CASH FROM OPERATIONS
($millions)

Cameco's cash from operations increased 92% from 2006, setting a new company record.

MARCH 7, 2008  Winning organizations like Cameco constantly strive to improve their game. We never forget that we are in a highly competitive world where the competition gets stronger, stakeholder expectations rise and attractive opportunities must be seized.

More than three years ago, Cameco embarked upon a leadership development strategy specifically designed to challenge leaders at all levels of the organization to sharpen their skills, embrace a common culture and develop other leaders. The program, which continues, has been a great success and was recently recognized by the Canadian Society for Training and Development with its Silver Award for Training Excellence. More than 96 senior leaders have entered the 18-month leadership development program and another 86 of our front-line supervisors and managers have commenced a leadership essentials program tailored to their leadership needs.

And while the leadership programs have certainly raised the level of our game, we know that improvement must come in other areas as well. The challenges we faced in 2007 demonstrated that our commitment to excellence was not consistently achieved throughout the organization. For this reason, we refocused our activities on only the most important objectives. We redoubled our insistence upon a broadly defined "safety culture" where a questioning attitude and innovation are recognized and appreciated, and where risks and opportunities for improvement are debated and addressed, all the while striving for continual improvement.

We recruited more talent and reorganized our operations to better define roles and accountabilities and then insisted upon top performance. Support functions put aside "nice to have" projects and aligned their activities to reinforce the refocused operational objectives. Our employees and teams were asked to hold themselves accountable and to hold others accountable, as well, without making or taking it personally.

Employee feedback has shown that some Cameco sites suffer from lower engagement scores, and collaborative efforts are underway to address specific issues without detracting from main objectives. On a corporate-wide basis, we have enhanced our communications about what is expected and, for the first time, reported the package of competitive benefits that Cameco provides its employees, referred to as "total rewards." Our compensation programs have been redesigned to emphasize individual and team performance and to recognize and reward high performance. Moreover, the emphasis on being a high-reliability organization in everything we do has become a constant theme communicated throughout the organization.

We know, too, that we must continue to seek environmental leadership in all of our activities. Accordingly, we created an environmental leadership department, supported by a new technology and innovation group. After lengthy consultations with our various operating sites, ambitious long-term goals were established in five areas (air, water, land use, energy consumption and waste). Intermediate targets were identified and the company committed to support the environmental leadership agenda, measure performance and hold itself accountable. Only in this way will nuclear technology be seen to be environmentally friendly with only minimal and temporary impacts on the planet.

As would be expected, the effort to raise the level of our game has been broad-based. It is a commitment that must continue, for we know that in our competitive environment, the quest to elevate our game will never end.