Delaware
(State of incorporation) |
52-2107911
(I.R.S. Identification No.) |
Title of Each Class
Common Stock, par value $.10 per share Preferred Stock Purchase Rights |
Name of Exchange on Which Registered
New York Stock Exchange New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
Page | ||||
|
PART I | |||
Items 1 and 2.
|
Business and Properties | 3 | ||
Item 1A.
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Risk Factors | 27 | ||
Item 1B.
|
Unresolved Staff Comments | 47 | ||
Item 3.
|
Legal Proceedings | 47 | ||
Item 4.
|
Submission of Matters to a Vote of Security Holders | 48 | ||
|
Executive Officers of the Company | 49 | ||
|
||||
|
PART II | |||
Item 5.
|
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 51 | ||
Item 6.
|
Selected Financial Data | 55 | ||
Item 7.
|
Managements Discussion and Analysis of Financial Condition and Results of Operations | 57 | ||
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk | 85 | ||
Item 8.
|
Consolidated Financial Statements and Supplementary Data | 85 | ||
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 85 | ||
Item 9A.
|
Controls and Procedures | 86 | ||
Item 9B.
|
Other Information | 87 | ||
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||||
|
PART III | |||
Item 10.
|
Directors, Executive Officers and Corporate Governance | 87 | ||
Item 11.
|
Executive Compensation | 87 | ||
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 87 | ||
Item 13.
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Certain Relationships and Related Transactions, and Director Independence | 87 | ||
Item 14.
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Principal Accountant Fees and Services | 87 | ||
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||||
|
PART IV | |||
Item 15.
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Exhibits and Financial Statement Schedules | 88 | ||
Signatures
|
89 | |||
Consolidated Financial Statements | 90 127 | |||
Glossary
|
128 | |||
Exhibit Index
|
131 |
2
| supply LEU to both domestic and international utilities for use in about 150 nuclear reactors worldwide, | ||
| are demonstrating and deploying what we anticipate will be the worlds most efficient uranium enrichment technology, known as the American Centrifuge, | ||
| are the exclusive executive agent for the U.S. government for a nuclear nonproliferation program with Russia, known as Megatons to Megawatts, | ||
| perform contract work for the U.S. Department of Energy (DOE) and its contractors at the Paducah and Portsmouth gaseous diffusion plants (GDPs), and | ||
| provide transportation and storage systems for spent nuclear fuel and provide nuclear and energy consulting services, including nuclear materials tracking. |
3
| Mining and Milling Natural, or unenriched, uranium is removed from the earth in the form of ore and then crushed and concentrated. | ||
| Conversion Uranium concentrates are combined with fluorine gas to produce uranium hexafluoride, a solid at room temperature and a gas when heated. Uranium hexafluoride is shipped to an enrichment plant. | ||
| Enrichment Uranium hexafluoride is enriched in a process that increases the concentration of the U 235 isotope in the uranium hexafluoride from its natural state of 0.711% up to 5%, which is usable as a fuel for light water commercial nuclear power reactors. Depleted uranium is a by-product of the uranium enrichment process. USEC currently has the only commercial uranium enrichment plant operating in the United States. The standard measure of uranium enrichment is a separative work unit (SWU). A SWU represents the effort that is required to transform a given amount of natural uranium into two streams of uranium, one enriched in the U 235 isotope and the other depleted in the U 235 isotope. SWUs are measured using a standard formula derived from the physics of uranium enrichment. The amount of enrichment deemed to be contained in LEU under this formula is commonly referred to as its SWU component and the quantity of natural uranium used in the production of LEU under this formula is referred to as its uranium component. | ||
| Fuel Fabrication LEU is converted to uranium oxide and formed into small ceramic pellets by fabricators. The pellets are loaded into metal tubes that form fuel assemblies, which are shipped to nuclear power plants. | ||
| Nuclear Power Plant The fuel assemblies are loaded into nuclear reactors to create energy from a controlled chain reaction. Nuclear power plants generate about 16% of the worlds electricity. | ||
| Consumers Businesses and homeowners rely on the steady, baseload electricity supplied by nuclear power and value its clean air qualities. |
4
| sales of the SWU component of LEU, | ||
| sales of both the SWU and uranium components of LEU, and | ||
| sales of uranium. |
| actions to prepare the Portsmouth GDP, which had been maintained in a state of readiness or cold standby, for a decontamination and decommissioning program, or cold shutdown, | ||
| processing DOE-owned out-of-specification uranium, and | ||
| providing infrastructure support services. |
| design, fabrication and implementation of spent nuclear fuel technologies, | ||
| nuclear materials transportation, and | ||
| nuclear fuel cycle consulting services. |
Years Ended December 31, | ||||||||||||
2007 | 2006 | 2005 | ||||||||||
United States
|
$ | 1,310.6 | $ | 1,109.5 | $ | 1,074.1 | ||||||
Foreign:
|
||||||||||||
Japan
|
274.7 | 389.8 | 224.2 | |||||||||
Other
|
342.7 | 349.3 | 261.0 | |||||||||
|
||||||||||||
|
617.4 | 739.1 | 485.2 | |||||||||
|
||||||||||||
|
$ | 1,928.0 | $ | 1,848.6 | $ | 1,559.3 | ||||||
|
5
6
| except as provided in the 2002 DOE-USEC Agreement, we have the right to renew the lease at either plant indefinitely in six year increments and can adjust the property under lease to meet our changing requirements. The current lease term expires in 2010 and we expect to make a decision regarding a lease extension in the first half of 2008; | ||
| we may leave the property in an as is condition at termination of the lease, but must remove wastes we generate and must place the plants in a safe shutdown condition; | ||
| the U.S. government is responsible for environmental liabilities associated with plant operations prior to July 28, 1998 except for liabilities relating to the disposal of some identified wastes generated by USEC and stored at the plants; | ||
| DOE is responsible for the costs of decontamination and decommissioning of the plants; | ||
| title to capital improvements not removed by us will transfer to DOE at the end of the lease term, and if we elect to remove any capital improvements, we are required to pay any increases in DOEs decontamination and decommissioning costs that are a result of our removing the capital improvements; | ||
| DOE must indemnify us for costs and expenses related to claims asserted against us or incurred by us arising out of the U.S. governments operation, occupation, or use of the plants prior to July 28, 1998; and | ||
| DOE must indemnify us against claims for public liability (as defined in the Atomic Energy Act of 1954, as amended) from a nuclear incident or precautionary evacuation in connection with activities under the lease. Under the Price- Anderson Act, DOEs financial obligations under the indemnity are capped at $10 billion for each nuclear incident or precautionary evacuation occurring inside the United States. |
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Strategic Supplier | Responsibility | |
|
||
Honeywell International
|
Final machine assembly | |
|
||
Alliant Techsystems Inc.
|
Fabricating carbon fiber rotor tubes | |
|
||
The Babcock & Wilcox Company
|
Classified machining and unclassified part procurement, rotor balancing and assembly | |
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Fluor Corporation
|
Managing commercial plant engineering, procurement and construction activities | |
|
||
Major Tool and Machine
|
Fabricate machine casing and appurtenances |
14
15
Milestones under | Milestone | Achievement | ||
2002 DOE-USEC Agreement | Date | Date | ||
Begin refurbishment of K-1600 centrifuge testing
facility in Oak Ridge, Tennessee
|
December 2002 | December 2002 | ||
|
||||
Build and begin testing a centrifuge end cap
|
January 2003 | January 2003 | ||
|
||||
Submit license application for Lead Cascade to NRC
|
April 2003 | February 2003 | ||
|
||||
NRC dockets Lead Cascade application
|
June 2003 | March 2003 | ||
|
||||
First rotor tube manufactured
|
November 2003 | September 2003 | ||
|
||||
Centrifuge testing begins
|
January 2005 | January 2005 | ||
|
||||
Submit license application for commercial plant
to NRC
|
March 2005 | August 2004 | ||
|
||||
NRC dockets commercial plant application
|
May 2005 | October 2004 | ||
|
||||
Begin Lead Cascade centrifuge manufacturing
|
June 2005 | April 2005 | ||
|
||||
Begin commercial plant construction and
refurbishment
|
June 2007 | May 2007 | ||
|
||||
Lead Cascade operational and generating product
assay in a range usable by commercial nuclear
power plants
|
October 2007 | October 2007 | ||
|
||||
Financing commitment secured for a one million
SWU per year centrifuge plant
|
January 2008 | January 2008 |
Milestones under | ||
2002 DOE-USEC Agreement | Milestone Date | |
|
||
Begin American Centrifuge commercial plant operations at
facility in Piketon, Ohio
|
January 2009 | |
|
||
American Centrifuge Plant capacity at one million SWU per
year
|
March 2010 | |
|
||
American Centrifuge Plant projected to have an annual
capacity of 3.5 million SWU
|
September 2011 |
16
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18
19
| USEC, | ||
| Urenco, a consortium of companies owned or controlled by the British and Dutch governments and by two private German utilities, | ||
| a multinational consortium controlled by AREVA, a company principally owned by the French government, and | ||
| the Russian Federal Agency for Atomic Energy, which sells LEU through TENEX, a Russian government-owned entity. |
20
| a continuation or recurrence of dumping of Russian uranium products (a determination made by the DOC), and | ||
| a continuation or recurrence of material injury to the U.S. uranium industry, including to us (a determination made by the ITC). |
21
22
23
| We now expect that the application of the Federal Circuits 2005 decision to individual imports of LEU from France will be decided in the first instance by the DOC, on a case by case basis based upon certifications and other documentation submitted by U.S. utilities and the French exporter. | ||
| The Federal Circuits ruling concluded the pending litigation before the Federal Circuit concerning the implementation of the Federal Circuits 2005 decision regarding the exclusion of enrichment services transactions from the antidumping law. It is now possible for any of the parties, including us, to seek review of the 2005 decision by the U.S. Supreme Court. If the U.S. Supreme Court were to agree to review the case, it could reverse or modify the 2005 decision. |
24
No. of Employees | ||||||
at December 31, | ||||||
Location | 2007 | 2006 | ||||
Paducah GDP
|
Paducah, KY | 1,169 | 1,147 | |||
Portsmouth GDP
|
Piketon, OH | 1,147 | 1,082 | |||
NAC
|
Primarily Atlanta, GA | 63 | 68 | |||
|
Primarily Oak Ridge, TN | |||||
American Centrifuge
|
and Piketon, OH | 397 | 295 | |||
Headquarters
|
Bethesda, MD | 90 | 85 | |||
|
||||||
|
||||||
|
Total Employees | 2,866 | 2,677 |
Contract | ||||
Number of Employees | Term | |||
Paducah GDP:
|
||||
USW Local 5-550
|
563 | July 2011 | ||
SPFPA Local 111
|
77 | March 2012 | ||
|
||||
Portsmouth GDP:
|
||||
USW Local 5-689
|
536 | May 2010 | ||
SPFPA Local 66
|
93 | (1) |
(1) | Contract expired August 4, 2007. USEC and SPFPA Local 66 continue to operate under the contract provisions. The union has worked without incident and has said it would provide 72 hours notice prior to any work stoppage. No work stoppage is anticipated and discussions between the parties continue. |
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43
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50
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68
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134
135
136
increase our costs for the project, both on an overall basis and in
terms of the incremental costs we must incur to recover from delays,
cause us to fail to meet a milestone under the 2002 DOE-USEC
Agreement, leading DOE to exercise the remedies described in the next
risk factor,
make it more difficult for us to attract and retain customers who may
want to contract for purchases of LEU beyond 2012 before we can enter
into long-term contracts for the sale of LEU generated by the American
Centrifuge Plant, and
extend the time under which we are contractually required to continue
to operate our high-cost Paducah GDP.
January 2009:
Begin American Centrifuge commercial plant operations
at the facility in Piketon, Ohio;
March 2010:
American Centrifuge Plant capacity at one million SWU per
year; and
September 2011:
American Centrifuge Plant (if expanded at our option)
projected to have an annual capacity of 3.5 million SWU.
the success of our demonstration of the American Centrifuge technology and
the estimated costs, efficiency, timing and return on investment of the
deployment of the American Centrifuge Plant (described below),
consequences of a failure to reach an agreement with DOE regarding future
milestones under the 2002 DOE-USEC Agreement or the determination by DOE
that we have not complied with a prior milestone that we believe we met,
the level of success of our current operations,
our ability to get loan guarantees or other support from the U.S. government,
competition for financing or loan guarantees from other uranium enrichment
projects and nuclear-related projects generally,
the impact of reductions or changes in trade restrictions on imports of
Russian and other foreign LEU and related uncertainties,
SWU prices,
USECs perceived competitive position and investor confidence in our
industry and in us,
our ability to secure long-term SWU purchase commitments from customers at
adequate prices and for adequate duration,
projected costs for the disposal of depleted uranium and the decontamination
and decommissioning of the American Centrifuge Plant, and the impact of
related financial assurance requirements,
additional downgrades in our credit rating,
market price and volatility of our common stock,
general economic and capital market conditions,
conditions in energy markets,
regulatory developments,
our reliance on LEU delivered to us under the Russian Contract and
uncertainty regarding prices and deliveries under the Russian Contract, and
restrictive covenants in the agreements governing our revolving credit
facility and in our outstanding notes and any future financing arrangements
that limit our operating and financial flexibility.
equipment breakdowns,
interruptions of electric power, including those interruptions permitted under the TVA
power agreement, or an inability to purchase electric power at an acceptable price,
regulatory enforcement actions,
labor disruptions,
unavailability or inadequate supply of uranium feedstock,
natural or other disasters, including seismic activity in the vicinity of the Paducah
GDP, which is located near the New Madrid fault line, or
accidents or other incidents.
LEU and uranium production levels and costs in the industry,
supply and demand shifts,
actions taken by governments to regulate, protect or promote trade in
nuclear material, including the continuation of existing restrictions
on unfairly priced imports,
actions taken by governments to narrow, reduce or eliminate limits on
trade in nuclear material, including the removal of existing
restrictions on unfairly priced imports,
actions of competitors,
exchange rates,
availability and cost of alternate fuels, and
inflation.
accidents, terrorism or other incidents at nuclear facilities or
involving shipments of nuclear materials,
regulatory actions or changes in regulations by nuclear regulatory
bodies, or decisions by agencies, courts or other bodies that limit
our ability to seek relief under applicable trade laws to offset
unfair competition or pricing by foreign competitors,
disruptions in other areas of the nuclear fuel cycle, such as uranium
supplies or conversion,
civic opposition to, or changes in government policies regarding,
nuclear operations,
business decisions concerning reactors or reactor operations,
the need for generating capacity, or
consolidation within the electric power industry.
leases for the gaseous diffusion plants and American Centrifuge facilities,
the Executive Agent agreement under which we are designated the U.S.
Executive Agent and purchase the SWU component of LEU under the Russian
Contract,
the 2002 DOE-USEC Agreement and other agreements that address issues
relating to the domestic uranium enrichment industry and the American
Centrifuge technology,
electric power purchase agreements with the Tennessee Valley Authority,
contract work for DOE and DOE contractors at the Portsmouth and Paducah
GDPs, including maintenance of the Portsmouth GDP in preparation for a DOE
decontamination and decommissioning program, and
NAC consulting and transportation activities.
Redemption price or exchange value:
Generally the redemption price or
exchange value for any shares of our common stock redeemed or
exchanged would be their fair market value. However, if we redeem or
exchange shares held by foreign persons and our Board in good faith
determines that such foreign person knew or should have known that the
foreign ownership restrictions in our certificate of incorporation
were violated at the time of their purchase, the redemption price or
exchange value is required to be the lesser of fair market value and
the foreign persons purchase price for the shares redeemed or
exchanged.
Form of payment:
Cash, securities or a combination, valued by our
Board in good faith.
Notice:
At least 30 days notice of redemption is required, however,
if we have deposited the cash or securities for the redemption or
exchange in trust for the benefit of the relevant foreign holders, we
may redeem shares held by such holders on the same day that we provide
notice.
Name
Age
Position
57
President and Chief Executive Officer
43
Senior Vice President and Chief Financial Officer
61
Senior Vice President, American Centrifuge and Russian
HEU
46
Senior Vice President, Uranium Enrichment
60
Senior Vice President, Human Resources and Administration
43
Vice President, Marketing and Sales
50
Vice President, Finance and Treasurer
57
Vice President, American Centrifuge
47
Controller and Chief Accounting Officer
60
Vice President, Government Relations
65
Vice President, Operations
2007
2006
High
Low
High
Low
$
16.62
$
12.13
$
15.84
$
11.08
25.65
16.14
14.65
9.74
22.31
9.56
12.18
9.19
10.48
7.81
13.52
9.35
Number of
securities to be
issued upon
Weighted-average
Number of securities
exercise of
exercise price of
remaining available
outstanding
outstanding
for future issuance
options, warrants
options, warrants
under equity
Plan category
and rights
and rights
compensation plans
1,318,000
$
10.23
7,191,000
(1)
1,318,000
7,191,000
(1)
Includes 7,098,000 shares available for issuance under the USEC Inc. 1999 Equity
Incentive Plan (net of awards which terminate or are cancelled without being exercised or
that are settled for cash) and 93,000 shares available for issuance under the Employee Stock
Purchase Plan.
Redemption price or exchange value:
Generally the redemption price or exchange
value for any shares of our common stock redeemed or exchanged would be their fair
market value. However, if we redeem or exchange shares held by foreign persons and our
Board in good faith determines that such foreign person knew or should have known that
the foreign ownership restrictions in our certificate of incorporation were violated at
the time of their purchase, the redemption price or exchange value is required to be
the lesser of fair market value and the foreign persons purchase price for the shares
redeemed or exchanged.
Form of payment:
Cash, securities or a combination, valued by our Board in good
faith.
Notice:
At least 30 days notice of redemption is required, however, if we have
deposited the cash or securities for the redemption or exchange in trust for the
benefit of the relevant foreign holders, we may redeem shares held by such holders on
the same day that we provide notice.
1.
Unless the Board determines that the further exercise of rights under our
certificate of incorporation is necessary to maintain our regulatory compliance
(whether as a result of a request or order of a regulatory authority or otherwise), the
Board will seek to maintain our regulatory compliance by first limiting the voting
rights of any such foreign person.
2.
To the extent that the Board determines that the exercise of our right of
redemption or exchange is necessary to maintain our regulatory compliance (whether as a
result of a request or order of a regulatory authority or otherwise), such redemption
or exchange shall be taken only to the extent necessary, in the judgment of the Board,
to maintain such regulatory compliance or comply with such request or order, shall be
settled only in cash and in no event will we avail ourselves of the trust redemption
right (unless otherwise required by law or to maintain our regulatory compliance).
3.
In no event will we exercise our right of redemption or exchange if the Board
determines that such redemption or exchange is required to be made at the lesser of
fair market value and the foreign persons purchase price for the shares redeemed or
exchanged.
(c) Total Number
(d) Maximum Number
(a) Total
(b)
of Shares (or Units)
(or Approximate Dollar
Number of
Average
Purchased as Part
Value) of Shares (or
Shares (or
Price Paid
of Publicly
Units) that May Yet Be
Units)
Per Share
Announced Plans
Purchased Under the
Period
Purchased(1)
(or Unit)
or Programs
Plans or Programs
2,595
$
8.96
2,595
$
8.96
(1)
These purchases were not made pursuant to a publicly announced repurchase plan or
program. Represents 2,595 shares of common stock surrendered to USEC to pay withholding
taxes in connection with the vesting of restricted stock under the 1999 Equity Incentive
Plan.
December 31,
December 31,
December 31,
December 31,
December 31,
December 31,
2002
2003
2004
2005
2006
2007
$
100.00
$
151.49
$
186.16
$
240.04
$
255.50
$
180.76
$
100.00
$
128.68
$
142.68
$
149.69
$
173.32
$
182.84
$
100.00
$
129.29
$
147.76
$
164.32
$
192.73
$
239.89
(1)
The Peer Group consists of: Air Products and Chemicals, Inc.,
Albemarle Corporation, Alcoa Inc., Constellation Energy Group, Inc.,
Dominion Resources, Inc., Duke Energy Corporation, Eastman Chemical
Company, Exelon Corporation, Georgia Gulf Corporation, NL Industries,
Inc., PPL Corporation, Praxair, Inc., Progress Energy, Inc., The
Southern Company, and XCEL Energy Inc. In accordance with SEC
requirements, the return for each issuer has been weighted according
to the respective issuers stock market capitalization at the
beginning of each year for which a return is indicated.
Years Ended December 31,
2007
2006
2005
2004
2003
(millions, except per share data)
$
1,570.5
$
1,337.4
$
1,085.6
$
1,027.3
$
1,110.8
163.5
316.7
261.3
224.0
159.9
194.0
194.5
212.4
165.9
166.0
1,928.0
1,848.6
1,559.3
1,417.2
1,436.7
1,473.6
1,349.2
1,148.4
1,071.6
1,124.1
166.9
162.5
181.4
151.5
150.2
1,640.5
1,511.7
1,329.8
1,223.1
1,274.3
287.5
336.9
229.5
194.1
162.4
3.9
(1)
7.3
(2)
127.3
105.5
94.5
58.5
44.8
45.3
48.8
61.9
64.1
69.4
(1.0
)(3)
(1.7
)(4)
114.9
178.7
66.8
73.2
48.2
16.9
14.5
40.0
40.5
38.4
(33.8
)
(6.2
)
(10.5
)
(3.9
)
(5.4
)
131.8
170.4
37.3
36.6
15.2
35.2
64.2
15.0
13.1
6.2
$
96.6
$
106.2
$
22.3
$
23.5
$
9.0
$
1.04
$
1.22
$
.26
$
.28
$
.11
$
.94
$
1.22
$
.26
$
.28
$
.11
$
$
$
.55
$
.55
$
.55
December 31,
2007
2006
2005
2004
2003
(millions)
$
886.1
(5)
$
171.4
$
259.1
$
174.8
$
214.1
1,153.4
900.0
974.3
1,009.4
883.2
24.2
71.4
156.2
266.1
3,087.8
1,861.4
2,080.8
2,003.4
2,134.8
288.8
725.0
(5)
150.0
150.0
475.0
500.0
337.5
300.3
270.2
244.4
256.0
1,309.5
(5)
986.0
907.6
918.7
923.6
(1)
Special charges of $3.9 million in 2006 include a $2.6 million impairment of an
intangible asset established in 2004 relating to the acquisition of NAC, $1.5 million
related to consolidation of office space in connection with the 2005 restructuring plan,
and special credits totaling $0.2 million representing changes in estimate of costs for
termination benefits charged in 2005.
(2)
The plan to restructure headquarters and field operations resulted in special charges
of $7.3 million in 2005 related to termination benefits, principally consisting of
severance benefits.
(3)
Other income in 2005 includes $1.0 million from customs duties paid to USEC as a result
of trade actions.
(4)
Other income in 2004 includes income of $4.4 million from customs duties paid to USEC
as a result of trade actions, partly offset by an expense of $2.7 million for
acquired-in-process research and development expense relating to the acquisition of NAC.
(5)
In September 2007, we raised net proceeds, after underwriter commissions and offering
expenses, of approximately $775 million through the concurrent issuance of 23 million
shares of common stock and $575 million in aggregate principal amount of convertible notes.
supply LEU to both domestic and international utilities for use in about 150 nuclear
reactors worldwide,
are demonstrating and deploying what we anticipate will be the worlds most efficient
uranium enrichment technology, known as the American Centrifuge,
are the exclusive executive agent for the U.S. government under a nuclear
nonproliferation program with Russia, known as Megatons to Megawatts,
perform contract work for the U.S. Department of Energy (DOE) and its contractors at
the Paducah and Portsmouth gaseous diffusion plants (GDPs), and
provide transportation and storage systems for spent nuclear fuel and provide nuclear
and energy consulting services, including nuclear materials tracking.
Negotiated a five-year power contract with Tennessee Valley Authority (TVA) that helps
us manage our power costs by providing relative price predictability for our largest
production cost.
Received a NRC construction and operating license for the ACP following an intense,
33-month review by the regulator.
Began construction of the ACP in Piketon, Ohio in May, about one month after the NRC
license was issued. This met a milestone under the 2002 agreement with DOE.
Entered into several major contracts with key vendors for essential materials and parts
for the ACP, reducing our exposure to volatile commodity prices for steel and carbon fiber.
Initiated the Lead Cascade testing program in late August that involved the first group
of American Centrifuge prototype machines operating in a closed-loop cascade configuration.
These machines are achieving a number of key objectives through the integrated testing
program and produced nuclear fuel at commercial product assay levels, which met an October
2007 milestone with DOE.
In September, we raised net proceeds of approximately $775 million through a concurrent
issuance of common stock and $575 million of convertible notes. We believe this new
capital, along with an existing $400 million credit facility and anticipated cash flow from
operations, was sufficient to meet a January 2008 DOE milestone regarding financing.
sales of the SWU component of LEU,
sales of both the SWU and uranium components of LEU, and
sales of uranium.
December 31,
2007
2006
2005
$
143.00
$
136.00
$
113.00
260.47
192.54
106.06
241.00
199.00
106.00
Cumulative as of
2007
2006
2005
December 31, 2007
$
244.4
$
144.5
$
108.7
$
615.1
$
125.9
$
103.3
$
92.7
$
433.3
$
118.5
$
41.2
$
16.0
$
181.8
(A)
Total expenditures are all American Centrifuge costs including, but not limited to, demonstration
facility, licensing activities, commercial plant facility, program management, and interest related
costs and accrued asset retirement obligations capitalized.
(B)
Amounts capitalized include interest of $6.3 million in 2007, $3.1 million in 2006 and $0.7 million
in 2005. Cumulative capitalized interest at December 31, 2007 is $10.3 million. Amount excludes
prepayments made to suppliers for services not yet performed of $16.9 million.
The weighted average expected return on benefit plan assets was 8.0% for 2007 and is
8.0% for 2008. The expected return is based on historical returns and expectations of
future returns for the composition of the plans equity and debt securities. A 0.5%
decrease in the expected return on plan assets would increase annual pension costs by $3.9
million and postretirement health and life costs by $0.4 million.
A weighted average discount rate of 6.2% was used at December 31, 2007 to calculate the
net present value of benefit obligations. The discount rate is the estimated rate at which
the benefit obligations could be effectively settled on the measurement date and is based
on yields of high quality fixed income investments whose cash flows match the timing and
amount of expected benefit payments of the plans. A 0.5% reduction in the discount rate
would increase the valuation of pension benefit obligations by $47.7 million and
postretirement health and life benefit obligations by $9.6 million, and the resulting
changes in the valuations would increase annual pension costs by $1.0 million and
postretirement health and life costs by $1.0 million.
The healthcare costs trend rates are 9.0% projected in 2008 reducing to 5.0% in 2014.
The healthcare costs trend rate represents our estimate of the annual rate of increase in
the gross cost of providing benefits. The trend rate is a reflection of health care
inflation assumptions, changes in healthcare utilization and delivery patterns,
technological advances, and changes in the health status of our plan participants. A 1%
increase in the healthcare cost trend rates would increase postretirement health benefit
obligations by about $8.7 million and would increase costs by about $1.1 million.
U.S. Government
LEU Segment
Contracts Segment
Total
$
1,734.0
$
194.0
$
1,928.0
1,473.6
166.9
1,640.5
$
260.4
$
27.1
$
287.5
$
1,654.1
$
194.5
$
1,848.6
1,349.2
162.5
1,511.7
$
304.9
$
32.0
$
336.9
$
1,346.9
$
212.4
$
1,559.3
1,148.4
181.4
1,329.8
$
198.5
$
31.0
$
229.5
Years Ended December 31,
2007
2006
2005
$
1,570.5
$
1,337.4
$
1,085.6
163.5
316.7
261.3
$
1,734.0
$
1,654.1
$
1,346.9
Years Ended December 31,
2007
2006
2005
$
157.4
$
156.7
$
167.5
11.5
11.6
17.2
25.1
26.2
27.7
$
194.0
$
194.5
$
212.4
Years Ended December 31,
2007
2006
2005
$
287.5
$
336.9
$
229.5
3.9
7.3
127.3
105.5
94.5
45.3
48.8
61.9
(1.0
)
114.9
178.7
66.8
16.9
14.5
40.0
(33.8
)
(6.2
)
(10.5
)
131.8
170.4
37.3
35.2
64.2
15.0
$
96.6
$
106.2
$
22.3
Years Ended December 31,
2007
2006
2005
(in millions)
$
$
1.3
$
7.3
2.6
$
$
3.9
$
7.3
The timing of recognition of previously deferred revenue and deferred revenue related
to uranium deliveries;
Movement and timing of customer orders;
Changes in inflation and in SWU and uranium market prices;
Additional uranium sales made possible by underfeeding the production process at the
Paducah GDP; and
The amount of spending on the American Centrifuge plant that is classified as
expense.
Years Ended December 31,
2007
2006
2005
$
109.2
$
278.1
$
188.9
(170.4
)
(79.6
)
(26.3
)
775.9
(286.2
)
(78.3
)
$
714.7
$
(87.7
)
$
84.3
December 31,
2007
2006
(millions)
$
886.1
$
171.4
252.9
215.9
831.1
843.1
(255.3
)
(246.4
)
$
1,714.8
$
984.0
December 31,
2007
2006
$
$
38.4
35.8
361.6
346.2
the sum of (1) the greater of the JPMorgan Chase Bank prime rate and the federal funds
rate plus
1
/
2
of 1% plus (2) a margin ranging from 0.25% to 0.75% based upon collateral
availability, or
the sum of LIBOR plus a margin ranging from 2.0% to 2.5% based on collateral
availability.
Standard & Poor's
Moody's
3.0% convertible senior notes
6.75% senior notes
Outlook
B-
CCC
CCC
Negative
B3
unrated
Caa2
Negative
December 31,
2007
2006
$
98.3
$
71.5
$
24.1
$
24.1
164.2
130.6
$
188.3
$
154.7
$
4.4
$
8.8
$
$
41.6
8.8
$
41.6
$
8.8
$
14.3
$
11.7
2.2
3.6
$
16.5
$
15.3
$
38.4
$
35.8
208.0
143.0
$
246.4
$
178.8
$
97.0
$
60.8
2009
2011
2008
2010
2012
Thereafter
Total
$
$
150.0
$
$
575.0
$
725.0
27.5
39.6
34.5
34.5
136.1
27.5
189.6
34.5
609.5
861.1
508.2
1,029.5
712.4
2,250.1
599.5
1,329.0
1,480.7
695.4
4,104.6
38.9
43.1
37.2
119.2
19.4
19.4
1,166.0
2,401.6
2,230.3
695.4
6,493.3
7.4
12.1
9.1
64.3
92.9
12.4
64.8
10.3
250.0
337.5
$
1,213.3
$
2,668.1
$
2,284.2
$
1,619.2
$
7,784.8
(1)
The 6.750% senior notes amounting to $150.0 million are due January 20, 2009, and the
3.0% convertible senior notes amounting to $575.0 million are due October 1, 2014,
assuming no conversion to shares of common stock.
(2)
Capacity under the TVA power purchase agreement is fixed. Prices are subject to
monthly fuel cost adjustments to reflect changes in TVAs fuel costs, purchased power
costs, and related costs.
(3)
Commitments to purchase SWU and uranium for resale include commitments to purchase
SWU under the Russian Contract and to purchase uranium from suppliers. Prices under the
Russian Contract are determined using a discount from an index of international and U.S.
price points, including both long-term and spot prices. A multi-year retrospective view
of the index is used to minimize the disruptive effect of any short-term price swings.
Actual amounts will vary based on changes in the price points.
(4)
Supply agreements for the purchase of materials, goods and services for the
manufacture of centrifuge machines to be used in the American Centrifuge Plant. Prices
for minimum purchase commitments above are subject to adjustment for inflation.
Contractual provisions for termination payments total $47 million for these agreements.
(5)
Purchase commitments are enforceable and legally binding and consist of purchase
orders or contracts issued to vendors and suppliers to procure materials and services.
(6)
Other long-term liabilities reported on the balance sheet include pension benefit
obligations and postretirement health and life benefit obligations
amounting to $153.6
million, accrued depleted uranium disposition costs of $98.3 million, the long-term
portion of accrued lease turnover costs of $52.2 million and the liability for
unrecognized tax benefits of $10.8 million.
Balance Sheet
Fair
Carrying Amount
Value
$
150.0
$
142.7
575.0
568.0
$
725.0
$
710.7
commodity price risk for electric power requirements for the Paducah GDP (refer to
Overview Cost of Sales and Results of Operations Cost of Sales),
commodity price risk for raw materials needed for construction of the American
Centrifuge Plant, that could affect the overall cost of the project (refer to Item 1A. Risk
Factors
Cost increases and uncertainty regarding the costs of the American Centrifuge
Plant could adversely affect our ability to finance and deploy the American Centrifuge
Plant.
), and
interest rate risk relating to any outstanding borrowings at variable interest rates
under the $400.0 million revolving credit agreement (refer to Liquidity and Capital
Resources Capital Structure and Financial Resources).
(a)
(1)
Consolidated Financial Statements
Reference is made to the consolidated financial statements appearing elsewhere in this
annual report.
(2)
Financial Statement Schedules
No financial statement schedules are required to be filed as part of this annual report.
(3)
Exhibits
The exhibits listed on the accompanying Exhibit Index are filed or incorporated by reference
as part of this report and such Exhibit Index is incorporated herein by reference. The
accompanying Exhibit Index identifies each management contract or compensatory plan or
arrangement required to be filed as an exhibit to this report, and such listing is
incorporated herein by reference.
USEC Inc.
February 29, 2008
/s/ John K. Welch
John K. Welch
President and Chief Executive Officer
Signature
Title
Date
President and Chief Executive Officer
(Principal Executive Officer) and Director
February 29, 2008
Senior Vice President and Chief Financial
Officer
(Principal Financial Officer)
February 29, 2008
Controller and Chief Accounting Officer
(Principal Accounting Officer)
February 29, 2008
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
91
92
93
94
95
96 127
McLean, Virginia
February 22, 2008
CONSOLIDATED BALANCE SHEETS
(millions, except share and per share data)
December 31,
2007
2006
$
886.1
$
171.4
252.9
215.9
677.3
701.7
465.9
189.1
10.2
9.2
1,153.4
900.0
49.5
24.0
88.7
97.8
2,430.6
1,409.1
292.2
189.9
180.1
156.2
97.0
60.8
67.1
13.8
24.2
13.8
6.8
6.8
0.2
0.6
365.0
262.4
$
3,087.8
$
1,861.4
$
162.2
$
129.1
112.2
105.3
322.3
56.9
119.1
133.8
715.8
425.1
725.0
150.0
98.3
71.5
130.6
128.7
23.0
20.2
85.6
79.9
337.5
300.3
12.3
10.0
1,186.2
970.6
215.2
137.5
(92.9
)
(95.5
)
(11.3
)
(36.6
)
1,309.5
986.0
$
3,087.8
$
1,861.4
CONSOLIDATED STATEMENTS OF INCOME
(millions, except per share data)
Years Ended December 31,
2007
2006
2005
$
1,570.5
$
1,337.4
$
1,085.6
163.5
316.7
261.3
194.0
194.5
212.4
1,928.0
1,848.6
1,559.3
1,473.6
1,349.2
1,148.4
166.9
162.5
181.4
1,640.5
1,511.7
1,329.8
287.5
336.9
229.5
3.9
7.3
127.3
105.5
94.5
45.3
48.8
61.9
(1.0
)
114.9
178.7
66.8
16.9
14.5
40.0
(33.8
)
(6.2
)
(10.5
)
131.8
170.4
37.3
35.2
64.2
15.0
$
96.6
$
106.2
$
22.3
$
1.04
$
1.22
$
.26
$
.94
$
1.22
$
.26
93.0
86.6
86.1
105.8
86.8
86.6
$
$
$
.55
CONSOLIDATED STATEMENTS OF CASH FLOWS
(millions)
Years Ended December 31,
2007
2006
2005
$
96.6
$
106.2
$
22.3
39.5
36.7
35.0
(40.6
)
(13.4
)
(43.2
)
2.6
(37.0
)
40.8
(18.2
)
36.2
176.1
76.3
6.9
(6.3
)
21.9
5.1
(3.7
)
42.0
26.8
24.5
19.8
(25.1
)
(82.1
)
26.2
0.8
(3.3
)
6.8
109.2
278.1
188.9
(137.2
)
(44.8
)
(26.3
)
(33.2
)
(34.8
)
(170.4
)
(79.6
)
(26.3
)
75.1
133.8
4.7
(75.1
)
(133.8
)
(4.7
)
(288.8
)
(36.3
)
0.9
0.4
575.0
(14.3
)
(0.3
)
(3.5
)
214.3
2.5
8.8
(47.3
)
775.9
(286.2
)
(78.3
)
714.7
(87.7
)
84.3
171.4
259.1
174.8
$
886.1
$
171.4
$
259.1
$
6.9
$
19.3
$
32.6
101.9
107.3
38.7
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(millions, except per share data)
Common
Accumulated
Stock,
Excess of
Other
Par Value
Capital
Deferred
Compre-
Total
Compre-
$.10 per
over
Retained
Treasury
Comp-
hensive
Stockholders
hensive
Share
Par Value
Earnings
Stock
ensation
Income (Loss)
Equity
Income (Loss)
$
10.0
$
963.9
$
56.3
$
(109.2
)
$
(1.6
)
$
(0.7
)
$
918.7
0.3
5.1
5.4
6.4
4.6
(1.1
)
9.9
(47.3
)
(47.3
)
(1.4
)
(1.4
)
(1.4
)
22.3
22.3
22.3
10.0
970.6
31.3
(99.5
)
(2.7
)
(2.1
)
907.6
$
20.9
2.1
2.1
2.7
1.9
4.6
(2.7
)
2.7
1.1
1.1
1.1
(35.6
)
(35.6
)
106.2
106.2
106.2
10.0
970.6
137.5
(95.5
)
(36.6
)
986.0
$
107.3
(18.9
)
(18.9
)
2.3
211.5
213.8
0.8
0.8
4.1
1.8
5.9
25.3
25.3
25.3
96.6
96.6
96.6
$
12.3
$
1,186.2
$
215.2
$
(92.9
)
$
$
(11.3
)
$
1,309.5
$
121.9
December 31,
2007
2006
(millions)
$
160.9
$
174.3
53.3
2.0
214.2
176.3
24.9
19.8
13.8
19.8
38.7
39.6
$
252.9
$
215.9
$
58.3
$
78.4
30.4
19.4
$
88.7
$
97.8
$
47.3
$
21.6
49.5
46.3
9.6
5.2
4.2
7.4
51.6
48.6
$
162.2
$
129.1
(1)
Valuation and allowances for doubtful accounts were $17.4 million at
December 31, 2007 and $14.4 million at December 31, 2006.
(2)
Unbilled revenue for utility customers represents price adjustments for
past deliveries that are not yet billable under the applicable contracts, of which
$51.5 million will be billed in the first quarter of 2008.
(3)
Billings for contract services related to DOE are invoiced based on
provisional billing rates approved by DOE. Unbilled revenue represents the
difference between actual costs incurred and invoiced amounts. USEC expects to
invoice and collect the unbilled amounts as provisional billing rates are revised,
submitted to and approved by DOE.
December 31,
2007
2006
(millions)
$
677.3
$
701.7
465.9
189.1
10.2
9.2
1,153.4
900.0
24.2
(322.3
)
(56.9
)
$
831.1
$
867.3
Capital
Transfers
Capital
Transfers
December 31,
Expenditures
and
December 31,
Expenditures
and
December 31,
2004
(Depreciation)
Retirements
2005
(Depreciation)
Retirements
2006
$
13.3
$
28.0
$
(12.3
)
$
29.0
$
53.9
$
(11.1
)
$
71.8
157.1
4.4
161.5
6.5
168.0
174.3
0.4
5.0
179.7
1.2
1.1
182.0
344.7
28.4
(2.9
)
370.2
55.1
(3.5
)
421.8
(166.7
)
(34.7
)
2.4
(199.0
)
(36.3
)
3.4
(231.9
)
$
178.0
$
(6.3
)
$
(0.5
)
$
171.2
$
(18.8
)
$
(0.1
)
$
189.9
Capital
Transfers
December 31,
Expenditures
and
December 31,
2006
(Depreciation)
Retirements
2007
$
71.8
$
141.5
$
(20.6
)
$
192.7
168.0
3.8
171.8
182.0
2.7
6.3
191.0
421.8
144.2
(10.5
)
555.5
(231.9
)
(37.4
)
6.0
(263.3
)
$
189.9
$
106.8
$
(4.5
)
$
292.2
Years Ended December 31,
2007
2006
2005
$
68.3
$
70.4
$
51.7
7.5
7.2
6.5
75.8
77.6
58.2
(41.2
)
(14.4
)
(42.4
)
0.6
1.0
(0.8
)
(40.6
)
(13.4
)
(43.2
)
$
35.2
$
64.2
$
15.0
December 31,
2007
2006
$
23.9
$
23.4
57.4
68.6
28.7
7.6
66.9
40.8
4.4
5.4
38.7
26.1
1.9
1.9
7.3
6.9
3.4
2.2
$
232.6
$
182.9
(1.8
)
(1.4
)
230.8
181.5
1.2
1.3
1.2
1.3
$
229.6
$
180.2
Years Ended December 31,
2007
2006
2005
35
%
35
%
35
%
3
2
2
(1
)
(1
)
(1
)
(6
)
(1
)
(1
)
(5
)
(1
)
1
2
1
2
12
(9
)
1
27
%
38
%
40
%
$
38.5
5.6
(4.2
)
1.1
(12.2
)
(18.0
)
$
10.8
Gross
Carrying
Accumulated
Amount
Amortization
Net
$
3.9
$
$
3.9
(0.3
)
(0.3
)
3.9
(0.3
)
3.6
(2.6
)
(0.4
)
(3.0
)
1.3
(0.7
)
0.6
(0.4
)
(0.4
)
$
1.3
$
(1.1
)
$
0.2
December 31,
2007
2006
(millions)
$
575.0
$
150.0
150.0
$
725.0
$
150.0
the sum of (1) the greater of the JPMorgan Chase Bank prime rate and the federal funds
rate
plus
1
/
2
of 1% plus (2) a margin ranging from .25% to .75% based upon collateral availability,
or
the sum of LIBOR plus a margin ranging from 2.0% to 2.5% based on collateral
availability.
Years Ended December 31,
2007
2006
2005
(in millions)
$
96.6
$
106.2
$
22.3
2.9
$
99.5
$
106.2
$
22.3
93.4
86.9
86.3
0.4
0.3
0.2
93.0
86.6
86.1
12.5
0.3
0.2
0.5
105.8
86.8
86.6
$
1.04
$
1.22
$
.26
$
.94
$
1.22
$
.26
December 31,
2007
2006
$
116.4
$
129.4
2.7
4.4
$
119.1
$
133.8
Paid
Balance
Special
Paid
Balance
Special
and
Dec. 31,
Charge
and
Dec. 31,
Charge
Utilized
2005
(Credit)
Utilized
2006
$
4.5
$
(2.7
)
$
1.8
$
$
(1.8
)
$
2.8
(1.5
)
1.3
(0.2
)
(1.1
)
1.5
(1.5
)
$
7.3
$
(4.2
)
$
3.1
$
1.3
$
(4.4
)
$
$
8.8
(4.6
)
0.2
$
4.4
$
7.4
6.4
5.7
5.3
3.8
64.3
$
92.9
Postretirement Health
Defined Benefit Pension Plans
and Life Benefit Plans
Years Ended
Years Ended
December 31,
December 31,
2007
2006
2007
2006
$
744.4
$
742.2
$
202.2
$
202.7
(31.7
)
(16.9
)
(5.0
)
(7.5
)
0.7
17.9
18.3
4.1
4.7
43.1
40.7
11.8
11.0
(36.3
)
(40.6
)
(9.7
)
(8.9
)
(0.4
)
N/A
N/A
0.2
0.2
737.0
744.4
203.6
202.2
737.7
684.7
73.5
69.6
70.2
77.5
6.1
7.1
9.8
16.1
3.1
5.7
(36.3
)
(40.6
)
(9.7
)
(8.9
)
(0.5
)
780.9
737.7
73.0
73.5
43.9
(6.7
)
(130.6
)
(128.7
)
$
67.1
$
13.8
$
$
(0.2
)
(0.3
)
(23.0
)
(20.2
)
(130.6
)
(128.7
)
$
43.9
$
(6.7
)
$
(130.6
)
$
(128.7
)
$
26.0
$
71.3
$
26.2
$
33.9
9.2
11.0
(37.4
)
(51.9
)
$
35.2
$
82.3
$
(11.2
)
$
(18.0
)
6.21
%
5.75
%
5.96
%
5.75
%
4.25
4.00
4.25
4.00
Postretirement Health
Defined Benefit Pension Plans
and Life Benefit Plans
Years Ended December 31,
Years Ended December 31,
2007
2006
2005
2007
2006
2005
$
17.9
$
18.3
$
16.7
$
4.1
$
4.7
$
7.2
43.1
40.7
39.7
11.8
11.0
14.4
(58.0
)
(53.8
)
(54.9
)
(5.6
)
(5.5
)
(5.5
)
1.8
1.7
1.7
(14.5
)
(14.5
)
(0.9
)
1.3
5.3
3.2
2.2
2.6
1.5
(4.9
)
0.6
0.1
0.1
$
6.2
$
12.2
$
2.1
$
(2.0
)
$
(1.7
)
$
16.8
5.75
%
5.50
%
5.75
%
5.75
%
5.50
%
5.75
%
8.00
8.00
8.50
8.00
8.00
8.50
4.00
3.75
3.75
4.00
3.75
3.75
December 31,
2007
2006
9
%
9
%
5
%
5
%
2014
2011
One Percentage Point
Increase
Decrease
$
8.7
$
(8.0
)
$
1.1
$
(1.0
)
Percentage of
Target
Plan Assets
Allocation
December 31,
Range
2007
2006
2007
60
%
64
%
50-70
%
40
36
30-50
100
%
100
%
65
%
68
%
55-75
%
35
32
25-45
100
%
100
%
Postretirement Health
Expected
Defined Benefit
and Life Benefit
Subsidies
Pension Plans
Plans
From Medicare
$
37.3
$
10.6
$
0.3
39.2
12.2
0.4
40.3
14.0
0.6
42.0
15.7
0.7
50.1
17.1
0.9
256.8
104.6
8.3
2007
2006
2005
$
5.2
$
3.5
$
4.8
0.8
0.8
(a)
(0.3
)
(0.3
)
(0.1
)
$
5.7
$
4.0
$
4.7
$
3.6
$
2.6
$
2.9
(a)
Prior to January 1, 2006, the fair value of compensation related to stock options
and the employee stock purchase plan was disclosed but not recognized as a cost. Refer
to
Accounting for Stock-Based Compensation under SFAS No. 123(R)
below.
Weighted-Average
Grant-Date
Shares
Fair Value
798
$
10.28
313
13.26
(300
)
11.77
(23
)
12.93
788
$
10.82
Years Ended December 31,
2007
2006
2005
4.5
%
4.6
%
3.8
%
4
%
42
%
41
%
42
%
3.5 years
3.5 years
3.5 years
$
4.77
$
4.21
$
4.07
258,000
288,000
361,000
Weighted-Average
Stock
Weighted-
Remaining
Aggregate
Options
Average
Contractual
Intrinsic Value
(thousands)
Exercise Price
Term (years)
(millions)
1,212
9.45
258
13.24
(107
)
7.71
(45
)
12.60
1,318
$
10.23
3.4
$
1.2
896
$
9.09
3.2
$
1.2
Weighted Average
Remaining
Stock Exercise
Contractual Life in
Price
Options Outstanding
Years
Options Exercisable
216
4.3
216
151
4.1
151
104
1.2
104
142
3.6
142
103
2.7
70
233
3.3
76
282
4.0
50
87
2.3
87
1,318
3.4
896
2005
$
22.3
3.0
(6.0
)
$
19.3
$
.26
.22
Shares
Treasury
Shares
Issued
Stock
Outstanding
100,320
(15,171
)
85,149
1,422
1,422
100,320
(13,749
)
86,571
571
571
100,320
(13,178
)
87,142
23,000
437
23,437
123,320
(12,741
)
110,579
Years Ended December 31,
2007
2006
2005
$
1,310.6
$
1,109.5
$
1,074.1
274.7
389.8
224.2
342.7
349.3
261.0
617.4
739.1
485.2
$
1,928.0
$
1,848.6
$
1,559.3
Years Ended December 31,
2007
2006
2005
(millions)
$
1,570.5
$
1,337.4
$
1,085.6
163.5
316.7
261.3
1,734.0
1,654.1
1,346.9
194.0
194.5
212.4
$
1,928.0
$
1,848.6
$
1,559.3
$
260.4
$
304.9
$
198.5
27.1
32.0
31.0
287.5
336.9
229.5
127.3
105.5
94.5
45.3
48.8
61.9
3.9
6.3
114.9
178.7
66.8
(16.9
)
8.3
29.5
$
131.8
$
170.4
$
37.3
December 31,
2007
2006
2005
(millions)
$
3,036.4
$
1,800.1
$
2,008.5
51.4
61.3
72.3
$
3,087.8
$
1,861.4
$
2,080.8
March 31,
June 30,
Sept. 30,
Dec. 31,
Year
2007
2007
2007
2007
2007
$
465.0
$
211.1
$
634.7
$
617.2
$
1,928.0
391.8
183.4
522.7
542.6
1,640.5
73.2
27.7
112.0
74.6
287.5
33.7
35.6
30.8
27.2
127.3
12.5
11.5
9.0
12.3
45.3
27.0
(19.4
)
72.2
35.1
114.9
3.5
2.4
3.3
7.7
16.9
(9.9
)
(7.9
)
(3.9
)
(12.1
)
(33.8
)
(5.9
)
(0.5
)
27.2
14.4
35.2
$
39.3
$
(13.4
)
$
45.6
$
25.1
$
96.6
$
.45
$
(.15
)
$
.52
$
.22
$
1.04
$
.45
$
(.15
)
$
.51
$
.18
(2)
$
.94
86.8
87.1
87.9
110.1
93.0
87.2
87.1
89.8
158.4
(2)
105.8
March 31,
June 30,
Sept. 30,
Dec. 31,
Year
2006
2006
2006
2006
2006
$
361.3
$
525.3
$
417.8
$
544.2
$
1,848.6
269.3
445.7
365.7
431.0
1,511.7
92.0
79.6
52.1
113.2
336.9
1.5
(0.1
)
2.5
3.9
19.8
27.3
23.9
34.5
105.5
11.7
14.1
10.9
12.1
48.8
59.0
38.2
17.4
64.1
178.7
4.7
3.5
3.2
3.1
14.5
(1.8
)
(0.5
)
(1.7
)
(2.2
)
(6.2
)
21.5
13.6
6.0
23.1
64.2
$
34.6
$
21.6
$
9.9
$
40.1
$
106.2
$
.40
$
.25
$
.11
$
.46
$
1.22
$
.40
$
.25
$
.11
$
.46
$
1.22
86.3
86.6
86.7
86.8
86.6
86.6
86.9
86.9
87.0
86.8
(1)
Special charges consisted of a $1.5 million charge related to consolidation of office
space in connection with the 2005 restructuring plan, credits of $0.2 million representing
changes in estimate of costs for termination benefits charged in 2005, and a $2.6 million
impairment of an intangible asset established in 2004 relating to the acquisition of NAC.
(2)
Diluted net income per share of $.18 and diluted average number of shares outstanding of 158.4 million represent
corrections to the amounts of $.13 and 122.3 million, respectively, previously reported on Form 10-K as filed February 26, 2008.
Exhibit No.
Description
Certificate of Incorporation of USEC Inc., incorporated by reference to Exhibit 3.1 of the
Registration Statement on Form S-1, filed June 29, 1998 (Commission file number 333-57955).
Certificate of Increase to the Certificate of Designation, Preferences and Rights of Series
A Junior Participating Preferred Stock, incorporated by reference to Exhibit 3.1 of the
Current Report on Form 8-K filed on September 25, 2007 (Commission file number 1-14287).
Amended and Restated Bylaws of USEC Inc., dated December 13, 2007, incorporated by
reference to Exhibit 3.1 of the Current Report on Form 8-K filed on December 13, 2007
(Commission file number 1-14287).
Indenture, dated January 15, 1999, between USEC Inc. and First Union National Bank,
incorporated by reference to Exhibit 4.2 of the Annual Report on Form 10-K for the fiscal
year ended June 30, 1999 (Commission file number 1-14287).
Rights Agreement, dated April 24, 2001, between USEC Inc. and Fleet National Bank, as
Rights Agent, including the form of Certificate of Designation, Preferences and Rights as
Exhibit A, the form of Rights Certificates as Exhibit B and the Summary of Rights as
Exhibit C, incorporated by reference to Exhibit 4.3 of the Registration Statement on Form
8-A filed April 24, 2001 (Commission file number 1-14287).
Indenture dated September 28, 2007, between USEC Inc. and Wells Fargo Bank, N.A.,
incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed on
September 28, 2007 (Commission file number 1-14287).
Lease Agreement between the United States Department of Energy (DOE) and the United
States Enrichment Corporation, dated as of July 1, 1993, including notice of exercise of
option to renew, incorporated by reference to Exhibit 10.1 of the Registration Statement on
Form S-1, filed June 29, 1998 (Commission file number 333-57955).
Supplemental Agreement No. 1 to the Lease Agreement between DOE and the United States
Enrichment Corporation, dated as of December 7, 2006, incorporated by reference to Exhibit
10.2 of the Annual Report on Form 10-K for the year ended December 31, 2006 (Commission
file number 1-14287). (Certain information has been omitted and filed separately pursuant
to confidential treatment under Rule 24b-2).
Contract between United States Enrichment Corporation, Executive Agent of the United States
of America, and AO Techsnabexport, Executive Agent of the Ministry of Atomic Energy,
Executive Agent of the Russian Federation, dated January 14, 1994, as amended (Russian
Contract) incorporated by reference to Exhibit 10.17 of the Registration Statement on Form
S-1, filed June 29, 1998 (Commission file number 333-57955).
Amendment No. 11, dated June 1998, to Russian Contract, incorporated by reference to
Exhibit 10.4 of the Annual Report on Form 10-K for the year ended December 31, 2005
(Commission file number 1-14287).
Amendment No. 12, dated March 4, 1999, to Russian Contract, incorporated by reference to
Exhibit 10.36 of the Annual Report on Form 10-K for the fiscal year ended June 30, 1999
(Commission file number 1-14287).
Amendment No. 13, dated November 11, 1999, to Russian Contract, incorporated by reference
to Exhibit 10.6 of the Annual Report on Form 10-K for the year ended December 31, 2005
(Commission file number 1-14287).
Amendment No. 14, dated October 27, 2000, to Russian Contract, incorporated by reference to
Exhibit 10.7 of the Annual Report on Form 10-K for the year ended December 31, 2005
(Commission file number 1-14287).
Exhibit No.
Description
Amendment No. 15, dated January 18, 2001, to Russian Contract, incorporated by reference to
Exhibit 10.8 of the Annual Report on Form 10-K for the year ended December 31, 2005
(Commission file number 1-14287).
Amendment No. 17, dated December 5, 2007, to Russian Contract. (Certain information has
been omitted and filed separately pursuant to a request for confidential treatment under
Rule 24b-2). (a)
Memorandum of Agreement, dated April 6, 1998, between the Office of Management and Budget
and United States Enrichment Corporation relating to post-privatization liabilities,
incorporated by reference to Exhibit 10.18 of the Registration Statement on Form S-1, filed
June 29, 1998 (Commission file number 333-57955).
Memorandum of Agreement, dated April 20, 1998, between DOE and United States Enrichment
Corporation for transfer of natural uranium and highly enriched uranium and for blending
down of highly enriched uranium, incorporated by reference to Exhibit 10.20 of the
Registration Statement on Form S-1, filed June 29, 1998 (Commission file number 333-57955).
Memorandum of Agreement entered into as of April 18, 1997, between the United States,
acting by and through the United States Department of State and the DOE, and United States
Enrichment Corporation for United States Enrichment Corporation to serve as the United
States Governments Executive Agent under the Agreement between the United States and the
Russian Federation concerning the disposal of highly enriched uranium extracted from
nuclear weapons, incorporated by reference to Exhibit 10.25 of the Registration Statement
on Form S-1/A, filed July 21, 1998 (Commission file number 333-57955).
Memorandum of Agreement, entered into as of June 30, 1998, between DOE and United States
Enrichment Corporation regarding certain worker benefits, incorporated by reference to
Exhibit 10.27 of the Registration Statement on Form S-1/A, filed July 21, 1998 (Commission
file number 333-57955).
Power Contract between Tennessee Valley Authority and United States Enrichment Corporation,
dated July 11, 2000 (TVA Power Contract), incorporated by reference to Exhibit 10.45 of
the Annual Report on Form 10-K for the fiscal year ended June 30, 2000 (Commission file
number 1-14287). (Certain information has been omitted and filed separately pursuant to
confidential treatment under Rule 24b-2).
Supplement No. 1 dated March 2, 2006 to TVA Power Contract, incorporated by reference to
Exhibit 10.2 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006
(Commission file number 1-14287). (Certain information has been omitted and filed
separately pursuant to confidential treatment under Rule 24b-2).
Supplement No. 2 dated March 2, 2006 to TVA Power Contract, incorporated by reference to
Exhibit 10.3 of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006
(Commission file number 1-14287). (Certain information has been omitted and filed
separately pursuant to confidential treatment under Rule 24b-2).
Amendatory Agreement (Supplement No. 3) dated April 3, 2006 to TVA Power Contract,
incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2006 (Commission file number 1-14287). (Certain information has
been omitted and filed separately pursuant to confidential treatment under Rule 24b-2).
Amendatory Agreement (Supplement No. 4) dated June 1, 2007 to Power Contract between
Tennessee Valley Authority and United States Enrichment Corporation, incorporated by
reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the quarter ended June
30, 2007 (Commission file number 1-14287). (Certain information has been omitted and filed
separately pursuant to a request for confidential treatment under Rule 24b-2).
Agreement, dated June 17, 2002, between DOE and USEC Inc., incorporated by reference to
Exhibit 10.54 of the current report on Form 8-K filed June 21, 2002 (Commission file number
1-14287).
Exhibit No.
Description
Modification 1 to Agreement dated June 17, 2002 between DOE and USEC Inc., dated August 20,
2002, incorporated by reference to Exhibit 10.15 of the Annual Report on Form 10-K for the
year ended December 31, 2005 (Commission file number 1-14287).
Cooperative Research and Development Agreement, Development of an Economically Attractive
Gas Centrifuge Machine and Enrichment Process, by and between UT-Battelle, LLC, under its
DOE Contract, and USEC Inc., dated June 30, 2000, Amendment A, dated July 12, 2002, and
Amendment B, dated September 11, 2002, incorporated by reference to Exhibit 10.58 of the
Quarterly Report on Form 10-Q for the quarter ended September 30, 2002 (Commission file
number 1-14287).
Amendment C to the Cooperative Research and Development Agreement, Development of an
Economically Attractive Gas Centrifuge Machine and Enrichment Process, by and between
UT-Battelle, LLC, under its DOE Contract, and USEC Inc., dated February 28, 2007,
incorporated by reference to Exhibit 10.1 of the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2007 (Commission file number 1-14287).
Amendment D to the Cooperative Research and Development Agreement, Development of an
Economically Attractive Gas Centrifuge Machine and Enrichment Process, by and between
UT-Battelle, LLC, under its DOE Contract, and USEC Inc., dated August 10, 2007,
incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2007. (Commission file number 1-14287).
Administrative Order on Consent for Removal Action in the Matter of Starmet CMI, dated
February 6, 2004, between the United States Environmental Protection Agency, United States
Enrichment Corporation, DOE and United States Department of the Army, incorporated by
reference to Exhibit 10.64 of the Annual Report on Form 10-K for the year ended December
31, 2003 (Commission file number 1-14287).
Memorandum of Understanding between USEC Inc. and DOE, dated October 22, 2004, Effectuating
the Transfer of Natural Uranium Hexafluoride for Affected Inventory, incorporated by
reference to Exhibit 10.68 of the current report on Form 8-K filed October 28, 2004
(Commission file number 1-14287).
Memorandum of Agreement between USEC Inc. and DOE, dated as of December 10, 2004, for the
Continued Operation of Portsmouth S&T Facilities for the Processing of Affected Inventory
in Fiscal Year 2005 and Thereafter, incorporated by reference to Exhibit 10.75 of the
current report on Form 8-K filed December 16, 2004 (Commission file number 1-14287).
Amendment No. 1 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated May 16, 2005, incorporated by reference to Exhibit 10.23 of the Annual Report on Form
10-K for the year ended December 31, 2005 (Commission file number 1-14287).
Amendment No. 2 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated February 9, 2006, incorporated by reference to Exhibit 10.1 of the Quarterly Report
on Form 10-Q for the quarter ended March 31, 2006 (Commission file number 1-14287).
Amendment No. 3 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated June 23, 2006, incorporated by reference to Exhibit 10.1 of the Quarterly Report on
Form 10-Q for the quarter ended June 30, 2006 (Commission file number 1-14287).
Amendment No. 4 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated September 18, 2006, incorporated by reference to Exhibit 10.1 of the Quarterly Report
on Form 10-Q for the quarter ended September 30, 2006 (Commission file number 1-14287).
Amendment No. 5 to the December 10, 2004 Memorandum of Agreement between DOE and USEC Inc.,
dated November 30, 2006, incorporated by reference to Exhibit 10.29 of the Annual Report on
Form 10-K for the year ended December 31, 2006 (Commission file number 1-14287).
Exhibit No.
Description
Amended and Restated Revolving Credit Agreement dated as of August 18, 2005 among USEC
Inc., United States Enrichment Corporation, the lenders named therein, JPMorgan Chase Bank,
N.A., as administrative and collateral agent, J.P. Morgan Securities, Inc., Merrill Lynch
Capital and Goldman Sachs Credit Partners, L.P., as joint book managers and joint lead
arrangers, Merrill Lynch Capital and Goldman Sachs Credit Partners, L.P., as co-syndication
agents, GMAC Commercial Finance LLC and Wachovia Bank, National Association, as
co-documentation agents, and CIT Capital Securities, LLC, as co-agent, incorporated by
reference to Exhibit 10.83 of the Current Report on Form 8-K filed on August 23, 2005
(Commission file number 1-14287).
First Amendment to Amended and Restated Revolving Credit Agreement dated as of August 18,
2005 among USEC Inc., United States Enrichment Corporation, the lenders named therein,
JPMorgan Chase Bank, N.A., as administrative and collateral agent, and the other financial
institutions named therein, dated March 6, 2006, incorporated by reference to Exhibit 10.2
of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 (Commission file
number 1-14287).
Second Amendment to Amended and Restated Revolving Credit Agreement among USEC Inc., United
States Enrichment Corporation, the lenders named therein, JPMorgan Chase Bank, N.A., as
administrative and collateral agent, and the other financial institutions named therein,
dated October 16, 2006, incorporated by reference to Exhibit 10.1 of the Current Report on
Form 8-K filed on October 19, 2006 (Commission file number 1-14287).
Third Amendment dated September 21, 2007 to the Amended and Restated Revolving Credit
Agreement, dated as of August 18, 2005, among USEC Inc., United States Enrichment
Corporation, the lenders named therein, JPMorgan Chase Bank, N.A., as administrative and
collateral agent, and the other financial institutions named therein, incorporated by
reference to Exhibit 10.1 of the Current Report on Form 8-K filed on September 25, 2007
(Commission file number 1-14287).
Amended and Restated Omnibus Pledge and Security agreement dated as of August 18, 2005 by
USEC Inc., United States Enrichment Corporation, NAC Holding Inc. and NAC International
Inc., in favor of JPMorgan Chase Bank, N.A., as administrative and collateral agent for the
lenders, incorporated by reference to Exhibit 10.84 of the Current Report on Form 8-K filed
on August 23, 2005 (Commission file number 1-14287).
License dated December 7, 2006 between the United States of America, as represented by DOE,
as licensor, and USEC Inc., as licensee, incorporated by reference to Exhibit 10.34 of the
Annual Report on Form 10-K for the year ended December 31, 2006 (Commission file number
1-14287).
Contract dated June 25, 2007 between USEC Inc. and BWXT Services, Inc., incorporated by
reference to Exhibit 10.2 of the Quarterly Report on Form 10-Q for the quarter ended June
30, 2007 (Commission file number 1-14287). (Certain information has been omitted and filed
separately pursuant to a request for confidential treatment under Rule 24b-2).
Contract dated as of August 16, 2007 between USEC Inc., ATK Space Systems Inc., a
subsidiary of Alliant Techsystems, and Hexcel Corporation, incorporated by reference to
Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2007
(Commission file number 1-14287). (Certain information has been omitted and filed
separately pursuant to a request for confidential treatment under Rule 24b-2).
Contract dated August 30, 2007 between USEC Inc. and Major Tool and Machine, Inc.,
incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2007 (Commission file number 1-14287). (Certain information has
been omitted and filed separately pursuant to a request for confidential treatment under
Rule 24b-2).
Form of Director and Officer Indemnification Agreement, incorporated by reference to
Exhibit 10.25 of the Registration Statement on Form S-1/A, filed July 21, 1998 (Commission
file number 333-57955). (b)
Form of Change in Control Agreement with executive officers. (a)(b)
Form of Change in Control Agreement with senior executive officers. (a)(b)
USEC Inc. 1999 Equity Incentive Plan, incorporated by reference to Exhibit 10.35 of the
Registration Statement on Form S-8, No. 333-71635, filed February 2, 1999. (b)
Exhibit No.
Description
First Amendment to the USEC Inc. 1999 Equity Incentive Plan, incorporated by reference to
Annex B of Schedule 14A filed March 31, 2004, with respect to the 2004 annual meeting of
shareholders (Commission file number 1-14287). (b)
Second Amendment to the USEC Inc. 1999 Equity Incentive Plan, dated November 1, 2007. (a)(b)
Form of Employee Nonqualified Stock Option Agreement, incorporated by reference to Exhibit
4.4 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2004
(Commission file number 1-14287). (b)
Form of Employee Restricted Stock Award Agreement (stock in lieu of annual incentive),
incorporated by reference to Exhibit 4.6 of the Annual Report on Form 10-K for the year
ended December 31, 2004 (Commission file number 1-14287). (b)
Form of Employee Restricted Stock Award Agreement (three year vesting), incorporated by
reference to Exhibit 4.7 of the Annual Report on Form 10-K for the year ended December 31,
2004 (Commission file number 1-14287). (b)
Form of Non-Employee Director Nonqualified Stock Option Agreement, incorporated by
reference to Exhibit 4.8 of the Annual Report on Form 10-K for the year ended December 31,
2004 (Commission file number 1-14287). (b)
Form of Non-Employee Director Restricted Stock Award Agreement Founders Stock and
Incentive Stock, incorporated by reference to Exhibit 4.9 of the Annual Report on Form 10-K
for the year ended December 31, 2004 (Commission file number 1-14287). (b)
Form of Non-Employee Director Restricted Stock Award Agreement Annual Retainers and
Meeting Fees, incorporated by reference to Exhibit 4.10 of the Annual Report on Form 10-K
for the year ended December 31, 2004 (Commission file number 1-14287). (b)
Form of Non-Employee Director Restricted Stock Unit Award Agreement (Annual Retainers and
Meeting Fees). (a)(b)
Form of Non-Employee Director Restricted Stock Unit Award Agreement (Incentive Awards).
(a)(b)
USEC Inc. Pension Restoration Plan, as amended and restated, dated November 1, 2007. (a)(b)
USEC Inc. 401(k) Restoration Plan, incorporated by reference to Exhibits 10.41(a) through
(f) of the Quarterly Report on Form 10-Q for the quarter ended December 31, 1999
(Commission file number 1-14287). (b)
USEC Inc. Supplemental Executive Retirement Plan, dated April 7, 1999 and amended April 25,
2001, incorporated by reference to Exhibit 10.51 of the Annual Report on Form 10-K for the
fiscal year ended June 30, 2001 (Commission file number 1-14287). (b)
Summary Sheet for 2006 Non-Employee Director Compensation, incorporated by reference to
Exhibit 10.1 to the Current Report on Form 8-K filed on December 18, 2006 (Commission file
number 1-14287). (b)
Summary Sheet for 2007 Non-Employee Director Compensation, incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
(Commission file number 1-14287). (b)
Summary of Compensation Arrangements for Certain Executive Officers, incorporated by
reference to Exhibit 10.90 of the Current Report on Form 8-K filed on September 16, 2005
(Commission file number 1-14287). (b)
Summary of Compensation Arrangement with James R. Mellor, incorporated by reference to
Exhibit 10.61 of the Annual Report on Form 10-K for the year ended December 31, 2006
(Commission file number 1-14287). (b)
Exhibit No.
Description
Summary of 2006 Annual Performance Objectives for Executive Officers, incorporated by
reference to Exhibit 10.1 of the Current Report on Form 8-K filed on February 10, 2006
(Commission file number 1-14287). (b)
Summary of 2007 Annual Performance Objectives for Executive Officers, incorporated by
reference to Exhibit 10.1 of the Current Report on Form 8-K filed on February 14, 2007
(Commission file number 1-14287). (b)
USEC Inc. 2006 Supplemental Executive Retirement Plan, as amended and restated, dated
November 1, 2007. (a)(b)
Executive Incentive Plan Summary Plan Description, incorporated by reference to Exhibit
10.1 of the current report on Form 8-K filed on April 28, 2006 (Commission file number
1-14287). (b)
Summary of Employment Arrangement for Chief Financial Officer, incorporated by reference to
Exhibit 10.1 of the Current Report on Form 8-K/A filed on September 11, 2006 (Commission
File Number 1-14287). (b)
USEC Inc. Executive Deferred Compensation Plan, dated November 1, 2007. (a)(b)
USEC Inc. Director Deferred Compensation Plan, dated November 1, 2007. (a)(b)
Subsidiaries of USEC Inc. (a)
Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm. (a)
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). (a)
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). (a)
Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002. (a)
Letter from U.S. Department of State, dated August 23, 2002, in compliance with Rule 0-6 of
the Securities Exchange Act of 1934, incorporated by reference to Exhibit 99.4 of the
Annual Report on Form 10-K for the fiscal year ended June 30, 2002 (Commission file number
1-14287).
Annual CEO Certification dated May 11, 2007, as filed with the New York Stock Exchange. (a)
(a)
Filed herewith
(b)
Management contracts and compensatory plans and arrangements required
to be filed as exhibits pursuant to Item 15(b) of this report.
UNITED STATES ENRICHMENT
CORPORATION |
JOINT STOCK COMPANY
TECHSNABEXPORT |
||||||
By: | /s/ Philip G. Sewell | By: | /s/ Alexey A. Grigoriev | ||||
Philip G. Sewell
Senior Vice President |
Alexey A. Grigoriev
General Director |
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USEC INC.
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By: | ||||
W. Lance Wright | ||||
Senior Vice President, Human Resources
and Administration |
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USEC INC.
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By: | ||||
W. Lance Wright | ||||
Senior Vice President, Human Resources and Administration | ||||
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USEC INC.
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By: | /s/ W. Lance Wright | |||
SVP, Human Resources & Administration | ||||
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USEC Inc.
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By | W. Lance Wright | |||
Its: | Senior Vice President, Human Resources and | |||
Administration | ||||
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USEC Inc.
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By | W. Lance Wright | |||
Its: |
Senior Vice President, Human Resources and
Administration |
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Section | Page | |||||||
ARTICLE I ESTABLISHMENT AND PURPOSE | 1 | |||||||
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1.1. | The Plan | 1 | |||||
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1.2. | Purpose | 1 | |||||
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1.3. | Application of Plan | 1 | |||||
ARTICLE II DEFINITIONS AND CONSTRUCTION | 1 | |||||||
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2.1. | Definitions | 1 | |||||
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2.2. | Gender and Number | 2 | |||||
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2.3. | Severability | 2 | |||||
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2.4. | Applicable Law | 2 | |||||
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2.5. | Plan Not an Employment Contract | 2 | |||||
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2.6. | Definitions to Implement Section 409A. | 2 | |||||
ARTICLE III PARTICIPATION IN THE PLAN | 4 | |||||||
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3.1. | Participants | 4 | |||||
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3.2. | Benefit Payments | 4 | |||||
ARTICLE IV BENEFITS | 5 | |||||||
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4.1. | Amount of Benefits | 5 | |||||
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4.2. | Form of Payment | 5 | |||||
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4.3. | Commencement Date | 5 | |||||
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4.4. | Death Benefits | 6 | |||||
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4.5. | Disability Benefits | 6 | |||||
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4.6. | Funding | 6 | |||||
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4.7. | Tax Withholding | 6 | |||||
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4.8. | Nontransferabilty | 6 | |||||
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4.9. | Specified Employees | 6 | |||||
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4.10. | Application of 409A | 7 | |||||
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4.11. | Acceleration of Payments for Tax Obligations | 7 | |||||
ARTICLE V ADMINISTRATION | 8 | |||||||
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5.1. | Administration | 8 | |||||
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5.2. | Costs | 8 | |||||
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5.3. | Finality of Determination | 8 | |||||
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5.4. | Indemnification and Exculpation | 8 | |||||
ARTICLE VI NAMED FIDUCIARY AND CLAIMS PROCEDURE | 9 | |||||||
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6.1. | Named Fiduciary | 9 | |||||
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6.2. | Payment of Benefits | 9 | |||||
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6.3. | Denied Claim | 9 | |||||
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6.4. | Written Notice | 9 | |||||
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6.5. | Appeal | 10 | |||||
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6.6. | Review of Appeal | 10 | |||||
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6.7. | Hearing | 11 | |||||
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6.8. | Written Decision | 11 | |||||
ARTICLE VII MERGER, AMENDMENT, AND TERMINATION | 12 | |||||||
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7.1. | Merger, Consolidation, or Acquisition | 12 | |||||
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7.2. | Amendment and Termination | 12 |
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(i) | to request a review by the Committee upon written application to the Named Fiduciary; | ||
(ii) | to review pertinent documents with regard to the employee benefit plan created under this Plan; | ||
(iii) | the right to submit issues and comments in writing; | ||
(iv) | to request an extension of time to make a written submission of issues and comments; and | ||
(v) | to request that a hearing be held to consider claimants appeal. |
(i) | If an extension of time is necessary in order to hold a hearing, the Committee shall give the claimant written notice of the extension of time and of the hearing. This notice shall be given prior to any extension. | ||
(ii) | The written notice of extension shall indicate that an extension of time will occur in order to hold a hearing on claimants appeal. The notice shall also specify the place, date, and time of that hearing and the claimants opportunity to participate in the hearing. It may also include any other information the Committee believes may be important or useful to the claimant in connection with the appeal. |
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USEC Inc. 2006 Supplemental Executive Retirement Plan | 1 | |||||
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ARTICLE I INTRODUCTION | 1 | |||||
1.1 |
Establishment
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1 | ||||
1.2 |
Purpose
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1 | ||||
1.3 |
Avoidance of Section 409A Penalties
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1 | ||||
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ARTICLE II DEFINITIONS | 1 | |||||
2.1 |
Accrued Benefit
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1 | ||||
2.2 |
Actuarial Equivalent
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1 | ||||
2.3 |
Administrative Committee or Committee
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1 | ||||
2.4 |
Annuity
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2 | ||||
2.5 |
Beneficiary
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2 | ||||
2.6 |
Benefit Commencement Date
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2 | ||||
2.7 |
Board
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2 | ||||
2.8 |
Cause
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2 | ||||
2.9 |
Claim
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3 | ||||
2.10 |
Claimant
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3 | ||||
2.11 |
Code
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3 | ||||
2.12 |
Compensation Committee
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3 | ||||
2.13 |
Confidential Information
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3 | ||||
2.14 |
Death Benefit
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3 | ||||
2.15 |
Disability
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3 | ||||
2.16 |
Effective Date
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3 | ||||
2.17 |
Employer
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3 | ||||
2.18 |
ERISA
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3 | ||||
2.19 |
Final Average Pay
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3 | ||||
2.20 |
Final Benefit Objective
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4 | ||||
2.21 |
Indemnified Persons
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4 | ||||
2.22 |
Joint and Survivor Annuity
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4 | ||||
2.23 |
Member
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4 | ||||
2.24 |
Months of Service
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4 | ||||
2.25 |
Normal Retirement Date
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4 | ||||
2.26 |
Offset
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4 | ||||
2.27 |
Other Plan or Other Plans
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4 | ||||
2.28 |
Pay
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4 | ||||
2.29 |
Plan
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5 | ||||
2.30 |
Plan Year
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5 | ||||
2.31 |
Primary Social Security Benefit
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5 | ||||
2.32 |
Qualified Plan
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5 | ||||
2.33 |
Related Company
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5 | ||||
2.34 |
Restoration Plan
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5 | ||||
2.35 |
Retirement Benefit
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5 | ||||
2.36 |
Section 409A
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5 | ||||
2.37 |
Section 409A Penalties
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5 | ||||
2.38 |
Specified Employee
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5 |
2.39 |
Single Life Annuity
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5 | ||||
2.40 |
Sponsor
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5 | ||||
2.41 |
Termination of Employment
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5 | ||||
2.42 |
Year of Service
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6 | ||||
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ARTICLE III MEMBERSHIP | 6 | |||||
3.1 |
Membership
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6 | ||||
3.2 |
Commencement of Membership
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6 | ||||
3.3 |
Resumption of Membership
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6 | ||||
3.4 |
Cessation of Membership Following a Change in Status
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6 | ||||
3.5 |
Conditions of Membership
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6 | ||||
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ARTICLE IV VESTING | 8 | |||||
4.1 |
Generally
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8 | ||||
4.2 |
Vesting
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8 | ||||
4.3 |
Unvested Accrued Benefit Forfeited
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8 | ||||
4.4 |
Accelerated Vesting
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8 | ||||
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ARTICLE V DETERMINATION, DISTRIBUTION AND FORFEITURE OF ACCRUED BENEFIT | 8 | |||||
5.1 |
Generally
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8 | ||||
5.2 |
Accrued Benefit
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8 | ||||
5.3 |
Final Benefit Objective
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8 | ||||
5.4 |
Offset
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9 | ||||
5.5 |
Retirement Benefit
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10 | ||||
5.6 |
Lump Sum Death Benefit
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11 | ||||
5.7 |
Forfeiture of Accrued Benefit
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11 | ||||
5.8 |
Facility of Payment
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12 | ||||
5.9 |
Designation or Change of Beneficiary
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12 | ||||
5.10 |
Limited Cashout
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12 | ||||
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ARTICLE VI AMENDMENT AND TERMINATION OF THE PLAN | 13 | |||||
6.1 |
Sponsors Right to Amend or Terminate the Plan
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13 | ||||
6.2 |
Restriction on Amendments
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13 | ||||
6.3 |
Distribution upon Termination
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13 | ||||
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ARTICLE VII PLAN ADMINISTRATION | 13 | |||||
7.1 |
Authority and Responsibility of the Sponsor
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13 | ||||
7.2 |
Composition and Responsibility of the Administrative Committee
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13 | ||||
7.3 |
Powers of the Administrative Committee
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14 | ||||
7.4 |
Administrative Committee Expenses
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14 | ||||
7.5 |
Information to be Supplied by Employer and Members; Notice
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14 | ||||
7.6 |
Claims Procedures
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15 | ||||
7.7 |
Determinations of the Administrative Committee
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16 | ||||
7.8 |
Right to Settle Claims
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16 | ||||
7.9 |
Indemnification
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16 | ||||
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ARTICLE VIII MISCELLANEOUS | 16 |
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8.1 |
Action of the Compensation Committee
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16 | ||||
8.2 |
Adoption by a Related Company
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16 | ||||
8.3 |
Establishment of Trust
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17 | ||||
8.4 |
Unfunded Obligation
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17 | ||||
8.5 |
Taxes
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17 | ||||
8.6 |
No Employment Guarantee
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17 | ||||
8.7 |
No Rights Under Plan Except as Set Forth Herein
|
17 | ||||
8.8 |
Benefits Under Plan Not Taken into Account for Other Benefits
|
18 | ||||
8.9 |
Acceleration of Payments for Tax Obligations
|
18 | ||||
8.10 |
Nonalienability
|
18 | ||||
8.11 |
Entire Agreement
|
18 | ||||
8.12 |
Gender and Number
|
18 | ||||
8.13 |
Headings
|
18 | ||||
8.14 |
Governing Law
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18 | ||||
8.15 |
Severability
|
19 | ||||
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Schedule A | A-1 | |||||
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Schedule B | B-1 |
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USEC Inc. | ||||
By: | W. Lance Wright | |||
Its: | SVP, Human Resources & Administration | |||
19
A-1
Years of Service | Final Benefit Objective | |
Less than 5 | 0% | |
At least 5 but less than 7 | 30% of Final Average Pay | |
At least 7 but less than 10 | 40% of Final Average Pay | |
10 or more | 50% of Final Average Pay |
B-1
2
3
4
5
6
7
8
9
Completed Years of Service | Percentage of Account Vested | |||
Less than 2
|
0 | % | ||
2 but less than 3
|
50 | % | ||
3 or more
|
100 | % |
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USEC INC.
|
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By: | W. Lance Wright | |||
Title: Senior Vice President, Human Resources & Administration | ||||
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USEC INC.
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By: | W. Lance Wright | |||
Title: Senior Vice President, | ||||
Human Resources & Administration | ||||
12
Name of Subsidiary | State of Incorporation | |
United States Enrichment Corporation
|
Delaware | |
NAC International Inc.
|
Delaware |
1. | I have reviewed this Amendment No. 1 to the annual report on Form 10-K of USEC Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
February 29, 2008 | /s/ John K. Welch | |||
John K. Welch | ||||
President and Chief Executive Officer |
1. | I have reviewed this Amendment No. 1 to the annual report on Form 10-K of USEC Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
February 29, 2008 | /s/ John C. Barpoulis | |||
John C. Barpoulis | ||||
Senior Vice President and Chief Financial Officer |
February 29, 2008 | /s/ John K. Welch | |||
John K. Welch | ||||
President and Chief Executive Officer | ||||
February 29, 2008 | /s/ John C. Barpoulis | |||
John C. Barpoulis | ||||
Senior Vice President and Chief Financial Officer | ||||
þ
|
Without qualification | |
|
or | |
o
|
With qualification |
By
|
/s/ John K. Welch
|