Financial statements

Consolidated statements of earnings

Years ended September 30 (in thousands of Canadian dollars, except share data)

2005

2004

2003

restated

restated

3,685,986

3,150,070

2,589,905

3,151,558
199,283
24,014
(7,156)
(11,000)
(4,216)
(321)
3,352,162

2,677,396
162,591
20,672
(8,728)

(488)
2,851,443

2,182,447
119,097
12,578
(3,094)

(295)
2,310,733

Earnings from continuing operations before income taxes

Income taxes (note 14)
Net earnings from continuing operations

333,824
114,126
219,698

298,627
113,241
185,386

279,172
113,057
166,115

Net (loss) gain from discontinued operations (note 17)

net earnings

(3,210)
216,488

8,655
194,041

3,083
169,198

419,510,503

395,191,927

0.44
0.02
0.46

0.42
0.01
0.43

2005

2004

2003

$
377,944

revenue
Operating expenses
Costs of services, selling and administrative (note 15)
Amortization (note 12)
Interest on long-term debt
Other income, net
Sale of right (note 13)
Gain on sale of investment in an entity subject to signicant inuence (note 16)
Entity subject to significant influence

Weighted-average number of outstanding Class A

subordinate and Class B shares

439,349,210

basic and diluted earnings (loss) per share (note 11)

Continuing operations
Discontinued operations

0.50
(0.01)
0.49

See Notes to the consolidated nancial statements.

Consolidated statements of retained earnings

Years ended September 30 (in thousands of Canadian dollars)

balance, beginning of year, as previously reported

769,421

$
555,310

Change in accounting policies (note 2)

Balance, beginning of year, restated

(38,664)
730,757

(13,105)
542,205

(4,937)
373,007

Net earnings

216,488

194,041

169,198

Share issue costs, net of income taxes (note 9)

Excess of purchase price over carrying value of Class A subordinate shares acquired (note 9)
balance, end of year

(51,978)
895,267

(5,489)

730,757

542,205

See Notes to the consolidated nancial statements.

cgi group inc. 2005 annual report

55

Financial statements

Consolidated balance sheets

2005

As at September 30 (in thousands of Canadian dollars)

assets
Current assets
Cash and cash equivalents
Accounts receivable (note 3)
Work in progress
Prepaid expenses and other current assets
Future income taxes (note 14)
Capital assets (note 4)
Contract costs (note 5)
Finite-life intangibles and other long-term assets (note 6)
Future income taxes (note 14)
Goodwill (note 7)
Total assets before funds held for clients
Funds held for clients (note 2)
liabilities
Current liabilities
Accounts payable and accrued liabilities
Accrued compensation
Deferred revenue
Income taxes
Future income taxes (note 14)
Current portion of long-term debt (note 8)
Future income taxes (note 14)
Long-term debt (note 8)
Accrued integration charges (note 16) and other long-term liabilities
Total liabilities before clients funds obligations
Clients funds obligations (note 2)

2004

restated

240,459
487,731
214,470
75,531
22,118
1,040,309
116,388
228,646
580,642
46,601
1,773,370
3,785,956
200,703
3,986,659

200,623
546,286
222,278
89,658
79,584
1,138,429
143,641
278,240
630,080
101,899
1,827,604
4,119,893
196,622
4,316,515

378,691
107,014
127,950
31,955
47,163
14,899
707,672
238,983
234,801
109,810
1,291,266
200,703
1,491,969

427,635
110,700
123,213
31,369
68,603
14,529
776,049
287,433
475,291
119,258
1,658,031
196,622
1,854,653

1,762,973
67,578
19,655
895,267
(250,783)
2,494,690
3,986,659

1,820,230
49,879
19,655
730,757
(158,659)
2,461,862
4,316,515

Commitments and contingencies (note 23)

shareholders equity
Capital stock (note 9)
Contributed surplus (note 10c)
Warrants (note 10b)
Retained earnings
Foreign currency translation adjustment

See Notes to the consolidated nancial statements.

Approved by the Board

(signed)

(signed)

Serge Godin

Andr Imbeau

director

56

cgi group inc. 2005 annual report

director

Financial statements

Consolidated statements of cash flows

Years ended September 30 (in thousands of Canadian dollars)

2005

2004

2003

restated

restated

219,698

185,386

166,115

230,933
(3,038)
35,650
1,993
20,554
(11,000)
(4,216)
(321)
(10,576)
479,677

192,325
(16,439)
55,626
(789)
25,559

(488)
(211,376)
229,804

146,886
(30,174)
46,249
1,914
8,168

(295)
(108,789)
230,074

investing activities
Business acquisitions (net of cash acquired) (note 16)
Proceeds from sale of assets and businesses (net of cash disposed) (note 16)
Proceeds from sale of investment in an entity subject to signicant inuence (note 16)
Proceeds from sale of right (note 13)
Purchase of capital assets
Proceeds from disposal of capital assets
Contract costs
Reimbursement of contract costs upon termination of a contract
Additions to nite-life intangibles and other long-term assets
Proceeds from disposal of nite-life intangibles
Decrease in other long-term assets
Cash used in continuing investing activities

(66,229)
29,521
20,849
11,000
(25,314)
6,663
(27,304)
15,300
(88,000)
5,251
13,018
(105,245)

(589,678)
87,503

(59,829)
4,738
(76,260)

(84,696)

17,595
(700,627)

(233,512)

(61,226)

(29,211)

(149,951)

10,321
(463,579)

financing activities
Increase in credit facilities (note 8)
Repayment of credit facilities
Increase in other long-term debt
Repayment of other long-term debt
Repurchase of Class A subordinate shares
Issuance of shares (net of share issue costs) (note 9)
Cash (used in) provided by continuing financing activities

190,000
(397,578)

(16,705)
(109,456)
4,551
(329,188)

240,534
(219,000)
257,604
(26,451)

330,996
583,683

219,000

2,471
(22,220)

6,451
205,702

operating activities
Net earnings from continuing operations
Adjustments for:
Amortization (note 12)
Deferred credits
Future income taxes (note 14)
Foreign exchange loss (gain)
Stock-based compensation expense
Sale of right (note 13)
Gain on sale of investment in an entity subject to signicant inuence (note 16)
Entity subject to signicant inuence
Net change in non-cash working capital items (note 19)
Cash provided by continuing operating activities

Effect of foreign exchange rate changes on cash and cash equivalents

of continuing operations
Net increase (decrease) in cash and cash equivalents of continuing operations
Net cash and cash equivalents provided by discontinued operations (note 17)
Cash and cash equivalents, beginning of year
cash and cash equivalents, end of year

(6,167)
39,077
759
200,623
240,459

186
113,046
4,068
83,509
200,623

917
(26,886)
6,174
104,221
83,509

Supplementary cash ow information (note 19)

See Notes to the consolidated nancial statements.

cgi group inc. 2005 annual report

57