million website visits each year. Since 2011, FTB has partnered with CGI to modernize its tax systems through the Enterprise-Data-to-Revenue (EDR) project. It is one of the largest IT projects for the State, touching nearly every taxpayer in California. The EDR project has successfully addressed business problems FTB hired CGI to achieve, including: Data availability: Returns are now corrected, payments and taxpayers are properly identified, more fraud goes detected, and cases are properly prioritized and assigned the most effective strategy and resources because more data is now available, shared and less costly to maintain. Filing business processes: Returns take less overall time to process, business changes take a shorter time to implement, data is captured, returns are corrected and performance can be monitored because return filing processes have been updated. System redundancy and reuse: Systems and functionality are less costly to develop and maintain because they are no longer redundant, have a common technology platform and are integrated. Filing self-services: Taxpayer self-services are no longer limited due to outdated technologies and limited security. Data analysis: Noncompliance discovery and fraud detection, tracking and prevention are improved through state of-the-art enterprise modeling. EDR is a continuous digitization project that replaces manual paper processes and uses leading data and analytics techniques to enable FTB to administer the tax system more effectively. It provides a common view of information to improve transparency and citizen service. To date, EDR revenue increases have exceeded targets, realizing $2.8 billion as of October 2016 and hitting its goal for the entire project early. As a performance-based, benefits-funded project, CGI services are paid from state revenue generated. HOLISTIC APPROACH Helping clients transform to become digital organizations end-to-end The CGI Global 1000 outlook reveals that our client executives are challenged to balance investments in running the business and those needed to change the business. With more than 40 years of experience, we have put in place the key building blocks to help clients succeed in a holistic manner at every point along their digital journeys: End-to-end services equip us to work with clients to design, build, secure and operate for their digital future Strong foundation enables us to deliver in a consistent and successful manner around the world Client proximity model co-locates our members with our clients, fostering and delivering innovation from the shop floor Enabling solutions help accelerate our clients’ digital transformation through CGI’s intellectual property, global delivery network, methodologies and strategic partnerships Talented professionals bring expertise and these capabilities to our clients each day The EDR project success is not a fluke. The CGI team has been successful due to strengths in five key areas. These include planning and phasing the project; effective processes, including risk management; teaming with the FTB staff; use of modern technology tools; and optimizing the solution for success and taxpayer needs. Cathy Cleek, Chief Information Officer California Franchise Tax Board Sacramento, California, United States 2016 ANNUAL REVIEW 31

Transport giant DB Schenker expands outsourcing agreement with CGI to cover more mission-critical applications It is extremely important to us that we have an IT partner that understands our business and can meet our need for modern, efficient and business-critical IT support. Tina Rundstrom, Senior Vice-President IT Sweden, DB Schenker, Gothenburg, Sweden ELEXON contracts CGI for three-year L20m business processing and IT outsourcing agreement This outsourced agreement with CGI provides significant expertise, capability and a modern, scalable infrastructure at highly competitive rates. We will save over 1 million annually in our fixed IT running costs, which is great news for our customers and demonstrates ELEXON’s ability to continue to deliver value for money to the industry. Mark Bygraves, CEO, ELEXON, London, United Kingdom Scottish Borders Council awards long-term L92 million outsourced digital services contract to CGI This is a landmark deal for the Scottish Borders as we join forces with one of the leading IT companies in the world to offer a once in a generation transformational opportunity for the region. David Parker, Scottish Borders Council Leader, Scotland, United Kingdom SNC Lavalin and CGI sign IT outsourcing agreement The agreement will yield an average annual savings of 20% in terms of our IT operating costs for the duration of the contract. This will enable us to reinvest to improve our competitiveness in the global engineering and construction marketplace. It is the first of many business improvement initiatives that will be completed as part of our Operational Excellence approach, which we launched at the end of March. Designed to improve our efficiency and execution, it will enable us to focus on what we do best— leveraging our global engineering and construction expertise to deliver on our clients specific needs. Neil Bruce, President and Chief Executive Officer, SNC Lavalin, Montreal, Canada CGI enters into 10-year modernization agreement with Sears Canada CGI’s long-term commitment, hands-on approach, and the alignment of the agreement with Sears Canada’s goals made CGI an ideal partner to provide technology support and services for our current platform. Becky Penrice, Executive Vice-President and Chief Operating Officer, Sears Canada Inc., Toronto, Canada CGI signs eight-year contract with La Banque Postale We’ve worked together for 12 years now, and CGI’s teams know how to organize and assist us to ensure that our major transformation projects are successful by helping us achieve greater flexibility for financing some of our key investments. Patrick Renouvin, Chief Information Officer, La Banque Postale and Reeau La Poste, Paris, France DCNS entrusts CGI with its technology support The approach proposed by CGI ensures a more appropriate allocation of our resources and an application support model focused much more on prevention and user satisfaction. Under the agreement, our partner is also committed to helping us achieve our overall performance objectives on a day-to-day basis. And, with its global presence, CGI is the ideal partner to help us achieve our ambitions by providing efficient, agile support for our international development strategy. Michele Fouchard, Chief Information Officer, DCNS, Brest, France Hydro Tasmania extends 15-year relationship with CGI Tasmania has the competitive advantage of being the nation’s renewable energy powerhouse, but it is important for us to manage risks and improve efficiencies in the highly competitive National Electricity Market given the current challenges facing the industry across the country. To date, our partnership with CGI has enabled us to focus on our core business and position us well for leaner financial times ahead. Luke Stow, Chief Information Officer, Hydro Tasmania, Melbourne, Australia WE DELIVER 2016 new business and renewal highlights Digital technologies are changing fundamentally how our clients operate and innovate. Throughout 2016, CGI began, extended and renewed client partnerships at all phases of their digital journeys, as reported in these sample media announcements: 32

DIGITAL EXPERTISE Strategy and technology to create digitally connected enterprises As an expert of choice, CGI helps clients maximize the benefits of digital technology identified in our CGI Global 1000 outlook as key enablers of transformation. Today, we partner with our clients to support their most strategic and visible initiatives to innovate and secure their mission-critical technology. The combination of listening, innovating and leading ensures operational excellence in delivering on-target solutions for our clients. CGI’s enablers of digital transformation CGI Global 1000 client insights Enterprise transformation digital strategy and roadmap human capital strategy technology strategy and architecture 72% identified overcoming internal resistance to embedding a digital-first culture as the top barrier to implementing digital transformation Customer-centric business transformation customer experience innovation and collaboration digital first customer customer value 62% rated improve customer/citizen experience as their top business priority People, process and technology transformation digital insights digital employee intelligent automation Internet of Things SaaS digital BPS 76% plan to increase or maintain investment in changing their organizations including new digital services IT operating model transformation IT modernization transformational outsourcing cybersecurity agile and DevOps hybrid IT/cloud 75% cited rationalizing and modernizing IT to reduce costs as their top IT priority CGI realizes cross-channel e-commerce solution for mobilcom-debitel Our new e-commerce platform is the foundation for the further digitalization of our business model. With CGI, we have a partner that optimally supports us because they understand our organization and business requirements. Florian Wolf, Head of IT Customer & Commerce Systems, mobilcom-debitel, Berlin, Germany Awards recognize CGI as top tech integrator in government: Engagements in California and Kentucky earn Center for Digital Government honors From the first meeting, CGI performed as a true partner and collaborated with the City to establish a unified and cohesive City-CGI team. Our partnership on this innovative performance budgeting solution is putting the multiple benefits of centralization, standardization and automation to work for the City of Los Angeles. We are pleased to see the company receive this prestigious honor. Ben Ceja, Assistant City Administrative Officer, City of Los Angeles, California, United States CGI not only provided an offering that addressed the Commonwealth’s challenges, but also brought the staff and expertise required to deliver the project within budget and on schedule. Congratulations to CGI for this recognition as a best fit integrator. Working together, we are realizing DOR’s vision of improved citizen service and increased revenue recovery. Mark Gillim, Executive Director of the Office of Processing and Enforcement, Kentucky Department of Revenue, Frankfort, Kentucky, United States 2016 ANNUAL REVIEW 33

BEST-FIT DELIVERY Providing local accountability and global delivery CGI’s best-fit delivery model combines the deep talent pool of our extensive global delivery network with locally based teams to deliver competitive services that are highly responsive to client needs. Our client proximity model empowers local teams to develop strong client relationships and gain deep knowledge of our clients’ industries and businesses, as well as be firmly rooted in our clients’ markets and communities. These teams are backed by a comprehensive global delivery network of onshore, nearshore and offshore delivery technology and industry experts who operate seamlessly to provide consistent, high-value results. CGI is ranked as a Leader on The 2016 Global Outsourcing 100 of the International Association of Outsourcing Professionals giving CGI Sustained Excellence status for having made the GO100 list for 5 consecutive years. WE DELIVER 34

2016 highlights Global delivery CGI enhanced our global delivery capabilities and celebrated milestones and recognition, including: Marking 10 years of service from centers in Prague, Czech Republic, and Lebanon, Virginia, United States Receiving the Innovation and New Market award from the Chamber of Commerce and Industry of Shawinigan in recognition of CGI’s Shawinigan Center of Excellence in Quebec, Canada Dedicating our 50,000 square foot center in Lafayette, Louisiana, United States CGI’s arrival in Louisiana has helped elevate our state’s status as a leading destination for knowledge-based employers and the creative professionals who help them thrive. John Bel Edwards, Governor of Louisiana (from May 17, 2016, media announcement on the dedication) Hiring 500 members in South Wales, United Kingdom, where our team has been awarded both 5-Star Service Desk Certification from the Service Desk Institute (SDI) and Transformation Project of the Year at the DataCenter Dynamics EMEA Awards CGI is one of our Anchor Companies and I am delighted to hear it has already created hundreds of jobs well ahead of schedule. Edwina Hart, former Minister of Business, Enterprise, Technology and Science, South Wales (from March 31, 2016, media announcement to mark the milestone) Specialized expertise A Digital Transformation— Industrialization and Innovation Center of Excellence was established jointly in Montpellier and Toulouse, France, to drive forward clients’ digital transformation with the latest innovations in social, mobility, analytics, cloud and security (SMACS). Cybersecurity centers were opened in Finland, France, the Netherlands and the U.S., adding to our global network of security operations centers (SOCs) and security capabilities. Adding to our team CGI is committed to being a consolidator in the industry. We target firms identified by clients as partners of choice through the CGI Global 1000 insights to augment our metro market footprint and industry and digital capabilities. In 2016, key acquisitions included: Alcyane in Paris, providing consulting and applications services with an emphasis on investment banking to financial institutions in France and globally Collaborative Consulting in Boston, providing IT and consulting services capabilities throughout New England in areas such as business process and program management; IT strategy, performance and quality services; and end-to-end digital solutions JSL in Toronto, with deep relationships in Canada’s banks and strong capabilities in high-end IT consulting, including agile development Spotlight on Asia-Pacific In 2016, CGI’s Asia-Pacific delivery centers continued to expand their capabilities and grew by more than 20% to meet ever-growing demand from CGI clients. Solution architects and other experts from these centers play an integral role in working with our client-facing metro market teams to develop best-fit solutions for our clients. Key focus areas include: Information technology with vertical industry specialization Card-based systems Voice-based services and business process services 2016 ANNUAL REVIEW 35

Sacramento Phoenix Tempe Denver Seattle Aurora El Paso Olympia Halifax Fredericton Ottawa Montrreal Sherbrooke Shawinigan Qubec City Saguenay Edmonton Regina Vancouver Victoria Lakewood Minneapolis Wausau Chicago Cleveland Fairview Heights Huntsville Frankfort Louisville Lebanon Durham Greenville Fayetteville Columbus Athens Pittsburgh Atlanta Birmingham Troy Orange Park Charleston Columbia Lansing Detroit Oakland San Francisco Los Angeles San Diego Sierra Vista Calgary Moncton Buffalo Annapolis Junction Baltimore Fairfax Lexington Park Manassas Newport News Norfolk Richmond Sterling Washington, D.C. Saskatoon Stratford CANADA UNITED STATES OF AMERICA Markham Mississauga Toronto Lafayette Hot Springs Oklahoma City Lawton Fort Worth San Angelo San Antonio Austin Dallas Belton Houston Miami Tampa New Orleans Tucson New York City Trenton Philadelphia Jersey City Somersworth Portsmouth Waterville Gales Ferry Hartford Albany St. Albans City Boston Burlington Mansfield Wilmington Juneau Honolulu BRAZIL PUERTO RICO So Paulo Mogi das Cruzes San Juan A strong local presence in hundreds of communities around the world GLOBAL FOOTPRINT Americas cgi.com/offices 36

Birmingham Bristol Chelmsford Gloucester Leatherhead London Milton Keynes Reading Lisbon Odivelas Sacavm Sintra Espoo Helsinki Hmeenlinna Kouvola Lahti Riihimki Tampere Casablanca Rabat Mlaga Frascati Madrid Pau Montpellier Toulouse FRANCE ITALY Aix-en-Provence Nice Niort Lyon Munich Prague Bratislava Krakow Ostrava Malm Copenhagen Tallinn Tartu Berlin Wroclaw Newcastle Newtown St Boswells Didsbury St Asaph Bridgend Edinburgh Aberdeen Orl?ans Clermont-Ferrand Nantes Brest Rennes Le Mans Brno Warsaw Kolding Bordeaux Limoges Porto PORTUGAL SPAIN MOROCCO GERMANY POLAND ESTONIA NETHERLANDS UNITED KINGDOM NORWAY FINLAND Glasgow CZECH REPUBLIC SLOVAKIA LUXEMBOURG BELGIUM Aarhus Aalborg DENMARK Herning Grenoble Tnsberg Sarpsborg Oslo Stavanger Haugesund Bromlla Eskilstuna Gteborg Jnkping Kalmar Karlskrona Karlstad Linkping Norrkping rebro Oskarshamn Skara Tornio Oulu Vaasa Kuopio Joensuu Mikkeli Jyvskyl Lappeenranta Pori Stockholm Gvle Borlnge Hrnsand rnskldsvik Gllivare stersund Sundsvall Ume Skellefte Lule Kiruna SWEDEN Vsters Turku Hamburg Arnhem Eindhoven Groningen Hoofddorp Maastricht Rotterdam Brussels Bertrange Bremen Darmstadt Dsseldorf Erfurt Karlsruhe Kln Leinfelden-Echterdingen Mannheim Sulzbach Wolfsburg Amiens Lille Paris Saint-Denis Strasbourg Mumbai Hyderabad Chennai Kuala Lumpur Manila Brisbane Sydney Hobart Bangalore Melbourne INDIA MALAYSIA PHILIPPINES AUSTRALIA Europe Asia Pacific 2016 ANNUAL REVIEW 37

CGI’s leadership team LEADERSHIP TEAM Corporate services Serge Godin George D. Schindler Julie Godin Founder and President and Vice-Chair of the Board, Executive Chairman Chief Executive Officer Chief Planning and Administration Officer of the Board Stuart A. Forman Luc Pinard Stanley L. Sims Senior VP, Executive VP, VP, Chief Global Chief Corporate Security Officer Information Officer Performance Global operations EASTERN, CENTRAL FRANCE, AND SOUTHERN LUXEMBOURG ASIA PACIFIC CANADA EUROPE AND MOROCCO Colin Holgate Mark Boyajian Doug McCuaig Jean-Michel Baticle President President President President Rakesh Aerath Rejean Bernard Ron de Mos Philippe Bouron Multi-Industry and Global Technology Operations Netherlands Business Consulting Government Delivery Center, India Christian G. Brosseau JoseCarlos Gonalves Fabien Deb Greater Montral Southern Europe and Brazil East Mark Aston Financial Services South East Asia Dariusz Gorze Laurent Gerin Chantal Buteau Poland Innovation Center Robert Dewar Qubec City of Excellence Australia Torsten Stra Lisa Carroll Germany St phane Jaubert Vinayak Hegde National Capital Region Consumer Packaged Goods tefan Szab Financial Services Delivery Retail and Manufacturing Center, India Shawn R. Derby Czech Republic, Slovakia Western Canada and Eastern Europe David Kirchhoffer George Mattackal Financial Services Communication and Enterprise Michael Godin Frank van Nistelrooij Services Delivery Center, India Greater Montreaal Commercial Services to Shell Daniel Lecerf and Public Services North Sridhar Ramamurthy Ben Vicca Global Technology Operations Marie T. MacDonald Belgium Gilles Le Franc Delivery Center, India Greater Toronto Commercial West and Public Services Sudhir Subbaraman Michel Malhomme Solutions Delivery Center, Jay Maclsaac Global Delivery Center Atlantic Canada India Pierre-Dominique Martin Ramana Rayavarapu Transportation, Public Sector Communications and Human Resources Services Business Sassan Mohseni Peter Sweers Energy and Utilities, Greater Toronto Banking and Telecommunications Global Wealth

2016 ANNUAL REVIEW Francois Boulanger Benoit Dube Lorne Gorber Tim Gregory Executive VP, Executive VP, Executive VP, Global Executive VP, Chief Financial Officer Chief Legal Officer Communications and Business and Corporate Investor Relations Engineering, Secretary Marketing and Kevin Linder Steve Perron Guy Vigeant IP Strategy Senior VP, Corporate Senior VP, Finance Senior VP, Controller and Treasury Mergers and Acquisitions NORDICS UNITED KINGDOM UNITED STATES Heikki Nikku Steve Thorn David L. Henderson President President President P r Fors David Fitzpatrick Lynne Bushey Tim Hurlebaus Sweden Global Technology Operations Mid-Atlantic President, CGI Federal Tom Hauge Matthew Grisoni Dave Delgado Patrick Dougherty Norway Oil, Gas and Consumer West Defense Programs Services Leena-Mari L hteenmaa Ned Hammond Candice Ling Global Technology Operations Michael Herron Global Technology Operations Regulatory Agency Programs Health, Local Public Services and Onshore Delivery Martin Petersen Stephanie Mango and Scotland Denmark Christopher James Security, Administrative, Elwyn Jones Industry Solutions Judicial and Enforcement Tapio Volanen Central Government Finland and Estonia Bill Robichaud Dave Ralston and Justice New England Government Secure Solutions, Tara McGeehan CGI Inc. Energy, Utilities John Roggemann and Telecommunications Central George Strader Health Compliance Programs Neil Sadler Vijay Srinivasan Banking and Financial Markets South Kenyon Wells International Diplomacy, Steven Starace Steve Smart Assistance and Commerce Space, Defence, East National and Cyber Security

The CGI Constitution While most companies have a vision and mission, CGI goes a step beyond. We have a company dream, which emphasizes the enjoyment and ownership principles essential to our success. The CGI Dream, together with our vision, mission and values, make up the CGI Constitution. With frameworks and programs founded upon this Constitution, CGI provides for the consistent growth that benefits our clients, members and shareholders. Our dream To create an environment in which we enjoy working together and, as owners, contribute to building a company we can be proud of. Our vision To be a global world class information technology and business process services leader helping our clients succeed. Our mission To help our clients succeed through outstanding quality, competence and objectivity, providing thought leadership and delivering the best services and solutions to fully satisfy client objectives in information technology, business processes and management. In all we do, we foster a culture of partnership, intrapreneurship, teamwork and integrity, building a global world class information technology and business process services company. Our values PARTNERSHIP AND QUALITY For us, partnership and quality are both a philosophy and a way of life. We constantly deepen our understanding of our clients business and we develop and follow the best management practices. We entrench these approaches into client relationship and service delivery frameworks in order to foster long term and strong partnerships with our clients. We listen to our clients and we are committed to their total satisfaction in everything we do. OBJECTIVITY AND INTEGRITY We exercise the highest degree of independent thinking in selecting the products, services and solutions we recommend to clients. In doing so, we adhere to the highest values of quality, objectivity and integrity. We do not accept any remuneration from suppliers. We always act honestly and ethically. We never seek to gain undue advantages and we avoid conflicts of interest, whether real or perceived. INTRAPRENEURSHIP AND SHARING Our collective success is based on our competence, commitment and enthusiasm. We promote a culture of innovation and initiative where we are empowered with a sense of ownership in supporting clients, thus ensuring our profitable growth. Through teamwork, sharing our know-how and expertise across our global operations, we bring the best of CGI to our clients. As members, we share in the value we create through equity ownership and profit participation. RESPECT In all we do, we are respectful of our fellow members, clients, business partners and competitors. As a global company, we recognize the richness that diversity brings to the company and welcome this diversity while embracing the overall CGI business culture. FINANCIAL STRENGTH We strive to deliver strong, consistent financial performance which sustains long term growth and benefits both members and shareholders. Financial strength enables us to continuously invest in our members capabilities, our services and our business solutions to the benefit of our clients. To this end, we manage our business to generate industry superior returns. CORPORATE SOCIAL RESPONSIBILITY Our business model is designed to ensure that we are close to our clients and communities. As members, we embrace our social responsibilities and contribute to the continuous development of the communities in which we live and work. OUR STRONG FOUNDATION 40

C G I C o n s t i t u t i o n Code Human Resources Financial Security Quality Dream Vision Mission Values of Ethics Policies Policies Policies Policy Strategic Directions Corporate and Operations Organizational Model Management and Plans Governance and Adjustments Frameworks Business Unit Processes Corporate Processes Client Relationship Assignment Managing Engagement Business Business Unit Innovation, IP and Business and for Risk Development Performance and Efficiency Financial Development Recruitment Excellence Management Health CheckReview Investments Management Client Partnership Management Framework Member Shareholder IT Management Partnership Partnership Best Practices Closing Management Management Proposal Contract Engagement Delivery Framework Framework Governance Integration Relationship management Consulting, Team meetings Technology Application System Business Performance Disclosure Management Management Integration and Process management & guidelines Development Management career planning Communications Leadership Institute Client Member Shareholder Satisfaction Satisfaction Satisfaction Assessment Assessment Assessment Program Program Program The CGI Management Foundation At CGI, we are committed to being the best in our industry. To be the best, we need to operate as the best, and the CGI Management Foundation includes the key elements that define and guide the management of our company, including the CGI Constitution and our common policies, frameworks, processes, operational principles and measures. The Foundation encompasses the best practices that enable us to deliver in a consistent and successful manner no matter where CGI operates around the world. 2016 CGI Group Inc.

Working together to build stronger communities Corporate social responsibility (CSR) is a key part of CGI’s day-to-day operations. Everything we do— from delivering sustainable services and solutions to donating our time and talents to strengthen our communities— ties back to the communities in which we, and our clients, live and work. At CGI, our focus is to work together with our stakeholders and our communities to make a difference in the world around us. CORPORATE SOCIAL RESPONSIBILITY CGI renewed listings and was included within top CSR indices that cover sustainability-driven companies worldwide, including RobecoSAM and S&P Dow Jones Sustainability Indices, MSCI and ECPI. CGI is also a constituent of the FTSE4Good Index Series. 42

PARTNERING FOR GOOD CGI at work in our communities CGI professionals are passionate about the communities in which we live and work. We take the skills required to be a leading IT services company— problem solving, creativity and collaboration— and put them to work to make a positive difference. Through volunteer and pro-bono initiatives and financial investments, we are committed to contributing to those causes that benefit the well-being of our communities. 2016 highlights Hacking for good CGI members from around the world combine technology expertise and an innovative mindset to participate in hackathon events aimed at generating new ideas and solving problems for clients and their communities. Here are examples of how we hacked for good this year: Digital Lifestyle— CGI members in D sseldorf, Germany, participated in a 24 hour in-office hackathon, where teams brainstormed ideas to bring digital transformation to life. The winning idea was a solution called Smarking— a smart parking solution for cities— to help residents find street parking in congested areas and enable cities to increase the efficiency of parking enforcement and capacity planning. Earth Day Hackathon— The U.S. General Services Administration hosted an event to encourage teams of government employees, students and industry professionals to develop eco-friendly technology ideas. One of the four winning teams included CGI members who created a climate change indicator map for the Environmental Protection Agency. Ministry of Justice (MoJ) Hackathon— Members from across the United Kingdom participated in the first ever MoJ Hackathon to help the MoJ enable the courts to deliver justice more swiftly, offer better rehabilitation to offenders nationwide, and reduce the risk to the Legal Aid fund. Steel City Codefest— This annual citywide event brings together volunteers to develop applications for local organizations in Pittsburgh, Pennsylvania (United States). In 2016, CGI members developed an app for the Children’s Museum of Pittsburgh to help improve the visitor experience, and another for the Allegheny Children’s Initiative to make data collection for families easier and more reliable. Research for resilient communities To support building strong and healthy communities, CGI works with clients and organizations to study issues and present recommendations for driving a more sustainable future. Here are examples of research we conducted this year: ‘Better business’— CGI supported a groundbreaking study conducted by Social Value Lab to analyze business, CSR and reporting practices among Scotland’s 500 leading companies. The study found emerging business leaders and the public at large are ethically motivated and less tolerant of corporate negligence and corrupt practices. It offered practical recommendations to encourage more responsible and progressive business practices. Identifying and analyzing digital payment flows regarding illegal purposes on the Internet— In Sweden, CGI is part of a coalition of financial institutions and NGOs that collaborate to prevent payments related to the sexual abuse of children. This year, CGI supported a master thesis at Link ping University that studied unexplored illegal exploitation of legal businesses, with the purpose of limiting this market and especially the related transactions. Partnering with the Leaders of Tomorrow— Every year in France, CGI partners with leading universities to mentor students and work with them in carrying out meaningful projects. This year, CGI and the CentraleSup?lec engineering school joined forces to explore millennials? views on the future of digital. By understanding and anticipating this generation’s expectations, French decision-makers in both the public and private sectors can better understand and anticipate this group’s expectations and needs. Members in D’sseldorf, Germany, spent a weekend participating in a 24-hour in-office hackathon to brainstorm ideas to bring digital transformation to life. Members from across the United Kingdom attended the first ever Ministry of Justice (MoJ) Hackathon. 2016 ANNUAL REVIEW 43

Dedicating our time and talents Across our global operations, CGI members work together with charities and community organizations to support needed causes. Here are examples of community service initiatives from the year: Driving technology education— CGI serves as the digital partner for the TEKNIK project in France, which mobilizes companies to educate young students on key industries and help them discover promising careers. CGI is working to create a positive perception among young people of the digital industry and promote it as one of the most dynamic and largest job providers in France. Empowering rural education— CGI members began working with the Swami Vivekananda Adivasi Ashram Shala residential school outside of Mumbai, India, to help provide the underprivileged students with the basic necessities of life and tools to thrive in modern society. Nearly each month, CGI hosts an initiative to support the school, including providing medical treatment for the children, teaching spoken English and offering career guidance. Partnering with the Prince’s Trust— This past year, both CGI and the Prince’s Trust celebrated their 40th anniversaries. A leading charity in the United Kingdom, the Prince’s Trust helps 13 to 30 year olds who are unemployed or struggling at school to transform their lives. To commemorate the joint milestones, CGI’s members engaged in 40 different ways to dedicate their time and talents to the charity and raised more than 50,000 for the organization. The Ride to Conquer Cancer— CGI members in Quebec, Canada, once again participated in the two-day Enbridge Ride to Conquer Cancer to raise money for cancer research and treatment. The CGI cyclists collected more than $63,000 with the help of CGI-matched donations. CGI’s five-year total contribution to the organization now exceeds $500,000. DRIVING SUSTAINABILITY Services and solutions that benefit clients and society Across industries, we partner with clients to deliver solutions that support energy and environmental sustainability, make cities smarter and improve the lives of citizens, protect the welfare of children and more. Here are examples of our innovative sustainability services and solutions: Smart utilities Smart grids: In collaboration with Smart Society Services, CGI developed the Open Smart Grid Platform (OSGP) that uses Internet of Things (IoT) technology to integrate applications and link them to smart devices not only for utilities, but also for critical infrastructures such as roads and railways. The platform supports energy conservation solutions for public lighting, smart metering, energy distribution automation and more. Smart meters: CGI is playing a key role in the rollout of 53 million smart meters in the UK between 2015 and 2020, one of the largest rollouts of smart meters in the world. We’re designing, developing and implementing the technology solutions required to support the rollout and ensure its success. Renewable energy: Our Renewables Management System (RMS) solution controls more than 7,000 turbines on 600 wind farms in 9 countries across the globe. Our clients, including Energias de Portugal Renewables (EDPR), the third largest wind energy producer in the world, use RMS for remote farm control, decreased downtime and maintenance costs, immediate connection to the grid, and more. CGI leaders in the United Kingdom participated in 40 different fundraising events to raise money for the Prince’s Trust. CORPORATE SOCIAL RESPONSIBILITY 44

Environmental protection Driver performance: CGI’s BestDriver mobile app helps transportation and logistics companies improve driving performance by combining big data analytics with gamification. The end result is reduced fuel consumption and carbon emissions, and improved safety and cost-efficiencies. Hazardous materials: CGI’s ProSteward360 solution provides for the safe handling of hazardous chemicals. In use in 100+ countries, the solution effectively manages chemical data, increases product safety and supports global regulatory compliance. Regulatory management: CGI Advantage Regulatory Management helps agencies improve a wide range of regulatory functions, such as permitting, licensing and inspections, and provides constituents with self-service capabilities. Disaster recovery: In partnership with the New Jersey Department of Community Affairs, CGI developed the Sandy Integrated Recovery Operations and Management System (SIROMS) to manage the distribution of federal funds in support of Superstorm Sandy recovery efforts. Smart cities Public spaces: CGI’s IBOR is an IoT-based solution that enables cities to remotely control public assets such as traffic lights to increase public safety, decrease energy consumption and reduce CO2 emissions. Community policing: Working with the Dutch police, CGI developed a mobile application that allows Dutch citizens to report suspicious activities to police, as well as receive crime and other security alerts. Emergency response: CGI developed an innovative emergency response system for Estonia’s Ministry of the Interior that uses digital technologies to enable faster emergency response, better information sharing, and improved decision-making. Patient-centered care: Using the latest digital technologies, CGI CommunityCare360 connects patients, primary care physicians, case coordinators, first responders and other healthcare workers to provide patientcentric care, whenever and wherever it’s needed. Child welfare Child safety: More than 35,000 case workers across the U.S. depend on CGI-implemented State-wide Automated Child Welfare Information Systems (SACWIS) every day to protect the safety of children. Exploitation: CGI is deeply involved with the Swedish Financial Coalition and NGOs in using technology, including the development of an innovative payment solution, to prevent payments related to the sexual abuse of children. PROJECT SPOTLIGHT Minimizing the impact of Hurricane Matthew for utility clients and their customers Utility companies were bracing for widespread outages as Hurricane Matthew wreaked havoc on the East Coast of the United States in October 2016. With persistent tropical force winds and potential damage from storm surge and seawater incursion, Hurricane Matthew presented a serious test to utilities and their mission-critical systems. With Florida home to several CGI utility clients operating our Pragma portfolio of outage, network and mobile workforce management solutions, we took a proactive approach to ensuring our clients were prepared to manage the incoming surge of outages and hazardous incidents as a result of Matthew’s impact. CGI provided onsite resources who offered critical technical support to safeguard system stability and help maintain business continuity during the actual storm response process, as well as the restoration efforts that followed. This work helped to increase safety and minimize downtime for the communities our clients serve. Our name, OUC’The Reliable One, demonstrates our commitment to being one of the most reliable utilities in the nation every day. So when we wanted to upgrade our Outage Management System (OMS), we recently chose CGI for a major update to our advanced digital metering and computer-aided dispatch systems. We appreciate that CGI went above and beyond to come to Orlando before the impact of Hurricane Matthew. This helped ensure our team had the support they needed to restore power to our customers as quickly and safely as possible. Clint Bullock, Vice-President of Electric & Water Delivery Orlando Utilities Commission (OUC The Reliable One) Orlando, Florida, United States 2016 ANNUAL REVIEW 45

CORPORATE SOCIAL RESPONSIBILITY DREAM CONNECTORS Making a difference in our communities around the world In 2016, in commemoration of CGI’s 40th anniversary, we launched the CGI Dream Connectors program to deepen our commitment to serving our communities. In this inaugural year, after a company-wide vote, seven projects- one from each of CGI’s Strategic Business Units- were selected to receive CGI support, which includes access to IT, facilities and funding, as well as the strength of thousands of member volunteers. 2016 Dream Connectors projects ASIA PACIFIC Providing Education and Sports Facilities for Children at Gowdihalli Village Primary School CGI is working to help raise the literacy rate in the Gowdihalli Village Primary School and nearby villages in India by improving access to education and school supplies. CANADA Habitat for Humanity (HFH) CGI professionals are helping HFH to develop an e-commerce solution to connect with the community on a larger scale and to better coordinate donations across chapters. EASTERN, CENTRAL AND SOUTHERN EUROPE CGI Mimar Project In Portugal, CGI is helping the Mimar youth shelter build a database and an application to organize its services and information, and is sponsoring much-needed repairs and enhancements to its facilities. FRANCE, LUXEMBOURG AND MOROCCO R Zo City R Zo City, a non-profit organization that provides career development tools and guidance to young job seekers, is teaming with CGI volunteers to provide instructional classes and one-on-one training sessions on IT topics. NORDICS Helping Hand App— Digital Volunteering Center CGI members are developing an app to help the Finnish Association for Mental Health match volunteers to people in need. UNITED KINGDOM Fighting cybercrime CGI members in the UK are taking a stand against cybercrime by supporting the Cyber Made Simple initiative, which teaches positive online behaviors to children and parents. UNITED STATES CGI STEM Camp CGI is offering CGI STEM (Science, Technology, Engineering and Math) camps in five office locations across the country to provide students with valuable IT and networking skills. Learn more about the program and projects at cgi.com/dream-connectors.

CGI GLOBAL 1000 Sharing the voice of our clients and CGI insights There has never been a more extraordinary opportunity to transform how organizations create value for their stakeholders, and central to this opportunity is the role of technology. To best understand the disruptive forces at work in today’s digital world and how technology can drive transformation, CGI conducts annual in-person conversations with business and technology executives to listen to and discuss their challenges and priorities What emerge from these meetings are practical insights- based on quantitative and qualitative data- that shape future strategies, both for participants and for CGI. For many years, we shared the findings and insights from these conversations with those who participated. This year, for the first time, we’ve also published a full report- the 2016 2017_CGI Global_1000 outlook. Request your copy at cgi.com/global1000.

Founded in 1976, CGI is one of the largest IT and business process services providers in the world. With 68,000 professionals operating in hundreds of locations around the globe, CGI helps clients become customer-centric digital organizations. We deliver high-quality business consulting, systems integration and transformational outsourcing services, complemented by more than 150 IP-based solutions, to support clients in transforming into digital enterprises end-to-end. CGI works with clients across the globe through a unique client proximity and best-fi t global delivery model to accelerate their digital transformation and drive competitive advantage. cgi.com CGI Experience the commitment 2016 CGI Group Inc. BestDriver, CGI Advantage, CGI Atlas360, CGI Collections360, CGI CommunityCare360, CGI ProperPay, CGI Trade360, CGI Traffi c360, CGI Unify360, Data2Diamonds, Experience the commitment, Exploration2Revenue, GIOS, HotScan, Pragma, Pro Logistica, ProSteward360, Ratabase, Sm@rtering and Sovera are trademarks or registred trademarks of CGI Group Inc. or its related companies. Microsoft and Hololens are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. iBeacon is a trademark of Apple Inc.

HIGH-END BUSINESS AND IT CONSULTING SYSTEMS INTEGRATION TRANSFORMATIONAL OUTSOURCING IP-BASED SERVICES AND SOLUTIONS Fiscal 2016 Results Your end-to-end partner in digital transformation CGI Experience the commitment

This Management’s Discussion and Analysis of the Financial Position and Results of Operations (“MD&A”) is the responsibility of management and has been reviewed and approved by the Board of Directors. This MD&A has been prepared in accordance with the requirements of the Canadian Securities Administrators. The Board of Directors is ultimately responsible for reviewing and approving the MD&A. The Board of Directors carries out this responsibility mainly through its Audit and Risk Management Committee, which is appointed by the Board of Directors and is comprised entirely of independent and financially literate directors.

Throughout this document, CGI Group Inc. is referred to as “CGI”, “we”, “our” or “Company”. This MD&A provides information management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company. This document should be read in conjunction with the audited consolidated financial statements and the notes thereto for the years ended September 30, 2016 and 2015. CGI’s accounting policies are in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All dollar amounts are in Canadian dollars unless otherwise indicated.

This MD&A includes information we believe is material to investors. We consider something to be material if it results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares, or if it is likely that a reasonable investor would consider the information to be important in making an investment decision.

All statements in this MD&A that do not directly and exclusively relate to historical facts constitute “forward-looking statements” within the meaning of that term in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and are “forward-looking information” within the meaning of Canadian securities laws. These statements and this information represent CGI’s intentions, plans, expectations and beliefs, and are subject to risks, uncertainties and other factors, of which many are beyond the control of the Company. These factors could cause actual results to differ materially from such forward-looking statements or forward-looking information. These factors include but are not restricted to: the timing and size of new contracts; acquisitions and other corporate developments; the ability to attract and retain qualified employees; market competition in the rapidly evolving information technology industry; general economic and business conditions; foreign exchange and other risks identified in the MD&A and in other public disclosure documents filed with the Canadian securities authorities (filed on SEDAR at www.sedar.com) and the U.S. Securities and Exchange Commission (filed on EDGAR at www.sec.gov), as well as assumptions regarding the foregoing. The words “believe”, “estimate”, “expect”, “intend”, “anticipate”, “foresee”, “plan”, and similar expressions and variations thereof, identify certain of such forward-looking statements or forward-looking information, which speak only as of the date on which they are made. In particular, statements relating to future performance are forward-looking statements and forward-looking information. CGI disclaims any intention or obligation to publicly update or revise any forward-looking statements or forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law. Readers are cautioned not to place undue reliance on these forward-looking statements or on this forward-looking information. You will find more information about the risks that could cause our actual results to differ significantly from our current expectations in section 10 – Risk Environment.

The reader should note that the Company reports its financial results in accordance with IFRS. However, we use a combination of financial measures, ratios, and non-GAAP measures to assess our Company’s performance. The non-GAAP measures used in this MD&A do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS.

The table below summarizes our non-GAAP measures and most relevant key performance measures:

The Company’s operations are managed through the following seven operating segments, referred to as our Strategic Business Units, namely: United States of America (“U.S.”); Nordics; Canada; France (including Luxembourg and Morocco) (“France”); United Kingdom (“U.K.”); Eastern, Central and Southern Europe (primarily Netherlands and Germany) (“ECS”); and Asia Pacific (including Australia, India and the Philippines) (“Asia Pacific”). Please refer to sections 3.4 and 3.6 of the present document and to note 27 of our audited consolidated financial statements for additional information on our segments.

In order to achieve these objectives, this MD&A is presented in the following main sections:

Founded in 1976 and headquartered in Montréal, Canada, CGI is among the largest Information Technology (“IT”) and business process service providers in the world, with approximately 68,000 professionals. Through high-end consulting, systems integration, transformational outsourcing and Intellectual Property (“IP”) solutions, combined with in-depth industry expertise, CGI works with clients across the globe through a unique client proximity and best-fit global delivery model to accelerate their digital transformation and drive competitive advantage.

CGI delivers end-to-end services that cover the full spectrum of delivery; from solution design and development, to implementation, integration and technology operations. Our portfolio encompasses:

CGI has long and focused practices in all of our core industries, providing clients with a partner that is not only expert in IT, but expert in their industries. This combination of business knowledge and digital technology expertise allows us to help our clients adapt as their industries change and, in the process, allows us to evolve the industries in which we operate.

Our targeted industries include: government, financial services, health, utilities, telecommunications, oil & gas, manufacturing, retail & consumer services, transportation and post & logistics. While these represent our go-to-market industry targets, we group these industries into the following: government; financial services; health; telecommunications & utilities; and manufacturing, retail & distribution (“MRD”).

As the move toward digitalization continues to increase across industries, CGI partners with clients to support their strategic initiatives. We provide extensive industry expertise to guide them in becoming customer-centric digital organizations.

CGI’s comprehensive portfolio of IP solutions support our clients’ mission-critical business functions and accelerate their digital transformation. We offer more than 150 IP-based solutions for the industries we serve, as well as cross-industry solutions. These solutions include digital-enabling software applications, reusable frameworks and innovative delivery methodologies - like Software as a Service.

CGI is a trusted partner with more than 40 years of experience in delivering innovative, client-inspired business services and solutions. Through innovation programs and investments, CGI supports clients with their most strategic initiatives. We help develop, innovate and protect the technology that enables clients to achieve their digital transformation goals faster with reduced risk and enduring results.

CGI clients expect consistency of service wherever and whenever they engage us. We have an outstanding track record of on-time, within-budget delivery as a result of our commitment to excellence and our robust governance model - the CGI Management Foundation. The CGI Management Foundation provides a common business language, frameworks and

practices for managing all operations consistently across the globe, driving a focus on continuous improvement. We also invest in rigorous quality and service delivery standards (including ISO and Capability Maturity Model Integration (“CMMI”) certification programs), as well as a comprehensive Client Satisfaction Assessment Program, to ensure high client satisfaction on an ongoing basis.

CGI is unique compared to most companies. We not only have a vision, but also a dream: “To create an environment in which we enjoy working together and, as owners, contribute to building a company we can be proud of.” This dream has motivated us since our founding in 1976 and drives our vision: “To be a global, world-class information technology and business process services leader helping our clients succeed.”

In pursuing this dream and vision, CGI has been highly disciplined throughout its history in executing a Build and Buy profitable growth strategy comprised of four pillars that combine profitable organic growth (Build) and accretive acquisitions (Buy):

The first two pillars relate to driving profitable organic growth through the pursuit of contracts - both large and small - with new and existing clients in our targeted industries.

The last two pillars focus on growth through niche and large acquisitions. We identify niche acquisitions through a strategic qualification process that systematically searches for targets to strengthen our local proximity in metro markets, our industry expertise and enhance our services and solutions. We also pursue large acquisitions to further expand our geographic presence and critical mass, which enables us to compete for large outsourcing contracts and broaden our client relationships. CGI will continue to be a consolidator in the IT services industry.

Since 1976, our professionals have been working toward the same dream and vision. Today, with a presence in hundreds of global locations and more than $10 billion in revenue, our aspiration is to double our size over a 5 to 7 year period.

CGI’s strategy is executed through a unique business model that combines client proximity with an extensive global delivery network to deliver the following benefits:

In today’s digital era, there is a competitive urgency for organizations across industries to become digital in a sustainable way. The pressure is on to modernize legacy assets and connect them to digital business and operating models. Central to this massive transformation is the evolving role of technology. Traditionally viewed as an enabler, technology is now being recognized as a business driver. The promise of digital creates an enormous opportunity to transform organizations end-to-end, and CGI is well-positioned to serve as a digital partner and expert of choice. We’re working with clients across the globe to implement digital strategies, roadmaps and solutions that revolutionize the customer/citizen experience, drive the launch of new products and services, and deliver efficiencies and cost savings.

As the demand for digitalization increases, competition within the global IT industry is intensifying. CGI’s competition comprises a variety of players; from niche companies providing specialized services and software, to global, end-to-end IT service providers, to large consulting firms. All of these players are competing to deliver some or all of the services we provide. Many factors distinguish the industry leaders, including the following:

CGI compares very favourably with the competition with respect to all of these factors. We’re not only delivering all of the capabilities clients need to compete in a digital world, but the immediate results and long-term value they expect. We’re helping clients to better run, change and grow their businesses providing a competitive differentiator.

CGI’s shares are listed on the Toronto Stock Exchange (“TSX”) (stock quote – GIB.A) and the New York Stock Exchange (“NYSE”) (stock quote – GIB) and are included in various indexes such as the S&P/TSX 60 Index.

On January 27, 2016, the Company’s Board of Directors authorized and subsequently received the approval from the TSX for the renewal of the Normal Course Issuer Bid (“NCIB”) to purchase up to 21,425,992 Class A subordinate voting shares for cancellation, representing 10% of the Company’s public float as of the close of business on January 22, 2016. The Class A subordinate voting shares may be purchased under the NCIB commencing February 11, 2016 and ending on the earlier of February 3, 2017 or the date on which the Company has either acquired the maximum number of Class A subordinate voting shares allowable under the NCIB, or elects to terminate the NCIB.

During fiscal 2016, the Company repurchased 9,319,875 Class A subordinate voting shares for approximately $517.8 million at an average price of $55.56 under the previous and current NCIB. The repurchased shares included 7,112,375 Class A subordinate voting shares repurchased from Caisse de dépôt et placement du Québec for cash consideration of $400.0 million. In accordance with the TSX rules, the repurchase is considered in the annual aggregate limit that the Company is entitled to repurchase under its current NCIB. As at September 30, 2016, the Company may repurchase up to 14,313,617 Class A subordinate voting shares under the current NCIB.

The following table provides a summary of the Capital Stock and Options Outstanding as at November 4, 2016:

On November 4, 2016, the Company announced the closing of the acquisition of Collaborative Consulting, a system integration and consulting company headquartered in Boston, Massachusetts. With approximately 400 professionals and annualized revenues of approximately US$76.0M, Collaborative Consulting will enhance and accelerate CGI’s position as a provider of digital transformation services.

The cash acquisition of all unit holder positions of Collaborative Consulting was completed effective November 3, 2016.

Bookings for the year were $11.7 billion representing a book-to-bill ratio of 109.8%. The breakdown of the new bookings signed during the year is as follows:

Information regarding our bookings is a key indicator of the volume of our business over time. However, due to the timing and transition period associated with outsourcing contracts, the realization of revenue related to these bookings may fluctuate from period to period. The values initially booked may change over time due to their variable attributes, including demand-driven usage, modifications in the scope of work to be performed caused by changes in client requirements as well as termination clauses at the option of the client. As such, information regarding our bookings is not comparable to, nor should it be substituted for an analysis of our revenue; it is instead a key indicator of our future revenue used by the Company’s management to measure growth.

The following table provides a summary of the bookings and book-to-bill ratio by segment:

The Company operates globally and is exposed to changes in foreign currency rates. Accordingly, as prescribed by IFRS, we value assets, liabilities and transactions that are measured in foreign currencies using various exchange rates. We report all dollar amounts in Canadian dollars.

The following charts provide additional information regarding our revenue mix for the year:

Service Type

Client Geography

Vertical Market

Management of IT and business functions

54%

U.S.

28%

Government

34%

1. IT services

44%

Canada

15%

MRD

23%

2. Business process services

10%

U.K.

15%

Financial services

21%

France

13%

Telecommunications & utilities

15%

Systems integration and consulting

46%

Sweden

Health

Finland

Rest of the world

15%

IFRS guidance on segment disclosures defines a single customer as a group of entities that are known to the reporting entity to be under common control. As a consequence, our work for the U.S. federal government including its various agencies represented 13.2% of our revenue for fiscal 2016 as compared to 14.0% in fiscal 2015.

Our seven segments are reported based on where the client’s work is delivered from - our geographic delivery model.

The following table provides a summary of the year-over-year changes in our revenue, in total and by segment, separately showing the impacts of foreign currency exchange rate variations between fiscal 2016 and fiscal 2015. The fiscal 2015 revenue by segment was recorded reflecting the actual foreign exchange rates for that period. The foreign exchange impact is the difference between the current period’s actual results and the same period’s results converted with the prior year’s foreign exchange rate.

For the year ended September 30, 2016 revenue was $10,683.3 million, an increase of $396.2 million, or 3.9% over the same period of fiscal 2015. On a constant currency basis, revenue increased by 0.2%. Foreign currency rate fluctuations favourably impacted our revenue by $379.4 million or 3.7%. The revenue growth in U.K., France and the increased use of our offshore global delivery centers in Asia Pacific compensated for the non-renewal of contracts in the U.S. federal defense market and lower work volumes in the Nordics and ECS segments.

For the year ended September 30, 2016 revenue in our U.S. segment was $2,878.7 million, an increase of $65.5 million or 2.3% over fiscal 2015. On a constant currency basis, revenue decreased by $139.5 million or 5.0%. The change in revenue was mainly driven by the non-renewal of contracts in the U.S. government market, mainly in the defense sector. This was partly offset by an increased volume of work within the U.S. federal civilian agencies.

For the year ended September 30, 2016, the top two U.S. vertical markets were government and financial services, which together accounted for approximately 77% of revenue.

For the year ended September 30, 2016, revenue in our Nordics segment was $1,651.3 million, an increase of $12.3 million or 0.8% over the same period of fiscal 2015. On a constant currency basis, revenue decreased by $55.8 million or 3.4%. The change in revenue was mostly due to the expiration of certain infrastructure contracts, lower work volumes, and an increased usage of our offshore delivery centers in Asia Pacific. This was partly offset by an increased work volume in Denmark mainly in the MRD vertical market.

For the year ended September 30, 2016, Nordics’ top two vertical markets were MRD and government, which together accounted for approximately 65% of revenue.

For the year ended September 30, 2016, revenue in our Canada segment was $1,536.3 million, an increase of $2.6 million or 0.2% compared to the same period last year. When considering the higher proportion of revenues delivered from our offshore delivery centers in Asia Pacific, our client revenue grew by 2.3%. This increase was mainly due to growth in the financial services market, including IP-based services and solutions revenue and new outsourcing contracts within the MRD vertical market. This was partly offset by expiration of certain infrastructure outsourcing contracts and the positive impact on revenue of a client arbitration award in Q3 2015.

For the year ended September 30, 2016, Canada’s top two vertical markets were financial services and telecommunications & utilities, which together accounted for approximately 62% of revenue.

For the year ended September 30, 2016, revenue in our France segment was $1,445.0 million, an increase of $161.6 million or 12.6% over the same period of fiscal 2015. On a constant currency basis, revenue increased by $97.6 million or 7.6%. The increase in revenue was mostly due to more work volume across the majority of their vertical markets and, to a lesser extent, to a recent business acquisition.

For the year ended September 30, 2016, France’s top two vertical markets were MRD and financial services, which together accounted for approximately 63% of revenue.

For the year ended September 30, 2016, revenue in our U.K. segment was $1,431.7 million, an increase of $100.5 million or 7.5% over fiscal 2015. On a constant currency basis, revenue increased by $114.0 million or 8.6%. The increase in revenue was mainly due to new outsourcing contracts in the government market combined with higher work volume in the telecommunication & utilities and financial services vertical markets. This was partly offset by lower work volume with a client in the MRD vertical market.

For the year ended September 30, 2016, U.K.’s top two vertical markets were government and telecommunications & utilities, which together accounted for approximately 68% of revenue.

For the year ended September 30, 2016, revenue in our ECS segment was $1,198.9 million, a decrease of $12.4 million or 1.0% over fiscal 2015. On a constant currency basis, revenue decreased by $59.2 million or 4.9%. The change in revenue was mostly due to lower work volume and projects completed in the Netherlands, lower work volume combined with the divesting of certain low margin contracts in Southern Europe and the wind-down of the majority of our operations in South America. This was partly offset by increased work volume in Germany mainly in the MRD and telecommunication & utilities vertical markets.

For the year ended September 30, 2016, ECS’ top two vertical markets were MRD and telecommunications & utilities, which together accounted for approximately 63% of revenue.

For the year ended September 30, 2016, revenue in our Asia Pacific segment was $541.4 million, an increase of $66.0 million or 13.9% over the same period of fiscal 2015. On a constant currency basis, revenue increased by $57.7 million or 12.1%. The increase in revenue was due the continued increased demand of our offshore delivery centers across our segments, as our clients continue taking advantage of our global delivery network. This was partly offset by lower work volumes in Australia.

For the year ended September 30, 2016, Asia Pacific’s top two vertical markets were telecommunications & utilities and MRD, which together accounted for approximately 72% of revenue.

For the year ended September 30, 2016, costs of services, selling and administrative expenses amounted to $9,120.9 million, an increase of $301.9 million over the same period last year. As a percentage of revenue, cost of services, selling and administrative expenses improved to 85.4% from 85.7%. As a percentage of revenue, our costs of services improved compared to the same period last year mainly due to savings related to the recent restructuring program, improved utilization rates and the increased use of our global delivery network. Our selling and administrative expenses, as a percentage of revenue, remained stable.

During the year ended September 30, 2016 the translation of the results of our foreign operations from their local currencies to the Canadian dollar unfavourably impacted costs by $325.5 million substantially offsetting the favourable translation impact of $379.4 million on our revenue.

During the year ended September 30, 2016, CGI incurred $2.0 million of foreign exchange loss, mainly driven by the timing in payments combined with the volatility and fluctuation of foreign exchange rates. The Company, in addition to its natural hedges, has a strategy in place to manage its exposure, to the extent possible, to exchange rate fluctuations through the effective use of derivatives.

For the year ended September 30, 2016, adjusted EBIT margin increased to 14.6% from 14.2% for the same period last year. The favourable variance in adjusted EBIT margin was primarily due to productivity improvements, the savings driven by our restructuring program and a better mix of profitable revenue.

For the year ended September 30, 2016, adjusted EBIT in the U.S. segment was $486.3 million, an increase of $32.0 million. Adjusted EBIT margin increased to 16.9% from 16.2% mostly due to additional research and development tax credits and the decrease in amortization of client relationships related to the acquisition of Stanley, Inc.

For the year ended September 30, 2016, adjusted EBIT in the Nordics segment was $186.7 million, an increase of $32.9 million, while the adjusted EBIT margin improved to 11.3% from 9.4%. The increase in adjusted EBIT margin came mainly from the ongoing cost synergies within our infrastructure business, the improved delivery performance, and the savings generated from the restructuring program.

For the year ended September 30, 2016, adjusted EBIT in the Canada segment was $345.5 million, an increase of $1.8 million compared to the same period last year, while the adjusted EBIT margin was stable when compared to fiscal 2015. When excluding the positive impact of a client arbitration award in Q3 2015, adjusted EBIT increased by 1.1% due to a better mix of profitable revenue, and growth in the financial services sector.

For the year ended September 30, 2016, adjusted EBIT in the France segment was $174.7 million, an increase of $28.1 million when compared to the same period last year. Adjusted EBIT margin improved to 12.1% from 11.4%. The increase in adjusted EBIT margin was mostly due to improved utilization rates on a year-over-year basis.

For the year ended September 30, 2016, adjusted EBIT in the U.K. segment was $154.3 million, a decrease of $9.3 million when compared to fiscal 2015. Adjusted EBIT margin decreased to 10.8% from 12.3% mostly due to the positive impact of additional change orders on certain large contracts in fiscal 2015.

For the year ended September 30, 2016, adjusted EBIT was $114.3 million, a decrease of $3.9 million when compared to the same period last year. Adjusted EBIT margin was essentially stable with productivity improvements being offset by revenue impacts in the Netherlands as described in the revenue section.

For the year ended September 30, 2016, adjusted EBIT in the Asia Pacific segment was $98.6 million an increase of $21.5 million, while the margin improved to 18.2% from 16.2% compared to the same period last year mostly due to productivity improvements across their global delivery centers.

The following table provides a reconciliation between our adjusted EBIT and earnings before income taxes, which is reported in accordance with IFRS.

In Q1 2016, we completed the previously announced restructuring program for productivity improvement initiatives. For the year ended September 30, 2016, the Company incurred $29.1 million of restructuring costs for a total expense of $65.0 million over the entire program.

Net finance costs mainly include the interest on our long-term debt. The decrease in net finance costs for the year ended September 30, 2016 was mainly the result of the early repayments of the May 2016 maturing tranche of the unsecured committed term loan credit facility.

The following table sets out the information supporting the earnings per share calculations:

For the year ended September 30, 2016, the income tax expense was $384.1 million compared to $351.0 million over the same period last year, while our effective tax rate remained stable. The income tax expense was impacted by a favourable tax adjustment of $14.4 million in Q2 2016 attributable to the recognition of deferred tax assets following an agreement with the U.K. tax authority and an additional tax expense for an amount of $5.9 million in Q1 2016 resulting from the re-evaluation of our deferred tax assets following the U.K. corporate tax reduction enacted in November 18, 2015. When excluding these tax adjustments and the tax effects from restructuring costs incurred in both years, the income tax rate would have been 27.0% during fiscal 2016 compared to 26.3% in fiscal 2015. The increase in the income tax expense and the income tax rate was mainly attributable to the increased profitability of our U.S., India and France operations where enacted income tax rates are higher.

The table in section 3.8.3. shows the year-over-year comparison of the tax rate with the impact of specific items removed.

Based on the enacted rates at the end of fiscal 2016 and our current business mix, we expect our effective tax rate before any significant adjustments to be in the range of 27.0% to 29.0% in subsequent periods.

For fiscal 2016, CGI’s basic and diluted weighted average number of shares decreased compared to fiscal 2015 due to the impact of the repurchase of Class A subordinate voting shares, partly offset by the grants and the exercise of stock options.

Below is a table showing the year-over-year comparison excluding specific items namely, restructuring costs, and tax adjustments:

CGI’s growth is financed through a combination of our cash flow from operations, borrowing under our existing credit facilities, the issuance of long-term debt, and the issuance of equity. One of our financial priorities is to maintain an optimal level of liquidity through the active management of our assets and liabilities as well as our cash flows.

As at September 30, 2016, cash and cash equivalents were $596.5 million. The following table provides a summary of the generation and use of cash for the years ended September 30, 2016 and 2015.

For the year ended September 30, 2016, the $267.9 million of net change in non-cash working capital items was mostly due to :

The timing of our working capital inflows and outflows will always have an impact on the cash flow from operations.

For the year ended September 30, 2016, $382.7 million were used in investing activities while $257.1 million were used in the prior year.

The following table provides a summary of the generation and use of cash from investing activities:

The increase of $125.6 million in cash used in investing activities during the year ended September 30, 2016 was mainly due to :

This was partially offset by the net proceeds from the sale of long-term investments.

For the year ended September 30, 2016, $666.3 million were used in financing activities while $1,303.7 million were used in the prior year.

The following table provides a summary of the generation and use of cash from financing activities:

For the year ended September 30, 2016, $182.7 million was used to reduce our outstanding long-term debt mainly driven by the $129.7 million repayment under the term loan credit facility, while we made net repayments of $901.6 million to reduce our long-term debt last year. During the years ended September 30, 2016 and 2015, the Company used $24.1 million and $121.6 million respectively to settle the cross-currency swaps related to the outstanding long-term debt repaid during these periods.

For the year ended September 30, 2016, an amount of $21.8 million was used to purchase CGI Class A subordinate voting shares in connection with the Company’s Performance Share Unit Plan (“PSU Plan”), while for the comparable period last year, an amount of $11.1 million was used. More information concerning the PSU Plan can be found in note 19 of the audited consolidated financial statements.

For the year ended September 30, 2016, we used $517.8 million to repurchase 9,319,875 Class A subordinate voting shares under the previous and current NCIB. We also used $9.5 million to pay and subsequently cancel 200,000 Class A subordinate voting shares repurchased and held by the Company as at the end of fiscal 2015. For the year ended September 30, 2015, $323.1 million was used to repurchase 6,725,735 Class A subordinate voting shares under the annual aggregate limit of the NCIB then in effect.

Finally, for the year ended September 30, 2016, we received $89.5 million in proceeds from the exercise of stock options, compared to $53.7 million during the year ended September 30, 2015.

For the year ended September 30, 2016, the effect of foreign exchange rate changes on cash and cash equivalents was $7.2 million. This amount had no effect on net earnings as it was recorded in other comprehensive income.

^a Consists of Letters of Credit for $33.9 million outstanding as at September 30, 2016.

Our cash position and bank lines are sufficient to support our growth strategy. At September 30, 2016, cash and cash equivalents and long-term investments represented $623.8 million.

Cash equivalents typically include term deposits, all with maturities of 90 days or less. Long-term investments include corporate and government bonds with maturities ranging from one to five years, rated “A” or higher.

The amount of capital available was $2,089.9 million. The long-term debt agreements contain covenants, which require us to maintain certain financial ratios. As at September 30, 2016, CGI was in compliance with these covenants.

Total debt decreased by $216.1 million to $1,911.0 million as at September 30, 2016, compared to $2,127.1 million as at September 30, 2015. The variation was mainly due to the $129.7 million repayment under the unsecured committed revolving credit facility combined with other repayments.

As at September 30, 2016, CGI was showing a positive working capital¹ of $425.0 million. The Company also had $1,466.1 million available under its unsecured committed revolving facility and is generating a significant level of cash that will allow it to fund its operations while maintaining adequate levels of liquidity. On November 8, 2016, the unsecured committed revolving facility was extended by two years to December 2021 and can be further extended. There were no material changes in the terms and conditions including interest rates and banking covenants.

As at September 30, 2016, the cash and cash equivalents held by foreign subsidiaries were $557.8 million ($263.6 million as at September 30, 2015). The tax implications and impact related to its repatriation will not materially affect the Company’s liquidity.

We are committed under the terms of contractual obligations which have various expiration dates, primarily for the rental of premises, computer equipment used in outsourcing contracts and long-term service agreements. For the year ended September 30, 2016, the Company decreased its commitments by $770.2 million mainly due to a decrease in rental office space commitments and repayments of long-term debt.


Commitment type	Total		Less than 1 year		2nd and 3rd years		4th and 5th years		After 5 years
In thousands of CAD

Long-term debt		1,861,880		173,362		423,464		342,285		922,769

Estimated interest on long-term debt		361,842		69,010		124,309		97,673		70,850

Finance lease obligations		42,172		18,738		17,183		5,489		762

Estimated interest on finance lease obligations		2,033		978		878		171		6

Operating leases

Rental of office space (excluding costs of services and taxes)		573,957		154,247		209,521		117,861		92,328

Computer equipment		15,562		7,941		6,350		976		295

Automobiles		97,775		39,256		49,072		9,111		336

Long-term service agreements and other		189,676		85,825		93,446		10,092		313

Total contractual obligations		3,144,897		549,357		924,223		583,658		1,087,659

Our required benefit plan contributions have not been included in this table as such contributions depend on periodic actuarial valuations for funding purposes. Our contributions to defined benefit plans are estimated at $19.2 million for fiscal 2017 as described in note 16 of the audited consolidated financial statements.

We use various financial instruments to manage our exposure to fluctuations of foreign currency exchange rates and interest rates. Please refer to notes 3 and 30 of our audited consolidated financial statements for additional information on our financial instruments.

We use the net debt to capitalization ratio as an indication of our financial leverage in order to pursue large outsourcing contracts, expand global delivery centers, or make acquisitions. The net debt to capitalization ratio decreased to 15.8% in 2016 from 21.7% in 2015. The change in the net debt to capitalization ratio was mostly due to our improved cash generation allowing us to reduce our net debt by $446.3 million.

ROE is a measure of the return we are generating for our shareholders. ROE decreased to 17.2% in fiscal 2016 from 17.7% in fiscal 2015. The change was mostly the result of an increase in average capital driven by accumulated earnings.

ROIC is a measure of the Company’s efficiency in allocating the capital under our control to profitable investments. The return on invested capital was stable when compared to fiscal 2015 at 14.5%.

DSO of 44 days was stable when compared to fiscal 2015. In calculating the DSO, we subtract the deferred revenue balance from trade accounts receivable and work in progress; for that reason, the timing of payments received from outsourcing clients in advance of the work to be performed and the timing of payments related to project milestones can affect the DSO fluctuations. We remain committed to manage our DSO within our 45 day target or less.

CGI engages in the practice of off-balance sheet financing in the normal course of operations for a variety of transactions such as operating leases for office space, computer equipment and vehicles as well as accounts receivable factoring. From time to time, we also enter into agreements to provide financial or performance assurances to third parties on the sale of assets, business divestitures and guarantees on government and commercial contracts.

In connection with sales of assets and business divestitures, we may be required to pay counterparties for costs and losses incurred as the result of breaches in our contractual obligations, representations and warranties, intellectual property right infringement and litigation against counterparties, among others. While some of the agreements specify a maximum potential exposure of approximately $10.8 million, others do not specify a maximum amount or limited period. It is not possible to reasonably estimate the maximum amount that may have to be paid under such guarantees. The amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. The Company does not expect to incur any potential payment in connection with these guarantees that could have a materially adverse effect on its audited consolidated financial statements.

In the normal course of business, we may provide certain clients, principally governmental entities, with bid and performance bonds. In general, we would only be liable for the amount of the bid bonds if we refuse to perform the project once the bid is awarded. We would also be liable for the performance bonds in the event of default in the performance of our obligations. As at September 30, 2016, we had committed a total of $30.9 million for these bonds. To the best of our knowledge, we complied with our performance obligations under all service contracts for which there was a performance or bid bond, and the ultimate liability, if any, incurred in connection with these guarantees would not have a materially adverse effect on our consolidated results of operations or financial condition.

Sufficient capital resources and liquidity are required for supporting ongoing business operations and to execute our build and buy growth strategy. The Company has sufficient capital resources coming from the cash generated from operations, credit facilities, long-term debt agreements and invested capital from shareholders. Our principal uses of cash are for procuring new large outsourcing and managed services contracts; investing in our business solutions; pursuing accretive acquisitions; buying back CGI shares and paying down debt. Funds are also used to expand our global delivery network as more and more of our clients demand lower cost alternatives. In terms of financing, we are well positioned to continue executing our four-pillar growth strategy in fiscal 2017.

Strong and experienced leadership is essential to successfully implement our Company’s strategy. CGI has a strong leadership team with members who are highly knowledgeable and have gained a significant amount of experience within the IT industry via various career paths and leadership roles. CGI fosters leadership development to ensure a continuous flow of knowledge and strength is maintained throughout the organization. As part of our succession planning in key positions, we established the Leadership Institute, our own corporate university, to develop leadership, technical and managerial skills inspired by CGI’s roots and traditions.

As a Company built on human capital, our professionals and their knowledge are critical to delivering quality service to our clients. Our human resources program provides competitive compensation and benefits, a favourable working environment, and our training and career development programs combine to allow us to attract and retain the best talent. Employee satisfaction is monitored regularly through a Company-wide survey. Furthermore, approximately 52,000 of our members, are also owners of CGI through our Share Purchase Plan. The Share Purchase Plan, along with the Profit Participation Program, allows members to share in the success of the Company and aligns member objectives with our strategic goals.

In addition to our capital resources and the talent of our human capital, CGI has established a Management Foundation encompassing governance policies, sophisticated management frameworks and an organizational model for its business units and corporate processes. This foundation, along with our appropriate internal systems, helps in providing a disciplined high standard of quality service to our clients across all of our operations, and additional value to our stakeholders. CGI’s operations maintain appropriate certifications in accordance with service requirements such as the ISO and CMMI certification programs.

The following table provides a summary of the year-over-year changes in our revenue, in total and by segment, separately showing the impacts of foreign currency exchange rate variations between the Q4 2016 and Q4 2015 periods. The Q4 2015 revenue by segment was recorded reflecting the actual average foreign exchange rates for that period. The foreign exchange impact is the difference between the current period’s actual results and the current period’s results converted with the prior year’s average foreign exchange rates.

Change

For the three months ended September 30,

2016

2015

In thousands of CAD except for percentages

Total CGI revenue

2,582,429

2,585,275

(2,846)

(0.1%)

Variation prior to foreign currency impact

2.8%

Foreign currency impact

(2.9%)

Variation over previous period

(0.1%)

U.S.

Revenue prior to foreign currency impact

725,638

752,231

(26,593)

(3.5%)

Foreign currency impact

(4,146)

U.S. revenue

721,492

752,231

(30,739)

(4.1%)

Nordics

Revenue prior to foreign currency impact

361,126

368,109

(6,983)

(1.9%)

Foreign currency impact

(2,546)

Nordics revenue

358,580

368,109

(9,529)

(2.6%)

Canada

Revenue prior to foreign currency impact

387,476

371,824

15,652

4.2%

Foreign currency impact

(432)

Canada revenue

387,044

371,824

15,220

4.1%

France

Revenue prior to foreign currency impact

342,165

314,234

27,931

8.9%

Foreign currency impact

(493)

France revenue

341,672

314,234

27,438

8.7%

U.K.

Revenue prior to foreign currency impact

406,207

355,095

51,112

14.4%

Foreign currency impact

(63,120)

U.K. revenue

343,087

355,095

(12,008)

(3.4%)

ECS

Revenue prior to foreign currency impact

288,202

295,721

(7,519)

(2.5%)

Foreign currency impact

185

ECS revenue

288,387

295,721

(7,334)

(2.5%)

Asia Pacific

Revenue prior to foreign currency impact

146,270

128,061

18,209

14.2%

Foreign currency impact

(4,103)

Asia Pacific revenue

142,167

128,061

14,106

11.0%

We ended the fourth quarter of fiscal 2016 with revenue of $2,582.4 million, essentially stable when compared to the same period of fiscal 2015. On a constant currency basis, revenue increased by $71.8 million or 2.8%. Foreign currency rate fluctuations unfavourably impacted our revenue by $74.7 million or 2.9%.

Revenue in our U.S. segment was $721.5 million in Q4 2016, a decrease of $30.7 million or 4.1% compared to the same period of fiscal 2015. On a constant currency basis, revenue decreased by $26.6 million or 3.5%. The change in revenue was mostly due to the non-renewal of contracts in the U.S. government market, mainly in the defense sector, partly offset by an increased volume of work within the U.S. federal civilian agencies.

For the current quarter, the top two U.S. vertical markets were government and financial services, which together accounted for approximately 77% of its revenue.

Revenue from our Nordics segment was $358.6 million in Q4 2016, a decrease of $9.5 million or 2.6% compared to the same period of fiscal 2015. On a constant currency basis, revenue decreased by $7.0 million or 1.9%. The change in revenue is mainly due to the expiration of certain infrastructure outsourcing contracts and an increased usage of our offshore delivery centers in Asia Pacific. This was partly offset by an increased work volume within the MRD vertical market for both Sweden and Denmark.

For the current quarter, the Nordics’ top two vertical markets were MRD and government, which together accounted for approximately 65% of its revenue.

Revenue in our Canada segment for Q4 2016 was $387.0 million, an increase of $15.2 million or 4.1% compared to the same period of fiscal 2015. The increase of revenue was mostly due to an increase in financial services, including IP-based services and solutions revenue, as well as new outsourcing contracts within the MRD vertical market. This was partly offset by the expiration of certain infrastructure outsourcing contracts.

For the current quarter, Canada’s top two vertical markets were financial services and telecommunications & utilities, which together accounted for approximately 60% of its revenue.

Revenue from our France segment was $341.7 million in Q4 2016 an increase of $27.4 million or 8.7% compared to the same period of fiscal 2015. On a constant currency basis, revenue increased by $27.9 million or 8.9%. The increase in revenue was mostly due to an increase in work volume across the majority of its vertical markets and, to a lesser extent, a recent business acquisition.

For the current quarter, France’s top two vertical markets were MRD and financial services, which together accounted for approximately 63% of its revenue.

Revenue from our U.K. segment was $343.1 million in Q4 2016, a decrease of $12.0 million or 3.4% compared to the same period of fiscal 2015. On a constant currency basis, revenue increased by $51.1 million or 14.4%. The increase in revenue was mainly due to new outsourcing contracts in the government market combined with higher work volume in telecommunications & utilities. In addition, revenue in Q4 2016 was favourably impacted by the sale of additional equipment. The growth was partly offset by lower work volume with a client in the MRD vertical market.

For the current quarter, U.K.’s top two vertical markets were government and telecommunications & utilities, which together accounted for approximately 73% of its revenue.

Revenue from our ECS segment was $288.4 million in Q4 2016, a decrease of $7.3 million or 2.5% when compared to fiscal 2015. The change in revenue was mostly due to lower work volume and projects completed in the Netherlands, lower work volume combined with the divesting of certain low margin contracts in Southern Europe and the wind-down of the majority of our operations in South America. This was partly offset by an increased work volume in Germany mainly in MRD and telecommunications & utilities vertical markets.

For the current quarter, ECS’ top two vertical markets were MRD and telecommunications & utilities, which together accounted for approximately 64% of its revenue.

Revenue from our Asia Pacific segment was $142.2 million in Q4 2016, an increase of $14.1 million or 11.0% compared to the same period of fiscal 2015. On a constant currency basis, revenue increased by $18.2 million or 14.2%. The increase in revenue was due to the continued increased demand of our offshore delivery centers across our segments, as our clients continue taking advantage of our global delivery network. This was partly offset by lower work volumes in Australia.

For the current quarter, Asia Pacific’s top two vertical markets were telecommunications & utilities and MRD, which together accounted for approximately 69% of its revenue.

For the three months ended September 30,

Change

2016

2015

In thousands of CAD except for percentages

U.S.

128,494

117,313

11,181

9.5

As a percentage of U.S. revenue

17.8%

15.6%

Nordics

43,784

30,176

13,608

45.1

As a percentage of Nordics revenue

12.2%

8.2%

Canada

94,136

77,450

16,686

21.5

As a percentage of Canada revenue

24.3%

20.8%

France

43,067

35,806

7,261

20.3

As a percentage of France revenue

12.6%

11.4%

U.K.

28,698

62,406

(33,708

)

(54.0

As a percentage of U.K. revenue

8.4%

17.6%

ECS

30,302

36,886

(6,584

)

(17.8

As a percentage of ECS revenue

10.5%

12.5%

Asia Pacific

26,598

18,927

7,671

40.5

As a percentage of Asia Pacific revenue

18.7%

14.8%

Adjusted EBIT

395,079

378,964

16,115

4.3

Adjusted EBIT margin

15.3%

14.7%

Adjusted EBIT for the quarter was $395.1 million an increase of $16.1 million or 4.3% from Q4 2015, while the margin improved to 15.3% from 14.7%.

Adjusted EBIT in the U.S. segment was $128.5 million for Q4 2016, an increase of $11.2 million year-over-year. Adjusted EBIT margin increased to 17.8% from 15.6% when compared to Q4 2015 mostly due to additional research and development tax credits and the decrease in amortization of client relationships related to the acquisition of Stanley, Inc.

Adjusted EBIT in the Nordics segment was $43.8 million for Q4 2016, an increase of $13.6 million year-over-year, while adjusted EBIT margin increased to 12.2% from 8.2% in Q4 2015. The increase in adjusted EBIT margin came mainly from the ongoing cost synergies within our infrastructure business and the savings generated from the restructuring program.

Adjusted EBIT in the Canada segment was $94.1 million for Q4 2016, an increase of $16.7 million year-over-year while adjusted EBIT margin increased to 24.3% from 20.8%. This increase was mostly the result of an improved mix of IP-based services and solutions revenue related to license sales.

Adjusted EBIT in the France segment was $43.1 million for Q4 2016, an increase of $7.3 million year-over-year. Adjusted EBIT margin improved to 12.6% from 11.4%. The increase in adjusted EBIT margin was mostly due to improved utilization rates on a year-over-year basis.

Adjusted EBIT in the U.K. segment was $28.7 million for Q4 2016, a decrease of $33.7 million year-over-year. Adjusted EBIT margin decreased to 8.4% from 17.6% due mostly to the positive impact of additional change orders on certain large contracts in Q4 2015 and a provision taken on a client contract in Q4 2016.

Adjusted EBIT in the ECS segment was $30.3 million for Q4 2016, a decrease of $6.6 million year-over-year, while the margin was 10.5% compared to 12.5% in Q4 2015. The change in margin was mostly due to the revenue impacts from the Netherlands described in the revenue section.

Adjusted EBIT in the Asia Pacific segment was $26.6 million for Q4 2016, an increase of $7.7 million year-over-year, while the margin increased to 18.7% from 14.8%. This was mainly due to productivity improvements across their global delivery centers. In addition, during Q4 2015, adjusted EBIT margin was unfavourably impacted by of a provision on a contract in the Middle East.

The following table sets out the information supporting the earnings per share calculations:

Change

For the three months ended September 30,

2016

2015

In thousands of CAD except for percentage and shares data

Adjusted EBIT

395,079

378,964

16,115

4.3%

Minus the following items:

Restructuring costs

—

35,903

(35,903

)

(100.0%)

Net finance costs

17,623

23,984

(6,361

)

(26.5%)

Earnings before income taxes

377,456

319,077

58,379

18.3%

Income tax expense

103,021

86,188

16,833

19.5%

Effective tax rate

27.3%

27.0%

Net earnings

274,435

232,889

41,546

17.8%

Margin

10.6%

9.0%

Weighted average number of shares

Class A subordinate voting shares and Class B multiple voting shares (basic)

303,203,548

309,337,317

(2.0%)

Class A subordinate voting shares and Class B multiple voting shares (diluted)

309,569,738

318,572,873

(2.8%)

Earnings per share (in dollars)

Basic EPS

0.91

0.75

0.16

21.3%

Diluted EPS

0.89

0.73

0.16

21.9%

For the current quarter, the increase in earnings before income taxes mainly came from the increase in adjusted EBIT as described in section 5.3 of the present document. In addition, $35.9 million of restructuring costs were incurred in Q4 2015.

In Q4 2016, the income tax expense was $103.0 million, an increase of $16.8 million compared to $86.2 million in Q4 2015, while our effective income tax rate increased from 27.0% to 27.3%. The increase in income tax rate was mainly attributable to the decrease in U.K earnings where the enacted tax rate is lower.

Net earnings were $274.4 million, an increase of $41.5 million compared to $232.9 million last year.

The table in section 5.4.1 shows the quarterly year-over-year comparison of the tax rate with the impact of restructuring costs removed.

During the quarter, no Class A subordinate voting shares were repurchased while 924,816 stock options were exercised.

Below is a table showing the year-over-year comparison excluding specific items namely, restructuring costs :

For the three months ended September 30,

Change

2016

2015

In thousands of CAD except for percentage and shares data

Earnings before income taxes

377,456

319,077

58,379

18.3%

Add back:

Restructuring costs

—

35,903

(35,903

)

(100.0%)

Earnings before income taxes excluding specific items

377,456

354,980

22,476

6.3%

Income tax expense

103,021

86,188

16,833

19.5%

Add back:

Tax deduction on restructuring

—

8,352

(8,352

)

(100.0%)

Income tax expense excluding specific items

103,021

94,540

8,481

9.0%

Effective tax rate excluding specific items

27.3%

26.6%

Net earnings excluding specific items

274,435

260,440

13,995

5.4%

Net earnings excluding specific items margin

10.6%

10.1%

Weighted average number of shares outstanding

Class A subordinate voting shares and Class B multiple voting shares (basic)

303,203,548

309,337,317

(2.0%)

Class A subordinate voting shares and Class B multiple voting shares (diluted)

309,569,738

318,572,873

(2.8%)

Earnings per share excluding specific items (in dollars)

Basic EPS

0.91

0.84

0.07

8.3%

Diluted EPS

0.89

0.82

0.07

8.5%

As at September 30, 2016, cash and cash equivalents were $596.5 million. The following table provides a summary of the generation and use of cash and cash equivalents for the quarters ended September 30, 2016 and 2015.

For the three months ended September 30, 2016, the $12.9 million of net change in non-cash working capital items was mostly due to:

The timing of our working capital inflows and outflows will always have an impact on the cash flow from operations.

For Q4 2016,$101.3 million were used in investing activities while $79.3 million were used in the prior year.

The following table provides a summary of the generation and use of cash from investing activities:

The increase of $22.0 million in cash used in investing activities during Q4 2016 was mainly due to :

During Q4 2016, $16.7 million was used to reduce our outstanding long-term debt while for the same period last year $120.8 million was used mainly driven by $121.9 million in repayments under the term loan credit facility.

During Q4 2016, we did not repurchase Class A subordinate voting shares under the NCIB. For the same period last year, we used $229.0 million to repurchase 4,850,402 Class A subordinate voting shares under the NCIB.

In Q4 2016, we received $15.2 million in proceeds from the exercise of stock options, compared to $7.0 million during the same period last year.

There are factors causing quarterly variances which may not be reflective of the Company’s future performance. First, there is seasonality in systems integration and consulting work, and the quarterly performance of these operations is impacted by occurrences such as vacations and the number of statutory holidays in any given quarter. Outsourcing contracts including BPS contracts are affected to a lesser extent by seasonality. Second, the workflow from some clients may fluctuate from quarter to quarter based on their business cycle and the seasonality of their own operations. Third, the savings that we generate for a client on a given outsourcing contract may temporarily reduce our revenue stream from this client, as these savings may not be immediately offset by additional work performed for this client.

In general, cash flow from operating activities could vary significantly from quarter to quarter depending on the timing of monthly payments received from large clients, cash requirements associated with large acquisitions, outsourcing contracts

and projects, the timing of the reimbursements for various tax credits as well as profit sharing payments to members and the timing of restructuring cost payments.

Foreign exchange fluctuations can also contribute to quarterly variances as our percentage of operations in foreign countries evolves. The effect from these variances is primarily on our revenue and to a much lesser extent, on our margin as we benefit from natural hedges.

The audited consolidated financial statements for the year ended September 30, 2016 include all adjustments that CGI’s management considers necessary for the fair presentation of its financial position, results of operations, and cash flows.

In May 2014, the IASB issued IFRS 15, “Revenue from Contracts with Customers”, to specify how and when to recognize revenue as well as requiring the provision of more informative and relevant disclosures. The standard supersedes IAS 18, “Revenue”, IAS 11, “Construction Contracts”, and other revenue related Interpretations. The standard will be effective on October 1, 2018 for the Company, with earlier adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In July 2014, the IASB amended IFRS 9, “Financial Instruments”, to bring together the classification and measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39, “Financial Instruments: Recognition and Measurement”. The standard supersedes all previous versions of IFRS 9 and will be effective on October 1, 2018 for the Company, with earlier adoption permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In January 2016, the IASB issued IFRS 16, “Leases”, to set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a lease contract. The standard supersedes IAS 17, “Leases”, and other lease related Interpretations. The standard will be effective on October 1, 2019 for the Company with earlier adoption permitted only if IFRS 15 “Revenue from Contracts with Customers” is also applied. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

The Company’s significant accounting policies are described in note 3 of the audited consolidated financial statements for the year ended September 30, 2016. Certain of these accounting policies, listed below, require management to make accounting estimates and judgment that affect the reported amounts of assets, liabilities and equity and the accompanying disclosures at the date of the consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting period. These accounting estimates are considered critical because they require management to make subjective and/or complex judgments that are inherently uncertain and because they could have a material impact on the presentation of our financial condition, changes in financial condition or results of operations.

If an arrangement involves the provision of multiple components, the total arrangement value is allocated to each separately identifiable component based on its relative selling price at the inception of the contract. At least on a yearly basis, the Company reviews its best estimate of the selling price which is established by using a reasonable range of prices for the various services and products offered by the Company based on local market information available. Information used in determining the range is mainly based on recent contracts signed and the economic environment. A change in the range could have a material impact on the allocation of total arrangement value, and therefore on the amount and timing of revenue recognition.

Revenue from systems integration and consulting services under fixed-fee arrangements where the outcome of the arrangements can be estimated reliably is recognized using the percentage-of-completion method over the service periods. The Company primarily uses labour costs or labour hours to measure the progress towards completion. Project managers monitor and re-evaluate project forecasts on a monthly basis. Forecasts are reviewed to consider factors such as: changes to the scope of the contracts, delays in reaching milestones and new complexities in the project delivery. Forecast can also be affected by market risks such as the availability and retention of qualified IT professionals and/or the ability of the subcontractors to perform their obligation within agreed upon budget and timeframes. To the extent that actual labour hours or labour costs could vary from estimates, adjustments to revenues following the review of the costs to complete on projects are reflected in the period in which the facts that give rise to the revision occur. Whenever the total costs are forecasted to be higher than the total revenues, estimated losses on revenue-generating contracts is accounted for as described below.

Estimated losses on revenue-generating contracts may occur due to additional contract costs which were not foreseen at inception of the contract. Projects and services are monitored by the project managers on a monthly basis. Some of the indicators reviewed are: current financial results, delays in reaching milestones, new complexities in the project delivery and third party deliverables and estimated costs.

In addition, CGI’s Engagement Assessment Services (“EAS”) team conducts a formal monthly health check assessment on CGI’s project portfolio for all contracts that has a value above an established threshold. The reviews are based on a defined set of risk dimensions and assessment categories that results in detailed reports containing actual delivery and current financial status which are reviewed with the Executive management. Due to the variability of the indicators reviewed, and because the estimates are based on many variables, estimated losses on revenue-generating contracts are subject to change.

The carrying value of goodwill is tested for impairment annually on September 30, or earlier if events or changes in circumstances indicate that the carrying value may be impaired. In order to determine if a goodwill impairment test is required, management reviews different factors on a quarterly basis such as changes in technological or market environment, changes in assumptions used to derive the weighted average cost of capital (“WACC”) and actual financial performance compared to planned performance.

The recoverable amount of each segment has been determined based on its value in use (“VIU”) calculation which includes estimates about their future financial performance based on cash flows approved by management. However, factors such as our ability to continue developing and expanding service offered to address emerging business demands and technology trends, a lengthened sales cycle and our ability to hire and retain qualified IT professionals affect future cash flow, and actual results might differ from future cash flows used in the goodwill impairment test. Key assumptions used in goodwill impairment testing are presented in note 11 of audited consolidated financial statements for the fiscal year ended September 30, 2016. Historically the Company has not recorded an impairment charge on goodwill. As at September 30, 2016, the fair value of each segment represents between 180% and 350% of its carrying value.

Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be available for their utilization. The Company considers the analysis of forecast and future tax planning strategies. Estimates of taxable profit are made based on the forecast by jurisdiction which are aligned with goodwill impairment testing assumptions, on an undiscounted basis. In addition, management considers factors such as substantively enacted tax rates, the history of the taxable profits and availability of tax strategies. Due to the uncertainty and the variability of the factors mentioned above, deferred tax asset are subject to change. Management reviews its assumptions on a quarterly basis and adjusts the deferred tax assets when appropriate.

The Company is subject to taxation in numerous jurisdictions and there are transactions and calculations for which the ultimate tax determination is uncertain which occurs when there is uncertainty as to the meaning of the law, or to the applicability of the law to a particular transaction or both. In those circumstances, the Company might review administrative practice, consult tax authorities or advisors on the interpretation of tax legislation. When a tax position is uncertain, the Company recognizes an income tax benefit or reduces an income tax liability only when it is probable that the tax benefit will be realized in the future or that the income tax liability is no longer probable. The provision for uncertain tax position is made using the best estimate of the amount expected to be paid based on qualitative assessment of all relevant factors and is subject to change. The review of assumptions is done on a quarterly basis.

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The accrued litigation and legal claim provisions are based on historical

experience, current trends and other assumptions that are believed to be reasonable under the circumstances. Estimates include the period in which the underlying cause of the claim occurred and the degree of probability of an unfavourable outcome. Management reviews assumptions and facts surrounding outstanding litigation and claims on a quarterly basis, involves external counsel when necessary and adjusts the provision accordingly. The Company has to be compliant with applicable law in many jurisdictions which increases the complexity of determining adequate provision following litigation review. Since the outcome of such litigation and claims are not predictable, those provisions are subject to change. Adjustments to litigation and claims provision are reflected in the period when the facts that give rise to an adjustment occur.

Our management assumes the responsibility for the existence of appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and reliable.

CGI has a formal corporate disclosure policy whose goal is to raise awareness of the Company’s approach to disclosure among the members of the Board of Directors, senior management and employees.

The Board of Directors has the responsibility under its charter and under the securities laws that govern CGI’s continuous disclosure obligations to oversee CGI’s compliance with its continuous and timely disclosure obligations, as well as the integrity of the Company’s internal controls and management information systems. The Board of Directors carries out this responsibility mainly through its Audit and Risk Management Committee.

The Audit and Risk Management Committee of CGI is composed entirely of independent directors who meet the independence and experience requirements of National Instrument 52-110 adopted by the Canadian Securities Administrators as well as those of the New York Stock Exchange (“NYSE”) and the U.S. Securities and Exchange Commission. The role and responsibilities of the Committee include: (a) reviewing all public disclosure documents containing audited or unaudited financial information concerning CGI; (b) identifying and examining the financial and operating risks to which the Company is exposed, reviewing the various policies and practices of the Company that are intended to manage those risks, and reporting on a regular basis to the Board of Directors concerning risk management; (c) reviewing and assessing the effectiveness of CGI’s accounting policies and practices concerning financial reporting; (d) reviewing and monitoring CGI’s internal control procedures, programs and policies and assessing their adequacy and effectiveness; (e) reviewing the adequacy of CGI’s internal audit resources including the mandate and objectives of the internal auditor; (f) recommending to the Board of Directors the appointment of the external auditor, asserting the external auditor’s independence, reviewing the terms of their engagement, conducting an annual auditor’s performance assessment, and pursuing ongoing discussions with them; (g) reviewing all related party transactions in accordance with the rules of the NYSE and other applicable laws and regulations; (h) reviewing the audit procedures including the proposed scope of the external auditor’s examinations; and (i) performing such other functions as are usually attributed to audit committees or as directed by the Board of Directors. In making its recommendation to the Board of Directors in relation to the annual appointment of the external auditor, the Audit and Risk Management Committee conducts an annual assessment of the external auditor’s performance following the recommendations of the Chartered Professional Accountants of Canada. The formal assessment is concluded in advance of the Annual General Meeting of Shareholders and is conducted with the assistance of key CGI personnel.

The Company evaluated the effectiveness of its disclosure controls and procedures and internal controls over financial reporting based on the framework established in Internal Control - Integrated Framework issued by the Commitee of Sponsoring Organizations of the Treadway Commission (2013 COSO Framework), supervised by and with the participation of the Chief Executive Officer and the Chief Financial Officer as of September 30, 2016. The Chief Executive Officer and Chief Financial Officer concluded that, based on this evaluation, the Company’s disclosure controls and procedures and internal controls over financial reporting were adequate and effective, at a reasonable level of assurance, to ensure that material information related to the Company and its consolidated subsidiaries would be made known to them by others within those entities.

While we are confident about our long-term prospects, the following risks and uncertainties could affect our ability to achieve our strategic vision and objectives for growth and should be considered when evaluating our potential as an investment.

The level of business activity of our clients, which is affected by economic conditions, has a bearing upon the results of our operations. We can neither predict the impact that current economic conditions will have on our future revenue, nor predict when economic conditions will show meaningful improvement. During an economic downturn, our clients and potential clients may cancel, reduce or defer existing contracts and delay entering into new engagements. In general, companies also decide to undertake fewer IT systems projects during difficult economic times, resulting in limited implementation of new technology and smaller engagements. Since there are fewer engagements in a downturn, competition usually increases and pricing for services may decline as competitors, particularly companies with significant financial resources, decrease rates to maintain or increase their market share in our industry and this may trigger pricing adjustments related to the benchmarking obligations within our contracts. Our revenue and profitability could be negatively impacted as a result of these factors.

CGI operates in a global marketplace in which competition among providers of IT services is vigorous. Some of our competitors possess greater financial, marketing, sales resources, and larger geographic scope in certain parts of the world than we do, which, in turn, provides them with additional leverage in the competition for contracts. In certain niche, regional or metropolitan markets, we face smaller competitors with specialized capabilities who may be able to provide competing services with greater economic efficiency. Some of our competitors have more significant operations than we do in lower cost countries that can serve as a platform from which to provide services worldwide on terms that may be more favourable. Increased competition among IT services firms often results in corresponding pressure on prices. There can be no assurance that we will succeed in providing competitively priced services at levels of service and quality that will enable us to maintain and grow our market share.

We derive significant revenue from contracts awarded through competitive bidding processes, which require the Company to estimate accurately the resource and costs that will be required to service any contracts it is awarded, based on the client’s bid specification and sometimes, in advance of the final determination of the full scope and design of the contract (“see Cost estimation risks”), and which limit the Company’s ability to negotiate certain contractual terms and conditions. Risks related to competitive bidding processes also include the substantial cost and managerial time and effort spent by the Company to prepare bids and proposals for contracts that may or may not be awarded to the Company, as well as expenses and delays that may arise if the Company’s competitors protest or challenge awards made to the Company pursuant to competitive bidding process.

There is strong demand for qualified individuals in the IT industry. Hiring and retaining a sufficient amount of individuals with the desired knowledge and skill set may be difficult. Therefore, it is important that we remain able to successfully attract and retain highly qualified professionals and establish an effective succession plan. If our comprehensive programs aimed at attracting and retaining qualified and dedicated professionals do not ensure that we have staff in sufficient numbers and with the appropriate training, expertise and suitable government security clearances required to serve the needs of our clients, we may have to rely on subcontractors or transfers of staff to fill resulting gaps. If our succession plan fails to identify those with potential or to develop these key individuals, we may lose key members and be required to recruit and train new resources. This might result in lost revenue or increased costs, thereby putting pressure on our net earnings.

The ability to continue developing and expanding service offerings to address emerging business demands and technology trends

The rapid pace of change in all aspects of IT and the continually declining costs of acquiring and maintaining IT infrastructure mean that we must anticipate changes in our clients’ needs. To do so, we must adapt our services and our solutions so that we maintain and improve our competitive advantage and remain able to provide cost effective services and solutions. The market for the services and solutions we offer is extremely competitive and there can be no assurance that we will succeed in developing and adapting our business in a timely manner. If we do not keep pace, our ability to retain existing clients and gain new business may be adversely affected. This may result in pressure on our revenue, net earnings and resulting cash flows from operations.

Despite our efforts, the steps we take to ensure that our services and offerings do not infringe on the intellectual property rights of third parties may not be adequate to prevent infringement and, as a result, claims may be asserted against us or our clients. We enter into licensing agreements for the right to use intellectual property and may otherwise offer indemnities against liability and damages arising from third-party claims of patent, copyright, trademark or trade secret infringement in respect of our own intellectual property or software or other solutions developed for our clients. In some instances, the amount of these indemnity claims could be greater than the revenue we receive from the client. Intellectual property claims or litigation could be time-consuming and costly, harm our reputation, require us to enter into additional royalty or licensing arrangements, or prevent us from providing some solutions or services. Any limitation on our ability to sell or use solutions or services that incorporate software or technologies that are the subject of a claim could cause us to lose revenue-generating opportunities or require us to incur additional expenses to modify solutions for future projects.

Some of our outsourcing contracts contain clauses allowing our clients to externally benchmark the pricing of agreed upon services against those offered by other providers in a peer comparison group. The uniqueness of the client environment should be factored in and, if results indicate a difference outside the agreed upon tolerance, we may be required to work with clients to reset the pricing for their services. There can be no assurance that benchmarks will produce accurate or reliable data, including pricing data. This may result in pressure on our revenue, net earnings and resulting cash flows from operations.

Our success depends, in part, on our ability to protect our proprietary methodologies, processes, know-how, tools, techniques and other intellectual property that we use to provide our services. CGI’s business solutions will generally benefit from available copyright protection and, in some cases, patent protection. Although CGI takes reasonable steps to protect and enforce its intellectual property rights, there is no assurance that such measures will be enforceable or adequate. The cost of enforcing our rights can be substantial and, in certain cases, may prove to be uneconomic. In addition, the laws of some countries in which we conduct business may offer only limited intellectual property rights protection. Despite our efforts, the steps taken to protect our intellectual property may not be adequate to prevent or deter infringement or other misappropriation of intellectual property, and we may not be able to detect unauthorized use of our intellectual property, or take appropriate steps to enforce our intellectual property rights.

CGI’s Build and Buy strategy is founded on four pillars of growth: first, organic growth through contract wins, renewals and extensions in the areas of outsourcing and system integration; second, the pursuit of new large transformational outsourcing contracts; third, acquisitions of smaller firms or niche players; and fourth, transformational acquisitions.

Our ability to have organic growth is affected by a number of factors outside of our control, including a lengthening of our sales cycle for major outsourcing contracts.

Our ability to grow through niche and transformational acquisitions requires that we identify suitable acquisition targets and that we correctly evaluate their potential as transactions that will meet our financial and operational objectives. There can be no assurance that we will be able to identify suitable acquisition candidates and consummate additional acquisitions that meet our economic thresholds, or that future acquisitions will be successfully integrated into our operations and yield the tangible accretive value that had been expected.

If we are unable to implement our Build and Buy strategy, we will likely be unable to maintain our historic or expected growth rates.

Our ability to maintain and increase our revenues is affected not only by our success in implementing our Build and Buy strategy, but also by a number of other factors, including: our ability to introduce and deliver new services and business solutions; a lengthened sales cycle; the cyclicality of purchases of technology services and products; the nature of a customer’s business; and the structure of agreements with customers. These, and other factors, make it difficult to predict financial results for any given period.

The proportion of revenue that we generate from shorter-term systems integration and consulting projects, versus revenue from long-term outsourcing contracts, will fluctuate at times, affected by acquisitions or other transactions. An increased exposure to revenue from SI&C projects may result in greater quarterly revenue variations.

We manage operations in numerous countries around the world including offshore delivery centers. The scope of our operations subjects us to various issues that can negatively impact our operations: the fluctuations of currency (see foreign exchange risk); the burden of complying with a wide variety of national and local laws (see regulatory risk); the differences in and uncertainties arising from local business culture and practices; political, social and economic instability including the threats of terrorism, civil unrest, war, natural disasters and pandemic illnesses. Any or all of these risks could impact our global business operations and cause our profitability to decline.

Our culture, standards, core values, internal controls and our policies need to be instilled across newly acquired businesses as well as maintained within our existing operations. To effectively communicate and manage these standards throughout a large global organization is both challenging and time consuming. Newly acquired businesses may be resistant to change and may remain attached to past methods, standards and practices which may compromise our business agility in pursuing opportunities. Cultural differences in various countries may also present barriers to introducing new ideas or aligning our vision and strategy with the rest of the organization. If we cannot overcome these obstacles in maintaining a strategic bond throughout the Company worldwide, we may not be able to achieve our growth and profitability objectives.

In estimating our income tax payable, management uses accounting principles to determine income tax positions that are likely to be sustained by applicable tax authorities. However, there is no assurance that our tax benefits or tax liability will not materially differ from our estimates or expectations. The tax legislation, regulation and interpretation that apply to our operations are continually changing. In addition, future tax benefits and liabilities are dependent on factors that are inherently uncertain

and subject to change, including future earnings, future tax rates, and anticipated business mix in the various jurisdictions in which we operate. Moreover, our tax returns are continually subject to review by applicable tax authorities; it is these tax authorities that will make the final determination of the actual amounts of taxes payable or receivable, of any future tax benefits or liabilities and of income tax expense that we may ultimately recognize. Any of the above factors could have a material adverse effect on our net income or cash flows by affecting our operations and profitability, the availability of tax credits, the cost of the services we provide, and the availability of deductions for operating losses as we develop our international service delivery capabilities.

We benefit from government sponsored programs designed to support research and development and labour and economic growth in jurisdictions where we operate. Government programs reflect government policy and depend on various political and economic factors. There can be no assurance that such government programs will continue to be available to the Company in the future, or will not be reduced, amended or eliminated. Any future government program reductions or eliminations or other amendments to the tax credit programs could increase operating or capital expenditures incurred by the Company and have a material adverse effect on its net earnings or cash flows.

In order to sustain our net earnings and cash flows from operations, we must invoice and collect the amounts owed to us in an efficient and timely manner. Although we maintain provisions to account for anticipated shortfalls in amounts collected, the provisions we take are based on management estimates and on our assessment of our clients’ creditworthiness which may prove to be inadequate in the light of actual results. To the extent that we fail to perform our services in accordance with our contracts and our clients’ reasonable expectations, and to the extent that we fail to invoice clients for our services correctly in a timely manner, our collections could suffer resulting in a direct and adverse effect to our revenue, net earnings and cash flows. In addition, a prolonged economic downturn may cause clients to curtail or defer projects, impair their ability to pay for services already provided, and ultimately cause them to default on existing contracts, in each case, causing a shortfall in revenue and impairing our future prospects.

Material developments regarding major commercial clients resulting from such causes as changes in financial condition, mergers or business acquisitions

Consolidation among our clients resulting from mergers and acquisitions may result in loss or reduction of business when the successor business’ IT needs are served by another service provider or are provided by the successor Company’s own personnel. Growth in a client’s IT needs resulting from acquisitions or operations may mean that we no longer have a sufficient geographic scope or the critical mass to serve the client’s needs efficiently, resulting in the loss of the client’s business and impairing our future prospects. There can be no assurance that we will be able to achieve the objectives of our growth strategy in order to maintain and increase our geographic scope and critical mass in our targeted markets.

If we should fail to deliver our services according to contractual agreements, some of our clients could elect to terminate contracts before their agreed expiry date, which would result in a reduction of our earnings and cash flow and may impact the value of our backlog. In addition, a number of our outsourcing contractual agreements have termination for convenience and change of control clauses according to which a change in the client’s intentions or a change in control of CGI could lead to a termination of these agreements. Early contract termination can also result from the exercise of a legal right or when circumstances that are beyond our control or beyond the control of our client prevent the contract from continuing. In cases of early termination, we may not be able to recover capitalized contract costs and we may not be able to eliminate ongoing costs incurred to support the contract.

In order to generate acceptable margins, our pricing for services is dependent on our ability to accurately estimate the costs and timing for completing projects or long-term outsourcing contracts. In addition, a significant portion of our project-oriented contracts are performed on a fixed-price basis. Billing for fixed-price engagements is carried out in accordance with the contract terms agreed upon with our client, and revenue is recognized based on the percentage of effort incurred to date in relation to the total estimated efforts to be incurred over the duration of the respective contract. These estimates reflect our best judgment regarding the efficiencies of our methodologies and professionals as we plan to apply them to the contracts in accordance

with the CGI Client Partnership Management Framework (“CPMF”), a process framework that contains high standards of contract management to be applied throughout the organization. If we fail to apply the CPMF correctly or if we are unsuccessful in accurately estimating the time or resources required to fulfill our obligations under a contract, or if unexpected factors, including those outside of our control, arise, there may be an impact on costs or the delivery schedule which could have an adverse effect on our expected net earnings.

We derive revenues from contracts where we enter into teaming agreements with other providers. In some teaming agreements we are the prime contractor whereas in others we act as a subcontractor. In both cases, we rely on our relationships with other providers to generate business and we expect to do so in the foreseeable future. Where we act as prime contractor, if we fail to maintain our relationships with other providers, we may have difficulty attracting suitable participants in our teaming agreements. Similarly, where we act as subcontractor, if our relationships are impaired, other providers might reduce the work they award to us, award that work to our competitors, or choose to offer the services directly to the client in order to compete with our business. In either case, our business, prospects, financial condition and operating results could be harmed.

Increasingly large and complex contracts may require that we rely on third party subcontractors including software and hardware vendors to help us fulfill our commitments. Under such circumstances, our success depends on the ability of the third parties to perform their obligations within agreed upon budgets and timeframes. If our partners fail to deliver, our ability to complete the contract may be adversely affected, which may have an unfavourable impact on our profitability.

In the normal course of business, we enter into agreements that may provide for indemnification and guarantees to counterparties in transactions such as consulting and outsourcing services, business divestitures, lease agreements and financial obligations. These indemnification undertakings and guarantees may require us to compensate counterparties for costs and losses incurred as a result of various events, including breaches of representations and warranties, intellectual property right infringement, claims that may arise while providing services or as a result of litigation that may be suffered by counterparties.

In order to maintain our net earnings, it is important that we maintain the appropriate availability of professional resources in each of our geographies by having a high utilization rate while still being able to assign additional resources to new work. Maintaining an efficient utilization rate requires us to forecast our need for professional resources accurately and to manage recruitment activities, professional training programs, attrition rates and restructuring programs appropriately. To the extent that we fail to do so, or to the extent that laws and regulations, particularly those in Europe, restrict our ability to do so, our utilization rates may be reduced; thereby having an impact on our revenue and profitability. Conversely, we may find that we do not have sufficient resources to deploy against new business opportunities in which case our ability to grow our revenue would suffer.

We derive a significant portion of our revenue from the services we provide to the U.S. federal government and its agencies, and we expect that this will continue for the foreseeable future. In the event that a major U.S. federal government agency were to limit, reduce, or eliminate the business it awards to us, we might be unable to recover the lost revenue with work from other agencies or other clients, and our business, prospects, financial condition and operating results could be materially and adversely affected. Although IFRS considers a national government and its agencies as a single client, our client base in the U.S. government economic sector is in fact diversified with contracts from many different departments and agencies.

Changes in government spending policies or budget priorities could directly affect our financial performance. Among the factors that could harm our government contracting business are the curtailment of governments’ use of consulting and IT services firms; a significant decline in spending by governments in general, or by specific departments or agencies in particular; the adoption of new legislation and/or actions affecting companies that provide services to governments; delays in the payment

of our invoices by government payment offices; and general economic and political conditions. These or other factors could cause government agencies and departments to reduce their purchases under contracts, to exercise their right to terminate contracts, to issue temporary stop work orders, or not to exercise options to renew contracts, any of which would cause us to lose future revenue. Government spending reductions or budget cutbacks at these departments or agencies could materially harm our continued performance under these contracts, or limit the awarding of additional contracts from these agencies.

Our global operations require us to be compliant with laws in many jurisdictions on matters such as: anti-corruption, trade restrictions, immigration, taxation, securities regulation, antitrust, data privacy and labour relations, amongst others. Complying with these diverse requirements worldwide is a challenge and consumes significant resources. Some of these laws may impose conflicting requirements; we may face the absence in some jurisdictions of effective laws to protect our intellectual property rights; there may be restrictions on the movement of cash and other assets; or restrictions on the import and export of certain technologies; or restrictions on the repatriation of earnings and reduce our earnings, all of which may expose us to penalties for non-compliance and harm our reputation.

Our business with the U.S. federal government and its agencies requires that we comply with complex laws and regulations relating to government contracts. These laws relate to the integrity of the procurement process, impose disclosure requirements, and address national security concerns, among other matters. For instance, we are routinely subject to audits by U.S. government agencies with respect to compliance with these rules. If we fail to comply with these requirements we may incur penalties and sanctions, including contract termination, suspension of payments, suspension or debarment from doing business with the federal government, and fines.

We create, implement and maintain IT solutions that are often critical to the operations of our clients’ business. Our ability to complete large projects as expected could be adversely affected by unanticipated delays, renegotiations, and changing client requirements or project delays. Also, our solutions may suffer from defects that adversely affect their performance; they may not meet our clients’ requirements or may fail to perform in accordance with applicable service levels. Such problems could subject us to legal liability, which could adversely affect our business, operating results and financial condition, and may negatively affect our professional reputation. We typically use reasonable efforts to include provisions in our contracts which are designed to limit our exposure to legal claims relating to our services and the applications we develop. We may not always be able to include such provisions and, where we are successful, they may not protect us adequately or may not be enforceable under some circumstances or under the laws of some jurisdictions.

Our business often requires that our clients’ applications and information, which may include their proprietary information and personal information they manage, be processed and stored on our networks and systems, and in data centers that we manage. We also process and store proprietary information relating to our business, and personal information relating to our members. The Company faces risk inherent in protecting the security of such personal data. Digital information and equipment are subject to loss, theft or destruction, and services that we provide may become temporarily unavailable as a result of those risks, or upon an equipment or system malfunction. The causes of such failures include human error in the course of normal operations (including from advertent or inadvertent actions or inactions by our members), maintenance and upgrading activities, as well as hacking, vandalism (including denial of service attacks and computer viruses), theft, and unauthorized access, as well as power outages or surges, floods, fires, natural disasters and many other causes. The measures that we take to protect against all information infrastructure risks, including both physical and logical controls on access to premises and information may prove in some circumstances to be inadequate to prevent the improper disclosure, loss, theft, misappropriation of, unauthorized access to, or destruction of information, or service interruptions. Such events may expose the Company to financial loss arising from the costs of remediation and those arising from litigation (including under the laws that protect the privacy of personal information), claims and damages, as well as expose the Company to government sanctions and damage to our brand and reputation.

In the current environment, there are numerous and evolving risks to cybersecurity, including criminal hackers, hacktivists, state sponsored organizations, industrial espionage, employee misconduct, and human or technological error. Our business could be negatively impacted by these physical and cybersecurity threats, and could affect our future sales and financial position or increase our costs and expenses. The risks to the Company include attempted breaches not only of our own products, services and systems, but also those of our customers, contractors, business partners, vendors and other third parties. We seek to detect and investigate all security incidents and to prevent their occurrence or recurrence. We continue to invest in and improve our threat protection, detection and mitigation policies, procedures and controls, and work with industry and government on increased awareness and enhanced protections against cybersecurity threats. However, because of the evolving nature and sophistication of these security threats, there can be no assurance that we can detect or prevent all of these threats. As the cybersecurity landscape evolves, the Company may also find it necessary to make significant further investments to protect data and infrastructure. Occurrence of any of these aforementioned security threats could expose the Company, our customers or other third parties to potential liability, litigation, and regulatory action, as well as the loss of customer confidence, loss of existing or potential customers, loss of sensitive government contracts, damage to brand and reputation, and other financial loss.

CGI’s reputation as a capable and trustworthy service provider and long term business partner is key to our ability to compete effectively in the market for IT services. The nature of our operations exposes us to the potential loss, unauthorized access to, or destruction of our clients’ information, as well as temporary service interruptions. Depending on the nature of the information or services, such events may have a negative impact on how the Company is perceived in the marketplace. Under such circumstances, our ability to obtain new clients and retain existing clients could suffer with a resulting impact on our revenue and net earnings.

The successful integration of new operations arising from our acquisition strategy or from large outsourcing contracts requires that a substantial amount of management time and attention be focused on integration tasks. Management time that is devoted to integration activities may detract from management’s normal operations focus with resulting pressure on the revenues and earnings from our existing operations. In addition, we may face complex and potentially time-consuming challenges in implementing the uniform standards, controls, procedures and policies across new operations to harmonize their activities with those of our existing business units. Integration activities can result in unanticipated operational problems, expenses and liabilities. If we are not successful in executing our integration strategies in a timely and cost-effective manner, we will have difficulty achieving our growth and profitability objectives.

Due to the inherent limitations of internal controls including the circumvention or overriding of controls, or fraud, there can only be reasonable assurance that the Company’s internal controls will detect and prevent a misstatement. If the Company is unable to design, implement, monitor and maintain effective internal controls throughout its different business environments, the efficiency of our operations might suffer, resulting in a decline in revenue and profitability, and the accuracy of our financial reporting could be impaired.

The Company’s future growth is contingent on the execution of its business strategy, which, in turn, is dependent on its ability to grow the business organically as well as conclude business acquisitions. By its nature, our growth strategy requires us to fund the investments required to be made using a mix of cash generated from our operations, money borrowed under our existing or future credit agreements, and equity funding generated by the issuance of shares of our share capital to counterparties in transactions, or to the general public. Our ability to raise the required fundi


Profitability	•	Adjusted EBIT (non-GAAP) – is a measure of earnings excluding restructuring costs, net finance costs and income tax expense as these items are not directly related to the cost of operations. Management believes this measure is useful to investors as it best reflects the Company’s operating profitability and allows for better comparability from period to period as well as to trend analysis in our operations. A reconciliation of the adjusted EBIT to its closest IFRS measure can be found in section 3.7 of the present document.
	•	Net earnings – is a measure of earnings generated for shareholders.
	•	Diluted earnings per share – is a measure of earnings generated for shareholders on a per share basis, assuming all dilutive elements are exercised.
	•	Net earnings excluding specific items (non-GAAP) – is a measure of net earnings excluding certain items not considered by management to be part of the day to day operations. By excluding these items, it provides a better evaluation of operating performance using the same measures as management. Management believes that, as a result, the investors are afforded greater transparency in assessing the true operation performance of the Company also providing better comparability from period to period. A reconciliation of the net earnings excluding specific items to its closest IFRS measure can be found in section 3.8.3. of the present document.
	•	Basic and diluted earnings per share excluding specific items (non-GAAP) – is defined as the net earnings excluding specific items (non-GAAP) on a per share basis. Management believes that this measure is useful to investors as it best reflects the Company’s operating profitability on a per share basis and allows for better comparability from period to period. The basic and diluted earnings per share reported in accordance with IFRS can be found in section 3.8 of the present document while the basic and diluted earnings per share excluding specific items can be found in section 3.8.3.
Liquidity	•	Cash provided by operating activities – is a measure of cash generated from managing our day-to-day business operations. We believe strong operating cash flow is indicative of financial flexibility, allowing us to execute our Company’s strategy.
	•	Days sales outstanding (“DSO”) (non-GAAP) – is the average number of days needed to convert our trade receivables and work in progress into cash. DSO is obtained by subtracting deferred revenue from trade accounts receivable and work in progress; the result is divided by the quarter’s revenue over 90 days. Deferred revenue is net of the fair value adjustments on revenue-generating contracts established upon a business combination. Management tracks this metric closely to ensure timely collection, healthy liquidity, and is committed to a DSO target of 45 days or less. We believe this measure is useful to investors as it demonstrates the Company’s ability to timely convert its trade receivables and work in progress into cash.


Growth	•	Constant currency growth (non-GAAP) – is a measure of revenue growth before foreign currency impacts. This growth is calculated by translating current period results in local currency using the conversion rates in the equivalent period from the prior year. Management believes that it is helpful to adjust revenue to exclude the impact of currency fluctuations to facilitate period-to-period comparisons of business performance. We believe that this measure is useful to investors for the same reason.
	•	Backlog (non-GAAP) – includes new contract wins, extensions and renewals (“bookings”(non-GAAP)), partially offset by the backlog consumed during the period as a result of client work performed and adjustments related to the volume, cancellation and the impact of foreign currencies to our existing contracts. Backlog incorporates estimates from management that are subject to change. Management tracks this measure as it is a key indicator of management’s best estimate of revenue to be realized in the future and believes that this measure is useful to investors for the same reason.
	•	Book-to-bill ratio (non-GAAP) – is a measure of the proportion of the value of our bookings to our revenue in the period. This metric allows management to monitor the Company’s business development efforts to ensure we grow our backlog and our business over time and believes that this measure is useful to investors for the same reason. Management remains committed to maintaining a target ratio greater than 100% over a trailing 12-month period. Management believes that a longer period is a more representative measure as the services and contract type, size and timing of bookings could cause this measurement to fluctuate significantly if taken for only a three-month period.
Capital Structure	•	Net debt (non-GAAP) – is obtained by subtracting from our debt our cash and cash equivalents, short- term investments, long-term investments and fair value of foreign currency derivative financial instruments related to debt. Management uses the net debt metric to monitor the Company’s financial leverage. We believe that this metric is useful to investors as it provides insight into our financial strength. A reconciliation of net debt to its closest IFRS measure can be found in section 4.5 of the present document.
	•	Net debt to capitalization ratio (non-GAAP) – is a measure of our level of financial leverage and is obtained by dividing the net debt by the sum of shareholder’s equity and debt. Management uses the net debt to capitalization metric to monitor the proportion of debt versus capital used to finance our operations and to assess the Company’s financial strength. We believe that this metric is useful to investors as it provides insight into our financial strength.
	•	Return on equity (“ROE”) (non-GAAP) – is a measure of the rate of return on the ownership interest of our shareholders and is calculated as the proportion of earnings for the last 12 months over the last four quarters’ average equity. Management looks at ROE to measure its efficiency at generating earnings for the Company’s shareholders and how well the Company uses the invested funds to generate earnings growth. We believe that this measure is useful to investors for the same reasons.
	•	Return on invested capital (“ROIC”) (non-GAAP) – is a measure of the Company’s efficiency at allocating the capital under its control to profitable investments and is calculated as the proportion of the after-tax adjusted EBIT for the last 12 months, over the last four quarters’ average invested capital, which is defined as the sum of equity and net debt. Management examines this ratio to assess how well it is using its funds to generate returns. We believe that this measure is useful to investors for the same reason.


Section	Contents	Pages
1. Corporate Overview	A description of our business and how we generate revenue as well as the markets in which we operate.

	1.1. About CGI	6
	1.2. Vision and Strategy	7
	1.3. Competitive Environment	8
2. Highlights and Key Performance Measures	A summary of key highlights during the year, the past three years’ key performance measures, and CGI’s stock performance.
2. Highlights and Key Performance Measures	2.1. Fiscal 2016 Year-Over-Year Highlights	9
	2.2. Selected Yearly Information & Key Performance Measures	10
	2.3. Stock Performance	11
	2.4. Investments in subsidiaries	12
3. Financial Review	A discussion of year-over-year changes to financial results between the years ended September 30, 2016 and 2015, describing the factors affecting revenue and adjusted EBIT on a consolidated and reportable segment basis, and also by describing the factors affecting changes in the major expense categories. Also discussed are bookings broken down by contract type, service type, segment, and by vertical market.

	3.1. Bookings and Book-to-Bill Ratio	13
	3.2. Foreign Exchange	14
	3.3. Revenue Distribution	14
	3.4. Revenue Variation and Revenue by Segment	15
	3.5. Operating Expenses	17
	3.6. Adjusted EBIT by Segment	18
	3.7. Earnings Before Income Taxes	19
	3.8. Net Earnings and Earnings Per Share (“EPS”)	20


Section	Contents	Pages
4. Liquidity	A discussion of changes in cash flows from operating, investing and financing activities. This section also describes the Company’s available capital resources, financial instruments, and off-balance sheet financing and guarantees. Measures of capital structure (net debt to capitalization, ROE, and ROIC) and liquidity (DSO) are analyzed on a year-over-year basis.
4. Liquidity	4.1. Consolidated Statements of Cash Flows	22
	4.2. Capital Resources	25
	4.3. Contractual Obligations	26
	4.4. Financial Instruments and Hedging Transactions	26
	4.5. Selected Measures of Liquidity and Capital Resources	27
	4.6. Off-Balance Sheet Financing and Guarantees	27
	4.7. Capability to Deliver Results	28
5. Fourth Quarter Results	A discussion of year-over-year changes to operating results between the three months ended September 30, 2016 and 2015, describing the factors affecting revenue, adjusted EBIT earnings on a consolidated and reportable segment basis as well as cash from operating, investing and financing activities.

	5.1. Foreign Exchange	29
	5.2. Revenue Variation and Revenue by Segment	30
	5.3. Adjusted EBIT by Segment	33
	5.4. Net Earnings and EPS	35
	5.5. Consolidated Statements of Cash Flows	37
6. Eight Quarter Summary	A summary of the past eight quarters’ key performance measures and a discussion of the factors that could impact our quarterly results.	39
7. Changes in Accounting Policies	A summary of the future accounting standard changes.	41
8. Critical Accounting Estimates	A discussion of the critical accounting estimates made in the preparation of the audited consolidated financial statements.	42
9. Integrity of Disclosure	A discussion of the existence of appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and reliable.	45
10. Risk Environment	A discussion of the risks affecting our business activities and what may be the impact if these risks are realized.

	10.1. Risks and Uncertainties	46
	10.2. Legal Proceedings	53


As at and for the years ended September 30,	2016		2015		2014		Change 2016 / 2015		Change 2015 / 2014
In millions of CAD unless otherwise noted
Growth
Revenue		10,683.3		10,287.1		10,499.7		396.2		(212.6)

Year-over-year revenue growth		3.9%		(2.0%)		4.1%		5.9%		(6.1%)

Constant currency year-over-year revenue growth ¹		0.2%		(4.0%)		(2.9%)		4.2%		(1.1%)

Backlog		20,893		20,711		18,237		182		2,474

Bookings		11,731		11,640		10,169		91		1,471

Book-to-bill ratio		109.8%		113.2%		96.8%		(3.4%)		16.4%
Profitability
Adjusted EBIT ²		1,560.3		1,457.3		1,356.9		103.0		100.4

Adjusted EBIT margin ²		*14.6%*		14.2%		12.9%		0.4%		1.3%

Net earnings		1,068.7		977.6		859.4		91.2		118.2

Net earnings margin		*10.0%*		9.5%		8.2%		0.5%		1.3%

Diluted EPS (in dollars)		3.42		3.04		2.69		0.38		0.35

Net earnings excluding specific items³		1,081.5		1,005.1		893.5		76.4		111.6

Net earnings margin excluding specific items ³		10.1%		9.8%		8.5%		0.3%		1.3%

Diluted EPS excluding specific items (in dollars) ³		3.46		3.13		2.80		0.33		0.33
Liquidity
Cash provided by operating activities		1,333.1		1,289.3		1,174.8		43.8		114.5

As a % of revenue		*12.5%*		12.5%		11.2%		—		1.3%

Days sales outstanding ⁴		44		44		43		—		1
Capital structure
Net debt ⁵		1,333.3		1,779.6		2,113.3		(446.3)		(333.7)

Net debt to capitalization ratio ⁶		15.8%		21.7%		27.6%		(5.9%)		(5.9%)

Return on equity ⁷		17.2%		17.7%		18.8%		(0.5%)		(1.1%)

Return on invested capital ⁸		14.5%		14.5%		14.5%		—		—
Balance sheet
Cash and cash equivalents, and short-term investments		596.5		305.3		535.7		291.2		(230.4)

Total assets		11,693.3		11,787.3		11,234.1		(94.0)		553.2

Long-term financial liabilities ⁹		1,765.4		1,896.4		2,748.4		(131.0)		(852.0)


TSX	(CAD)

Open:		48.35

High:		65.84

Low:		46.91

Close:		62.49

CDN average daily trading volumes¹:		1,001,525


NYSE	(USD)

Open:		36.34

High:		50.58

Low:		35.38

Close:		47.63

NYSE average daily trading volumes:		199,750


Capital Stock and Options Outstanding		As at November 4, 2016

Class A subordinate voting shares		272,103,193

Class B multiple voting shares		32,852,748

Options to purchase Class A subordinate voting shares		16,546,269



Contract Type				Service Type				Segment				Vertical Market

A.	Extensions and renewals	57	%	A.	Systems integration and consulting	53	%	A. B.	U.S. Canada	25 21	% %	A. B.	Government MRD	33 30	% %
								C.	Nordics	15	%	C.	Financial services	20	%
B.	New business	43	%	B.	Management of IT and business functions	47	%	D. E.	France U.K.	14 14	% %	D.	Telecommunications & utilities	11	%
								F.	ECS	10	%	E.	Health	6	%
								G.	Asia Pacific	1	%


*In thousands of CAD except for percentages*	Bookings for the year ended September 30, 2016	Book-to-bill ratio for the year ended September 30, 2016
Total CGI	11,730,713	109.8%

U.S.	2,978,558	100.3%

Nordics	1,736,860	100.6%

Canada	2,495,550	151.4%

France	1,584,578	107.6%

U.K.	1,650,659	105.6%

ECS	1,128,600	96.8%

Asia Pacific	155,908	113.4%


For the years ended September 30,	2016	2015	Change
In thousands of CAD

Cash provided by operating activities	1,333,074	1,289,310		43,764

Cash used in investing activities	(382,731)	(257,127)		(125,604)

Cash used in financing activities	(666,304)	(1,303,663)		637,359

Effect of foreign exchange rate changes on cash and cash equivalents	7,228	41,027		(33,799)
Net increase (decrease) in cash and cash equivalents	291,267	(230,453)		521,720
4.1.1. Cash Provided by Operating Activities For the year ended September 30, 2016, cash provided by operating activities was $1,333.1 million or 12.5% of revenue as compared to $1,289.3 million or 12.5% from the prior year. The following table provides a summary of the generation and use of cash from operating activities:
For the years ended September 30,	2016	2015	Change
In thousands of CAD

Net earnings	1,068,716	977,556		91,160

Amortization and depreciation	400,060	424,044		(23,984)

Other adjustments ¹	132,171	89,451		42,720

Cash flow from operating activities before net change in non-cash working capital items	1,600,947	1,491,051		109,896

Net change in non-cash working capital items:

Accounts receivable, work in progress and deferred revenue	(134,632)	(25,517)		(109,115)

Accounts payable and accrued liabilities, accrued compensation, provisions and long-term liabilities	(115,853)	(204,169)		88,316

Other ²	(17,388)	27,945		(45,333)

Net change in non-cash working capital items	(267,873)	(201,741)		(66,132)
Cash provided by operating activities	1,333,074	1,289,310		43,764


As at September 30, 2016	Total		Available		Outstanding
In thousands of CAD

Cash and cash equivalents		—		596,529		—

Long-term investments		—		27,246		—

Unsecured committed revolving facility ^a		1,500,000		1,466,086		33,914

Total		1,500,000		2,089,861		33,914


As at September 30,	2016			2015
In thousands of CAD except for percentages
Reconciliation between net debt and long-term debt including the current portion:
Net debt		1,333,323			1,779,623
Add back:
Cash and cash equivalents		596,529			305,262
Long-term investments		27,246			42,202
Fair value of foreign currency derivative financial instruments related to debt		(46,123	)		—
Long-term debt including the current portion		1,910,975			2,127,087
Net debt to capitalization ratio		15.8%			21.7%
Return on equity		17.2%			17.7%
Return on invested capital		14.5%			14.5%
Days sales outstanding		44			44



As at and for the three months	Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,
ended,	2016		2016		2016		2015		2015		2015		2015		2014
In millions of CAD unless otherwise noted
Growth

Revenue		2,582.4		2,667.1		2,750.0		2,683.7		2,585.3		2,559.4		2,601.2		2,541.3

Year-over-year revenue growth		(0.1%)		4.2%		5.7%		5.6%		4.1%		(4.0%)		(3.8%)		(3.9%)

Constant currency year-over-year revenue growth		2.8%		0.6%		(1.0%)		(1.8%)		(3.1%)		(3.5%)		(3.5%)		(6.0%)

Backlog		20,893		20,614		20,705		21,505		20,711		19,697		20,000		20,175

Bookings		2,858		2,940		2,734		3,199		2,856		2,227		2,253		4,304

Book-to-bill ratio		110.7%		110.2%		99.4%		119.2%		110.5%		87.0%		86.6%		169.4%

Book-to-bill ratio trailing twelve months		109.8%		109.8%		104.1%		101.0%		113.2%		106.4%		107.4%		112.1%
Profitability

Adjusted EBIT		395.1		390.5		390.6		384.1		379.0		371.2		363.1		344.0

Adjusted EBIT margin		*15.3%*		14.6%		14.2%		14.3%		14.7%		14.5%		14.0%		13.5%

Net earnings		274.4		273.8		282.7		237.7		232.9		257.2		251.2		236.3

Net earnings margin		*10.6%*		10.3%		10.3%		8.9%		9.0%		10.1%		9.7%		9.3%

Diluted EPS (in dollars)		0.89		0.89		0.90		0.75		0.73		0.80		0.78		0.74

Net earnings excluding specific items		274.4		273.8		268.3		264.9		260.4		257.2		251.2		236.3

Net earnings margin excluding specific items		*10.6%*		10.3%		9.8%		9.9%		10.1%		10.1%		9.7%		9.3%

Diluted EPS excluding specific items (in dollars)		0.89		0.89		0.86		0.84		0.82		0.80		0.78		0.74
Liquidity

Cash provided by operating activities		401.8		351.7		251.4		328.2		451.3		214.1		284.7		339.2

As a % of revenue		*15.6%*		13.2%		9.1%		12.2%		17.5%		8.4%		10.9%		13.3%

Days sales outstanding		44		45		41		44		44		46		41		42
Capital structure

Net debt		1,333.3		1,648.7		1,926.7		1,573.7		1,779.6		1,791.4		1,869.8		1,924.5

Net debt to capitalization ratio		15.8%		20.5%		23.8%		18.3%		21.7%		22.7%		24.4%		25.1%

Return on equity		17.2%		16.9%		16.9%		16.9%		17.7%		18.2%		18.4%		18.9%

Return on invested capital		14.5%		14.4%		14.4%		14.5%		14.5%		14.8%		14.6%		14.7%
Balance sheet

Cash and cash equivalents, and short-term investments		596.5		283.7		168.9		552.4		305.3		264.7		223.5		489.6

Total assets		11,693.3		11,434.0		11,417.9		12,130.3		11,787.3		11,190.4		10,985.8		11,171.9

Long-term financial liabilities		1,765.4		1,764.5		1,928.5		1,822.1		1,896.4		1,765.8		2,067.7		2,451.5


Areas impacted by estimates	Consolidated balance sheets	Consolidated statements of earnings
		Revenue	Cost of services, selling and administrative	Income taxes

Revenue recognition ¹	✓	✓	✓

Estimated losses on revenue-generating contracts	✓		✓

Goodwill impairment	✓		✓

Income taxes	✓			✓

Litigation and claims	✓	✓	✓