Delaware
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52-2107911
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(State of incorporation)
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(I.R.S. Employer Identification No.)
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Two Democracy Center, 6903 Rockledge Drive, Bethesda, Maryland 20817
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(301) 564-3200
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.10 per share
Preferred Stock Purchase Rights
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New York Stock Exchange
New York Stock Exchange
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Page
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PART I
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PART II
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PART III
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PART IV
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•
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supply LEU to both domestic and international utilities for use in about 150 nuclear reactors worldwide;
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are deploying what we believe is the world’s most advanced uranium enrichment technology, known as the American Centrifuge;
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enrich uranium at the Paducah gaseous diffusion plant (“GDP”) that we lease from the U.S. Department of Energy (“DOE”);
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are the exclusive executive agent for the U.S. government under a nuclear nonproliferation program with Russia, known as Megatons to Megawatts;
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provide transportation and storage systems for spent nuclear fuel and provide nuclear and energy consulting services; and
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perform contract work for DOE and its contractors at the Paducah and Portsmouth sites.
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design, fabrication and implementation of spent nuclear fuel technologies including the high capacity MAGNASTOR™ system,
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Years Ended December 31,
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2010
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2009
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2008
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United States
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$ | 1,487.5 | $ | 1,402.2 | $ | 1,212.5 | ||||||
Foreign:
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Japan
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199.7 | 305.0 | 242.6 | |||||||||
Other
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348.2 | 329.6 | 159.5 | |||||||||
547.9 | 634.6 | 402.1 | ||||||||||
$ | 2,035.4 | $ | 2,036.8 | $ | 1,614.6 |
•
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except as provided in the 2002 DOE-USEC Agreement (described under “Business and Properties – 2002 DOE-USEC Agreement and Related Agreements with DOE”), 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 2016;
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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;
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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;
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DOE is responsible for the costs of decontamination and decommissioning of the plants;
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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 DOE’s decontamination and decommissioning costs that are a result of our removing the capital improvements;
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DOE must indemnify us for costs and expenses related to claims asserted against us or incurred by us arising out of the U.S. government’s operation, occupation, or use of the plants prior to July 28, 1998; and
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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, DOE’s financial obligations under the indemnity are capped at $12.6 billion for each nuclear incident or precautionary evacuation occurring inside the United States to which the indemnity applies.
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Operated our lead cascade of production-ready AC100 machines in a commercial plant cascade configuration and accumulated significant runtime;
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Demonstrated that the cascade operates as designed and that a range of commercial product assays can be produced for our customers;
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Executed an agreement with Toshiba Corporation (“Toshiba”) and Babcock & Wilcox Investment Company (“B&W”) for a $200 million strategic investment and closed on the first phase of funding totaling $75 million;
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Initiated discussions with Japanese export credit agencies regarding financing up to $1 billion of the cost of completing the ACP;
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Completed a March 2010 cooperative Research, Development and Demonstration Agreement with DOE for pro-rata cost sharing support for continued American Centrifuge activities with a total cost of $90 million;
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Produced detailed updates to project scope, cost and schedule based on close collaboration with our suppliers;
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Restarted limited engineering work on portions of the physical plant infrastructure related to feeding and withdrawing uranium to facilitate the ramp up of construction activities in the future;
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Continued machine technology development in Oak Ridge in support of lead cascade testing, value engineering and increasing machine reliability and productivity; and
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Submitted a comprehensive update to our DOE loan guarantee application in July 2010.
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Milestones under
2002 DOE-USEC Agreement
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Milestone
Date
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Achievement
Date
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Begin refurbishment of K-1600 centrifuge testing facility in Oak Ridge, Tennessee
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December 2002
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December 2002
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Build and begin testing a centrifuge end cap
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January 2003
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January 2003
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Submit license application for Lead Cascade to NRC
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April 2003
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February 2003
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NRC dockets Lead Cascade application
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June 2003
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March 2003
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First rotor tube manufactured
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November 2003
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September 2003
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Centrifuge testing begins
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January 2005
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January 2005
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Submit license application for commercial plant to NRC
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March 2005
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August 2004
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NRC dockets commercial plant application
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May 2005
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October 2004
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Begin Lead Cascade centrifuge manufacturing
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June 2005
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April 2005
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Begin commercial plant construction and refurbishment
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June 2007
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May 2007
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Lead Cascade operational and generating product assay in a range usable by commercial nuclear power plants
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October 2007
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October 2007
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Secure firm financing commitment(s) for the construction of the commercial American Centrifuge Plant with an annual capacity of approximately 3.5 million SWU per year
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November 2011
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Begin commercial American Centrifuge Plant operations
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May 2014*
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Commercial American Centrifuge Plant annual capacity at 1 million SWU per year
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August 2015*
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Commercial American Centrifuge Plant annual capacity of approximately 3.5 million SWU per year
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September 2017*
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* USEC and DOE have agreed to discuss adjustment of this milestone as may be appropriate based on a revised deployment plan to be provided to DOE by January 30, 2012 following completion of the November 2011 financing milestone.
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USEC,
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Urenco, a consortium of companies owned or controlled by the British and Dutch governments and by two German utilities,
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a multinational consortium controlled by Areva, a company approximately 90% owned by the French government, and
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the Russian government’s State Atomic Energy Corporation (“Rosatom”), which sells LEU through TENEX, a Russian government-owned entity.
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No. of Employees
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at December 31,
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Location
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2010
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2009
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Paducah GDP
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Paducah, KY
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1,185 | 1,210 | ||||||
Portsmouth site
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Piketon, OH
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1,157 | 1,106 | ||||||
American Centrifuge
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Primarily Oak Ridge, TN and Piketon, OH
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453 | 442 | ||||||
NAC
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Primarily Norcross, GA
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60 | 57 | ||||||
Headquarters
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Bethesda, MD
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94 | 93 | ||||||
Total Employees
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2,949 | 2,908 |
Number of
Employees
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Contract
Term
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Paducah GDP:
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USW Local 5-550
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574
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July 2016
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SPFPA Local 111
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85
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March 2012
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Portsmouth site:
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USW Local 5-689
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522
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May 2015
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SPFPA Local 66
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95
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August 2012
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·
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Matters relating to the Transactions require substantial commitments of time and resources by our management, whether or not the remaining Transactions are completed, which could otherwise have been devoted to other opportunities that may have been beneficial to us, including pursuing other strategic options or sources of capital;
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The second closing of the Transactions is conditioned on our obtaining a conditional commitment for a loan guarantee of not less than $2 billion from DOE. The securities purchase agreement may be terminated by any party if the second closing does not occur by June 30, 2011. If the second closing is not consummated, our ability to continue to spend on the American Centrifuge project would be limited and our anticipated sources of near term liquidity could be affected;
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Our loan guarantee application includes the $200 million investment as part of the sources of funds for the American Centrifuge project. The strategic investment was also intended in part to address financial concerns of DOE with respect to the ability of the American Centrifuge project to mitigate cost and other risk. If the remaining Transactions are not consummated or are delayed significantly, this would adversely affect our ability to obtain a loan guarantee (which is a condition to the third closing);
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We need significant additional financing to complete construction of the American Centrifuge Plant beyond the DOE loan guarantee and the proceeds of the Transactions, and we will need to demonstrate the availability of that funding in order to obtain the DOE loan guarantee (which is a condition of the third closing). We have initiated discussions with Japanese export credit agencies (“ECAs”) for additional financing of up to $1 billion. Our ability to obtain Japanese ECA financing is highly dependent on the strategic investment by Toshiba. If the remaining Transactions are not consummated or are delayed significantly and our ability to obtain Japanese ECA financing is adversely affected, this would subsequently adversely affect our ability to obtain a DOE loan guarantee, consummate the third closing and complete the American Centrifuge project; and
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If the remaining Transactions are not consummated, we may be unable to raise capital from alternative sources on terms favorable to us, if at all. If the remaining Transactions are not consummated or are delayed significantly and we are unable to raise capital from alternative sources, our business and prospects (including the American Centrifuge project) may be substantially harmed and our stock price may decline.
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Success in potential efforts to sell our low enriched uranium in connection with Toshiba’s nuclear power plant proposals, including Toshiba’s success in nuclear reactor sales;
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Success of efforts to identify potential opportunities in our contract services segment; and
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Our success in achieving cost savings and other benefits through the manufacturing joint venture with B&W.
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our ability to get loan guarantees or other support from the U.S. government,
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our ability to meet the closing conditions of the second and third phases of the $200 million strategic transaction with Toshiba and B&W and to otherwise address the financial concerns identified by DOE,
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our ability to satisfy DOE that efforts we have taken, including with respect to lead cascade operations and efforts to reduce risk have addressed their concerns,
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the estimated costs, efficiency, timing and return on investment of the deployment of the American Centrifuge Plant (described below),
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our ability to secure and maintain a sufficient number of long-term SWU purchase commitments from customers on satisfactory terms, including adequate prices,
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the level of success of our current operations,
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SWU prices,
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USEC’s perceived competitive position and investor confidence in our industry and in us,
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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,
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additional downgrades in our credit rating,
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market price and volatility of our common stock,
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general economic and capital market conditions,
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conditions in energy markets,
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regulatory developments, including changes in laws and regulations, and
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our reliance on LEU delivered to us under the Russian Contract and uncertainty regarding deliveries and market based components of prices under the Russian Contract, and restrictive covenants in the agreements governing our credit facility and in our outstanding notes and any future financing arrangements that limit our operating and financial flexibility.
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November 2011 – Secure firm financing commitment(s) for the construction of the commercial American Centrifuge Plant with an annual capacity of approximately 3.5 million SWU per year;
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May 2014 – begin commercial American Centrifuge Plant operations;
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August 2015 – commercial American Centrifuge Plant annual capacity at 1 million SWU per year; and
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September 2017 – commercial American Centrifuge Plant annual capacity of approximately 3.5 million SWU per year.
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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;
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cause us to fail to meet one or more milestones under the 2002 DOE-USEC Agreement (including any potential adjustments to the remaining three milestones that we may agree to with DOE following satisfaction of the November 2011 financing milestone), which could cause DOE to exercise the remedies described in the risk factor relating to the 2002 DOE-USEC Agreement;
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make it more difficult for us to attract and retain customers and adversely affect our ability to compete with other enrichment plants being built in the U.S.;
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make it more difficult for us to maintain key suppliers for the ACP and the manufacturing infrastructure developed over the last several years; and
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extend the time under which we are contractually or otherwise required to continue to operate our high-cost Paducah GDP.
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The success of our efforts to optimize the machine we expect to deploy in the ACP;
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The performance and reliability of individual components built by our strategic suppliers;
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Issues with respect to the performance of our strategic suppliers; and
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Differences in actual commercial plant conditions from the conditions used to generate our test data.
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Our ability to negotiate an acceptable power arrangement with TVA or other suppliers of power;
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Our success in obtaining a contract with DOE for enriching a portion of the DOE’s depleted uranium stockpile on satisfactory terms, in sufficient amount, or at all; and
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SWU supply and demand and the outcome of discussions with customers about their near term SWU supply needs.
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equipment breakdowns,
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interruptions of electric power, including those interruptions permitted under the TVA power agreement, or an inability to purchase electric power at an acceptable price,
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regulatory enforcement actions,
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labor disruptions,
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unavailability or inadequate supply of uranium feedstock,
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extreme weather conditions,
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natural or other disasters, including seismic activity in the vicinity of the Paducah GDP, which is located near the New Madrid fault line, or
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accidents or other incidents.
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LEU and uranium production levels and costs in the industry,
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supply and demand shifts,
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actions taken by governments to regulate, protect or promote trade in nuclear material, including the continuation of existing restrictions on unfairly priced imports,
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actions taken by governments to narrow, reduce or eliminate limits on trade in nuclear material, including the decrease or elimination of existing restrictions on unfairly priced imports,
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actions of competitors,
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exchange rates,
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availability and cost of alternate fuels, and
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inflation.
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accidents, terrorism or other incidents at nuclear facilities or involving shipments of nuclear materials,
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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,
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disruptions in other areas of the nuclear fuel cycle, such as uranium supplies or conversion,
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civic opposition to, or changes in government policies regarding, nuclear operations,
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business decisions concerning reactors or reactor operations,
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the need for generating capacity, or
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consolidation within the electric power industry.
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leases for the gaseous diffusion plants and American Centrifuge facilities,
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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,
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the 2002 DOE-USEC Agreement and other agreements that address issues relating to the domestic uranium enrichment industry and the American Centrifuge technology,
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electric power purchase agreements with the Tennessee Valley Authority,
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contract work for DOE and DOE contractors at the Portsmouth site and Paducah GDP, which work at the Portsmouth site is currently in transition as described below, and
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NAC consulting and spent fuel storage and transportation activities.
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The potential impact on USEC employees and potential severance and other costs to USEC. We have approximately 1,100 employees working at the Portsmouth site supporting DOE, its activities and the cold shutdown contract.
As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contract Services Segment,” o
ur severance liability could be up to approximately $25 million with DOE owing a portion of this amount, estimated at $18.5 million. We are currently in discussions with DOE and the D&D contractor concerning strategies to avoid or lessen these potential severance payments, however, we may not be successful in mitigating these payments and the amount of our severance obligations could be material and could adversely affect our results of operations and financial condition
;
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The potential pension and post retirement benefits costs to USEC. The cessation of our contract services activities in Portsmouth will trigger closing adjustments to our pension and postretirement benefit. As a result, certain costs may be accelerated. Although we believe a portion of such costs would be recoverable from DOE under our contract and applicable cost accounting standards, we may not be able to recover those costs in the amounts we anticipate or at all.
As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contract Services Segment,” w
e recognized approximately $0.4 million in our cost of sales for December 2010 related to unamortized prior service costs based on our employee population at Portsmouth. As we receive additional information on the timing and number of employees leaving USEC, we may need to recognize significant additional costs, which could adversely affect our results of operations and financial condition. Closing adjustments from our pension plan could be up to approximately $32 million and for our postretirement benefit plan up to approximately $15 million, before cost recoveries from DOE. We are currently in discussions with DOE and the D&D contractor concerning strategies to avoid or lessen these potential closing adjustments from our pension and postretirement benefit plans, however, we may not be successful in mitigating these costs and these costs could adversely affect our results of operations and financial condition;
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The potential impact of the loss of employees on work we perform to comply with requirements of our certificate with the NRC for the Portsmouth facility;
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As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contract Services Segment,” w
e have property, plant and equipment at the Portsmouth site of approximately $14.6 million, net of accumulated depreciation, remaining on our consolidated balance sheet as of December 31, 2010. These assets are depreciated over their remaining useful life and, based on current events, depreciation of these assets has been accelerated to comply with DOE and the D&D contractors tentative de-lease schedule. This impact will be more significant if we are not able to obtain work as a subcontractor and extend work we currently perform providing infrastructure and support services to the site tenants;
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The potential impact of our de-lease of facilities at Portsmouth on our activities with respect to the American Centrifuge plant, including, but not limited to, potential reduction in flexibility with respect to the storage of materials, potential increased costs of site services and use of site facilities, potential increased interferences with our activities on site and potential increased difficulties in obtaining services;
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The potential impact on our ability to collect unbilled amounts from DOE.
As a part of performing contract work for DOE, certain contractual issues, scope of work uncertainties, and various disputes arise from time to time.
As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contract Services Segment,” we believe that as of December 31, 2010 additional amounts can be billed to DOE and revenue of approximately $3 million may be recognizable. There is also the potential for additional revenue to be recognized related to our valuation allowances pending the outcome of Defense Contract Audit Agency (“DCAA”) audits and DOE reviews. In addition, $77.3 million of receivables related directly to DOE or DOE contractors remain on our consolidated balance sheet as of December 31, 2010, including $10.9 million of past due receivables and $27.7 million of unbilled receivables where revenue has been previously recorded, and the timing and amount of recovery are uncertain. The termination of the cold shutdown contract could adversely affect our ability to timely recover these or other amounts we may be owed from DOE; and
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The potential impact on the cost of remaining services and activities. The reduction of the scope of work performed by USEC for DOE and the transition of the work to the D&D contractor could adversely impact the costs to us at the Portsmouth site and throughout the rest of the company. Costs of work self-performed by us could increase due to the increased allocation of overhead and other costs to such work. Costs of contracting with the D&D contractor to perform work previously performed by us could be higher than current costs.
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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 or contravening persons and our Board in good faith determines that such person knew or should have known that its ownership would constitute a foreign ownership review event (other than shares for which our Board determined at the time of the person’s purchase that the ownership of, or exercise of rights with respect to, such shares did not at such time constitute an adverse regulatory occurrence), the redemption price or exchange value is required to be the lesser of fair market value and the person’s purchase price for the shares redeemed or exchanged.
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Form of payment:
Cash, securities or a combination, valued by our Board in good faith.
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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 holders, we may redeem shares held by such holders on the same day that we provide notice.
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Name
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Age
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Position
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John K. Welch
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60
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President and Chief Executive Officer
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John C. Barpoulis
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46
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Senior Vice President and Chief Financial Officer
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Christine M. Ciccone
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46
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Senior Vice President, External Relations
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Peter B. Saba
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49
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Senior Vice President, General Counsel and Secretary
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Philip G. Sewell
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64
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Senior Vice President, American Centrifuge and Russian HEU
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Robert Van Namen
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49
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Senior Vice President, Uranium Enrichment
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W. Lance Wright
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63
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Senior Vice President, Human Resources and Administration
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John M.A. Donelson
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46
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Vice President, Marketing and Sales
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Stephen S. Greene
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53
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Vice President, Finance and Treasurer
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J. Tracy Mey
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50
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Vice President and Chief Accounting Officer
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E. John Neumann
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63
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Vice President, Government Relations
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Paul E. Sullivan
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58
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Vice President, American Centrifuge and Chief Engineer
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2010
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2009
|
|||||||||||||||
High
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Low
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High
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Low
|
|||||||||||||
First Quarter ended March 31
|
$ | 6.00 | $ | 3.61 | $ | 6.00 | $ | 3.26 | ||||||||
Second Quarter ended June 30
|
6.50 | 3.90 | 7.24 | 4.31 | ||||||||||||
Third Quarter ended September 30
|
5.88 | 4.51 | 6.52 | 3.22 | ||||||||||||
Fourth Quarter ended December 31
|
6.35 | 4.94 | 4.98 | 3.50 |
Plan category
|
Number of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of
outstanding
options, warrants
and rights
|
Number of securities
remaining available
for future issuance
under equity
compensation plans
|
|||||||||
Equity compensation plans approved by security holders
|
3,552,378 | $ | 6.20 | 2,686,786 | (1) | |||||||
Equity compensation plans not approved by security holders
|
- | - | - | |||||||||
Total
|
3,552,378 | 2,686,786 |
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(1)
|
Includes approximately 1,745,576 shares with respect to which awards are available for issuance under the USEC Inc. 2009 Equity Incentive Plan (net of awards which terminate or are cancelled without being exercised or that are settled for cash) and approximately 941,210 shares available for issuance under the Employee Stock Purchase Plan.
|
December 31,
|
December 31,
|
December 31,
|
December 31,
|
December 31,
|
December 31,
|
|||||||||||||||||||
|
2005
|
2006
|
2007
|
2008
|
2009
|
2010
|
||||||||||||||||||
USEC Inc.
|
$ | 100.00 | $ | 106.44 | $ | 75.31 | $ | 37.57 | $ | 32.22 | $ | 50.38 | ||||||||||||
S&P 500 Index
|
$ | 100.00 | $ | 115.79 | $ | 122.16 | $ | 76.96 | $ | 97.33 | $ | 111.99 | ||||||||||||
Peer Group Index
1
|
$ | 100.00 | $ | 117.29 | $ | 145.97 | $ | 97.24 | $ | 113.39 | $ | 124.07 | ||||||||||||
|
(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 issuer’s stock market capitalization at the beginning of each year for which a return is indicated.
|
Years Ended December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(millions, except per share data)
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Separative work units
|
$ | 1,521.4 | $ | 1,647.0 | $ | 1,175.5 | $ | 1,570.5 | $ | 1,337.4 | ||||||||||
Uranium
|
236.1 | 180.7 | 217.1 | 163.5 | 316.7 | |||||||||||||||
Contract services
|
277.9 | 209.1 | 222.0 | 194.0 | 194.5 | |||||||||||||||
Total revenue
|
2,035.4 | 2,036.8 | 1,614.6 | 1,928.0 | 1,848.6 | |||||||||||||||
Cost of sales:
|
||||||||||||||||||||
Separative work units and uranium
|
1,623.2 | 1,640.3 | 1,202.2 | 1,473.6 | 1,349.2 | |||||||||||||||
Contract services
|
253.8 | 191.8 | 183.6 | 166.9 | 162.5 | |||||||||||||||
Total cost of sales
|
1,877.0 | 1,832.1 | 1,385.8 | 1,640.5 | 1,511.7 | |||||||||||||||
Gross profit
|
158.4 | 204.7 | 228.8 | 287.5 | 336.9 | |||||||||||||||
Special charges
|
- | 4.1 | (1) | - | - | 3.9 | (2) | |||||||||||||
Advanced technology costs
|
110.2 | 118.4 | 110.2 | 127.3 | 105.5 | |||||||||||||||
Selling, general and administrative
|
58.9 | 58.8 | 54.3 | 45.3 | 48.8 | |||||||||||||||
Other (income)
|
(44.4 | ) (3) | (70.7 | ) (4) | - | - | - | |||||||||||||
Operating income
|
33.7 | 94.1 | 64.3 | 114.9 | 178.7 | |||||||||||||||
Preferred stock issuance costs
|
6.6 | (5) | - | - | - | - | ||||||||||||||
Interest expense
|
0.6 | 1.2 | 17.3 | 16.9 | 14.5 | |||||||||||||||
Interest (income)
|
(0.4 | ) | (1.3 | ) | (24.7 | ) | (33.8 | ) | (6.2 | ) | ||||||||||
Income before income taxes
|
26.9 | 94.2 | 71.7 | 131.8 | 170.4 | |||||||||||||||
Provision for income taxes
|
19.4 | 35.7 | 23.0 | 35.2 | 64.2 | |||||||||||||||
Net income
|
$ | 7.5 | $ | 58.5 | $ | 48.7 | $ | 96.6 | $ | 106.2 | ||||||||||
Net income per share –
|
||||||||||||||||||||
Basic
|
$ | .07 | $ | .53 | $ | .44 | $ | 1.04 | $ | 1.22 | ||||||||||
Diluted
|
$ | .05 | $ | .37 | $ | .35 | $ | .94 | $ | 1.22 |
December 31,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
(millions)
|
||||||||||||||||||||
Balance Sheet Data
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 151.0 | $ | 131.3 | $ | 248.5 | $ | 886.1 | (6) | $ | 171.4 | |||||||||
Inventories
|
1,522.5 | 1,301.2 | 1,231.9 | 1,153.4 | 924.2 | |||||||||||||||
Property, plant and equipment, net
|
1,231.4 | 1,115.1 | 736.1 | 292.2 | 189.9 | |||||||||||||||
Total assets
|
3,848.2 | 3,532.1 | 3,055.3 | 3,087.8 | 1,861.4 | |||||||||||||||
Current portion of long-term debt
|
- | - | 95.7 | - | - | |||||||||||||||
Long-term debt
|
660.0 | 575.0 | 575.0 | 725.0 | (6) | 150.0 | ||||||||||||||
Convertible preferred stock
|
78.2 | (5) | - | - | - | - | ||||||||||||||
Other long-term liabilities
|
527.7 | 598.9 | 601.5 | (7) | 337.5 | 300.3 | ||||||||||||||
Stockholders’ equity
|
1,313.8 | 1,275.6 | 1,162.4 | (7) | 1,309.5 | (6) | 986.0 |
(1)
|
The demobilization of the American Centrifuge project resulted in special charges of $2.5 million for one-time termination benefits consisting of severance payments and short-term health care coverage and $1.6 million for various contract terminations.
|
(2)
|
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.
|
(3)
|
Other income in 2010 consists of pro-rata cost sharing support from DOE for continued funding of American Centrifuge activities.
|
(4)
|
Other income in 2009 consists of distributions paid to USEC of custom duties collected by the U.S. government as a result of trade actions.
|
(5)
|
In September 2010, the first closing of $75 million occurred under a planned $200 million investment by Toshiba and B&W. The balance of $78.2 million as of December 31, 2010 includes $3.2 million of paid or accrued paid-in-kind dividends.
|
(6)
|
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.
|
(7)
|
Retiree benefit plan asset values declined in 2008 which contributed to the increase in other long-term liabilities and the decrease in stockholders’ equity. Subsequently in 2009, retiree benefit asset values increased as financial markets improved. See Note 12 to the consolidated financial statements.
|
·
|
supply LEU to both domestic and international utilities for use in about 150 nuclear reactors worldwide;
|
·
|
are deploying what we believe is the world’s most advanced uranium enrichment technology, known as the American Centrifuge;
|
·
|
enrich uranium at the Paducah gaseous diffusion plant (“GDP”) that we lease from the U.S. Department of Energy (“DOE”);
|
·
|
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 DOE and its contractors at the Paducah and Portsmouth sites; and
|
·
|
provide transportation and storage systems for spent nuclear fuel and provide nuclear and energy consulting services.
|
·
|
Manufactured and assembled approximately 40 AC100 series centrifuges installed in our Lead Cascade testing program. This cascade, which began operation in March, demonstrated that our strategic suppliers could manufacture and assemble the machines in accordance with our quality standards and that the ACP staff could install and operate the machines in a commercial plant configuration. The operation of these machines significantly increased the AC100 series run time to over 400,000 hours since the summer of 2009, providing further operational data and experience for the plant staff.
|
·
|
Continued manufacturing of centrifuge components at a rate of approximately eight machines each month. This keeps the manufacturing infrastructure in place, productive and prepared to transition to high-volume production as DOE reviews our loan guarantee application. To gain additional machine hours of operation, in late 2010 and early 2011 we assembled approximately two dozen AC100 machines that will operate during 2011.
|
·
|
Continued to work with B&W Technical Services Group, Inc. toward establishing a joint venture to better integrate the process of building components and assembling the machines. Their employees have been producing the classified AC100 components at USEC’s American Centrifuge Technology and Manufacturing Center in Oak Ridge, Tennessee. Additional steps were taken in 2010 to bring the joint venture into effect and we are currently working to make the joint venture fully operational.
|
·
|
Completed a $90 million cooperative agreement with DOE for pro-rata cost sharing support for continued American Centrifuge activities. This agreement supported continued operation of the AC100 cascade, manufacturing of additional AC100 machines and refinement of the rotor tube manufacturing process in anticipation of high-volume manufacturing following the close of financing. Work under that agreement has now been completed.
|
·
|
Completed a review of the company’s strategic alternatives that resulted in an agreement for a $200 million strategic investment by Babcock & Wilcox Investment Company (“B&W”) and Toshiba Corporation (“Toshiba”) in May 2010. The first phase investment of $75 million closed in September 2010.
|
·
|
Submitted a comprehensive update to our application to the DOE Loan Guarantee Office in July 2010. In October 2010, following an initial technical review of our updated application, DOE provided us with a draft term sheet that has served as the framework for discussions on terms between DOE and USEC.
|
·
|
Operated the Paducah GDP at its highest level of equipment utilization in 30 years. Although the plant is over 50 years old, it has operated at its highest efficiency in decades over the past several years as the plant staff works to keep equipment in peak condition.
|
·
|
Prepared leased facilities at the former Portsmouth GDP for accelerated turnover to DOE for decontamination and decommissioning. DOE awarded the D&D contract to a new contractor and USEC de-leased several large facilities on September 30, 2010, including three production buildings with approximately 75 acres under roof. We salvaged equipment and supplies that may be used at our Paducah plant. We will continue work at the site through March 2011 under a DOE contract but we anticipate transitioning the majority of our employees at the site to the D&D contractor. See “—Contract Services Segment” below.
|
·
|
Maintained the highly successful “Megatons to Megawatts” program that recycles former Soviet-era nuclear warheads into LEU to fuel nuclear power plants. The program has eliminated the equivalent of 16,500 nuclear warheads as of December 31, 2010 and is on track to finish down blending the equivalent of 20,000 warheads by the completion of the Russian Contract in 2013.
|
·
|
sales of the SWU component of LEU,
|
·
|
sales of both the SWU and uranium components of LEU, and
|
·
|
sales of uranium.
|
December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Long-term SWU price indicator ($/SWU)
|
$ | 158.00 | $ | 165.00 | $ | 159.00 | ||||||
UF
6
:
|
||||||||||||
Long-term price composite ($/KgU)
|
190.07 | 167.77 | 195.15 | |||||||||
Spot price indicator ($/KgU)
|
173.00 | 120.00 | 140.00 |
|
·
|
The weighted average expected return on benefit plan assets was 7.7% for 2009, 7.5% for 2010 and is 7.5% for 2011. 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 $3.6 million and postretirement health and life costs by $0.3 million.
|
|
·
|
A weighted average discount rate of 5.7% was used at December 31, 2010 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 $55.7 million and postretirement health and life benefit obligations by $10.6 million, and the resulting changes in the valuations would increase annual pension costs by $6.1 million and postretirement health and life benefit costs by $1.1 million.
|
|
·
|
The healthcare costs trend rates are 8.0% projected in 2011 reducing to a final trend rate of 5.0% by 2018. 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 $8.9 million and would increase costs by about $1.1 million.
|
2010
|
2009
|
Change
|
%
|
|||||||||||||
(millions)
|
||||||||||||||||
LEU segment
|
||||||||||||||||
Revenue:
|
||||||||||||||||
SWU revenue
|
$ | 1,521.4 | $ | 1,647.0 | $ | (125.6 | ) | (8 | )% | |||||||
Uranium revenue
|
236.1 | 180.7 | 55.4 | 31 | % | |||||||||||
Total
|
1,757.5 | 1,827.7 | (70.2 | ) | (4 | )% | ||||||||||
Cost of sales
|
1,623.2 | 1,640.3 | 17.1 | 1 | % | |||||||||||
Gross profit
|
$ | 134.3 | $ | 187.4 | $ | (53.1 | ) | (28 | )% | |||||||
Contract services segment
|
||||||||||||||||
Revenue
|
$ | 277.9 | $ | 209.1 | $ | 68.8 | 33 | % | ||||||||
Cost of sales
|
253.8 | 191.8 | (62.0 | ) | (32 | )% | ||||||||||
Gross profit
|
$ | 24.1 | $ | 17.3 | $ | 6.8 | 39 | % | ||||||||
Total
|
||||||||||||||||
Revenue
|
$ | 2,035.4 | $ | 2,036.8 | $ | (1.4 | ) | - | ||||||||
Cost of sales
|
1,877.0 | 1,832.1 | (44.9 | ) | (2 | )% | ||||||||||
Gross profit
|
$ | 158.4 | $ | 204.7 | $ | (46.3 | ) | (23 | )% |
2010
|
2009
|
Change
|
%
|
|||||||||||||
Gross profit
|
$ | 158.4 | $ | 204.7 | $ | (46.3 | ) | (23 | )% | |||||||
Special charges
|
- | 4.1 | 4.1 | 100 | % | |||||||||||
Advanced technology costs
|
110.2 | 118.4 | 8.2 | 7 | % | |||||||||||
Selling, general and administrative
|
58.9 | 58.8 | (0.1 | ) | - | |||||||||||
Other (income)
|
(44.4 | ) | (70.7 | ) | (26.3 | ) | (37 | )% | ||||||||
Operating income
|
33.7 | 94.1 | (60.4 | ) | (64 | )% | ||||||||||
Preferred stock issuance costs
|
6.6 | - | (6.6 | ) | - | |||||||||||
Interest expense
|
0.6 | 1.2 | 0.6 | 50 | % | |||||||||||
Interest (income)
|
(0.4 | ) | (1.3 | ) | (0.9 | ) | (69 | )% | ||||||||
Income before income taxes
|
26.9 | 94.2 | (67.3 | ) | (71 | )% | ||||||||||
Provision for income taxes
|
19.4 | 35.7 | 16.3 | 46 | % | |||||||||||
Net income
|
$ | 7.5 | $ | 58.5 | $ | (51.0 | ) | (87 | )% |
2009
|
2008
|
Change
|
%
|
|||||||||||||
(millions)
|
||||||||||||||||
LEU segment
|
||||||||||||||||
Revenue:
|
||||||||||||||||
SWU revenue
|
$ | 1,647.0 | $ | 1,175.5 | $ | 471.5 | 40 | % | ||||||||
Uranium revenue
|
180.7 | 217.1 | (36.4 | ) | (17 | )% | ||||||||||
Total
|
1,827.7 | 1,392.6 | 435.1 | 31 | % | |||||||||||
Cost of sales
|
1,640.3 | 1,202.2 | (438.1 | ) | (36 | )% | ||||||||||
Gross profit
|
$ | 187.4 | $ | 190.4 | $ | (3.0 | ) | (2 | )% | |||||||
Contract services segment
|
||||||||||||||||
Revenue
|
$ | 209.1 | $ | 222.0 | $ | (12.9 | ) | (6 | )% | |||||||
Cost of sales
|
191.8 | 183.6 | (8.2 | ) | (4 | )% | ||||||||||
Gross profit
|
$ | 17.3 | $ | 38.4 | $ | (21.1 | ) | (55 | )% | |||||||
Total
|
||||||||||||||||
Revenue
|
$ | 2,036.8 | $ | 1,614.6 | $ | 422.2 | 26 | % | ||||||||
Cost of sales
|
1,832.1 | 1,385.8 | (446.3 | ) | (32 | )% | ||||||||||
Gross profit
|
$ | 204.7 | $ | 228.8 | $ | (24.1 | ) | (11 | )% |
2009
|
2008
|
Change
|
%
|
|||||||||||||
Gross profit
|
$ | 204.7 | $ | 228.8 | $ | (24.1 | ) | (11 | )% | |||||||
Special charges
|
4.1 | - | (4.1 | ) | - | |||||||||||
Advanced technology costs
|
118.4 | 110.2 | (8.2 | ) | (7 | )% | ||||||||||
Selling, general and administrative
|
58.8 | 54.3 | (4.5 | ) | (8 | )% | ||||||||||
Other (income)
|
(70.7 | ) | - | 70.7 | - | |||||||||||
Operating income
|
94.1 | 64.3 | 29.8 | 46 | % | |||||||||||
Interest expense
|
1.2 | 17.3 | 16.1 | 93 | % | |||||||||||
Interest (income)
|
(1.3 | ) | (24.7 | ) | (23.4 | ) | (95 | )% | ||||||||
Income before income taxes
|
94.2 | 71.7 | 22.5 | 31 | % | |||||||||||
Provision for income taxes
|
35.7 | 23.0 | (12.7 | ) | (55 | )% | ||||||||||
Net income
|
$ | 58.5 | $ | 48.7 | $ | 9.8 | 20 | % |
·
|
Changes to the electric power fuel cost adjustment or changes to our power purchases from our current projection;
|
·
|
Recognition of potential severance costs, pension and post-retirement benefit costs and Portsmouth site costs related to the transition to the D&D contractor of our contract services work for DOE;
|
·
|
The timing of recognition of previously deferred revenue, particularly related to the sale of uranium;
|
·
|
Movement and timing of customer orders;
|
·
|
Changes to SWU and uranium price indicators, and changes in inflation that can affect the price of SWU billed to customers; and
|
·
|
Additional uranium sales made possible by underfeeding the production process at the Paducah GDP.
|
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Net cash provided by (used in) operating activities
|
$ | 22.5 | $ | 443.4 | $ | (104.9 | ) | |||||
Net cash (used in) investing activities
|
(144.6 | ) | (463.8 | ) | (477.2 | ) | ||||||
Net cash provided by (used in) financing activities
|
141.8 | (96.8 | ) | (55.5 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
$ | 19.7 | $ | (117.2 | ) | $ | (637.6 | ) |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(millions)
|
||||||||
Cash and cash equivalents
|
$ | 151.0 | $ | 131.3 | ||||
Accounts receivable, net
|
308.6 | 191.4 | ||||||
Inventories, net
|
806.7 | 831.8 | ||||||
Other current assets and liabilities, net
|
(280.7 | ) | (267.5 | ) | ||||
Working capital
|
$ | 985.6 | $ | 887.0 |
·
|
the greater of (1) the JPMorgan Chase Bank prime rate (with a floor of 3%) plus 6.5%, (2) the federal funds rate plus ½ of 1% (with a floor of 3%) plus 6.5%, or (3) an adjusted 1-month LIBO Rate plus 1% (with a floor of 3%) plus 6.5%; or
|
·
|
the adjusted LIBO Rate (with a floor of 2%) plus 7.5%.
|
|
·
|
the sum of (1) the greater of a) the JPMorgan Chase Bank prime rate, b) the federal funds rate plus ½ of 1%, or c) an adjusted 1-month LIBO Rate plus 1% plus (2) a margin ranging from 2.25% to 2.75% based upon availability, or
|
|
·
|
the sum of the adjusted LIBO Rate plus a margin ranging from 4.0% to 4.5% based upon availability.
|
December 31,
|
||||||||
2010
|
2009
|
|||||||
Short-term borrowings
|
$ | - | $ | - | ||||
Letters of credit
|
17.3 | 45.4 | ||||||
Available credit
|
207.7 | 295.5 |
Requirement
|
Outcome
|
Availability ≥ greater of 10% of aggregate lender commitments or $32.5 million
|
If not met at any time, an event of default is triggered.
|
Availability ≥ $75.0 million
|
If not met at any time, fixed charge ratio required to be 1.00 to 1.00 until the 90
th
consecutive day Availability is restored.
|
December
31, 2008
|
Expenditures
|
Amortization
|
December
31, 2009
|
Expenditures
|
Amortization
|
December
31, 2010
|
||||||||||||||||||||||
Other current assets:
|
||||||||||||||||||||||||||||
Bank credit facilities
|
$ | 1.3 | $ | - | $ | (0.8 | ) | $ | 0.5 | $ | 10.6 | $ | (3.7 | ) | $ | 7.4 | ||||||||||||
Deferred financing costs (long-term):
|
||||||||||||||||||||||||||||
Convertible notes
|
$ | 12.0 | $ | - | $ | (2.0 | ) | $ | 10.0 | $ | - | $ | (1.9 | ) | $ | 8.1 | ||||||||||||
DOE Loan Guarantee application
|
1.3 | 0.7 | - | 2.0 | 0.5 | - | 2.5 | |||||||||||||||||||||
Deferred financing costs
|
$ | 13.3 | $ | 0.7 | $ | (2.0 | ) | $ | 12.0 | $ | 0.5 | $ | (1.9 | ) | $ | 10.6 |
Financial Assurance
|
Long-Term Liability
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Depleted uranium disposition and stored wastes
|
$ | 215.8 | $ | 262.8 | $ | 125.4 | $ | 155.6 | ||||||||
Decontamination and decommissioning of American Centrifuge
|
22.2 | 22.2 | 22.6 | 21.3 | ||||||||||||
Other financial assurance
|
19.8 | 20.4 | ||||||||||||||
Total financial assurance
|
$ | 257.8 | $ | 305.4 | ||||||||||||
Letters of credit
|
17.3 | 45.4 | ||||||||||||||
Surety bonds
|
240.5 | 260.0 | ||||||||||||||
Cash collateral deposit for surety bonds
|
$ | 140.8 | $ | 158.3 |
2011
|
2012 – 2013 | 2014 – 2015 |
Thereafter
|
Total
|
||||||||||||||||
Financing:
|
||||||||||||||||||||
Long-term debt (1)
|
$ | - | $ | 85.0 | $ | 575.0 | $ | - | $ | 660.0 | ||||||||||
Interest on long-term debt
|
25.3 | 37.9 | 17.3 | - | 80.5 | |||||||||||||||
Total debt financing
|
25.3 | 122.9 | 592.3 | - | 740.5 | |||||||||||||||
Convertible preferred stock (2)
|
- | - | - | 78.2 | 78.2 | |||||||||||||||
Dividends on convertible preferred stock (3)
|
10.4 | 25.3 | 32.5 | 19.6 | 87.8 | |||||||||||||||
Total preferred financing
|
10.4 | 25.3 | 32.5 | 97.8 | 166.0 | |||||||||||||||
Purchase commitments:
|
||||||||||||||||||||
United States Enrichment Corporation (4)
|
1,177.0 | 1,627.2 | - | - | 2,804.2 | |||||||||||||||
American Centrifuge (5)
|
45.7 | - | - | - | 45.7 | |||||||||||||||
Total purchase commitments
|
1,222.7 | 1,627.2 | - | - | 2,849.9 | |||||||||||||||
Expected payments on operating leases
|
6.8 | 8.0 | 7.5 | 20.8 | 43.1 | |||||||||||||||
Other long-term liabilities (6)
|
16.5 | 78.6 | 29.4 | 403.2 | 527.7 | |||||||||||||||
$ | 1,281.7 | $ | 1,862.0 | $ | 661.7 | $ | 521.8 | $ | 4,327.2 |
(1)
|
Payment obligations under long-term debt consist of the credit facility term loan of $85.0 million due May 31, 2012 and the 3.0% convertible senior notes of $575.0 million due October 1, 2014, assuming no conversion to shares of common stock. In January 2011, the payment obligation for the convertible notes was reduced to $530.0 million after USEC exchanged 6,952,500 shares of common stock for convertible notes with a principal amount of $45.0 million. The payment obligation for interest on the convertible notes was reduced by $5.0 million.
|
(2)
|
The convertible preferred stock is not redeemable for cash.
|
(3)
|
Dividends are paid-in-kind with additional shares of convertible preferred stock.
|
(4)
|
Purchase commitments of subsidiary United States Enrichment Corporation include a commitment to purchase SWU under the Russian Contract of approximately $2.1 billion and a commitment to purchase power under the TVA contract of approximately $0.7 billion.
|
(5)
|
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. Prepayments to suppliers for services not yet performed totaled $34.4 million as of December 31, 2010. Contractual provisions for termination penalties related to both prepayment and contractual commitment amounts as of December 31, 2010 were estimated at $33.0 million, however this penalty reduces as material and services are received.
|
(6)
|
Other long-term liabilities reported on the balance sheet include pension benefit obligations and postretirement health and life benefit obligations amounting to $324.1 million, accrued depleted uranium disposition costs of $125.4 million, the long-term portion of accrued lease turnover costs of $41.2 million and the liability for unrecognized tax benefits of $4.1 million.
|
|
•
|
commodity price risk for electric power requirements for the Paducah GDP (refer to “Overview – Cost of Sales” and “Results of Operations – Cost of Sales”),
|
|
•
|
interest rate risk relating to the outstanding term loan and any outstanding borrowings at variable interest rates under our credit facility (refer to “Liquidity and Capital Resources – Capital Structure and Financial Resources”),
|
|
•
|
interest rate and other market risks relating to the valuation of our convertible preferred stock (refer to “Liquidity and Capital Resources – Capital Structure and Financial Resources”), and
|
|
•
|
market risk relating to the value of our defined benefit pension plan assets (refer to “Liquidity and Capital Resources – Financial Markets and Pension and Postretirement Benefit Plan Assets”).
|
|
Item
15.
Exhibits and Financial Statement Schedules
|
|
(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.
|
|
SIGNATURES
|
Signature
|
Title
|
Date
|
/s/ John K. Welch
John K. Welch
|
President and Chief Executive Officer
(Principal Executive Officer) and Director
|
February 24, 2011
|
/s/ John C. Barpoulis
John C. Barpoulis
|
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
|
February 24, 2011
|
/s/ J. Tracy Mey
J. Tracy Mey
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer)
|
February 24, 2011
|
/
s
/ James R. Mellor
James R. Mellor
|
Chairman of the Board
|
February 24, 2011
|
/s/ Michael H. Armacost
Michael H. Armacost
|
Director
|
February 24, 2011
|
/s/ Joyce F. Brown
Joyce F. Brown
|
Director
|
February 24, 2011
|
/s/ Joseph T. Doyle
Joseph T. Doyle
|
Director
|
February 24, 2011
|
/s/ H. William Habermeyer
H. William Habermeyer
|
Director
|
February 24, 2011
|
/s/ William J. Madia
William J. Madia
|
Director
|
February 24, 2011
|
/s/ W. Henson Moore
W. Henson Moore
|
Director
|
February 24, 2011
|
/s/ Hiroshi Sakamoto
Hiroshi Sakamoto
|
Director
|
February 24, 2011
|
/s/ M. Richard Smith
M. Richard Smith
|
Director
|
February 24, 2011
|
/s/ Michael S. Taff
Michael S. Taff
|
Director
|
February 24, 2011
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
109
|
Consolidated Balance Sheets
|
110
|
Consolidated Statements of Income
|
111
|
Consolidated Statements of Cash Flows
|
112
|
Consolidated Statements of Stockholders’ Equity
|
113
|
Notes to Consolidated Financial Statements
|
114 – 152
|
December 31,
|
||||||||
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 151.0 | $ | 131.3 | ||||
Accounts receivable, net
|
308.6 | 191.4 | ||||||
Inventories:
|
||||||||
Separative work units
|
947.4 | 805.1 | ||||||
Uranium
|
562.5 | 482.1 | ||||||
Materials and supplies
|
12.6 | 14.0 | ||||||
Total Inventories
|
1,522.5 | 1,301.2 | ||||||
Deferred income taxes
|
47.5 | 48.6 | ||||||
Deferred costs associated with deferred revenue
|
152.9 | 244.4 | ||||||
Other current assets
|
71.6 | 52.7 | ||||||
Total Current Assets
|
2,254.1 | 1,969.6 | ||||||
Property, Plant and Equipment, net
|
1,231.4 | 1,115.1 | ||||||
Other Long-Term Assets
|
||||||||
Deferred income taxes
|
204.5 | 270.3 | ||||||
Deposit for surety bonds
|
140.8 | 158.3 | ||||||
Deferred financing costs, net
|
10.6 | 12.0 | ||||||
Goodwill
|
6.8 | 6.8 | ||||||
Total Other Long-Term Assets
|
362.7 | 447.4 | ||||||
Total Assets
|
$ | 3,848.2 | $ | 3,532.1 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued liabilities
|
$ | 172.4 | $ | 153.4 | ||||
Payables under Russian Contract
|
201.2 | 134.8 | ||||||
Inventories owed to customers and suppliers
|
715.8 | 469.4 | ||||||
Deferred revenue and advances from customers
|
179.1 | 325.0 | ||||||
Total Current Liabilities
|
1,268.5 | 1,082.6 | ||||||
Long-Term Debt
|
660.0 | 575.0 | ||||||
Convertible Preferred Stock, 75,800 shares issued
|
78.2 | - | ||||||
Other Long-Term Liabilities
|
||||||||
Depleted uranium disposition
|
125.4 | 155.6 | ||||||
Postretirement health and life benefit obligations
|
178.7 | 168.9 | ||||||
Pension benefit liabilities
|
145.4 | 176.6 | ||||||
Other liabilities
|
78.2 | 97.8 | ||||||
Total Other Long-Term Liabilities
|
527.7 | 598.9 | ||||||
Commitments and Contingencies (Note 18)
|
||||||||
Stockholders’ Equity
|
||||||||
Preferred stock, par value $1.00 per share, 25,000,000 shares
|
||||||||
authorized, no shares recorded as stockholders' equity
|
- | - | ||||||
Common stock, par value $.10 per share, 250,000,000 shares
|
||||||||
authorized, 123,320,000 shares issued
|
12.3 | 12.3 | ||||||
Excess of capital over par value
|
1,172.8 | 1,179.6 | ||||||
Retained earnings
|
329.9 | 322.4 | ||||||
Treasury stock, 8,090,000 and 9,926,000 shares
|
(57.1 | ) | (71.3 | ) | ||||
Accumulated other comprehensive loss, net of tax
|
(144.1 | ) | (167.4 | ) | ||||
Total Stockholders’ Equity
|
1,313.8 | 1,275.6 | ||||||
Total Liabilities and Stockholders’ Equity
|
$ | 3,848.2 | $ | 3,532.1 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Revenue:
|
||||||||||||
Separative work units
|
$ | 1,521.4 | $ | 1,647.0 | $ | 1,175.5 | ||||||
Uranium
|
236.1 | 180.7 | 217.1 | |||||||||
Contract services
|
277.9 | 209.1 | 222.0 | |||||||||
Total revenue
|
2,035.4 | 2,036.8 | 1,614.6 | |||||||||
Cost of sales:
|
||||||||||||
Separative work units and uranium
|
1,623.2 | 1,640.3 | 1,202.2 | |||||||||
Contract services
|
253.8 | 191.8 | 183.6 | |||||||||
Total cost of sales
|
1,877.0 | 1,832.1 | 1,385.8 | |||||||||
Gross profit
|
158.4 | 204.7 | 228.8 | |||||||||
Special charges
|
- | 4.1 | - | |||||||||
Advanced technology costs
|
110.2 | 118.4 | 110.2 | |||||||||
Selling, general and administrative
|
58.9 | 58.8 | 54.3 | |||||||||
Other (income)
|
(44.4 | ) | (70.7 | ) | - | |||||||
Operating income
|
33.7 | 94.1 | 64.3 | |||||||||
Preferred stock issuance costs
|
6.6 | - | - | |||||||||
Interest expense
|
0.6 | 1.2 | 17.3 | |||||||||
Interest (income)
|
(0.4 | ) | (1.3 | ) | (24.7 | ) | ||||||
Income before income taxes
|
26.9 | 94.2 | 71.7 | |||||||||
Provision for income taxes
|
19.4 | 35.7 | 23.0 | |||||||||
Net income
|
$ | 7.5 | $ | 58.5 | $ | 48.7 | ||||||
Net income per share – basic
|
$ | .07 | $ | .53 | $ | .44 | ||||||
Net income per share – diluted
|
$ | .05 | $ | .37 | $ | .35 | ||||||
Weighted average number of shares outstanding:
|
||||||||||||
Basic
|
112.8 | 111.4 | 110.6 | |||||||||
Diluted
|
166.6 | 160.1 | 158.7 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Cash Flows From Operating Activities
|
||||||||||||
Net income
|
$ | 7.5 | $ | 58.5 | $ | 48.7 | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation and amortization
|
43.3 | 31.9 | 34.2 | |||||||||
Deferred income taxes
|
44.3 | (1.6 | ) | 3.1 | ||||||||
Other non-cash income on release of disposal obligation
|
(44.4 | ) | - | - | ||||||||
Preferred stock issuance costs and capitalized paid-in-kind dividends
|
8.5 | - | - | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable – (increase) decrease
|
(117.2 | ) | (37.3 | ) | 98.8 | |||||||
Inventories – net (increase) decrease
|
25.1 | 269.9 | (270.6 | ) | ||||||||
Payables under Russian Contract – increase (decrease)
|
66.4 | 13.3 | 9.3 | |||||||||
Deferred revenue, net of deferred costs – increase (decrease)
|
(10.6 | ) | (3.9 | ) | 24.5 | |||||||
Accrued depleted uranium disposition – increase (decrease)
|
(30.2 | ) | 36.1 | 21.2 | ||||||||
Accounts payable and other liabilities – increase (decrease)
|
23.5 | 44.6 | (31.2 | ) | ||||||||
Other, net
|
6.3 | 31.9 | (42.9 | ) | ||||||||
Net Cash Provided by (Used in) Operating Activities
|
22.5 | 443.4 | (104.9 | ) | ||||||||
Cash Flows Used in Investing Activities
|
||||||||||||
Capital expenditures
|
(162.2 | ) | (441.3 | ) | (441.9 | ) | ||||||
Deposits for surety bonds, net
(increase) decrease
|
17.6 | (22.5 | ) | (35.3 | ) | |||||||
Net Cash (Used in) Investing Activities
|
(144.6 | ) | (463.8 | ) | (477.2 | ) | ||||||
Cash Flows Provided by (Used in) Financing Activities
|
||||||||||||
Borrowings under credit facility
|
38.7 | 196.6 | 48.3 | |||||||||
Repayments under credit facility
|
(38.7 | ) | (196.6 | ) | (48.3 | ) | ||||||
Proceeds from credit facility term loan
|
85.0 | - | - | |||||||||
Proceeds from issuance of convertible preferred stock and
warrants
|
75.0 | - | - | |||||||||
Repayment and repurchases of senior notes
|
- | (95.7 | ) | (54.3 | ) | |||||||
Payments for deferred financing costs and preferred stock issuance costs
|
(16.4 | ) | (0.7 | ) | (1.3 | ) | ||||||
Common stock issued (purchased), net
|
(1.8 | ) | (0.4 | ) | 0.1 | |||||||
Net Cash Provided by (Used in) Financing Activities
|
141.8 | (96.8 | ) | (55.5 | ) | |||||||
Net Increase (Decrease)
|
19.7 | (117.2 | ) | (637.6 | ) | |||||||
Cash and Cash Equivalents at Beginning of Period
|
131.3 | 248.5 | 886.1 | |||||||||
Cash and Cash Equivalents at End of Period
|
$ | 151.0 | $ | 131.3 | $ | 248.5 | ||||||
Supplemental Cash Flow Information
|
||||||||||||
Interest paid, net of capitalized interest
|
$ | - | $ | 0.7 | $ | 15.9 | ||||||
Income taxes paid, net of refunds
|
3.2 | 4.5 | 50.0 |
Common Stock,
Par Value
$.10 per Share
|
Excess of
Capital over
Par Value
|
Retained
Earnings
|
Treasury
Stock
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Total
|
|||||||||||||||||||
Balance at December 31, 2007
|
$ | 12.3 | $ | 1,186.2 | $ | 215.2 | $ | (92.9 | ) | $ | (11.3 | ) | $ | 1,309.5 | ||||||||||
Valuation revisions and amortization of actuarial losses and prior service costs (credits), net of income tax of $114.7 million
|
- | - | - | - | (202.6 | ) | (202.6 | ) | ||||||||||||||||
Net income
|
- | - | 48.7 | - | - | 48.7 | ||||||||||||||||||
Comprehensive (loss)
|
(153.9 | ) | ||||||||||||||||||||||
Restricted and other common stock issued, net of amortization
|
- | (2.0 | ) | - | 8.8 | - | 6.8 | |||||||||||||||||
Balance at December 31, 2008
|
12.3 | 1,184.2 | 263.9 | (84.1 | ) | (213.9 | ) | 1,162.4 | ||||||||||||||||
Valuation revisions and amortization of actuarial losses and prior service costs (credits), net of income tax of $23.9 million
|
- | - | - | - | 46.5 | 46.5 | ||||||||||||||||||
Net income
|
- | - | 58.5 | - | - | 58.5 | ||||||||||||||||||
Comprehensive income
|
105.0 | |||||||||||||||||||||||
Restricted and other common stock issued, net of amortization
|
- | (4.6 | ) | - | 12.8 | - | 8.2 | |||||||||||||||||
Balance at December 31, 2009
|
12.3 | 1,179.6 | 322.4 | (71.3 | ) | (167.4 | ) | 1,275.6 | ||||||||||||||||
Valuation revisions and amortization of actuarial losses and prior service costs (credits), net of income tax of $22.6 million
|
- | - | - | - | 23.3 | 23.3 | ||||||||||||||||||
Net income
|
- | - | 7.5 | - | - | 7.5 | ||||||||||||||||||
Comprehensive income
|
30.8 | |||||||||||||||||||||||
Restricted and other common stock issued, net of amortization
|
- | (6.8 | ) | - | 14.2 | - | 7.4 | |||||||||||||||||
Balance at December 31, 2010
|
$ | 12.3 | $ | 1,172.8 | $ | 329.9 | $ | (57.1 | ) | $ | (144.1 | ) | $ | 1,313.8 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(millions)
|
||||||||
Accounts receivable (1):
|
||||||||
Utility customers:
|
||||||||
Trade receivables
|
$ | 249.1 | $ | 118.4 | ||||
Unbilled revenue (2)
|
0.4 | 0.4 | ||||||
249.5 | 118.8 | |||||||
Contract services, primarily Department of Energy (3):
|
||||||||
Billed revenue
|
34.8 | 38.4 | ||||||
Unbilled revenue
|
24.3 | 34.2 | ||||||
59.1 | 72.6 | |||||||
$ | 308.6 | $ | 191.4 | |||||
Other current assets:
|
||||||||
Prepayments to American Centrifuge suppliers
|
$ | 34.4 | $ | 25.2 | ||||
Prepaid taxes, power purchases and insurance
|
21.0 | 19.7 | ||||||
Deferred financing costs for credit facility
|
7.4 | 0.5 | ||||||
Other
|
8.8 | 7.3 | ||||||
$ | 71.6 | $ | 52.7 |
(1)
|
Accounts receivable are net of valuation allowances and allowances for doubtful accounts totaling $18.6 million at December 31, 2010 and $15.2 million at December 31, 2009.
|
(2)
|
Unbilled revenue for utility customers represents price adjustments for past deliveries that are not yet billable under the applicable contracts.
|
(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, prior to DCAA audit and notice by DOE authorizing final billing, and provisional billing rate invoiced amounts. USEC expects to invoice and collect the unbilled amounts as billing rates are revised, submitted to and approved by DOE.
|
December 31,
|
||||||||
2010
|
2009
|
|||||||
(millions)
|
||||||||
Current assets:
|
||||||||
Separative work units
|
$ | 947.4 | $ | 805.1 | ||||
Uranium
|
562.5 | 482.1 | ||||||
Materials and supplies
|
12.6 | 14.0 | ||||||
1,522.5 | 1,301.2 | |||||||
Current liabilities:
|
||||||||
Inventories owed to customers and suppliers
|
(715.8 | ) | (469.4 | ) | ||||
Inventories, net
|
$ | 806.7 | $ | 831.8 |
December 31,
2007
|
Capital Expenditures
(Depreciation
)
|
Transfers
and
Retirements
|
December 31,
2008
|
Capital Expenditures
(Depreciation
)
|
Transfers
and
Retirements
|
December 31,
2009
|
||||||||||||||||||||||
Construction work in progress
|
$ | 192.7 | $ | 472.5 | $ | (47.7 | ) | $ | 617.5 | $ | 405.3 | $ | (31.4 | ) | $ | 991.4 | ||||||||||||
Leasehold improvements
|
171.8 | - | 5.0 | 176.8 | - | 5.8 | 182.6 | |||||||||||||||||||||
Machinery and equipment
|
191.0 | 2.1 | 41.2 | 234.3 | 1.6 | 24.2 | 260.1 | |||||||||||||||||||||
555.5 | 474.6 | (1.5 | ) | 1,028.6 | 406.9 | (1.4 | ) | 1,434.1 | ||||||||||||||||||||
Accumulated depreciation and
amortization
|
(263.3 | ) | (30.7 | ) | 1.5 | (292.5 | ) | (27.9 | ) | 1.4 | (319.0 | ) | ||||||||||||||||
$ | 292.2 | $ | 443.9 | $ | - | $ | 736.1 | $ | 379.0 | $ | - | $ | 1,115.1 |
December 31,
2009
|
Capital Expenditures
(Depreciation
)
|
Transfers
and
Retirements
|
December 31,
2010
|
|||||||||||||
Construction work in progress
|
$ | 991.4 | $ | 149.4 | $ | (14.5 | ) | $ | 1,126.3 | |||||||
Leasehold improvements
|
182.6 | - | 4.7 | 187.3 | ||||||||||||
Machinery and equipment
|
260.1 | 3.0 | 6.0 | 269.1 | ||||||||||||
1,434.1 | 152.4 | (3.8 | ) | 1,582.7 | ||||||||||||
Accumulated depreciation and
amortization
|
(319.0 | ) | (36.1 | ) | 3.8 | (351.3 | ) | |||||||||
$ | 1,115.1 | $ | 116.3 | $ | - | $ | 1,231.4 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
(millions)
|
||||||||
Trade payables
|
$ | 36.3 | $ | 27.4 | ||||
Compensation and benefits
|
61.3 | 52.8 | ||||||
American Centrifuge accrued liabilities
|
14.5 | 16.5 | ||||||
Accrued taxes payable
|
11.1 | 23.0 | ||||||
Accrued lease turnover – current
|
10.5 | 3.3 | ||||||
Accrued interest payable on long-term debt
|
5.3 | 5.0 | ||||||
Other accrued liabilities
|
33.4 | 25.4 | ||||||
$ | 172.4 | $ | 153.4 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
Deferred revenue
|
$ | 176.1 | $ | 301.9 | ||||
Advances from customers
|
3.0 | 23.1 | ||||||
$ | 179.1 | $ | 325.0 | |||||
Deferred costs associated with deferred revenue
|
$ | 152.9 | $ | 244.4 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
Credit facility term loan, due May 31, 2012
|
$ | 85.0 | $ | - | ||||
3.0% convertible senior notes, due October 1, 2014
|
575.0 | 575.0 | ||||||
$ | 660.0 | $ | 575.0 |
·
|
the greater of (1) the JPMorgan Chase Bank prime rate (with a floor of 3%) plus 6.5%, (2) the federal funds rate plus ½ of 1% (with a floor of 3%) plus 6.5%, or (3) an adjusted 1-month LIBO Rate plus 1% (with a floor of 3%) plus 6.5%; or
|
·
|
the adjusted LIBO Rate (with a floor of 2%) plus 7.5%.
|
|
·
|
the sum of (1) the greater of a) the JPMorgan Chase Bank prime rate, b) the federal funds rate plus ½ of 1%, or c) an adjusted 1-month LIBO Rate plus 1% plus (2) a margin ranging from 2.25% to 2.75% based upon availability, or
|
|
·
|
the sum of the adjusted LIBO Rate plus a margin ranging from 4.0% to 4.5% based upon availability.
|
December 31,
|
||||||||
2010
|
2009
|
|||||||
Short-term borrowings
|
$ | - | $ | - | ||||
Letters of credit
|
17.3 | 45.4 | ||||||
Available credit
|
207.7 | 295.5 |
December
31, 2008
|
Expenditures
|
Amortization
|
December
31, 2009
|
Expenditures
|
Amortization
|
December
31, 2010
|
||||||||||||||||||||||
Other current assets:
|
||||||||||||||||||||||||||||
Bank credit facilities
|
$ | 1.3 | $ | - | $ | (0.8 | ) | $ | 0.5 | $ | 10.6 | $ | (3.7 | ) | $ | 7.4 | ||||||||||||
Deferred financing costs (long-term):
|
||||||||||||||||||||||||||||
Convertible notes
|
$ | 12.0 | $ | - | $ | (2.0 | ) | $ | 10.0 | $ | - | $ | (1.9 | ) | $ | 8.1 | ||||||||||||
DOE Loan Guarantee application
|
1.3 | 0.7 | - | 2.0 | 0.5 | - | 2.5 | |||||||||||||||||||||
Deferred financing costs
|
$ | 13.3 | $ | 0.7 | $ | (2.0 | ) | $ | 12.0 | $ | 0.5 | $ | (1.9 | ) | $ | 10.6 |
December 31,
2010
|
||||
Series B-1 12.75% convertible preferred stock:
|
||||
Value at issuance
|
$ | 75.0 | ||
Additional shares as paid-in-kind dividends
|
0.8 | |||
Dividends payable
|
2.4 | |||
Balance as of December 31, 2010
|
$ | 78.2 |
•
|
Level 1 – quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
|
•
|
Level 3 – unobservable inputs in which little or no market data exists.
|
Years Ended
December 31,
|
||||||||
2010
|
2009
|
|||||||
Series B-1 12.75% convertible preferred stock:
|
||||||||
Beginning balance
|
$ | - | $ | - | ||||
Total gains or losses (realized/unrealized)
|
- | - | ||||||
Purchases, issuances, sales and settlements:
|
||||||||
Purchases
|
- | - | ||||||
Issuances
|
75.8 | - | ||||||
Paid in kind dividends payable
|
2.4 | - | ||||||
Sales
|
- | - | ||||||
Settlements
|
- | - | ||||||
Ending balance
|
$ | 78.2 | $ | - |
December 31, 2010
|
December 31, 2009
|
|||||||||||||||
Carrying
Value
|
Fair
Value
|
Carrying
Value
|
Fair
Value
|
|||||||||||||
Credit facility term loan, due May 31, 2012
|
$ | 85.0 | $ | 85.6 | - | - | ||||||||||
3.0% convertible senior notes, due October 1, 2014
|
575.0 | 517.9 | 575.0 | 372.0 | ||||||||||||
$ | 660.0 | $ | 603.5 | $ | 575.0 | $ | 372.0 |
Defined Benefit Pension Plans
|
Postretirement Health
and Life Benefit Plans
|
|||||||||||||||
Years Ended December 31,
|
Years Ended December 31,
|
|||||||||||||||
Changes in Benefit Obligations:
|
2010
|
2009
|
2010
|
2009
|
||||||||||||
Obligations at beginning of year
|
$ | 840.0 | $ | 782.8 | $ | 219.3 | $ | 211.2 | ||||||||
Actuarial (gains) losses, net
|
10.3 | 28.7 | 5.0 | 0.3 | ||||||||||||
Service costs
|
19.3 | 18.7 | 5.0 | 4.6 | ||||||||||||
Interest costs
|
48.9 | 47.7 | 11.9 | 12.6 | ||||||||||||
Gross benefits paid
|
(41.7 | ) | (39.2 | ) | (10.8 | ) | (9.9 | ) | ||||||||
Less federal subsidy on benefits paid
|
- | - | 0.2 | 0.3 | ||||||||||||
Plan amendments
|
- | 1.3 | - | 0.2 | ||||||||||||
Obligations at end of year
|
876.8 | 840.0 | 230.6 | 219.3 | ||||||||||||
Changes in Plan Assets:
|
||||||||||||||||
Fair value of plan assets at beginning of year
|
661.7 | 558.8 | 50.4 | 43.1 | ||||||||||||
Actual return on plan assets
|
95.7 | 120.0 | 5.4 | 11.0 | ||||||||||||
USEC contributions
|
12.8 | 22.1 | 6.9 | 6.2 | ||||||||||||
Benefits paid
|
(41.7 | ) | (39.2 | ) | (10.8 | ) | (9.9 | ) | ||||||||
Fair value of plan assets at end of year
|
728.5 | 661.7 | 51.9 | 50.4 | ||||||||||||
Funded (Unfunded) status at end of year
|
(148.3 | ) | (178.3 | ) | (178.7 | ) | (168.9 | ) | ||||||||
Amounts recognized in assets and liabilities:
|
||||||||||||||||
Current liabilities
|
$ | (2.9 | ) | $ | (1.7 | ) | $ | - | $ | - | ||||||
Noncurrent liabilities
|
(145.4 | ) | (176.6 | ) | (178.7 | ) | (168.9 | ) | ||||||||
$ | (148.3 | ) | $ | (178.3 | ) | $ | (178.7 | ) | $ | (168.9 | ) | |||||
Amounts recognized in accumulated other comprehensive income, pre-tax:
|
||||||||||||||||
Net actuarial loss
|
$ | 176.7 | $ | 229.3 | $ | 43.6 | $ | 43.1 | ||||||||
Prior service cost (credit)
|
4.8 | 7.0 | 0.1 | (8.4 | ) | |||||||||||
$ | 181.5 | $ | 236.3 | $ | 43.7 | $ | 34.7 |
Assumptions used to determine benefit
obligations at end of year:
|
||||||||||||||||
Discount rate
|
5.77 | % | 5.84 | % | 5.32 | % | 5.44 | % | ||||||||
Compensation increases
|
4.25 | 4.25 | 4.25 | 4.25 |
Defined Benefit Pension Plans
|
Postretirement Health
and Life Benefit Plans
|
|||||||||||||||||||||||
(in millions)
|
Years Ended December 31,
|
Years Ended December 31,
|
||||||||||||||||||||||
2010
|
2009
|
2008
|
2010
|
2009
|
2008
|
|||||||||||||||||||
Net Periodic Benefit Costs (Income)
|
||||||||||||||||||||||||
Service costs
|
$ | 19.3 | $ | 18.7 | $ | 17.4 | $ | 5.0 | $ | 4.6 | $ | 4.4 | ||||||||||||
Interest costs
|
48.9 | 47.7 | 45.7 | 11.9 | 12.6 | 12.1 | ||||||||||||||||||
Expected return on plan assets (gains)
|
(48.7 | ) | (42.6 | ) | (61.4 | ) | (3.6 | ) | (3.0 | ) | (5.2 | ) | ||||||||||||
Amortization of prior service costs (credits)
|
1.8 | 1.7 | 1.7 | (8.5 | ) | (14.4 | ) | (14.5 | ) | |||||||||||||||
Amortization of actuarial (gains) losses, net
|
16.0 | 23.9 | 0.7 | 2.7 | 4.2 | 0.7 | ||||||||||||||||||
Other special charges
|
0.4 | - | - | - | - | - | ||||||||||||||||||
Net periodic benefit costs (income)
|
$ | 37.7 | $ | 49.4 | $ | 4.1 | $ | 7.5 | $ | 4.0 | $ | (2.5 | ) | |||||||||||
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
|
||||||||||||||||||||||||
Net (gain) loss
|
$ | (36.7 | ) | $ | (48.7 | ) | $ | 276.5 | $ | 3.2 | $ | (7.8 | ) | $ | 29.5 | |||||||||
Prior service costs
|
- | 1.3 | - | - | 0.2 | - | ||||||||||||||||||
Amortization of actuarial (gains) losses, net
|
(16.0 | ) | (23.9 | ) | (0.7 | ) | (2.7 | ) | (4.2 | ) | (0.7 | ) | ||||||||||||
Amortization of prior service costs (credits)
|
(2.2 | ) | (1.7 | ) | (1.7 | ) | 8.5 | 14.4 | 14.5 | |||||||||||||||
Total (gain) loss recognized in other comprehensive income, pre-tax
|
$ | (54.9 | ) | $ | (73.0 | ) | $ | 274.1 | $ | 9.0 | $ | 2.6 | $ | 43.3 | ||||||||||
Total (gain) loss recognized in net periodic benefit costs (income) and other comprehensive income, pre-tax
|
$ | (17.2 | ) | $ | (23.6 | ) | $ | 278.2 | $ | 16.5 | $ | 6.6 | $ | 40.8 |
Assumptions used to determine net periodic benefit costs:
|
||||||||||||||||||||||||
Discount rate
|
5.84 | % | 6.09 | % | 6.21 | % | 5.44 | % | 6.00 | % | 5.96 | % | ||||||||||||
Expected return on plan assets
|
7.50 | 7.75 | 8.00 | 7.50 | 7.50 | 7.50 | ||||||||||||||||||
Compensation increases
|
4.25 | 4.25 | 4.25 | 4.25 | 4.25 | 4.25 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
Healthcare cost trend rate for the following year
|
8.00 | % | 7.75 | % | ||||
Long-term rate that the healthcare cost trend rate
gradually declines to
|
5 | % | 5 | % | ||||
Year that the healthcare cost trend rate is expected to reach the long-term rate
|
2018 | 2016 |
One Percentage Point
|
||||||||
Increase
|
Decrease
|
|||||||
Postretirement health benefit obligation
|
$ | 8.9 | $ | (8.4 | ) | |||
Net periodic benefit costs
|
$ | 1.1 | $ | (1.0 | ) |
Percentage of
Plan Assets
|
Target Allocation
|
|||||||||||
December 31,
|
Range
|
|||||||||||
2010
|
2009
|
2010
|
||||||||||
Defined Benefit Pension Plans:
|
||||||||||||
Equity securities
|
54 | % | 54 | % | 40-60 | % | ||||||
Debt securities
|
46 | 46 | 40-60 | |||||||||
100 | % | 100 | % | |||||||||
Postretirement Health and Life Benefit Plans:
|
||||||||||||
Equity securities
|
67 | % | 66 | % | 55-75 | % | ||||||
Debt securities
|
33 | 34 | 25-45 | |||||||||
100 | % | 100 | % |
Defined Benefit Pension Plans
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
U.S. government securities
|
$ | 54.9 | $ | 8.1 | $ | - | $ | 63.0 | ||||||||
Collective trust – money market funds
|
14.7 | - | - | 14.7 | ||||||||||||
Collective trust – bond funds
|
- | 47.6 | - | 47.6 | ||||||||||||
Collective trust – equity funds
|
- | 394.2 | - | 394.2 | ||||||||||||
Corporate debt
|
- | 200.1 | - | 200.1 | ||||||||||||
Mortgage and asset backed securities
|
- | 4.6 | - | 4.6 | ||||||||||||
Fair value of investments by hierarchy level
|
$ | 69.6 | $ | 654.6 | $ | - | $ | 724.2 | ||||||||
Accrued interest receivable
|
4.1 | |||||||||||||||
Unsettled transactions payable
|
0.2 | |||||||||||||||
Plan assets at December 31, 2010
|
$ | 728.5 |
Postretirement Health and Life Benefit Plans
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Money market funds
|
$ | 0.7 | $ | - | $ | - | $ | 0.7 | ||||||||
Bond mutual funds
|
16.4 | - | - | 16.4 | ||||||||||||
Equity mutual funds
|
34.8 | - | - | 34.8 | ||||||||||||
Fair value of investments by hierarchy level
|
$ | 51.9 | $ | - | $ | - | $ | 51.9 | ||||||||
Accrued interest receivable
|
- | |||||||||||||||
Plan assets at December 31, 2010
|
$ | 51.9 |
Corporate Debt
|
||||
Beginning balance – January 1, 2010
|
$ | 1.0 | ||
Net Investment gain (loss)
|
- | |||
Sale
|
(0.2 | ) | ||
Transfer out of Level 3
|
(0.8 | ) | ||
Ending balance – December 31, 2010
|
$ | - |
Defined Benefit
Pension Plans
|
Postretirement Health and Life
Benefit Plans
|
Expected
Subsidies
From Medicare
|
||||||||||
2011
|
$ | 46.1 | $ | 13.4 | $ | 0.4 | ||||||
2012
|
54.5 | 14.9 | 0.5 | |||||||||
2013
|
48.4 | 16.4 | 0.7 | |||||||||
2014
|
50.3 | 18.0 | 0.9 | |||||||||
2015
|
52.5 | 19.6 | 1.0 | |||||||||
2016 to 2020
|
299.9 | 115.5 | 8.0 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Total stock-based compensation costs:
|
||||||||||||
Restricted stock and restricted stock units
|
$ | 7.4 | $ | 7.3 | $ | 5.1 | ||||||
Stock options, performance awards and other
|
1.9 | 1.6 | 1.2 | |||||||||
Less: costs capitalized as part of inventory
|
(0.3 | ) | (0.3 | ) | (0.2 | ) | ||||||
Expense included in selling, general and administrative
|
$ | 9.0 | $ | 8.6 | $ | 6.1 | ||||||
Total after-tax expense
|
$ | 5.8 | $ | 5.6 | $ | 3.9 |
Weighted-Average
|
||||||||
Grant-Date
|
||||||||
Shares
|
Fair Value
|
|||||||
Restricted Shares at December 31, 2009
|
1,953 | $ | 5.51 | |||||
Granted
|
1,862 | 5.18 | ||||||
Vested
|
(1,654 | ) | 5.44 | |||||
Forfeited
|
(23 | ) | 5.05 | |||||
Restricted Shares at December 31, 2010
|
2,138 | $ | 4.64 |
Years Ended December 31,
|
|||
2010
|
2009
|
2008
|
|
Risk-free interest rate
|
0.78-1.43%
|
1.40-1.45%
|
1.84-2.62%
|
Expected volatility
|
72-75%
|
65-72%
|
50-56%
|
Expected option life
|
4.0-4.1 years
|
3.8-4.0 years
|
3.5 years
|
Weighted-average grant date fair value
|
$2.81
|
$1.82
|
$2.23
|
Options granted
|
773,018
|
1,107,342
|
818,000
|
Weighted-Average
|
||||||||||||||||
Stock
|
Weighted-
|
Remaining
|
Aggregate
|
|||||||||||||
Options
|
Average
|
Contractual
|
Intrinsic Value
|
|||||||||||||
(thousands)
|
Exercise Price
|
Term (years)
|
(millions)
|
|||||||||||||
Outstanding at December 31, 2009
|
3,119 | 6.84 | ||||||||||||||
Granted
|
773 | 5.18 | ||||||||||||||
Exercised
|
(116 | ) | 4.20 | |||||||||||||
Forfeited or expired
|
(224 | ) | 12.60 | |||||||||||||
Outstanding at December 31, 2010
|
3,552 | $ | 6.20 | 2.7 | $ | 3.3 | ||||||||||
Exercisable at December 31, 2010
|
1,789 | $ | 7.57 | 2.0 | $ | 0.9 |
Stock Exercise
Price
|
Options
Outstanding
|
Weighted Average Remaining Contractual
Life in Years
|
Options
Exercisable
|
|||||||||||
$3.72 | 1,069 | 3.3 | 356 | |||||||||||
5.00 to 7.00
|
1,704 | 3.1 | 654 | |||||||||||
7.02 to 7.13
|
146 | 1.8 | 146 | |||||||||||
8.50 | 142 | 0.6 | 142 | |||||||||||
11.33 to 12.09
|
227 | 0.3 | 227 | |||||||||||
13.04 to 14.28
|
264 | 1.5 | 264 | |||||||||||
3,552 | 2.7 | 1,789 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Current:
|
||||||||||||
Federal
|
$ | (27.8 | ) | $ | 30.4 | $ | 13.7 | |||||
State and local
|
2.9 | 6.9 | 6.2 | |||||||||
(24.9 | ) | 37.3 | 19.9 | |||||||||
Deferred:
|
||||||||||||
Federal
|
43.3 | (2.1 | ) | 2.5 | ||||||||
State and local
|
1.0 | 0.5 | 0.6 | |||||||||
44.3 | (1.6 | ) | 3.1 | |||||||||
$ | 19.4 | $ | 35.7 | $ | 23.0 |
December 31,
|
||||||||
2010
|
2009
|
|||||||
Deferred tax assets:
|
||||||||
Plant lease turnover and other exit costs
|
$ | 18.9 | $ | 23.6 | ||||
Employee benefits costs
|
135.6 | 153.6 | ||||||
Inventory
|
15.1 | 22.8 | ||||||
Property, plant and equipment
|
18.9 | 44.3 | ||||||
Tax intangibles
|
1.7 | 2.5 | ||||||
Deferred costs for depleted uranium
|
49.4 | 59.7 | ||||||
Net operating loss carryforwards
|
1.6 | 1.6 | ||||||
Accrued expenses
|
9.2 | 7.4 | ||||||
Other
|
5.4 | 6.1 | ||||||
255.8 | 321.6 | |||||||
Valuation allowance
|
(1.5 | ) | (1.5 | ) | ||||
Deferred tax assets, net of valuation allowance
|
254.3 | 320.1 | ||||||
Deferred tax liabilities:
|
||||||||
Prepaid expenses
|
1.2 | 1.2 | ||||||
Dividends on preferred stock
|
1.1 | - | ||||||
Deferred tax liabilities
|
2.3 | 1.2 | ||||||
$ | 252.0 | $ | 318.9 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Federal statutory tax rate
|
35 | % | 35 | % | 35 | % | ||||||
State income taxes, net of federal
|
9 | 4 | 5 | |||||||||
Research and other tax credits
|
(16 | ) | (4 | ) | (6 | ) | ||||||
Other nondeductible expenses
|
8 | 2 | 2 | |||||||||
Preferred stock issuance costs and paid-in-kind dividends
|
13 | - | - | |||||||||
Change in Medicare D Subsidy tax treatment
|
24 | - | - | |||||||||
Uncertain tax positions (see below)
|
(1 | ) | 1 | (4 | ) | |||||||
72 | % | 38 | % | 32 | % |
Years Ended December 31,
|
||||||||
2010
|
2009
|
|||||||
Balance at beginning of the year
|
$ | 4.4 | $ | 3.8 | ||||
Reductions to tax positions of prior years
|
(0.5 | ) | - | |||||
Additions for tax positions of current year
|
0.2 | 0.6 | ||||||
Balance at end of the year
|
$ | 4.1 | $ | 4.4 |
Shares
Issued
|
Treasury
Stock
|
Shares
Outstanding
|
||||||||||
Balance at December 31, 2007
|
123,320 | (12,741 | ) | 110,579 | ||||||||
Common stock issued
|
- | 1,177 | 1,177 | |||||||||
Balance at December 31, 2008
|
123,320 | (11,564 | ) | 111,756 | ||||||||
Common stock issued
|
- | 1,638 | 1,638 | |||||||||
Balance at December 31, 2009
|
123,320 | (9,926 | ) | 113,394 | ||||||||
Common stock issued
|
- | 1,836 | 1,836 | |||||||||
Balance at December 31, 2010
|
123,320 | (8,090 | ) | 115,230 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(in millions)
|
||||||||||||
Numerator:
|
||||||||||||
Net income
|
$ | 7.5 | $ | 58.5 | $ | 48.7 | ||||||
Interest expense on convertible notes and convertible preferred stock dividends – net of capitalized and tax
|
- | 0.1 | 6.5 | |||||||||
Net income if-converted
|
$ | 7.5 | $ | 58.6 | $ | 55.2 | ||||||
Denominator:
|
||||||||||||
Weighted average common shares
|
114.7 | 112.9 | 111.4 | |||||||||
Less: Weighted average unvested restricted stock
|
1.9 | 1.5 | 0.8 | |||||||||
Denominator for basic calculation
|
112.8 | 111.4 | 110.6 | |||||||||
Weighted average effect of dilutive securities:
|
||||||||||||
Stock compensation awards
|
0.5 | 0.6 | - | |||||||||
Convertible preferred stock
|
5.2 | - | - | |||||||||
Convertible notes
|
48.1 | 48.1 | 48.1 | |||||||||
Denominator for diluted calculation
|
166.6 | 160.1 | 158.7 | |||||||||
Net income per share – basic
|
$ | .07 | $ | .53 | $ | .44 | ||||||
Net income per share – diluted
|
$ | .05 | $ | .37 | $ | .35 |
Years Ended December 31,
|
|||
2010
|
2009
|
2008
|
|
Options excluded from diluted earnings per share
|
2.5
|
1.9
|
2.0
|
Warrants excluded from diluted earnings per share
|
2.1
|
-
|
-
|
Exercise price of excluded options
|
$5.18 to $14.28
|
$5.00 to $16.90
|
$5.86 to $16.90
|
Exercise price of excluded warrants
|
$7.50
|
-
|
-
|
Balance at December 31, 2007
|
$ | 4.4 | ||
Additional retirement obligation
|
8.8 | |||
Accretion
|
0.5 | |||
Balance at December 31, 2008
|
$ | 13.7 | ||
Additional retirement obligation
|
6.3 | |||
Accretion
|
1.3 | |||
Balance at December 31, 2009
|
$ | 21.3 | ||
Additional retirement obligation
|
- | |||
Accretion
|
1.3 | |||
Balance at December 31, 2010
|
$ | 22.6 |
2011
|
$ | 6.8 | ||
2012
|
4.1 | |||
2013
|
3.9 | |||
2014
|
3.9 | |||
2015
|
3.6 | |||
Thereafter
|
20.8 | |||
$ | 43.1 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
United States
|
$ | 1,487.5 | $ | 1,402.2 | $ | 1,212.5 | ||||||
Foreign:
|
||||||||||||
Japan
|
199.7 | 305.0 | 242.6 | |||||||||
Other
|
348.2 | 329.6 | 159.5 | |||||||||
547.9 | 634.6 | 402.1 | ||||||||||
$ | 2,035.4 | $ | 2,036.8 | $ | 1,614.6 |
Years Ended December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(millions)
|
||||||||||||
Revenue
|
||||||||||||
LEU segment:
|
||||||||||||
Separative work units
|
$ | 1,521.4 | $ | 1,647.0 | $ | 1,175.5 | ||||||
Uranium
|
236.1 | 180.7 | 217.1 | |||||||||
1,757.5 | 1,827.7 | 1,392.6 | ||||||||||
Contract services
segment
|
277.9 | 209.1 | 222.0 | |||||||||
$ | 2,035.4 | $ | 2,036.8 | $ | 1,614.6 | |||||||
Segment Gross Profit
|
||||||||||||
LEU segment
|
$ | 134.3 | $ | 187.4 | $ | 190.4 | ||||||
Contract services
segment
|
24.1 | 17.3 | 38.4 | |||||||||
Gross profit
|
158.4 | 204.7 | 228.8 | |||||||||
Special charges
|
- | 4.1 | - | |||||||||
Advanced technology costs
|
110.2 | 118.4 | 110.2 | |||||||||
Selling, general, and administrative
|
58.9 | 58.8 | 54.3 | |||||||||
Other (income)
|
(44.4 | ) | (70.7 | ) | - | |||||||
Operating income
|
33.7 | 94.1 | 64.3 | |||||||||
Interest expense (income) and issuance costs, net
|
6.8 | (0.1 | ) | (7.4 | ) | |||||||
Income before income taxes
|
$ | 26.9 | $ | 94.2 | $ | 71.7 |
December 31,
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
(millions)
|
||||||||||||
Assets
|
||||||||||||
LEU segment
|
$ | 3,760.6 | (1) | $ | 3,444.9 | $ | 2,997.7 | |||||
Contract services
segment
|
87.6 | 87.2 | 57.6 | |||||||||
$ | 3,848.2 | $ | 3,532.1 | $ | 3,055.3 |
|
(1)
|
Assets in the LEU segment include property, plant and equipment at the Portsmouth site in Piketon, Ohio of $14.6 million at December 31, 2010.
|
March 31,
2010
|
June 30,
2010
|
Sept. 30,
2010
|
Dec. 31,
2010
|
Year
2010
|
||||||||||||||||
Revenue
|
$ | 344.7 | $ | 459.7 | $ | 564.6 | $ | 666.4 | $ | 2,035.4 | ||||||||||
Cost of sales
|
318.0 | 415.6 | 526.6 | 616.8 | 1,877.0 | |||||||||||||||
Gross profit
|
26.7 | 44.1 | 38.0 | 49.6 | 158.4 | |||||||||||||||
Advanced technology costs
|
25.7 | 26.0 | 28.6 | 29.9 | 110.2 | |||||||||||||||
Selling, general and administrative
|
15.1 | 14.3 | 14.0 | 15.5 | 58.9 | |||||||||||||||
Other (income)
|
(9.7 | ) | (10.3 | ) | (12.4 | ) | (12.0 | ) | (44.4 | ) | ||||||||||
Operating income (loss)
|
(4.4 | ) | 14.1 | 7.8 | 16.2 | 33.7 | ||||||||||||||
Preferred stock issuance costs
|
- | - | 4.8 | 1.8 | 6.6 | |||||||||||||||
Interest expense
|
- | 0.1 | 0.3 | 0.2 | 0.6 | |||||||||||||||
Interest (income)
|
(0.1 | ) | (0.1 | ) | (0.2 | ) | - | (0.4 | ) | |||||||||||
Provision (benefit) for income taxes
|
5.4 | 6.9 | 1.9 | 5.2 | 19.4 | |||||||||||||||
Net income (loss)
|
$ | (9.7 | ) | $ | 7.2 | $ | 1.0 | $ | 9.0 | $ | 7.5 | |||||||||
Net income (loss) per share – basic
|
$ | (.09 | ) | $ | .06 | $ | .01 | $ | .08 | $ | .07 | |||||||||
Net income (loss) per share – diluted
|
$ | (.09 | )(a) | $ | .04 | $ | .01 | $ | .05 | $ | .05 | |||||||||
Weighted average number of shares outstanding:
|
||||||||||||||||||||
Basic
|
111.7 | 112.9 | 113.2 | 113.2 | 112.8 | |||||||||||||||
Diluted
|
111.7 | (a) | 161.4 | 166.4 | 177.6 | 166.6 |
March 31,
2009
|
June 30,
2009
|
Sept. 30,
2009
|
Dec. 31,
2009
|
Year
2009
|
||||||||||||||||
Revenue
|
$ | 505.6 | $ | 514.3 | $ | 549.3 | $ | 467.6 | $ | 2,036.8 | ||||||||||
Cost of sales
|
463.4 | 436.9 | 510.1 | 421.7 | 1,832.1 | |||||||||||||||
Gross profit
|
42.2 | 77.4 | 39.2 | 45.9 | 204.7 | |||||||||||||||
Special charges
|
- | - | 2.5 | 1.6 | 4.1 | |||||||||||||||
Advanced technology costs
|
31.4 | 30.7 | 31.7 | 24.6 | 118.4 | |||||||||||||||
Selling, general and administrative
|
14.5 | 16.6 | 14.0 | 13.7 | 58.8 | |||||||||||||||
Other (income)
|
- | - | - | (70.7 | ) | (70.7 | ) | |||||||||||||
Operating income (loss)
|
(3.7 | ) | 30.1 | (9.0 | ) | 76.7 | 94.1 | |||||||||||||
Interest expense
|
0.5 | 0.3 | 0.2 | 0.2 | 1.2 | |||||||||||||||
Interest (income)
|
(0.6 | ) | (0.4 | ) | (0.2 | ) | (0.1 | ) | (1.3 | ) | ||||||||||
Provision (benefit) for income taxes
|
(1.5 | ) | 12.9 | (2.8 | ) | 27.1 | 35.7 | |||||||||||||
Net income (loss)
|
$ | (2.1 | ) | $ | 17.3 | $ | (6.2 | ) | $ | 49.5 | $ | 58.5 | ||||||||
Net income (loss) per share – basic
|
$ | (.02 | ) | $ | .16 | $ | (.06 | ) | $ | .44 | $ | .53 | ||||||||
Net income (loss) per share – diluted
|
$ | (.02 | )(a) | $ | .11 | $ | (.06 | )(a) | $ | .31 | $ | .37 | ||||||||
Weighted average number of shares outstanding:
|
||||||||||||||||||||
Basic
|
110.7 | 111.5 | 111.8 | 111.8 | 111.4 | |||||||||||||||
Diluted
|
110.7 | (a) | 160.3 | 111.8 | (a) | 160.5 | 160.1 |
(a)
|
No dilutive effect is recognized in periods in which a net loss has occurred.
|
|
Exhibit
No.
|
Description
|
3.1
|
Certificate of Incorporation of USEC Inc., as amended, incorporated by reference to Exhibit 3.1 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (Commission file number 1-14287).
|
3.3
|
Amended and Restated Bylaws of USEC Inc., dated May 25, 2010, incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287).
|
4.1
|
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).
|
4.2
|
First Amendment dated May 25, 2010, to Rights Agreement dated April 24, 2001, between USEC Inc. and Mellon Investor Services LLC, as Rights Agent, incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287).
|
4.3
|
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).
|
4.4
|
Warrant to purchase 3,125,000 shares of Class B Common Stock or 3,125 shares of Series C Convertible Participating Preferred Stock issued to Toshiba America Nuclear Energy Corporation, incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed on September 2, 2010 (Commission file number 1-14287).
|
4.5
|
Warrant to purchase 3,125,000 shares of Class B Common Stock or 3,125 shares of Series C Convertible Participating Preferred Stock issued to Babcock & Wilcox Investment Company, incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K filed on September 2, 2010 (Commission file number 1-14287).
|
10.1
|
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).
|
10.2
|
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).
|
10.3
|
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).
|
10.4
|
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).
|
10.5
|
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).
|
10.6
|
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).
|
10.7
|
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).
|
10.8
|
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).
|
10.23
|
Modification No. 2 dated January 12, 2009, to Agreement dated June 17, 2002 between DOE and USEC Inc., incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on January 13, 2009 (Commission file number 1-14287).
|
10.24
|
Modification No. 3 dated January 28, 2010, to Agreement dated June 17, 2002 between DOE and USEC Inc., incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on February 2, 2010 (Commission file number 1-14287).
|
10.25
|
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).
|
10.26
|
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).
|
10.27
|
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).
|
10.28
|
Third Amended and Restated Credit Agreement dated as of October 8, 2010, among USEC Inc., United States Enrichment Corporation, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative and collateral agent, JPMorgan Securities, Inc., Wells Fargo Capital Finance, LLC, and UBS Securities LLC, as revolving joint book managers and revolving joint lead arrangers, J.P. Morgan Securities, Inc., as Term Facility Bookrunner, Wells Fargo Capital Finance, LLC, as syndication agent, and UBS Securities LLC, as documentation agent., incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on October 8, 2010 (Commission file number 1-14287).
|
10.29
|
Third Amended and Restated Omnibus Pledge and Security Agreement dated as of October 8, 2010 by USEC Inc., United States Enrichment Corporation 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 10.2 of the Current Report on Form 8-K filed on October 8, 2010 (Commission file number 1-14287). , 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).
|
10.30
|
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).
|
10.31
|
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).
|
10.32
|
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).
|
10.33
|
Amendment dated December 16, 2009 to MOU dated August 16, 2007 among Hexcel Corporation, USEC Inc., and ATK Space Systems Inc., incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 22, 2009 (Commission file number 1-14287). (Certain information has been omitted and filed separately pursuant to a request for confidential treatment under Rule 24b-2.)
|
10.34
|
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).
|
10.35
|
Amendment dated November 3, 2009 to the Contract dated August 30, 2007 between the Company and Major Tool and Machine, Inc., incorporated by reference to Exhibit 10.40 to the Annual Report on Form 10-K for the year ended December 31, 2009 (Commission file number 1-14287) (Certain information has been omitted and filed separately pursuant to a request for confidential treatment under Rule 24b-2).
|
10.36
|
Contract dated April 24, 2008 between Fluor Enterprises, Inc., as agent for USEC Inc., and Teledyne Brown Engineering, Inc., incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 (Commission file number 1-14287). (Certain information has been omitted and filed separately pursuant to a request for confidential treatment under Rule 24b-2).
|
10.37
|
Amended and Restated Design, Engineering, Procurement, Construct ion and Construction Management Agreement for the American Centrifuge Plant between USEC Inc. and Fluor Enterprises, Inc., entered into September 24, 2008, effective as of January 1, 2008, incorporated by reference to Exhibit 10.4 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 (Commission file number 1-14287). (Certain information has been omitted and filed separately pursuant to a request for confidential treatment under Rule 24b-2).
|
10.38
|
Cooperative Agreement dated March 23, 2010 between the U.S. Department of Energy and USEC Inc., incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on March 23, 2010 (Commission file number 1-14287)
|
10.39
|
Securities Purchase Agreement, dated as of May 25, 2010, by and among USEC Inc., Toshiba Corporation, and Babcock & Wilcox Investment Company, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on May 25, 2010 (Commission file number 1-14287).
|
10.40
|
Investor Rights Agreement, dated as of September 2, 2010, by and among USEC Inc., Toshiba Corporation, and Babcock & Wilcox Investment Company, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on September 2, 2010 (Commission file number 1-14287).
|
10.41
|
Limited Liability Company Agreement of American Centrifuge Manufacturing, LLC dated as of September 2, 2010 between American Centrifuge Holdings, LLC and Babcock & Wilcox Technical Services Group, Inc., incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed on September 2, 2010 (Commission file number 1-14287) (Certain information has been omitted and filed separately pursuant to a request for confidential treatment under Rule 24b-2).
|
10.42
|
Form of Director and Officer Indemnification Agreement, incorporated by reference to Exhibit 10.24 of the Registration Statement on Form S-1, filed June 29, 1998 (Commission file number 333-57955). (b)
|
10.43
|
Form of Change in Control Agreement with executive officers, incorporated by reference to Exhibit 10.36 of the Annual Report on Form 10-K for the year ended December 31, 2008. (Commission file number 1-14287). (b)
|
10.44
|
Form of Change in Control Agreement with senior executive officers, incorporated by reference to Exhibit 10.37 of the Annual Report on Form 10-K for the year ended December 31, 2008. (Commission file number 1-14287). (b)
|
10.45
|
Form of First Amendment to Change in Control Agreement with executive officers and senior executive officers. (a)(b)
|
10.46
|
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)
|
10.47
|
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)
|
10.48
|
Second Amendment to the USEC Inc. 1999 Equity Incentive Plan, dated November 1, 2007, incorporated by reference to Exhibit 10.46 of the Annual Report on Form 10-K for the year ended December 31, 2007 (Commission file number 1-14287). (b)
|
10.49
|
Form of Employee Nonqualified Stock Option Agreement under the USEC Inc. 1999 Equity Incentive Plan, 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)
|
10.50
|
Form of Employee Restricted Stock Award Agreement (stock in lieu of annual incentive) under the USEC Inc. 1999 Equity Incentive Plan, 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)
|
10.51
|
Form of Employee Restricted Stock Award Agreement (three year vesting) under the USEC Inc. 1999 Equity Incentive Plan, 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)
|
10.52
|
Form of Non-Employee Director Nonqualified Stock Option Agreement under the USEC Inc. 1999 Equity Incentive Plan, 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)
|
10.53
|
Form of Non-Employee Director Restricted Stock Award Agreement — Founder’s Stock and Incentive Stock under the USEC Inc. 1999 Equity Incentive Plan, 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)
|
10.54
|
Form of Non-Employee Director Restricted Stock Award Agreement — Annual Retainers and Meeting Fees under the USEC Inc. 1999 Equity Incentive Plan, 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)
|
10.55
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement (Annual Retainers and Meeting Fees) under the USEC Inc. 1999 Equity Incentive Plan, incorporated by reference to Exhibit 10.53 of the Annual Report on Form 10-K for the year ended December 31, 2007 (Commission file number 1-14287). (b)
|
10.56
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement (Incentive Awards) under the USEC Inc. 1999 Equity Incentive Plan, incorporated by reference to Exhibit 10.54 of the Annual Report on Form 10-K for the year ended December 31, 2007 (Commission file number 1-14287). (b)
|
10.57
|
USEC Inc. 2009 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K filed on May 6, 2009 (Commission file number 1-14287). (b)
|
10.58
|
Form of Employee Restricted Stock Award Agreement (Annual Incentive Program) under the USEC Inc. 2009 Equity Incentive Plan, incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K filed on May 6, 2009 (Commission file number 1-14287). (b)
|
10.59
|
Form of Employee Restricted Stock Award Agreement (Long Term Incentive Program) under the USEC Inc. 2009 Equity Incentive Plan, incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K filed on May 6, 2009 (Commission file number 1-14287). (b)
|
10.60
|
Form of Employee Non-qualified Stock Option Award Agreement (Three Year Vesting) under the USEC Inc. 2009 Equity Incentive Plan, incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K filed on May 6, 2009 (Commission file number 1-14287). (b)
|
10.61
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement (Annual Retainers and Chairman Fees) under the USEC Inc. 2009 Equity Incentive Plan, incorporated by reference to Exhibit 10.5 of the Current Report on Form 8-K filed on May 6, 2009 (Commission file number 1-14287). (b)
|
10.62
|
Form of Non-Employee Director Restricted Stock Unit Award Agreement (Incentive Awards) under the USEC Inc. 2009 Equity Incentive Plan, incorporated by reference to Exhibit 10.6 of the Current Report on Form 8-K filed on May 6, 2009 (Commission file number 1-14287). (b)
|
10.63
|
USEC Inc. Pension Restoration Plan, as amended and restated, dated November 1, 2007 incorporated by reference to Exhibit 10.55 of the Annual Report on Form 10-K for the year ended December 31, 2007 (Commission file number 1-14287). (b)
|
10.64
|
First Amendment, dated August 1, 2008, to USEC Inc. Pension Restoration Plan, as amended and restated, dated November 1, 2007, incorporated by reference to Exhibit 10.3 of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 (Commission file number 1-14287). (b)
|
10.65
|
USEC Inc. 1999 Supplemental Executive Retirement Plan, as amended and restated, dated November 1, 2010. (a)(b)
|
10.66
|
Summary Sheet for 2010 Non-Employee Director Compensation, incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (Commission file number 1-14287). (b)
|
(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.
|
(a)
|
with respect to any Member other than a Government Pension Member (i) with regard to Grandfathered Benefits, at the same time and in the same form as the Member’s benefit is paid under the Qualified Plan, and (ii) with regard to Non-Grandfathered Benefits, on the Benefit Commencement Date in a lump sum, and
|
(b)
|
with respect to any Government Pension Member, (i) with regard to Grandfathered Benefits, at the time and in the form elected by the Government Pension Member in a manner established by the Committee, provided that the Government Pension Member then could have elected a benefit at such time and in such form under the Qualified Plan had he participated in the Qualified Plan, or (ii) with regard to Non-Grandfathered Benefits, on the Benefit Commencement Date in a lump sum.
|
(a)
|
One hundred percent (100%) of the Member’s monthly Primary Social Security Benefit;
|
(b)
|
One hundred percent (100%) of (i) in the case of a Member other than a Government Pension Member, the Actuarial Equivalent of the Member’s monthly benefit under the Qualified Plan, or (ii) in the case of a Government Pension Member, the Actuarial Equivalent of the Government Pension Member’s CSRS/FERS Benefit attributable to his service with the Company, in the case of either clause (i) or (ii), assuming commencement as of his Benefit Commencement Date, and
|
(c)
|
The lump sum Actuarial Equivalent of 100% of the Member’s benefit under the Restoration Plan, and
|
(d)
|
The Actuarial Equivalent of the Member’s Grandfathered Benefit.
|
(a)
|
The business address and telephone number of the Chief Human Resources Officer of the Company is:
|
(b)
|
The Company shall have the right to change the address and telephone number of the Chief Human Resources Officer. The Company shall give each Member written notice of any change of the Chief Human Resources Officer, or any change in the address and telephone number of the Chief Human Resources Officer.
|
(a)
|
the specific reasons for the denial;
|
(b)
|
the specific reference to pertinent Plan provisions on which the denial is based;
|
(c)
|
a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary; and
|
(d)
|
appropriate information and explanation of the claims procedure under this Plan to permit the Claimant to submit his claim for review.
|
(a)
|
The Claimant shall exercise his right of appeal by submitting a written request for a review of the denied claim to the Chief Human Resources Officer. This written request for review must be submitted to the Chief Human Resources Officer within sixty (60) days after receipt by the Claimant of the written notice of denial.
|
(b)
|
The Claimant shall have the following rights under this appeal procedure:
|
(1)
|
to request a review by the Committee upon written application to the Chief Human Resources Officer;
|
(2)
|
to review pertinent documents with regard to the employee benefit plan created under this Plan;
|
(3)
|
to submit issues and comments in writing;
|
(4)
|
to request an extension of time to make a written submission of issues and comments; and
|
(5)
|
to request that a hearing be held to consider Claimant’s appeal.
|
(a)
|
within forty-five (45) days after the receipt of the request for review if no hearing is held; or
|
(b)
|
within ninety (90) days after the receipt of the request for review, if an extension of time is necessary in order to hold a hearing.
|
(1)
|
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.
|
(2)
|
The written notice of extension shall indicate that an extension of time will occur in order to hold a hearing on Claimant’s appeal. The notice shall also specify the place, date, and time of that hearing and the Claimant’s 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.
|
(a)
|
the decision(s);
|
(b)
|
the reasons for the decision(s); and
|
(c)
|
specific reference to the provisions of this Plan on which the decision(s) is/are based.
|
Attest:
/s/ Peter B. Saba
Secretary
|
USEC Inc.
By:
/s/ W. Lance Wright
Title:
Senior Vice President, Human Resources & Administration
|
(c)
|
Small Benefit Exception
. Notwithstanding the foregoing, (i) with respect to amounts deferred on or after November 1, 2010, if payment is made in installments, immediate payment of all remaining installments shall be made if the present value of the deferred amount to be paid in the remaining installments falls below twenty-five thousand dollars ($25,000), and (ii) if at the time of any payment from an Account, the Distributable Amount from such Account is less than or equal to the applicable dollar amount under Code Section 402(g)(1)(B) ($16,500 in 2010), the full Distributable Amount shall be paid from such Account in a single lump sum payment, provided such single lump sum payment results in the distribution of the Participant’s entire interest in all nonqualified deferred compensation considered under Treasury Regulation Section 1.409A-1(c)(2) to be deferred under a single plan of which the Plan is a part.
|
Name of Subsidiary
|
State of Incorporation
|
United States Enrichment Corporation
|
Delaware
|
NAC International Inc.
|
Delaware
|
|
I, John K. Welch, certify that:
|
1.
|
I have reviewed this 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 registrant's 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 registrant's 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 registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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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 registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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February 24, 2011
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/s/ John K. Welch
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John K. Welch
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President and Chief Executive Officer
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I, John C. Barpoulis, certify that:
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1.
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I have reviewed this annual report on Form 10-K of USEC Inc.;
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2.
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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;
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3.
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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;
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4.
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The registrant's 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:
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(a)
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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;
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(b)
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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;
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(c)
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Evaluated the effectiveness of the registrant's 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
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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|
5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's 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 registrant's 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 registrant's internal control over financial reporting.
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February 24, 2011
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/s/ John C. Barpoulis
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John C. Barpoulis
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|
Senior Vice President and Chief Financial Officer
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February 24, 2011
|
/s/ John K. Welch
|
John K. Welch
|
|
President and Chief Executive Officer
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February 24, 2011
|
/s/ John C. Barpoulis
|
John C. Barpoulis
|
|
Senior Vice President and Chief Financial Officer
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