USEC Reports First Quarter 2011 Results

USEC Inc. (NYSE:USU) today reported a net loss of $16.6 million or 14
cents per share for the quarter ended March 31, 2011, compared to a net
loss of $9.7 million or 9 cents per share for the first quarter of 2010.
The loss in the 2010 quarter reflected a one-time charge of $6.5 million
related to a change in tax treatment of Medicare Part D reimbursements
resulting from changes in health care law.

The financial results for the quarter ended March 31, 2011, reflect a 16
percent increase in separative work unit (SWU) revenue but a decline in
overall gross profit. Gross profit in the low enriched uranium (LEU)
segment increased slightly in the quarter compared to the same period
last year due to higher average selling prices, partially offset by
higher unit costs. Gross profit was reduced by a loss in the contract
services segment as the cold shutdown work at the Portsmouth site for
the Department of Energy (DOE) transitioned to a decontamination and
decommissioning (D&D) contractor at the end of the quarter.

'We′ve had several important successes thus far in 2011 but we knew our
financial results would be reduced by higher costs,? said John K. Welch,
USEC president and chief executive officer. 'We expect gross profit
margins for 2011 will be compressed by higher production and purchase
costs reflected in our average SWU inventory cost.

'The largest cost we face is for electricity, which makes up
approximately 70 percent of our production cost. That is why we are
focused on building the American Centrifuge Plant, or ACP, which will
reduce the amount of electricity required to enrich an equivalent amount
of uranium by 95 percent,? Welch said. 'In the near-term, we are also
focused on negotiations with our major power supplier and other
utilities to obtain lower-cost power with less volatility in pricing
after our current contract expires in May 2012.

'The completion of the due diligence and negotiation stage of the loan
guarantee application process with the DOE Loan Guarantee Program and
progress towards final approval of a conditional commitment of a $2
billion loan guarantee was another important step along the path towards
resuming construction of the ACP.

'We also reached agreement with Russia regarding a long-term supply
arrangement that will provide low enriched uranium for delivery to our
customers after the end of the Megatons to Megawatts program as we build
out the ACP over the next several years. And we worked with DOE, the
unions that represent our employees and the new D&D contractor to
provide continuity for those employees transitioning to the
decontamination and decommissioning of the Portsmouth site,? he said.

Revenue

Revenue for the first quarter was $380.5 million, an increase of 10
percent compared to the same quarter of 2010. Revenue from the sale of
SWU for the quarter was $308.5 million compared to $266.6 million in the
same period last year. The volume of SWU sales increased 9 percent in
the quarter and the average price billed to customers increased 6
percent, reflecting the specific contracts under which SWU were sold
during the periods as well as the general trend of higher prices under
contracts signed in recent years. We anticipate a decrease in the volume
of SWU sales of approximately 10 percent in the full year 2011 compared
with 2010.

Revenue from the sale of uranium was $14.0 million, a decrease of $1.6
million from the same quarter last year. The quarterly results reflect a
decrease of 38 percent in uranium volume sold but average prices were 44
percent higher than in the 2010 period due to the mix and timing of
uranium contracts. Revenue from our contract services segment was $58.0
million, a decrease of 7 percent compared to first quarter last year.

In a number of sales transactions, USEC transfers title and collects
cash from customers but does not recognize the revenue until low
enriched uranium is physically delivered. At March 31, 2011, deferred
revenue totaled $248.8 million, an increase of $72.7 million from
December 31, 2010. The gross profit associated with deferred revenue as
of March 31, 2011, was $32.8 million.

A majority of reactors served by USEC are refueled on an 18-to-24-month
cycle, and this can lead to significant quarterly and annual swings in
SWU sales volume that reflects the mix of refueling cycles. Therefore,
short-term comparisons of USEC′s financial results are not necessarily
indicative of longer-term results.

Cost of Sales, Gross Profit Margin, Other Income and Expenses

Cost of sales for the quarter ended March 31, 2011, for SWU and uranium
was $307.2 million, an increase of $40.0 million or 15 percent, compared
to the corresponding period in 2010 due to the associated increase in
SWU sales volume noted above and higher SWU unit costs. Cost of sales
per SWU was 7 percent higher in the quarter compared to the first
quarter of 2010. Cost of sales for SWU and uranium reflects monthly
moving average inventory costs based on production and purchase costs.

Production costs declined $12.2 million, or 5 percent, as production
volume decreased 15 percent in the three months ended March 31, 2011,
compared to the corresponding period in 2010. The cost of electric power
decreased by $13.8 million, or 8 percent, in the three months ended
March 31, 2011, compared to the corresponding period in 2010. We
purchased less electricity under our contract with Tennessee Valley
Authority but the average cost per megawatt hour increased 11 percent
due to higher TVA fuel cost adjustments as well as the fixed annual
increase in the contract price. The unit production cost increased 12
percent in the three-month period compared to the corresponding period
in 2010.

We expect to purchase 5.5 million SWU under the Megatons to Megawatts
program in 2011, but under our agreed upon shipping schedule there were
no deliveries in the first quarter.

Cost of sales for contract services was $59.4 million in the first
quarter, an increase of $8.6 million or 17 percent over the same period
last year, reflecting a temporary increase in contract services work at
the Portsmouth site, as well as higher costs at our subsidiary NAC
International. We recorded a curtailment charge of $3.2 million for the
defined benefit pension plan in the current period in connection with
the transition of USEC employees to a new contractor following the
expiration of the cold shutdown contract on March 28, 2011.

The gross profit for the first quarter was $13.9 million, a decrease of
$12.8 million or 48 percent over the same period in 2010. The gross
profit margin for the 2011 period was 3.7 percent compared to 7.7
percent in the first quarter of 2010. Gross profit for the LEU segment
was $0.3 million higher due to higher average selling prices for SWU and
uranium, partially offset by higher unit costs. Gross profit for the
contract services segment declined $13.1 million in the three months
compared to the corresponding period in 2010, reflecting fee recognition
on certain contracts in the prior period as well as a $3.2 million
pension curtailment charge related to the transition of cold shutdown
work at the Portsmouth site.

Selling, general and administrative expenses in the first quarter were
$15.5 million, an increase of $0.4 million over the same period in 2010,
primarily due to slightly higher salary and employee benefit costs.

Advanced technology expense, primarily related to the demonstration of
the American Centrifuge technology, was $26.7 million in the quarter
compared to $25.7 million in the first quarter of 2010. For the quarter,
the $1 million increase reflects a slight increase in development costs
for the American Centrifuge project. Advanced technology expense
includes expenses by NAC to develop its MAGNASTOR? storage and
transportation technology of $0.4 million during the first quarter
compared to $0.5 million in the same period of 2010.

In January 2011, we executed an exchange with a noteholder whereby USEC
received convertible notes with a principal amount of $45 million in
exchange for 6,952,500 shares of common stock and cash for accrued but
unpaid interest on the convertible notes. In connection with this
exchange USEC recognized a gain on debt extinguishment of $3.1 million
in the first quarter of 2011.

In the 2010 period, the income tax provision of $5.4 million included a
one-time charge of $6.5 million related to the change in tax treatment
of Medicare Part D reimbursements as a result of the health care
legislation.

Cash Flow

At March 31, 2011, USEC had a cash balance of $149.8 million compared to
$151.0 million at December 31, 2010. Cash flow provided by operations in
the first quarter was $51.3 million, compared to cash flow used in
operations of $42.9 million in the previous year. Payment of the Russian
Contract payables balance of $201.2 million was a significant use of
cash flow in the three months ended March 31, 2011. More than offsetting
this use was positive cash flow provided by our LEU segment based on the
timing of customer orders and deliveries. Inventories declined $147.4
million in the three-month period, providing monetization of inventory
produced in the prior year; accounts receivable declined $63.8 million;
and deferred revenue, net of deferred costs, increased $62.3 million.
Capital expenditures, primarily related to the ACP, totaled $50.7
million during the first quarter compared to $49.0 million in the same
period of 2010.

American Centrifuge Update

USEC updated its application for a $2 billion DOE loan guarantee for the
ACP in July 2010. As part of its due diligence on the application, DOE
conducted independent financial, legal and engineering reviews of the
project. USEC has also been working with DOE since October 2010 on terms
for a conditional commitment for a $2 billion loan guarantee. In April
2011, the DOE Loan Guarantee Program Office substantially completed the
due diligence and negotiation stage of the application process and
advanced the ACP application to the next phase. As part of this next
phase, the credit package prepared by the DOE Loan Guarantee Program
Office, including the terms and conditions that we have negotiated with
that office, are being reviewed in parallel by DOE′s credit group and by
the Office of Management and Budget (OMB), the Department of the
Treasury, and the National Economic Council. This review will include
the establishment of an estimated range of credit subsidy cost.

The next steps leading to a conditional commitment involve approval by
DOE′s Credit Committee, then approval by DOE′s Credit Review Board. We
have made it clear to DOE that prompt action is essential. The terms of
USEC′s credit facility limit spending on the American Centrifuge project
without additional investment of capital. The second phase of an
investment by Toshiba Corporation and Babcock & Wilcox Investment
Company, which is conditioned upon receipt of a conditional commitment,
would provide an additional $50 million. However, if USEC does not close
on the second phase of that investment by June 30, 2011, each of the
investors has the right to terminate its obligations under the
investment agreement with the Company.

In support of our application, we continue to operate a lead cascade
test program with production-ready AC100 machines at the Piketon, Ohio
plant. By increasing the number of operating machine hours, we provide
additional assurance of performance, reliability and plant availability.
Our suppliers continue to build components and assemble machines for the
lead cascade program, demonstrate machine manufacturing capability and
sustain key infrastructure for remobilization.

In addition, we launched American Centrifuge Manufacturing, LLC (ACM),
to provide integrated manufacturing and assembly of uranium enrichment
centrifuges for the ACP. USEC established ACM, effective May 1, in
concert with The Babcock & Wilcox Company subsidiary Babcock & Wilcox
Technical Services Group, Inc. The company will be housed at USEC′s
American Centrifuge Technology and Manufacturing Center in Oak Ridge,
Tennessee. Once the loan guarantee and other project funding needed to
complete the American Centrifuge Plant is secured and the project is
remobilized, employment is expected to grow to approximately 600
positions as ACM ramps up to its full manufacturing rate. Approximately
11,500 centrifuges will be assembled and installed in Piketon.

New Russian Supply Agreement

USEC is the U.S.  government′s exclusive executive agent in connection
with a government-to-government nonproliferation agreement between the
United States  and the Russian Federation known as 'Megatons to
Megawatts?. We currently purchase about one-half of our SWU supply from
Russia under this program from a Russian government entity known as
Techsnabexport (TENEX). The 20-year contract with TENEX expires at the
end of 2013.

On March 23, 2011, USEC signed a new multi-year commercial contract with
TENEX for the 10-year supply of Russian LEU beginning in 2013. Under the
terms of the new contract, the supply of LEU to USEC will begin in 2013
and increase until it reaches a level in 2015 that includes a quantity
of SWU equal to approximately one-half the level currently supplied by
TENEX to USEC under the Megatons to Megawatts program. TENEX and USEC
also may mutually agree to increase the purchase and sales of SWU by
additional optional quantities of SWU up to an amount beginning in 2015
equal to the amount USEC now purchases each year under the Megatons to
Megawatts program. Unlike the Megatons to Megawatts program, the
quantities supplied under the new contract will come from Russia′s
commercial enrichment activities rather than from downblending excess
Russian weapons material.

Deliveries under the new contract are expected to continue through 2022.
USEC will purchase the SWU component of the LEU and deliver natural
uranium to TENEX for the LEU′s uranium component. The pricing terms for
SWU under the contract are based on a mix of market-related price points
and other factors.  The effectiveness of the new contract between TENEX
and USEC is subject to approval of the Russian State Corporation for
Atomic Energy and completion of administrative arrangements between the
U.S. and Russian governments under the agreement for cooperation in
nuclear energy between the United States and the Russian Federation (the
Russia 123 Agreement) which, among other things,  provides the framework
for the return to Russia of natural uranium delivered by USEC to  TENEX.

2011 Outlook Reiterated

We are reiterating our guidance for 2011. Specifically, in 2011 we
expect revenue of approximately $1.7 billion and gross profits in a
range of $70 to $80 million. We expect our gross profit margin to be in
a range of approximately 4 percent to 5 percent. Below the gross profit
line, we anticipate our selling, general and administrative expense to
be approximately $60 million.

We are not offering annual guidance for spending on the American
Centrifuge project at this time because the level of project spending
continues to be uncertain. Project spending will have a significant
effect on net income and cash flow, and therefore, USEC is not providing
guidance on net income or cash flow at this time. However, taking into
account our anticipated ACP spending during the first half of 2011 and
our anticipated gross profit margin, we continue to expect to report a
net loss for 2011.

Spending related to the American Centrifuge project is restricted under
our credit facility and will be dependent upon if and when additional
capital becomes available. We expect total spending on the American
Centrifuge project, both capitalized and expensed, to be approximately
$110 million through June 30, 2011, which includes our plan to continue
building a limited number of additional AC100 machines. We also expect
our current enrichment operations will generate cash in 2011, but ACP
spending will reduce our cash flow from operations.

Our financial guidance is subject to a number of assumptions and
uncertainties that could affect results either positively or negatively.
Variations from our expectations could cause substantial differences
between our guidance and ultimate results. Among the factors that could
affect our results are:

• 
  Changes to the electric power fuel cost adjustment or changes to our
  power purchases from our current projection;
  
• 
  Closing out contract services work at Portsmouth and recognition of
  estimated contract closeout costs to be recovered from DOE as well as
  amounts previously billed and owed;
  
• 
  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.
  

USEC Inc., a global energy company, is a leading supplier of enriched
uranium fuel for commercial nuclear power plants.

Forward Looking Statements

This news release contains 'forward-looking statements? within the
meaning of Section 21E of the Securities Exchange Act of 1934 ? that is,
statements related to future events. In this context, forward-looking
statements may address our expected future business and financial
performance, and often contain words such as 'expects,? 'anticipates,?
'intends,? 'plans,? 'believes,? 'will? and other words of similar
meaning. Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. For USEC, particular risks and
uncertainties that could cause our actual future results to differ
materially from those expressed in our forward-looking statements
include, but are not limited to: risks related to the deployment of the
American Centrifuge technology, including risks related to performance,
cost, schedule and financing; our success in obtaining a loan guarantee
from DOE for the American Centrifuge Plant, including our ability to
address the technical and financial concerns raised by DOE and the
timing of any loan guarantee; our ability to reach agreement with DOE on
acceptable terms of a conditional commitment, including the timing of
any decision and the determination of credit subsidy cost, and our
ability to meet all required conditions to funding; our ability to
obtain additional financing beyond the $2 billion of DOE loan guarantee
funding for which we have applied, including our success in obtaining
Japanese export credit agency financing of $1 billion; the impact of the
demobilization of the American Centrifuge project and uncertainty
regarding our ability to remobilize the project and the potential for
termination of the project; our ability to meet the November 2011
financing milestone and other milestones under the June 2002 DOE-USEC
Agreement; restrictions in our credit facility that may impact our
operating and financial flexibility and spending on the American
Centrifuge project; risks related to the completion of the remaining two
phases of the three-phased strategic investment by Toshiba Corporation
('Toshiba?) and Babcock & Wilcox Investment Company ('B&W?), including
our ability to satisfy the significant closing conditions in the
securities purchase agreement governing the transactions and our ability
to close on the second phase of the transactions prior to the outside
date of June 30, 2011, and the impact of a failure to consummate the
transactions on our business and prospects; certain restrictions that
may be placed on our business as a result of  the transactions with
Toshiba and B&W; our ability to achieve the benefits of any strategic
relationships with Toshiba and B&W; uncertainty regarding the cost of
electric power used at our gaseous diffusion plant; the economics of
extended Paducah plant operations, including our ability to negotiate an
acceptable power arrangement and our ability to obtain a contract to
enrich DOE′s depleted uranium; our dependence on deliveries of LEU from
Russia under the Russian Contract and on a single production facility;
risks related to the approvals and implementing agreements needed for
our new supply contract with TENEX to become effective; limitations on
our ability to import the Russian LEU we buy under the new supply
contract into the United States and other countries; our inability under
many existing long-term contracts to directly pass on to customers
increases in our costs; the decrease or elimination of duties charged on
imports of foreign-produced low enriched uranium; pricing trends and
demand in the uranium and enrichment markets and their impact on our
profitability; changes to, or termination of, our contracts with the
U.S. government including uncertainty regarding the impacts on our
business of the transition of government services performed by us at the
former Portsmouth gaseous diffusion plant to the new decontamination and
decommissioning contractor; limitations on our ability to compete for
potential contracts with the U.S. government; changes in U.S. government
priorities and the availability of government funding, including loan
guarantees; the impact of government regulation by DOE and the U.S.
Nuclear Regulatory Commission; the outcome of legal proceedings and
other contingencies (including lawsuits and government investigations or
audits); the competitive environment for our products and services;
changes in the nuclear energy industry; the impact of the recent natural
disaster in Japan on the nuclear industry and on our business, results
of operations and prospects; the impact of volatile financial market
conditions on our business, liquidity, prospects, pension assets and
credit and insurance facilities; and other risks and uncertainties
discussed in our filings with the Securities and Exchange Commission,
including Item 1A entitled 'Risk Factors? and the other sections of our
Annual Report on Form 10-K and quarterly reports on Form 10-Q, which are
available on our website at www.usec.com.
Revenue and operating results can fluctuate significantly from quarter
to quarter, and in some cases, year to year. We do not undertake to
update our forward-looking statements to reflect events or circumstances
that may arise after the date of this news release except as required by
law.

USEC Inc.

Investors:

Steven Wingfield, 301-564-3354

or

Media:

Paul
Jacobson, 301-564-3354