The following points are intended to assist the reader in analysing the trends in the annual financial highlights for the years 2003 through 2005.

• Revenue has trended higher over the three-year period, rising by 59% over 2003. More than half of this increase was related to the gold business where revenues have increased due to the commissioning of the Boroo mine in 2004 as well as a change in ownership interest in the Kumtor gold mine in the same year, which resulted in the full consolidation of Kumtor's results.
• Revenue has also been influenced by improved prices in the uranium and conversion services businesses. Our realized price for uranium concentrates has increased consistently over the three-year period, averaging $20.14 (Cdn) per pound in 2005 compared to $16.08 (Cdn) per pound for 2003, a 25% improvement. We have also seen consistent improvement in the price for conversion services, where our average realized price has risen by 10% during the period.
• Earnings from operations have also trended higher during the period but the rise has been tempered by higher costs for product sold, higher administration charges and greater investment in exploration. The increase in the cost of sales was attributable to higher costs for purchased uranium and conversion services, driven by rising spot prices. Our administration costs have risen significantly over the three-year period due to establishing Centerra as a separate publicly traded company, higher stock compensation expenses and higher costs for regulatory compliance.
• Net earnings have not trended with revenue due to two main reasons. First, our results are significantly influenced by operating results from Bruce Power. Until November 1, 2005, we used the equity method to account for the investment in Bruce Power and therefore no revenue was recorded prior to the time. Second, our earnings have been influenced by unusual, one-time items over the past three years. In 2003, we recorded income tax recoveries of $81 million as the result of changes in tax legislation. In 2004, we recorded a gain of $94 million (after tax) on the restructuring of our gold business. In 2005, there were two such items: 1) the disposition of our investment in ERA which resulted in a gain of $69 million (after tax), and 2) the restructuring of the BPLP partnership which resulted in an after-tax loss of $62 million.

• Excluding the adjustments noted above, net earnings have increased by 66% in 2005 over the $127 million recorded in 2003. The 46% increase to $185 million in 2004 from 2003 was attributable to improved results in the uranium and gold businesses as well as stronger performance at Bruce Power. The improvement in the uranium business was due to a higher realized price, which was related mainly to the significant increase in the spot price for uranium. Earnings from Bruce Power benefited from a 37% increase in generation as a result of the restart of two A reactors (units 3 and 4). Results from the gold business improved due to increased production and a higher realized selling price. The improvement in net earnings from 2004 to 2005 was due largely to improved results in our uranium business and higher earnings from Bruce Power. The higher earnings were partially offset by reduced earnings in gold as well as higher charges for administration and exploration. The improvement in the uranium profits was due to the higher average realized price, which was mainly the result of higher prices under fixed-price contracts and a higher uranium spot price. The earnings from Bruce Power benefited from a 23% increase in its average realized price to $58.00 per MWh as a result of higher electricity spot prices.
• In 2005, Cameco generated record cash from operations of $278 million compared to $228 million in 2004. This increase of $50 million was mainly attributable to higher revenues in the uranium and gold businesses compared to the previous year and cash distributions received from BPLP. Cash from operations of $228 million in 2004 represented a decline of $22 million compared to the $250 million recorded in 2003. This decrease was primarily due to an increase in inventory levels during 2004.
• The major components of Cameco's long-term financial liabilities are long-term debt, future income taxes and provision for reclamation. In 2005, Cameco's total long-term financial liabilities rose to $1,654 million from $1,306 million at the end of 2004 due primarily to a $340 million increase in long-term debt. This increase was attributable to a $300 million debenture issue and the proportionate consolidation of financial results from BPLP, which added $204 million to long-term debt. These increases were partially offset by the repayment of commercial paper during the year. Also, on January 17, 2006, Cameco redeemed $100 million of 6.9% senior unsecured debentures and $50 million of 7% senior unsecured debentures for a total redemption price of $152 million plus accrued interest.
• At the end of 2005, Cameco's total assets amounted to $4,773 million, an increase of $721 million over the previous year. Most of the increase was due to the proportionate consolidation of financial results from BPLP. In addition, the cash balance rose by $434 million during the year. The company used $152 million to redeem outstanding debentures in January 2006. During 2004, total assets increased to $4,052 million from $3,431 million at the end of 2003. The primary reason for this increase was the restructuring of the company's gold business which resulted in the full consolidation of Kumtor Gold Company whereas it had previously been proportionately consolidated. As a result of the restructuring, Cameco recorded goodwill amounting to $187 million.