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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
52-2107911
|
(State of incorporation)
|
(I.R.S. Employer Identification No.)
|
Large accelerated filer
|
o
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Accelerated filer
|
o
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Non-accelerated filer
|
o
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Smaller reporting company
|
ý
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Page
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PART I – FINANCIAL INFORMATION
|
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PART II – OTHER INFORMATION
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
180.3
|
|
|
$
|
218.8
|
|
Accounts receivable, net
|
20.3
|
|
|
58.9
|
|
||
Inventories
|
257.8
|
|
|
462.2
|
|
||
Deferred costs associated with deferred revenue
|
63.0
|
|
|
82.9
|
|
||
Other current assets
|
15.8
|
|
|
19.6
|
|
||
Total current assets
|
537.2
|
|
|
842.4
|
|
||
Property, plant and equipment, net
|
3.5
|
|
|
3.5
|
|
||
Deferred taxes
|
20.7
|
|
|
26.0
|
|
||
Deposits for surety bonds
|
29.8
|
|
|
34.8
|
|
||
Intangible assets, net
|
112.0
|
|
|
119.2
|
|
||
Excess reorganization value
|
137.2
|
|
|
137.2
|
|
||
Other long-term assets
|
20.1
|
|
|
20.6
|
|
||
Total Assets
|
$
|
860.5
|
|
|
$
|
1,183.7
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
||
Accounts payable and accrued liabilities
|
$
|
40.7
|
|
|
$
|
50.5
|
|
Payables under SWU purchase agreements
|
8.4
|
|
|
140.1
|
|
||
Deferred taxes
|
20.7
|
|
|
26.0
|
|
||
Inventories owed to customers and suppliers
|
69.4
|
|
|
158.9
|
|
||
Deferred revenue
|
75.4
|
|
|
100.9
|
|
||
Total current liabilities
|
214.6
|
|
|
476.4
|
|
||
Long-term debt
|
247.6
|
|
|
240.4
|
|
||
Postretirement health and life benefit obligations
|
216.3
|
|
|
211.4
|
|
||
Pension benefit liabilities
|
194.2
|
|
|
179.3
|
|
||
Other long-term liabilities
|
51.7
|
|
|
54.6
|
|
||
Total Liabilities
|
924.4
|
|
|
1,162.1
|
|
||
Commitments and Contingencies (Note 13)
|
|
|
|
|
|
||
Stockholders’ Equity (Deficit)
|
(63.9
|
)
|
|
21.6
|
|
||
Total Liabilities and Stockholders’ Equity (Deficit)
|
$
|
860.5
|
|
|
$
|
1,183.7
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
2015
|
|
|
2014
|
|
2015
|
|
|
2014
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Separative work units
|
$
|
8.8
|
|
|
|
$
|
97.4
|
|
|
$
|
154.6
|
|
|
|
$
|
347.5
|
|
Uranium
|
—
|
|
|
|
—
|
|
|
43.2
|
|
|
|
—
|
|
||||
Contract services
|
20.4
|
|
|
|
23.3
|
|
|
62.5
|
|
|
|
43.0
|
|
||||
Total Revenue
|
29.2
|
|
|
|
120.7
|
|
|
260.3
|
|
|
|
390.5
|
|
||||
Cost of Sales:
|
|
|
|
|
|
|
|
|
|
||||||||
Separative work units and uranium
|
33.8
|
|
|
|
103.3
|
|
|
210.1
|
|
|
|
369.4
|
|
||||
Contract services
|
19.8
|
|
|
|
22.8
|
|
|
63.4
|
|
|
|
43.9
|
|
||||
Total Cost of Sales
|
53.6
|
|
|
|
126.1
|
|
|
273.5
|
|
|
|
413.3
|
|
||||
Gross (loss)
|
(24.4
|
)
|
|
|
(5.4
|
)
|
|
(13.2
|
)
|
|
|
(22.8
|
)
|
||||
Advanced technology costs
|
1.9
|
|
|
|
5.3
|
|
|
7.7
|
|
|
|
56.6
|
|
||||
Selling, general and administrative
|
13.5
|
|
|
|
10.4
|
|
|
32.1
|
|
|
|
32.2
|
|
||||
Amortization of intangible assets
|
1.1
|
|
|
|
—
|
|
|
7.1
|
|
|
|
—
|
|
||||
Special charges for workforce reductions
|
9.8
|
|
|
|
0.1
|
|
|
13.3
|
|
|
|
2.1
|
|
||||
Other (income)
|
(0.3
|
)
|
|
|
(4.8
|
)
|
|
(1.8
|
)
|
|
|
(39.4
|
)
|
||||
Operating (loss)
|
(50.4
|
)
|
|
|
(16.4
|
)
|
|
(71.6
|
)
|
|
|
(74.3
|
)
|
||||
Interest expense
|
4.8
|
|
|
|
4.7
|
|
|
14.6
|
|
|
|
14.0
|
|
||||
Interest (income)
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
(0.3
|
)
|
|
|
(0.5
|
)
|
||||
Reorganization items, net
|
—
|
|
|
|
(440.0
|
)
|
|
—
|
|
|
|
(426.9
|
)
|
||||
Income (loss) before income taxes
|
(55.1
|
)
|
|
|
419.0
|
|
|
(85.9
|
)
|
|
|
339.1
|
|
||||
Provision (benefit) for income taxes
|
—
|
|
|
|
0.1
|
|
|
(0.3
|
)
|
|
|
(1.0
|
)
|
||||
Net income (loss)
|
$
|
(55.1
|
)
|
|
|
$
|
418.9
|
|
|
$
|
(85.6
|
)
|
|
|
$
|
340.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share - basic
|
$
|
(6.05
|
)
|
|
|
$
|
85.49
|
|
|
$
|
(9.51
|
)
|
|
|
$
|
69.41
|
|
Net income (loss) per share - diluted
|
$
|
(6.05
|
)
|
|
|
$
|
55.51
|
|
|
$
|
(9.51
|
)
|
|
|
$
|
45.93
|
|
Weighted-average number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
9.1
|
|
|
|
4.9
|
|
|
9.0
|
|
|
|
4.9
|
|
||||
Diluted
|
9.1
|
|
|
|
7.6
|
|
|
9.0
|
|
|
|
7.6
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
2015
|
|
|
2014
|
|
2015
|
|
|
2014
|
||||||||
Net income (loss)
|
$
|
(55.1
|
)
|
|
|
$
|
418.9
|
|
|
$
|
(85.6
|
)
|
|
|
$
|
340.1
|
|
Other comprehensive income (loss), before tax (Note 14):
|
|
|
|
|
|
|
|
|
|
||||||||
Curtailment (gain) recognized in net income (loss)
|
—
|
|
|
|
(2.2
|
)
|
|
—
|
|
|
|
(2.2
|
)
|
||||
Amortization of actuarial losses, net
|
—
|
|
|
|
0.3
|
|
|
—
|
|
|
|
0.9
|
|
||||
Amortization of prior service (credits), net
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
|
(0.3
|
)
|
||||
Other comprehensive (loss), before tax
|
(0.1
|
)
|
|
|
(2.0
|
)
|
|
(0.2
|
)
|
|
|
(1.6
|
)
|
||||
Income tax benefit related to items of other comprehensive income
|
—
|
|
|
|
0.1
|
|
|
—
|
|
|
|
—
|
|
||||
Other comprehensive (loss), net of tax
|
(0.1
|
)
|
|
|
(1.9
|
)
|
|
(0.2
|
)
|
|
|
(1.6
|
)
|
||||
Elimination of Predecessor Company accumulated other comprehensive loss
|
—
|
|
|
|
121.7
|
|
|
—
|
|
|
|
121.7
|
|
||||
Comprehensive income (loss)
|
$
|
(55.2
|
)
|
|
|
$
|
538.7
|
|
|
$
|
(85.8
|
)
|
|
|
$
|
460.2
|
|
|
Nine Months Ended
September 30,
|
|||||||
|
Successor
|
|
|
Predecessor
|
||||
|
2015
|
|
|
2014
|
||||
Cash Flows from Operating Activities
|
|
|
|
|
||||
Net income (loss)
|
$
|
(85.6
|
)
|
|
|
$
|
340.1
|
|
Adjustments to reconcile net income (loss) to net cash (used in) operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
7.5
|
|
|
|
4.2
|
|
||
Immediate recognition of net actuarial losses
|
20.9
|
|
|
|
—
|
|
||
PIK interest on paid-in-kind toggle notes
|
5.4
|
|
|
|
—
|
|
||
Gain on sales of assets
|
(1.8
|
)
|
|
|
(5.7
|
)
|
||
Non-cash reorganization items
|
—
|
|
|
|
(449.2
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable – decrease
|
39.0
|
|
|
|
79.0
|
|
||
Inventories, net – decrease
|
114.9
|
|
|
|
177.0
|
|
||
Payables under SWU purchase agreements – (decrease)
|
(131.7
|
)
|
|
|
(293.4
|
)
|
||
Deferred revenue, net of deferred costs – (decrease)
|
(5.7
|
)
|
|
|
(9.7
|
)
|
||
Accounts payable and other liabilities – (decrease)
|
(12.1
|
)
|
|
|
(58.9
|
)
|
||
Other, net
|
4.1
|
|
|
|
(3.7
|
)
|
||
Net Cash (Used in) Operating Activities
|
(45.1
|
)
|
|
|
(220.3
|
)
|
||
|
|
|
|
|
||||
Cash Flows Provided by (Used In) Investing Activities
|
|
|
|
|
||||
Deposits for surety bonds - net decrease
|
5.0
|
|
|
|
3.9
|
|
||
Proceeds from sales of assets
|
1.8
|
|
|
|
8.4
|
|
||
Capital expenditures
|
(0.2
|
)
|
|
|
—
|
|
||
Net Cash Provided by Investing Activities
|
6.6
|
|
|
|
12.3
|
|
||
|
|
|
|
|
||||
Cash Flows (Used in) Financing Activities
|
|
|
|
|
||||
Payments for deferred financing costs
|
—
|
|
|
|
(0.7
|
)
|
||
Common stock issued (purchased), net
|
—
|
|
|
|
(0.1
|
)
|
||
Net Cash (Used in) Financing Activities
|
—
|
|
|
|
(0.8
|
)
|
||
|
|
|
|
|
||||
Net (Decrease)
|
(38.5
|
)
|
|
|
(208.8
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
218.8
|
|
|
|
314.2
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
180.3
|
|
|
|
$
|
105.4
|
|
|
|
|
|
|
||||
Supplemental cash flow information:
|
|
|
|
|
||||
Interest paid
|
$
|
12.2
|
|
|
|
$
|
15.9
|
|
Non-cash activities:
|
|
|
|
|
||||
Conversion of interest payable-in-kind to long-term debt
|
$
|
1.8
|
|
|
|
$
|
—
|
|
|
Common Stock,
Par Value
$.10 per Share
|
|
Excess of
Capital over
Par Value
|
|
Retained
Earnings
(Deficit)
|
|
Treasury
Stock
|
|
Accumulated
Other Comprehensive Income (Loss)
|
|
Total
|
||||||||||||
Balance at December 31, 2013 (Predecessor)
|
$
|
0.5
|
|
|
$
|
1,216.4
|
|
|
$
|
(1,520.7
|
)
|
|
$
|
(34.3
|
)
|
|
$
|
(120.1
|
)
|
|
$
|
(458.2
|
)
|
Net income
|
—
|
|
|
—
|
|
|
340.1
|
|
|
—
|
|
|
—
|
|
|
340.1
|
|
||||||
Other comprehensive (loss), net of tax (Note 14)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.6
|
)
|
|
(1.6
|
)
|
||||||
Restricted and other common stock issued, net of amortization
|
—
|
|
|
1.1
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
1.0
|
|
||||||
Surrender of restricted stock
|
—
|
|
|
4.4
|
|
|
—
|
|
|
(4.4
|
)
|
|
—
|
|
|
—
|
|
||||||
Elimination of Predecessor Company equity
|
(0.5
|
)
|
|
(1,221.9
|
)
|
|
1,180.6
|
|
|
38.8
|
|
|
121.7
|
|
|
118.7
|
|
||||||
Issuance of Successor Company common stock and excess of capital over par value
|
0.9
|
|
|
58.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59.3
|
|
||||||
Balance at September 30, 2014 (Predecessor)
|
$
|
0.9
|
|
|
$
|
58.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at September 30, 2014 (Successor)
|
$
|
0.9
|
|
|
$
|
58.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at December 31, 2014 (Successor)
|
$
|
0.9
|
|
|
$
|
58.6
|
|
|
$
|
(42.3
|
)
|
|
$
|
—
|
|
|
$
|
4.4
|
|
|
$
|
21.6
|
|
Net (loss)
|
—
|
|
|
—
|
|
|
(85.6
|
)
|
|
—
|
|
|
—
|
|
|
(85.6
|
)
|
||||||
Other comprehensive (loss), net of tax (Note 14)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
||||||
Restricted stock units and stock options issued, net of amortization
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||||
Balance at September 30, 2015 (Successor)
|
$
|
0.9
|
|
|
$
|
58.9
|
|
|
$
|
(127.9
|
)
|
|
$
|
—
|
|
|
$
|
4.2
|
|
|
$
|
(63.9
|
)
|
-
|
Lump-sum pension payments to former employees in the first nine months of 2015 resulted in the remeasurement of pension obligations under the Retirement Program Plan for Employees of United States Enrichment Corporation and direct charges to cost of sales of
$21.6 million
in both the three and nine months ended September 30, 2015;
|
-
|
Operating expenses of
$2.3 million
and
$10.6 million
in the three and nine months ended September 30, 2015, compared to
$15.6 million
and
$51.3 million
in the corresponding periods in 2014. Charges in 2015 include off-site inventory management and logistics costs. Charges in 2014 include inventory management and disposition, ongoing regulatory compliance, utility requirements for operations, security, and other Paducah site management activities related to the transitioning of facilities and infrastructure to DOE;
|
-
|
Inventory charges of $0 and
$0.3 million
in the three and nine months ended September 30, 2015, compared to
$1.8 million
and
$13.5 million
in the three and nine months ended September 30, 2014, including the cost of inventories deployed for cascade drawdown, assay blending and repackaging, and residual uranium in cylinders transferred to DOE. The Company determined that it was uneconomic to recover resulting residual quantities for resale; and
|
-
|
Asset depreciation charges of
$0.1 million
and
$1.9 million
in the three and nine months ended September 30, 2014. Paducah GDP asset depreciation was completed as of June 30, 2014.
|
|
Liability Balance to Be Paid,
Dec. 31, 2014
|
|
Nine Months Ended September 30, 2015
|
|
Liability Balance to Be Paid,
Sep. 30, 2015
|
||||||||||
|
|
Special Charges
|
|
Paid
|
|
||||||||||
Workforce reductions, primarily severance payments
|
$
|
2.4
|
|
|
$
|
13.6
|
|
|
$
|
(6.7
|
)
|
|
$
|
9.3
|
|
Less: Amounts billed to DOE
|
|
|
(0.3
|
)
|
|
|
|
|
|||||||
Special charges for workforce reductions
|
|
|
$
|
13.3
|
|
|
|
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
|
(millions)
|
||||||
Utility customers and other
|
$
|
5.9
|
|
|
$
|
36.3
|
|
Contract services, primarily DOE
|
14.4
|
|
|
22.6
|
|
||
Accounts receivable, net
|
$
|
20.3
|
|
|
$
|
58.9
|
|
|
September 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Current
Assets
|
|
Current
Liabilities
(a)
|
|
Inventories, Net
|
|
Current
Assets
|
|
Current
Liabilities
(a)
|
|
Inventories, Net
|
||||||||||||
Separative work units
|
$
|
218.4
|
|
|
$
|
37.4
|
|
|
$
|
181.0
|
|
|
$
|
330.6
|
|
|
$
|
76.6
|
|
|
$
|
254.0
|
|
Uranium
|
39.2
|
|
|
32.0
|
|
|
7.2
|
|
|
131.4
|
|
|
82.3
|
|
|
49.1
|
|
||||||
Materials and supplies
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||||
|
$
|
257.8
|
|
|
$
|
69.4
|
|
|
$
|
188.4
|
|
|
$
|
462.2
|
|
|
$
|
158.9
|
|
|
$
|
303.3
|
|
(a)
|
Inventories owed to customers and suppliers, included in current liabilities, consist primarily of SWU and uranium inventories owed to fabricators.
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
|
(millions)
|
||||||
Property, plant and equipment, gross
|
$
|
3.9
|
|
|
$
|
3.7
|
|
Accumulated depreciation
|
(0.4
|
)
|
|
(0.2
|
)
|
||
Property, plant and equipment, net
|
$
|
3.5
|
|
|
$
|
3.5
|
|
|
September 30,
2015 |
|
December 31,
2014 |
||||
|
(millions)
|
||||||
Amortizable intangible assets:
|
|
|
|
||||
Backlog
|
$
|
54.6
|
|
|
$
|
54.6
|
|
Customer relationships
|
68.9
|
|
|
68.9
|
|
||
Amortizable intangible assets, gross
|
$
|
123.5
|
|
|
$
|
123.5
|
|
Accumulated amortization
|
(11.5
|
)
|
|
(4.3
|
)
|
||
Amortizable intangible assets, net
|
$
|
112.0
|
|
|
$
|
119.2
|
|
|
|
|
|
||||
Nonamortizable intangible assets:
|
|
|
|
||||
Excess reorganizational value
|
$
|
137.2
|
|
|
$
|
137.2
|
|
•
|
under a future credit facility;
|
•
|
held by or for the benefit of the Pension Benefit Guaranty Corporation ("PBGC") pursuant to any settlement of any actual or alleged ERISA Section 4062(e) event;
|
•
|
held by any party with respect to any equity investment (or any commitment to make an equity investment) with respect to the financing of the American Centrifuge project;
|
•
|
held by DOE, export credit agencies or any other lenders or insurers with respect to the financing or government support of the American Centrifuge project; and
|
•
|
held by the U.S. government.
|
•
|
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.
|
|
September 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Money market funds (a)
|
$
|
170.2
|
|
|
—
|
|
|
—
|
|
$
|
170.2
|
|
|
$
|
212.2
|
|
|
—
|
|
|
—
|
|
$
|
212.2
|
|
||
Deferred compensation asset (b)
|
—
|
|
$
|
1.4
|
|
|
—
|
|
$
|
1.4
|
|
|
—
|
|
$
|
3.2
|
|
|
—
|
|
$
|
3.2
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation obligation (b)
|
—
|
|
1.2
|
|
|
—
|
|
1.2
|
|
|
—
|
|
3.0
|
|
|
—
|
|
3.0
|
|
(a)
|
Included in cash and cash equivalents.
|
(b)
|
The deferred compensation obligation represents the balance of deferred compensation plus net investment earnings. The deferred compensation plan is informally funded through a rabbi trust using variable universal life insurance. The cash surrender value of the life insurance policies is designed to track the deemed investments of the plan participants. Investment crediting options consist of institutional and retail investment funds. The deemed investments are classified within Level 2 of the valuation hierarchy because (i) of the indirect method of investing and (ii) unit prices of institutional funds are not quoted in active markets.
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
2015
|
|
|
2014
|
|
2015
|
|
|
2014
|
||||||||
Service costs
|
$
|
1.1
|
|
|
|
$
|
0.6
|
|
|
$
|
3.1
|
|
|
|
$
|
1.8
|
|
Interest costs
|
9.2
|
|
|
|
10.6
|
|
|
27.8
|
|
|
|
31.7
|
|
||||
Expected return on plan assets (gains)
|
(12.2
|
)
|
|
|
(12.9
|
)
|
|
(36.6
|
)
|
|
|
(38.5
|
)
|
||||
Amortization of actuarial (gains) losses, net
|
—
|
|
|
|
0.4
|
|
|
—
|
|
|
|
1.0
|
|
||||
Actuarial (gain) loss from remeasurements, net
|
24.8
|
|
|
|
—
|
|
|
20.9
|
|
|
|
—
|
|
||||
Curtailment (gain)
|
—
|
|
|
|
(2.2
|
)
|
|
—
|
|
|
|
(2.2
|
)
|
||||
Net periodic benefit cost (credit)
|
$
|
22.9
|
|
|
|
$
|
(3.5
|
)
|
|
$
|
15.2
|
|
|
|
$
|
(6.2
|
)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
2015
|
|
|
2014
|
|
2015
|
|
|
2014
|
||||||||
Service costs
|
$
|
0.1
|
|
|
|
$
|
0.4
|
|
|
$
|
0.2
|
|
|
|
$
|
1.3
|
|
Interest costs
|
2.2
|
|
|
|
2.5
|
|
|
6.6
|
|
|
|
7.5
|
|
||||
Expected return on plan assets (gains)
|
(0.2
|
)
|
|
|
(0.5
|
)
|
|
(0.7
|
)
|
|
|
(1.5
|
)
|
||||
Amortization of prior service (credits), net
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
|
(0.3
|
)
|
||||
Net periodic benefit cost
|
$
|
2.0
|
|
|
|
$
|
2.3
|
|
|
$
|
5.9
|
|
|
|
$
|
7.0
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||
|
2015
|
|
|
2014
|
|
2015
|
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total stock-based compensation costs:
|
|
|
|
|
|
|
|
|
|
||||||||
Restricted stock and restricted stock units
|
$
|
0.1
|
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
|
$
|
0.6
|
|
Stock options, performance awards and other
|
—
|
|
|
|
—
|
|
|
0.1
|
|
|
|
—
|
|
||||
Expense included primarily in selling, general and administrative expense
|
$
|
0.1
|
|
|
|
$
|
0.1
|
|
|
$
|
0.3
|
|
|
|
$
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total recognized tax benefit
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
|
2015
|
|
|
2014
|
|
2015
|
|
|
2014
|
Risk-free interest rate
|
1.91%
|
|
|
-
|
|
1.91%
|
|
|
-
|
Expected volatility
|
75%
|
|
|
-
|
|
75%
|
|
|
-
|
Expected option life (years)
|
6
|
|
|
-
|
|
6
|
|
|
-
|
Weighted-average grant date fair value
|
$2.59
|
|
|
-
|
|
$2.85
|
|
|
-
|
Options granted
|
37,500
|
|
|
-
|
|
337,500
|
|
|
-
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||
(in millions, except per share amounts)
|
2015
|
|
|
2014
|
|
2015
|
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Numerators:
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) - basic
|
$
|
(55.1
|
)
|
|
|
$
|
418.9
|
|
|
$
|
(85.6
|
)
|
|
|
$
|
340.1
|
|
Interest expense on convertible notes
|
—
|
|
|
|
3.0
|
|
|
—
|
|
|
|
9.0
|
|
||||
Net income (loss), if converted - diluted
|
$
|
(55.1
|
)
|
|
|
$
|
421.9
|
|
|
$
|
(85.6
|
)
|
|
|
$
|
349.1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares
|
9.1
|
|
|
|
5.0
|
|
|
9.0
|
|
|
|
5.0
|
|
||||
Less: Weighted average unvested restricted stock
|
—
|
|
|
|
0.1
|
|
|
—
|
|
|
|
0.1
|
|
||||
Denominator for basic calculation
|
9.1
|
|
|
|
4.9
|
|
|
9.0
|
|
|
|
4.9
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Stock compensation awards (a)
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||
Convertible notes
|
—
|
|
|
|
1.8
|
|
|
—
|
|
|
|
1.8
|
|
||||
Convertible preferred stock:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Equivalent common shares
|
—
|
|
|
|
35.8
|
|
|
—
|
|
|
|
27.2
|
|
||||
Less: share issuance limitation (b)
|
—
|
|
|
|
34.9
|
|
|
—
|
|
|
|
26.3
|
|
||||
Net allowable common shares
|
—
|
|
|
|
0.9
|
|
|
—
|
|
|
|
0.9
|
|
||||
Subtotal
|
—
|
|
|
|
2.7
|
|
|
—
|
|
|
|
2.7
|
|
||||
Less: shares excluded in a period of a net loss
|
—
|
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
||||
Weighted average effect of dilutive securities
|
—
|
|
|
|
2.7
|
|
|
—
|
|
|
|
2.7
|
|
||||
Denominator for diluted calculation
|
9.1
|
|
|
|
7.6
|
|
|
9.0
|
|
|
|
7.6
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share - basic
|
$
|
(6.05
|
)
|
|
|
$
|
85.49
|
|
|
$
|
(9.51
|
)
|
|
|
$
|
69.41
|
|
Net income (loss) per share - diluted
|
$
|
(6.05
|
)
|
|
|
$
|
55.51
|
|
|
$
|
(9.51
|
)
|
|
|
$
|
45.93
|
|
(a)
|
Compensation awards under the 2014 Equity Incentive Plan resulted in common stock equivalents of less than 0.1 million shares of common stock and are excluded from the diluted calculation as a result of net losses in the three and nine months ended September 30, 2015.
|
(b)
|
Conversion of the convertible preferred stock of the Predecessor Company was limited based on NYSE rules requiring shareholder approval.
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
||||||||||||||||
|
Successor
|
|
|
|
Predecessor
|
|
|
Successor
|
|
|
|
Predecessor
|
|
||||||||
|
2015
|
|
|
|
2014
|
|
|
2015
|
|
|
|
2014
|
|
||||||||
Options excluded from diluted net income per share
|
382,500
|
|
|
|
|
200
|
|
|
|
382,500
|
|
|
|
|
200
|
|
|
||||
Warrants excluded from diluted net income per share
|
N/A
|
|
|
|
|
250,000
|
|
|
|
N/A
|
|
|
|
|
250,000
|
|
|
||||
Exercise price of excluded options
|
$
|
3.90
|
|
to
|
|
|
$
|
283.25
|
|
to
|
|
$
|
3.90
|
|
to
|
|
|
$
|
283.25
|
|
to
|
|
$
|
5.62
|
|
|
|
|
$
|
357.00
|
|
|
|
$
|
5.62
|
|
|
|
|
$
|
357.00
|
|
|
Exercise price of excluded warrants
|
N/A
|
|
|
|
|
$
|
187.50
|
|
|
|
N/A
|
|
|
|
|
$
|
187.50
|
|
|
2016
|
$
|
0.2
|
|
2017
|
0.5
|
|
|
2018
|
0.8
|
|
|
2019
|
0.9
|
|
|
2020
|
0.9
|
|
|
Thereafter
|
6.6
|
|
|
|
$
|
9.9
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
||||||||||||||
|
Successor
|
|
|
Predecessor
|
|
Successor
|
|
|
Predecessor
|
||||||||
(in millions)
|
2015
|
|
|
2014
|
|
2015
|
|
|
2014
|
||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
||||||||
LEU segment:
|
|
|
|
|
|
|
|
|
|
||||||||
Separative work units
|
$
|
8.8
|
|
|
|
$
|
97.4
|
|
|
$
|
154.6
|
|
|
|
$
|
347.5
|
|
Uranium
|
—
|
|
|
|
—
|
|
|
43.2
|
|
|
|
—
|
|
||||
|
8.8
|
|
|
|
97.4
|
|
|
197.8
|
|
|
|
347.5
|
|
||||
Contract services segment
|
20.4
|
|
|
|
23.3
|
|
|
62.5
|
|
|
|
43.0
|
|
||||
Revenue
|
$
|
29.2
|
|
|
|
$
|
120.7
|
|
|
$
|
260.3
|
|
|
|
$
|
390.5
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Gross Profit (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
||||||
LEU segment
|
$
|
(25.0
|
)
|
|
|
$
|
(5.9
|
)
|
|
$
|
(12.3
|
)
|
|
|
$
|
(21.9
|
)
|
Contract services segment
|
0.6
|
|
|
|
0.5
|
|
|
(0.9
|
)
|
|
|
(0.9
|
)
|
||||
Gross (loss)
|
$
|
(24.4
|
)
|
|
|
$
|
(5.4
|
)
|
|
$
|
(13.2
|
)
|
|
|
$
|
(22.8
|
)
|
•
|
significantly reduce the gross profit impact of deferred revenues going forward;
|
•
|
result in the amortization of sales backlog and customer relationship intangible assets that were created at emergence; and
|
•
|
result in higher cost of sales as a result of increasing inventory values at emergence.
|
•
|
sales of the SWU component of LEU,
|
•
|
sales of both the SWU and uranium components of LEU, and
|
•
|
sales of natural uranium.
|
|
September 30,
2015 |
|
December 31, 2014
|
|
September 30,
2014 |
||||||
SWU:
|
|
|
|
|
|
||||||
Long-term price indicator ($/SWU)
|
$
|
75.00
|
|
|
$
|
90.00
|
|
|
$
|
90.00
|
|
Spot price indicator ($/SWU)
|
62.00
|
|
|
88.00
|
|
|
89.00
|
|
|||
UF
6
:
|
|
|
|
|
|
|
|
|
|||
Long-term price composite ($/KgU)
|
129.97
|
|
|
146.64
|
|
|
133.58
|
|
|||
Spot price indicator ($/KgU)
|
100.00
|
|
|
100.50
|
|
|
99.00
|
|
•
|
Additional short-term sales;
|
•
|
Timing of customer orders, related deliveries, and purchases of LEU or components;
|
•
|
The outcome of legal proceedings and other contingencies;
|
•
|
Execution and funding of a new agreement with ORNL for the continuation of American Centrifuge development and testing activities in Oak Ridge following the expiration of the ACTDO Agreement on September 30, 2015; and
|
•
|
The cost of any American Centrifuge demobilization or additional costs related to the overall transition of Centrus.
|
|
Three Months Ended
September 30,
|
|
|
|
|
||||||||||
|
Successor
|
|
|
Predecessor
|
|
|
|
|
|||||||
|
2015
|
|
|
2014
|
|
Change
|
|
%
|
|||||||
LEU segment
|
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
SWU revenue
|
$
|
8.8
|
|
|
|
$
|
97.4
|
|
|
$
|
(88.6
|
)
|
|
(91
|
)%
|
Uranium revenue
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
Total
|
8.8
|
|
|
|
97.4
|
|
|
(88.6
|
)
|
|
(91
|
)%
|
|||
Cost of sales
|
33.8
|
|
|
|
103.3
|
|
|
69.5
|
|
|
67
|
%
|
|||
Gross (loss)
|
$
|
(25.0
|
)
|
|
|
$
|
(5.9
|
)
|
|
$
|
(19.1
|
)
|
|
(324
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Contract services segment
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
20.4
|
|
|
|
$
|
23.3
|
|
|
$
|
(2.9
|
)
|
|
(12
|
)%
|
Cost of sales
|
19.8
|
|
|
|
22.8
|
|
|
3.0
|
|
|
13
|
%
|
|||
Gross profit
|
$
|
0.6
|
|
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
29.2
|
|
|
|
$
|
120.7
|
|
|
$
|
(91.5
|
)
|
|
(76
|
)%
|
Cost of sales
|
53.6
|
|
|
|
126.1
|
|
|
72.5
|
|
|
57
|
%
|
|||
Gross (loss)
|
$
|
(24.4
|
)
|
|
|
$
|
(5.4
|
)
|
|
$
|
(19.0
|
)
|
|
(352
|
)%
|
|
Nine Months Ended
September 30,
|
|
|
|
|
||||||||||
|
Successor
|
|
|
Predecessor
|
|
|
|
|
|||||||
|
2015
|
|
|
2014
|
|
Change
|
|
%
|
|||||||
LEU segment
|
|
|
|
|
|
|
|
|
|||||||
Revenue:
|
|
|
|
|
|
|
|
|
|||||||
SWU revenue
|
$
|
154.6
|
|
|
|
$
|
347.5
|
|
|
$
|
(192.9
|
)
|
|
(56
|
)%
|
Uranium revenue
|
43.2
|
|
|
|
—
|
|
|
43.2
|
|
|
—
|
%
|
|||
Total
|
197.8
|
|
|
|
347.5
|
|
|
(149.7
|
)
|
|
(43
|
)%
|
|||
Cost of sales
|
210.1
|
|
|
|
369.4
|
|
|
159.3
|
|
|
43
|
%
|
|||
Gross (loss)
|
$
|
(12.3
|
)
|
|
|
$
|
(21.9
|
)
|
|
$
|
9.6
|
|
|
44
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Contract services segment
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
62.5
|
|
|
|
$
|
43.0
|
|
|
$
|
19.5
|
|
|
45
|
%
|
Cost of sales
|
63.4
|
|
|
|
43.9
|
|
|
(19.5
|
)
|
|
(44
|
)%
|
|||
Gross (loss)
|
$
|
(0.9
|
)
|
|
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|||||||
Total
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
260.3
|
|
|
|
$
|
390.5
|
|
|
$
|
(130.2
|
)
|
|
(33
|
)%
|
Cost of sales
|
273.5
|
|
|
|
413.3
|
|
|
139.8
|
|
|
34
|
%
|
|||
Gross (loss)
|
$
|
(13.2
|
)
|
|
|
$
|
(22.8
|
)
|
|
$
|
9.6
|
|
|
42
|
%
|
|
Three Months Ended
September 30,
|
|
|
|
|
||||||||||
|
Successor
|
|
|
Predecessor
|
|
|
|
|
|||||||
|
2015
|
|
|
2014
|
|
Change
|
|
%
|
|||||||
Cost of sales for the LEU segment:
|
|
|
|
|
|
|
|
|
|||||||
SWU and uranium
|
$
|
9.9
|
|
|
|
$
|
85.8
|
|
|
$
|
75.9
|
|
|
88
|
%
|
Direct charges
|
23.9
|
|
|
|
17.5
|
|
|
(6.4
|
)
|
|
(37
|
)%
|
|||
Total
|
$
|
33.8
|
|
|
|
$
|
103.3
|
|
|
69.5
|
|
|
67
|
%
|
|
Nine Months Ended
September 30,
|
|
|
|
|
||||||||||
|
Successor
|
|
|
Predecessor
|
|
|
|
|
|||||||
|
2015
|
|
|
2014
|
|
Change
|
|
%
|
|||||||
Cost of sales for the LEU segment:
|
|
|
|
|
|
|
|
|
|||||||
SWU and uranium
|
$
|
177.6
|
|
|
|
$
|
302.7
|
|
|
$
|
125.1
|
|
|
41
|
%
|
Direct charges
|
32.5
|
|
|
|
66.7
|
|
|
34.2
|
|
|
51
|
%
|
|||
Total
|
$
|
210.1
|
|
|
|
$
|
369.4
|
|
|
159.3
|
|
|
43
|
%
|
-
|
Lump-sum pension payments to former employees in the first nine months of 2015 resulted in the remeasurement of pension obligations under the Retirement Program Plan for Employees of United States Enrichment Corporation and direct charges to cost of sales of $21.6 million in both the three and nine months ended September 30, 2015;
|
-
|
Operating expenses of $2.3 million and $10.6 million in the three and nine months ended September 30, 2015, compared to $15.6 million and $51.3 million in the corresponding periods in 2014. Charges in 2015 include off-site inventory management and logistics costs. Charges in 2014 include inventory management and disposition, ongoing regulatory compliance, utility requirements for operations, security, and other Paducah site management activities related to the transitioning of facilities and infrastructure to DOE;
|
-
|
Inventory charges of $0 and $0.3 million in the three and nine months ended September 30, 2015, compared to $1.8 million and $13.5 million in the three and nine months ended September 30, 2014, including the cost of inventories deployed for cascade drawdown, assay blending and repackaging, and residual uranium in cylinders transferred to DOE. We determined that it was uneconomic to recover resulting residual quantities for resale; and
|
-
|
Asset depreciation charges of $0.1 million and $1.9 million in the three and nine months ended September 30, 2014. Paducah GDP asset depreciation was completed as of June 30, 2014.
|
|
Three Months Ended
September 30,
|
|
|
|
|
||||||||||
|
Successor
|
|
|
Predecessor
|
|
|
|
|
|||||||
|
2015
|
|
|
2014
|
|
Change
|
|
%
|
|||||||
Gross (loss)
|
$
|
(24.4
|
)
|
|
|
$
|
(5.4
|
)
|
|
$
|
(19.0
|
)
|
|
(352
|
)%
|
Advanced technology costs
|
1.9
|
|
|
|
5.3
|
|
|
3.4
|
|
|
64
|
%
|
|||
Selling, general and administrative
|
13.5
|
|
|
|
10.4
|
|
|
(3.1
|
)
|
|
(30
|
)%
|
|||
Amortization of intangible assets
|
1.1
|
|
|
|
—
|
|
|
(1.1
|
)
|
|
—
|
%
|
|||
Special charges for workforce reductions
|
9.8
|
|
|
|
0.1
|
|
|
(9.7
|
)
|
|
(9,700
|
)%
|
|||
Other (income)
|
(0.3
|
)
|
|
|
(4.8
|
)
|
|
(4.5
|
)
|
|
(94
|
)%
|
|||
Operating (loss)
|
(50.4
|
)
|
|
|
(16.4
|
)
|
|
(34.0
|
)
|
|
(207
|
)%
|
|||
Interest expense
|
4.8
|
|
|
|
4.7
|
|
|
(0.1
|
)
|
|
(2
|
)%
|
|||
Interest (income)
|
(0.1
|
)
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
%
|
|||
Reorganization items, net
|
—
|
|
|
|
(440.0
|
)
|
|
(440.0
|
)
|
|
100
|
%
|
|||
Income (loss) from before income taxes
|
(55.1
|
)
|
|
|
419.0
|
|
|
(474.1
|
)
|
|
(113
|
)%
|
|||
Provision (benefit) for income taxes
|
—
|
|
|
|
0.1
|
|
|
0.1
|
|
|
100
|
%
|
|||
Net income (loss)
|
$
|
(55.1
|
)
|
|
|
$
|
418.9
|
|
|
$
|
(474.0
|
)
|
|
(113
|
)%
|
|
Nine Months Ended
September 30,
|
|
|
|
|
||||||||||
|
Successor
|
|
|
Predecessor
|
|
|
|
|
|||||||
|
2015
|
|
|
2014
|
|
Change
|
|
%
|
|||||||
Gross (loss)
|
$
|
(13.2
|
)
|
|
|
$
|
(22.8
|
)
|
|
$
|
9.6
|
|
|
42
|
%
|
Advanced technology costs
|
7.7
|
|
|
|
56.6
|
|
|
48.9
|
|
|
86
|
%
|
|||
Selling, general and administrative
|
32.1
|
|
|
|
32.2
|
|
|
0.1
|
|
|
—
|
%
|
|||
Amortization of intangible assets
|
7.1
|
|
|
|
—
|
|
|
(7.1
|
)
|
|
—
|
%
|
|||
Special charges for workforce reductions
|
13.3
|
|
|
|
2.1
|
|
|
(11.2
|
)
|
|
(533
|
)%
|
|||
Other (income)
|
(1.8
|
)
|
|
|
(39.4
|
)
|
|
(37.6
|
)
|
|
(95
|
)%
|
|||
Operating (loss)
|
(71.6
|
)
|
|
|
(74.3
|
)
|
|
2.7
|
|
|
4
|
%
|
|||
Interest expense
|
14.6
|
|
|
|
14.0
|
|
|
(0.6
|
)
|
|
(4
|
)%
|
|||
Interest (income)
|
(0.3
|
)
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
(40
|
)%
|
|||
Reorganization items, net
|
—
|
|
|
|
(426.9
|
)
|
|
(426.9
|
)
|
|
100
|
%
|
|||
Income (loss) from before income taxes
|
(85.9
|
)
|
|
|
339.1
|
|
|
(425.0
|
)
|
|
(125
|
)%
|
|||
Provision (benefit) for income taxes
|
(0.3
|
)
|
|
|
(1.0
|
)
|
|
(0.7
|
)
|
|
(70
|
)%
|
|||
Net income (loss)
|
$
|
(85.6
|
)
|
|
|
$
|
340.1
|
|
|
$
|
(425.7
|
)
|
|
(125
|
)%
|
|
Nine Months Ended
September 30,
|
|||||||
|
Successor
|
|
|
Predecessor
|
||||
|
2015
|
|
|
2014
|
||||
Net Cash (Used in) Operating Activities
|
$
|
(45.1
|
)
|
|
|
$
|
(220.3
|
)
|
Net Cash Provided by Investing Activities
|
6.6
|
|
|
|
12.3
|
|
||
Net Cash (Used in) Financing Activities
|
—
|
|
|
|
(0.8
|
)
|
||
Net (Decrease) in Cash and Cash Equivalents
|
$
|
(38.5
|
)
|
|
|
$
|
(208.8
|
)
|
|
September 30,
2015
|
|
December 31,
2014
|
||||
|
(millions)
|
||||||
Cash and cash equivalents
|
$
|
180.3
|
|
|
$
|
218.8
|
|
Accounts receivable, net
|
20.3
|
|
|
58.9
|
|
||
Inventories, net
|
188.4
|
|
|
303.3
|
|
||
Other current assets and liabilities, net
|
(66.4
|
)
|
|
(215.0
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)
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Working capital
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$
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322.6
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$
|
366.0
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|
|
|
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Centrus Energy Corp.
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Date:
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November 12, 2015
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By:
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/s/ Stephen S. Greene
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Stephen S. Greene
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Senior Vice President, Chief Financial Officer and Treasurer
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(Duly Authorized Officer and Principal Financial Officer)
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Exhibit No.
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Description
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10.1
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Amendment No. 005 dated July 7, 2015 to the Enriched Product Transitional Supply Contract dated March 23, 2011 between United States Enrichment Corporation and TENEX (Certain information has been omitted and filed separately pursuant to confidential treatment under Rule 24b-2). (a)
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10.2
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Amendment No. 006 dated September 4, 2015 to the Enriched Product Transitional Supply Contract dated March 23, 2011 between United States Enrichment Corporation and TENEX (Certain information has been omitted and filed separately pursuant to confidential treatment under Rule 24b-2). (a)
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10.3
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Modification 23 dated July 22, 2015 to Subcontract No. 4000130255 issued by UT-Battelle, LLC acting under contract DE-AC05-00OR22725 with the U.S. Department of Energy, listing USEC Inc. as Seller for Centrifuge Information and Analysis, dated May 1, 2014. (a)
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10.4
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Modification 24 dated August 3, 2015 to Subcontract No. 4000130255 issued by UT-Battelle, LLC acting under contract DE-AC05-00OR22725 with the U.S. Department of Energy, listing USEC Inc. as Seller for Centrifuge Information and Analysis, dated May 1, 2014. (a)
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10.5
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Modification 25 dated August 14, 2015 to Subcontract No. 4000130255 issued by UT-Battelle, LLC acting under contract DE-AC05-00OR22725 with the U.S. Department of Energy, listing USEC Inc. as Seller for Centrifuge Information and Analysis, dated May 1, 2014. (a)
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31.1
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Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended. (a)
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31.2
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Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended. (a)
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32.1
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Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350. (a)
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101
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Condensed consolidated financial statements from the quarterly report on Form 10-Q for the quarter ended
September
30, 2015, filed in interactive data file (XBRL) format.
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(a)
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Filed herewith.
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1.
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Whereas effective as of November 14, 2014 TENEX’s full corporate name was changed from Joint Stock Company “Techsnabexport” to Joint Stock Company “TENEX”, all references in the Contract to Joint Stock Company “Techsnabexport” shall be considered references to Joint Stock Company “TENEX”.
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2.
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Paragraph E1-6(b) of the Contract is hereby modified to read as follows:
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3.
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Starting from (and including) CY2015, the Delivery Receipts identified in Appendix G1 of the Contract as forms G1-1 “Delivery Receipt Format for Delivery of Enriched Product in Product Cylinders” and G1-2 “Delivery Receipt Format for Delivery of Enriched Product” referred to in Section 5.02 and Paragraph E1-1(b) of the Contract, shall not be required to be executed, unless specifically agreed by the Parties regarding specific Physical Deliveries.
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4.
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Section 1.18 of the Contract is hereby modified by inserting “*****” after the phrase “*****”. Further, Section 1.44 is hereby modified by inserting the following new subsection (g) after existing subsection (f):
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(g)
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with respect to Related Natural Uranium in ***** Cylinders ***** Delivered to TENEX under *****, these terms mean the delivery term agreed between TENEX and *****, for TENEX to take physical possession of such Related Natural Uranium in ***** Cylinders following Delivery by USEC.”
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5.
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The introductory phrase of Section 7.02(c) is hereby modified by replacing the words “Section 7.02(a), Section 7.02(b) or Section 7.02(h)” with “Section 7.02(a), Section 7.02(b). Section 7.02(h) or Section 7.02(j)”.
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6.
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In Section 7.02(f)(iii), the words “or Section 7.02(c)” are hereby replaced with “Section 7.02(c) or Section 7.02(j)”.
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7.
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In Section 7.02(g), the words “and Section 7.02(c)” are hereby replaced with “Section 7.02(c) and Section 7.02(j)”in three places.
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8.
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The following language shall be inserted at the end of Section 7.02:
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(i)
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*****
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(ii)
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*****
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(iii)
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*****
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(iv)
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*****
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(v)
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*****
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(vi)
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*****
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(vii)
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The terms applicable to Acceptance and rejection of Related Natural Uranium Delivered under this Section 7.02(j) can be found in Appendix E2. The terms applicable to acceptance and rejection of the ***** Cylinders, *****. The remedies applicable in the case of a Delivery of non-Conforming Related Natural Uranium under Section 7.02(j) can be found in Paragraph E2-6 and the remedies in the case of a failure to Deliver Related Natural Uranium under Section 7.02(j) can be found in Paragraph E2-5. Supplemental procedures for Natural Uranium Delivered under this Section 7.02(j), which shall constitute the procedures contemplated by Paragraph E2-1 in cases where Appendix E2 applies to Related Natural Uranium Delivered under Section 7.02(j), shall be agreed separately by the Parties, but in no event shall a delay in final agreement on such procedures preclude USEC from making a Delivery under Section 7.02(j). TENEX shall not take Physical Delivery of the filled ***** Cylinders until such procedures have been agreed or the Parties agree that they are not needed.”
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9.
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Section 7.03(a)(ii) is hereby modified by replacing the words “or 7.02(c)” with “, 7.02(c) or 7.02(j)”.
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10.
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The last sentence of Section 7.04 is hereby replaced with the following: “Title to, and risk of loss of, Related Natural Uranium Delivered under Section 7.02(h) and Section 7.02(j) shall be governed by those Sections.”
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11.
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Section 7.09 is hereby modified by replacing the words “under Section 7.02(c) or Section 7.2(h)” with “under Section 7.02(c), Section 7.02(h) or Section 7.2(j).”
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12.
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Section 7.10 is hereby modified by inserting the following new sentence at the end of Section 7.10: “The procedures for Acceptance of Related Natural Uranium Delivered under Section 7.02(j) are set forth in Appendix E2 and in any supplemental procedures agreed by the Parties pursuant to Paragraph E2-1.”
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13.
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In Appendix B of the CONTRACT, references to Section 7.02(c) in item (iv) in Paragraph B-1(b) and items (h) and (j) in Paragraph B-2 shall be deemed to refer to the Delivery of Related Natural Uranium under either Section 7.02(c) or Section 7.02(j) as applicable. Where applicable, not later than thirty (30) days after the date this Amendment No. 005 to the CONTRACT takes effect, USEC shall update its most recent non-binding estimate and any pending Orders submitted prior to the date this Amendment No. 005 takes effect under which it plans to Deliver any Related Natural Uranium under Section 7.02(j).
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14.
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In Appendix E2, references to Section 7.02(c) shall be deemed to refer to Related Natural Uranium Physically Delivered under Section 7.02(c) or Delivered under Section 7.02(j). In addition, with respect to Related Natural Uranium Delivered under Section 7.02(j), the ***** in Paragraph E2-2 shall commence from *****.
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15.
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The words “or Section 7.02(c)” in Paragraph E2-3(a) are hereby replaced with “, Section 7.02(c) or Section 7.02(j)” and the words “under Section 7.02(c)” in Paragraph E2-3(b) are hereby replaced with “under Section 7.02(c) or Section 7.02(j)”.
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16.
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The words “and Section 7.02(c)” in Paragraph E2-5(f) are hereby replaced with “, Section 7.02(c) or Section 7.02(j)”.
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17.
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In Appendix H, references to Related Natural Uranium ***** in Paragraph H-9 shall be deemed to refer to Related Natural Uranium *****.
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18.
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Appendix M of the Contract is hereby modified by adding the following *****
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19.
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In Appendix N, *****
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20.
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*****
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1.
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The following sentence shall be inserted at the end of Section 3.02(g):
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2.
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The following new subsections (h) and (i) shall be inserted at the end of Section 3.02:
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“(h)
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*****”
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(i)
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Notwithstanding anything to the contrary in the CONTRACT, *****.
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3.
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The following new subsection (h) shall be inserted at the end of Section 4.03:
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“(h)
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*****”
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4.
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The following new Section 5.09 shall be inserted at the end of Article 5:
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(a)
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*****
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(b)
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*****
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(c)
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For the avoidance of doubt, the risk of loss of EUP ordered pursuant to Section 3.02(h) shall pass to USEC upon completion of Physical Delivery of such EUP, as envisaged by Section 5.04.”
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5.
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Section 7.02(a)(vi) is hereby replaced with the following:
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“(vi)
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*****”
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6.
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The Table 3 in Appendix I is hereby replaced with the following, and the footnote following such table is deleted:
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7.
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*****
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8.
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*****
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9.
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Appendix J of the CONTRACT is hereby replaced with the updated Appendix J in Exhibit 1. Appendices O1 and O2 in Exhibit 2 are hereby inserted as new appendices to the CONTRACT.
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1.
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I have reviewed this quarterly report on Form 10-Q of Centrus Energy Corp.;
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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(s) 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(s) 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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November 12, 2015
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/s/ Daniel B. Poneman
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Daniel B. Poneman
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President and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Centrus Energy Corp.;
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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(s) 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(s) 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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November 12, 2015
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/s/ Stephen S. Greene
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Stephen S. Greene
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Senior Vice President, Chief Financial Officer and Treasurer
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November 12, 2015
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/s/ Daniel B. Poneman
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Daniel B. Poneman
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President and Chief Executive Officer
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November 12, 2015
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/s/ Stephen S. Greene
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Stephen S. Greene
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Senior Vice President, Chief Financial Officer and Treasurer
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