News Release

BETHESDA, Md.--(BUSINESS WIRE)--April 3, 2001--

Success of Megatons to Megawatts Implementation Continues

In a report to the Senate Foreign Relations Committee, USEC Inc. (NYSE:USU), a private sector company that serves as the U.S. government's executive agent implementing the historic Megatons to Megawatts program, documented the continuing success of the $12 billion, 20-year program that converts Russian nuclear warhead material into fuel for nuclear power plants. The report states that, to date, the equivalent of more than 4,500 nuclear explosives have been eliminated by conversion to nuclear fuel, which is purchased by USEC at no cost to U.S. taxpayers.

Now in the seventh year of the agreement, the governments of the United States and the Russian Federation are 40 percent ahead of the original schedule in converting 500 metric tons of nuclear weapons-derived highly enriched uranium (HEU) into low-enriched uranium (LEU) fuel. USEC purchases the LEU fuel, ships it to the United States and sells it to its utility customers for use in commercial nuclear power plants.

"Since 1994, at the direction of the U.S. government, USEC has successfully implemented the Megatons to Megawatts agreement," said USEC President and CEO William H. Timbers. "To date, approximately 113 metric tons of HEU have been converted into LEU, the equivalent of more than 4,500 nuclear weapons--thus eliminating enough nuclear explosives to destroy every large city in the world.

"The success of this agreement reflects the close cooperation of the U.S. government, the Russian Federation, USEC and Russia's executive agent, Tenex. We are proud to play a pivotal commercial role in reducing the threat of nuclear weapons. USEC's purchases make this program commercially self-sustaining, at no cost to the U.S. government," Timbers added.

The Executive Summary of the report, Implementation of the U.S.-Russian HEU Purchase Program, follows. To access the report through the USEC website, go to www.usec.com, click News Room, then Recent News. To obtain a printed copy of the report, call USEC Corporate Communications, (301) 564-3391. Implementation of the U.S.-Russian HEU Purchase Program by USEC Inc. Report to the U.S. Senate Committee on Foreign Relations, March 28, 2001

Executive Summary

This marks the seventh successful year for USEC as the U.S. executive agent for the 1993 government-to-government Russian Highly Enriched Uranium (HEU) Purchase Agreement. As called for in this nuclear nonproliferation agreement, USEC and the Russian executive agent, Techsnabexport (Tenex), signed a contract in 1994 that governs the commercial implementation of the 1993 agreement.

This 20-year, $12 billion contract facilitates the conversion of 500 metric tons of nuclear weapons-derived HEU into low-enriched uranium (LEU) fuel purchased by USEC for use in commercial nuclear power plants. The program has come to be known as Megatons to Megawatts.

Russian shipments to USEC of weapons-derived LEU commenced in June 1995. Since then, USEC has received 84 shipments of 2,203 cylinders containing 3,303 metric tons of LEU-- an amount sufficient to meet U.S. nuclear fuel demand for two years.

These seven years of implementation of the Megatons to Megawatts program clearly demonstrate that both the U.S. and Russian partners have been successful in making this 1993 agreement work. In doing so, the partners have reduced the threat to world stability posed by the proliferation of nuclear weapons and materials. The results are impressive. As of March 2001:

• 1. Approximately 113 metric tons of Russian warhead HEU have been converted to LEU fuel and purchased by USEC for use by its electric utility customers.

• 2. The 113 metric tons of HEU is the equivalent of more than 4,500 nuclear weapons--enough nuclear explosives to destroy every large city in the world. The conversion of this material eliminates its potential use as a nuclear explosive.

• 3. USEC and Tenex are 40 percent ahead of the original 1993, 20-year schedule to convert a total of 500 metric tons of HEU to LEU. This is equivalent to an estimated 20,000 to 25,000 nuclear warheads.

• 4. No taxpayer dollars are required for this program. USEC pays Russia hundreds of millions of dollars a year for these purchases--a total to date of about $2 billion. Russia vitally needs this hard currency to help offset the falling value of the ruble, to meet the terms and goals of the HEU agreement and for trade purposes.

• 5. USEC and Tenex have established a strong, flexible, responsive and cooperative working relationship.

• 6. USEC and Tenex reached agreement in May 2000 on new market-based commercial terms that would begin January 1, 2002, when the current terms expire. The new terms are under review by the respective governments.

These achievements demonstrate that the Megatons to Megawatts program is working. Government nonproliferation and national energy security objectives are being met and sustained by commercial transactions. Implementation of the contact requires continuing interaction and responsiveness. USEC does not act unilaterally in this process. As executive agent for the government, USEC is subject to an ongoing consultative process that includes direction from the Administration before acting on contract matters.

USEC has proven itself to be highly effective as executive agent under sometimes difficult circumstances. In fact, it has not been smooth sailing during the past seven years of implementing this agreement. A number of contentious issues have emerged, ranging from the appropriateness of USEC's privatization to issues of over payment for, and disposition of, the natural uranium portion of the deal.

Still, the agreement has been a success story, and USEC is uniquely positioned to continue as the sole U.S. executive agent. USEC's global customer base, domestic enrichment operations, unique market experience, financial resources and continuing commitment have all contributed to the strong foundation that is essential to support the continuing implementation of this unique and challenging program.

USEC Inc., a global energy company, is the world's leading supplier of enriched uranium fuel for commercial nuclear power plants.