FOR IMMEDIATE RELEASE:
August 3, 2010

USEC Submits Update to Loan Guarantee Application

�         USEC addresses technical and financial concerns raised by DOE

�         Number of machines in AC100 cascade roughly doubles; additional AC100 machines to be built in 2010

�         More than 480,000 machine hours accumulated in Lead Cascade test program

�         Go-forward investment to build American Centrifuge Plant estimated at $2.8 billion from closing on a loan guarantee

BETHESDA, Md. - USEC Inc. (NYSE:USU) has submitted a comprehensive update to its application with the U.S. Department of Energy (DOE) Loan Guarantee Program to help finance construction of the American Centrifuge Plant. The ACP is a more than "shovel-ready" project deploying innovative U.S. technology and U.S. manufacturing that will support approximately 8,000 jobs during its construction.

The update was submitted at the end of July and reflects the significant steps taken by USEC to address concerns expressed by DOE about our application for a $2 billion loan guarantee last year. Among the steps taken in the past year:

�         Completed a thorough quality assurance program review;

�         Worked with our strategic suppliers to build and operate more than 40 AC100 machines, which are the production-ready commercial centrifuge machines;

�         Assembled and operated AC100 machines configured for a multi-stage cascade that replicates anticipated commercial plant conditions;

�         Gained substantial cascade operating experience, including maintenance and repairs in an operating environment;

�         Continued development work and value engineering to increase the machine's productivity and lower its unit cost;

�         Entered into an agreement for a strategic investment of $200 million by two leading companies in the nuclear industry; and

�         Produced detailed updates to project scope, cost and schedule based on close collaboration with our suppliers.

"We have addressed, head on, each concern raised in the independent engineer's report that was prepared for DOE last year. The American Centrifuge program is much stronger today because of that sharp focus," said John K. Welch, USEC president and chief executive officer.

"We have seen solid performance from our production-ready AC100 machines operating in a cascade configuration. Our Lead Cascade testing program has accumulated more than 480,000 machine hours since mid-2007.  We are continuing to assemble, install and operate additional centrifuges, and collectively these will accumulate significant additional machine hours, further confirming that this technology is ready for commercial deployment."

"On the financial front, we have taken steps to reduce project-related risk factors and signed a definitive agreement for a three-phased investment of $200 million by nuclear industry leaders Toshiba Corporation and The Babcock & Wilcox Company. This investment and related strategic relationship strengthens USEC's position in the nuclear fuel industry," Welch said. "The relationship with Toshiba has opened the possibility of additional financing through Japanese export credit agencies, an option we are pursuing."

Update to Loan Guarantee Program

"We are pleased with the progress we've made over the past year and the steps we've taken to strengthen our application. Based on that success, we provided an update to the Loan Guarantee Office in late July," he said.

"We have engaged the DOE Loan Guarantee Office. We are prepared to answer any questions that may arise and work towards a timely conditional commitment for funding. Since this is an update, we will work with DOE to review the application expeditiously," Welch added..

Activity has increased in the DOE Loan Guarantee Program in recent weeks. Southern Company has been offered and has accepted a conditional commitment for a loan guarantee of approximately $3..4 billion for two new power reactors at the Vogtle Plant. Our competitor Areva has been offered and has accepted a conditional commitment for $2 billion in financing to build an enrichment plant in Idaho. Areva, which is substantially owned by the French government, has stated they expect to receive a construction and operating license from the U. S. Nuclear Regulatory Commission (NRC) for the plant in 2011. USEC began building its plant in May 2007 after receipt of a NRC construction and operating license but has demobilized plant construction due to uncertainty of funding to complete the plant.

Over the past several months, USEC has been working with our suppliers to update the scope, cost and schedule to build the ACP. Several factors have contributed to the increase in our cost estimates since we established our initial baseline project budget in 2008, including:

�         Costs related to the demobilization and remobilization and costs associated with continued ACP activities prior to any remobilization period;

�         Cost increases as a result of additional design work and refined cost estimates from our suppliers related to machine manufacturing and engineering, procurement and construction (EPC) costs; and

�         Costs related to the maturity of scope of the project.

The $2.8 billion estimate is a go-forward cost estimate and does not include spending from now until financial closing of a DOE loan guarantee, our $1.8 billion investment through June 30, 2010, overall project contingency, financing costs or financial assurance. Until potential financial closing of a DOE loan guarantee, we expect to continue to invest at a rate consistent with our anticipated spending indicated in our outlook for the remainder of 2010, while taking into account our anticipated cash from operations and other available liquidity. We are currently evaluating the appropriate level for overall project contingency, taking into account the level of risk given the maturity of the project.  We are also evaluating the financing costs and financial assurance required for the project, which will be affected by, among other things, the overall financing plan for the project, the amount of the credit subsidy cost for any DOE loan guarantee, and the amount and sources of the additional financing we need to complete the project.  

We continue to work with suppliers to refine our estimates and seek reductions in the project cost. With respect to schedule, we anticipate it will require 18 to 24 months to begin initial commercial operations upon receiving financing. We also anticipate that it will require 30 to 36 months to complete the plant after initial commercial operations. We continue to work with our EPC contractor and suppliers to reduce the deployment schedule for the ACP.

We will need additional funding beyond the $2 billion in loan guarantees from DOE, proceeds from the Toshiba and B&W investments and internally generated cash flow to complete the American Centrifuge project. Toshiba's agreement to invest in USEC also opens the potential of financing through Japanese export credit agencies and we have initiated discussions with these export credit agencies.

If we are successful in obtaining a DOE loan guarantee and other financing required to complete the project, the American Centrifuge project could create nearly 8,000 jobs in the United States, with almost half located in Ohio.

Agreement for Investment by Toshiba and B&W

On May 25, 2010, we announced that Toshiba and Babcock & Wilcox (B&W) signed a definitive agreement to make an investment in USEC to support the ACP. Under terms of the agreement, each company will invest $100 million in USEC, over three phases, each of which is subject to specific closing conditions.  The first phase of $75 million from the strategic investment is expected to close in the third quarter of 2010 and will promote continued deployment of the ACP over the remainder of the year.

Conditions for the first phase include obtaining necessary regulatory approvals and concluding agreements related to a joint venture between USEC and B&W announced last year to manufacture USEC's commercial AC100 centrifuge machines for the American Centrifuge Plant. The joint venture will be a single point of responsibility for centrifuge machine manufacture and assembly for the plant, and will integrate the efforts of the other suppliers.

Deployment Continues

Although we significantly demobilized construction and deferred high-volume machine manufacturing pending resolution of our application, we have continued to manufacture a limited number of centrifuge machines as part of the scope of work under a March 2010 cooperative agreement with DOE. Approximately two dozen AC100 machines have been operating in a cascade configuration since March 2010.  Approximately 20 more machines were assembled earlier this year and were operated individually. We recently reconfigured the cascade to introduce these additional machines into the cascade, thus creating a cascade with about 40 AC100 machines. Our suppliers are continuing to build and assemble AC100 machines, which will increase the total number of machine hours of AC100 centrifuge operation. We have operated centrifuges as part of our Lead Cascade test program for more than 480,000 machine hours.

During the second quarter we took the initial cascade of prototype machines off-line that had been operating since August 2007. We have disassembled and examined components from some of those prototype machines as an element of our deterministic approach to assuring reliability of the AC100 centrifuges. The machine positions in the demonstration area used for the initial cascade have been refurbished with upgraded control systems and instrumentation in preparation for installation of 25 AC100 machines by the end of the year. These additional machines will run individually to provide additional data and to accumulate additional operating hours. By the end of 2010, we expect to have roughly 65 AC100 machines in operation. This activity maintains our supplier base, demonstrates the capability to manufacture production-ready centrifuge machines within our design specifications and our robust quality assurance program.

"The AC100 machines have been operating in line with our predictive models. The Lead Cascade testing program has provided our staff with invaluable experience in assembly and startup procedures, operations and maintenance," Welch said.

"We believe the American Centrifuge offers our country energy security through technical ingenuity that can keep us competitive in a growing global market that is dominated by foreign governments," Welch said.  "We are ready for the American Centrifuge to transition to a commercial operation and we have a solid business case that supports repayment of a loan through the DOE Loan Guarantee Program."

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

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Forward Looking Statements

        This news release contains "forward-looking statements" - 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 deployment of the American Centrifuge technology, including risks related to performance, cost, schedule and financing; our success in obtaining a loan guarantee for the American Centrifuge Plant, including our ability to address the technical and financial concerns raised by the U.S. Department of Energy ("DOE"); our ability to raise capital beyond the $2 billion of DOE loan guarantee funding for which we have applied; the impact of the demobilization of the American Centrifuge project and uncertainty regarding our ability to remobilize the project and the potential for termination of the project; our ability to meet milestones under the June 2002 DOE-USEC Agreement related to the deployment of the American Centrifuge technology; restrictions in our revolving credit facility that may impact our operating and financial flexibility and spending on the American Centrifuge project; our ability to expand our revolving credit facility with additional commitments from financial institutions to increase the total capacity beyond $250 million; risks related to the completion of the announced three-phased strategic investment by Toshiba Corporation ("Toshiba") and The Babcock & Wilcox Company ("B&W"), including our ability to satisfy the significant closing conditions in the securities purchase agreement governing the transactions and the impact of a failure to consummate the transactions on our business and prospects; certain restrictions that may be placed on our business as a result of the transactions with Toshiba and B&W; our ability to achieve the benefits of any strategic relationships with Toshiba and B&W; changes in U.S. government priorities and the availability of government funding, including loan guarantees; the competitive environment for our products and services; changes in the nuclear energy industry; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q. Revenue and operating results can fluctuate significantly from quarter to quarter, and in some cases, year to year. For a discussion of these risks and uncertainties and other factors that may affect our future results, please see Item 1A entitled "Risk Factors" and the other sections of our quarterly report on Form 10-Q and our annual report on Form 10-K.  We do not undertake to update our forward-looking statements except as required by law. 

Contacts:
Investors:      Steven Wingfield (301) 564-3354
Media:          Paul Jacobson (301) 564-3399