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I’d like to remind everyone that certain of the information that we may discuss on this call today may be considered forward-looking information that involves risks and uncertainties, including assumptions about the future performance of USEC. Our actual results may differ materially from those in our forward-looking statements.Additional information concerning factors that could cause actual results to materially differ from those in our forward-looking statements is contained in our filings with the SEC, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. Finally, the forward-looking information provided today is time sensitive and is accurate only as of today, March 4th, 2012. This call is the property of USEC. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of USEC is strictly prohibited. Thank you for your participation and now, and now I’d like to turn the call over to John Welch. John Welch Good morning and thank you for joining us today. Earlier this morning, we reported our fourth quarter and yearend results. At the bottom line, we reported a substantial net loss. The net loss of $540.7 million for the full year was a result of a confluence of several factors including non cash write-offs. John Barpoulis will have a more detailed discussion on these factors in his report, but let me address them at a high level. First the expense for Advanced Technology was higher than in prior years because of the impact of write-offs associated with the American Centrifuge project and because of changes and how we accounting for American Centrifuge spending. For the last several years we have been capitalizing spending on the project for activities that were intended to be part of our commercial plan. Beginning in the fourth quarter, we are now expensing all project spending because the work we expect to do over the next two years will be related primarily to the Research, Development and Demonstration programs or RD&D. Expense for Advanced Technology for the full year totaled $273 million including $127 million of previously capitalized spending related to earlier centrifuge machines that were determined to no longer be compatible with the commercial plant design.
Those American Centrifuge expenses more than offset our $84 million gross profit. From an income tax viewpoint that caused a substantial cumulative loss for the past several years that makes it difficult to assume we can use our tax benefit going forward. Therefore USEC recorded a full valuation allowance for the net deferred tax assets of $369 million.From an operation standpoint, our gross profit was lower due to lower sales volume of our products, uranium and separate work units or SWU and higher cost. While much of our loss was due to expense related to the American Centrifuge project, we also have high production costs at Paducah that are making profitable operations difficult going forward. Last summer we said that there were three key factors that would drive our decision to operate our Paducah plant beyond May 2012. First we need sufficient demand for Paducah’s output of low-enriched uranium. Second we need a program to re-enrich uranium tails stored at Paducah or find other demand for enrichment that would load the plant sufficiently to keep it economic. Finally we need attractive power pricing and supply to extend operations beyond the May 31 expiration date of our power contract with TVA. At this point we do not have three elements in place. The earthquakes, tsunami and nuclear event in Japan a year ago has led to virtually all of Japan's reactors being temporarily shut down for inspections and refueling. It is uncertain how long these outages may extend and our competitors have been left with significant supplies of low-enriched uranium to sell in the near term. Our current view is that we do not see sufficient commercial demand to support Paducah production of LEU for utility customers after the TVA contract expires. Read the rest of this transcript for free on seekingalpha.com