USEC Reports $7.5 Million Net Income for 2010

USEC Inc. (NYSE:USU) today reported net income for 2010 of $7.5 million
or 5 cents per diluted share (7 cents per basic share) compared to net
income of $58.5 million or 37 cents per diluted share (53 cents per
basic share) for 2009. For the fourth quarter ended December 31, 2010,
USEC earned $9 million or 5 cents per diluted share (8 cents per basic
share) compared to $49.5 million or 31 cents per diluted share (44 cents
per basic share) for the same quarter of 2009. The financial results in
the full year and fourth quarter of 2009 reflected the receipt of
approximately $70 million (pretax) related to a trade case settlement
with Eurodif S.A. and its affiliates.

Gross profit declined due to lower volume of separative work units (SWU)
sold, higher unit costs for SWU and uranium, and lower average uranium
selling price. These declines were partially offset by higher average
SWU selling prices and increased revenue recognition of uranium sold in
prior periods. A 3 percent increase in the average price of SWU billed
to customers was more than offset by higher electricity costs on a per
SWU basis and higher purchase costs from Russia, squeezing gross profit
margins. In addition, USEC ended the year with a cash balance of $151.0
million.

USEC is offering limited guidance for financial results in 2011. We
expect revenue to total $1.7 billion as SWU sales volume is anticipated
to decline 10 percent compared to 2010 and we expect a significant
decline in revenue in our contract services segment as a result of the
transition to a new decontamination and decommissioning contractor at
the Portsmouth site. Higher cost of sales from prior periods imbedded in
our SWU inventory will continue to compress gross profit margins to an
expected range of 4 to 5 percent. Because our level of spending on the
American Centrifuge project continues to be uncertain, we are not
offering earnings or cash flow from operations guidance at this time,
but we expect to report a net loss for the year. More details on our
guidance can be found on page 4 of this news release.

'Efforts taken during 2010 to increase sales and reduce costs resulted
in a modest profit,? said John K. Welch, USEC president and chief
executive officer. 'We improved the gross profit margin from our initial
guidance, made additional sales to our customers and adjusted delivery
dates for some SWU orders already under contract.

'In addition, we had outstanding performance at the Paducah Gaseous
Diffusion Plant. Employees worked to improve electric power utilization,
a key measure of production efficiency, by 2 percent over 2009′s
outstanding performance. Paducah also worked to keep the average number
of production cells on line at its highest level in 30 years,? he said.

Revenue

Revenue for the fourth quarter was $666.4 million, an increase of 43
percent compared to the same quarter of 2009. Revenue from the sale of
SWU for the quarter was $519.6 million compared to $380.8 million in the
same period of the prior year. Revenue from the sale of uranium was
$71.6 million, an increase of $41.1 million from the same quarter last
year. Revenue from our contract services segment was $75.2 million
compared to $56.3 million in the fourth quarter last year.

For the full year, revenue was $2.04 billion, nearly unchanged from
2009. SWU volume declined 10 percent year over year due to the timing
and mix of customers refueling reactors in 2010. The average SWU prices
billed to customers increased 3 percent compared to 2009, reflecting the
general trend of higher prices under contracts signed in recent years.
The volume of uranium sold increased by 47 percent and the average price
billed to customers decreased 11 percent. Revenue from the contract
services segment was $277.9 million, a 33 percent increase year over
year due primarily to an acceleration of clean-up activities at the
former Portsmouth Gaseous Diffusion Plant.

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 December 31, 2010, deferred
revenue totaled $176.1 million, compared to $301.9 million at December
31, 2009. The gross profit associated with deferred revenue as of
December 31, 2010, was $23.2 million.

A majority of reactors served by USEC are refueled on an 12-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 and Expenses

Cost of sales for 2010 for SWU and uranium was $1.62 billion, a decrease
of $17.1 million compared to 2009. The 1 percent change is a result of
the decline in SWU sold, partially offset by higher uranium volume sold
and higher unit costs. Production costs declined $13.4 million or 2
percent in 2010 compared to 2009. This was primarily a result of a 4
percent reduction in overall production volume partially offset by a 2
percent increase in unit production costs. We purchased 6 percent fewer
megawatt hours but the average cost per megawatt hour increased 4
percent due to higher fuel cost adjustments charged by the Tennessee
Valley Authority (TVA). Purchase costs for the SWU component of LEU
under the Russian Contract increased $49.6 million in 2010 compared to
2009 due to an 8 percent increase in the purchase cost per SWU. Purchase
prices paid under the Russian Contract are set by a pricing formula that
includes market-based price points and have increased as market prices
have increased in recent years.

Cost of sales for SWU and uranium reflects monthly moving average
inventory costs based on production and purchase costs. Cost of sales
per SWU in 2010 was negatively impacted by higher purchase costs under
the Russian Contract, higher production costs and the carry-forward
effect of high costs in prior periods. In the contract services segment,
cost of sales was $253.8 million in 2010, an increase of $62.0 million
or 32 percent, in line with the additional work performed in 2010.

The gross profit for 2010 was $158.4 million, a decrease of $46.3
million or 23 percent over the previous year. The gross profit margin
for the year was 7.8 percent compared to 10.1 percent in 2009. The lower
gross profit margin reflects lower margins in the LEU segment while the
profitability of the contract services segment improved $6.8 million,
primarily due to additional cold shutdown services performed at the
Portsmouth site and contract fee recognition on certain contracts.

The gross profit margin in the fourth quarter of 2010 was 7.4 percent
compared to 9.8 percent in the same quarter of 2009, due primarily to
higher costs rolling through cost of sales from inventory in 2010 that
offset higher prices invoiced to customers. USEC′s initial guidance for
2010 was for a gross profit margin in the range of 5 to 6 percent, which
was later adjusted to approximately 7 percent.

Selling, general and administrative expenses in 2010 were $58.9 million,
nearly unchanged compared to 2009. Salaries, other cash-based
compensation and employee benefits increased $4.2 million in 2010 and
stock-based compensation expense increased $0.4 million compared to
2009. Consulting expenses decreased $4.0 million, as did other SG&A
categories such as corporate facility related costs.

Advanced technology expenses, primarily related to the demonstration of
the American Centrifuge technology, were $29.9 million in the fourth
quarter and $110.2 million for the full year of 2010, an increase of
$5.3 million quarter over quarter and a decrease of $8.2 million
compared to the full year of 2009. The lower year over year expense
reflects the demobilization of the project in the second half of 2009.
Advanced technology costs include expenses of $2.4 million in 2010 by
NAC to develop and expand its MAGNASTOR? technology and its
transportation counterpart, MAGNATRAN?.

During 2010 we worked under a cooperative agreement entered into with
DOE in March 2010 to provide for pro-rata cost sharing support for
continued funding of American Centrifuge activities with a total cost of
$90 million. In 2010, USEC made qualifying American Centrifuge
expenditures of $88.8 million, and DOE′s pro-rata share of 50 percent,
or $44.4 million, is recognized as other income. The program was
completed in January 2011 when USEC made the remaining expenditures.

Cash Flow

At December 31, 2010, USEC had a cash balance of $151.0 million compared
to $131.3 million at December 31, 2009. Cash flow from operations in
2010 was $22.5 million, compared to cash flow from operations of $443.4
million in the previous year. An increase in accounts receivable of
$117.2 million in 2010 following strong sales in the fourth quarter of
2010 and decreased deferred profits relating to uranium and LEU that
were previously sold but not shipped until 2010, was a timing-related
use of cash flow. Capital expenditures, primarily related to
construction of the American Centrifuge Plant, totaled $162.2 million
during 2010 compared to $441.3 million in 2009.

Transition of Contract Services Segment

In recent years a substantial portion of our contract services revenue
has been related to cold shutdown work at the Portsmouth site. During
2010, we prepared leased facilities at the former Portsmouth GDP for
accelerated turnover to DOE for decontamination and decommissioning
(D&D). DOE awarded the D&D contract to a new contractor and USEC
de-leased several large facilities on September 30, 2010, including
three production buildings with approximately 75 acres under roof. We
salvaged equipment and supplies that may be used at our Paducah plant.
We will continue work at the site through March 2011 under a DOE
contract but we anticipate transitioning the majority of our employees
at the site to the D&D contractor.

The end of the cold shutdown contract could result in USEC incurring
employee related severance costs. Our requirement to pay severance is
the result of obligations to our employees under our Collective
Bargaining Agreements and USEC′s severance policy. Our severance
liability could be up to approximately $25 million, with DOE owing a
portion of this amount, estimated at $18.5 million. We are currently in
discussions with DOE and the D&D contractor concerning strategies to
avoid or lessen the potential severance liability for employees who may
receive offers of employment from the new D&D contractor. As of December
31, 2010, no amounts have been recorded on our consolidated financial
statements.

The potential cessation of our U.S. government contract activities in
Portsmouth will also trigger closing adjustments to our pension and
post-retirement benefit. As a result, certain costs may be accelerated
and we believe a portion of such costs would be recoverable from DOE
under our contract and applicable cost accounting standards. Closing
adjustments from our pension plan could be up to approximately $32
million and for our post-retirement benefit plan up to approximately $15
million, before cost recoveries from DOE. We are currently in
discussions with DOE and the D&D contractor concerning strategies to
avoid or lessen these potential closing adjustments from our pension and
post-retirement benefit plans.

2011 Outlook

We expect total revenue for 2011 to be approximately $1.7 billion as
revenue in both business segments declines over 2010. Revenue from SWU
sales is expected to be approximately $1.4 billion or about $100 million
less than 2010. This assumes a 10 percent reduction in SWU sales volume
and an average price billed to customers that increases by approximately
3 percent. Revenue from the sale of uranium is expected to be
approximately $150 million or about $85 million less than 2010. Uranium
revenue is expected to reflect 15 percent higher prices but a 45 percent
decline in uranium volume due to liquidation of inventory in 2010 and a
decline in deferred revenue for uranium delivered in prior periods.

After a one-year accelerated cleanup contract at the former Portsmouth
GDP, the contract services segment is expected to see a significant
decrease in revenue to approximately $150 million largely due to the
transition of the clean-up project to the recipient of a decontamination
and decommissioning contract. Most of the employees performing the
contract services work at the Portsmouth site are expected to be hired
by the D&D contractor, and the related costs for our work at the site
will decline proportionately.

On the cost side of the LEU segment, electric power is expected to
remain about 70 percent of the cost of SWU production, our largest
production cost component. We expect to buy less electricity in 2011 as
our non-summer power purchases under our contract with TVA were reduced
by 350 megawatts to 1650 megawatts beginning September 1, 2010. We pay
TVA a fixed base price plus an adjustment to reflect the cost of fuel or
purchased power above the cost assumed in the base price. This fuel cost
adjustment increased our costs above the base price by 10 percent in
2010 compared to 6 percent in 2009 as commodity prices for coal remained
strong and availability of lower cost hydropower within the TVA system
was below average in 2010 due to weather conditions. We produce
approximately half of our SWU supply and purchase half from Russia under
the Megatons to Megawatts program. The purchase price in 2011 is 3
percent higher than in 2010. In 2010, the purchase price was 8 percent
higher than in 2009.

Our cost of sales continues to reflect higher production and purchase
costs rolling through our inventory from previous periods, and these
costs are increasing at a higher rate than our average price billed to
customers. Thus, the expected increase in the cost of sales is greater
than the 3 percent increase in average SWU prices billed to customers.
We expect our gross profit margin in 2011 to be 4 to 5 percent, compared
to 7.8 percent in 2010. Looking beyond 2011, we expect improvement in
prices billed to customers in future years to begin to reverse this
trend and any future production from the ACP will lower our cost of
production. In the nearer term, however, production costs will be
subject to continued volatility in the fuel cost adjustment. We continue
to evaluate our TVA load profile and production requirements through the
end of our current power contract with a goal of optimizing power
purchases and decreasing our exposure to TVA fuel cost volatility. In
addition, we are negotiating with TVA and other suppliers regarding the
purchase price for power after the expiration of our current power
contract in May 2012.

Based on our gross profit margin guidance, we expect gross profit in
2011 in a range of $70 to $80 million. Below the gross profit line, we
anticipate our selling, general and administrative expense to be
approximately $60 million. The amount of spending related to the
American Centrifuge will be a function of our progress toward a
conditional commitment and timely financial closing on a DOE loan
guarantee and related funding, and is also restricted by the covenants
in our revolving credit facility. We expect total spending, both
capitalized and expensed, to be approximately $50 million in the first
quarter of 2011.

We expect to evaluate our spending plan on the American Centrifuge
project regularly in 2011 and we will not continue spending on the
project without a clear path to a DOE loan guarantee commitment. 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 of $50 million in the first quarter and our
anticipated gross profit margin, we do expect to report a net loss for
2011. We also expect our current enrichment operations will generate
cash in 2011, but ACP spending and potential payments related to the
transition to the D&D contractor of our contract services work for DOE
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;
  
• 
  Recognition of potential severance costs, pension and post-retirement
  benefit costs and Portsmouth site costs related to the transition to
  the D&D contractor of our contract services work for DOE;
  
• 
  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 credit subsidy
cost, and our ability to meet any 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 up to $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; 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 and Babcock & Wilcox Investment
Company, including our ability to satisfy the significant closing
conditions in the securities purchase agreement governing the
transactions and the impact of a failure to consummate the transactions
on our business and prospects; 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;
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; 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 except as required by law.

USEC Inc.

Investors:

Steven Wingfield, 301-564-3354

or

Media:

Paul
Jacobson, 301-564-3399