-
$418.9 million net income primarily driven by net reorganization
items
-
Return of Paducah GDP facility reduces future non-production
expenses
-
Cash balance of $105.4 million at September 30, 2014
-
Year-end 2014 cash balance expected to be greater than $150
million
BETHESDA, Md.--(BUSINESS WIRE)--Nov. 14, 2014--
Centrus Energy Corp. (NYSE: LEU) today reported net income of $418.9
million for the quarter ended September 30, 2014, compared to a net loss
of $44.3 million for the third quarter of 2013. For the nine months
ended September 30, 2014, Centrus reported net income of $340.1 million
compared to a net loss $87.2 million in the same period of 2013. The
2014 results were primarily driven by net reorganization gains.
“We are pleased to have successfully concluded the Chapter 11 process at
the end of the third quarter and have sharpened our focus on improving
the prospects for our business going forward,” said John R. Castellano,
Centrus interim president and chief executive officer. “The results
reported for the third quarter include a number of adjustments that are
part of strengthening our balance sheet.
“A major focus of our employees over the past 15 months has been
preparing the Paducah plant for return to the Department of Energy. This
effort was largely concluded in October, and the non-production expenses
related to Paducah should have a diminishing effect on our cost of sales
in the future,” Castellano said.
In connection with the company’s emergence from Chapter 11, Centrus
applied fresh start accounting as of September 30, 2014. The results of
operations and cash flows for the period ending September 30, 2014 are
attributed to the Predecessor Company (USEC Inc.). Upon the application
of fresh start accounting, Centrus allocated the reorganization value of
the Company to its individual assets based on their estimated fair
values. The reorganization value represents the fair value of the
Successor Company (Centrus) assets before considering liabilities. The
reorganization value exceeded the sum of the fair value assigned to
assets. The excess of reorganization value over the fair value of
identified tangible and intangible assets is reported separately on the
balance sheet.
For the third quarter, reorganization items, net, were $440.0 million, a
result of the Company’s emergence from bankruptcy. Centrus reported an
operating loss of $16.4 million that was primarily driven by lower sales
volume and $17.5 million of non-production expenses related to
transition activities at the Paducah Gaseous Diffusion Plant (GDP) as
Centrus prepared the facility for return to the Department of Energy
(DOE) in October, offset by higher gross profit due to a decline in
non-production expenses and higher average SWU prices, and lower
interest expenses.
Upon adoption of fresh start accounting, the recorded amounts of assets
and liabilities were adjusted to reflect their estimated fair values.
Accordingly, the reported historical financial statements of the
Predecessor Company prior to the adoption of fresh start accounting for
periods ended on or prior to September 30, 2014 are not comparable to
those of the Successor Company. Fair value adjustments for the Successor
Company were made that will:
-
Significantly reduce the gross profit impact of deferred revenues
going forward;
-
Result in the amortization of sales backlog and customer relationship
intangible assets that were created at emergence; and
-
Result in higher cost of sales as a result of increasing inventory
values at emergence.
Revenue
Revenue for the third quarter of 2014 was $120.7 million, a decrease of
$183.1 million or 60 percent compared to the same quarter of 2013. In
the nine-month period ending September 30, 2014, revenue was $390.5
million, a decrease of $518.5 million or 57 percent from the same period
in 2013. The volume of separative work units (SWU) sales declined 70
percent in the three-month period and 61 percent in the nine-month
period reflecting the variability in timing of utility customer orders
and the expected decline in SWU deliveries in 2014 compared to 2013. The
average price billed to customers for sales of SWU increased 6 percent
in the three-month period and 2 percent in the nine-month period
reflecting the particular contracts under which SWU were sold during the
period. There were no uranium sales in 2014 through the third quarter as
most of our inventories of uranium were sold in prior years.
Revenue from the contract services segment increased significantly in
both the third quarter and the nine-month period of 2014 compared to the
prior year, reflecting $33.7 million for American Centrifuge work
performed under the American Centrifuge Technology Demonstration and
Operations (ACTDO) Agreement with Oak Ridge National Laboratory (ORNL)
beginning May 1, 2014.
In a number of sales transactions, Centrus previously transferred title
and collected cash from customers but did not recognize the revenue
until the low enriched uranium was physically delivered. Fresh start
adjustments at September 30, 2014, reflect the elimination of deferred
revenue and associated costs of $94.0 million and $73.9 million,
respectively. Going forward, the prior practices and rules for revenue
recognition will continue.
Cost of Sales and Gross Profit Margin
Cost of sales for the quarter ended September 30, 2014, was $126.1
million, a decrease of $207.7 million or 62 percent compared to the
corresponding period in 2013. For the nine-month period of 2014, cost of
sales was $413.3 million, a reduction of $559.3 million or 58 percent
compared to the same period in 2013. The lower cost of sales in 2014 was
due to lower SWU sales volume and lower non-production expenses.
Non-production expenses are included in cost of sales during both 2013
and 2014 periods, but non-production expense declined 63 percent in the
third quarter of 2014 and 46 percent in the nine-month period of 2014
compared to the corresponding periods of 2013 as Paducah activities
wound down.
Cost of sales per SWU, excluding non-production expenses, increased 2
percent in the three months ended September 30, 2014, and decreased 2
percent in the nine months ended September 30, 2014, compared to the
corresponding periods in 2013. Cost of sales for SWU reflects monthly
moving average inventory costs based on historic production and purchase
costs. Purchase costs for the SWU component of LEU from Russia declined
$528.8 million or 91 percent in the nine months ended September 30, 2014
compared to the corresponding period of 2013 following the conclusion of
the Megatons to Megawatts program in December 2013 and the commencement
of deliveries under the Russian Supply Agreement in June 2013 at lower
volume than under the Megatons to Megawatts program and reflecting
differences in timing of deliveries.
As we accelerated the expected productive life of plant assets and
ceased enrichment at the Paducah GDP in May 2013, we incurred a number
of expenses unrelated to production that have been charged directly to
cost of sales. Non-production expenses totaled $17.5 million and $66.7
million in the three and nine months ended September 30, 2014, and $47.7
million and $123.4 million in the three and nine months ended September
30, 2013. Following the return of the facility to DOE in October 2014,
these expenses are substantially complete.
Cost of sales for the contract services segment was $22.8 million and
$43.9 million in the three and nine month periods ended September 30,
2014. The substantial increase in both periods compared to the
corresponding periods in 2013 primarily reflects American Centrifuge
work performed under the ACTDO Agreement beginning May 1, 2014, as well
as increased absorption of fixed costs for government services contracts
at the Paducah site.
The LEU segment reported a gross loss in both the three and nine-month
periods primarily due to non-production expenses. However, because the
non-production expenses decreased compared to the prior periods of 2013,
gross profit increased $24.9 million in the three-month period and $41.8
million in the nine-month periods of 2014.
Similarly, Centrus reported a gross loss in both the three and
nine-month periods of 2014, but gross profitability increased $24.6
million in the three months and $40.8 million in the nine months ended
September 30, 2014, compared to the corresponding periods in 2013. Our
margin was (4.5) percent in the three months ended September 30, 2014,
compared to (9.9) percent in the corresponding period in 2013, and (5.8)
percent in the nine months ended September 30, 2014, compared to (7.0)
percent in the corresponding period in 2013.
Reorganization items, net, which included fresh start accounting
adjustments, were recorded as a net gain of $426.9 million year to date.
The major factors in the net gain were gains on the extinguished debt
and preferred equity obligations, valuation of intangibles, inventory
revaluation and other fresh start adjustments, offset by the
remeasurement of pension and postretirement benefit obligations.
Advanced Technology, Other Income and Special Charges
Advanced technology costs were $5.3 million in the three months ended
September 30, 2014, a decrease of $39.2 million compared to the
corresponding period in 2013. During the nine month period ended
September 30, 2014, advanced technology costs were $56.6 million, a
decrease of $93.4 million. The reduction in scope of work under the
ACTDO Agreement as compared with the scope under our previous
Cooperative Agreement resulted in a decrease in advanced technology
expense. We continue to perform research, development and demonstration
of the American Centrifuge technology under the ACTDO Agreement with
UT-Battelle, LLC, as management and operating contractor for ORNL, for
which revenue and cost of sales are recognized in the contract services
segment. Included in the advanced technology expense were $5.3 million
and $12.3 million for the three and nine months ended September 30,
2014, for certain demobilization and maintenance costs incurred as a
result of the reduction in scope of work under the ACTDO Agreement
compared to the previous Cooperative Agreement with DOE. Costs in the
corresponding nine-month period in 2013 included construction of the
American Centrifuge commercial demonstration cascade that was completed
in April 2013.
Funding for American Centrifuge activities was previously provided under
the Cooperative Agreement, which provided for 80 percent DOE and 20
percent Centrus cost sharing for work performed during the period June
1, 2012, through April 30, 2014, when the agreement expired in
accordance with its terms. DOE’s share of qualifying American Centrifuge
expenditures under the Cooperative Agreement was recognized as other
income. Centrus reported $39.4 million in other income, which was
primarily payment for DOE’s share of qualifying expenditures, during the
nine months ended September 30, 2014, compared to $124.1 million in the
same period in 2013.
On May 1, 2014, we signed the ACTDO Agreement with UT-Battelle for
continued cascade operations and continuation of core American
Centrifuge research and technology activities and the furnishing of
related reports to ORNL. The scope of the overall work under the ACTDO
Agreement is reduced from the scope of work that was being conducted by
Centrus under the Cooperative Agreement. Revenue and cost of sales for
work that Centrus performs under the fixed-price ACTDO Agreement as a
contractor to ORNL is reported in the contract services segment. On July
31, 2014, ORNL exercised its option to extend the period of performance
for the ACTDO Agreement by an additional six months to March 31, 2015.
The agreement also provides ORNL with one additional option to extend
the agreement by six months to September 30, 2015.
Selling, general and administrative (SG&A) expenses were $10.4 million
in the three months and $32.2 million in the nine months ended September
30, 2014. SG&A expenses in the nine-month period were 11 percent lower
compared to the corresponding periods in 2013 as compensation and
benefit costs declined $2.3 million due to reduced staffing.
Special charges in the three and nine months ended September 30, 2014
consist of charges for termination benefits for workforce reductions in
American Centrifuge development and headquarters operations, as well as
severance accrual refinements for Paducah workforce reductions occurring
in 2014. Special charges for termination benefits consist of $4.5
million in the nine-month period, less amounts paid by Centrus and
invoiced to DOE for its portion of Paducah employee severance of $2.4
million.
Cumulative charges for termination benefits since ceasing enrichment in
2013 total $29.7 million, less $3.6 million paid by Centrus and invoiced
to DOE. As of September 30, 2014, workforce reductions total 705
employees at the Paducah GDP, including 503 employees in 2014, and 28
employees at American Centrifuge and headquarters. Nearly all of the
remaining Paducah employees were terminated by early November after the
leased portions of the site were turned over to DOE.
Cash Flow
At September 30, 2014, Centrus had a cash balance of $105.4 million
compared to $314.2 million at December 31, 2013, and $128.4 million at
September 30, 2013. Cash flow used by operations in the nine-month
period of 2014 was $220.3 million, compared to cash flow used by
operations of $104.6 million in the corresponding period of 2013. The
net operating loss of $74.3 million, net of non-cash charges including
depreciation and amortization and primarily due to non-production
expenses, was a use of cash flow in the nine months ended September 30,
2014. In addition, cash payments made for reorganization items of $15.6
million and interest payments of $15.9 million made to holders of the
old notes was a use of cash flow in the period. Net reductions of the
Russian Contract payables balance of $293.4 million, due to the timing
of deliveries, was a significant use of cash flow in the nine months
ended September 30, 2014, partially offset by the monetization of
inventory purchased or produced in prior periods that provided cash flow
in the nine-month period as inventories declined $177.0 million.
2014 Outlook Update
Following the Bankruptcy Court’s confirmation of the Company’s Plan of
Reorganization, we successfully satisfied the conditions of the Plan and
emerged on the Effective Date, September 30, 2014, as Centrus Energy
Corp. with a new capital structure. We emerged from bankruptcy as a
stronger sponsor of the American Centrifuge project, however, the
Company will continue to go through a period of transition in its core
businesses. We completed the transition of the Paducah GDP back to DOE
on October 21, 2014 and are continuing to take steps to appropriately
reduce the size of our corporate organization. We expect to continue to
execute the ACTDO Agreement with ORNL to continue research, development
and demonstration of the American Centrifuge technology and largely
complete the remaining demobilization of activities related to machine
manufacturing and to engineering, procurement and construction of the
commercial plant not included in the scope of the ACTDO Agreement.
In 2013, uranium enrichment ceased at the Paducah plant and the 20-year
Megatons to Megawatts program successfully concluded. During a five-year
period from 2008 to 2012, our average sales volume was approximately 11
million SWU annually. In 2013, our sales volume declined to a level that
was approximately 70 percent of that average. In 2014, we expect our
sales volume to decline to a level that is approximately 30 percent of
that historic average with our sources of supply consisting of LEU from
existing inventory, purchases from Russia under the Russian Supply
Agreement and other potential supplies. We expect our sales volume going
forward to be at levels consistent with our reduced sources of supply.
Our cash balance at September 30, 2014 was $105.4 million, and we expect
to end 2014 with a cash balance of greater than $150 million.
In connection with our emergence from Chapter 11 bankruptcy, we applied
the provisions of fresh start accounting as of September 30, 2014. The
results of operations and cash flows for the periods ending September
30, 2014 are attributed to the Predecessor Company. Fresh start
accounting resulted in the selection of appropriate policies for the
Successor. The significant policies disclosed in the Predecessor
Company’s audited financial statements for the year ended December 31,
2013, were adopted by the Successor Company, except the Successor
Company has elected an accounting policy change related to its method of
recognizing gains and losses arising from its pensions and
postretirement benefits for all of its plans. Historically, we
recognized the actuarial gains and losses as a component of
stockholders’ equity on an annual basis. We generally amortized them
into operating results over the average future service period of the
active employees of these plans. Going forward, we have modified our
accounting policy to immediately recognize these actuarial gains and
losses in the statement of operations in the period in which they arise,
and the Successor Company expects to report such actuarial gains and
losses on a separate line item in the consolidated statement of
operations. The immediate recognition in the statement of operations is
intended to increase transparency into how movements in plan assets and
benefit obligations impact financial results. Gains or losses different
from annual expectations will be measured annually and recorded in the
fourth quarter.
Compliance With NYSE Listing Standards
On October 31, 2014, Centrus was notified by the New York Stock Exchange
that the Company regained compliance with the continued listing
standards of the NYSE. Centrus achieved compliance by making progress
consistent with a plan submitted to the NYSE to address the Company’s
non-compliance with a NYSE listing standard beginning in 2013 and by
achieving an average 30 trading-day market capitalization above $50
million.
In addition, Centrus is also in compliance with a related listing
standard for stockholders’ equity of at least $50 million. Specifically,
the standard states: “A company will be considered to be below
compliance if its average global market capitalization over a
consecutive 30 trading-day period is less than $50 million and, at the
same time stockholders’ equity is less than $50 million.”
In accordance with NYSE regulations, the Company will be subject to a
12-month follow-up period to ensure that the Company does not fall below
any of the NYSE’s continued listing standards.
Additional Information
Centrus plans to file its quarterly report on Form 10-Q with the
Securities and Exchange Commission today. A conference call with the
financial community by members of Centrus senior management will be held
at 9:00 a.m. ET on November 14. A webcast of the call and the Form 10-Q
will each be available in the Investor Relations section of the Centrus
website, www.centrusenergy.com.
About Centrus Energy Corp.
Centrus Energy Corp. is a trusted supplier of enriched uranium fuel for
a growing fleet of international and domestic commercial nuclear power
plants. Centrus is working to deploy the American Centrifuge technology
for commercial needs and to support U.S. energy and national security.
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 Centrus Energy Corp.,
particular risks and uncertainties that could cause our actual future
results to differ materially from those expressed in our forward-looking
statements include, uncertainty of our ability to improve our operating
structure, financial results and profitability following emergence from
Chapter 11 and other risks and uncertainties related to our emergence
from Chapter 11 bankruptcy, our new capital structure and the adoption
of fresh start accounting including the risk that assumptions and
factors used in estimating enterprise value vary significantly from the
current estimate calculated in connection with the application of fresh
start accounting; risks related to material unfunded defined benefit
pension plan obligations and postretirement health and life benefit
obligations and potential actions the Pension Benefit Guaranty
Corporation could pursue with respect to our qualified pension plans in
connection with the de-lease of the gaseous diffusion plants at
Portsmouth and Paducah or with any demobilization or termination of the
American Centrifuge project or otherwise including the involuntary
termination of the plans, imposition of liens or requiring additional
funding; risks related to the thin trading markets in our securities and
risks relating to our ability to maintain the listing of our common
stock on the NYSE; risks related to the ongoing transition of our
business, including the impact of our ceasing enrichment at and the
de-lease and return to the U.S. Department of Energy (“DOE”) of the
Paducah gaseous diffusion plant and uncertainty regarding our ability to
commercially deploy the American Centrifuge project; uncertainty
regarding funding for the American Centrifuge project and the potential
for a demobilization or termination of the American Centrifuge project
if additional government funding is not provided during the term of the
agreement with UT-Battelle, LLC, the management and operating contractor
for Oak Ridge National Laboratory (“ORNL”) for continued research,
development and demonstration of the American Centrifuge technology (the
“ACTDO Agreement”), including for any option periods, or upon completion
of such agreement; risks related to our ability to perform the work
required under the ACTDO Agreement at a cost that does not exceed the
firm fixed funding provided thereunder; uncertainty regarding the timing
and structure of the U.S. government program for maintaining a domestic
enrichment capability to meet national security requirements and our
role in such a program; the impact of actions we have taken (including
as a result of the reduction in scope of work under the ACTDO Agreement
as compared to the scope of work under the prior agreement signed with
DOE in June 2012 (the "Cooperative Agreement") or might take in the
future to reduce spending on the American Centrifuge project, including
the potential loss of key suppliers and employees and impacts to cost,
schedule and the ability to remobilize for commercial deployment of the
American Centrifuge Plant; the continued 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
extended duration of the current supply/demand imbalance in the market
for low enriched uranium (“LEU”); the impact of enrichment market
conditions, increased project costs and other factors on the economic
viability of the American Centrifuge project without additional
government support and on our ability to finance the project and the
potential for a demobilization or termination of the project;
uncertainty regarding our ability to achieve targeted performance over
the life of the American Centrifuge Plant which could affect the overall
economics of the American Centrifuge Plant; uncertainty concerning the
ultimate success of our efforts to obtain a loan guarantee from DOE
and/or other financing for the American Centrifuge project or additional
government support for the project and the timing and terms thereof;
uncertainty concerning customer actions under current contracts and in
future contracting due to market conditions, the delay and uncertainty
in deployment of the American Centrifuge technology and/or as a result
of changes that may be required to such contracts due to our cessation
of enrichment at Paducah; the dependency of government funding or other
government support for the American Centrifuge project on Congressional
appropriations or on actions by DOE or Congress; potential changes in
our anticipated ownership of or role in the American Centrifuge project,
including as a result of our role as a subcontractor to ORNL or as a
result of the need to raise additional capital to finance the project in
the future; the potential for DOE to seek to terminate or exercise its
remedies under the 2002 DOE-USEC agreement, or to require modifications
to such agreement that are materially adverse to Centrus Energy Corp.’s
interests; changes in U.S. government priorities and the availability of
government funding or support, including loan guarantees; risks related
to our ability to manage our liquidity without a credit facility; our
dependence on deliveries of LEU from Russia under a commercial supply
agreement (the “Russian Supply Agreement”) with a Russian government
entity known as Techsnabexport (“TENEX”) and limitations on our ability
to import the Russian LEU we buy under the Russian Supply Agreement into
the United States and other countries; risks related to actions that may
be taken by the U.S. Government, the Russian Government or other
governments that could affect our ability or the ability of TENEX to
perform under the Russian Supply Agreement, including the imposition of
sanctions, restrictions or other requirements; risks related to our
ability to sell the LEU we procure under our purchase obligations under
the Russian Supply Agreement; risks associated with our reliance on
third-part suppliers to provide essential services to us; the decrease
or elimination of duties charged on imports of foreign-produced LEU;
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 agreements with the U.S.
government; risks related to delays in payment for our contract services
work performed for DOE, including our ability to resolve certified
claims for payment filed by United States Enrichment Corporation under
the Contracts Dispute Act; 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; and other
risks and uncertainties discussed in this and our other filings with the
Securities and Exchange Commission, including our Annual Report on Form
10-K for the year ended December 31, 2013 (“10-K”). Revenue and
operating results can fluctuate significantly from quarter to quarter,
and in some cases, year to year. Readers are urged to carefully review
and consider the various disclosures made in this report and in our
other filings with the Securities and Exchange Commission that attempt
to advise interested parties of the risks and factors that may affect
our business. We do not undertake to update our forward-looking
statements except as required by law.
|
|
|
CENTRUS ENERGY CORP.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
Predecessor
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separative work units
|
|
$
|
97.4
|
|
|
$
|
295.8
|
|
|
$
|
347.5
|
|
|
$
|
853.4
|
|
|
Uranium
|
|
—
|
|
|
3.8
|
|
|
—
|
|
|
45.3
|
|
|
Contract services
|
|
23.3
|
|
|
4.2
|
|
|
43.0
|
|
|
10.3
|
|
|
Total revenue
|
|
120.7
|
|
|
303.8
|
|
|
390.5
|
|
|
909.0
|
|
|
Cost of Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separative work units and uranium
|
|
103.3
|
|
|
330.4
|
|
|
369.4
|
|
|
962.4
|
|
|
Contract services
|
|
22.8
|
|
|
3.4
|
|
|
43.9
|
|
|
10.2
|
|
|
Total cost of sales
|
|
126.1
|
|
|
333.8
|
|
|
413.3
|
|
|
972.6
|
|
|
Gross profit (loss)
|
|
(5.4
|
)
|
|
(30.0
|
)
|
|
(22.8
|
)
|
|
(63.6
|
)
|
|
Advanced technology costs
|
|
5.3
|
|
|
44.5
|
|
|
56.6
|
|
|
150.0
|
|
|
Selling, general and administrative
|
|
10.4
|
|
|
11.2
|
|
|
32.2
|
|
|
36.0
|
|
|
Special charges for workforce reductions and advisory costs
|
|
0.1
|
|
|
3.5
|
|
|
2.1
|
|
|
9.6
|
|
|
Other (income)
|
|
(4.8
|
)
|
|
(35.9
|
)
|
|
(39.4
|
)
|
|
(124.2
|
)
|
|
Operating (loss)
|
|
(16.4
|
)
|
|
(53.3
|
)
|
|
(74.3
|
)
|
|
(135.0
|
)
|
|
Interest expense
|
|
4.7
|
|
|
9.5
|
|
|
14.0
|
|
|
32.1
|
|
|
Interest (income)
|
|
(0.1
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
(0.4
|
)
|
|
Reorganization items, net
|
|
(440.0
|
)
|
|
—
|
|
|
(426.9
|
)
|
|
—
|
|
|
Income (loss) from continuing operations before income taxes
|
|
419.0
|
|
|
(62.8
|
)
|
|
339.1
|
|
|
(166.7
|
)
|
|
Provision (benefit) for income taxes
|
|
0.1
|
|
|
(18.5
|
)
|
|
(1.0
|
)
|
|
(57.8
|
)
|
|
Income (loss) from continuing operations
|
|
418.9
|
|
|
(44.3
|
)
|
|
340.1
|
|
|
(108.9
|
)
|
|
Income from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21.7
|
|
|
Net income (loss)
|
|
$
|
418.9
|
|
|
$
|
(44.3
|
)
|
|
$
|
340.1
|
|
|
$
|
(87.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
85.49
|
|
|
$
|
(9.04
|
)
|
|
$
|
69.41
|
|
|
$
|
(22.22
|
)
|
|
Net income (loss)
|
|
$
|
85.49
|
|
|
$
|
(9.04
|
)
|
|
$
|
69.41
|
|
|
$
|
(17.79
|
)
|
|
Weighted-average number of shares outstanding
|
|
4.9
|
|
|
4.9
|
|
|
4.9
|
|
|
4.9
|
|
|
Diluted income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$
|
55.51
|
|
|
$
|
(9.04
|
)
|
|
$
|
45.93
|
|
|
$
|
(22.22
|
)
|
|
Net income (loss)
|
|
$
|
55.51
|
|
|
$
|
(9.04
|
)
|
|
$
|
45.93
|
|
|
$
|
(17.79
|
)
|
|
Weighted-average number of shares outstanding
|
|
7.6
|
|
|
4.9
|
|
|
7.6
|
|
|
4.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CENTRUS ENERGY CORP.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
Successor
|
|
|
Predecessor
|
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
2014
|
|
|
2013
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
105.4
|
|
|
|
$
|
314.2
|
|
|
Accounts receivable
|
|
90.0
|
|
|
|
163.0
|
|
|
Inventories
|
|
499.4
|
|
|
|
967.6
|
|
|
Deferred costs associated with deferred revenue
|
|
—
|
|
|
|
165.5
|
|
|
Other current assets
|
|
21.6
|
|
|
|
21.7
|
|
|
Total current assets
|
|
716.4
|
|
|
|
1,632.0
|
|
|
Property, plant and equipment
|
|
3.7
|
|
|
|
7.9
|
|
|
Deferred income taxes
|
|
26.4
|
|
|
|
—
|
|
|
Deposits for surety bonds
|
|
35.9
|
|
|
|
39.8
|
|
|
Intangible assets
|
|
123.5
|
|
|
|
—
|
|
|
Excess reorganization value
|
|
137.2
|
|
|
|
—
|
|
|
Other long-term assets
|
|
20.5
|
|
|
|
25.8
|
|
|
Total Assets
|
|
$
|
1,063.6
|
|
|
|
$
|
1,705.5
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
79.5
|
|
|
|
$
|
114.5
|
|
|
Payables under Russian Contract
|
|
47.3
|
|
|
|
340.7
|
|
|
Deferred income taxes
|
|
26.4
|
|
|
|
—
|
|
|
Inventories owed to customers and suppliers
|
|
173.1
|
|
|
|
499.7
|
|
|
Deferred revenue
|
|
0.7
|
|
|
|
195.9
|
|
|
Convertible senior notes (Predecessor)
|
|
—
|
|
|
|
530.0
|
|
|
Convertible preferred stock (Predecessor), 85,900 shares issued
|
|
—
|
|
|
|
113.9
|
|
|
Total current liabilities
|
|
327.0
|
|
|
|
1,794.7
|
|
|
Long-term debt
|
|
240.4
|
|
|
|
—
|
|
|
Postretirement health and life benefit obligations
|
|
211.6
|
|
|
|
195.0
|
|
|
Pension benefit liabilities
|
|
174.1
|
|
|
|
121.2
|
|
|
Other long-term liabilities
|
|
51.2
|
|
|
|
52.8
|
|
|
Total liabilities
|
|
1,004.3
|
|
|
|
2,163.7
|
|
|
Stockholders’ Equity (Deficit)
|
|
|
|
|
|
|
|
|
Preferred stock (Predecessor), par value $1.00 per share, 25,000,000
shares authorized, no shares recorded as stockholders’ equity at
December 31, 2013
|
|
—
|
|
|
|
—
|
|
|
Common stock (Predecessor), par value $0.10 per share, 25,000,000
shares authorized, 5,211,000 shares issued at December 31, 2013
|
|
—
|
|
|
|
0.5
|
|
|
Preferred stock (Successor), par value $1.00 per share, 20,000,000
shares authorized, none issued at September 30, 2014
|
|
—
|
|
|
|
—
|
|
|
Common stock (Successor), par value $0.10 per share, 100,000,000
shares authorized, 9,000,000 shares issued at September 30, 2014
|
|
0.9
|
|
|
|
—
|
|
|
Excess of capital over par value
|
|
58.4
|
|
|
|
1,216.4
|
|
|
Retained earnings (deficit)
|
|
—
|
|
|
|
(1,520.7
|
)
|
|
Treasury stock, no shares at September 30, 2014 and 226,000 shares
at December 31, 2013
|
|
—
|
|
|
|
(34.3
|
)
|
|
Accumulated other comprehensive loss, net of tax
|
|
—
|
|
|
|
(120.1
|
)
|
|
Total stockholders’ equity (deficit)
|
|
59.3
|
|
|
|
(458.2
|
)
|
|
Total Liabilities and Stockholders’ Equity (Deficit)
|
|
$
|
1,063.6
|
|
|
|
$
|
1,705.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CENTRUS ENERGY CORP.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
(in millions)
|
|
|
|
|
|
|
|
Predecessor
|
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
|
2014
|
|
2013
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
340.1
|
|
|
$
|
(87.2
|
)
|
|
Adjustments to reconcile net income (loss) to net cash (used in)
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
4.2
|
|
|
22.8
|
|
|
Non-cash reorganization items
|
|
(442.5
|
)
|
|
—
|
|
|
Transfers and retirements of machinery and equipment
|
|
—
|
|
|
19.3
|
|
|
Convertible preferred stock dividends payable-in-kind
|
|
—
|
|
|
9.9
|
|
|
Gain on sales of assets and subsidiary
|
|
(5.7
|
)
|
|
(35.6
|
)
|
|
Inventory valuation adjustments reflecting declines in market price
indicators
|
|
—
|
|
|
15.0
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable – (increase) decrease
|
|
79.0
|
|
|
(23.9
|
)
|
|
Inventories, net – (increase) decrease
|
|
177.0
|
|
|
(72.7
|
)
|
|
Payables under Russian Contract – increase (decrease)
|
|
(293.4
|
)
|
|
115.0
|
|
|
Deferred revenue, net of deferred costs – increase (decrease)
|
|
(9.7
|
)
|
|
17.6
|
|
|
Accrued depleted uranium disposition - increase (decrease)
|
|
(0.6
|
)
|
|
0.3
|
|
|
Accounts payable and other liabilities – (decrease)
|
|
(65.8
|
)
|
|
(80.4
|
)
|
|
Other, net
|
|
(2.9
|
)
|
|
(4.7
|
)
|
|
Net Cash (Used in) Operating Activities
|
|
(220.3
|
)
|
|
(104.6
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows Provided by Investing Activities
|
|
|
|
|
|
|
|
Deposits for surety bonds - net (increase) decrease
|
|
3.9
|
|
|
(17.5
|
)
|
|
Proceeds from sales of assets and subsidiary
|
|
8.4
|
|
|
43.2
|
|
|
Net Cash Provided by Investing Activities
|
|
12.3
|
|
|
25.7
|
|
|
|
|
|
|
|
|
|
|
Cash Flows Used in Financing Activities
|
|
|
|
|
|
|
|
Repayment of credit facility term loan
|
|
—
|
|
|
(83.2
|
)
|
|
Payments for deferred financing costs
|
|
(0.7
|
)
|
|
(2.2
|
)
|
|
Common stock issued (purchased), net
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
Net Cash (Used in) Financing Activities
|
|
(0.8
|
)
|
|
(85.6
|
)
|
|
Net (Decrease)
|
|
(208.8
|
)
|
|
(164.5
|
)
|
|
Cash and Cash Equivalents at Beginning of Period
|
|
314.2
|
|
|
292.9
|
|
|
Cash and Cash Equivalents at End of Period
|
|
$
|
105.4
|
|
|
$
|
128.4
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
15.9
|
|
|
$
|
20.7
|
|
|
Income taxes paid, net of refunds
|
|
—
|
|
|
0.4
|
|
|
|
|
|
|
|
|
|
Source: Centrus Energy Corp.
Centrus Energy Corp.
Investors:
Steven Wingfield, 301-564-3354
Media:
Paul
Jacobson, 301-564-3399
