Washington - The Board of Directors of the United States Enrichment Corporation ("USEC") announced today its decision to privatize USEC through an initial public offering ("IPO") of securities to the public. USEC is a federally chartered entity owned by the United States Government. Today's decision culminates a wide-ranging, intensive process to determine the best method of privatizing USEC, the world leader in the production and sale of uranium enrichment services for commercial nuclear power plants.

In connection with today's decision, USEC Inc. announced the filing of a registration statement with the Securities and Exchange Commission for an initial public offering of 100 million shares of common stock at an expected range of $13.50 to $16.50 per share. Total proceeds from the common stock offering are expected to be approximately $1.35 billion to $1.65 billion. All of the shares to be offered will be sold by the United States Government, which is selling its entire interest in USEC. Overallotment shares, if any, will be sold by USEC Inc. In connection with the IPO, USEC Inc. will also borrow $550 million in the bank market and pay $500 million to the U.S. Treasury, which when added to the proceeds from the common stock offering will result in total USEC privatization proceeds to the Treasury of approximately $1.85 to $2.15 billion. Additionally, the U.S. Government will retain the approximately $1.2 billion remaining in USEC's revenue account at the Treasury.

The sale decision, which was approved by the Treasury Department, culminates more than five years of actions by USEC to restructure the government's uranium enrichment enterprise and to complete preparations for its privatization. The privatization effort formally began in June 1995 when, as required by the 1992 Energy Policy Act, USEC submitted to President Clinton and Congress "A Plan for the Privatization of the United States Enrichment Corporation." The plan proposed that USEC would explore a "dual path" process, simultaneously considering a sale to a private party and a sale of securities to the public. After the USEC Privatization Act was enacted in April 1996, and reviews conducted and completed by the Administration, President Clinton approved implementation of the plan in July 1997.

Upon completion of preparations and consultation with the Treasury Department, in January 1998 the USEC Board announced the commencement of the dual path sale process. USEC's Board of Directors conducted a lengthy process and unanimously determined after reviewing the acquisition proposals that an initial public offering would best meet the statutory criteria. In making the announcement, William J. Rainer, USEC Board Chairman, said that "after an exhaustive evaluation of the acquisition proposals, an analysis of the potential of an IPO and consideration of the effects of not privatizing, the Board, based on the strength of the record and data before it, unanimously reached the conclusion that the sale of USEC to the public through an IPO best meets the statutory criteria, provisions and requirements governing the sale."

USEC, a global energy company, currently has approximately a 75 percent share of the North American uranium enrichment market and a 40 percent share of the world market. Uranium enrichment is a critical step in transforming natural uranium into fuel for nuclear reactors to produce electricity. The Company supplies enriched uranium to approximately 60 customers for use in 176 nuclear reactors located in 14 countries throughout the world.

Morgan Stanley Dean Witter is the Lead Manager of the initial public offering, and Merrill Lynch & Co. is the Co-Lead Manager. M.R. Beal & Company, Janney Montgomery Scott, Lehman Brothers Inc., Prudential Securities Inc. and Salomon Smith Barney Inc., are the Co-Managers. J.P. Morgan Securities Inc. is the Company's financial adviser.

Copies of the prospectus may be obtained from Morgan Stanley Dean Witter, 1585 Broadway, New York, New York 10036; telephone (212) 761-4000.

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities law of any such state.

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