LADOCS1 - #97049v40 /0

Transcription

1 LADOCS1 - #97049v40 /0 EnergySolutionsS l 0

2 February 2009

3 LADOCS1 - #97049v40 /2 Forward-Looking Statements Disclaimer This presentation contains forward-looking statements that involve substantial risks and uncertainties. You can identify forward-looking statements by words such as anticipate, believe, could, estimate, expect, intend, may, plan, should, will, would or similar words. You should consider these statements carefully because they discuss our plans, targets, strategies, prospects and expectations concerning our business, operating results, financial condition and other similar matters. We believe that it is important to communicate our future expectations to our investors. There may be events in the future, however, that we are not able to predict accurately or control. Our actual results may differ materially from the expectations we describe in our forward looking statements. Factors or events that could cause our actualresultstomaterially differ may emerge from time to time, and it is not possible for us to accurately predict all of them. Before you invest in our common stock, you should be aware that the occurrence of any such event could have a material adverse effect on our business, results of operation and financial position. Any forward-looking statement made by us in this presentation speaks only as of the date on which we make it. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. 2

4 LADOCS1 - #97049v40 /3 The Nuclear Fuel Cycle FRONT END Uranium Mining & Fuel Fabrication / Conversion to UF6 Enrichment Milling Engineering Nuclear Reactor Produces Electricity and/or Materials Reprocessing BACK END Logistics, Processing & Disposal Decontamination & Decommissioning Spent Fuel Management/ Recycling Spent Fuel Storage / Transport. Services Specialized Nuclear Services 3

5 LADOCS1 - #97049v40 /4 Nuclear Services Pure-Play Sector Nuc clear Products / Services Engineering & Con nstruction Reactor Equipment Company Nuclear Sector Focus Uranium Nuclear Specialized Logistics, Conversion Fuel Plant Spent Fuel Spent Fuel Decontam. Mining & Enrichment Reactor Nuclear Processing & to UF6 Fabrication Engineering Management Recycling & Decomm. Milling Operation Services Disposal Areva (France) Cameco (Canada) USEC Bechtel Fluor Jacobs Engineering McDermott (BWXT) Shaw Group * Washington Group GE / Hitachi MHI (Japan) Toshiba (Japan) * Part of URS Corporation as of November % of our revenues are derived from the provision of nuclear services. 4

6 A Leading Provider of Technology-Based Nuclear Services LADOCS1 - #97049v40 /5 Logistics, Processing & Disposal Services (LP&D) Unique off-site processing and disposal Significant capacity Crown jewel asset Life-of-plant contracts Federal Services Technology and project management leader Significant DOE bidding cycle GNEP Commercial Services Existing on-site services Reactor D&D Large components License stewardship International Strong presence in the U.K. Reactor operation Opportunities in diverse geographies including Canada, Europe, Russia and Far East 5

7 Logistics, Processing & Disposal Services 6

8 Off-Site Logistics, Processing & Disposal Services LADOCS1 - #97049v40 /7 LP&D differentiates EnergySolutions from all other providers Logistics Processing Disposal Encompasses all aspects of complex planning and transportation of radioactive materials Dedicated fleet of tractors, trailers, railcars and shipping containers Operates multiple processing facilities in South Carolina and Tennessee The most diverse capabilities in the U.S. for handling, treating and processing of radioactive materials Owns the largest commercial radioactive disposal facility for Class A LLRW in the U.S. Located in Clive, UT Operates the Barnwell, SC facility pursuant to a long-term lease with the state. The facility receives Class A, B, and C LLRW from Atlantic Compact only Clive, UT Disposal Site Bear Creek Operations, Oak Ridge, TN Memphis, TN Operations Gallaher Operations, Kingston, TN Barnwell Disposal, Barnwell, SC Manufacturing Sciences Corp, Oak Ridge, TN 7

9 Life-of-Plant Contracts Are Visible Sources of Long-Term Revenue LADOCS1 - #97049v40 /8 Approximately 80% of operating reactors in the U.S. are life-of-plant customers of EnergySolutions Life-of-plant ( LOP ) contracts provide customers with ongoing processing & disposal services for the remaining lives of their nuclear plants, as well as D&D disposal when the plants are shutdown Benefit to EnergySolutions CUSTOMER NO. OF OPERATING REACTORS CAPACITY IN MWE Stable source of recurring revenue Secure long-term relationships with important utility customers Benefit to Customers Guaranteed disposal capacity Accurate identification of D&D costs Signed Agreement AmerenUE 1 1,137 Arizona Public Service 3 3,825 Constellation 5 3,957 Detroit Edison 1 (1) 1,111 Dominion 7 6,003 Duke 7 6,996 Entergy ,903 Exelon 17 (2) 17,362 FirstEnergy 4 3,760 Florida Power and Light Co. 8 5,984 Nebraska Public Power Omaha Public Power Progress 5 4,131 Southern California i Edison ,150 Southern Nuclear Operating 6 5,715 STP 2 2,560 TXU 2 2,208 Wolf Creek 1 1,165 Total 84 79,200 (1) Excludes Fermi-1. (2) Excludes tw o Zion reactors. LOP contracts provide a visible stream of complementary, high-margin revenue to our LP&D business segment. 8

10 Commercial Services 9

11 Broad Range of Services at U.S. Nuclear Plants and Other Commercial Facilities LADOCS1 - #97049v40 /10 In-plant services Liquid waste processing Locations of 104 Operating Nuclear Power Reactors in the U.S. Radioactive materials management Fuel pool services Technology based solutions Large component disposal License stewardship 13 shut down reactors WA 1 OR NV CA 4 ID UT AZ 3 MT WY CO NM ND SD NE 2 KS 1 OK TX ME MN VT NH 3 WI MA 3 MI NY 2 RI PA 4 CT IA 1 9 NJ IN OH MD DE 2 WV MO IL KY VA 1 NC 5 3 TN 7 AR 2 GA SC MS AL LA 5 FL Zion contract t award in December 2007 Operating Reactor Number of Operating Nuclear Power Reactors/State Source: Nuclear Regulatory Commission. 10

12 License Stewardship A New Approach to D&D LADOCS1 - #97049v40 /11 EnergySolutions proprietary business model for decommissioning projects is a radically new turn-key D&D solution that is highly attractive to existing owners of shutdown plants Benefit to the Utility Owner Shutdown Reactor Locations Cost certainty Accelerated site restoration Big Rock Point Indian Point 1 Millstone 1 Demonstration of commitment to environmental responsibility Humboldt Bay 3 GE VBWR Rancho Seco LaCrosse Dresden 1 Zion 1 & 2 Fermi 1 Peach Bottom 1 Three Mile Island Benefit to EnergySolutions SONGS 1 Revenue visibility CVTR Opportunity to realize cost and time efficiencies Disposal facility ownership mitigates key project risk The decommissioning funds for plants in SAFSTOR (nuclear plant in retirement) exceed $3 billion and represent a significant D&D opportunity EnergySolutions is the only company capable of providing this solution given our integrated disposal facilities. 11

13 Zion Project Update License Stewardship LADOCS1 - #97049v40 /12 In December 2007 we entered into a license stewardship agreement for the decommissioning of Exelon's two reactors in Zion, IL Pursuant to this agreement, and subject to NRC and other regulatory approvals, the Company will become the NRC licensee and assume full responsibility for decommissioning and site restoration Key Highlights: Sole source (approx. $1B) contract over approx. ten years a first in the nuclear services industry EnergySolutions will be compensated from the Zion D&D trust fund Unique opportunity to bulk ship waste to the Clive facility, expediting the clean-up effort and reducing lifetime i costs compared to conventional approaches Provides a template for other license stewardship opportunities in the U.S. Remediated site will be returned to Exelon upon completion of the project Zion 1 and 2 Reactors 12

14 Federal Services 13

15 Highly Customized Nuclear Services Solutions for Unique DOE and Federal Projects LADOCS1 - #97049v40 /14 Mare Island Naval Shipyard SLAC Location of Major DOE and DOD Nuclear Sites Puget Sound Naval Shipyard Hanford Argonne-West (2) Lawrence Berkeley INL Lab Lawrence LEHR Livermore Yucca National Lab Mountain Moab Nevada Test Site Sandia National Lab Livermore ETEC Rocketdyne General Atomics Sandia National Lab Albuquerque Source: DOE. Selected EnergySolutions S l On-site Federal Projects GJPO Rocky Flats Los Alamos Ames Pantex Plant Inhalation Toxicology Research Institute West Valley SPRU PETC RMI Fermi Lab Fernald Argonne East Mound Plant Paducah Y-12 Knolls Atomic Power Lab RPI Bettis Battele Columbus Oak Ridge Savannah River Site Pinellas Plant MIT Brookhaven National Lab EML Princeton Plasma Physics Lab Aberdeen Proving Ground Norfolk Naval Shipyard Newport News Shipbuilding Portsmouth Nuclear Services Provided Facility operations Materials management Recycling and equipment disposition Professional engineering g services On-site environmental and technologydriven management services on large projects Radioactive materials preparation, profiling, processing, treatment and disposal Transportation and logistics Emergency response Success in the Federal market is driven by access to applied technology and proven project management credentials areas where EnergySolutions is a leader. 14

16 Federal Services Momentum Recent Tier 1 Win at Hanford LADOCS1 - #97049v40 /15 In May 2008 EnergySolutions was awarded a Tier 1 contract valued at $7.1 billion (over ten years) to clean up and close nuclear waste stored in tanks at the Hanford site in Washington Key Highlights Structured as a 5 year base period with option to extend up to an additional 5 years EnergySolutions has 40% interest in contracting consortium Consortium will safely maintain the 177 underground tanks (stored in 18 farms) while conducting final retrieval and transfer of the waste and closure of the tanks Key factors in Win: Capital and human resources necessary to perform as a Tier 1 contractor Pre-existing knowledge of the Hanford Tanks site through previous on-site work Significant operational know-how and engineering and technology (E&T) expertise Highly qualified key personnel 15

17 Approximately $19.7 billion of Near-Term Prime Contracting Opportunities with the DOE LADOCS1 - #97049v40 /16 EnergySolutions is well-positioned for upcoming DOE prime contract awards: Strong existing relationship with the DOE Extensive experience on DOE sites due for re-bid Critical mass and technological know-how to be a lead prime / Tier 1 contractor ($ in billions) Expected Federal Contract Opportunities Estimated Contract Value ES On-Site Experience Adv. Mixed Waste Treatment Plant $0.6 X Paducah Remediation $0.4 X Portsmouth D&D $1.4 X Pantex M&O $5.0 X Waste Isolation Pilot Plant $1.5 X Y-12 Y12 Plant M&O $7.5 X Oak Ridge Disposition Program $1.7 X Paducah D&D $1.6 X TOTAL $19.7 Source: Estimated contract value is based on our internal estimates using public DOE data and DOE announcements. The DOE typically awards five-year contracts with fiveyear extensions. 16

18 Long-Term Opportunity in Recycling of Spent Nuclear Fuel LADOCS1 - #97049v40 /17 EnergySolutions is the exclusive owner of BNFL s spent fuel recycling technology in the U.S., Canada and Mexico EnergySolutions was one of three companies chosen by the DOE to evaluate potential locations for a nuclear fuel recycling center and an advanced d recycling reactor The Company has received $13.2 million from the DOE to perform Global Nuclear Energy Partnership (GNEP) Deployment Studies, more than any other team involved in the project Current Once Through Process Recycling Spent Nuclear Fuel Existing Nuclear Reactor Nuclear Waste Existing Nuclear Reactor Spent Fuel Recycling and Fuel Fabrication Facilities Spent Fuel New Fuel Fuel Spectrum Reactors Nuclear Waste Geologic Repository (Yucca Mountain) Geologic Repository Above: EnergySolutions vitrified product store design can hold the entire volume of high-level waste by-products from the potential recycling of all the existing fuel in the U.S. Source: U.S. Government Printing Office. 17

19 International Services 18

20 Comprehensive Nuclear Services for the U.K. Government LADOCS1 - #97049v40 /19 EnergySolutions manages 10 sites with 22 nuclear reactors for the U.K. s Nuclear Decommissioning Authority ( NDA ), providing reactor operation, defueling and decommissioning services NDA Contracts Bring Significant Additional Value to EnergySolutions Hunterston Decommissioning Wylfa Operating Trawsfynydd Decommissioning Berkeley Decommissioning Oldbury Operating Hinkley Decommissioning Chapelcross Defueling Sizewell Defueling Bradwell Decommissioning Dungeness Defueling High profit and cash flow contracts Base fee Incentive fee Contracted visible revenue stream Extremely talented employee pool in a resource-constrained constrained industry Reactor operation experience expands the scope of future project opportunities Contracted through March With Limited Liability Exposure Ownership of Magnox reactors, reactor employees benefits and nuclear-related liabilities remain with the NDA Cost-plus contract structure 19

21 Strong Platform for Growth within the U.K. and Beyond LADOCS1 - #97049v40 /20 EnergySolutions is well-positioned for significant government nuclear clean-up contract opportunities as well as operation, maintenance and decommissioning of nuclear reactors across the U.K. and beyond NDA is overseeing clean-up of all nuclear facilities in the U.K. Total clean-up cost is estimated at 64 billion ( in billions) Opportunity Site 5-yr Oppn. Tier I Tier II Dounreay Site 0.7 X X NDA announced these Harwell Site 0.3 X X will be bid as one Magnox North Reactors (re-bid) 1.6 X contract for work Magnox South Reactors (re-bid) 1.2 X beginning in 2013 Winfrith Site 0.2 X X TOTAL Source: NDA/British Nuclear Group 2006/2007 Lifetime Plans. Also, 1 of 2 pre-qualified teams to operate the U.K. National Nuclear Laboratory Significant Tier II opportunities at the Sellafield site in the U.K. Other opportunities in Western Europe including Germany, Italy, Spain 20

22 Financial Overview 21

23 LADOCS1 - #97049v40 /22 Key Financial Highlights Significant free cash flow with modest capital expenditures and working capital requirements Visible revenue stream supported by long-term contracts Diversified, growing revenue base Critical size / scale Robust margins Financial flexibility 22

24 LADOCS1 - #97049v40 /23 Segment Gross Margin Snapshot ($ in millions) 2007 Pro Forma Revenue 2007 Pro Forma Gross Margin 2008 YTD (1) Gross Margin Comments Logistics, Proc cessing & Disposal Se ervices $ % 39.2% High margin business with strong free cash flow Visible revenue from LOP contracts Complements and benefits from growth in Commercial and Federal Services projects Commercial Services $ % 34.3% 2008 margin spike due to one-time project now completed Various large components projects as they get released from on-site storage at utilities Long-term growth from License Stewardship initiative Fede eral Services $ % 15.1% Long-term, visible contracts Tier 1 and Tier 2 projects have different revenue and gross margin profiles JV consolidation in 2008 results in lower overall gross margin with no earnings impact Intern ational $1, % 6.7% Strong gross profit contribution from cost-plus contracts and history of base and incentive fees Significant pass-through revenue results in lower gross margin percentage Fx exposure to British Pound (1) Through 9/30/08 23

25 LADOCS1 - #97049v40 /24 Conservative Ongoing Business Snapshot Logistics, Processing & Disposal Life of Plant contracts with 84 of 104 U.S plants Existing Federal (DOE, DOD) contracts Secondary customers: mining, i large industrial, i hospitals $85 95M EBITDA Commercial Services Primary customers: U.S. Nuclear Utilities Secondary customers: mining, large industrial, hospitals $15 17M EBITDA Federal Services Customers: U.S. Department of Energy, U.S. Department of Defense Ten year $7.1B Hanford TANK contract started in 10/08 $15 17M EBITDA International Customers: U.K. Nuclear Decommissioning Authority Current Magnox North & Magnox South contracts $40 45M EBITDA EnergySolutions has high near-term visibility and significant long-term contracts that generate positive cash flow 24

26 LADOCS1 - #97049v40 /25 EnergySolutions Business Strategy We are committed to growth and maintaining our leadership in nuclear services Continue to paydown debt from free cash flow Pursue large component disposal exemptions and alternate financing forms Focus on decommissioning of shut-down U.S. reactors through license stewardship program Continue prime contracting momentum with the DOE Expand international operations in selected markets (U.K., Germany, Italy, Spain) Become a long-term leader in spent fuel recycling 25