USEC Reports Second Quarter 2012 Results

USEC Inc. (NYSE:USU) today reported a net loss of $92.0 million or 76
cents per share for the quarter ended June 30, 2012, compared to a net
loss of $21.2 million or 18 cents per share for the second quarter of
2011. For the six-month period of 2012, the company reported a net loss
of $120.8 million or 99 cents per share compared to a net loss of $37.8
million or 31 cents per share in the same period of 2011.

The largest factor in the net loss for the second quarter of 2012 was
advanced technology expense of $85.7 million. This amount includes an
expense of $44.6 million related to the title transfer of previously
capitalized machinery and equipment to the Department of Energy (DOE) as
provided under the cooperative agreement for the research, development
and demonstration (RD&D) program for the American Centrifuge technology.
Since the fourth quarter of 2011, USEC has expensed all American
Centrifuge project costs, including interest expense that previously
would have been capitalized. In the second quarter of 2012, interest
expense was $12.7 million. Combined, advanced technology and interest
expense in the second quarter of 2012 was $64.8 million more than in the
same quarter of 2011, partially offset by $10.0 million in other income
that represents DOE′s share of the RD&D program beginning June 1, 2012.

'We made significant progress in the second quarter by securing
near-term funding for the RD&D program and putting in place a contract
to support one year of continued enrichment operations at the Paducah
Gaseous Diffusion Plant,? said John K. Welch, USEC president and chief
executive officer. 'While the benefits of these achievements on our
financial performance for the second quarter were limited, these are
significant accomplishments that are important to our longer term
success and will positively impact our financial performance over the
balance of the year.

'Our spending on American Centrifuge during the first half of the year
kept this important project moving forward even as we worked with DOE to
fund the RD&D program. Clearly this advanced technology expense had a
substantial effect on our financial results, but we believe it was
essential to providing a path for the successful commercial deployment
of the technology.

'Our updated financial guidance reflects our expectation for better
results for the remainder of 2012,? Welch said. 'We now expect total
revenue of nearly $2 billion and a gross profit of approximately $140
million. In addition, the cost-share arrangement for spending on the
American Centrifuge will significantly offset future expensing of RD&D
spending.?

USEC issued a separate news release today providing an update on the
American Centrifuge project and the RD&D program.

Revenue

Revenue for the second quarter of 2012 was $364.8 million, a 20 percent
decline over the same quarter of 2011. Revenue from the sale of
separative work units (SWU) for the quarter was $347.2 million compared
to $330.3 million in the same period last year. The volume of SWU sales
was virtually unchanged compared to the same quarter of 2011, but the
average price billed to customers was 5 percent higher. For the
six-month period, revenue in 2012 was $926.3 million, an increase of
$91.4 million or 11 percent compared to the same period in 2011. Revenue
from the sale of uranium was $3.6 million in both the second quarter and
six-month period of 2012 compared to $81.8 million in the first half of
2011. Most of our inventories of uranium available for sale have been
sold in prior years, and we expect this trend of significantly lower
uranium revenue to continue.

Revenue from the contract services segment was $14.0 million in the
second quarter and $37.6 million in the six-month period of 2012
compared to $56.3 million and $114.3 million in the respective periods
of 2011. The decrease was due to a 98 percent reduction in contract
services revenue at the Portsmouth site as work was transferred to a
decontamination and decommissioning contractor for DOE over the course
of 2011. Revenue in the segment is now dominated by our subsidiary NAC.
Revenue by NAC decreased $3.6 million in the three-month period and
increased $8.3 million in the six-month period primarily as a result of
timing in sales related to NAC′s dry cask storage systems.

In a number of sales transactions, USEC transfers title and collects
cash from customers but does not recognize the revenue until the low
enriched uranium (LEU) is physically delivered. At June 30, 2012,
deferred revenue totaled $139.4 million compared to $146.8 million at
March 31, 2012. The gross profit associated with deferred revenue as of
June 30, 2012, was $8.6 million.

A majority of reactors served by USEC are refueled on an 18-to-24-month
cycle, which 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 and Gross Profit Margin

Cost of sales for the quarter ended June 30, 2012, for SWU and uranium
was $340.4 million, a decrease of $28.2 million compared to the same
quarter in 2011, primarily due to lower uranium sales volumes, partially
offset by higher unit SWU costs. Cost of sales for the segment increased
$165.8 million in the six months ended June 30, 2012, compared to the
corresponding period in 2011, primarily due to higher SWU sales volumes,
partially offset by lower uranium sales volumes. Cost of sales per SWU
was 4 percent higher in the second quarter and was flat for the six
months ended June 30, 2012, compared to the corresponding periods in
2011. Cost of sales was reduced during the current periods for revisions
to prior accrued amounts related to estimated disposal costs for
depleted uranium and property taxes and power prepayments related to
enrichment operations. These accrued estimated amounts had been
previously included in our production costs and included in SWU
inventory. In addition, prior to the start of 2012, a significant
portion of the costs related to pension and postretirement health and
life benefit plans were attributed to Portsmouth contract services,
based on the employee base performing contract services work. Starting
in 2012, ongoing pension costs related to our former Portsmouth
employees are charged to the LEU segment rather than the contract
services segment based on our continuing enrichment operations that
support our active and retired employees. Excluding the effects of these
items, cost of sales per SWU was approximately 2 percent higher in the
six months ended June 30, 2012, compared to the corresponding period in
2011.

Production costs increased $26.2 million, or 15 percent, in the second
quarter and $29.4 million in the six-month period compared to the
corresponding periods of 2011. Production volume increased 20 percent
and 11 percent in the three- and six-month periods, respectively, as
USEC purchased supplemental power during 2012 from the Tennessee Valley
Authority (TVA) that had been deferred from 2011 due to regional flood
conditions. The average cost per megawatt hour decreased 1 percent in
the first half of 2012 compared to the corresponding period of 2011,
reflecting lower TVA fuel cost adjustments, partially offset by the
fixed, annual increase in the TVA contract price. The unit production
cost declined 3 percent in the six-month period reflecting the lower
impact of fixed costs on increased production volumes.

We purchase approximately 5.5 million SWU per year under the Megatons to
Megawatts program, and the purchase costs for the SWU component of LEU
under the program declined $4.1 million in the six-month period compared
to the corresponding period of 2011, reflecting reduced volume due to
the timing of deliveries, partially offset by a 2 percent increase in
the market-based unit purchase cost.

Cost of sales for contract services was $33.6 million in the six-month
period, a decrease of $78.4 million over the same period last year,
reflecting the transition of contract services work at the Portsmouth
site to DOE′s decontamination and decommissioning contractor.

The gross profit for the second quarter was $12.3 million compared to
$33.2 million in the same quarter last year. In the six-month period,
the gross profit was $51.1 million compared to $47.1 million in the same
period of 2011. The gross profit margin for the six-month period of 2012
period was 5.5 percent compared to 5.6 percent in the same period of
2011. Gross profit for the LEU segment increased $2.3 million in the
six-month period due to higher SWU unit gross profits and sales volumes,
partially offset by lower uranium sales volumes. Gross profit for the
contract services segment increased $1.7 million in the 2012 six-month
period reflecting increased gross profit for NAC.

Advanced Technology, Other Income, Special Charges and Interest

Advanced technology expense, primarily related to the demonstration of
the American Centrifuge technology, was $85.7 million in the second
quarter compared to $33.5 million in the second quarter of 2011. This
increase of $52.2 million primarily reflects an expense of $44.6 million
related to the title transfer of previously capitalized American
Centrifuge machinery and equipment to DOE as provided in the cooperative
agreement entered into with DOE for the RD&D program. As previously
noted, beginning in the fourth quarter 2011, all American Centrifuge
project costs incurred have been expensed. Capitalization of
expenditures related to the American Centrifuge project has ceased until
commercial plant deployment resumes.

Advanced technology expense includes expenses by NAC to develop and
expand its MAGNASTOR? storage and transportation technology of $0.4
million during the six-month period of 2012 compared to $0.7 million in
the same period of 2011.

USEC entered into a cooperative agreement with DOE in June 2012 for
pro-rata cost sharing support for continued American Centrifuge
activities with a total estimated spending in the initial phase of $33.1
million. DOE made the $26.4 million available by taking the disposal
obligation for a specific quantity of depleted uranium from USEC, which
will release encumbered funds for investment in the American Centrifuge
technology that we had otherwise committed to future depleted uranium
disposition obligations. ?As of June 30, 2012, USEC made qualifying
American Centrifuge expenditures of $12.5 million. DOE′s pro-rata share
of 80 percent, or $10.0 million, is recognized as other income in the
three and six-month periods.

Selling, general and administrative expenses in the six-month period of
2012 were $29.7 million, a decrease of $2.5 million over the same period
in 2011, reflecting lower salary, employee benefit and other
compensation costs and lower consulting costs.

USEC′s business is in a state of significant transition, and in early
2012 we initiated an internal review of our organizational structure. We
engaged a management consulting firm to support this review, and costs
for the management consulting firm and other advisors totaled $1.5
million in the second quarter of 2012 and $6.0 million in the six months.

Initial actions taken related to our organizational structure resulted
in workforce reductions at our American Centrifuge design and
engineering operations in Oak Ridge, Tenn., the central services
operations located in Piketon, Ohio, and at our headquarters operations
located in Bethesda, Md. The reductions to-date involved 45 employees,
including two senior corporate officers. A charge of $1.9 million was
incurred in the first quarter of 2012 and $1.7 million in the second
quarter of 2012 for one-time termination benefits consisting of
severance payments, short-term health care coverage and immediate
vesting of restricted stock for certain employees. Additional actions
affecting employees to align the organization with our evolving business
environment are expected.

Interest expense increased $12.6 million in the three months and $25.3
million in the six months ended June 30, 2012, compared to the
corresponding periods in 2011. As noted above, all American Centrifuge
related project costs incurred have been expensed, including interest
expense that previously would have been capitalized. For comparison, in
the three and six months ended June 30, 2011, interest costs of $10.6
million and $21.6 million were capitalized, respectively. Interest
expense in the first quarter of 2012 included $1.4 million of previously
deferred financing costs related to the former credit facility that were
expensed in connection with the amended and restated credit facility
obtained in March 2012.

Cash Flow

At June 30, 2012, USEC had a cash balance of $229.0 million compared to
$72.3 million at March 31, 2012. Cash flow provided by operations in the
six-month period of 2012 was $162.1 million compared to cash flow
provided by operations of $285.6 million in the same period last year.
Inventories declined $340.3 million in the six-month period due to
monetization of inventory produced in the prior year. Payment of the
Russian Contract payables balance of $65.2 million, due to the timing of
deliveries, was a significant use of cash flow in the six months ended
June 30, 2012. Capital expenditures were significantly reduced due to
our decision to expense all costs related to the American Centrifuge
project. In the same period of 2011, capital expenditures totaled $91.0
million. Cash collateral deposits of $43.8 million were returned to us
in June 2012 in connection with the modification of surety bonds
following the decrease in accrued depleted uranium disposition in the
first quarter associated with the March 2012 uranium transfer agreement
with DOE. Cash payments of $9.8 million were made for financing costs.

2012 Outlook Update

On June 27, 2012, USEC provided an update to its financial outlook for
2012. We are providing a further update to our 2012 outlook and
additional details specifically related to the RD&D program. During the
second quarter of 2012, we signed agreements with DOE and others that
have enabled us to provide an updated view of financial projections for
the remainder of the year. In May, USEC entered into a multi-party
arrangement with Energy Northwest, the Bonneville Power Administration,
the Tennessee Valley Authority and DOE to extend uranium enrichment
operations at the Paducah, Ky. plant. In June, we also entered into an
agreement with DOE regarding a two-year, cooperative research,
development and demonstration program for the American Centrifuge
technology. The RD&D program includes an 80 percent DOE and 20 percent
USEC cost-sharing of expenses with a total estimated cost of $350
million. This agreement will be incrementally funded, and to date, DOE
funding is limited to $87.7 million.

Under the Paducah agreement, Energy Northwest is providing USEC with
approximately 9,000 metric tons of high-assay depleted uranium. USEC
will enrich the depleted uranium tails to make about 480 metric tons of
LEU. The program, combined with other USEC commercial obligations, will
require approximately 5 million SWU. Production of the LEU, which began
in early June, will take about 12 months. The overall tails disposal
liability of the U.S. government will be reduced as a result of the
agreement and subsequent processing.

USEC′s guidance in the first quarter of 2012 did not assume Paducah
operations beyond May 31, 2012, and included an expectation that 2012
SWU deliveries would be roughly equivalent to 2011 deliveries. As a
result of the new contract, USEC expects to increase SWU deliveries in
2012 by approximately 30 percent compared to last year and roughly equal
to the volume of SWU sold in 2009. Revenue from the sale of SWU is
expected to be approximately $1.8 billion, an increase of $300 million
to $400 million over first quarter guidance. We anticipate the average
price per SWU billed to customers will increase 5 percent compared to
2011. Uranium revenue in 2012 is expected to be less than $50 million,
subject to timing of sales, which is $80 million less than in 2011.

Guidance for the contract services segment is unchanged. Contract
services work for DOE at the former Portsmouth GDP was completed in
September 2011, and revenue for the segment is expected to decline
significantly in 2012. In prior years, contract work at Portsmouth
represented approximately three-quarters of revenue for the contract
services segment. USEC subsidiary NAC will represent a majority of
revenue for the segment going forward, and we expect annual revenue for
contract services in 2012 of approximately $85 million.

Total revenue is expected to be approximately $1.95 billion. Based on
our view of revenue and expense, we expect to earn a gross profit of
approximately $140 million, reflecting a gross profit margin in 2012 of
approximately 7 percent, compared to 5 percent in 2011.

Below the gross profit line, we will have significant expenses related
to the American Centrifuge project. Beginning in the fourth quarter of
2011, all project costs incurred have been expensed, including interest
expense that previously would have been capitalized. We will expense
cost under the RD&D program as incurred. We expect advanced technology
expense and the transfer of certain assets to DOE valued at $44.6
million to total approximately $250 million in 2012, with about half of
that amount having been expensed prior to the start of the RD&D program
in June. Interest expense that previously would have been capitalized is
expected to be approximately $40 million. Under the 80/20 cost share
with DOE for the RD&D program, we expect to report Other Income of
approximately $105 million for 2012. This assumes additional funding is
authorized in addition to the $87.7 million authorized to date.

We have undertaken a review to align our organization with our evolving
business environment and to reduce the size of our workforce over time.
The recent agreements regarding the RD&D program and a 12-month
extension of Paducah enrichment operations will stretch out the time
period for additional workforce reductions. Further workforce reductions
would require us to take additional charges for one-time employee
termination benefits. We expect our SG&A expense to be approximately $58
million in 2012, a $4 million reduction from 2011, as our financial
results begin to reflect the benefit of reductions in corporate expenses.

Although we expect to earn a gross profit of approximately $140 million,
advanced technology expense, interest expense, and special charges are
expected to result in loss for the full year 2012 of approximately $100
million. However, we expect to report cash flow from operations of
approximately $30 million and to end the year with a cash balance of
approximately $200 million without outstanding loans on the revolving
portion of our credit facility, although we will have issued letters of
credit. Looking to 2013, we expect the volume of SWU sold will decline
by approximately one-third.

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

• 
  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;
  
• 
  The pace and number of nuclear power reactors in Japan that are
  restarted following extensive safety inspections;
  
• 
  Availability of funding for and continuance of the RD&D program;
  
• 
  Our ability to complete the contract with Energy Northwest to enrich
  depleted uranium; and
  
• 
  Potential acceleration of expenses and depreciation and other costs
  that may be triggered by decisions with respect to the continuation of
  Paducah enrichment operations beyond May 2013.
  

USEC Inc., a global energy company, is a leading supplier of enriched
uranium fuel and nuclear industry related services 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 ongoing transition
of our business, including uncertainty regarding the transition of the
Paducah gaseous diffusion plant and uncertainty regarding continued
funding for the American Centrifuge project and the impact of decisions
we may make in the near term on our business and prospects; our
dependency on the multi-party arrangement with Energy Northwest, the
Bonneville Power Administration, the Tennessee Valley Authority and the
U.S. Department of Energy ('DOE?) to support continued enrichment
operations at the Paducah gaseous diffusion plant; risks related to
Energy Northwest obtaining the financing needed to complete the
multi-party arrangement and the potential for termination of the
agreement if such financing is not secured on terms acceptable to Energy
Northwest; risks related to the performance of each of the parties under
the multi-party arrangement, including the obligations of DOE to timely
deliver depleted uranium to Energy Northwest; the impact of the March
2011 earthquake and tsunami in Japan on the nuclear industry and on our
business, results of operations and prospects; the impact and potential
duration of the current supply/demand imbalance in the market for low
enriched uranium; the potential impacts of a decision to cease
enrichment operations at Paducah; uncertainty regarding the timing,
amount and availability of additional funding for the research,
development and demonstration ('RD&D?) program and the dependency of
government funding on Congressional appropriations; restrictions in our
credit facility on our spending on the American Centrifuge project and
the potential for us to demobilize the project; limitations on our
ability to provide any required cost sharing under the RD&D program; the
ultimate success of efforts to obtain a DOE loan guarantee and other
financing for the American Centrifuge project, including the ability
through the RD&D program or otherwise to address the concerns raised by
DOE with respect to the financial and project execution depth of the
project, and the timing and terms thereof; potential changes in our
anticipated ownership of or role in the American Centrifuge project; the
impact of actions we have taken or may take to reduce spending on the
American Centrifuge project, including the potential loss of key
suppliers and employees, and impacts to cost and schedule; the impact of
delays in the American Centrifuge project and uncertainty regarding our
ability to remobilize the project; the potential for DOE to seek to
exercise its remedies under the June 2002 DOE-USEC agreement; 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 the potential
for immediate termination of the securities purchase agreement governing
their investments; changes in U.S. government priorities and the
availability of government funding, including loan guarantees;
uncertainty regarding the continued capitalization of certain assets
related to the American Centrifuge Plant and the impact of a potential
impairment of these assets on our results of operations; our ability to
extend, renew or replace our credit facility that matures on May 31,
2013 and the impact of a failure to timely renew on our ability to
continue as a going concern; restrictions in our credit facility that
may impact our operating and financial flexibility; our ability to
actively manage and enhance our liquidity and working capital and the
potential adverse consequences of any actions taken on the long term
value of our ongoing operations; our dependence on deliveries of LEU
from Russia under a commercial agreement (the 'Russian Contract?) with a
Russian government entity known as Techsnabexport ('TENEX?) and on a
single production facility and the potential for us to cease commercial
enrichment of uranium in the event of a decision to shut down Paducah
enrichment operations; limitations on our ability to import the Russian
LEU we buy under the new supply agreement 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; movement and
timing of customer orders; changes to, or termination of, our contracts
with the U.S. government, risks related to delays in payment for our
contract services work performed for DOE; our subsidiary NAC may not
perform as expected; 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 volatile financial
market conditions on our business, liquidity, prospects, pension assets
and credit and insurance facilities; risks related to the underfunding
of our defined benefit pension plans and the impact of the potential
requirement to accelerate the funding of these obligations on our
liquidity; the impact of a potential de-listing of our common stock on
the NYSE; the impact of potential changes in the ownership of our stock
on our ability to realize the value of our deferred tax benefits; the
timing of recognition of previously deferred revenue; and other risks
and uncertainties discussed in our filings with the Securities and
Exchange Commission, including 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, 301-564-3399