1065059--2/27/2007--USEC

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We face a number of risks and uncertainties associated with the successful demonstration, construction and deployment of the American Centrifuge technology. Deployment of the American Centrifuge technology will require external financial support that is likely to be difficult to secure. Our estimates of the costs of the American Centrifuge project are subject to significant uncertainties that could adversely affect our ability to finance and deploy the American Centrifuge Plant. Significant increases in the cost of the electric power supplied to our Paducah plant 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 50% 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. A significant increase in market prices for SWU could result in a significant increase in the price we pay for the SWU Component of Russian LEU. Changes in, or termination of, the Russian Suspension Agreement 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 approximately 50% 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. 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 gross profit margins in current and future periods. 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. 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 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 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--2/27/2007--USEC_INC