USEC Inc. Q3 2008 Earnings Call Transcript

Nov. 5.08 | About: Centrus Energy (LEU)

USEC Inc. (USU) Q3 2008 Earnings Call Transcript November 5, 2008 8:30 AM ET

Executives

Steven Wingfield – Director, IR

John Welch – President and CEO

John Barpoulis – SVP and CFO

Bob Van Namen – SVP, Uranium Enrichment

Analysts

Lucy Watson – Jefferies

Gabriel Abis [ph] – Goldman Sachs

Tom Lewis – Century Management

Operator

Good day and welcome everyone to the USEC Inc.’s third quarter 2008 earnings results conference call. This call is being recorded. With us today from the company is Mr. John Welch, President and Chief Executive Officer, and Mr. Steven Wingfield, the Director of Investor Relations. Management will make opening remarks which will be followed by a question-and-answer period.

At this time, I would like to turn the call over to Steve Wingfield. Please go ahead, sir.

Steven Wingfield

Good morning. Thank you for joining us for USEC’s conference call regarding the third quarter, which ended September 30. With me today are John Welch, President and Chief Executive Officer; John Barpoulis, Senior Vice President and Chief Financial Officer; Phil Sewell, Senior Vice President, Van Namen, Senior Vice President; and Tracy Mey, Controller and Chief Accounting Officer.

Before turning the call over to John Welch, I want to welcome all of our callers, as well as those listening to our webcast via the Internet. This conference call follows our earnings news release and separate update on the American Centrifuge project issued yesterday after the markets closed. Those news releases are available on many financial websites, as well as our corporate website usec.com.

I want to inform all of our listeners that our news releases and SEC filings, including our 10-K, 10-Qs, 8-Ks are available on our website. We expect to file our third quarter 10-Q later today. A replay of this call also will be available later this morning on the USEC website.

I would like to remind everyone that certain of the information that we may discuss on this call today maybe considered forward-looking information that involves risk and uncertainty, 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 10-K and subsequent quarterly 10-Qs.

Finally, the forward-looking information provided today is time-sensitive and is accurate only as of today, November 3, 2008. This call is the property of USEC. Any redistribution, retransmission or re-broadcast of this call in any form without the expressed written consent of USEC is strictly prohibited.

Thanks for your participation, and now I would like to turn the call over to John Welch.

John Welch

Good morning to you all and thank you for joining us to discuss our third quarter 2008 results. We have had a busy productive quarter on several fronts regarding our American Centrifuge project. We are also prevailing against significant headwinds during this period as we transition to the more energy efficient centrifuge technology. As this is our practice in these quarterly calls.

John Barpoulis will provide a detail review of our financial results in just a moment. I will start with the brief review of earnings for the quarter and then provide a status report on the American Centrifuge project. Taking a look at the bottom line we earned $8.4 million in the third quarter compared to a net income of $45.6 million in the same quarter last year. For the nine months we earned $23.6 million compared to $71.5 million from the same period last year. These results track to our expectations for the year.

As we noted in our 2008 financial outlook issued in February repeated in April, August and again today, our sales volume will be substantially lower in 2008 than in 2007. We set a record for revenue and volume SWU delivered to customers in 2007, but the flip side of that point we are seeing fewer refueling at the reactors we serve in 2008. Majority of reactors serve by USEC are refueled on an 18 to 24 month cycle and that means we should see SWU volume in 2009 similar to what we saw in 2007.

We also updated our earnings and cash flow guidance. Customers are locking in delivery dates and quantities for the rest of the year, so we have a pretty good handle on the revenue. We tighten the range our net income to a range of $25 million to $40 million and lowered guidance for cash flow used in operations to $90 million to $110 million. The increase in cash flow used in operations is mainly due to higher power cost, we expected to see through the fuel and purchase power cost adjustment and our contract with the Tennessee Valley Authority.

Yesterday we also provided an update on our progress to build the American Centrifuge Plant. There are several major takeaways in the release that I want to emphasize to our investors. First, we are working closely with our strategic suppliers to manufacture the 40 to 50 AC100 machines that will be installed at our Lead Cascade program in Piketon, Ohio. We expect the first of these machines to be delivered over the next couple of weeks. This is an important step forward. Previously we build each centrifuge machine ourselves. Earlier this summer we qualified our strategic suppliers on the components they are responsible for manufacturing. They are now making the centrifuge components and will soon assemble the machines for this larger Cascade.

Our plan is to assemble these AC100 machines and begin operating them individually during the next couple of months. During this period we can prepare and condition them for Cascade operation by the end of the first quarter 2009. Successful results from this Cascade will be an important checkmark on our list of accomplishments before beginning high volume manufacturing of 1000’s of centrifuges for our plan.

Second we are continuing our effort to value engineer the AC100 to reduce the cost of manufacturing the production machines. We are working closely with our strategic suppliers to identify, implement and test ways to simplify the design reduce the part count in the machine and it manufacturing economics through automation. We planned to have the design for the AC100 value engineer machine finalize in the spring of 2009.

Third, the Lead Cascade integrated testing and it has been underway since August, 2007 continues to provide us with important information. We’ve logged more than a 125,000 machine hours since the Lead Cascade operations began. We’ve recently swapped out some components in the original cascade with AC100 components to give us additional operating hours for the improved parts. Changing the components also allows us to annualize the impact of operations on the components, which is part of our deterministic approach to long-term reliability of the centrifuges.

Fourth, we have submitted both parts of our project applications of the Department of Energy loan guarantee program and have been actively involved in the review process. USEC was the first company to apply to loan guarantee program after this solicitation for projects for this year at the end of June. In the final hours of the application period that ended September 29, our competitor earned by the French government, AREVA was the last company to submit their part one applications for nuclear power projects.

We strongly believe the American Centrifuge is the perfect fit with the loan guarantee program. Our project is tightly align with DOE criteria for the program and both these are effort to reestablish the manufacturing base for this industry in the United States. Importantly we’ve receive the construction an operating license from the nuclear regulatory commission approximately 18 months ago and our construction is well underway.

AREVA on the other hand has not yet applied for the construction and operating license, a regulatory of process that will take at least 30 months. Under the current legislation that DOE funding authority for loan guarantee program expire September 30, 2009. We have invested about $1 billion of our shareholders money in this project. Higher power prices are constant remainder that is essential to our company that we switch to the more energy efficient centrifuge technology. We have a strong desire to stand our current schedule and we are working closely with the officials has the Department of Energy to keep the review process for the application moving forward.

We are actively seeking a prompt review of our application and a commitment from the Department of Energy. Since the timing of our commitment by DOE for projects is uncertain, on a parallel path we evaluate alternative sources of capital for the project. We must maintain adequate liquidity for our ongoing operations. If we are not able to obtain timely action from DOE or obtain an alternative capital commitment, we will be forced to slow spending on the project or take other actions.

Now, I would like to turn the call over the John Barpoulis, to report on the third quarters; John.

John Barpoulis

Thank you, John and good morning everyone. As John said, our financial results for the quarter and for the nine months track the guidance we provided during the year. Since we expect to issue our detailed 10-Q report later today, I will keep my report to the highlights, so we can get your questions.

Starting at the top-line for the quarter, revenue was $590 million, a decrease of 7% or $44 million over the same quarter last year. As we would expect, SWU sales made up the majority of revenue at $490 million. SWU sales in the third quarter reflected a 2% decline in sales volume, but a 3% increase in the average billed to customers. So, netting of those factors, SWU revenue was $7 million higher quarter-over-quarter.

Uranium revenue was $49 million, which was about half the revenue from uranium recorded in the same quarter last year. Both volume and average price billed to customers decreased significantly. Uranium revenue is a good example of the variability we can see from quarter-to-quarter. In the second quarter, uranium revenue more than doubled year-over-year and in the third quarter it was 50% lower.

Nonetheless, we have seen uranium prices drop in the last few months along with other energy commodities due to selling by financial players and recessionary concerns. Although we believe there is solid demand for uranium over the medium-to-long-term, we are seeing price weakness in the near-term that will impact our uranium revenue line.

Turning back to the quarter, the U.S. government contracts segment, contributed $51 million, 4% more than the same quarter of last year. Looking briefly of revenue from the nine month period, total revenue was down 10%. The timing of reactor refueling can clearly be seen in this period and SWU volume was down 17% in the year-over-year period. Average SWU prices billed to customers increased 1% compared to the same nine month period last year. This fits in with our guidance that SWU sales volume will likely be down approximately 20% this year compared to 2007.

Uranium revenue was 15% higher in the nine month period. Our government contracts segment contributed $167 million, the $25 million or 17% more than the same period of 2007. The increase was due to increased contract work related to cold shutdown efforts at the Portsmouth GDP, revolution of concerns regarding billable and credit costs for DOE contract work from fiscal year 2002 and to a lesser extent the timing of sales for NAC.

Turning next to cost of sales for the LEU segment for the first nine months of 2008, cost of sales for SWU and uranium was $894 million that $82 million or 8% less than the same period a year ago and mainly due to the combination of the decline in SWU sales volume and higher unit costs. As you know, under our monthly moving average inventory methodology cost of sales reflects changes in production and purchase costs.

Our production cost increased 14% during the nine-month period reflecting an 18% increase in the amount of power purchased. You will recall that we are now buying 2000 megawatts of power 24/7 during the non-summer months from TVA. That translates into 1.6 million more megawatt hours of electricity being purchased during the first nine months of this year compared to the same timeframe of 2007.

The additional power is used to increase food production and to underfeed the enrichment process. Production volume is up by 15% as we built inventory in advance of sales in the upcoming quarters as well as taking advantage of the economics of underfeeding. The quantity of uranium that is added to uranium inventory from underfeeding is accounted for as a by-product of the enrichment process.

Production costs are allocated to the uranium obtained from underfeeding based on the net realizable value of the uranium and the remainder of the production cost is allocated through inventory costs. Our overall unit production cost declined 1% during the nine-month period.

The impact of higher prices paid to Russia is also pressuring our margins. In 2008 the price we are paying to Russia under the market based pricing formula is a 11% higher than in 2007. Cost of sales in the government contract segment increased $16 million during the nine-month period compared to the same period last year primarily due to increased contract work related to coal shutdown efforts of the Portsmouth GDP.

Gross profit for the quarter was $48 million a decline of $64 million from the same quarter of last year. Our gross profit margin was 8% for the quarter compared to almost 18% in the same quarter of 2007. For the nine-month period, the gross profit was $151 million, which was $62 million or 29% lower than the same period last year.

The gross profit margin was nearly 13% for the nine months of 2008 compared to 16% in the same period last year. This remains inline with our guidance for a full year gross profit margin of 13% to 14%. Below gross margin, we have expenses for the continued demonstration and development costs of American Centrifuge. The amount expense just $29 million in the quarter and $80 million in the nine-month period.

Compared to last year expenses charged to the project are 6% and 19% lower in the quarter and the nine-month period respectively. The reduction in advanced technology expense is due to reduced activities associated with assembling and testing centrifuges and equipment at our test facilities in Oak Ridge and increased spending in activities related to capitalized construction work in progress on the centrifuge machines and the ACP.

Clearly we have increased the pace of spending on the plant. During the first nine months of 2008, $292 million of spending was capitalized compared to $63 million in the nine month period of 2007. As we continue to move forward with the commercial deployment of the American Centrifuge most of our spending will be capitalized. Total spending in the nine-month period on ACP including accruals was $400 million. We have lowered our projection for spending on the project in 2008 and I will cover that when I discuss our outlook for the remainder of the year.

Selling, general and administrative expense increased by $8 million over the nine month period, compared to 2007. The last year’s expense benefited from the reversal of a previously accrued tax penalty of more than $3 million. Compensation and benefit related expenses increased by nearly $2 million and consulting expenses is $1.5 million higher over the nine months compared to 2007.

In drawings comparisons to last year, I am going to focus on the non-diluted earnings per share to keep the comparison even, on that phases going to the bottom line we have recorded net income of $8.4 million or $0.08 per share for the third quarter of 2008 compared to a net income of $45.6 million or $0.52 per share in the same quarter of 2007. In the nine month period we have recorded net income of $23.6 million or $0.21 per share compared to $71.5 million or $0.82 per share in the same period of 2007.

I would also point out that the results in 2007 benefited from $22 million from the non-cash reversal of previously recorded accruals for taxes and interest associated with the accounting standards known as FIN 48. Earnings per share in 2008 do include the impact of the additional 23 million shares issued at the end of September 2007.

Turning next to cash, we had $359 million in cash as of September 30, 2008 compared to $886 million on December 31, 2007 and $504 million at the end of June. Cash flow used in operations in the nine-month period was $184 compared to the cash flow used in operations of $104 million in the first nine months of 2007. The reduction in cash flow from operations was largely the result of a billed and net inventory year-over-year. The other draw on our cash balance with the higher level of capital expenditures related to the American Centrifuge project.

Our cash balance along with access to a $400 million credit facility and anticipated cash generated by operations should be sufficient to meet our cash needs for approximately 9 to 12 months without impacting our current project schedule for the ACP. Our ability to stay on schedule will depend on several factors, including expected cash flow from operations, the anticipated spending profile for the project and our progress in obtaining a financing commitment from DOE under the loan guarantee program.

In the yesterday’s new release, we also reset our net income and cash flow guidance for 2008. As noted in the news release, our guidance is subject to a number of assumptions and uncertainties that could affect results. To summarize our guidance, we expect revenue for 2008 to be $1.6 billion with SWU revenue making up $1.2 billion of that total. That is a reduction of approximately $100 million in SWU revenue.

Our updated outlook reiterates our expectation for approximately 20% lower SWU sales in 2008, partially offset by 2% higher prices, as a result of order shifting into 2009. I want to emphasize that these are not lost sales, but rather sales that have moved into the next year. To a lesser extent, we have seen customers requesting higher tails assays in their orders as uranium prices declined in recent months.

We expect uranium revenue to be approximately $190 million, given where uranium prices are right now and our belief that short-term uranium prices are experiencing a market disruption. We are not making some of the opportunistic sales we anticipated earlier in the year. U.S. government contracts and other is expected to be approximately $230 million. Although, our base cost for power is set under a five-year contract with TVA, we expect the fuel cost and purchased power costs adjustment in that contract to increase our costs. This will negatively affect our production cost and cash flow from operations for the rest of 2008.

Through the nine month period, that adjustment was 13%. TVA has eluded us that higher coal prices in the 2008 could push that adjustment significantly higher, but we’ve all seen the volatility in the energy markets recently. Below the gross profit line, we’ve lowered our projection for spending related to American Centrifuge. We now expect the expenses to be $115 million for the year and total spending on the product should be in the range of $550 million to $600 million.

Expected spending on the project in 2008 is below the guidance we issued in previous quarters due primarily to the timing of certain project activities that are not expected to effect the schedule completion of the American Centrifuge plan at the end of 2012 and to a lesser extend lower than expected project management and labor costs from the current period.

We tightened our net income expectation to a range of $25 million to $40 million. Cash flow used in operations is expected to be in the range of $90 million to $110 million. We’ve reduced our cash flow guidance because we expect to spend more an electric power in the fourth quarter. This will be partially offset by the timing of customer collections, payments to Russia and lower expenses on the ACP.

Our sales volume rebound in 2009 to level seen in 2007, we similarly expect cash flow from ops to rebound. To quickly summarize, financial results for the third quarter and year-to-date were inline with our expectations. Looking ahead we see stronger sales in 2009 and improving cash flow from operations. We are continuing to pursue at DOE loan guarantee to raise the substantial capital we need to complete the ACP under our schedule.

And with that operator, we are now ready to take questions from our callers.

Question-and-Answer Session

Operator

(Operator instructions) And our first question comes from Laurence Alexander of Jefferies.

Lucy Watson – Jefferies

Hi, this is Lucy Watson sitting in for Laurence.

John Welch

Good morning, Lucy.

Lucy Watson – Jefferies

Good morning. Given the risk that the achievement of $3.8 million through a possibly pushback beyond 2012 due to financing issues. How you that can showing an appropriate return on capital on going today or I guess in other words, the contracts you negotiating now including an exclusive adjustment for the change in fixed cost absorption?

John Welch

Lucy, I’ll answer that in two ways. One is we has confirmed in our discussion this morning and you will see in our 10-Q, we are not adjusting our overall schedule for the project. So, we continue to anticipate the $3.8 million will being online at the end of 2012 and second, with our general approach to contracting for ACP has been to wait until we have a very good sense for our costs and our schedule and so, that has been one advantage to waiting to contract for that, but until really over the last six months and so, we’re taking into account the cost that we see and the expected structure of our operating cost profile as we contract for that output. Bob anything to add.

Bob Van Namen

Just two other comments, one would be the as the ACP is starting up, we do have our building inventory and we have some flexibility in the way we sell that inventory as we are going through the start up process and then again we do see substantial opportunities for continued operations from Paducah whether it would be for low and rich uranium productions shifting of higher assay tails or other mission. So, we do have several moving parts, but we are very conscious of making sure that the prices were looking for under those future deliveries will be aligned with our cost structure.

Lucy Watson – Jefferies

Okay, in the past you have suggested cash flow from operations in 2009 would be an improvement on 2008. I am just wondering what’s your level of confidence is the cash flow from of the next will be process?

John Barpoulis

We are not yet giving our guidance for 2009, but as hopefully we communicated in our comments this morning and you will see in our 10-Q. we are, again reinforcing significantly higher sales volumes in 2009 similar to that in 2007 in which that will be improved – significantly improved cash flow from operations. And but at this point I can’t give specific numbers or guidance, but we will clearly being expecting to do so in conjunction with our 10-K and comments in February.

Lucy Watson – Jefferies

Okay, and given the decreased wage in project management spending on the ACP in 2008, have you made any adjustments to the labor and project management cost forecast for the ACP going forward?

John Barpoulis

No, we are certainly taking into account and looking at the experience that we are seeing to-date and the extent that there are material changes we will adjust our forecast, but at this point we are not making any changes to the forecast.

Lucy Watson – Jefferies

Thank you.

John Barpoulis

Thank you.

Operator

We will take our next question from Gabriel Abis [ph] of Goldman Sachs.

Gabriel Abis – Goldman Sachs

So just (inaudible) almost the last question given the recent drop in commodity cost, does that provide additional headroom under the $3.5 billion cost to have or have these cost kind of being locked in already?

John Barpoulis

Certain costs have been locked in. we have during the quarter made some additional procurements raw materials. We will continue to make procurements throughout the builds and deployment of the project and again similar to the comment on labor, I don’t think we are at a point, where we are updating any forecast, although candidly, I think we are certainly thankful with that. This is one way that the declining potential recessionary economy can benefit the overall pressure that we have seen over the past year or two years on build costs for plants and other infrastructure.

Gabriel Abis – Goldman Sachs

Okay and can you walk through the importance of setting up the ACP subsidiary? And was this done impart to potentially how facilitated third-party investment?

John Barpoulis

The DOE loan guarantee is following a very traditional product finance approach and so we have established the subsidiaries really to affect the DOE loan guarantee and so that is our very clear objective in establishing the entities. At the same time that may provide us with additional flexibility with respect to investors of that level and we have certainly seen AREVA do that with their George Besse II plants and so that is something that we will be contemplating and potentially looking at over the coming months.

Gabriel Abis – Goldman Sachs

And any sort of looking to who this kind of candidate might be? Would it be like a government or private equity for this third-party investment that you mentioned?

John Barpoulis

To the extent we see anything on that front we will certainly let you know, but at this point I don’t want to forecast or speculate on that kind of entity that might be interested in that kind of investment.

Gabriel Abis – Goldman Sachs

Okay, and finally, the gross profit in the backlog is $74 million with revenues of $140 million, this implied gross margin was kind of a higher than your previous corporate average. How should we be looking at this?

John Barpoulis

Gaby can you just restate those numbers and reiterate the question? Sorry,

Gabriel Abis – Goldman Sachs

Sure. The gross profit for the backlog that you guys have, the deferred revenue was $74 million, while the revenues that were locked in where $140 million? So inside gross margin was a well above your corporate average and I wanted to know how we should be looking at this going forward?

John Barpoulis

I think, if you are looking at deferred revenue cost. Those items are very much linked to uranium and the timing for the recognition of that uranium is very much depended again on when LEU leaves the sight and so, I wouldn’t look fore say specifically at the gross margin on the deferred revenues and costs, but again we are reinforcing our guidance for overall gross profit margin this year for 13% to 14% and again when we get into 2009, we will be providing additional guidance for gross profit margin on the whole.

Gabriel Abis – Goldman Sachs

Thank you very much.

John Barpoulis

Sure.

Operator

Okay, your next question from Tom Lewis of Century Management.

Tom Lewis – Century Management

Yes, good morning.

John Welch

Good morning, Tom.

Tom Lewis – Century Management

Yes, first off in you are kinds of focusing on your comments about the customers requesting higher tail assays we have watched the price – the market price, which doesn’t seem to figure much into your realized revenues of uranium come down. We have seen SWU moving up to that at a nice pace and at least one concern that perhaps already dipping point that could effect your ability to realize value from uranium and all of that, but I’m wondering is there anything about the supply and demand for uranium besides the unwinding of speculative positions that could be putting downward pressure on uranium that we should be thinking about?

Bob Van Namen

Bob Van Namen here. There is no doubt uranium has been through an incredible year volatility, and as you know for a number of years uranium supply has been only above 50% of demand. Inventories have been liquidated, new mines are needed to meet the long term demand and that fundamental has not changed. The recent turmoil in the financial markets as far as many investors who had taken positions in uranium actually liquidate those position to raise cash and they were making those sales at what we considered to be lower prices than the overall fundamentals in the market would dictate.

We do see that most of that selling is complete and we have observed a recent firming in the market. It’s also worth noting that the long term market has been much less volatile than the spot prices. USEC definitely has an advantage when uranium prices are higher as uranium provides – it provides us uranium that we can sell at attractive margins, but right now with prices that are lower than they have been in just the last year and its counter prices are increasing. We are taking a careful look in our operations and the way we balanced out uranium in SWU supply.

We continue to see long term strong fundamentals in the uranium market and we really see few opportunities for now in and making any opportunistic sales, but we are looking forward and seeing some pretty good opportunities still.

Tom Lewis – Century Management

So, if you take that the while we see at across all asset categories, you take that force liquidation out of the equation Bob would you bet up or down on the price of uranium?

Bob Van Namen

Not being a speculative guy, again we I do think that that speculation has been driving the price decline. We have seen an upturn over the last several weeks and I would see that continuing in the near term.

Tom Lewis – Century Management

Okay, great and its sounds like none of this should really affect the tone of the conversations that you are having on long-term commitments for the output the ACP, is that a fair assessment or is it giving some of your – the guys across the table pauses to what they want to log into?

Bob Van Namen

No, I think that the as that you really do see as uranium prices have dropped, SWU prices have continue to increase that you are looking at, two fundamentally separate markets and we see the continued need for the new production in the enrichment market, continued interest from our customers and signing long-term contract to bring that new production online. So, they are playing out in very different market environment.

Tom Lewis – Century Management

Okay. Now, the question, I am looking at your 125,000 machine hours on ACP and talking about, providing data to the DOE for the loan decision. It kind of I am sitting here wondering, is there is something – is there are work to do? Is there are debt of something you need to get done on the technical nature to get this thing approved after all that work?

Bob Van Namen

No, I don’t think so from a technical achievement standpoint, Tom but as you can appreciate that any loan or loan commitment is subject to due diligence and although this is technology that is based on the DOEs technology. There are certain boxes that we expect to have to check including independent advisor review as well.

Tom Lewis – Century Management

So this is not a matter of technical proof, it is a matter of like big project that has to work through the process there in Washington?

John Welch

It would certainly be our viewpoint.

Tom Lewis – Century Management

Okay. Last question, I know you don’t want to – maybe you don’t want to speak, you have given 2009 guidance when you get there, but I am just trying to think about what the price realizations on your contracts might be and again I know that the spot market and contract market are two different worlds, but if you got nine months into it with your – can you talk to why your realized prices are only up 1% this year in a much stronger market and that? And what the implications might be for next year?

John Barpoulis

As John said, we were seeing substantially lower demand from our existing customers and much of that was based on older prices, the older contracts with lower prices. So, we do see continued upturn in prices going forward, outpacing where we were, a number of order movements going into 2009 from 2008 contribute to that price. The price movements from year-to-year, but we do see continued firming and tracking with market prices, which are now up about 11% this year up to roughly – $150 to SWU.

Tom Lewis – Century Management

Alright, thanks a lot.

John Barpoulis

Okay. Thank you Tom

Operator

And gentlemen there are no other questions.

John Welch

Well, thank you for your questions this morning. In summary, we have made great progress on many fronts on the American Centrifuge project during the quarter and we are actively engaged with DOE regarding the loan guarantee program and you can be assured we’re keeping the short focus on our current operations. We have a vision for delivering a long-term shareholder value and we are focused on executing that plan. Thank you for your interest and investment in USEC. Have a good day.

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