Company Update. Calyon Securities US Nuclear Forum New York, NY. Robert Van Namen Senior Vice President, Uranium Enrichment.

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1 Company Update Calyon Securities US Nuclear Forum New York, NY Robert Van Namen Senior Vice President, Uranium Enrichment Steven Wingfield Director, Investor Relations December 2, 2008 NYSE: USU

2 Legal Notice This presentation contains forward-looking statements that is, statements related to future events. In this context, forward-looking statements may address our expected future business and financial performance, and often contain words such as expects, anticipates, intends, plans, believes, will and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For USEC, particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include, but are not limited to: the success of the demonstration and deployment of our American Centrifuge technology including our ability to meet our performance targets and schedule for the American Centrifuge Plant; the cost of the American Centrifuge Plant and our ability to timely secure a loan guarantee or other financing; the cost of electric power used at our gaseous diffusion plant; our dependence on deliveries under the Russian Contract and on a single production facility; our inability under most existing long-term contracts to pass on to customers increases in SWU prices under the Russian Contract resulting from significant increases in market prices; changes in existing restrictions on imports of Russian enriched uranium; the elimination of duties charged on imports of foreignproduced low enriched uranium; pricing trends in the uranium and enrichment markets and their impact on our profitability; changes to, or termination of, our contracts with the U.S. government and changes in U.S. government priorities and the availability of government funding, including loan guarantees; the impact of government regulation; the outcome of legal proceedings and other contingencies (including lawsuits and government investigations or audits); the competitive environment for our products and services; changes in the nuclear energy industry; the potential impact of volatile financial market conditions on our pension assets and credit and insurance facilities; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K/A and subsequent quarterly Form 10-Qs. Revenue and operating results can fluctuate significantly from quarter to quarter, and in some cases, year to year. We do not undertake to update our forward-looking statements except as required by law. Page 1

3 USEC s Role in the Nuclear Fuel Cycle Cameco, Denison, Areva, Rio Tinto ConverDyn, Cameco, Areva GE, Areva, Toshiba/Westinghouse USEC, Urenco, Areva, Tenex Page 2

4 Enrichment is a Key Element of the Fuel Cycle 2007 Front-End Nuclear Fuel Market Costs * 2007 Share of Worldwide Deliveries ** Front-End Nuclear Fuel Industry: $24 Billion Enrichment Industry: 41 MMSWU*** or $6 Billion *Based on TradeTech LLC 2007 average market term prices and assumes 4 0% enriched 0 30% tails Based on TradeTech, LLC 2007 average market term prices and assumes 4.0% enriched, 0.30% tails **NAC FuelTrac, TradeTech, Ux Consulting, USEC *** NAC FuelTrac estimate

5 Nuclear Power Sustains Competitive Advantage Source: NEI 2007 cents pe er kwh Comparative Generation & Fuel Costs O&M 10.0 Fuel Nuclear Coal Gas Oil % Fuel Cost 27% 77% 93% 86% Nuclear power enjoys a substantial production cost advantage over other forms of electricity generation Carbon taxes/ghg emissions standards would greatly benefit nuclear power

6 Nuclear Power Construction Remains Strong 12 New Reactors Under Construction or Planned/Approved by Country as of October i Operating Reactors: 439 i Long-term shutdown: 5 i Under Construction: 36 i Planned/Approved: 99 i Proposed: 232 i The International Atomic Energy Agency projects at least a 27% increase in nuclear capacity by new reactors 3-6 new reactors 7-10 new reactors Over 10 new reactors Sources: World Nuclear Association; IAEA Energy, Electricity and Nuclear Power Estimates for the Period up to 2030, Reference Data Series No Edition 1 IAEA Low Estimate for nuclear capacity growth by IAEA High Estimate expects a 46% increase in nuclear capacity by 2030 Page 5

7 WNA Enrichment Demand Scenarios Demand expected to grow 75% to 138% by 2030 Source: WNA Market Report 2007 Page 6

8 SWU Market Prices Improve Prices reflect higher power costs for GDPs, greater demand for enrichment and higher uranium prices Source: TradeTech, LLC, month-end prices Page 7

9 Gaseous Diffusion Operations Paducah GDP operating at its highest efficiency and capacity in decades Production in 2007 was at its highest level in 10 years Five-year pricing agreement e with TVA provides greater certainty ty and flexibility of operations, but fuel cost adjustment has increased power cost

10 Enrichment Supply in Transition to to 2020 Existing Centrifuge Expansion Expansion as Required New Centrifuge Expansion Expansion as Required Laser Enrichment? Supply Sources Gaseous Diffusion Extended Production? Megatons to Megawatts Uprates and Initial Cores New Plants- China, Japan, U.S., Others Emerging Demand

11 Enrichment Capacity Transitioning to Centrifuge 2010 expected capacity 2020 expected capacity Laser Technology? 4% Centrifuge 96% Page 10

12 Implications of Transition to Centrifuge Energy intensive and high variable GDP capital intensive and lower production centrifuge enrichment GDP has significant production flexibility Tails assay flexibility is narrowing in new USEC contracts Modular design allows additional capacity to be added quickly Increased financial imperative for customer and supplier to work together to match capacity to demand Page 11

13 USEC s American Centrifuge Lower-cost Production Uses approximately 95% less electricity than current gaseous diffusion technology American Centrifuge Lead Cascade in Piketon, Ohio in January 2008 Higher Efficiency Design 350 SWU/machine/year More productive than competition Tests show higher potential output Modular Expansion Production can begin incrementally as machines are installed Allows for potential future expansion beyond expected initial 3.8 million SWU Security of Supply Enhances long-term nuclear fuel supply Supports national energy security Develops an essential U.S. technology and related manufacturing capacity Page 12

14 Managing ACP to Detailed Budget Approximate split of project costs Budget of $3.5 billion includes $1 billion spent through 9/30/08 but not Demo & program mgmt 15% Commercial plant 40% Machine manufacturing and assembly 45% financing costs or financial assurance Management reserve included Budget reflects bottom-up, roll-up detailed work-breakdown structure Contracts signed with strategic suppliers, including $1 billion contract that includes cost-reduction incentives with EPC contractor t Fluor Page 13

15 American Centrifuge Progress and Schedule ges (million SWU U/ year) ion Capacity of In nstalled Centrifu Lead cascade closedloop tests begin Initial AC100 design freeze AC100 cascade testing High volume manufacturing ( 400 centrifuges per month) Commence limited it commercial operations 1 MMSWU capacity 3.8 million SWU at end of 2012 Producti Lead Cascade Test Program AC100 Testing and Initial Deployment High-Volume Centrifuge Deployment Page 14

16 Re-establishing Manufacturing Base Working with suppliers to build thousands of American Centrifuge machines Babcock & Wilcox Co. managing high-precision machining at USEC s Technology and Manufacturing Center in Oak Ridge,Tenn. ATK building rotor tubes in Rocket Center, W.Va. Major Tool and Machine casting steel casings for machines in Indianapolis, Ind. Teledyne Brown building service modules in Huntsville, Ala. Fluor serves as EPC contractor for balance of plant at ACP in Piketon, Ohio Page 15

17 Financing the ACP Submitted both parts of DOE Loan Cumulative anticipated i t spending Guarantee application during on ACP over the next five years summer Final DOE deadline $4.0 is December 2, 2008 $3.5 $2 billion set aside in program for front end of nuclear fuel cycle $3.0 $2.5 $2.0 ACP meets DOE criteria, ideally suited for loan guarantee program USEC seeking a timely commitment from DOE for the project $1.0 $0.5 $0.0 Thru $1.5 Page 16

18 ACP Expansion Potential Existing buildings (3.8 MM SWU) Available land & g. enance & mbly Bld Mainte Assem Process Bldg. 1 Process Bldg. 2 Environmental impact evaluated for 7 MM SWU Current U.S. market is 12 MM SWU Page 17

19 Summary Maximizing shareholder value We are focused on delivering shareholder value and our goals are to: Continue solid progress on deployment of the American Centrifuge as we actively seek DOE Loan Guarantee program financing for the ACP Control production costs and continue to operate the Paducah plant efficiently during the transition to the American Centrifuge Maintain strong customer relationships as we secure new long-term sales contracts that reflect today s higher market prices Page 18