During 2010, USEC worked under a cooperative agreement entered into with DOE to provide for pro-rata cost sharing support for continued funding of American Centrifuge activities with a total cost of $90 million. In 2010, USEC made qualifying American Centrifuge expenditures of $88.8 million, and DOE’s pro-rata share of 50 percent, or $44.4 million, was recognized as other income in 2010. The program was completed in January 2011 when USEC made the remaining expenditures and recognized the income in the first quarter of 2011.Future tax consequences of temporary differences between carrying amounts for financial reporting purposes and USEC’s estimate of the tax bases of its assets and liabilities result in deferred tax assets and liabilities. In 2011, the net increase of $369.1 million in the valuation allowance reduced the net deferred tax assets to their realizable value as of the end of the year. A full valuation allowance against net deferred taxes was recorded in 2011 due to cumulative losses incurred in recent years and due to substantial uncertainty to generate future taxable income that would lead to realization of the net deferred tax assets. The ultimate realization of the net deferred tax assets is dependent upon generating sufficient taxable income in future years when deferred tax assets are recoverable or are expected to reverse. Cash Flow At December 31, 2011, USEC had a cash balance of $37.6 million compared to $151.0 million at December 31, 2010. Cash flow from operations in 2011 was $56.3 million compared to cash flow from operations of $22.5 million in the previous year. Positive cash flow resulted from the decline in accounts receivable of $146.6 million. Net inventories increased $75.2 million representing higher unit costs. Capital expenditures, primarily related to construction of the ACP, totaled $152.8 million during 2011 compared to $162.2 million in 2010. As noted above, USEC ceased capitalizing spending on the ACP as of September 30, 2011.