Disclaimer

Caution about forward-looking information

Our MD&A includes statements and information about our expectations for the future. When we discuss our strategy, plans, future financial and operating performance, or other things that have not yet taken place, we are making statements considered to be forward-looking information or forward-looking statements under Canadian and United States (US) securities laws. We refer to them in this MD&A as forward-looking information.

Key things to understand about the forward-looking information in this MD&A:

It typically includes words and phrases about the future, such as: anticipate, believe, estimate, expect, plan, will, intend, goal, target, forecast, project, strategy and outlook (see examples below).
It represents our current views, and can change significantly.
It is based on a number of material assumptions, including those we have listed below, which may prove to be incorrect.
Actual results and events may be significantly different from what we currently expect, due to the risks associated with our business. We list a number of these material risks below. We recommend you also review our annual information form, which includes a discussion of other material risks that could cause actual results to differ significantly from our current expectations.
Forward-looking information is designed to help you understand management’s current views of our near and longer term prospects, and it may not be appropriate for other purposes. We will not necessarily update this information unless we are required to by securities laws.

Examples of forward-looking information in this MD&A

our expectations about 2016 and future global uranium supply, consumption, demand, contracting volumes, number of reactors and nuclear generating capacity, including the discussion under the headings Market overview and 2015 developments
the discussion under the heading Our strategy
our 2016 objectives
our expectations for uranium deliveries in 2016
the discussion of our expectations relating to our transfer pricing disputes, including our estimate of the amount and timing of expected cash taxes and transfer pricing penalties
our consolidated outlook for the year and the outlook for our uranium, fuel services and NUKEM segments for 2016
our expectations for future tax payments and rates
our expectations for future royalty payments
our price sensitivity analysis for our uranium segment
our expectation that existing cash balances and operating cash flows will meet our anticipated 2016 capital requirements without the need for any significant additional funding, other than we may need to temporarily draw on other short-term liquidity during the course of the year
our expectations for 2016, 2017 and 2018 capital expenditures
our expectation that in 2016 we will continue to comply with all the covenants in our unsecured revolving credit facility
our future plans and expectations for each of our uranium operating properties and projects under evaluation, and fuel services operating sites
our mineral reserve and resource estimates

Material risks

actual sales volumes or market prices for any of our products or services are lower than we expect for any reason, including changes in market prices or loss of market share to a competitor
we are adversely affected by changes in currency exchange rates, interest rates, royalty rates, or tax rates
our production costs are higher than planned, or necessary supplies are not available, or not available on commercially reasonable terms
our estimates of production, purchases, costs, decommissioning or reclamation expenses, or our tax expense estimates prove to be inaccurate
we are unable to enforce our legal rights under our existing agreements, permits or licences
we are subject to litigation or arbitration that has an adverse outcome, including lack of success in our disputes with tax authorities
we are unsuccessful in our dispute with Canada Revenue Agency (CRA) and this results in significantly higher cash taxes, interest charges and penalties than the amount of our cumulative tax provision
we are unable to utilize letters of credit to the extent anticipated in our dispute with CRA
there are defects in, or challenges to, title to our properties
our mineral reserve and resource estimates are not reliable, or we face unexpected or challenging geological, hydrological or mining conditions
we are affected by environmental, safety and regulatory risks, including increased regulatory burdens or delays
we cannot obtain or maintain necessary permits or approvals from government authorities
we are affected by political risks
we are affected by terrorism, sabotage, blockades, civil unrest, social or political activism, accident or a deterioration in political support for, or demand for, nuclear energy
we are impacted by changes in the regulation or public perception of the safety of nuclear power plants, which adversely affect the construction of new plants, the relicensing of existing plants and the demand for uranium
there are changes to government regulations or policies that adversely affect us, including tax and trade laws and policies
our uranium suppliers fail to fulfil delivery commitments
our McArthur River development, mining or production plans are delayed or do not succeed for any reason
our Cigar Lake development, mining or production plans are delayed or do not succeed, including as a result of any difficulties with freezing the deposit to meet production targets, or any difficulties with the McClean Lake mill modifications or expansion or milling of Cigar Lake ore
the production increase approval at McClean Lake is delayed or not obtained, or there is a labour dispute at McClean Lake
we are affected by natural phenomena, including inclement weather, fire, flood and earthquakes
our operations are disrupted due to problems with our own or our customers’ facilities, the unavailability of reagents, equipment, operating parts and supplies critical to production, equipment failure, lack of tailings capacity, labour shortages, labour relations issues (including an inability to renew the collective bargaining agreement with unionized employees at the Port Hope conversion facility), strikes or lockouts, underground floods, cave-ins, ground movements, tailings dam failures, transportation disruptions or accidents, or other development and operating risks

Material assumptions

our expectations regarding sales and purchase volumes and prices for uranium and fuel services
our expectations regarding the demand for uranium, the construction of new nuclear power plants and the relicensing of existing nuclear power plants not being more adversely affected than expected by changes in regulation or in the public perception of the safety of nuclear power plants
our expected production level and production costs
the assumptions regarding market conditions upon which we have based our capital expenditures expectations
our expectations regarding spot prices and realized prices for uranium, and other factors discussed under the heading Price sensitivity analysis: uranium segment
our expectations regarding tax rates and payments, royalty rates, currency exchange rates and interest rates
our expectations about the outcome of disputes with tax authorities
we are able to utilize letters of credit to the extent anticipated in our dispute with CRA
our decommissioning and reclamation expenses
our mineral reserve and resource estimates, and the assumptions upon which they are based, are reliable
the geological, hydrological and other conditions at our mines
our McArthur River development, mining and production plans succeed
our Cigar Lake development, mining and production plans succeed, and the deposit freezes as planned
modification and expansion of the McClean Lake mill are completed as planned and the mill is able to process Cigar Lake ore as expected
the production increase approval at McClean Lake is approved by the regulator and there is no labour dispute at the McClean Lake mill
our ability to continue to supply our products and services in the expected quantities and at the expected times
our ability to comply with current and future environmental, safety and other regulatory requirements, and to obtain and maintain required regulatory approvals
our operations are not significantly disrupted as a result of political instability, nationalization, terrorism, sabotage, blockades, civil unrest, breakdown, natural disasters, governmental or political actions, litigation or arbitration proceedings, the unavailability of reagents, equipment, operating parts and supplies critical to production, labour shortages, labour relations issues (including an ability to renew the collective bargaining agreement with unionized employees at the Port Hope conversion facility), strikes or lockouts, underground floods, cave-ins, ground movements, tailings dam failure, lack of tailings capacity, transportation disruptions or accidents, or other development or operating risks