Advanced Technology, Other Income, Special Charges and Interest
Advanced technology expense, primarily related to the demonstration of the American Centrifuge technology, was $45.1 million in the third quarter compared to $26.0 million in the third quarter of 2011. For the nine-month period of 2012, advanced technology expense was $167.6 million, which includes 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. 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, which we anticipate to begin upon successful completion of the RD&D program.
Advanced technology costs include expenses by NAC of $0.6 million in the nine months of 2012 and $1.1 million in the corresponding period in 2011 to develop and expand its MAGNASTOR storage technology and its transportation counterpart, MAGNATRAN.
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 cost of $350.0 million. DOE made $87.7 million of initial funding available by taking the disposal obligation for a specific quantity of depleted uranium from USEC, which releases encumbered funds for investment in the American Centrifuge technology that we had otherwise committed to future depleted uranium disposition obligations. As of September 30, 2012, USEC made qualifying American Centrifuge expenditures of $55.7 million. DOE’s pro-rata share of 80 percent, or $44.6 million, is recognized as other income in the nine-month period.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 $1.1 million in the third quarter of 2012 and $7.1 million in the nine months.
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