USEC Reports on Challenging 2011 and Realignment for Future

USEC Inc. USU today held its annual meeting of shareholders and reported on the challenges the Company faced in 2011 and the steps it is taking to address them in 2012 as it charts a course for the future. John K. Welch, USEC president and chief executive officer, said that last year's results demanded that USEC's management team take action and make fundamental changes to the organization to position the Company to capitalize on the long-term prospects for nuclear power, which includes demand from more than 60 new reactors under construction. Meeting that demand will require USEC to transition from production at the Paducah Gaseous Diffusion Plant to its American Centrifuge technology. “Despite near-term challenges and uncertainties, we remain positive about the longer term prospects for the enrichment sector and the nuclear industry,” said Welch. “We remain convinced that the American Centrifuge technology is our best path to a competitive source of enrichment that will meet the long-term needs for our customers, while providing an indigenous capability for U.S. domestic energy and national security requirements. Meeting those needs through a reliable, competitive source will, in turn, build long-term value for shareholders.” Welch noted that USEC is proceeding with a two-year, cost-sharing research, development and demonstration program designed to enhance the technical and financial readiness of the centrifuge technology, which USEC sees as a bridge to obtaining a U.S. Department of Energy (DOE) loan guarantee and commercial deployment of the technology. “We have been encouraged by the Administration's increasingly visible support for the essential national security role that both our Paducah gaseous diffusion plant and the American Centrifuge project play in providing indigenous U.S. sources to enrich uranium,” said Welch. Welch said USEC is working with DOE and Congress on legislative and non-legislative paths for obtaining funding for the RD&D program, which USEC has funded through the end of May. He noted that both House and Senate appropriators have included funding for the program in fiscal 2013, but he reiterated that the Company is prepared to demobilize the project if federal funding for the remainder of fiscal year 2012 is not secured before May 31. Welch concluded by highlighting that the Company is in a major transition to align its workforce with its future business structure, resulting in a smaller workforce and leaner cost structure. While USEC is taking a phased approach, he expects further reductions in the months ahead.