USEC Advances American Centrifuge RD&D Program

USEC Inc. (NYSE: USU) reported today that it is making steady progress
towards the goals of the American Centrifuge research, development and
demonstration (RD&D) program. During the program′s first two months,
USEC met the initial program milestone, placed additional AC100
centrifuge machines into service and established an independent board of
managers to oversee the program. USEC also met the conditions
established in the cooperative agreement to continued funding in the
initial budget period, and the Department of Energy (DOE) has authorized
continued federal cost share for the program of up to $61.3 million, for
a total federal cost share of $87.7 million, which is expected to fund
the program through November.

Workers at USEC's American Centrifuge facility in Piketon, Ohio, prepare for the installation of the first of several service modules (far left) that will support a 120-machine demonstration cascade as part of a research, development and demonstration program. (Photo: USEC Inc.)

'Our preparations for the RD&D program during the first half of 2012
allowed us to hit the ground running and to make excellent progress
during the past two months,? said John K. Welch, USEC president and CEO.
'With DOE′s approval of the RD&D test program, we will continue to build
and install AC100 machines, complete balance of plant systems for a full
commercial cascade and operate that cascade to demonstrate technical
readiness of the American Centrifuge in a production plant. During the
past two weeks, we have begun installing service modules and other
control equipment to support the RD&D commercial cascade.

'We have also made great progress in establishing the governance
structure required by our agreement with DOE, including establishing the
board of managers for American Centrifuge Demonstration,? said Welch.
'We have identified and attracted a board with strong project
management, nuclear operations and technology deployment experience. The
board includes representatives from the largest U.S. nuclear operator,
our strategic partners and other noted experts. This is another
important step towards commercialization of the American Centrifuge
technology.?

USEC recently completed the first of five project technical milestones
for the RD&D program with the finalization of a test program. The test
program defines the objectives of the RD&D program with specific
requirements for fulfillment of each of the remaining milestones. The
RD&D program will be complete when American Centrifuge Demonstration and
USEC have demonstrated AC100 centrifuge manufacturing quality, AC100
operational reliability, and sustained operation of a full cascade of
120 AC100 machines. During the process of achieving these milestones,
American Centrifuge Demonstration and USEC will also demonstrate the
robustness of the AC100 centrifuge and plant support systems. American
Centrifuge Demonstration and USEC expect to complete the program by
December 2013.

Under the terms of the RD&D program, USEC has begun hiring to support
manufacturing and operating additional AC100 machines and expects to
complete and operate a 120-machine cascade in a commercial plant
configuration in 2013. As of July 31, USEC has built and conditioned
with uranium gas approximately 50 AC100 machines for the demonstration
cascade. USEC is also finalizing the installation of the first of six
service modules, a critical component of the balance of plant systems,
which includes wiring and piping to connect centrifuges together in the
cascade. The Company continues to build new AC100 machines and
supporting infrastructure for the demonstration cascade.

Program Governance

USEC and its newly created subsidiary, American Centrifuge
Demonstration, LLC, will carry out the RD&D program. American Centrifuge
Demonstration is putting in place a program management and enhanced
program execution structure as agreed to in the cooperative agreement
with DOE. Last week, USEC entered into a limited liability company
agreement for American Centrifuge Demonstration that, among other
things, establishes a board of managers in accordance with the enhanced
program execution structure. The board of managers will oversee and
direct the management of the RD&D program. The seven-person board is
comprised of the following members:

• 
  M. Roger Eshelman, executive vice president and chief operating
  officer (retired), Savannah River Nuclear Solutions, LLC,
  
• 
  Bruce Rash, director, nuclear project management,Exelon
  Generation Company, LLC,
  
• 
  Luis Reyes, executive director for operations (retired), U.S. Nuclear
  Regulatory Commission,
  
• 
  Philip G. Sewell, senior vice president, American Centrifuge and
  Russian HEU, USEC Inc.,
  
• 
  Randall J. Spickard, vice president, business development, Babcock
  & Wilcox Technical Services Group, Inc.,
  
• 
  Robert Van Namen, senior vice president, uranium enrichment, USEC
  Inc., and
  
• 
  Hitoshi Yabuta, vice president, project management, Toshiba
  America Nuclear Energy Corporation.
  

Funding

On June 12, USEC and DOE entered into a cooperative agreement to provide
funding for the RD&D program. The agreement provides for 80 percent DOE
and 20 percent USEC cost sharing for work performed during the period
June 1, 2012, through December 31, 2013, having a total estimated cost
of $350 million. DOE′s total contribution would be up to $280 million,
and USEC′s contribution would be up to $70 million. USEC and DOE are
initially providing $110 million in cost-shared funding for the program.
This is intended to fund the RD&D program through the end of November
2012. DOE′s portion of the funding for the initial period will come from
taking the disposal obligation for a quantity of depleted uranium tails
from USEC, releasing $87.7 million in cash that USEC had previously
committed as security for future tails disposition obligations.

The cooperative agreement will be incrementally funded, and DOE funding
is limited to $87.7 million until DOE provides authorization for
additional funding. DOE funding through July 31, 2012, was $26.4
million. On July 31, 2012, after USEC completed a series of actions
including completing a detailed cost/schedule review, setting firm dates
for the project milestones, establishing the project governance
structure and submitting to the Nuclear Regulatory Commission a Foreign
Ownership, Control or Influence information package for American
Centrifuge Demonstration, DOE authorized an additional $61.3 million of
funding, for a total of $87.7 million. The remaining funding of $192.3
million from DOE has not yet been authorized and is subject to the
availability of appropriations or other sources of consideration. USEC
will continue to work with Congress and DOE to pursue opportunities for
funding the balance of the RD&D program.

Program Background

The objective of the RD&D program is to demonstrate the American
Centrifuge technology through the construction and operation of a
cascade of 120 commercial centrifuge machines and to sustain the
domestic U.S. centrifuge technical and industrial base to ensure the
capability exists to meet future national security needs. This includes
activities to reduce the risks and improve the future prospects of
deployment of the American Centrifuge technology.

USEC intends to meet this objective through the construction and
operation of one complete demonstration cascade of 120 commercial
centrifuge machines and supporting infrastructure. USEC will also
demonstrate redundancy of the primary cascade support systems that will
be used in a production plant and complete integrated testing against
operational requirements. The RD&D cascade would be incorporated in the
full commercial plant in Piketon, Ohio, which is planned to operate 96
identical cascades.

The RD&D program will support more than 1,000 direct jobs in Ohio,
Tennessee and several other states.

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; 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 loan
guarantee from the U.S. Department of Energy ('DOE?) 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; 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.
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.

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USEC Inc.

Media:

Paul Jacobson (301) 564-3399

or

Investors:

Steven
Wingfield (301) 564-3354