1065059--2/24/2006--USEC

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{regulation, government, change}

{competitive, industry, competition}

{provision, law, control}

{cost, regulation, environmental}

{stock, price, operating}

{gas, price, oil}

{cost, contract, operation}

{customer, product, revenue}

{cost, operation, labor}

{loss, insurance, financial}

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{condition, economic, financial}

{operation, international, foreign}

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Changes in, or termination of, the Russian Suspension Agreement ( Russian SA ) could lead to significantly increased competition from Russian LEU or, if replaced with tariffs, could increase our costs under the Russian Contract. We depend on a single production facility in Paducah, Kentucky for the remainder of our supply and significant or extended unscheduled interruptions in production could affect our ability to meet customer orders and pose a significant risk to, or could significantly limit, our continued operations and profitability. We face a number of risks associated with the demonstration and deployment of the American Centrifuge technology. There can be no assurance that we will be able to obtain financing for deployment of the American Centrifuge Plant and other operations on acceptable terms. The rights of our creditors under the documents governing our indebtedness may limit our operating and financial flexibility. A decrease in prices for SWU and uranium could adversely affect our profitability in current and future periods. Our inability to increase prices under long-term contracts could adversely affect our results of operations in current and future years. We face significant competition from three major producers who may be less cost sensitive or may be favored due to national loyalties. The release of excess government stockpiles of enriched uranium into the market could depress market prices and reduce demand for LEU from USEC. Our dependence on our largest customers could adversely affect us. Our ability to compete in certain foreign markets may be limited for political, legal and economic reasons. Recent court decisions may reduce our ability to protect ourselves from unfairly priced imports, which could adversely affect our results of operations. Our future prospects are tied directly to the nuclear energy industry worldwide. Changes to, or termination of, any of our agreements with the U.S. government, or deterioration in our relationship with the U.S. government, could adversely affect our results of operations. Our existing U.S. government contracts are subject to continued appropriations by Congress and may be terminated if future funding is not made available. Our operations are highly regulated by the NRC and DOE. Our operations are subject to numerous federal, state and local environmental protection laws and regulations. Our operations involve the use, transportation and disposal of toxic, hazardous and/or radioactive chemicals and could result in liability without regard to our fault or negligence. The dollar amount of our sales backlog, as stated at any given time, is not necessarily indicative of our future earnings. We use estimates in accounting for the future disposition of depleted uranium and changes in these estimates or in actual costs could affect our future financial results and liquidity. Deferral of revenue recognition could result in volatility in our quarterly and annual results. Our operating results may fluctuate significantly from quarter to quarter, and even year to year, which could have an adverse effect on our cash flows. The levels of returns on pension and post-retirement plan assets, changes in interest rates and other factors affecting the amounts we have to contribute to fund future pension liabilities could adversely affect our earnings in future periods. Anti-takeover provisions in Delaware law and in our charter, bylaws and shareholder rights plan could delay or prevent an acquisition of USEC.

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1065059--2/24/2006--USEC_INC