-
Net loss of $40.9 million reflecting Paducah plant transition
costs
-
Cash balance of $194.7 million
-
American Centrifuge research, development and demonstration
program continues on budget and on schedule, meeting DOE milestones
-
New York Stock Exchange accepts USEC’s plan to regain compliance
with minimum market capitalization requirement
BETHESDA, Md.--(BUSINESS WIRE)--Aug. 5, 2013--
USEC Inc. (NYSE:USU) today reported a net loss of $40.9 million or $8.35
per basic and diluted share for the quarter ended June 30, 2013,
compared to a net loss of $92.0 million or $18.78 per basic and diluted
share for the second quarter of 2012. For the six-month period ended
June 30, 2013, the net loss reported was $42.9 million or $8.76 per
basic and diluted share, compared to a $120.8 million net loss or $24.65
per basic and diluted share in the same period of 2012. Per share
calculations reflect the 1-for-25 reverse stock split completed on July
1, 2013.
The financial results for the second quarter and first half of 2013
reflect a reduction in separative work unit (SWU) revenue and lower
gross profit compared to the same periods of 2012. On May 24, 2013, we
announced that we were not able to conclude a deal for the short-term
extension of uranium enrichment at the Paducah Gaseous Diffusion Plant
(GDP) and began ceasing uranium enrichment at the end of May 2013. We
are working on the transition of the Paducah GDP, including preparing
facilities for return to the U.S. Department of Energy (DOE) following
the termination of enrichment in the second quarter of 2013. These
actions resulted in significant charges to cost of goods sold for
immediate asset retirement charges for property formerly used in the
enrichment process at the Paducah GDP, inventory valuation adjustments,
site expenses including lease turnover activities, power contract
losses, and accelerated depreciation. Additionally, we recorded special
charges related to workforce reductions and advisory costs.
Second quarter 2013 results also include the recognition of $40.7
million of other income from DOE pro-rata cost sharing support for the
research, development and demonstration (RD&D) program, offset by
increased advanced technology costs.
The June 30, 2013, cash balance was $194.7 million, an increase of
$122.8 million during the second quarter and a net decrease of $98.2
million for the six-month period. The decrease in the cash balance
compared to December 31, 2012, reflects repayment of an $83.2 million
term loan.
“The termination of enrichment resulted in significant non-production
related expenses and special charges in the current period,” said John
K. Welch, USEC president and chief executive officer. “As we transition
the Paducah facilities back to DOE and reduce the level of employment
over the coming months, we expect to have additional charges against
earnings.
“As we expected, our cash balance improved during the second quarter,
and we continue to have adequate liquidity to meet the needs of our
operations for at least the next 12 months, assuming renewal or
replacement of our revolving credit facility beyond September 30,” Welch
said.
USEC's liquidity over the next 12 months is also dependent on the level
of American Centrifuge expenditures after the conclusion of the RD&D
program.
Revenue
Revenue for the second quarter of 2013 was $284.8 million, a decrease of
$69.0 million or 20 percent compared to the same quarter of 2012.
Revenue from the sale of SWU for the quarter was $267.4 million compared
to $347.2 million in the same period last year. The volume of SWU sales
declined 27 percent in the quarter and 40 percent in the six-month
period reflecting the variability in timing of utility customer orders
and the expected decline in SWU deliveries in 2013 compared to 2012. The
average price billed to customers for sales of SWU increased 5 percent
in both the quarter and six-month periods, reflecting the particular
contracts under which SWU were sold. Revenue from the sale of uranium
was $13.9 million in the second quarter of 2013 compared with $3.6
million in the same period of 2012, reflecting the timing of uranium
sales. Revenue from the contract services segment was $3.5 million in
the second quarter of 2013 compared to $3.0 million in the same period
of 2012. USEC sold its NAC International subsidiary in March 2013;
revenue and costs for NAC in both the 2012 and 2013 six-month periods
are included in discontinued operations.
In a number of sales transactions, USEC transfers title and collects
cash from customers but does not recognize the revenue until the low
enriched uranium (LEU) is physically delivered. At June 30, 2013,
deferred revenue totaled $143.3 million compared to $123.1 million at
December 31, 2012. The gross profit associated with deferred revenue as
of June 30, 2013, was $24.6 million.
Cost of Sales and Gross Profit Margin
As we began to cease enrichment at the Paducah GDP following completion
of the one-year, multi-party depleted uranium enrichment program in May
2013, we incurred $70.0 million of non-production expenses in the
quarter that have been charged directly to cost of sales. These include
immediate asset retirement charges for property formerly used in the
enrichment process at the Paducah GDP, inventory valuation adjustments,
site expenses including lease turnover activities, power contract
losses, and accelerated depreciation.
Excluding the non-production expenses, cost of sales for the quarter
ended June 30, 2013, for SWU and uranium was $258.2 million, a decrease
of $78.9 million or 23 percent, compared to the corresponding period in
2012 due to lower SWU sales volume, partially offset by higher uranium
sales in the current period. Cost of sales per SWU was unchanged in the
quarter compared to the second quarter of 2012. Cost of sales for SWU,
excluding non-production expenses, reflects monthly moving average
inventory costs based on production and purchase costs.
Cost of sales for the LEU segment declined $209.6 million in the
six-month period ended June 30, 2013, compared to the corresponding
period in 2012 due to lower SWU sales volumes partially offset by higher
non-production expenses of $69.1 million, higher SWU unit costs and
higher uranium sales in the current periods. Cost of sales per SWU,
excluding non-production expenses, was 3 percent higher in the six
months ended June 30, 2013, compared to the corresponding period of 2012.
Production costs declined $73.8 million, or 37 percent, in the second
quarter and $111.7 million or 26 percent in the six-month period
compared to the same periods in 2012 as production volume declined 34
percent and 23 percent in the respective periods. Production in both the
three- and six-month periods of 2013 consisted of enrichment of depleted
uranium under the one-year multi-party arrangement with Energy
Northwest, the Bonneville Power Administration, the Tennessee Valley
Authority (TVA) and DOE. This program was completed in May 2013 and then
a small quantity of LEU was produced in June 2013 as we ceased
enrichment at the Paducah GDP. Unit production costs declined 5 percent
in the three and six month periods ended June 30, 2013, compared to the
corresponding periods in 2012. The average cost per megawatt hour
declined 5 percent in the three- and six-month periods, reflecting lower
unit power costs commencing in June 2012 under the amended TVA power
contract.
We historically have purchased approximately 5.5 million SWU per year
under the Megatons to Megawatts program, which will conclude at the end
of 2013. We have also entered into a 10-year Russian Supply Agreement
under which we began taking deliveries in the second quarter of 2013.
Purchase costs for the SWU component of LEU from Russia increased $36.2
million in the six months ended June 30, 2013, compared to the
corresponding period in 2012 due to a 3 percent increase in the purchase
cost per SWU under the Megatons to Megawatts program and due to the
commencement of purchases under the new Russian Supply Agreement.
The gross profit for the second quarter was a loss of $46.9 million, a
decrease of $57.1 million over the same period in 2012, reflecting the
additional non-production costs in the LEU segment. In the six-month
period, the loss was $33.6 million, a decrease of $80.5 million from the
same period in 2012. The margin for the second quarter of 2013 was
(16.5) percent compared to 2.9 percent in the second quarter of 2012,
and (5.6) percent in the six months ended June 30, 2013 compared to 5.2
percent in the corresponding period in 2012.
Advanced Technology, Special Charges, Other Income and Interest
Advanced technology costs decreased $39.2 million in the three months
and $16.6 million in the six months ended June 30, 2013, compared to the
corresponding period in 2012, reflecting an expense in the second
quarter of 2012 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. All American Centrifuge project costs in both years
were expensed.
Selling, general and administrative expenses for the six-month period
ended June 30, 2013, were $24.8 million, a decrease of $2.0 million over
the same period in 2012, reflecting decreases in salary expense due to
corporate workforce reductions and decreases in other compensation
expenses.
We incurred special charges for workforce reductions and advisory costs
totaling $3.7 million in the second quarter of 2013.
Following the cessation of enrichment at the Paducah GDP, we expect that
an initial workforce reduction of approximately 160 employees will be
substantially completed by August 19, 2013. We accrued a charge
associated with the workforce reduction of these employees of $2.1
million in the second quarter of 2013 for estimated one-time termination
benefits consisting of severance payments. Please see the discussion on
the Paducah GDP transition below.
In early 2012, we initiated an internal review of our organizational
structure and engaged a management consulting firm to support this
review. We are also engaged with our advisors and certain stakeholders
on alternatives for a possible restructuring of our balance sheet. Costs
for these advisors totaled $2.3 million and $4.7 million in the three
months and six months ended June 30, 2013, compared to $1.5 million and
$6.0 million in the corresponding periods of 2012.
Effective August 5, 2013, accrued benefits for active employees who are
not covered by a collective bargaining agreement have been frozen under
the defined benefit pension plans. The retirement benefit will be fixed
and will no longer increase based on service or earnings. The freeze of
the defined benefit pension plans is part of the internal organizational
structure review effort. We are currently in discussions with the
leadership of the two local unions that represent approximately one-half
of the employees at the Paducah plant regarding the implementation of
these changes for their members.
DOE and USEC provide pro-rata cost sharing support for continued
American Centrifuge activities under our June 2012 cooperative
agreement, as amended. DOE’s pro-rata share of 80 percent of qualifying
American Centrifuge expenditures, or $40.7 million in the three months
and $88.3 million in the six months ended June 30, 2013, is recognized
as other income.
Interest expense declined $3.4 million in the three months and $2.8
million in the six months ended June 30, 2013, compared to the
corresponding periods in 2012, primarily as a result of repaying the
term loan in connection with the March 2013 amendment to the credit
facility.
Cash Flow
At June 30, 2013, USEC had a cash balance of $194.7 million compared to
$71.9 million at March 31, 2013, and $292.9 million at December 31,
2012. Cash flow used by operations in the first six months of 2013 was
$48.8 million, compared to cash flow provided by operations of $162.1
million in the previous year’s period. Payment of the Russian Contract
payables balance of $32.5 million, due to the timing of deliveries, was
a use of cash flow in the six months ended June 30, 2013, partially
offset with decreases in our net inventory balances primarily from the
timing of sales. The net loss of $42.9 million in the six-month period,
net of non-cash charges including depreciation and amortization, was a
use of cash flow.
Cash proceeds on the sale of NAC of $43.2 million were received in the
six months ended June 30, 2013. Cash collateral deposits of $43.8
million were returned to us in the six months ended June 30, 2012,
following the transfer of quantities of our depleted uranium to DOE in
exchange for the SWU component of LEU under a March 2012 agreement with
DOE.
Paducah GDP Transition
On May 24, 2013, we announced that we were not able to conclude a deal
for the short-term extension of uranium enrichment at the Paducah GDP
and began ceasing uranium enrichment at the end of May 2013. We are
working on the transition of the Paducah GDP following the termination
of enrichment in the second quarter of 2013. Depending on the
finalization of a transition plan with DOE, we could expect to incur
significant costs in connection with ceasing enrichment at Paducah. For
example, delays in the de-lease schedule, delays in the packaging and
transfer to other locations of the inventories held by us, additional
lease turnover activities, additional costs for waste removal, and other
costs could be greater than anticipated. These costs could place
significant demands on our liquidity, and we are evaluating alternatives
to manage these potential costs. We are also seeking to manage the
impacts of the Paducah transition on our existing business.
In addition, we have no assurance that DOE would accept the areas of the
Paducah GDP that we wish to de-lease on a schedule that would be cost
efficient. Under the terms of the lease, we can terminate the lease
prior to June 2016 upon two years' notice. Also, as our needs change, we
can de-lease portions of the property under lease upon 60 days' notice
with DOE's consent, which cannot be unreasonably withheld. On August 1,
2013, we provided notice to DOE that we have exercised our rights to
terminate the lease with respect to the Paducah GDP. We anticipate being
able to complete the return of the leased premises and to terminate the
GDP lease as early as July 2014. If we and DOE are unable to agree on a
schedule for termination prior to two years, we plan to retain a small
portion of the leased premises until August 1, 2015, at which time the
Paducah GDP lease will terminate and any remaining portion of the leased
premises will be returned to DOE. In such an event, during this period
we plan to return portions of the leased premises no longer required to
meet our business needs. However, limitations on available funding to
DOE in light of federal budget restraints and spending cuts could limit
DOE's willingness to accept the return of areas that we wish to de-lease
on a timely basis. Disputes could also arise regarding the requirements
of the lease and responsibility for associated turnover costs.
As of June 30, 2013, we have accrued current liabilities for lease
turnover costs related to the Paducah GDP of $43.8 million. Lease
turnover costs are costs incurred in returning the GDP to DOE in
accordance with the lease, including removing nuclear material as
required and removing USEC-generated waste.
The Paducah GDP has operated for more than 60 years. Environmental
liabilities associated with plant operations by agencies of the
U.S. government prior to USEC's privatization on July 28, 1998, are the
responsibility of the U.S. government. The USEC Privatization Act and
the lease for the plant provide that DOE remains responsible for
decontamination and decommissioning of the Paducah site.
On May 31, 2013, USEC notified its Paducah employees of potential
layoffs beginning in August 2013. The notifications were provided under
the Worker Adjustment and Retraining Notification Act (WARN Act), a
federal statute that requires an employer to provide advance notice to
its employees of potential layoffs in certain circumstances. We expect
that an initial workforce reduction of approximately 160 employees will
be substantially completed by August 19, 2013. We currently estimate
that we could incur employee related severance costs of approximately
$2.1 million to $7.5 million for the expected initial layoff in August
depending on the seniority of the workers and the final number of
employees severed. As such, we accrued a special charge associated with
the workforce reduction of approximately 160 employees of $2.1 million
in the three months ended June 30, 2013, for estimated one-time
termination benefits consisting of severance payments.
Additional layoffs may occur in stages during 2013 and/or 2014 depending
on business needs to manage inventory, fulfill customer orders, meet
regulatory requirements and transition the site back to DOE in a safe
and orderly manner. USEC currently estimates that it could incur total
employee related severance costs of approximately $25 million to $30
million for all Paducah GDP workers, including the $2.1 million special
charge for the 160 employees described above, in the event of a full
termination of activities at the site without a transfer of employees to
another employer, depending on the timing of severances, if incurred.
DOE would owe a portion of this amount estimated to be up to $6 million.
2013 Outlook Update
Due to the uncertainties inherent in USEC's period of transition from
enrichment at the Paducah plant, the end of the Megatons to Megawatts
program and the incremental nature of funding for the RD&D program, we
are limiting our guidance for USEC's financial results and operating
metrics for 2013. We expect the average SWU price billed to customers in
2013 to increase by 5 percent but deliveries to be approximately 35
percent lower than in 2012, resulting in total revenue of approximately
$1.25 billion.
We are in the midst of an RD&D program that has an 80 percent DOE and 20
percent USEC cost share. Federal funding for the program has been
incremental and subject to Congressional action. As noted earlier, DOE
provided additional obligated funding of $29.9 million on July 24, 2013,
bringing total government obligated funding to $227.7 million, which is
expected to fund the RD&D program through September 30, 2013. DOE’s
remaining cost share of up to $52.3 million to fund the program for the
last three months of the calendar year is conditioned upon USEC
continuing to meet all milestones and deliverables on schedule, USEC
continuing to demonstrate to DOE’s satisfaction its ability to meet
future milestones, and the availability of appropriations or other
sources of consideration.
USEC has announced that layoffs will begin at the Paducah plant in
August and additional employment reductions could come later in the
year. This could result in special charges for termination-related
benefits. Also below the gross profit line, we expect selling, general
and administrative expenses of less than $50 million for 2013.
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:
-
The timing and amount of potential severance costs, pension and
postretirement benefit costs and other costs related to the transition
of the Paducah GDP;
-
The timing of recognition of previously deferred revenue;
-
Movement and timing of customer orders; and
-
Changes to SWU and uranium price indicators, and changes in inflation
that can affect the price of SWU billed to customers.
New York Stock Exchange Listing Standards Notices
On July 1, 2013, USEC effectuated a reverse stock split in order to
regain compliance with the New York Stock Exchange (NYSE) continued
listing criteria related to minimum share price. This action resulted in
USEC's closing share price exceeding $1.00 per share, and the condition
will be deemed cured if the average closing price remains above the
level for at least the following 30 trading days. The NYSE listing
requirements require that a company's common stock trade at a minimum
average closing price of $1.00 over a consecutive 30 trading-day period.
On May 8, 2012, USEC had received notice from the NYSE that the average
closing price of its common stock was below the NYSE's continued listing
criteria relating to minimum share price.
On August 1, 2013, the NYSE accepted USEC's plan to regain compliance
with the NYSE’s minimum market capitalization requirement. On April 30,
2013, USEC had received notice from the NYSE that the decline in USEC's
total market capitalization has caused it to be out of compliance the
NYSE's continued listing standards related to minimum market
capitalization. The NYSE listing requirements require that a company
maintain an average market capitalization of not less than $50 million
over a consecutive 30 trading-day period where the company's total
stockholders' equity is less than $50 million. USEC's common stock will
continue to be listed on the NYSE during an 18-month cure period,
subject to the compliance with other NYSE continued listing standards
and continued periodic review by the NYSE of USEC's progress with
respect to its plan. USEC's plan outlines initiatives USEC must execute
by quarter. These initiatives include the successful completion of
American Centrifuge plant development milestones, as well as the
successful execution of the Company’s Russian supply agreement and the
Company’s potential balance sheet restructuring. The NYSE has notified
us that if USEC does not achieve these financial and operational goals,
the Company will be subject to NYSE trading suspension at the point the
initiative or goal is not met.
----------------
USEC Inc., a global energy company, is a leading supplier of enriched
uranium fuel for commercial nuclear power plants.
Forward-Looking Statements:
This news release contains “forward-looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934 - that is,
statements related to future events. In this context, forward-looking
statements may address our expected future business and financial
performance, and often contain words such as “expects”, “anticipates”,
“intends”, “plans”, “believes”, “will” and other words of similar
meaning. Forward-looking statements by their nature address matters that
are, to different degrees, uncertain. For USEC, particular risks and
uncertainties that could cause our actual future results to differ
materially from those expressed in our forward-looking statements
include, but are not limited to: risks related to the ongoing transition
of our business, including uncertainty regarding the transition of the
Paducah gaseous diffusion plant and uncertainty regarding the economics
of and continued funding for the American Centrifuge project and the
potential for a demobilization or termination of the project; the impact
of a potential de-listing of our common stock on the NYSE, including the
potential for the holders of our convertible notes to require the
Company to repurchase their notes in the event of a de-listing; the
impact of a potential balance sheet restructuring on the holders of our
common stock and convertible notes; risks related to the need to
restructure the investments by Toshiba Corporation (“Toshiba”) and
Babcock & Wilcox Investment Company (“B&W”); risks related to the
underfunding of our defined benefit pension plans and the impact of the
potential requirement for us to place an amount in escrow or purchase a
bond with respect to such underfunding; the impact of uncertainty
regarding our ability to continue as a going concern on our liquidity
and prospects; our ability to reach an agreement with the U.S.
Department of Energy (“DOE”) regarding the transition of the Paducah
gaseous diffusion plant and uncertainties regarding the transition costs
and other impacts of USEC ceasing enrichment at the Paducah gaseous
diffusion plant and returning the plant to DOE; 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
economics of the American Centrifuge project and our ability to finance
the project and the potential for a demobilization or termination of the
project; 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; limitations on our ability
to provide any required cost sharing under the RD&D program; uncertainty
concerning our ability through the RD&D program to demonstrate the
technical and financial readiness of the centrifuge technology for
commercialization; uncertainty concerning the ultimate success of our
efforts to obtain a loan guarantee from DOE and other financing for the
American Centrifuge project or additional government support for the
project and the timing and terms thereof and the potential for a
demobilization or termination of the project if financing or additional
government support is not in place at the end of the RD&D program;
potential changes in our anticipated ownership of or role in the
American Centrifuge project, including as a result of the need to raise
additional capital to finance the 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 potential for DOE to seek to terminate or
exercise its remedies under the RD&D cooperative agreement or June 2002
DOE-USEC agreement; changes in U.S. government priorities and the
availability of government funding, including loan guarantees; our
ability to extend, renew or replace our credit facility that matures on
September 30, 2013; risks related to our inability to repay our
convertible notes at maturity in October 2014; restrictions in our
credit facility that may impact our operating and financial flexibility;
our dependence on deliveries of LEU from Russia under a commercial
agreement (the “Russian Contract”) with a Russian government entity
known as Techsnabexport (“TENEX”) that expires in 2013 and under a new
commercial supply agreement with Russia (the “Russian Supply Agreement”)
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 our ability to sell our fixed purchase obligations
under the Russian Supply Agreement; 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 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 USEC under the Contracts Dispute Act for
payment of breach-of-contract amounts; 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; 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 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, 2012 (“10-K”). 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.
|
|
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
|
|
(Unaudited)
|
|
(millions, except per share data)
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
|
2013
|
|
|
2012
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separative work units
|
|
|
$
|
267.4
|
|
|
|
$
|
347.2
|
|
|
|
$
|
557.6
|
|
|
|
$
|
885.1
|
|
|
Uranium
|
|
|
|
13.9
|
|
|
|
|
3.6
|
|
|
|
|
41.5
|
|
|
|
|
3.6
|
|
|
Contract services
|
|
|
|
3.5
|
|
|
|
|
3.0
|
|
|
|
|
6.1
|
|
|
|
|
7.1
|
|
|
Total Revenue
|
|
|
|
284.8
|
|
|
|
|
353.8
|
|
|
|
|
605.2
|
|
|
|
|
895.8
|
|
|
Cost of Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Separative work units and uranium
|
|
|
|
328.2
|
|
|
|
|
340.4
|
|
|
|
|
632.0
|
|
|
|
|
841.6
|
|
|
Contract services
|
|
|
|
3.5
|
|
|
|
|
3.2
|
|
|
|
|
6.8
|
|
|
|
|
7.3
|
|
|
Total Cost of Sales
|
|
|
|
331.7
|
|
|
|
|
343.6
|
|
|
|
|
638.8
|
|
|
|
|
848.9
|
|
|
Gross profit (loss)
|
|
|
|
(46.9
|
)
|
|
|
|
10.2
|
|
|
|
|
(33.6
|
)
|
|
|
|
46.9
|
|
|
Advanced technology costs
|
|
|
|
46.2
|
|
|
|
|
85.4
|
|
|
|
|
105.5
|
|
|
|
|
122.1
|
|
|
Selling, general and administrative
|
|
|
|
11.9
|
|
|
|
|
13.2
|
|
|
|
|
24.8
|
|
|
|
|
26.8
|
|
|
Special charges for workforce reductions and advisory costs
|
|
|
|
3.7
|
|
|
|
|
3.2
|
|
|
|
|
6.1
|
|
|
|
|
9.6
|
|
|
Other (income)
|
|
|
|
(40.7
|
)
|
|
|
|
(10.0
|
)
|
|
|
|
(88.3
|
)
|
|
|
|
(10.0
|
)
|
|
Operating (loss)
|
|
|
|
(68.0
|
)
|
|
|
|
(81.6
|
)
|
|
|
|
(81.7
|
)
|
|
|
|
(101.6
|
)
|
|
Interest expense
|
|
|
|
9.3
|
|
|
|
|
12.7
|
|
|
|
|
22.6
|
|
|
|
|
25.4
|
|
|
Interest (income)
|
|
|
|
(0.1
|
)
|
|
|
|
(0.1
|
)
|
|
|
|
(0.4
|
)
|
|
|
|
(0.2
|
)
|
|
(Loss) from continuing operations before income taxes
|
|
|
|
(77.2
|
)
|
|
|
|
(94.2
|
)
|
|
|
|
(103.9
|
)
|
|
|
|
(126.8
|
)
|
|
Provision (benefit) for income taxes
|
|
|
|
(36.3
|
)
|
|
|
|
(2.1
|
)
|
|
|
|
(39.3
|
)
|
|
|
|
(5.4
|
)
|
|
Net (loss) from continuing operations
|
|
|
|
(40.9
|
)
|
|
|
|
(92.1
|
)
|
|
|
|
(64.6
|
)
|
|
|
|
(121.4
|
)
|
|
Net income from discontinued operations
|
|
|
|
—
|
|
|
|
|
0.1
|
|
|
|
|
21.7
|
|
|
|
|
0.6
|
|
|
Net (loss)
|
|
|
$
|
(40.9
|
)
|
|
|
$
|
(92.0
|
)
|
|
|
$
|
(42.9
|
)
|
|
|
$
|
(120.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) from continuing operations per share – basic and diluted
|
|
|
$
|
(8.35
|
)
|
|
|
$
|
(18.80
|
)
|
|
|
$
|
(13.18
|
)
|
|
|
$
|
(24.78
|
)
|
|
Net (loss) per share – basic and diluted
|
|
|
$
|
(8.35
|
)
|
|
|
$
|
(18.78
|
)
|
|
|
$
|
(8.76
|
)
|
|
|
$
|
(24.65
|
)
|
|
Weighted-average number of shares outstanding – basic and diluted
|
|
|
|
4.9
|
|
|
|
|
4.9
|
|
|
|
|
4.9
|
|
|
|
|
4.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USEC Inc.
|
|
CONSOLIDATED CONDENSED BALANCE SHEETS
|
|
(Unaudited)
|
|
(millions)
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
|
December 31,
2012
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
194.7
|
|
|
|
$
|
292.9
|
|
|
Restricted cash
|
|
|
|
3.3
|
|
|
|
|
—
|
|
|
Accounts receivable, net
|
|
|
|
140.9
|
|
|
|
|
134.8
|
|
|
Inventories
|
|
|
|
959.9
|
|
|
|
|
1,593.2
|
|
|
Deferred costs associated with deferred revenue
|
|
|
|
118.7
|
|
|
|
|
116.8
|
|
|
Other current assets
|
|
|
|
18.5
|
|
|
|
|
19.2
|
|
|
Total Current Assets
|
|
|
|
1,436.0
|
|
|
|
|
2,156.9
|
|
|
Property, Plant and Equipment, net
|
|
|
|
18.4
|
|
|
|
|
51.0
|
|
|
Other Long-Term Assets
|
|
|
|
|
|
|
|
|
|
|
|
Deposits for surety bonds
|
|
|
|
29.4
|
|
|
|
|
22.3
|
|
|
Goodwill
|
|
|
|
—
|
|
|
|
|
6.8
|
|
|
Other assets
|
|
|
|
28.4
|
|
|
|
|
29.4
|
|
|
Total Other Long-Term Assets
|
|
|
|
57.8
|
|
|
|
|
58.5
|
|
|
Total Assets
|
|
|
$
|
1,512.2
|
|
|
|
$
|
2,266.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
$
|
154.3
|
|
|
|
$
|
145.8
|
|
|
Payables under Russian Contract
|
|
|
|
177.3
|
|
|
|
|
209.8
|
|
|
Inventories owed to customers and suppliers
|
|
|
|
350.6
|
|
|
|
|
950.0
|
|
|
Deferred revenue and advances from customers
|
|
|
|
165.0
|
|
|
|
|
125.5
|
|
|
Credit facility term loan
|
|
|
|
—
|
|
|
|
|
83.2
|
|
|
Convertible preferred stock
|
|
|
|
107.0
|
|
|
|
|
100.5
|
|
|
Total Current Liabilities
|
|
|
|
954.2
|
|
|
|
|
1,614.8
|
|
|
Long-Term Debt
|
|
|
|
530.0
|
|
|
|
|
530.0
|
|
|
Other Long-Term Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement health and life benefit obligations
|
|
|
|
212.6
|
|
|
|
|
207.2
|
|
|
Pension benefit liabilities
|
|
|
|
180.3
|
|
|
|
|
321.7
|
|
|
Other liabilities
|
|
|
|
54.3
|
|
|
|
|
65.6
|
|
|
Total Other Long-Term Liabilities
|
|
|
|
447.2
|
|
|
|
|
594.5
|
|
|
Stockholders’ Equity (Deficit)
|
|
|
|
(419.2
|
)
|
|
|
|
(472.9
|
)
|
|
Total Liabilities and Stockholders’ Equity (Deficit)
|
|
|
$
|
1,512.2
|
|
|
|
$
|
2,266.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
USEC Inc.
|
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
|
(millions)
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
2013
|
|
|
2012
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
|
|
|
$
|
(42.9
|
)
|
|
|
$
|
(120.8
|
)
|
|
Adjustments to reconcile net (loss) to net cash provided by (used
in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
16.4
|
|
|
|
|
19.5
|
|
|
Transfer of machinery and equipment to U.S. Department of Energy
|
|
|
|
—
|
|
|
|
|
44.6
|
|
|
Deferred income taxes
|
|
|
|
—
|
|
|
|
|
(4.6
|
)
|
|
Other non-cash income on release of disposal obligation
|
|
|
|
—
|
|
|
|
|
(10.0
|
)
|
|
Convertible preferred stock dividends payable-in-kind
|
|
|
|
6.5
|
|
|
|
|
5.8
|
|
|
Gain on sale of subsidiary
|
|
|
|
(35.6
|
)
|
|
|
|
—
|
|
|
Non-cash transition charges
|
|
|
|
31.0
|
|
|
|
|
—
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable – (increase)
|
|
|
|
(6.1
|
)
|
|
|
|
(11.4
|
)
|
|
Inventories, net – decrease
|
|
|
|
24.0
|
|
|
|
|
340.3
|
|
|
Payables under Russian Contract – (decrease)
|
|
|
|
(32.5
|
)
|
|
|
|
(65.2
|
)
|
|
Deferred revenue, net of deferred costs – increase
|
|
|
|
37.6
|
|
|
|
|
27.1
|
|
|
Accounts payable and other liabilities – increase (decrease)
|
|
|
|
(44.3
|
)
|
|
|
|
3.6
|
|
|
Accrued depleted uranium disposition – increase (decrease)
|
|
|
|
0.4
|
|
|
|
|
(73.5
|
)
|
|
Other, net
|
|
|
|
(3.3
|
)
|
|
|
|
6.7
|
|
|
Net Cash Provided by (Used in) Operating Activities
|
|
|
|
(48.8
|
)
|
|
|
|
162.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows Provided by Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
—
|
|
|
|
|
(4.1
|
)
|
|
Deposits for surety bonds - net (increase) decrease
|
|
|
|
(7.1
|
)
|
|
|
|
43.8
|
|
|
Proceeds from sale of subsidiary
|
|
|
|
43.2
|
|
|
|
|
—
|
|
|
Net Cash Provided by Investing Activities
|
|
|
|
36.1
|
|
|
|
|
39.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows Used in Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility
|
|
|
|
—
|
|
|
|
|
123.6
|
|
|
Repayments under revolving credit facility
|
|
|
|
—
|
|
|
|
|
(123.6
|
)
|
|
Repayment of credit facility term loan
|
|
|
|
(83.2
|
)
|
|
|
|
—
|
|
|
Payments for deferred financing costs
|
|
|
|
(2.1
|
)
|
|
|
|
(9.8
|
)
|
|
Common stock issued (purchased), net
|
|
|
|
(0.2
|
)
|
|
|
|
(0.6
|
)
|
|
Net Cash (Used in) Financing Activities
|
|
|
|
(85.5
|
)
|
|
|
|
(10.4
|
)
|
|
Net Increase (Decrease)
|
|
|
|
(98.2
|
)
|
|
|
|
191.4
|
|
|
Cash and Cash Equivalents at Beginning of Period
|
|
|
|
292.9
|
|
|
|
|
37.6
|
|
|
Cash and Cash Equivalents at End of Period
|
|
|
$
|
194.7
|
|
|
|
$
|
229.0
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
$
|
11.8
|
|
|
|
$
|
13.2
|
|
|
Income taxes paid, net of refunds
|
|
|
|
0.4
|
|
|
|
|
0.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Source: USEC Inc.
USEC Inc.
Investors:
Steven Wingfield (301) 564-3354
or
Media:
Paul
Jacobson (301) 564-3399
