1065059--2/26/2009--USEC

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If we are not able to obtain timely action from DOE regarding a loan guarantee or an alternate capital commitment, we will need to take additional steps to implement further spending reductions with respect to the American Centrifuge project. The centrifuge machines and supporting equipment that we deploy in the American Centrifuge Plant may not meet our performance targets. We rely on third party suppliers for key components for our AC100 machine and the American Centrifuge Plant. The cost of the American Centrifuge project will likely exceed the baseline project budget and increased costs and cost uncertainty could adversely affect our ability to finance and deploy the American Centrifuge Plant. We are required to meet certain milestones under the 2002 DOE-USEC Agreement and our failure to meet these milestones could cause DOE to exercise one or more remedies under the 2002 DOE-USEC Agreement. Significant increases in the cost of the electric power supplied to the Paducah GDP have materially increased our overall production costs and may, in the future, increase our cost of sales to a level above the average prices we bill our customers. Deliveries of LEU under the Russian Contract account for approximately one-half of our supply mix and a significant delay or stoppage of deliveries could affect our ability to meet customer orders and could pose a significant risk to our continued operations and profitability. We depend on a single production facility in Paducah, Kentucky, for approximately one-half of our LEU 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. Our ability to retain key executives and managers is critical to the success of our business. The rights of our creditors under the documents governing our indebtedness may limit our operating and financial flexibility. The current global financial crisis may adversely affect our liquidity, business and prospects. Changes in the price for SWU or uranium could affect our gross profit margins and ability to service our indebtedness and finance the American Centrifuge project. The release of excess government stockpiles of enriched uranium into the market could depress market prices and reduce demand for LEU from our company. The long-term nature of our customer 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 and from emerging competitors in the domestic market. 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. 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 certificate of incorporation gives us certain rights with respect to equity securities held (beneficially or of record) by foreign persons. If levels of foreign ownership set forth in our certificate of incorporation are exceeded, we have the right, among other things, to redeem or exchange common stock held by foreign persons, and in certain cases, the applicable redemption price or exchange value may be equal to the lower of fair market value or a foreign person s purchase price. 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 materials 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 sales revenues. 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 postretirement benefit plan assets, changes in interest rates and other factors affecting the amounts we have to contribute to fund future pension and postretirement benefit liabilities could adversely affect our earnings and cash flows in future periods. Anti-takeover provisions in Delaware law and in our charter, bylaws and shareholder rights plan and in the indenture governing our convertible notes could delay or prevent an acquisition of USEC.

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1065059--2/26/2009--USEC_INC