BETHESDA, Md. - USEC Inc. (NYSE:USU) announced today the decision by the Board of Directors that the Company will continue to serve under existing terms as the U.S government’s Executive Agent for the purchase of Russian enriched uranium fuel derived from Russian nuclear warheads.

In making the announcement, William H. Timbers, President and Chief Executive Officer, stated, "The Board has extensively considered many factors, including near-term enrichment pricing, opportunities for improving the balance of supply in the market, and the potential for positive change in these factors. The Board of Directors and management have determined that it is in the long-term interests of the Company to remain as the Executive Agent.

"While there are quantifiable costs to USEC and its shareholders associated with the Executive Agent activities, the company would incur greater economic costs in the long run from not being the manager of this program. As the Executive Agent, USEC is the best equipped, best financed and most experienced entity to purchase this material and integrate it into the market in a manner that minimizes market disruption and ensures the reliability and continuity of economic supply to electric utility customers.

"This decision also takes into account recent statements by Russia that they are prepared to engage in market-based pricing contract negotiations for the post-2001 period," Timbers added. "For the next two years, USEC must pay $88 to $91 per unit for Russian material, while the market price for sales is only in the low $80 range."

The Company has been in discussions with the U.S. government since March, seeking financial support that would restore the commercial economics of the contract for the remainder of the current contract period, which expires at the end of 2001. Those discussions have not yet led to a mutually acceptable solution.

Taking these developments into consideration, management now believes that the Company’s fiscal year 2000 earnings will be in the $110-$115 million range, compared to the $120 million earned last year. This difference is due to increased costs associated with the Russian contract, partly offset by increased sales and cost reductions. The absence of government financial support for the Russian contract will continue to have a negative impact on earnings until market-based pricing is established under the contract.

"USEC management is committed to enhancing shareholder value," Timbers stated. "To meet the expectations of our shareholders, the relationship between our cost structure, including the purchase price of enriched uranium from Russia, and the market price of our products must come into better alignment. We will decisively pursue this objective," Timbers asserted.

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, USEC has its headquarters in Bethesda, Maryland, and operates production plants in Kentucky and Ohio.

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