Advanced Technology, Other Income, Special Charges and Interest
Advanced technology expense, primarily related to the demonstration of the American Centrifuge technology, was $85.7 million in the second quarter compared to $33.5 million in the second quarter of 2011. This increase of $52.2 million primarily reflects an expense of $44.6 million related to the title transfer of previously capitalized American Centrifuge machinery and equipment to DOE as provided in the cooperative agreement entered into with DOE for the RD&D program. As previously noted, beginning in the fourth quarter 2011, all American Centrifuge project costs incurred have been expensed. Capitalization of expenditures related to the American Centrifuge project has ceased until commercial plant deployment resumes.
Advanced technology expense includes expenses by NAC to develop and expand its MAGNASTOR™ storage and transportation technology of $0.4 million during the six-month period of 2012 compared to $0.7 million in the same period of 2011.
USEC entered into a cooperative agreement with DOE in June 2012 for pro-rata cost sharing support for continued American Centrifuge activities with a total estimated spending in the initial phase of $33.1 million. DOE made the $26.4 million available by taking the disposal obligation for a specific quantity of depleted uranium from USEC, which will release encumbered funds for investment in the American Centrifuge technology that we had otherwise committed to future depleted uranium disposition obligations. As of June 30, 2012, USEC made qualifying American Centrifuge expenditures of $12.5 million. DOE’s pro-rata share of 80 percent, or $10.0 million, is recognized as other income in the three and six-month periods.Selling, general and administrative expenses in the six-month period of 2012 were $29.7 million, a decrease of $2.5 million over the same period in 2011, reflecting lower salary, employee benefit and other compensation costs and lower consulting costs. USEC’s business is in a state of significant transition, and in early 2012 we initiated an internal review of our organizational structure. We engaged a management consulting firm to support this review, and costs for the management consulting firm and other advisors totaled $1.5 million in the second quarter of 2012 and $6.0 million in the six months.
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