Greetings. And welcome to the USEC Inc. Fourth Quarter Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the prepared remarks. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steven Wingfield, Director of Investor Relations for USEC. Thank you, Mr. Wingfield, you may begin.

Good morning. Thank you for joining us for USEC’s conference call regarding the fourth quarter and full year 2010 which ended December 31st. With me today are John Welch, President and Chief Executive Officer; John Barpoulis, Senior Vice President and Chief Financial Officer; Bob Van Namen, Senior Vice President; and Tracy Mey, Vice President and Chief Accounting Officer. Before turning the call over to John Welch, I’d like to welcome all of our callers as well as those listening to our webcast. This conference call follows our earnings news release issued yesterday after the markets closed. That news release is available on many financial websites as well as our corporate website usec.com. I want to inform all of our listeners that our news releases and SEC filings including our 10-K, 10-Qs and 8-Ks are available on our website. We expect to file our quarterly report on form 10-Q later today. A replay of this call also will be available later this morning on the USEC website. I’d like to remind everyone that certain of the information that we may discuss on this call today may be considered forward-looking information that involves risks and uncertainties, including assumptions about the future performance of USEC. Our actual results may differ materially from those in our forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in are forward-looking statements is contained in our filings with the SEC including our annual report on Form 10-K and quarterly reports on 10-Q. Finally, the forward-looking information provided today is time sensitive and is accurate only as of today, February 23, 2011. This call is the property of USEC, any redistribution, retransmission or rebroadcast of this call in any form without expressed written consent of USEC is strictly prohibited. Thank you for your participation. Now, I’d like to turn the call over to John Welch.

Good morning. And thank you for joining us to discuss our fourth quarter and full year 2010 results. We issued our earnings yesterday and the results were a bit better than we anticipated in prior guidance. John Barpoulis will go through our earnings in detail in a few minutes, as well as our guidance for 2011. During this call, we’ll provide an update on our American Centrifuge project and where we are in discussions with the Department of Energy’s Loan Guarantee Program office. We will also discuss the transition of the contract services work we performed in recent years at the former Portsmouth Gaseous Diffusion Plant. I will start-off with a brief summary of our financial results. Our 2010 revenue came in at $2 billion, which was nearly unchanged from the revenue reported for 2009. The gross profit margin was 7.8% which was somewhat above the range of our guidance. We earned $7.5 million for the full year and our annual results were certainly aided by our fourth quarter net income of $9 million. Although, our earnings were below those in 2009, the financial results in both the fourth quarter and full year 2009 reflected the receipt of approximately $70 million from a trade case settlement with Eurodif and its affiliates that had a significant impact on net income for 2009. Since the summer of 2009, the people involved in our American Centrifuge project have made significant progress on many fronts to address or mitigate project risk during the past 18 months. Our strategic suppliers have been building high-quality components for AC100 centrifuges, our production-ready machine. We have completed a $90 million cooperative agreement with DOE for continued American Centrifuge activities. This agreement supported Lead Cascade operations, manufacturing of additional AC100 machines and refinements to the manufacturing process. The Lead…

Thanks, John, and good morning, everyone. I’ll start with revenue for the fourth quarter. As is the norm, SWU sales made up the majority of revenue totaling $520 million, which was an increase of $139 million or 36% over the same period last year. Uranium revenue was $72 million, which was more than double sales in the fourth quarter of 2009. Contract services revenue was also higher than the same period of 2009, as we neared the end of our accelerated cleanup work at the former Portsmouth plant. For the full year 2010, total revenue is $2,035 billion virtually unchanged from 2009. SWU revenue for the year was down $126 million or 8%. The volume of SWU sales in 2010 was down 10% compared to 2009. Although, our backlog still contains contracts that were entered into prior to 2006, the average invoice price to customers was up 3% in 2010 year-over-year. In recent years, we have signed SWU contracts at higher prices and with indices that reflect changes to SWU market prices and electrical power prices. As these contracts have become a larger portion of our backlog, we have seen the average prices billed to customers improve. Uranium revenue was $236 million in 2010, which was an increase of $55 million compared to 2009. Uranium volumes were up 47% but prices invoiced to customers were down 11%, reflecting a decline in uranium prices seen in 2009 and the first half of 2010. As many of you know, uranium prices have improved significantly in the last several months and have recently been quoted around $70 a pound. Revenue from contract services in 2010 was $278 million, an increase of $69 million or 33% from 2009. The higher revenue reflects additional work in Ohio to prepare the Portsmouth site for the decontamination…

Thank you. (Operator Instructions) Our first question is coming from Laurence Alexander with Jefferies. Please state your question. Jeff – Jefferies: Hi. This [Jeff] on for Lawrence.

Good morning, Jeff. Jeff – Jefferies: Good. Now that you guys are in active discussions with lenders, can you benchmark what kind of margin structure is embedded in the ACP contracts?

Yeah. This is John. Let me take a cut at that. John Welch. As John Barpoulis said, our two largest production expenses today are electric power and people. Electricity counts for about 70% of our existing production costs and we talked about the whole reason for moving to American Centrifuge was that we can cut that power requirements per unit delivered by 95%. So that -- that clearly drives the economics and will allow us to say hundreds of millions of dollars in power costs annually. The staffing of the plant is about half of the thousand employees now working at Paducah plant and most importantly is when we look for future expansion that doubles the output of the plant, we’re probably only talking 40 to 50additional heads. At this point in time, we’re really not providing long-term gross profit margin guidance. During this decade, we recognize that we’ll be going through a big transformation and building out American Centrifuge, completing the Russian HEU agreement and as we move towards retiring the Paducah Gaseous Diffusion Plant. But when we look longer term, clearly we will be a centrifuge-based company and to give you some sort of projection, I would take a look at the financial statements of Urenco, it’s about the only publicly available information for a pure centrifuge based company that’s available. In 2009, Urenco’s statements and information showed an EBITDA profit margin of roughly 60%. We certainly look at that as a good objective for USEC to meet or beat in the very long-term. Jeff – Jefferies: Great. And I guess as a follow-up on margins, on your existing contracts at Paducah, how should margins evolve over the next few years and, I guess, assuming SWU prices don’t change should margins rise 200 to 300 basis points over the next several years as there is older contracts roll off.

Again, we don’t speculate on the actual margins and improvements there, but I can discuss a little bit about some of the trends. We clearly are rolling off older contracts. Last year, we had about half of our contracts delivered under backlog commitments that were prior to 2006. It will be substantially less than that this year. We do see continued improvement in pricing and our ability to get new sales booked at the higher market prices definitely helps our sales price. So keeping pace and exceeding the price behavior under the Russian HEU and the Paducah costs is something that we’re shooting for we think we can accomplish. Jeff – Jefferies: Great. Thanks for taking my questions.

Thank you.

Our next question is coming from Paul Clegg with Mizuho Securities. Please state your question. Paul Clegg – Mizuho Securities: Hi guys. Thanks for taking my question.

Hi Paul, nice to have you back. Paul Clegg – Mizuho Securities: Thanks. Can you talk about the contracting efforts at Paducah? It looks like contract of SWU delivers are down year-over-year 2011. Is that a trend issue or timing issue? And if it’s a trend, is there anything you can do to reverse it, get more sales people out trying to expand the capacity utilization of the facility.

Paul, this is Bob Van Namen. A couple of quick comments on that. We do see our deliveries fluctuate year to year. We’ve had a number of high years and several low years. So when you look back over the past three to four, so we definitely see cycles in that. We do see near-term open demand as being very limited over the next several years and we are looking to keep a good solid price in the market. So we do tend to moderate Paducah production as our customer demand kind of goes up and goes down. We do see demand increasing and the end open demand increasing in the 2013 to 2014 time frame. So looking to, again, a good balanced solid market over the next several years with a good opportunity for a step-up in the 2013, 2014 time frame. Paul Clegg – Mizuho Securities: Okay. And then obviously your uranium sales force are also down considerably in 2011 even as uranium prices are up. Can you comment on the opportunity for underfeeding out of Paducah during 2011 and how that changes, I guess, if your SWU volumes are down about 10% year-over-year and is there any possibility of you being able to expand that number during the year?

Yeah. Just as a little bit of a background, the diffusion process, we can create uranium by underfeeding the enrichment process, effectively using extra power to work the uranium harder and substituting that power for uranium, thus, creating uranium for us to be able to sell in the market. We always are balancing the SWU demand, the outlook for SWU from our customers, along with uranium prices and again, we benefit by the fact that we can take power and create uranium. And at today’s market prices, that is a fairly attractive opportunity for us. It also has another benefit in that as uranium prices go up, our customers under fixed commitment contracts will ask us for additional SWUs, so that creates more demand in the marketplace. They want us to work their uranium harder as well. So we do see stretching the Cascade, underfeeding the process and giving us an opportunity to create more uranium. We also have to keep a careful eye on power prices and how that fits in. We do see some attractive power price opportunities going forward. So we do see the opportunity to benefit from uranium. Paul Clegg – Mizuho Securities: So if I can maybe just dig into that just a little bit further. The year-over-year decline in uranium revenue forecast has a lot to do with where you are today on the existing TVA contract, I guess, combined with sequentially down SWU volumes. But as you see the -- as you see potential opportunities on power prices as you said, that could create the opportunity for some upside on the -- on underfeeding if you’re able to take advantage of it?

It could. We also have deferred revenue as part of our uranium revenue numbers and uranium that was delivered to customers in previous years or was sold to customers but not delivered until the last year. We did have a high volume of deferred revenue in 2010, as well. Paul Clegg – Mizuho Securities: Okay. That may not be repeated in 2011?

Correct. Paul Clegg – Mizuho Securities: And then just a final question about -- you sound like you’re still in kind of ongoing negotiations with the DOE to see who bears the lion’s share of some of the contract transition costs on Portsmouth. Can you just kind of walk us through the time line and the process for figuring out how much of that the DOE agrees to bear. Could this be a long drawn out process and are they all cash costs? I’m just trying to get a sense of whether or not there’s a point during the year where we see a large charge or if we are given some sort of advanced notice of when and how much that will be.

Yeah. We’ll tag team you on this one. How about if I talk about the process for the discussions with DOE and let John talk about some of the issues related to those potential liabilities. We are in discussions, I would say, on a daily basis with DOE and with the Fluor B&W D&D contract are up at Portsmouth about the transition. As John said, we will be looking to transition at least part of the work force likely by the end of March time frame. And as part of those discussions, we have a number of issues that we’re looking to reach resolution with DOE on. So I would say in the first half of this year, we won’t have all of the issues resolved but we should have a much clearer picture about the liabilities and about the transition issues.

And Paul, this is John Barpoulis completing the tag team. With respect to the liabilities, these are very much -- and we put some numbers out in the earnings release and there’s more information in the 10-K that these are -- it will very much be a function of the transition and how we work the transition with DOE and the new decommissioning and decontamination decommissioning contractor. As we noted in the release, at the end of the cold shutdown contract that could result in us incurring some employee-related severance costs, we estimate that that liability could be about $25 million, again, very much going to be a function of the transition. It could be up to that amount but again DOE would be responsible for a substantial portion of that which we estimated about $18.5 million. With respect to some pension, post-retirement health, potential-related costs, again, the end of contract activities could also trigger closing adjustments to those plans. Certain costs may be accelerated and again, we believe a portion of those costs would -- a significant portion of those costs would be recoverable from DOE. Again, we put out the numbers, closing adjustments, to our pension plan could be up to $32 million and for post retirement, health benefit plans up to $15 million, again, all before DOE recoveries. Those would be cash over a period of time but again, expected to recover from DOE and we’re working with DOE on how to mitigate the overall transition costs as we work with them. Paul Clegg – Mizuho Securities: And the most likely scenario a charge in the, perhaps a significant charge in the first quarter that’s not today in your guidance followed by a recovery subsequently from DOE?

No. Again, timing is uncertain. Amounts are uncertain. Again, we’re aiming to mitigate or eliminate these as part of the transition. An example is certainly with employees that are -- that are leaving our employment but beginning jobs with the decommissioning and decontamination contractor the next day. Clearly, that -- we’re looking to provide a SWU transition for our employees as well as with DOE. And again, the structure of the transition is also uncertain, so again, uncertainty of timing and amounts. Paul Clegg – Mizuho Securities: So it get -- okay. Okay. And so there’s no -- there’s no gun to your head to have to take these charges as of the first quarter. It really will depend on when you terminate discussions or when you come to a conclusion, rather, in discussions with the DOE on these matters?

Yeah. Entirely a function of the timing and structure of the transition. Paul Clegg – Mizuho Securities: Okay. Thanks, guys. I’ll jump back in the queue.

Thanks, Paul.

Our next question is coming from Charles Fishman with Pritchard Capital Partners. Please state your question. Charles Fishman – Pritchard Capital Partners: Good morning. Let’s see. First off, in your release last night on the progress of the ACP, you said that the DOE independent engineers are preparing a report. Can I ask back in October when you received the term sheet from the DOE, you indicated that you got the initial signoff, initial technical signoff. Was this independent engineer on board at that time and was this the entity that made -- that helped the DOE make that initial determination? So are we talking about just finalizing the due diligence report or is there the risk of a surprise here that this particular independent engineer doesn’t think things are as good technically?

Maybe Charles -- this is John Welch. I’ll take you back in time. In August of 2009, the Department of Energy identified technical issues that they wanted to see addressed. I think we previously talked about the fact that we worked through very extensive work plan to address those issues and have been reviewing that with the nuclear energy portion of the Department of Energy on a quarterly basis. The $90 million joint funding activity to address demonstration was a part of that. So the first thing the Department of Energy wanted to do after we had did an update through the loan guarantee application was to do their own assessment, have we made enough technical progress on addressing those issues to warrant full-born technical due diligence. So in October that is what we received. The go-ahead from their internal technical team that we had made enough progress from August 2009 on addressing those issues. Then the formal independent engineer Parsons was brought aboard at that timeframe to do their evaluation and those activities were kicked off in the late October, early November timeframe. That is the same independent engineer that was involved the summer before, albeit with mostly new members. We have been going through that review. There were very close interaction, no surprises from anything that we had been reporting on. They found no surprises. They actually found extremely positive progress in addressing those issues. Again, we didn’t -- we didn’t see anything being identified through that process that was a surprise to us. They prepared a report mid-January that was very positive. They’re going through final due diligence and discussions between the financial arm of a loan guarantee office and that’s -- if they’re going to be preconditions for closing, that would be part of a conditional commitment that will likely come out of that activity. But the progress, yeah, it’s taken a fair amount of time to come through it, but it’s been very formal in nature, very productive, highly professional-type activities. Charles Fishman – Pritchard Capital Partners: Okay. And another question on the -- also on that release last night from the -- on the progress of the ACP. You indicated that negotiations with the Japanese export agencies would potentially provide up to $1 billion. It’s my understanding -- now, that loan, they will key on the DOE loan guarantee and obviously, I guess the DOE is keying on this as part of your financing plan, so the two are sort of joined at the hip. Correct?

Yeah. That’s correct. Charles Fishman – Pritchard Capital Partners: And then, now, with the $1 billion from the Japanese export agencies, would that be the same seniority as the DOE loan guarantee?

We do expect that any debt provided by the Japanese ECA is -- as seen in other president transactions would likely be on a pari passu basis with a DOE loan. Charles Fishman – Pritchard Capital Partners: Okay. So, John could we think of the interest rate sort of somewhere to what the DOE loan guarantee would be too?

I think structurally they’re different programs and so we do expect to pay margins on borrowing consistent with each of the program designs. Charles Fishman – Pritchard Capital Partners: Okay. Thank you. Helpful.

Sure. Thanks, Charles.

Our next question is coming from George Kase with NOVACAP. Please state your question. George Kase – NOVACAP: Sure. Good morning.

Good morning, George. George Kase – NOVACAP: A couple of questions getting back again to Portsmouth. Is it your expectation that the majority of the employees would be transitioned over to Fluor and BMW?

This is Bob Van Namen and we are working down that path now. We would not say that’s for certainty, but we clearly see benefits in having that amount of a transition where the majority of the workforce goes over to the LLC. George Kase – NOVACAP: And -- and for let’s say for each individual that moves over, you know, I’m going to -- presumably, that would eliminate -- it would eliminate the severance expense, would it also eliminate any pension liability, things of that nature?

Yeah. Much of those discussions is what is involved in diagramming out the transition. There’s a lot of uncertainty as to how that is going to play out and a lot of it is subject to Fluor and BMW and the type of contracts and offers that they have with the -- with the employees. So again, too early to speculate on how that’s all going to come out, but that is -- the goal is that the transition can be as smooth as possible to minimize those liabilities. George Kase – NOVACAP: Okay. And when I look at the line item of contract services, is that exclusively Portsmouth or is there anything else in that line item?

Yeah. Two other things are in there. We do some government services work at Paducah, as well and then NAC International the subsidiary down in Atlanta, Georgia that does fuel transportation and storage as well as consulting is also included there. George Kase – NOVACAP: Can you share with us kind of a -- on a percentage basis what those two would represent of that total?

No. We do not have that broken out, but I would say at this point, the large majority is Portsmouth. George Kase – NOVACAP: Yeah. And are there any opportunities for, you know, other activity in the near future or even in the immediate future with the DOE for other services?

Let me give you two thoughts on that. Again, NAC does a lot of work with the government on spend fuel transportation. We consider the upside on spend fuel storage as being a good one with Yucca Mountain continuing to go through evaluations and delays and possible terminations. So we do see our customers around the world needing continued spend fuel storage services and NAC is very well positioned to take advantage of that. George Kase – NOVACAP: Okay. Thank you. And John, you -- I believe in the last call, at least in my notes, I believe you indicated that, you know, you were, you know, hopeful of a timing on a close with the DOE sometime in the second quarter of this year. You know, do you want to modify that timetable at this point, or is that still good?

I mean I think we’re very -- very close towards a conditional commitment (inaudible) to be able to answer that question we would have to know what the other final terms were going to be and as you would expect like any good negotiation. Then the closing will clearly be a function, if there are any preconditions there that we have to come through. And I think what we’ve said in our guidance and what I said earlier was that we believe that it can still be closed this year. We don’t know, to tell you the truth. As we know more in a conditional commitment or we’re able to lean forward a little bit more knowing the terms and the things that we come through, but it clearly takes some time to get to that closing activity. George Kase – NOVACAP: Would -- if I heard you correctly, maybe 2Q might be more accurate for a conditional commitment and then after seeing that you would make some evaluations as to when you might close this? Is that sort of how you are looking at it now?

I wouldn’t speculate. You’re trying to infer too much that we’re just not comfortable saying that right now. But I can tell you that I feel that we’re very close. George Kase – NOVACAP: Okay. And one last thing is, could you tell me the number of machines that are currently up at ACP now?

We’ve had -- boy, those are -- off the top of my head, I probably can’t tell you the exact numbers, but we’ve had a series of demonstration activities that have been going on for the -- since 2007. It’s safe to say those machines that we started in 2007we have taken off line because now all the running that we’re doing is of the AC100 machines. We’ve had multiple Cascade activities going on. I think we’re getting -- we’re bringing one of the Cascades down to bring it -- to put the new machines in that we referenced earlier to go in. But there is one series of machines that is operating today as speed on gas, but I don’t have the exact number with me. George Kase – NOVACAP: Okay. Well, I’ll follow up on it.

But it’s still a very dynamic program -- George Kase – NOVACAP: Sure.

And everything we’re doing in that program to demonstrate the readiness of the machine, the performance of the machine, we’re doing all of that hand-in-glove with the Department of Energy and independent engineers so they understand what objectives we’re trying to achieve with each piece of that. George Kase – NOVACAP: Thank you very much.

Yeah. Thanks, George.

(Operator Instructions) And our next question is a follow-up coming from Paul Clegg with Mizuho Securities. Please state your question. Paul Clegg – Mizuho Securities: Hi, guys. The -- a couple of more things here.

Okay. Paul Clegg – Mizuho Securities: The question about the possibility of a tail stripping contracts, you had a press release about this not that long ago. I don’t know if there’s anything new you can disclose but maybe digging into a little bit of detail about which part of the DOE are you talking to about this? Is that completely separate from the folks you talked to about ACP and does it need to be bid out broadly? Is your understanding or is it something that can just get awarded without a lot of other announcements?

This is Bob Van Namen. It is a separate part of the Department of Energy from what we were discussing the loan guarantee program with. So, it generally tends to be in the environmental management and nuclear energy areas of DOE. We do not have a structure yet. We have not reached any sort of conclusion. We’ve had conceptual discussions and are still on that basis right now for the tails program. So it is -- what we see it as is a good win-win opportunity. The Department of Energy has these tails that are on the books as liabilities and we can take that and turn it into an asset with our available capacity at Paducah. So, it is on that basis that we’ve been having these discussions. And again, still at a very early conceptual stage. Paul Clegg – Mizuho Securities: Okay. And it’s too early to say whether or not the assumption that DOE -- this would something that could be bid out or whether or not it could be something that could just be awarded.

That is not something again we have not had that levels of specificity of discussions on. Paul Clegg – Mizuho Securities: Too early to say. And on ACP spending, $50 million in the first quarter is -- that’s a decent number for not knowing yet for sure about the loan guarantee. If there’s no response in the second quarter and I don’t want to get too theoretical here, but I guess if there is -- at what point do you start to see that number trail off considerably if we don’t hear anything back from the DOE?

Paul, this is John Barpoulis. Again, we’re looking to move forward on ACP. And as we always say we will live within our cash from operations and constraints and so we will not peg a specific timeframe and we’ll continue to press forward with it.

I mean, Paul, the biggest thing that our investors, our customers and what we would like to see is a clear path to loan guarantee. I can tell you from a project standpoint, you know, we’re managing it in a demobilized state and a cost-constrained state. The clearer that loan guarantee comes, you know, my whole frame of reference, I would hope would change very positively. And there sure are a hell of a lot of things I would like to be doing right now to drive risks out of the project but we need that clear path. And until then, we will continue to be very conservative in how we’re spending our shareholders’ money. Paul Clegg – Mizuho Securities: Okay. Understood. And then just a follow-up on the guidance basically. The guidance is to have a net loss in 2011, but it wasn’t clear whether or not that would be the case with or without ACP spending?

That was intended to reflect the inclusion of ACP expense. Paul Clegg – Mizuho Securities: I see. So if there’s no -- in ex-ACP spending would you be in a net profit situation in 2011 based on your current outlook?

Again, in the guidance we left out there, you can clearly see that we expected a gross profit of $70 to $80 million and you can see the single line item of SG&A of about $60 million, so you can get a sense for contribution from existing operations. Obviously, our financial is very much a function of our progress on ACP and the timing and amount of that with respect to potential remobilization. So that would be the intent of the communication. Paul Clegg – Mizuho Securities: Okay. And then just finally, I guess I’m still a little confused about the Portsmouth transition and I think it’s a timing issue for me. Since the contract ends, as I understand it, before the -- before the employee’s transition to BMW and Fluor and before you actually resolve -- potentially before you resolve your cost issues with the DOE, it seems like there’s kind of a gap in timing there. Do you provide the employees to the BMW, Fluor JV on a contract basis until you work out the details?

Let me clarify that. What ends as of the end of March is a cold shutdown contract. There are two scopes of work that we perform, in general big buckets. One is the cold shutdown work that is preparing the site for transition to the DMV. The second is what we call the government or the infrastructure support work, things like security and fire and water and that work will continue after the end of March. So we will have again a relationship with Fluor and BMW which provides mutual support of people for their mission on the D&D work and for our infrastructure support work that is one of the details we’re working through right now. Paul Clegg – Mizuho Securities: Okay. Thanks very much, guys.

Okay. Thanks, Paul.

We have no further questions at this time. I would like to turn the floor back over to management for any closing comments.

Thank you all for participating on the call this morning. I think it’s safe to say we’re pleased with our accomplishments during 2010 regarding the American Centrifuge and with the recent progress towards obtaining a conditional commitment on DOE on funding to build the plant. We are intensely focused on moving the process forward as quickly as possible. We appreciate your support, your interest and your continued investment in USEC. Thank you and good day.

Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. And we thank you for your participation.