Please note that some statements made on the call may be forward looking. Actual events or results may differ materially from those expressed or implied, and CGI disclaims any intent or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The complete Safe Harbor statement is available on both our MD&A and press release, as well as on cgi.com. We encourage our investors to read it in its entirety. We report our results in accordance with Canadian GAAP, but we do discuss non-GAAP performance measures, which should be viewed as supplemental. The MD&A contains definitions of each of these non-GAAP performance indicators used in our reporting.All of the figures expressed on this call are in Canadian dollars unless otherwise noted. I'll turn the call over to David first to review the financial results for the third quarter. And then, he'll pass it over to Mike, who will discuss a few strategic highlights. David? R. Anderson Thank you, Lorne, and good morning. I'm pleased to share the financial details of another good quarter. In the third quarter, revenue was $1.04 billion, an increase of 15.1%, while $136.3 million compared with the same period last year. Revenue, on a constant currency basis, was up 18.0% after adjusting for foreign exchange fluctuations that unfavorably impacted revenue in the quarter by $26.3 million or 2.9% compared with the same period last year. Currency shaped $87 million from our topline during the first 9 months of fiscal 2011. And given the weakness of the U.S. dollar, we expect our top line to continue being challenged by FX. As a reminder, we have been successfully hedging our bottom-line exposure for a number of years through national hedges and financial instruments. Adjusted EBIT in Q3 was $144.3 million, up 12.2% compared with last year, and our EBIT margin remained strong at 13.9%.
Net earnings were $118.4 million or 37.9% better than the $85.9 million reported in Q3 of 2010, our net earnings margin for the 11.4% versus 9.5% in the same period last year.Diluted earnings per share were $0.43 compared with $0.30 in the year ago period, an improvement of 43.3%. Included in these results were favorable tax adjustments totaling $15.2 million, partially offset by $300,000 of acquisition-related and integration costs, net of tax. With respect to the Stanley acquisition, we have incurred charges of $3.7 million during the first 9 months of fiscal 2011 and continue to track to plan, which calls for an additional $800,000 to be incurred in Q4. On a comparable basis, excluding the adjustment I just mentioned, net earnings would've been $103.6 million or 10.0% of revenue compared with $86.5 million or 9.6% of revenue in the year ago period. And diluted earnings per share would've been $0.38, up 26.7% compared with the $0.30 in the third quarter of 2010. Our DSO increased to 52 days in Q3, up from 36 days in the year ago period and 7 days from our 45-day target. This year-over-year increase was due to 2 impacts: the addition of Stanley and its government clients base, which was not in our Q3 2010 results, was included in the 45-day target; and a cost strike in Canada, which had a one-time impact and contributed to a 5-day DSO increase in Canada. We remain committed to a DSO target of 45 days. The factors, which influence DSO, had an impact in cash as well. We generated $90.1 million of cash from our operating activities, compared with $102.8 million in the same period last year. I would like to remind you that on occasion, due to the fluctuations of certain working capital items, this amount can vary from quarter-to-quarter. The main items composing the fluctuations of the working capital related to the management of our accounts receivables and work in process and the timing of tax installments, vendor payments and payroll-related disbursements, including an extra payroll with approximately $30 million. That's why we continue to stress the importance of looking at cash trends, the same with the bookings over the trailing 12-month period. Read the rest of this transcript for free on seekingalpha.com