USEC Reports Third Quarter 2011 Results

USEC Inc. (NYSE:USU) today reported a net loss of $6.9 million or 6
cents per share for the quarter ended September 30, 2011, compared to
net income of $1.0 million or 1 cent per basic and diluted share for the
third quarter of 2010. For the nine-month period ended September 30,
2011, USEC reported a loss of $44.7 million or 37 cents per share
compared to a loss of $1.5 million or 1 cent per share in the same
period of 2010.

The financial results for the quarter and nine-month period ended
September 30, 2011, reflect lower sales volume and a decline in the
gross profit margin compared to 2010, but in line with USEC′s 2011
financial guidance. Advanced technology costs associated with the
American Centrifuge project were higher in the nine months compared to
the same period in 2010, when project costs were partially offset by
income from a technology cost-sharing program with the Department of
Energy (DOE).

'Our results are in line with the outlook provided to investors. Our
profit margin is being squeezed by higher production and purchase costs
that have exceeded the increase in average prices billed to customers,?
said John K. Welch, USEC president and chief executive officer. 'Those
higher and volatile costs are a key reason why we have been intently
focused on deploying the American Centrifuge technology.

'Electricity accounts for about 70 percent of production costs at the
Paducah plant. Our power contract with the Tennessee Valley Authority
expires May 31, 2012 and we are having discussions with TVA as well as
other power providers as we consider electricity purchases beyond that
time. Lower power costs, a depleted uranium tails re-enrichment program
with DOE and a solid book of future enrichment contracts will be
required to keep our Paducah plant economic and support a decision to
extend operations beyond May 2012. We expect to make a decision on
whether to extend Paducah operations in the next few months,? he said.

'As indicated in our recent news releases, we are currently in
discussions with DOE concerning a Research, Development and
Demonstration (RD&D) program to reduce the technology and financial risk
of commercializing the American Centrifuge technology,? Welch said. 'We
believe that this RD&D program is a good way to further de-risk the
project and move forward toward building the commercial plant and obtain
value from the investments that have been made to date. However, we have
not yet finalized an agreement and obtained funding for such a program
and so we are currently evaluating our options regarding the American
Centrifuge project, including whether to further reduce spending and
begin demobilizing the project.

'Given all this uncertainty and the fluidity of discussions with DOE and
potential Company decisions that could be made, we wanted to share our
third quarter results with investors but postpone holding the investor
conference call until we have greater certainty and can have a
meaningful conversation with analysts and investors regarding the path
forward for the American Centrifuge project.?

Additional information can be found in our quarterly report on Form 10-Q
filed today with the Securities and Exchange Commission, which is
available on our website at www.usec.com.

Revenue

Revenue for the third quarter was $374.5 million, a decrease of $190.1
million compared to the same quarter of 2010. Revenue from the sale of
separative work units (SWU) for the quarter was $297.9 million, a
decrease of $106.3 million compared to the same period last year. The
volume of SWU sales declined 31 percent in the quarter and 11 percent in
the nine-month period, compared to the corresponding periods in 2010,
reflecting the variability in timing of utility customer orders. For the
nine-month period, revenue was $1,209.4 million compared to $1,369.0
million in 2010, a decrease of 12 percent. Revenue from SWU was $936.7
million, a decrease of 6 percent over the same period in 2010. The
average price billed to customers increased 7 percent in the quarter and
5 percent in the nine-month period, 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.

Revenue from the sale of uranium in the third quarter was $21.3 million,
a decrease of 73 percent from the same quarter last year. The quarterly
results reflect a 79 percent decrease in uranium volume sold but average
prices that were 26 percent higher compared to the 2010 period due to a
decline in uranium inventory available for sale and the mix and timing
of uranium contracts. Uranium revenue in the nine-month period was
$103.1 million, a decrease of 37 percent reflecting a 52 percent
decrease in volume sold and 30 percent higher prices billed to customers.

Revenues from our contract services segment in the third quarter and
nine-month period ended September 30, 2011 were $55.3 million and $169.6
million, a decrease of 32 percent and 16 percent, respectively, compared
to the corresponding periods of 2010. These declines reflect reduced
site services at Portsmouth as work was transferred to the new
decontamination and decommissioning (D&D) contractor as well as fee
recognition on certain contracts in the first quarter of 2010. Revenues
by our subsidiary NAC International increased $8.0 million in the
three-month period and $18.7 million in the nine-month period primarily
as a result of increased sales of 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 low
enriched uranium is physically delivered. At September 30, 2011,
deferred revenue totaled $166.1 million, an increase of $7.6 million
from June 30, 2011. The gross profit associated with deferred revenue as
of September 30, 2011, was $6.3 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 and nine-month period ended September 30,
2011, for SWU and uranium was $298.5 million and $974.3 million, a
decrease of 34 percent and 10 percent, respectively, compared to the
corresponding periods in 2010. The lower cost of sales was due to lower
sales volume, partially offset by higher unit costs. Cost of sales per
SWU was 7 percent higher in the quarter and 8 percent higher in the
nine-month period compared to the corresponding periods of 2010. Cost of
sales for SWU and uranium reflects monthly moving average inventory
costs based on production and purchase costs.

Production costs declined $1.0 million or 1 percent and $51.2 million or
8 percent in the quarter and nine-month periods, respectively, as
production volume declined 15 percent in the nine-month period to more
closely match anticipated sales for the year. The unit production cost
increased 7 percent in the nine-month period compared to the
corresponding period in 2010. Under our power contract with the
Tennessee Valley Authority, beginning September 1, 2010, the power that
we purchase from TVA during the non-summer months (September ? May) was
reduced from 2,000 megawatts to 1,650 megawatts. As a result, megawatt
hours purchased declined 16 percent in the nine-month period. The
average cost per megawatt hour increased 5 percent in the nine-month
period. The higher prices reflect higher TVA fuel cost adjustments as
well as the fixed, annual increase in the TVA contract price, partially
offset by supplemental power purchases in the summer months at lower
market-based prices than the prior year. In addition, we expect to
purchase approximately 5.5 million SWU under the Megatons to Megawatts
program in 2011. Purchase costs increased $14.3 million in the
nine-month period reflecting a 3 percent increase in unit purchase costs.

Cost of sales for contract services was $49.1 million in the third
quarter, a decrease of $26.1 million or 35 percent over the same period
last year, reflecting a decreasing level of contract services work at
the Portsmouth site, partially offset by higher costs associated with
increased sales by NAC. In the nine-month period of 2011, cost of sales
for contract services was $161.1 million, a decrease of $21.9 million or
12 percent, reflecting reduced contract services work at Portsmouth and
curtailment charges of $5.1 million for the pension plan and
postretirement benefit plans in connection with the transition of
Portsmouth site contract service workers to the new D&D contractor,
partially offset by increased sales by NAC.

On September 30, 2011, we completed the transition of Portsmouth site
facilities to the D&D contractor. We continue to lease facilities used
for the American Centrifuge Plant (ACP) and administrative purposes. DOE
has agreed to provide infrastructure services in support of the
construction and operation of the ACP.

The gross profit for the third quarter was $26.9 million, a decrease of
$11.1 million or 29 percent over the same quarter in 2010. In the
nine-month period, the gross profit was $74.0 million, a decrease of
$34.8 million or 32 percent compared to the same period last year. The
gross profit margin for the 2011 periods was 7.2 percent in the
three-month and 6.1 percent in the nine-month period. Gross profit for
the LEU segment in both 2011 periods was lower due to lower volume.

Selling, general and administrative expenses in the nine-month period
were $47.8 million, an increase of $4.4 million over the same period in
2010, primarily due to higher salary and employee benefit costs in 2011,
higher consulting costs and increased director compensation related to
two additional directors in 2011. The 2010 expense reflected a favorable
lease adjustment of $0.5 million.

Advanced technology expense, primarily related to the demonstration of
the American Centrifuge technology, was $26.0 million in the quarter
compared to $28.6 million in the third quarter of 2010. For the
nine-month period of 2011, advanced technology expense was $86.2
million, compared to $80.3 million in the corresponding period last
year. In the second quarter of 2011, USEC expensed $9.6 million of
previously capitalized construction work in progress costs relating to a
number of centrifuge machines and associated capitalized interest costs.
Advanced technology expense includes expenses by NAC to develop its
MAGNASTOR ^? storage and transportation technology of $1.1
million during the nine-month period of 2011 compared to $1.7 million in
the same period of 2010.

Cash Flow

At September 30, 2011, USEC had a cash balance of $117.9 million
compared to $340.2 million at June 30, 2011 and $151.0 million at
December 31, 2010. Cash flow provided by operations in the nine-month
period of 2011 was $107.2 million, compared to cash flow provided by
operations of $30.0 million in the same period of 2010. The decline in
accounts receivable provided cash of $85.1 million in the nine months
ended September 30, 2011. Net inventories increased $71.6 million in the
nine-month period, representing higher power costs and lower 2011
volume. Payables under the Russian Contract increased $83.6 million in
the nine months ended September 30, 2011, due to the timing of
deliveries, representing additions to inventory that did not require a
cash outlay. Capital expenditures, primarily related to the ACP
including prepayments to suppliers for services not yet performed,
totaled $130.3 million during the 2011 nine-month period compared to
$123.0 million in the same period last year.

2011 Outlook Update

USEC is providing an update to our 2011 financial guidance. We expect
revenue for the full year to be approximately $1.7 billion, unchanged
from our initial guidance. Within that total revenue, we expect SWU
revenue to be approximately $1.4 billion and uranium revenue to be
approximately $135 million. Our projection for SWU volume sold has
declined by 1 percent from earlier guidance and is expected to be 10
percent less in 2011 compared to 2010. We continue to expect at least a
3 percent increase in the average SWU price billed to customers. The
contract services segment, which includes the closeout of work for DOE
at the former Portsmouth Gaseous Diffusion Plant, is now expected to
have revenue of approximately $200 million or $50 million more than our
initial guidance. The higher revenue reflects additional services
provided by USEC as the decontamination and decommissioning project at
Portsmouth was handed over to a DOE contractor and additional sales of
dry storage systems by our subsidiary, NAC International.

We produce approximately half of our SWU supply and purchase half from
Russia under the Megatons to Megawatts program. Electric power continues
to be the largest production cost component. Under the terms of our
contract with TVA, we are buying less electricity in 2011 than in 2010.
We also ramped down power purchases to our summer operations level
earlier than in previous years. The resulting reduction in power
purchases will lower our cost of sales, partially offset by higher than
expected fuel cost adjustments paid to TVA. The purchase price paid to
Russia in 2011 is 3 percent higher than in 2010. As customer orders firm
for deliveries in the final quarter of 2011, we expect the gross profit
margin for 2011 to be in a range of 5 to 6 percent.

Below the gross profit line, we expect our selling, general and
administrative expense to be approximately $60 million. Our spending on
the American Centrifuge in 2011 has been incrementally allocated as we
continue to evaluate our spending plan and our path toward a DOE loan
guarantee commitment or other funding for the project. During the fourth
quarter of 2011, our spending on ACP beyond amounts already spent or
committed to date will be dependent on our expectations regarding the
success and timing of any cooperative agreement with DOE to provide for
immediate funding under the RD&D program currently being discussed with
DOE. We expect to expense costs under any cooperative agreement as
incurred. If we are unable to reach agreement with DOE regarding the
RD&D program, or as part of any scoping phase, we expect to evaluate the
continued capitalization of existing ACP assets. The project has a
significant effect on net income and cash flow, and due to the ongoing
uncertainty, USEC is not providing guidance on net income or cash flow
at this time. Taking into account spending on the project to date and
our anticipated gross profit margin, we expect to report a net loss in
2011. We do, however, expect our current enrichment operations to
generate positive cash flow from operations for the year 2011.

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;
  
• 
  Actions by DOE regarding financing of the American Centrifuge and
  supporting its continued development, including the potential for any
  cooperative agreement;
  
• 
  Ongoing review and evaluation of the value of capitalized costs that
  are part of ACP construction that could be charged to expense; and
  
• 
  The timing of recognition of previously deferred revenue.
  

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? ? 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; the outcome of ongoing discussions with
DOE regarding the RD&D program, including uncertainty regarding the
timing, amount and availability of funding for such RD&D program and the
dependency of government funding on Congressional appropriations and the
potential for us to make a decision at any time to further reduce
spending and demobilize the project based on the timing and likelihood
of an agreement with DOE and any government funding; the impact of any
conditions that are placed on us or on the American Centrifuge project
in connection with or as a condition to the RD&D program or other
funding, including a restructuring of our role and investment in the
project; the potential for a decision to demobilize the project in the
near term and the impact of such a decision on our business and
prospects; 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 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; 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 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 potential impacts to
cost and schedule; the impact of delays in the American Centrifuge
project and uncertainty regarding our ability to remobilize the project;
the outcome of any discussions with DOE regarding modifications needed
to the remaining milestones under the June 2002 DOE-USEC Agreement and
the potential for DOE to seek to exercise its remedies under such
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
uncertainty regarding the potential participation of Toshiba and B&W in
any potential project structure that may be required under the RD&D
program, the failure to finalize any extension of the standstill
agreement that expired on October 31, 2011 if an agreement is not
reached between USEC and DOE on a framework for the RD&D program and the
potential for immediate termination of the securities purchase agreement
governing their investments; 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 our ability to extend, renew or replace our credit
facility that matures on May 31, 2012; restrictions in our credit
facility that may impact our operating and financial flexibility and
spending on the American Centrifuge project; 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; uncertainty regarding the cost of electric power
used at our gaseous diffusion plant; the economics of extended Paducah
plant operations beyond May 2012, including our ability to negotiate an
acceptable power arrangement, our ability to obtain a contract to enrich
DOE′s depleted uranium and sufficient market demand for the remaining
output; 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 being a producer of LEU in
the event of a decision to shut down Paducah operations; risks related
to the 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; 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; 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 March 2011
disaster in Fukushima 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; 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 our deferred tax assets, including the
potential for a valuation allowance; 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 except as required by law.

USEC Inc.

Media:

Paul Jacobson, 301-564-3399

or

Investors:

Steve
Wingfield, 301-564-3354