USEC Reports Third Quarter 2012 Results

USEC Inc. (NYSE:USU) today reported a net income of $4.5 million or 4
cents per share for the quarter ended September 30, 2012, compared to a
net loss of $6.9 million or 6 cents per share for the third quarter of
2011. For the nine-month period of 2012, the company reported a net loss
of $116.3 million or 95 cents per share compared to a net loss of $44.7
million or 37 cents per share in the same period of 2011.

Among the factors affecting financial results for the third quarter of
2012 was higher gross profit from the low enriched uranium (LEU) sector
driven by the delivery of higher volumes of separative work units (SWU).
Increased SWU volume reflects the variability of timing of utility
customer orders that USEC and customers have advanced from later in 2012
and from 2013, as well as the continued implementation of the one-year
program at the Paducah Gaseous Diffusion Plant to enrich depleted
uranium as feedstock to produce low enriched uranium under a multi-party
arrangement. The trend that began in 2011 toward lower uranium sales
continued as there were no uranium sales during the third quarter as
compared to $21.3 million in uranium revenue in the third quarter of
2011. Gross profit for the quarter was $37.5 million compared to $26.9
million in the same period last year.

Third quarter results were also affected by spending on 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. Advanced technology costs of
$45.1 million and interest expense of $12.3 million in the third quarter
of 2012, which together totaled $57.4 million, were partially offset by
$34.6 million in other income that represents the Department of Energy′s
share of the RD&D program.

'I am pleased to report crisp execution in the third quarter of the RD&D
program and the multi-party contract that has extended enrichment
activities at the Paducah Gaseous Diffusion Plant,? said John K. Welch,
USEC president and chief executive officer.

'We reported better financial results year over year with an improved
gross profit, and finished the quarter with a cash balance just over
$300 million. We reiterated our guidance for 2012 and expect to finish
the year with a cash balance exceeding $200 million,? Welch noted.

'We are assembling and conditioning AC100 centrifuge machines for the
RD&D program, installing service modules and preparing plant
infrastructure and control systems for the demonstration cascade we will
operate in 2013. We met the first two technical milestones, and we are
hitting the interim performance indicators goals in a manner that
reaffirms our confidence in the American Centrifuge technology and our
ability to deploy it successfully.

'Our employees at the Paducah plant are meeting the financial and
operational metrics we established for the agreements with Energy
Northwest, Tennessee Valley Authority and the Department of Energy that
extended enrichment at Paducah through next May. Our staff continues to
focus on equipment reliability and plant operation at a high level of
efficiency,? Welch said.

Revenue

Revenue for the third quarter of 2012 was $570.5 million, a 52 percent
increase over the same quarter of 2011. Revenue from the sale of SWU for
the quarter was $559.5 million compared to $297.9 million in the same
period last year. The volume of SWU sales increased 83 percent compared
to the same quarter of 2011, and the average price billed to customers
was 3 percent higher. For the nine-month period, revenue in 2012 was
$1,496.8 million, an increase of $287.4 million or 24 percent compared
to the same period in 2011. There were no sales of uranium in the third
quarter and $3.6 million in the nine-month period of 2012 compared to
$103.1 million in the nine-month period 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 $11.0 million in the
third quarter and $48.6 million in the nine-month period of 2012
compared to $55.3 million and $169.6 million in the respective periods
of 2011. The decrease was due to a reduction in contract services
revenue at the former Portsmouth Gaseous Diffusion Plant site as work
was transferred to DOE′s decontamination and decommissioning contractor
over the course of 2011. Revenue in the segment is now dominated by our
subsidiary NAC International. Revenue by NAC decreased $7.7 million in
the three-month period and increased $0.6 million in the nine-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 LEU is
physically delivered. At September 30, 2012, deferred revenue totaled
$105.0 million compared to $139.4 million at June 30, 2012. The gross
profit associated with deferred revenue as of September 30, 2012, was
$12.4 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 September 30, 2012, for the LEU
segment was $522.8 million, an increase of $224.3 million compared to
the same quarter in 2011, primarily due to higher SWU sales volumes and
unit costs, partially offset by no uranium sales in the 2012 period.
Cost of sales for the segment increased $390.1 million in the nine
months ended September 30, 2012, compared to the corresponding period in
2011, primarily due to the same explanations for the quarter results.
Cost of sales per SWU was 2 percent higher in the third quarter and 1
percent higher for the nine months ended September 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, 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. The total
reduction to cost of sales recognized in the nine months ended September
30, 2012, was approximately $26.2 million. 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
activities that support our active and retired employees. These net
benefit costs totaled $9.9 million for the nine months ended September
30, 2012, and are directly charged to cost of sales rather than
production. Additionally, $2.8 million of costs previously capitalized
as part of construction work in progress were charged to expense in the
third quarter of 2012 based on a short expected life once placed in
service at the Paducah GDP. Excluding the effects of these items, cost
of sales per SWU was approximately 2 percent higher in the nine months
ended September 30, 2012, compared to the corresponding period in 2011.

Production costs declined $23.0 million, or 13 percent, in the third
quarter reflecting a 6 percent decline in volume and an 8 percent
decline in unit production cost. Production in the quarter consisted of
depleted uranium enrichment under the one-year multi-party arrangement
with Energy Northwest, the Bonneville Power Administration, Tennessee
Valley Authority (TVA) and DOE. Effective June 1, 2012, although our
purchase costs under our power contract with TVA continue to be subject
to a fuel cost adjustment, the fuel cost adjustment is included in the
power price component of our sales price billed to Energy Northwest
under the depleted uranium enrichment agreement. The average cost per
megawatt hour declined 10 percent in the three months ended September
30, 2012, compared to the corresponding period in 2011.

Production costs in the nine-month period increased $6.4 million, or 1
percent, compared to the same period of 2011. Production volume
increased 6 percent as we purchased supplemental power from TVA in the
first two quarters of 2012 that had been deferred from 2011. The unit
production cost declined 5 percent in the nine-month period, reflecting
the lower unit production cost under the depleted uranium enrichment
program and increased production volumes in the first two quarters. The
average cost per megawatt hour declined 3 percent in the nine-month
period reflecting lower unit power costs.

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 increased $10.5 million in the nine-month period
compared to the corresponding period of 2011, reflecting a 2 percent
increase in the market-based unit purchase cost.

Cost of sales for the contract services segment declined $38.9 million
in the three months and $117.3 million in the nine months ended
September 30, 2012, compared to the corresponding periods in 2011,
primarily reflecting reduced contract services work at Portsmouth in
connection with the transition of Portsmouth site contract service
workers to DOE′s decontamination and decommissioning contractor.

The gross profit for the third quarter was $37.5 million compared to
$26.9 million in the same quarter last year. In the nine-month period,
the gross profit was $88.6 million compared to $74.0 million in the same
period of 2011. The gross profit margin for the third quarter was 6.6
percent compared to 7.2 percent for the same period in 2011. The gross
profit margin for the nine-month period of 2012 was 5.9 percent compared
to 6.1 percent in the same period of 2011. Gross profit for the LEU
segment increased 28 percent in the nine-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 declined
$3.7 million in the 2012 nine-month period reflecting the completion of
the Portsmouth site contract service work in 2011, offset by a $1.6
million increase in 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 $45.1 million in the third
quarter compared to $26.0 million in the third quarter of 2011. For the
nine-month period of 2012, advanced technology expense was $167.6
million, which includes 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. 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, which we
anticipate to begin upon successful completion of the RD&D program.

Advanced technology costs include expenses by NAC of $0.6 million in the
nine months of 2012 and $1.1 million in the corresponding period in 2011
to develop and expand its MAGNASTOR storage technology and its
transportation counterpart, MAGNATRAN.

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 cost of $350.0 million. DOE made $87.7
million of initial funding available by taking the disposal obligation
for a specific quantity of depleted uranium from USEC, which releases
encumbered funds for investment in the American Centrifuge technology
that we had otherwise committed to future depleted uranium disposition
obligations. ?As of September 30, 2012, USEC made qualifying American
Centrifuge expenditures of $55.7 million. DOE′s pro-rata share of 80
percent, or $44.6 million, is recognized as other income in the
nine-month period.

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 $1.1
million in the third quarter of 2012 and $7.1 million in the nine months.

Actions taken to-date 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 approximately
50 employees, including two senior corporate officers. A charge of $0.4
million was incurred in the third quarter of 2012 for a total of $4.0
million in the nine months ended September 30, 2012, for one-time
termination benefits consisting of severance payments, short-term health
care coverage and immediate vesting of restricted stock and stock
options for certain employees. Additional actions affecting employees to
align the organization with our evolving business environment are
expected.

Selling, general and administrative expenses in the nine-month period of
2012 were $42.5 million, a decrease of $5.3 million over the same period
in 2011, reflecting lower salary and other compensation costs and lower
consulting costs as we move forward with cost reductions identified and
actions taken in the second quarter.

Interest expense was $37.7 million in the nine months ended September
30, 2012, compared to $0.3 million the corresponding periods in 2011. As
noted above, beginning with the fourth quarter of 2011, all American
Centrifuge related project costs incurred have been expensed, including
interest expense that previously would have been capitalized. For
comparison, in the nine months ended September 30, 2011, interest costs
of $32.8 million were capitalized. 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 September 30, 2012, USEC had a cash balance of $303.3 million
compared to $229.0 million at June 30, 2012 and $37.6 million at
December 31, 2011. Cash flow provided by operations in the nine-month
period of 2012 was $180.5 million compared to cash flow provided by
operations of $107.2 million in the same period last year. Inventories
declined $271.1 million in the nine-month period due to monetization of
inventory produced in the prior year. Cash collateral deposits of $99.6
million were returned to us following the transfer of certain depleted
uranium to DOE in connection with the March 2012 uranium transfer
agreement and the June 2012 cooperative agreement to provide cost-share
funding for the RD&D program. The remaining pending amounts of $32.1
million are expected to be returned during the fourth quarter of 2012.
Capital expenditures were significantly reduced due to our decision to
expense all costs related to the American Centrifuge project. Capital
expenditures totaled $3.8 million in the nine months ended September 30,
2012, compared to $130.3 million in the same period last year. Cash
payments of $10.1 million were made for financing costs in the
nine-month period of 2012.

American Centrifuge Update

We are working to deploy the American Centrifuge technology, a highly
efficient uranium enrichment gas centrifuge technology. The American
Centrifuge technology requires 95 percent less electricity to produce
low enriched uranium on a per SWU unit basis than our existing gaseous
diffusion technology used at the Paducah plant. We are working to deploy
this technology in the American Centrifuge Plant (ACP) in Piketon, Ohio.
This new facility would provide us with a long term competitive source
of production.

We need significant additional financing in order to complete the ACP.
We applied for a $2 billion loan guarantee under the DOE Loan Guarantee
Program in July 2008. Instead of moving forward with a conditional
commitment for a loan guarantee, in the fall of 2011, DOE proposed the
RD&D program.

We began funding the RD&D program in January 2012 and have been building
machines and parts for the demonstration cascade. On June 12, 2012, we
and DOE entered into a cooperative agreement to provide cost-share
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
our contribution would be up to $70 million. The cooperative agreement
will be incrementally funded. The June cooperative agreement provided
initial DOE funding of $87.7 million and, on September 30, 2012, the
president signed a six-month spending measure that contains additional
funding for continued work on the RD&D program at an annual rate for
operations of $100 million, which we expect to result in $45.7 million
of additional funding for the program in the six-month period ending
March 31, 2013. The remaining funding from DOE has not yet been
authorized and is subject to Congressional appropriations, Congressional
transfer or reprogramming authority to permit the use by DOE of funds
previously appropriated for other programs, or other sources available
to DOE. We will continue working with Congress and the administration to
fully fund the RD&D program through December 2013, but there is no
assurance that this additional funding will be made available.

DOE provided the initial $87.7 million of funding by accepting title to
quantities of depleted uranium that enabled us to release encumbered
funds. We received $55.6 million of the cash in the third quarter of
2012 as the surety bonds and related cash deposits providing the
financial assurance for disposition of this depleted uranium were
reduced. We expect to receive the remainder in the fourth quarter of
2012.

Under the terms of the RD&D program, we have begun manufacturing and
operating additional AC100 machines and expect to complete and operate a
120-machine cascade in a commercial plant configuration in 2013. As of
September 30, 2012, we had approximately 80 machines built and
conditioned with uranium gas, and we continue to build new AC100
machines for the RD&D program′s demonstration cascade of commercial
centrifuge machines and supporting infrastructure. We have begun
installing service modules and other control equipment to support the
RD&D commercial cascade.

Continued lead cascade operations and the transition to a demonstration
of the 120-machine cascade in 2013 will accomplish two of the primary
objectives of the RD&D program. The first objective is to demonstrate
sufficient run time on the AC100 centrifuges to establish the high
confidence level in cascade reliability required by DOE to support loan
guarantee financing for the commercial plant. A second objective is to
build out and demonstrate the full level of balance of plant system
redundancy designed for the commercial plant.

The cooperative agreement with DOE includes five technical milestones
for the RD&D program. The first two milestones have been achieved and
the remaining three have a milestone date of December 31, 2013, tied to
the completion of the program. In addition, the cooperative agreement
also contains five non-binding performance indicators that are designed
to be achieved throughout the RD&D program and ensure that the RD&D
program is on track to achieve the remaining three milestones and other
program objectives. As of September 30, 2012, we had manufactured a
sufficient number of AC100 centrifuge machines and attained sufficient
centrifuge machine run time to meet two of the performance indicator
goals.

2012 Outlook Reiterated

USEC is reiterating the guidance provided in the second quarter, with a
small upward adjustment to cash flow from operations. Specifically, we
anticipate total revenue of approximately $1.95 billion and a gross
profit margin of 7 percent. Below the gross profit line, we expect
advanced technology expense of approximately $250 million in 2012,
including the transfer of certain assets to DOE valued at $44.6 million
in June 2012. Under the 80 percent/20 percent cost share with DOE for
the RD&D program in place since June 1, 2012, we expect to report Other
Income of approximately $105 million to offset the advanced technology
expense. Although we expect to report a gross profit, the advanced
technology expense, interest expense and special charges are expected to
result in a loss for 2012 of roughly $100 million.

We expect cash flow from operations to be approximately $60 million
compared to $30 million in our second quarter guidance. We anticipate
that our cash balance at December 31, 2012, will exceed $200 million.

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 enrichment at the Paducah
gaseous diffusion plant; 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
('LEU?); the potential impacts of a decision to cease enrichment 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; our ability through the
RD&D program to demonstrate the technical and financial readiness of the
centrifuge technology for commercialization; the ultimate success of
efforts to obtain a DOE loan guarantee and other financing for the
American Centrifuge 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 potential need to restructure
the investments by Toshiba ?Corporation and ?Babcock & Wilcox Investment
Company, including the potential for immediate termination of the
securities purchase agreement governing their investments; the impact of
a potential balance sheet restructuring on the holders of our common
stock; 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 low enriched uranium from
Russia under a commercial agreement (the 'Russian Contract?) with a
Russian government entity known as Techsnabexport ('TENEX?); limitations
on our ability to import the Russian LEU we buy under the new supply
agreement with Russia (the 'Russian 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

Media:
Paul Jacobson, 301-564-3399