Fourth Quarter Consolidated Results

Highlights ($ millions except where indicated)	Three months ended December 31
Highlights ($ millions except where indicated)	2012	2011	Change
Revenue	958	971	(1)%
Gross profit	307	353	(13)%
Net earnings attributable to equity holders	45	265	(83)%
$ per common share (basic)	0.11	0.67	(84)%
$ per common share (diluted)	0.11	0.67	(84)%
Adjusted net earnings (non-IFRS)	237	249	(5)%
$ per common share (adjusted and diluted)	0.60	0.63	(5)%
Cash provided by operations (after working capital changes)	283	258	10%

In the fourth quarter of 2012, our net earnings attributable to equity holders (net earnings) were $45 million ($0.11 per share diluted), a decrease of $220 million compared to $265 million ($0.67 per share diluted) in 2011. This decline was largely the result of the $168 million write-down of our interest in the Kintyre project and lower earnings from our uranium business, partially offset by stronger results in the electricity business. Uranium profits were impacted by a 7% decline in the average realized selling price due mainly to a lower spot price compared to the fourth quarter of 2011. Earnings in the electricity business improved as a result of higher generation and lower operating costs.

The 5% decrease in adjusted net earnings in the quarter followed the same trend as our net earnings, due to lower results in our uranium business, partially offset by the results in our electricity business.

We use adjusted net earnings, a non-IFRS measure, as a more meaningful way to compare our financial performance from period to period. See non-IFRS measures for more information. The table below reconciles adjusted net earnings with our net earnings.

($ millions)	Three months ended December 31
($ millions)	2012	2011
1 In 2008, we opted to discontinue hedge accounting for our portfolio of foreign currency forward sales contracts. Since then, we have adjusted our gains or losses on derivatives to reflect what our earnings would have been had hedge accounting been applied.
Net earnings attributable to equity holders	45	265
Adjustments
Adjustments on derivatives¹ (pre-tax)	33	(22)
Income taxes on adjustments to derivatives	(9)	6
Impairment charge on non-producing property	168	-
Adjusted net earnings	237	249

We recorded an income tax recovery of $5 million this quarter, based on adjusted net earnings, compared to a $25 million expense in 2011.

Direct administration costs were $53 million in the quarter, $7 million higher than the same period last year. Stock-based compensation expenses were $1 million lower than the fourth quarter of 2011. See note 27 to the financial statements.

	Three months ended December 31
($ millions)	2012	2011	change
Direct administration	53	46	15%
Stock-based compensation	4	5	(20)%
Total administration	57	51	12%