BETHESDA, Md. - USEC Inc. (NYSE: USU) today reported earnings for its first quarter ended September 30, 1999 of $16.1 million, or $.16 per share, compared to $8.6 million or $.09 per share in the previous year, excluding a special income tax benefit in the fiscal 1999 period. Net income for the first quarter of fiscal 1999, including the tax benefit, was $63.1 million or $.63 per share. The Company’s results were higher than analysts’ projections primarily due to the timing of project development spending during the quarter. The Company’s expectation for full-year financial results is unchanged from its previous guidance.

Revenue for the first quarter totaled $230.9 million, compared to $307.9 million in the first quarter of fiscal 1999. Revenue from the sales of SWU declined $102.5 million, reflecting the timing of customer nuclear reactor refueling orders. The sale of natural uranium increased from $.2 million in the first quarter of fiscal 1999 to $25.7 million this year.

Cost of sales during the first quarter declined 25 percent. Electric power, the largest component of production costs, declined $20.9 million quarter-on-quarter as the Company sharply reduced production during the summer of 1999 to reduce its exposure to high-cost, non-firm electric power. Production labor costs declined 8 percent quarter-on-quarter, reflecting the planned workforce reduction. Project development costs during the quarter declined to $1.4 million from $31.6 million in the same period a year ago, following the suspension of the AVLIS project in June 1999. Project development costs are expected to be $18 million for fiscal 2000.

During the quarter, USEC aggressively implemented the share repurchase program approved by the Board of Directors on June 9. The Board authorized the repurchase of up to 10 million shares over a 24-month period. As of September 30, the Company had repurchased 9.5 million shares, and there were 90,578,000 shares of common stock outstanding.

"When we authorized the share repurchase program, we believed it represented an attractive use of our strong cash flow. At recent price levels, we viewed USEC stock as an excellent value, and as a result we were very active in buying back our shares," said William H. Timbers, USEC President and Chief Executive Officer.

This news release includes certain forward-looking information (within the meaning of the Private Securities Litigation Reform Act of 1995) that involves risks and uncertainty, including certain assumptions regarding the future performance of the Company. Actual results and trends may differ materially depending upon a variety of factors, including, without limitation, market demand for the Company’s services, pricing trends in the uranium and the enrichment markets, deliveries and costs under the Russian contract, the availability and cost of electric power, the Company’s ability to successfully execute its internal performance plans, the refueling cycles of the Company’s customers, and the impact of any government regulation. Additional information regarding the foregoing factors is contained in the Company’s filings with the Securities and Exchange Commission.

USEC Inc. is the world leader in the sale of uranium fuel enrichment services for commercial nuclear power plants. A global energy company, the Company has it headquarters in Bethesda, Maryland, and operates production plants in Kentucky and Ohio.

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