The USEC reported a year-end loss of $540.7 million or $4.48 per basic diluted share, according to a Wednesday release. The company reports the losses were largely due to write-offs associated with its American Centrifuge Project, expenses for which totaled $273.2 million, including $127.1 million of previously capitalized work in progress related to earlier centrifuge machines that were determined to no longer be compatible with commercial plant design.
According to the release, gross profit declined $74.2 million from 2010, reflecting lower sales volume and higher costs for separative work units (SWU) and uranium sold, as well as the effect of pension plan and post-retirement benefit plan curtailment charges related to the conclusion of contract services work at the former Portsmouth Gaseous Diffusion Plant (GDP).
“Throughout 2011, USEC worked diligently to overcome a number of significant challenges facing the company,” said John K. Welch, USEC president and CEO. “Despite the lack of a conditional commitment for a loan guarantee, DOE’s proposal to share costs in a two-year research, development and demonstration program reflects the importance the U.S. government places on having a source of domestic uranium enrichment.”
While the company is still seeking the $2 billion loan guarantee, they currently have an agreement with the DOE that enables them to spend up to $44 million under the RD&D program, which is expected to fund program activities through March 31, 2012. Back in January, the company requested $150 million from the DOE for 2013 to help support construction of the next-generation Piketon, Ohio plant.
The company also is considering ending operations at its older plant in Paducah, Kentucky, when its power contract runs out in May.
“This year will present additional challenges as we continue operating under significant competitive and cost pressures, and we make important decisions regarding the future of the Paducah plant," Welch said in the release. "Nonetheless, we expect to sell more than 10 million SWU in 2012. These sales will come from our substantial inventory, from Paducah commercial production through at least midyear, and from our supply contract with Russia."
“Looking ahead, we have a highly efficient commercial centrifuge machine that has the potential to substantially reduce our power requirements and is an opportunity to position us as a low-cost producer in the long term," he said. "We are focused on a path to remain a leading supplier of enrichment to our customers and a contributor to U.S. national security.”