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USEC Inc. (NYSE:USU) today reported a net loss of $1.2 billion or $9.84 per basic and diluted share for the year ended December 31, 2012, reflecting the impact of $1.1 billion expense of previously capitalized costs associated with the American Centrifuge project. This compares to a net loss of $491.1 million or $4.07 per basic and diluted share for 2011 that was primarily due to American Centrifuge expenses, including a $146.6 million expense of previously capitalized costs associated with American Centrifuge machines, and a tax valuation allowance of $319.5 million recorded against our net deferred tax assets.
The non-cash charge to expense of previously capitalized assets was a part of USEC’s year-end review of the carrying value of the long-lived assets on its books and was taken as of December 31, 2012. USEC reported a net loss of $1.08 billion or $8.84 per basic and diluted share in the fourth quarter of 2012 compared to net loss of $446.4 million or $3.68 per basic and diluted share for the same quarter of 2011. The 2012 charge to expense did not affect the company’s cash flow from operations.
“Our core operations generated revenue of $1.9 billion, a gross profit of $138 million and cash flow from operations of $143 million that helped us end the year with a cash balance of $293 million,” said John K. Welch, USEC president and CEO. “In addition to a high level of sales to our utility customers, our employees kept our Paducah plant at peak efficiency and are continuing to successfully execute a program to re-enrich depleted uranium tails for Energy Northwest.
“As part of our annual review performed in connection with the preparation of our annual financial statements, we expensed the previously capitalized costs related to the American Centrifuge Plant (ACP) prior to late 2011. The accounting charge was based on our ability to recover the full amount of this prior capital investment. The write-off is not a reflection of our view of the importance of the project going forward. Importantly, the centrifuge machines, plant systems and manufacturing infrastructure that we built and developed will continue to operate.