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What changed in CENTRUS ENERGY CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CENTRUS ENERGY CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+636 added−509 removedSource: 10-K (2025-02-07) vs 10-K (2024-02-09)

Top changes in CENTRUS ENERGY CORP's 2024 10-K

636 paragraphs added · 509 removed · 371 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

102 edited+91 added−50 removed55 unchanged
Biggest changeOur training and development efforts focus on ensuring that the workforce is appropriately trained on critical job skills as well as leadership attributes that are consistent with our philosophy. 22 A summary of our employees by location is as follows: No. of Employees at December 31, Location 2023 2022 Piketon, OH 130 122 Oak Ridge, TN 110 104 Bethesda, MD 52 49 Total Employees 292 275 On October 1, 2022, the collective bargaining agreement for the employees represented by the United Steelworkers Local 689-5 union expired.
Biggest changeA summary of our employees by location is as follows: No. of Employees at December 31, Location 2024 2023 Piketon, OH 153 130 Oak Ridge, TN 116 110 Bethesda, MD 53 52 Total Employees 322 292 In May 2024, the Company and the United Steelworkers Local 689-5 union agreed to extend their collective bargaining agreement to October 2026.
References to “Centrus”, the “Company”, “our”, or “we” include Centrus Energy Corp. and its wholly-owned subsidiaries as well as the predecessor to Centrus, unless the context otherwise indicates. We were incorporated in 1998 as part of the privatization of the U.S. government’s uranium enrichment enterprise.
References to “Centrus”, the “Company”, “our”, or “we” include Centrus Energy Corp. and its wholly-owned subsidiaries as well as the predecessor to Centrus, unless the context indicates otherwise. We were incorporated in 1998 as part of the privatization of the U.S. government’s uranium enrichment enterprise.
For example, due to restrictions imposed by Canada on the ability of Canadian persons and entities to provide ocean transportation services to Russia, a permit is required for our shipper, a Canadian company, to transport the LEU that we procure under the TENEX Supply Contract to the United States.
For example, due to restrictions imposed by Canada on the ability of Canadian persons and entities to provide ocean transportation services to Russia, a permit is required for our shipper, a Canadian company, to transport the LEU that we procure under the TENEX Supply Contract to the United States.
The portion of the Company’s anticipated cost share under Phase 1 of the HALEU Operation Contract representing the Company’s share of projected program costs was recognized in Cost of Sales as an accrued loss in the fourth quarter ended December 31, 2022, and was adjusted over the Phase 1 contract term based on actual results and remaining program cost projections.
The portion of the Company’s anticipated cost share under Phase 1 of the HALEU Operation Contract representing the Company’s share of projected program costs was recognized in Cost of Sales as an accrued loss in the quarter ended December 31, 2022, and was adjusted over the Phase 1 contract term based on actual results and remaining program cost projections.
The USEC Privatization Act and the terms of our leases of the plants provide that DOE remains responsible for the D&D of the gaseous diffusion plants. Further, the DOE continued operations as well as cleanup activities, both during and subsequent, to our operations at the facilities. 21 We lease facilities and related personal property near Piketon from the DOE.
The USEC Privatization Act and the terms of our leases of the plants provide that DOE remains responsible for the D&D of the gaseous diffusion plants. Further, the DOE continued operations as well as cleanup activities, both during and subsequent, to our operations at the facilities. We lease facilities and related personal property near Piketon from the DOE.
These competitors may make business decisions in both domestic and international markets that are influenced by political or economic policy considerations rather than exclusively by commercial considerations. LEU also may be produced by down-blending government stockpiles of highly-enriched uranium.
These competitors may make business decisions in both domestic and international markets that are influenced by political or economic policy considerations rather than exclusively by commercial considerations. 22 LEU also may be produced by down-blending government stockpiles of highly-enriched uranium.
Imports of LEU and other uranium products produced in the Russian Federation are subject to restrictions as described below under — Russian Suspension Agreement ; • Urenco has reported installed capacity at its European and U.S. enrichment facilities of approximately 18 million SWU per year; • CNEIC has emerged as a significant producer primarily focused on supplying domestic requirements in China.
Imports of LEU and other uranium products produced in the Russian Federation are subject to restrictions as described below under — Russian Suspension Agreement and Ukraine War ; • Urenco has reported installed capacity at its European and U.S. enrichment facilities of approximately 18 million SWU per year; • CNEIC has emerged as a significant producer primarily focused on supplying domestic requirements in China.
Cutlip has been Senior Vice President, Field Operations since January 2018, was Vice President, Field Operations from May 2016 through December 2017, was Deputy Director of the American Centrifuge Project from January 2015 to May 2016, was Director, Centrifuge Manufacturing from April 2008 to December 2014, was Director, Program Management and Strategic Planning from December 2005 to April 2008, was Manager, Engineering from May 1999 to December 2005, and held positions in operations management and engineering at the Company and its predecessors since 1981. 24 John M.A.
Cutlip has been Senior Vice President, Field Operations since January 2018, was Vice President, Field Operations from May 2016 through December 2017, was Deputy Director of the American Centrifuge Project from January 2015 to May 2016, was Director, Centrifuge Manufacturing from April 2008 to December 2014, was Director, Program Management and Strategic Planning from December 2005 to April 2008, was Manager, Engineering from May 1999 to December 2005, and held positions in operations management and engineering at the Company and its predecessors since 1981. 27 John M.A.
Human Capital Management Our employees in Maryland, Ohio, and Tennessee are dedicated to our corporate philosophy based in honesty, trust, and the highest levels of integrity, safety and security.
Human Capital Management Our employees in Maryland, Ohio, and Tennessee are dedicated to our corporate philosophy based on honesty, trust, and the highest levels of integrity, safety, and security.
The four largest LEU suppliers comprise over 95% of mar ket share combined are as follows: • Rosatom, a Russian government entity, which sells LEU through its wholly-owned subsidiary TENEX; • Urenco, a consortium of companies owned or controlled by the British and Dutch governments and two German utilities; • CNEIC, a company owned by the Chinese government; and • Orano, a company largely owned by the French government, and formerly part of the French government.
The four largest LEU suppliers comprising over 95% of mar ket share combined are as follows: • Rosatom, a Russian government entity, which sells LEU through its wholly-owned subsidiary TENEX; • Urenco, a consortium of companies owned or controlled by the British and Dutch governments and two German utilities; • CNEIC, a company owned by the Chinese government; and • Orano, a company largely owned by the French government, and formerly part of the French government.
Contracts where we sell both the SWU and natural uranium hexafluoride components of LEU to utilities or where we sell natural uranium hexafluoride to utilities and other nuclear fuel related companies are generally shorter-term, fixed-commitment contracts. 12 Uranium and Enrichment Uranium is a naturally occurring element and is mined from deposits located in Kazakhstan, Canada, Australia, and several other countries, including the United States.
Contracts where we sell both the SWU and natural uranium hexafluoride components of LEU to utilities or where we sell natural uranium hexafluoride to utilities and other nuclear fuel related companies are generally shorter-term, fixed-commitment contracts. 15 Uranium and Enrichment Uranium is a naturally occurring element and is mined from deposits located in Kazakhstan, Canada, Australia, and several other countries, including the United States.
Prices are payable in a combination of U.S. dollars and euros. 15 We procure LEU from other sources under short-term and long-term contracts and have inventories available that diversify our supply portfolio and provide flexibility to help us meet the needs of our customers.
Prices are payable in a combination of U.S. dollars and euros. 19 We procure LEU from other sources under short-term and long-term contracts and have inventories available that diversify our supply portfolio and provide flexibility to help us meet the needs of our customers.
Refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. Government Contracting On October 31, 2019, we signed the cost-share HALEU Demonstration Contract with the DOE to deploy a cascade of centrifuges to demonstrate production of HALEU for advanced reactors.
Refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for additional information . Government Contracting On October 31, 2019, we signed the cost-share HALEU Demonstration Contract with the DOE to deploy a cascade of centrifuges to demonstrate production of HALEU for advanced reactors.
Given all of the foregoing, we continue to monitor the situation closely and assess the potential impact of any new sanctions and how the impact on the Company might be mitigated. Refer to Part I, Item 1A, Risk Factors - Operational Risks and - War in Ukraine Risks , for further discussion.
Given all of the foregoing, we continue to monitor the situation closely and assess the potential impact of any new sanctions or restrictions and how the impact on the Company might be mitigated. Refer to Part I, Item 1A, Risk Factors - Operational Risks and - War in Ukraine Risks , for further discussion.
Suppliers We have a diverse base of supply that includes: • existing inventory of LEU (Refer to Part II, Item 8, Financial Statements and Supplemental Data: Note 4 , Inventories , in the Consolidated Financial Statements in Part IV of this Annual Report); • long-term contracts with enrichment producers; • purchases and loans from secondary sources, including fabricators and utility operators of nuclear power plants that have excess inventory; and • spot purchases of SWU, uranium, and LEU.
Suppliers We have a diverse base of firm and prospective supply that includes: • existing inventory of LEU (Refer to Part II, Item 8, Financial Statements and Supplemental Data: Note 4 , Inventories , in the Consolidated Financial Statements in Part IV of this Annual Report); • long-term contracts with enrichment producers; • purchases and loans from secondary sources, including fabricators and utility operators of nuclear power plants that may have excess inventory; and • spot purchases of SWU, uranium, and LEU.
We will disclose on the website any amendments to, or waivers from, the COBC that are required to be publicly disclosed. We also make available on our website or upon request, free of charge, our Board of Directors Governance Guidelines and our Board committee charters. 26
We will disclose on the website any amendments to, or waivers from, the COBC that are required to be publicly disclosed. We also make available on our website or upon request, free of charge, our Board of Directors Governance Guidelines and our Board committee charters. 29
Nuclear power plants generate approximately 18% of U.S. electricity and 10% of the world’s electricity. Used Fuel Storage. After the nuclear fuel has been in a reactor for several years its efficiency is reduced and the assembly is removed from the reactor’s core.
Nuclear power plants generate approximately 18% of U.S. electricity and 9% of the world’s electricity. Used Fuel Storage. After the nuclear fuel has been in a reactor for several years its efficiency is reduced and the assembly is removed from the reactor’s core.
Under a contract with the DOE, our Technical Solutions segment is deploying uranium enrichment and other capabilities necessary for production of advanced nuclear fuel to meet the evolving needs of the global nuclear industry and the U.S. government.
Under a contract with the DOE, our Technical Solutions segment is deploying uranium enrichment capacity for HALEU production, and other capabilities necessary for production of advanced nuclear fuel to meet the evolving needs of the global nuclear industry and the U.S. government.
The higher U 235 concentration offers a number of potential advantages, which may include better fuel utilization, improved performance, fewer refueling outages, simpler reactor designs, reduced waste volumes, and greater nonproliferation resistance. The lack of HALEU supply is widely viewed as a major obstacle to the successful commercialization of these new reactors.
The higher U 235 concentration offers a number of potential advantages, which may include better fuel utilization, improved performance, fewer refueling outages, simpler reactor designs, reduced waste volumes, and greater nonproliferation resistance. The lack of HALEU supply is a major obstacle to the successful commercialization of these new reactors.
Since 2018, SWU prices have steadily increased and, following the Russian invasion of Ukraine, have increased to levels consistent with those prior to the 2011 Fukushima incident. Centrus’ purchase prices under the TENEX Supply Contract were adjusted to reflect lower market prices based on a one-time market related price reset.
Since 2018, SWU prices have steadily increased and, following the Russian invasion of Ukraine, have increased to levels consistent with those prior to the 2011 Fukushima incident. Centrus’ purchase prices under the TENEX Supply Contract were adjusted to reflect the lower market prices that prevailed in 2018, based on a one-time market related price reset.
Each employee is required to acknowledge receipt, understanding of, and compliance with our standards. Due to the highly specialized nature of our business we need to hire and train skilled and qualified personnel to design, build, and operate our state-of-the-art equipment, and to perform a broad range of services to support our country and our customers.
Each employee is required to acknowledge receipt, understanding of, and compliance with our standards. 25 Due to the highly specialized nature of our business we need to hire and train skilled and qualified personnel to design, build, operate our state-of-the-art equipment, and to provide a broad range of services to support our country and our customers.
Under this law and the RSA, imports of Russian uranium products peak in 2023 at 24% of the forecasted U.S. demand for enrichment and then begin to decline, reaching 15% by 2028. Despite the fact that overall limits will ramp down, the RSA, as amended in 2020, explicitly sets aside sufficient quota in 2021 through 2028 for Centrus.
Under this law and the RSA, imports of Russian uranium products peaked in 2023 at 24% of the forecasted U.S. demand for enrichment and then began to decline, reaching 15% by 2028. Despite the fact that overall limits will ramp down, the RSA, as amended in 2020, explicitly sets aside sufficient quota in 2021 through 2028 for Centrus.
According to the WNA, as of 2022, the production capacity for the major LEU suppliers is as follows: • Rosatom/TENEX was approximately 27 million SWU per year.
According to the WNA, as of 2023, the production capacity for the major LEU suppliers is as follows: • Rosatom/TENEX was approximately 27 million SWU per year.
We also have an agreement with Orano for the long-term supply of SWU contained in LEU, with deliveries that commenced in 2023. Under the Orano Supply Agreement, we purchase SWU contained in LEU received from Orano, and then deliver natural uranium to Orano for the natural uranium feed component of LEU.
We also have an agreement with Orano for the long-term supply of SWU contained in LEU, with deliveries that commenced in 2023 and extend through 2030. Under the Orano Supply Agreement, we purchase SWU contained in LEU received from Orano, and then deliver natural uranium to Orano for the natural uranium feed component of LEU.
The price reset occurred in 2018, reducing the cost for our purchases from 2019 through 2028. Similarly, Centrus’ SWU purchases under our long-term contract with Orano reflect the lower market prices that prevailed in 2018, when Centrus signed the long-term contract with Orano.
The 2018 price reset reduced the cost for our purchases from 2019 through 2028. Similarly, Centrus’ SWU purchases under our long-term contract with Orano reflect the lower market prices that prevailed in 2018, when Centrus signed the long-term contract with Orano.
We make available on our website, or upon request, without charge, access to our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed with, or furnished to, the SEC, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.
We make available on our website, or upon request, without charge, access to our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed with, or furnished to, the SEC, pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the SEC.
Revenue from our LEU segment is derived primarily from: • sales of the SWU component of LEU, • sales of natural uranium hexafluoride, uranium concentrates, or uranium conversion, and • sales of enriched uranium product that include both the natural uranium hexafluoride and SWU components of LEU.
Low Enriched Uranium LEU consists of two components: SWU and natural uranium hexafluoride. Revenue from our LEU segment is derived primarily from: • sales of the SWU component of LEU, • sales of natural uranium hexafluoride, uranium concentrates, or uranium conversion, and • sales of enriched uranium product that include both the natural uranium hexafluoride and SWU components of LEU.
Commercial Contracting In 2021, Centrus entered into a task order type services agreement with X-energy to provide services for detailed design of the TRISO fuel fabrication facility and various support services for establishing their TRISO Research and Development Center. X-energy is funded under the current DOE cooperative agreement titled ARDP.
Commercial Contracting Centrus has a task order type services agreement with X-energy to provide services for detailed design of the TRISO fuel fabrication facility and various support services for establishing their TRISO Research and Development Center. X-energy is funded under the current DOE cooperative agreement titled ARDP.
Under the HALEU Operation Contract, DOE is obligated to provide the 5B Cylinders necessary to collect the output of the cascade, but supply chain challenges have created difficulties for DOE in securing enough 5B Cylinders for the entire production year.
Under the HALEU Operation Contract, DOE is contractually obligated to provide the 5B Cylinders necessary to collect the output of the cascade, but supply chain challenges created difficulties for DOE in securing enough 5B Cylinders for the entire production year under Phase 2.
Refer to Item 1A, Risk Factors- Economic and Industry Risks - Dependence on our largest customers or suppliers could adversely affect us.
Refer to Item 1A, Risk Factors - Economic and Industry Risks - Dependence on our largest customers or suppliers could adversely affect us, for further discussion.
Any quota adjustment or other change to the RSA that reduces our quota allocations could affect our ability to implement the TENEX Supply Contract through sales to customers who take delivery in the United States, which is our most significant market. The 2023 adjustment, however, did not affect us.
Any quota adjustment or other change to the RSA that reduces our quota allocations could affect our ability to implement the TENEX Supply Contract through sales to customers who take delivery in the United States, which is our most significant market.
In addition to limitations targeted specifically at imports of LEU, the expanding sanctions imposed by the United States and foreign governments on the mechanisms used to make payments to Russia and to obtain services, including transportation have increased the risk that implementation of the TENEX Supply Contract may be disrupted in the future.
In addition to limitations targeted specifically at imports of LEU or exports of natural uranium back to Russia, the expanding sanctions imposed by the United States and foreign governments on the mechanisms used to make payments to Russia and to obtain services, including transportation, have increased the risk that implementation of the TENEX Supply Contract may be disrupted frequently.
Item 1. Business Overview Centrus Energy Corp., a Delaware corporation, is a trusted supplier of nuclear fuel components and services for the nuclear power industry, which provides a reliable source of carbon-free energy.
Item 1. Business Overview Centrus Energy Corp., a Delaware corporation, is a trusted supplier of nuclear fuel components for the nuclear power industry, which provides a reliable source of carbon-free energy, and provides enrichment and technical services for public and private customers.
In connection with a letter agreement that preceded the HALEU Demonstration Contract, the DOE and Centrus amended the lease agreement, which was scheduled to expire by its terms on June 30, 2019. The lease was extended until May 31, 2022. In September 2021, the Company and the DOE renewed and extended the lease until December 31, 2025.
In connection with a letter agreement that preceded the HALEU Demonstration Contract, the DOE and Centrus amended the lease agreement, which was scheduled to expire by its terms on June 30, 2019. The lease was extended until May 31, 2022.
The Company entered into this cost-share contract with the DOE as a critical first step on the road back to the commercial production of enriched uranium, which the Company had terminated in 2013 with the closure of the Paducah GDP. Under the 2019 HALEU Demonstration Contract, the Company constructed and installed 16 centrifuges for eventual site operations and HALEU production.
This contract with the DOE was a critical first step on the road back to the commercial production of enriched uranium, which the Company had terminated in 2013 with the closure of the Paducah GDP. Under the HALEU Demonstration Contract, the Company constructed and installed 16 centrifuges for eventual site operations and HALEU production.
Centrus’ delivery of the 900 kilograms was conditioned on the DOE’s ability to provide the 5B Cylinders on a timeline that allowed for continuous production throughout Phase 2 of the contract.
Centrus’ contractual delivery obligation of 900 kilograms by November 2024, was conditioned on DOE’s ability to provide the 5B Cylinders on a timeline that allowed for continuous production throughout Phase 2 of the contract.
The used fuel is warm and radioactive and is kept in a deep pool of water for several years. Many utilities have elected to then move the used fuel into steel or concrete and steel casks for interim storage. 13 LEU Segment Order Book Our Order Book extends to 2030.
The used fuel is warm and radioactive and is kept in a deep pool of water for several years. Many utilities have elected to then move the used fuel into steel or concrete and steel casks for interim storage. 16 LEU Backlog Our backlog in the LEU segment extends to 2040.
Centrus performed services pursuant to specific task orders, the last of which ended in March 2023. The services agreement expires on December 31, 2027, unless earlier terminated at the discretion of X-energy, but there are no active task orders pending.
Centrus performed services pursuant to specific task orders, the last of which ended in March 2023. The services agreement expires on December 31, 2027, unless earlier terminated at the discretion of X-energy, but there are no active task orders pending. Technical Solutions Backlog Our backlog in the Technical Solutions segment extends to 2034.
As a result, Centrus is exploring the opportunity to deploy LEU enrichment alongside HALEU enrichment to meet a range of commercial and U.S. government requirements, which could bring operational synergies while increasing sales opportunities.
As a result, Centrus is exploring the opportunity to deploy LEU enrichment alongside HALEU enrichment to meet a range of commercial and U.S. government requirements, which would bring cost synergies while increasing revenue opportunities.
Although the RSA quotas cover most of the LEU that we must order to fulfill our purchase obligations under the TENEX Supply Contract, we expect that a small portion of the Russian LEU that we order during the term of the TENEX Supply Contract will need to be delivered to customers that will use it in non-U.S. reactors. 14 The war in Ukraine has escalated tensions between Russia and the international community.
Although the RSA quotas cover most of the LEU that we must order to fulfill our purchase obligations under the TENEX Supply Contract, we expect that a small portion of the Russian LEU that we expect to order during the term of the TENEX Supply Contract will need to be delivered to customers that will use it in non-U.S. reactors.
The HALEU Operation Contract also gives DOE options to pay for up to nine additional years of production from the cascade beyond the base contract; those options are at the DOE’s sole discretion and subject to the availability of Congressional appropriations.
The HALEU Operation Contract also gives DOE the ability to exercise three optional periods to contract for up to nine additional years of production from the cascade beyond Phase 2; those options are at the DOE’s sole discretion and subject to the availability of Congressional appropriations.
Our work requires that we attract people who are dedicated to consistently performing quality work and, for many of our positions, are able to obtain a security clearance. We recognize that our success as a company depends on our ability to attract, develop, and retain such a workforce.
Our work requires that we attract individuals who are dedicated to consistently performing quality work and for many of our positions, can obtain a security clearance. We recognize that our success as a company depends on our ability to attract, develop, and retain such a workforce. We are dedicated to promoting the health, welfare, and safety of our employees.
If we determine the equipment and facilities may benefit Centrus after completion of the HALEU program, we can extend the facility lease and ownership of the equipment will be transferred to us, subject to mutual agreement regarding D&D and other issues.
If we determine the equipment and facilities may benefit Centrus after completion of the HALEU program, we can seek to extend the facility lease, subject to mutual agreement regarding D&D and other terms.
The war in Ukraine has contributed to a significant increase in market prices for enrichment and (along with proposed legislation to limit imports of LEU from Russia) has prompted calls for public and private investment in new, domestic uranium enrichment capacity not only for HALEU production but also for LEU production to support the existing fleet of reactors.
The war in Ukraine, along with the Import Ban Act and the Russian Decree, have contributed to a significant increase in market prices for enrichment and have prompted calls for public and private investment in new, domestic uranium enrichment capacity not only for HALEU production but also for LEU production to support the existing fleet of reactors.
Under the HALEU Operation Contract, the DOE is contractually required to provide the 5B Cylinders necessary to collect the output of the cascade, but supply chain challenges have created difficulties for the DOE in securing enough 5B Cylinders for the entire production year.
These amendments will support anticipated HALEU production beyond June 2025 under the HALEU Operation Contract. Under the HALEU Operation Contract, the DOE is contractually required to provide the 5B Cylinders necessary to collect the output of the cascade, but supply chain challenges created difficulties for the DOE in securing enough 5B Cylinders for the entire production year under Phase 2.
Further, sanctions by the United States, Russia or other countries may impact our ability and cost to transport, export, import, take delivery, or make payments related to the LEU we purchase.
Further, sanctions or restrictions by the United States, Russia or other countries may impact our ability and cost to transport, export, import, take delivery, or make payments related to the LEU we purchase and may require us to increase purchases from non-Russian sources to the extent available.
Since it was not possible to begin HALEU production without the 5B Cylinders, it was not possible to complete the operational portion of the HALEU Demonstration Contract before the expiration date of the contract.
During the HALEU Demonstration Contract, the DOE experienced a supply chain delay in obtaining HALEU 5B Cylinders. Since it was not possible to begin HALEU production without the 5B Cylinders, it was not possible to complete the operational portion of the HALEU Demonstration Contract before the expiration date of the contract.
Phase 1, which was completed in November 2023, included an approximately $30 million cost share contribution from Centrus matched by approximately $30 million from the DOE to complete construction of the cascade support systems, begin operations and produce the initial 20 kilograms of HALEU UF 6 . 11 Phase 2 of the contract includes continued operations and maintenance and production for a full year at an annual production rate of 900 kilograms of HALEU UF 6 .
Phase 1, which was completed in November 2023, included an approximately $30.0 million cost-share contribution from Centrus matched by approximately $30.0 million from the DOE to complete construction of the cascade support systems, begin operations and produce the initial 20 kilograms of HALEU UF 6 .
The Company also is performing additional work on infrastructure and facility repairs under the DOE’s technical direction. On September 28, 2023, the DOE modified the HALEU Operation Contract to incorporate additional scope, which are not subject to cost-share, for infrastructure and facility repairs, and costs associated with 5B Cylinder refurbishment, for an estimated additional contract value of $5.8 million.
The additional work is being performed under the DOE’s technical direction or contract modifications. On September 28, 2023, the DOE modified the HALEU Operation Contract to incorporate additional scope, which is not subject to cost-share, for infrastructure and facility repairs, and costs associated with 5B Cylinder refurbishment.
Centrus operates two business segments: (a) LEU, which supplies various components of nuclear fuel to commercial customers from our global network of suppliers, and (b) Technical Solutions, which provides advanced engineering, design, and manufacturing services to government and private sector customers and is deploying uranium enrichment and other capabilities necessary for production of advanced nuclear fuel to power existing and next-generation reactors around the world.
Centrus operates two business segments: (a) LEU, which supplies various components of nuclear fuel to commercial customers from our global network of suppliers, and (b) Technical Solutions, which provides advanced uranium enrichment for the U.S. government and advanced manufacturing and other technical services to government and private sector customers.
During November 2023, the Company transitioned to Phase 2 of the HALEU Operation Contract. The DOE will own the HALEU produced from the demonstration cascade and Centrus will be compensated on a cost-plus-incentive-fee basis, with an expected Phase 2 contract value of approximately $90 million, subject to Congressional appropriations.
During November 2023, the Company transitioned to Phase 2 of the HALEU Operation Contract, which had an original contract value of $90.0 million. The DOE will own the HALEU produced from the demonstration cascade and Centrus will be compensated on a cost-plus-incentive-fee basis. DOE has increased the Phase 2 contract value and related funding to $129.0 million.
Further, sanctions by the United States, Russia or other countries may impact our ability and cost to transport, export, import, take delivery, or make payments related to the LEU we purchase.
Further, sanctions or other restrictions by the United States, Russia or other countries may impact our ability and cost to transport, export, import, deliver, take delivery, or make payments related to the LEU we purchase and may require us to increase purchases from non-Russian sources to the extent available.
In addition, the expanding sanctions imposed by the United States and foreign governments on the mechanisms used to make payments to Russia and to obtain services, including transportation, have increased the risk that implementation of the TENEX Supply Contract may be disrupted in the future.
In addition to limitations targeted specifically at imports of LEU into the U.S. or export of LEU out of Russia, the expanding sanctions or restrictions imposed by the United States and foreign governments on the mechanisms used to make payments to Russia and to obtain services, including transportation, have increased the risk that implementation of the TENEX Supply Contract may be disrupted frequently.
We supply LEU and its components to both domestic and international utilities for use in nuclear reactors worldwide. We provide LEU from multiple sources, including our inventory, medium- and long-term supply contracts, and spot purchases. As a long-term supplier of LEU to our customers, our objective is to provide value through the reliability and diversity of our supply sources.
LEU is a critical component in the production of nuclear fuel for reactors that produce electricity. We supply LEU and its components to both domestic and international utilities for use in nuclear reactors worldwide. We provide LEU from multiple sources, including medium- and long-term supply contracts, spot purchases and our inventory.
For further details, refer to Part I, Item 1A , Risk Factors - Restrictions on imports or sales of SWU or uranium that we buy from our Russian supplier and our other sources of supply could adversely affect profitability and the viability of our business. Ukraine War The war in Ukraine has escalated tensions between Russia and the international community.
For further details, refer to Part I, Item 1A , Risk Factors - Restrictions on imports or sales of SWU or uranium that we buy from our Russian supplier and our other sources of supply could adversely affect profitability and the viability of our business. 1 The term “quota” is used herein for simplicity.
The Order Book is the estimated aggregate dollar amount of revenue for future SWU and uranium deliveries, and includes approximately $0.3 billion of deferred revenue and advances from customers as of December 31, 2023, whereby customers have made advance payments to be applied against future deliveries. No orders in our Order Book are considered at risk related to customer operations.
The LEU segment backlog also includes approximately $0.2 billion of deferred revenue and advances from customers as of December 31, 2024, whereby customers have made advance payments to be applied against future deliveries. No orders in our backlog are considered at risk related to customer operations.
Centrus also sells natural uranium hexafluoride (the raw material needed to produce LEU) and occasionally sells uranium concentrates, uranium conversion, or LEU with the natural uranium hexafluoride and SWU components combined into one sale. LEU is a critical component in the production of nuclear fuel for reactors that produce electricity.
The majority of these sales are for the enrichment component of LEU, which is measured in SWU. Centrus also sells natural uranium hexafluoride (the raw material needed to produce LEU) and occasionally sells uranium concentrates, uranium conversion, or LEU with the natural uranium hexafluoride and SWU components combined into one sale.
Our global Order Book includes long-term sales contracts with major utilities through 2030. We have secured cost-competitive supplies of SWU under long-term contracts through the end of this decade designed to allow us to fill our existing customer orders and make new sales.
We have secured cost-competitive supplies of SWU under long-term contracts through the end of this decade designed to allow us to fill our existing customer orders and make new sales. However, supply chain disruptions may impact our ability to fill existing customer orders.
The DOE modified the contract several times to increase the total contract funding to $173.0 million. The HALEU Demonstration Contract’s period of performance ended in November 2022.
The DOE modified the contract several times to increase the total contract funding to $173.0 million and to extend the period of performance through November 30, 2022.
Our Order Book estimate is also based on our estimates of selling prices, which may be subject to change. For example, depending on the terms of specific contracts, prices may be adjusted based on escalation using a general inflation index, published SWU price indicators prevailing at the time of delivery, and other factors, all of which are variable.
For example, depending on the terms of specific contracts, prices may be adjusted based on escalation using a general inflation index, published SWU price indicators prevailing at the time of delivery, and other factors, all of which are variable. We use external composite forecasts of future market prices and inflation rates in our pricing estimates.
Our LEU segment accounted for approximately 84% of our total revenue for the year ended December 31, 2023. The majority of our customers are domestic and international utilities that operate nuclear power plants. Our agreements with electric utilities are primarily medium-term and long-term, fixed-commitment contracts.
Our LEU segment accounted for approximately 79% of our total revenue for the year ended December 31, 2024. The majority of our customers are domestic and international utilities that operate nuclear power plants.
Our ability to deploy LEU and/or HALEU enrichment, and the timing, sequencing, and scale of those capabilities, is subject to the availability of funding and offtake commitments. Under the HALEU Demonstration Contract signed in 2019, Centrus constructed and installed a cascade of 16 AC100M centrifuges in Piketon, Ohio to demonstrate HALEU production.
Our ability to deploy LEU and/or HALEU enrichment, and the timing, sequencing, and scale of those capabilities, is subject to the task orders (and their funding levels) DOE is expected to issue under our LEU and HALEU Production Contracts. 12 Under the HALEU Demonstration Contract signed in 2019, Centrus entered into an agreement with the DOE to construct a cascade of 16 AC100M centrifuges in Piketon, Ohio to demonstrate HALEU production.
On October 19, 2023, the DOE provided additional funding of $5.5 million for the additional scope under the HALEU Operation Contract. Centrus believes it is well positioned to compete for any follow-on contract(s) to expand HALEU production capability at the Piketon site.
DOE is currently obligated for costs up to the current contract value of approximately $8.5 million for the additional scope of work. Centrus believes it is well positioned to compete for any follow-on contract(s) to expand HALEU production capability at the Piketon site.
The three-year program commenced on May 31, 2019, when the Company and the DOE signed an interim HALEU letter agreement that allowed work to begin while the full contract was being finalized.
The three-year program commenced on May 31, 2019, under the term of an interim HALEU letter agreement that allowed work to begin while the full contract was being finalized. Under the HALEU Demonstration Contract, the DOE agreed to reimburse the Company for 80% of its costs incurred in performing the contract.
We recognize and reward the performance of our employees in line with our pay-for-performance philosophy and provide a comprehensive suite of benefit options that are designed to enable our employees and their dependents to live healthy and productive lives. Safety in our workplaces is paramount.
Part of our responsibility includes treating all employees with dignity, respect and providing them with fair, competitive, market-based, and equitable compensation. We recognize and reward the performance of our employees in line with our pay-for-performance philosophy and provide a comprehensive suite of benefit options that are designed to enable our employees and their dependents to live healthy and productive lives.
A Canadian permit issued to our shipper was recently extended to early July 2024, but for so long as the Canadian sanctions remain in place, the shipper will require further extensions of the permit for us to continue to use the shipper beyond July 2024.
A Canadian permit issued to our shipper was extended to March 2027, but for so long as the Canadian sanctions remain in place, the shipper will require further extensions beyond the current validity of the permit for continued shipments of LEU imports.
The Company is currently performing closeout activities on the HALEU Demonstration Contract. As discussed above, the Company began work on the HALEU Operation Contract on December 1, 2022. On November 7, 2023, the Company announced that it made its first delivery of HALEU to the DOE, completing Phase 1 by successfully demonstrating its HALEU production process.
On November 7, 2023, the Company announced that it made its first delivery of HALEU to the DOE, completing Phase 1 by successfully demonstrating its HALEU production process.
Through 2027, well over one-half of the LEU that we expect to deliver to customers is anticipated to come from material supplied to us under the TENEX Supply Contract. While we have other sources, they are not sufficient to replace the TENEX supply.
Through 2027, well over one-half of the LEU that we expect to deliver to customers was sourced under the TENEX Supply Contract. While we have other sources of supply, they are not sufficient to replace the TENEX supply or may not be available for delivery in 2025.
As a result, the United States and other countries have imposed, and may continue imposing, additional sanctions and export controls against certain Russian products, services, organizations and/or individuals. In December 2023, for example, the U.S.
As a result, the United States and other countries have imposed, and may continue imposing, additional sanctions and export controls against certain Russian products, services, organizations and/or individuals, including through the enactment of the Import Ban Act and the issuance of the Russian Decree.
The pricing for the purchased SWU is determined by a formula that uses a combination of market-related price points and other factors, and is subject to certain floors and ceilings.
The Orano Supply Agreement provides flexibility to adjust purchase volumes, subject to annual minimums and maximums, in fixed amounts that vary year by year. The pricing for the purchased SWU is determined by a formula that uses a combination of market-related price points and other factors, and is subject to certain floors and ceilings.
However, it is possible that additional restrictions could be added that would affect our ability to purchase and re-sell Russian uranium enrichment, or implement the TENEX Supply Contract, which could have a negative material impact on our business.
Such additional restrictions could affect our ability to purchase, take delivery of, transport, or re-sell Russian uranium enrichment, engage in transactions with TENEX, or implement the TENEX Supply Contract, which would have a negative material impact on our business and financial condition.
Our Order Book estimate is based partially on customers’ estimates of the timing and size of their fuel requirements and other assumptions that are subject to change. For example, depending on the terms of specific contracts, the customer may be able to increase or decrease the quantity delivered within an agreed range.
For example, depending on the terms of specific contracts, the customer may be able to increase or decrease the quantity delivered within an agreed range. Our backlog estimate is also based on our estimates of selling prices, which may be subject to change.
On October 11, 2023, the Company announced that it began enrichment operations at its HALEU production facility in Piketon, Ohio under its contract with DOE. HALEU is a high-performance nuclear fuel component which will be required by a number of advanced reactor and fuel designs that are now under development for commercial and government uses.
On November 7, 2023, the Company announced that it made its first delivery of HALEU to the DOE, completing Phase 1 by successfully demonstrating its HALEU production process. HALEU is a high-performance nuclear fuel component that will be required by a number of advanced reactor and fuel designs that are now under development for commercial and government uses.
Under the TENEX Supply Contract, we purchase SWU contained in LEU, and we deliver natural uranium hexafluoride to TENEX for the LEU’s uranium component. The TENEX Supply Contract extends through 2028. We typically pay for the SWU contained in the LEU and supply natural uranium to TENEX for the natural uranium component.
Currently, our largest supplier of SWU is TENEX followed by the French government-owned company, Orano. 17 Under the TENEX Supply Contract, we purchase SWU contained in LEU, and we deliver natural uranium hexafluoride to TENEX for the LEU’s uranium component. The TENEX Supply Contract extends through 2028.
We aim to continue to further diversify this base of supply and take advantage of opportunities to obtain additional short and long-term supplies of LEU. Currently, our largest suppliers of SWU is TENEX followed by the French government-owned company, Orano.
We aim to continue to further diversify this base of supply and take advantage of opportunities to obtain additional short and long-term supplies of LEU.
Currently, these quotas allow us to supply Russian LEU to our U.S. customers through 2028. The terms of the RSA, as extended, were adopted into law by the U.S. Congress in the Consolidated Appropriations Act, 2021. Refer to Item 1A, Risk Factors - Operational Risks for further discussion.
However, as discussed below, supply under the TENEX Supply Contract has been impacted by the Import Ban Act and the Russian Decree. The terms of the RSA, as extended, were adopted into law by the U.S. Congress in the Consolidated Appropriations Act, 2021. Refer to Item 1A, Risk Factors - Operational Risks for further discussion.
Competition and Foreign Trade It is estimated that the enrichment industry market for commercial nuclear reactors powered by LEU is currently about 50 million SWU per year. Our global market share of enrichment for the LEU market is less than 5%. Global LEU suppliers in our highly competitive industry compete on the basis of price and reliability of supply.
Our global market share of enrichment for the LEU market is less than 5%. Global LEU suppliers in our highly competitive industry compete on the basis of price and reliability of supply.
Centrus currently is the only company with an NRC license to enrich uranium up to the 20% U-235 concentration that is contained in HALEU and is the only company known to us to produce HALEU outside of Russia. 16 Under the HALEU Demonstration Contract, the DOE agreed to reimburse the Company for 80% of its costs incurred in performing the contract.
Additionally, the Company designed, procured, and installed most of the necessary support systems. Centrus currently is the only company with an NRC license to enrich uranium up to the 20% U-235 concentration that is contained in HALEU and is the only company known to us to produce HALEU outside of Russia.
CNEIC’s commercial SWU production capacity was approximately 9 million SWU per year; and • Orano’s gas centrifuge enrichment plant in France began commercial operations in 2011 and the plant has SWU production capacity of approximately 8 million SWU per year. 18 All of our current competitors are owned or controlled, in whole or in part, by foreign governments, and operate enrichment technologies developed with the financial support of foreign governments.
CNEIC’s commercial SWU production capacity was approximately 9 million SWU per year; and • Orano’s gas centrifuge enrichment plant in France began commercial operations in 2011 and the plant has SWU production capacity of approximately 8 million SWU per year.
SWU pricing is determined by a formula using a combination of market-related price points and other factors. The LEU that we obtain from TENEX under the TENEX Supply Contract currently is subject to quotas and other restrictions under the RSA between the United States and the Russian Federation which governs exports of Russian uranium products to the United States.
The LEU that we obtain from TENEX under the TENEX Supply Contract currently is subject to quotas and other restrictions under the RSA between the United States and the Russian Federation which governs imports of Russian uranium products into the United States. These quotas allow us to supply Russian LEU to our customers through 2028.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks related to general factors primarily include: • failures to protect classified or other sensitive information, or security breaches of IT systems could result in significant liability; • the inability to attract and retain key personnel; • the potential for the DOE to seek to terminate or exercise its remedies under the 2002 DOE-USEC Agreement and our other agreements with the DOE, or to require modifications to such agreements; • government reviews or audits can lead to withholding or delay of payments to us, non-receipt of award fees, legal actions, fines, penalties and liabilities, and other remedies against us; • our U.S. government contracts and subcontracts are dependent on continued U.S. government funding and government appropriations, which may not be made on a timely basis or at all; • changes to, or termination of, any agreements with the U.S. government, or deterioration in our relationship with the U.S. government; and • the ability to adapt to a rapidly changing competitive environment in the nuclear industry.
Biggest changeRisks related to general factors primarily include: • failures to protect classified or other sensitive information, or security breaches of IT systems could result in significant liability; • artificial intelligence risks and challenges that can impact our business, including regulatory risks and operational risks if artificial intelligence is integrated into our operations and cybersecurity risks in the event that artificial intelligence is used by a threat actor in cybersecurity incident; • the inability to attract and retain key personnel; • the potential for the DOE to seek to terminate or exercise its remedies under the 2002 DOE-USEC Agreement and our other agreements with the DOE, or to require modifications to such agreements; • government reviews or audits can lead to withholding or delay of payments to us, non-receipt of award fees, legal actions, fines, penalties and liabilities, and other remedies against us; • our U.S. government contracts and subcontracts are dependent on continued U.S. government funding and government appropriations, which may not be made on a timely basis or at all; • changes to, or termination of, any agreements with the U.S. government, or deterioration in our relationship with the U.S. government; and • the ability to adapt to a rapidly changing competitive environment in the nuclear industry. 31 War in Ukraine Risks The current war in Ukraine and related international or U.S. sanctions and restrictions on trade could have a material adverse impact on our business, results of operations, and financial condition.
Phase 1 included an approximately $30 million cost share contribution from Centrus matched by approximately $30 million from the DOE to finish construction, bring the cascade online, and demonstrate production of 20 kilograms of 19.75% enriched HALEU by December 31, 2023. On October 11, 2023, the Company announced that it began enrichment operations in Piketon, Ohio.
Phase 1 included an approximately $30.0 million cost-share contribution from Centrus matched by approximately $30.0 million from the DOE to finish construction, bring the cascade online, and demonstrate production of 20 kilograms of 19.75% enriched HALEU by December 31, 2023. On October 11, 2023, the Company announced that it began enrichment operations in Piketon, Ohio.
The adverse impact of this reduced schedule could also lead the carrier to withdraw its ships entirely from routes to or from Russia, leaving us without a carrier to transport the LEU we procure from TENEX. Additional sanctions or other measures by the U.S. or foreign governments (including the Russian government) could be imposed in the future.
The adverse impact of this reduced schedule could also lead the carrier to withdraw its ships entirely from routes to or from Russia, leaving us without a carrier to transport the LEU we procure from TENEX. 32 Additional sanctions or other measures could be imposed by the U.S. or foreign governments (including the Russian government) in the future.
Moreover, our competitors may be better positioned to take advantage of improved market conditions and increase capacity to meet any future market expansion. The ability to compete in certain foreign markets may be limited for legal, political, economic, or other reasons. Doing business in foreign markets poses additional risks and challenges.
Moreover, our competitors may be better positioned to take advantage of improved market conditions and increase capacity to meet any future market expansion. 36 The ability to compete in certain foreign markets may be limited for legal, political, economic, or other reasons. Doing business in foreign markets poses additional risks and challenges.
Any of these actions could adversely impact our business and prospects. Our U.S. government contract work is regularly reviewed and audited by the U.S. government and these reviews can lead to withholding or delay of payments to us, non-receipt of award fees, legal actions, fines, penalties and liabilities, and other remedies against us.
Any of these actions could adversely impact our business and prospects. 48 Our U.S. government contract work is regularly reviewed and audited by the U.S. government and these reviews can lead to withholding or delay of payments to us, non-receipt of award fees, legal actions, fines, penalties and liabilities, and other remedies against us.
An interruption of deliveries from our suppliers or the provision of essential services by third parties, could adversely impact our business, results of operations, and prospects. We face significant competition from major producers who may be less cost sensitive or may be favored due to support from foreign governments.
An interruption of deliveries from our suppliers or the provision of essential goods and services by third parties, could adversely impact our business, results of operations, and prospects. We face significant competition from major producers who may be less cost sensitive or may be favored due to support from foreign governments.
As a result, these stockholders may have interests that differ from the remainder of the holders of our Class A Common Stock, and, as a result, may vote or take other actions in a way adverse to other holders of Class A Common Stock. Our ability to utilize our NOL carryforwards to offset future taxable income may be limited.
As a result, these stockholders may have interests that differ from the remainder of the holders of our Class A Common Stock, and, as a result, may vote or take other actions in a way adverse to other holders of Class A Common Stock. 42 Our ability to utilize our NOL carryforwards to offset future taxable income may be limited.
Our significant long-term liabilities (and other third-party financial obligations) could have important consequences, including: • making it more difficult for us to satisfy our obligations to lenders and other creditors, resulting in possible defaults on, and acceleration of, such indebtedness or breaches of such other commitments; • placing us at a competitive disadvantage by making us more vulnerable to react to adverse economic conditions or changes in the nuclear industry; • hindering our ability to obtain additional financing for future working capital and other general corporate requirements; • reducing our cash resources for payments on our 8.25% Notes thereby limiting our ability to fund our operations, capital expenditures, and future business opportunities; • placing certain restrictions on the ability of our subsidiary, Enrichment Corp., to transfer cash and other assets to us, which could constrain our ability to pay dividends on our Common Stock or to fund our commitments or the commitments of our other subsidiaries, pursuant to the indenture governing our 8.25% Notes, subject to certain exceptions; and • restricting our ability to engage in certain mergers or acquisitions pursuant to the indenture governing our 8.25% Notes which also require us to offer to repurchase all such outstanding notes at 101% of their outstanding principal amount in the event of certain change of control events.
Our significant long-term liabilities (and other third-party financial obligations) could have important consequences, including: • making it more difficult for us to satisfy our obligations to lenders and other creditors, resulting in possible defaults on, and acceleration of, such indebtedness or breaches of such other commitments; • placing us at a competitive disadvantage by making us more vulnerable to react to adverse economic conditions or changes in the nuclear industry; • hindering our ability to obtain additional financing for future working capital and other general corporate requirements; 39 • reducing our cash resources for payments on our 2.25% Convertible Notes and our 8.25% Notes, thereby limiting our ability to fund our operations, capital expenditures, and future business opportunities; • placing certain restrictions on the ability of our subsidiary, Enrichment Corp., to transfer cash and other assets to us, which could constrain our ability to pay dividends on our Common Stock or to fund our commitments or the commitments of our other subsidiaries, pursuant to the indenture governing our 8.25% Notes, subject to certain exceptions; and • restricting our ability to engage in certain mergers or acquisitions pursuant to the indenture governing our 8.25% Notes which also require us to offer to repurchase all such outstanding notes at 101% of their outstanding principal amount in the event of certain change of control events.
Although the COVID-19 pandemic has ended, other national or global health related outbreaks could disrupt the supply chains and day-to-day operations of the Company, our suppliers, our contractors, and our customers, which could materially adversely affect our operations, including increasing our costs.
Although the COVID-19 pandemic has ended, other national or global health related outbreaks could further disrupt the supply chains and day-to-day operations of the Company, our suppliers, our contractors, and our customers, which could materially adversely affect our operations, including increasing our costs.
Accordingly, there are situations in which a foreign stockholder or Contravening Person could lose the right to vote its shares or in which we may redeem or exchange shares held by a foreign person or Contravening Person and in which such redemption or exchange could be at the lesser of fair market value and the person’s purchase price for the shares redeemed or exchanged, which could result in a significant loss for that person. 42 General Risk Factors Failures to protect classified or other sensitive information, or cybersecurity incidents could result in significant liability or otherwise have an adverse effect on our business.
Accordingly, there are situations in which a foreign stockholder or Contravening Person could lose the right to vote its shares or in which we may redeem or exchange shares held by a foreign person or Contravening Person and in which such redemption or exchange could be at the lesser of fair market value and the person’s purchase price for the shares redeemed or exchanged, which could result in a significant loss for that person. 46 General Risk Factors Failures to protect classified or other sensitive information, or cybersecurity incidents could result in significant liability or otherwise have an adverse effect on our business.
Such a commercial purposes license is subject to payment of an agreed upon royalty to us, which will not exceed $665 million in the aggregate.
Such a commercial purposes license is subject to payment of an agreed upon royalty to us, which will not exceed $665.0 million in the aggregate.
Legal and consulting costs incurred in connection with debt or equity financing transactions in development are deferred and subject to immediate expensing if such a transaction becomes less likely to occur. If the actions we take in response to industry changes are not successful, our business, results of operations and financial condition may be adversely affected. Item 1B.
Legal and consulting costs incurred in connection with debt or equity financing transactions in development are deferred and subject to immediate expensing if such a transaction becomes less likely to occur. If the actions we take in response to industry changes are not successful, our business, results of operations and financial condition may be adversely affected.
Accordingly, the situation at this time is evolving and, therefore, there is no assurance that future developments would not have a material adverse effect on the Company’s procurement, payment, delivery, or sale of LEU, or business viability. 30 Economic and Industry Risks Our future prospects are tied directly to the nuclear energy industry worldwide.
Accordingly, the situation at this time is evolving and, therefore, there is no assurance that future developments would not have a material adverse effect on the Company’s procurement, payment, delivery, or sale of LEU, or business viability. 33 Economic and Industry Risks Our future prospects are tied directly to the nuclear energy industry worldwide.
Accordingly, the effectiveness of liability allocation in contracts with utilities depends, in large measure, on the continuation of the nuclear protection afforded by the Price-Anderson Act and its implementation by the NRC. Nuclear liability is a significant risk in all of our activities involving enriched uranium and other nuclear material and related goods and services.
Accordingly, the effectiveness of liability allocation in contracts with utilities depends, in large measure, on the availability of the nuclear protection afforded by the Price-Anderson Act and its implementation by the NRC. Nuclear liability is a significant risk in all of our activities involving enriched uranium and other nuclear material and related goods and services.
Further, sanctions by the United States, Russia, or other countries on goods and services needed to make imports may directly or indirectly impact performance of the TENEX Supply Contract and our ability to transport, import, take delivery or make payments related to the LEU we purchase.
Further, sanctions or restrictions by the United States, Russia, or other countries on goods and services needed to make imports may directly or indirectly impact performance of the TENEX Supply Contract and our ability to transport, import, take delivery of or make payments or deliveries related to the LEU we purchase.
There is no assurance that such a license, waiver, or approval, if sought, would be granted, or if granted, granted in a timely fashion. If a license, waiver, or approval were not granted, the Company would need to look to alternative sources of LEU to replace the LEU that it could not procure from TENEX.
There is no assurance that such a license, waiver, or approval, if sought, would be granted, or if granted, granted in a timely fashion. If a license, waiver, or approval was not granted, the Company would need to look to alternative sources of LEU to replace the LEU that it could not procure from TENEX.
However, our right to continue to operate the facility after completion of Phase 2 of the HALEU Operation Contract depends on the award of one or more follow-on contracts by the U.S. government, as well as continued funding for operation from the U.S. government or other sources.
However, our right to continue to operate the facility after completion of Phase 2 of the HALEU Operation Contract depends on the award of one or more follow-on options by the U.S. government, as well as continued funding for operation from the U.S. government or other sources.
For example, depending on the terms of specific contracts, prices may be adjusted based on escalation using a general inflation index, published SWU or uranium market price indicators prevailing at the time of delivery, and other factors, all of which are unpredictable. Any inaccuracy in estimates of future prices would add to the imprecision of the Order Book estimate.
For example, depending on the terms of specific contracts, prices may be adjusted based on escalation using a general inflation index, published SWU or uranium market price indicators prevailing at the time of delivery, and other factors, all of which are unpredictable. Any inaccuracy in estimates of future prices would add to the imprecision of the backlog estimate.
Any inability to award us a contract or subcontract, any delay in payment, or the termination of a contract or subcontract, in whole or in part, due to a lapse in funding or otherwise, could adversely affect our business, financial condition or results of operations, or cash flows.
Any inability to award us a contract, subcontract or task order, any delay in payment, or the termination of a contract, subcontract or task order, in whole or in part, due to a lapse in funding or otherwise, could adversely affect our business, financial condition or results of operations, or cash flows.
There is no assurance that we will be awarded such contracts or that such funding will be available. Further, it is uncertain whether or when demand to support the scale up of the facility will materialize.
There is no assurance that we will be awarded such options or that such funding will be available. Further, it is uncertain whether or when demand to support the scale up of the facility will materialize.
Moreover, the lack of such agreements for cooperation between the U.S. government and those governments or agencies in emerging markets may restrict our ability to sell into such markets. Additionally, countries may impose other restrictions on the import or export of material or services related to our business.
Moreover, the lack of such agreements for cooperation between the U.S. government and those governments or agencies in emerging markets may restrict our ability to sell into such markets. Additionally, countries may impose other restrictions on the import or export of material or services related to our business such as the Russian Decree.
On November 30, 2022, after a competitive selection award, we signed a contract with the DOE to complete and operate the enrichment plant we commenced building in 2019. The HALEU Operation Contract has a base contract value of approximately $150 million in two phases through 2024.
On November 30, 2022, after a competitive selection award, we signed a contract with the DOE to complete and operate the enrichment plant we commenced building in 2019. The HALEU Operation Contract had a base contract value of approximately $150.0 million in two phases through 2024.
We cannot provide any assurance that events will not preclude us from making deliveries to our customers or increase our costs or that our customers, suppliers, or contractors will not default on their obligations to us or file for bankruptcy protection.
We cannot provide any assurance that events will not prevent or delay us from making deliveries to our customers or increase our costs or that our customers, suppliers, or contractors will not default on their obligations to us or file for bankruptcy protection.
The dollar amount of the Order Book, as stated at any given time, is not necessarily indicative of future sales revenues and is subject to uncertainty. Our Order Book is the estimated aggregate dollar amount of SWU and uranium sales that we expect to recognize as revenue in future periods under existing contracts with customers.
The dollar amount of the LEU backlog, as stated at any given time, is not necessarily indicative of future sales revenues and is subject to uncertainty. Our LEU backlog is the estimated aggregate dollar amount of SWU and uranium sales that we expect to recognize as revenue in future periods under existing contracts with customers.
Aside from the proposals for a U.S. ban on LEU imports from Russia, the expanding sanctions imposed by the United States and foreign governments on goods, services, entities, and instrumentalities that could be needed for performance of the TENEX Supply Contract could have adverse effects on the TENEX Supply Contract, even if such sanctions are not directed at imports of Russian LEU or other trade in nuclear material with Russia.
Aside from the Import Ban Act, the expanding sanctions imposed by the United States and foreign governments on goods, services, entities, and instrumentalities that could be needed for performance of the TENEX Supply Contract could have adverse effects on the TENEX Supply Contract, even if such sanctions are not directed at imports of Russian LEU or other trade in nuclear material with Russia.
A change in these underlying assumptions could cause the fair value of the intangible asset to be less than its respective carrying amount. 37 Centrus is dependent on intercompany support from Enrichment Corp. Substantially all of our revenue-generating operations are conducted at our subsidiary, Enrichment Corp.
A change in these underlying assumptions could cause the fair value of the intangible asset to be less than its respective carrying amount. Centrus is dependent on intercompany support from Enrichment Corp. Substantial portion of our revenue-generating operations are conducted at our subsidiary, Enrichment Corp.
The Company and the DOE signed the “2002 DOE-USEC Agreement”, which requires the Company to develop, demonstrate, and deploy advanced enrichment technology in accordance with milestones and provides for remedies in the event of a failure to meet a milestone under certain circumstances.
The Company and the DOE signed the 2002 DOE-USEC Agreement, which requires the Company to develop, demonstrate, and deploy advanced enrichment technology in accordance with milestones and provides for remedies in the event of a failure to meet a milestone under certain circumstances.
Our ability to fully utilize our existing NOLs or NUBILs could be limited or eliminated in the event (i) we undergo an “ownership change” as described under Section 382 of the Code, (ii) we do not reach profitability or are only marginally profitable, or (iii) there are changes in U.S. government laws and regulations.
Our ability to fully utilize our existing NOLs or NUBILs could be limited or eliminated in the event (i) we undergo an “ownership change” as described under Section 382 of the Code, (ii) we become unprofitable or are only marginally profitable, or (iii) there are changes in U.S. government laws and regulations.
While we would expect to work closely with our contractual counterparties to mitigate impacts of shortages of material due to the impact of sanctions, there is also a risk that disputes could arise that could result in significant costs for us.
While we would expect to work closely with our contractual counterparties to mitigate impacts of shortages of material resulting from the impact of sanctions or restrictions, there is also a risk that disputes could arise that could result in significant costs for us.
If Centrus could not obtain adequate protection from nuclear risks through a DOE indemnification, it may be forced to forego new business with DOE, which could adversely affect our results of operations and financial condition.
If Centrus could not obtain adequate protection from nuclear risks through a DOE indemnification, it may be forced to forego new business with DOE or commercial activities on DOE property, which could adversely affect our results of operations and financial condition.
However, our alternative sources are not sufficient to replace all of the Russian LEU the Company is currently permitted to import under the RSA, and to the extent additional supply cannot be obtained, or obtained at a higher cost, it will have a material adverse impact on our business, results of operations, and competitive position.
However, our alternative sources are not sufficient, or may not be available, to replace all or any of the Russian LEU the Company would be permitted to import under the RSA, and to the extent additional supply cannot be obtained, or must be obtained at a higher cost, it will have a material adverse impact on our business, results of operations, and competitive position.
Absent indemnification, Centrus and its subsidiaries could seek commercial insurance to cover nuclear risks, but insurance typically is not available for work done on legacy DOE sites, such as the Piketon facilities. Further, even if insurance were available, the amounts would be very small compared to the amount covered by the DOE indemnification clause.
Centrus and its subsidiaries could seek commercial insurance to cover nuclear risks that may not be fully amenable to indemnification, but insurance typically is not available for work done on legacy DOE sites, such as the Piketon facilities. Further, even if insurance was available, the amounts would be very small compared to the amount covered by the DOE indemnification clause.
Our estimate of the Order Book is based on a number of factors including customers’ estimates of the timing and size of their fuel requirements and estimates of future selling prices.
Our estimate of the LEU backlog is based on a number of factors including customers’ estimates of the timing and size of their fuel requirements and estimates of future selling prices.
A default and bankruptcy filing by one or more customers or suppliers, or events, such as those listed above which prevent or limit our ability to obtain or sell material or services, could have a material adverse effect on our business, financial position, results of operations, or cash flows. 31 Our business, financial and operating performance could be adversely affected by epidemics and other health related issues, including but not limited to the COVID-19 pandemic.
A default and bankruptcy filing by one or more customers or suppliers, or events, such as those listed above which prevent or limit our ability to obtain or sell material or services, could have a material adverse effect on our business, financial position, results of operations, or cash flows. 34 Our business, financial and operating performance could be adversely affected by epidemics and other health related issues.
Geopolitical events, including domestic or international reactions or responses to such events, as well as concerns about national security or other issues, also could lead to U.S. or foreign government or international actions, or actions by the Russian government or TENEX, that could disrupt our ability to purchase, import, sell, or make deliveries of LEU, SWU, or other uranium products, or even to continue to do business with one or more of our suppliers or their affiliates.
Even absent such restrictions, some of our U.S. and foreign customers are unable or unwilling to accept Russian SWU and uranium. 35 Geopolitical events, including domestic or international reactions or responses to such events, as well as concerns about national security or other issues, also could lead to U.S. or foreign government or international actions, or actions by the Russian government (including the Russian Decree) or TENEX, that could disrupt our ability to purchase, import, sell, or make deliveries of LEU, SWU, or other uranium products, or even to continue to do business with one or more of our suppliers or their affiliates.
As of December 31, 2023, based solely on amounts reported in Schedule 13D and 13G filings with the SEC, two stockholders with the largest holdings of our Class A Common Stock collectively owned approximately 15% of our Class A Common Stock.
As of December 31, 2024, based solely on amounts reported in Schedule 13D and 13G filings with the SEC, three stockholders with the largest holdings of our Class A Common Stock collectively owned approximately 18% of our Class A Common Stock.
If the contracting governmental agency, or the prime contractor, does not receive sufficient appropriations for any reason, including due to a government shutdown, it may terminate our contract or subcontract (in whole or in part) or reduce the scope of our contract or subcontract, or delay or reduce payment to us.
If the contracting governmental agency, or the prime contractor, does not receive sufficient appropriations for any reason, including due to a government shutdown or changes in the prevailing policies and budgetary priorities of the incumbent administration, it may terminate our contract or subcontract (in whole or in part) or reduce the scope of our contract or subcontract, or delay or reduce payment to us.
Risks related to financial factors primarily include: • significant long-term liabilities; • material unfunded defined benefit pension plans obligations and postretirement health and life benefit obligations; • our revenues and operating results may fluctuate significantly from quarter to quarter and year to year; • possible impairment loss related to our intangible assets; • Centrus is dependent on intercompany support from Enrichment Corp.; • limited trading volume for our securities and the market price of our securities is subject to volatility; • a small number of holders of our Class A Common Stock may exert significant influence over the direction of the Company; 27 • a small number of Class A stockholders, who also have significant holdings of the Company’s 8.25% Notes, may be motivated by interests that are not aligned with the Company’s other Class A stockholders; and • limited ability to utilize our NOL carryforwards to offset future taxable income.
Risks related to financial factors primarily include: • significant long-term liabilities; • material postretirement health and life benefit obligations; • our revenues and operating results may fluctuate significantly from quarter to quarter and year to year; • possible impairment loss related to our intangible assets; • dependency on intercompany support from Enrichment Corp.; • a small number of holders of our Class A Common Stock may exert significant influence over the direction of the Company; • a small number of Class A stockholders, who also have significant holdings of the Company’s 8.25% Notes, may be motivated by interests that are not aligned with the Company’s other Class A stockholders; and 30 • limited ability to utilize our NOL carryforwards to offset future taxable income.
Foreign persons are defined in our certificate of incorporation to include, among others, an individual who is not a U.S. citizen, an entity that is organized under the laws of a non-U.S. jurisdiction and an entity that is controlled by individuals who are not U.S. citizens, or by entities that are organized under the laws of non-U.S. jurisdictions. 41 The occurrence of any one or more of the following events is a “foreign ownership review event” and triggers the board of directors’ right to take various actions under our certificate of incorporation: (1) the beneficial ownership by a foreign person of (a) 5% or more of the issued and outstanding shares of any class of our equity securities, (b) 5% or more in voting power of the issued and outstanding shares of all classes of our equity securities, or (c) less than 5% of the issued and outstanding shares of any class of our equity securities or less than 5% of the voting power of the issued and outstanding shares of all classes of our equity securities, if such foreign person is entitled to control the appointment and tenure of any of our management positions or any director; (2) the beneficial ownership of any shares of any class of our equity securities by or for the account of a foreign uranium enrichment provider or a foreign competitor (defined in our certificate of incorporation as a “Contravening Person”); or (3) any ownership of, or exercise of rights with respect to, shares of any class of our equity securities or other exercise or attempt to exercise control of us that is inconsistent with, or in violation of, any regulatory restrictions, or that could jeopardize the continued operations of our facilities (defined in our certificate of incorporation as an “Adverse Regulatory Occurrence”).
The occurrence of any one or more of the following events is a “foreign ownership review event” and triggers the board of directors’ right to take various actions under our certificate of incorporation: (1) the beneficial ownership by a foreign person of (a) 5% or more of the issued and outstanding shares of any class of our equity securities, (b) 5% or more in voting power of the issued and outstanding shares of all classes of our equity securities, or (c) less than 5% of the issued and outstanding shares of any class of our equity securities or less than 5% of the voting power of the issued and outstanding shares of all classes of our equity securities, if such foreign person is entitled to control the appointment and tenure of any of our management positions or any director; (2) the beneficial ownership of any shares of any class of our equity securities by or for the account of a foreign uranium enrichment provider or a foreign competitor (defined in our certificate of incorporation as a “Contravening Person”); or (3) any ownership of, or exercise of rights with respect to, shares of any class of our equity securities or other exercise or attempt to exercise control of us that is inconsistent with, or in violation of, any regulatory restrictions, or that could jeopardize the continued operations of our facilities (defined in our certificate of incorporation as an “Adverse Regulatory Occurrence”).
The NRC could refuse to grant our license amendment to construct and operate a commercial plant if it determines that: (1) we are foreign owned, controlled, or dominated; (2) the issuance of the amendment would be inimical to the maintenance of a reliable and economic domestic source of enrichment; (3) the issuance of the amendment would be adverse to U.S. defense or security objectives; or (4) the issuance of the amendment is otherwise not consistent with applicable laws or regulations then in effect. 39 The NRC has the authority to issue notices of violation for violations of the Atomic Energy Act, the NRC regulations and conditions of licenses, certificates of compliance, or orders.
The NRC could refuse to grant our license amendment to construct and operate a commercial plant if it determines that: (1) we are foreign owned, controlled, or dominated; (2) the issuance of the amendment would be inimical to the maintenance of a reliable and economic domestic source of enrichment; (3) the issuance of the amendment would be adverse to U.S. defense or security objectives; or (4) the issuance of the amendment is otherwise not consistent with applicable laws or regulations then in effect.
If impairment is indicated, the asset carrying value will be reduced to its fair value. Inherent in our fair value determinations are certain judgments and estimates, including projections of future cash flows, the discount rate reflecting the risk inherent in future cash flows, the interpretation of current economic indicators and market valuations, and strategic plans with regard to operations.
Inherent in our fair value determinations are certain judgments and estimates, including projections of future cash flows, the discount rate reflecting the risk inherent in future cash flows, the interpretation of current economic indicators and market valuations, and strategic plans with regard to operations.
Nearly all of the SWU and LEU that we use to fill existing contracts with customers is sourced from outside the United States, including from Russia under the TENEX Supply Agreement, and we expect these arrangements to continue into the future.
Nearly all of the SWU and LEU that we use to fill existing contracts with customers is sourced from outside the United States, including from Russia under the TENEX Supply Contract.
The Technical Solutions segment conducts business under various types of contracts, including fixed-price contracts and cost-share contracts, where costs must be estimated in advance of our performance.
Our Technical Solutions segment conducts business under various types of contracts, including fixed-price and cost-share contracts, which subjects us to risks associated with cost overruns. The Technical Solutions segment conducts business under various types of contracts, including fixed-price contracts and cost-share contracts, where costs must be estimated in advance of our performance.
Our ability to place this SWU and LEU into existing and future contracts with customers is subject to trade restrictions, sanctions, and other limitations imposed by the United States, other governments, and our customers. For example, our imports from Russia are subject to U.S. quotas.
Our ability to place this SWU and LEU into existing and future contracts with customers is subject to trade restrictions, sanctions, and other limitations imposed by the United States, other governments, and our customers.
Such policies limit our ability to sell in those countries. 33 Certain foreign markets lack a comprehensive nuclear liability law that protects suppliers by channeling liability for injury and property damage suffered by third persons from nuclear incidents at a nuclear facility to the facility’s operator.
Certain foreign markets lack a comprehensive nuclear liability law that protects suppliers by channeling liability for injury and property damage suffered by third persons from nuclear incidents at a nuclear facility to the facility’s operator.
As a result, a relatively small change in the timing, amount, or other terms of customer orders for LEU due to a change in a customer’s refueling schedule or other reasons may cause operating results to be substantially above or below expectations, which could have an adverse effect on our cash flows.
As a result, a relatively small change in the timing, amount, or other terms of customer orders for LEU due to a change in a customer’s refueling schedule or other reasons may cause operating results to be substantially above or below expectations, which could have an adverse effect on our cash flows. 41 Results of operations could be negatively impacted if adverse conditions or changes in circumstances indicate a possible impairment loss related to our intangible assets.
Additionally, we may be responsible for D&D of facilities where we conduct, or previously conducted, operations. Activities of our contractors, suppliers or other counterparties similarly may involve toxic, hazardous, and radioactive materials and we may be liable contractually, or under applicable law, to contribute to remedy damages or other costs arising from such activities, including the D&D of third-party facilities.
Activities of our contractors, suppliers or other counterparties similarly may involve toxic, hazardous, and radioactive materials and we may be liable contractually, or under applicable law, to contribute to remedy damages or other costs arising from such activities, including the D&D of third-party facilities. 44 We lease facilities from the DOE near Piketon.
In an extreme case, the DOE could terminate our permit to access classified information resulting in the elimination of our ability to continue American Centrifuge work or performance of DOE contracts, including the HALEU Operation Contract. The inability to attract and retain key personnel could have an adverse impact on our business.
In an extreme case, the DOE could terminate our permit to access classified information resulting in the elimination of our ability to continue American Centrifuge work or performance of DOE contracts, including the HALEU Operation Contract.
We may not achieve the anticipated benefits from supply agreements we enter into. The prices we are charged under some supply agreements are determined by formulas that may not be aligned with the prevailing market prices at the time we enter into contracts with customers.
Either of these events could adversely affect profitability and the viability of our business. We may not achieve the anticipated benefits from our supply agreements. The prices we are charged under some supply agreements are determined by formulas that may not be aligned with the prevailing market prices at the time we enter into contracts with customers.
The NRC has the authority to impose civil penalties or additional requirements and to order cessation of operations for violations of its regulations. Penalties under the NRC regulations could include substantial fines, imposition of additional requirements, or withdrawal or suspension of licenses or certificates. Any penalties imposed on us could adversely affect our results of operations and liquidity.
Penalties under the NRC regulations could include substantial fines, imposition of additional requirements, or withdrawal or suspension of licenses or certificates. Any penalties imposed on us could adversely affect our results of operations and liquidity. The NRC also has the authority to issue new regulatory requirements or to change existing requirements.
Purchases of LEU and SWU by customers in the EU are subject to a policy of the Euratom Supply Agency that seeks to limit foreign enriched uranium to no more than 20% of EU consumption per year. Similarly, China has a policy of using Chinese sources of LEU and SWU.
Purchases of LEU and SWU by customers in the EU are subject to a policy of the Euratom Supply Agency that seeks to limit foreign enriched uranium to no more than 20% of EU consumption per year. Such policies limit our ability to sell in those countries.
In 2023, our ten largest nuclear fuel customers represented approximately 79% of total revenue and our two largest customers represented approximately 32% of total revenue.
In 2024, our ten largest nuclear fuel customers represented approximately 75% of total revenue and our two largest customers represented approximately 33% of total revenue.
This concentration of ownership may make it more difficult for other stockholders to effect substantial changes in the Company, may limit the ability of the Company to pass certain initiatives or other items that require stockholder approval, and may also have the effect of delaying, preventing, or expediting, as the case may be, a change in control of the Company. 38 A small number of Class A stockholders, who also have significant holdings of the Company’s 8.25% Notes, may be motivated by interests that are not aligned with the Company’s other Class A stockholders.
This concentration of ownership may make it more difficult for other stockholders to effect substantial changes in the Company, may limit the ability of the Company to pass certain initiatives or other items that require stockholder approval, and may also have the effect of delaying, preventing, or expediting, as the case may be, a change in control of the Company.
These plans are anticipated to require material cash contributions in the future, which may divert funds from other uses and could adversely impact our liquidity depending on the timing of any required contributions or payments in relation to our sources of cash and other payment obligations.
This plan may require material cash contributions in the future with a change in market conditions, which may divert funds from other uses and could adversely impact our financial condition depending on the timing of any required contributions or payments in relation to our sources of cash and other payment obligations.
If levels of foreign ownership set forth in our certificate of incorporation are exceeded, we have the right, among other things, to redeem or exchange common stock held by foreign persons, and in certain cases, the applicable redemption price or exchange value may be equal to the lower of fair market value or a foreign person’s purchase price. 28 War in Ukraine Risks The current war in Ukraine and related international sanctions and restrictions on trade could have a material adverse impact on our business, results of operations, and financial condition.
If levels of foreign ownership set forth in our certificate of incorporation are exceeded, we have the right, among other things, to redeem or exchange common stock held by foreign persons, and in certain cases, the applicable redemption price or exchange value may be equal to the lower of fair market value or a foreign person’s purchase price.
We are a party to a number of agreements and arrangements with the U.S. government that are important to our business including our HALEU Operation Contract, the lease for the centrifuge facility near Piketon, and the 2002 DOE-USEC Agreement. Termination, expiration, or modification of one or more of these or other agreements could adversely affect our business and prospects.
We are a party to a number of agreements and arrangements with the U.S. government that are important to our business including our HALEU Operation Contract, the lease for the centrifuge facility near Piketon, HALEU Production Contract, LEU Production Contract, HALEU Deconversion Contract and the 2002 DOE-USEC Agreement.
Although, the prospect that a ban would actually be imposed remains uncertain, but appears to be becoming more likely, imports of Russian LEU continue to be permitted into the United States subject to the RSA and a law adopted to implement the RSA.
Although the prospect that additional restrictions would be imposed remains uncertain, imports of Russian LEU continue to be permitted into the United States pursuant to the DOE waivers, subject to the RSA and a law adopted to implement the RSA.
The inability to retain appropriately qualified and experienced senior executives could negatively affect our operations, strategic planning, and performance. 43 The potential for the DOE to seek to terminate or exercise its remedies under the 2002 DOE-USEC Agreement and our other agreements with DOE, or to require modifications to such agreements that are adverse to our interests, may have adverse consequences on the Company.
The potential for the DOE to seek to terminate or exercise its remedies under the 2002 DOE-USEC Agreement and our other agreements with DOE, or to require modifications to such agreements that are adverse to our interests, may have adverse consequences on the Company.
Our inability to meet our purchase or sales obligations, or to earn revenues from U.S. and international sales, would cause us to incur significant financial losses, in addition to impeding or preventing us from fulfilling our existing contracts, or winning new contracts, and could adversely affect our profitability and the viability of our business. 32 We may be unable to sell all of the LEU we are required to purchase under supply agreements for prices that cover our costs, which could adversely affect profitability and the viability of our business.
Our inability to meet our purchase or sales obligations, or to earn revenues from U.S. and international sales, would cause us to incur significant financial losses, in addition to impeding or preventing us from fulfilling our existing contracts, or winning new contracts, and could adversely affect our profitability and the viability of our business.
The Company has contracts for alternative sources that could be used to mitigate a portion of the near-term impacts.
The Company has contracts and prospects for alternative sources that it expects to use to mitigate a portion of the near-term impacts.
Risks related to the war in Ukraine factors primarily include: • the current war in Ukraine and related international sanctions and restrictions. • the possible imposition of a ban on imports of Russian LEU into the United States or other countries, as a response to Russia’s invasion; and • financial losses we incur in connection with (i) efforts to mitigate the impact of government sanctions imposed in response to the invasion of Ukraine and/or (ii) disputes with our counterparties arising from such sanctions or mitigation efforts.
Risks related to the war in Ukraine factors primarily include: • the current war in Ukraine and related international sanctions and restrictions; • market and supply chain complications arising from the Import Ban Act, and the Russian Decree; a nd • financial losses we incur in connection with (i) the impact of government sanctions imposed in response to the invasion of Ukraine and/or (ii) disputes with our counterparties arising from such sanctions or mitigation efforts.
The costs of defending against a claim arising out of a nuclear incident or precautionary evacuation, and any damages awarded as a result of such a claim, could be very high and, even if indemnified, could adversely affect our results of operations and financial condition.
The costs of defending against a claim arising out of a nuclear incident or precautionary evacuation, and any damages awarded as a result of such a claim, could be very high and, even if indemnified, could adversely affect our results of operations and financial condition. 45 Our certificate of incorporation gives us certain rights with respect to equity securities held (beneficially or of record) by foreign persons.
This contract is currently set to expire at the completion of Phase 2 which is no later than December 31, 2024. We filed a new license amendment with the NRC to increase our material possession limit to accommodate anticipated output under the HALEU Operation Contract and extend our production authorization period under our license.
This contract is currently set to expire at the completion of Phase 2 which was extended to June 30, 2025. The NRC approved our license amendment to increase our material possession limit to accommodate anticipated output under the HALEU Operation Contract and extend our production authorization period under our license.
If we experience performance issues under any of our U.S. government contracts and subcontracts, the U.S. government retains the right to pursue remedies, which could include termination under any affected contract.
If we experience performance issues under any of our U.S. government contracts and subcontracts, the U.S. government retains the right to pursue remedies, which could include termination under any affected contract. Termination of a contract or subcontract could adversely affect our ability to secure future contracts, and could adversely affect our business, financial condition, results of operations, and cash flows.
Termination of a contract or subcontract could adversely affect our ability to secure future contracts, and could adversely affect our business, financial condition, results of operations, and cash flows. 44 Our U.S. government contracts and subcontracts are dependent on continued U.S. government funding and government appropriations, which may not be made on a timely basis or at all, and could have an adverse effect on our business.
Our U.S. government contracts and subcontracts are dependent on continued U.S. government funding and government appropriations, which may not be made on a timely basis or at all, and could have an adverse effect on our business.
Further, earnings may be positively or negatively impacted by the amount of expense we record for employee benefit plans. U.S. GAAP requires a company to calculate expenses for these plans using actuarial valuations. The IRS and the Pension Protection Act of 2006 regulate the minimum amount we contribute to our pension plans.
Further, earnings may be positively or negatively impacted by the amount of expense we record for employee benefit plans. U.S. GAAP requires a company to calculate expenses for these plans using actuarial valuations. The amount we are required to contribute to the postretirement health and life plan could have an adverse effect on our cash flows.
Risks related to economic and industry factors primarily include: • the financial difficulties experienced by, and operating conditions of, our customers and suppliers; • epidemics and other health related issues, including, but not limited to the COVID-19 pandemic; and • price volatility associated with the procurement of SWU and uranium.
Risks related to economic and industry factors primarily include: • the financial difficulties experienced by, and operating conditions of, our customers and suppliers; • epidemics and other health related issues; and • price volatility associated with the procurement of SWU and uranium, which may be exacerbated by any U.S. or foreign government sanctions or other actions.
Consequently, if imports of Russian LEU into the United States are restricted or banned, and we cannot obtain replacement materials, we expect reduced revenues and higher costs, which would have an adverse effect on our business, results of operations, and prospects.
Consequently, if imports of Russian LEU into the United States are restricted or banned, and we cannot obtain replacement materials, we expect reduced revenues and higher costs and expenses, which would have an adverse effect on our business, results of operations, and prospects. 37 There is no assurance that we will be awarded any task orders under any of our IDIQ contracts and, if awarded, the nature, timing and amount of the task orders that may be issued under an award is uncertain.
Revenue is recognized when or as we transfer control of the promised LEU or uranium to the customer. Customer demand is affected by, among other things, electricity markets, reactor operations, maintenance, and the timing of refueling outages.
Customer demand is affected by, among other things, electricity markets, reactor operations, maintenance, and the timing of refueling outages.
We continue to have significant long-term liabilities, including the indebtedness under our 8.25% Notes, which mature in February 2027. We also still have substantial pension and postretirement health and life benefit obligations and other long-term liabilities.
We continue to have significant long-term liabilities, including the indebtedness under our 2.25% Convertible Notes, which mature in November 2030 and our 8.25% Notes, which mature in February 2027.
We do not know what actions TENEX might take in response to sanctions, but if it refused to make future deliveries, such refusal would likely affect our ability to meet our delivery obligations to our customers and would have a material adverse effect on the Company. 29 If measures are taken to limit the import of Russian LEU or to prohibit or limit dealings with Russian entities, including, but not limited to, TENEX or the Rosatom, the Company could seek a license, waiver, or other approval from the government imposing such measures to ensure that the Company could continue to fulfill its purchase and sales obligations using LEU delivered under the TENEX Supply Contract.
If additional measures are taken to limit the import of Russian LEU or to prohibit or limit dealings with Russian entities, including, but not limited to, TENEX or Rosatom, the Company would seek a license, waiver, or other approval from the government imposing such measures so that the Company could continue to fulfill its purchase and sales obligations using LEU delivered under the TENEX Supply Contract.
In addition, the Price-Anderson Act indemnification does not cover loss or damage due to a nuclear incident to property located on the leased facilities. 40 Centrus and Enrichment Corp. have been named as defendants in lawsuits alleging damages resulting from releases at the facilities we leased in the past at the Portsmouth GDP, and the centrifuge facilities we still lease near Piketon.
Centrus and Enrichment Corp. have been named as defendants in lawsuits alleging damages resulting from releases at the facilities we leased in the past at the Portsmouth GDP, and the centrifuge facilities we still lease near Piketon.
Current and future U.S. government contracts and subcontracts, including our HALEU Operation Contract, are dependent on government funding, which are generally subject to Congressional appropriations or continued government operations. Our ability to perform under these federal contracts and subcontracts is dependent upon sufficient funding for, and timely payment by, the entities with which we have contracted.
Our ability to perform under these federal contracts and subcontracts is dependent upon sufficient funding for, and timely payment by, the entities with which we have contracted.
Refer to Note 17, Commitments and Contingencies — Legal Matters , of our Consolidated Financial Statements in Part IV of this Annual Report for further details. The authority of the DOE to enter into new indemnification agreements under the Price-Anderson Act expires at the end of 2025.
Refer to Note 17, Commitments and Contingencies — Legal Matters , of our Consolidated Financial Statements in Part IV of this Annual Report for further details.
Through 2027, well over one-half of the LEU that we expect to deliver to customers will come from material supplied to us under the TENEX Supply Contract. While we have other sources, they are not sufficient to replace the TENEX supply.
Through 2027, well over one-half of the LEU that we expect to deliver to customers will come from material supplied to us under the TENEX Supply Contract subject to potential supply disruptions from the Imports Ban Act, the Russian Decree or other such restrictions.
Levels of returns on pension and postretirement benefit plan assets, changes in interest rates and other factors affecting the amounts to be contributed to fund future pension and postretirement benefit liabilities could adversely affect earnings and cash flows in future periods.
The Company has material unfunded postretirement health and life benefit obligations. Changes in interest rates and other factors affecting the amounts to be contributed to fund future postretirement benefit liabilities could adversely affect earnings and cash flows in future periods. Centrus’ subsidiary, Enrichment Corp., maintains a postretirement health and life benefit plan.
Our technology and manufacturing facility in Oak Ridge is also regulated by the State of Tennessee under the NRC’s Agreement State Program as well as applicable state laws. Our operations at the facility near Piketon also are subject to regulation by various agencies of the Ohio state government.
Changes to the regulatory requirements also could adversely affect our results of operations and financial condition. 43 In addition, certain of our operations are subject to DOE regulation or contractual requirements. Our technology and manufacturing facility in Oak Ridge is also regulated by the State of Tennessee under the NRC’s Agreement State Program as well as applicable state laws.
The success of our business depends on key executives, managers, scientists, engineers and other skilled personnel. The ability to attract and retain these key personnel may be difficult in light of the uncertainties currently facing the business and changes we may make to the organizational structure to adjust to changing circumstances.
The ability to attract and retain these key personnel may be difficult in light of the uncertainties currently facing the business and changes we may make to the organizational structure to adjust to changing circumstances. Changes in senior management could create uncertainty among our employees, customers, suppliers, and other third parties with which we do business.
If we were to initiate such discussions in the future, we have no assurance that our customers would agree to revise existing contracts or would not require concessions, which could adversely affect the value of our Order Book and our business, results of operations and prospects. 34 Our ability to operate the HALEU enrichment facility we are deploying under the HALEU Operation Contract after the completion of the contract is dependent on our ability to secure additional contracts and funding from the U.S. government or other sources.
If we were to initiate such discussions in the future, we have no assurance that our customers would agree to revise existing contracts or would not require concessions, which could adversely affect the value of our backlog and our business, results of operations and prospects.
Risks related to operational factors primarily include: • restrictions on imports or sales of SWU or uranium that we buy from our Russian supplier and our other sources of supply; and • the inability to sell all of the LEU we are required to purchase under supply agreements for prices that cover our costs.
Risks related to operational factors primarily include: • disruptions arising from the Import Ban Act or the Russian Decree restricting imports, exports or sales of SWU or uranium that we buy from our Russian supplier and our other sources of supply; • lack of assurance that we will be awarded any task orders under any of our IDIQ contracts and, if awarded, the nature, timing and amount of the task orders that may be issued under an award is uncertain; and • the inability to sell all of the LEU we are required to purchase under supply agreements for prices that cover our costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Board exercises its oversight of material risks from cybersecurity threats through the Board’s Audit and Finance Committee and the Board’s Technology, Competition and Regulatory Committee. The Chief Financial Officer has delegated the assessment and management of material risks from cybersecurity threats to the Cybersecurity Risk Committee which is comprised of members of senior management, including the Director, Information Technology.
Biggest changeIt coordinates with the Audit and Finance Committee and the Board’s Technology, Competition and Regulatory Committee on cross disciplinary issues such as cybersecurity. The Chief Financial Officer has delegated the assessment and management of material risks from cybersecurity threats to management’s Cybersecurity Risk Committee which is comprised of members of senior management, including the Director, Information Technology.
The Cybersecurity Risk Committee regularly provides those delegating oversight with updates on the Company’s cybersecurity program which includes the current cybersecurity risk landscape and efforts employed to assist in preventing those risks, the Company’s cybersecurity policies and practices, the ongoing efforts to improve security, as well as the Company’s efforts regarding significant cybersecurity events.
Management’s Cybersecurity Risk Committee regularly provides those delegating oversight with updates on the Company’s cybersecurity program which includes the current cybersecurity risk landscape and efforts employed to assist in preventing those risks, the Company’s cybersecurity policies and practices, the ongoing efforts to improve security, as well as the Company’s efforts regarding significant cybersecurity events.
In addition, the Company maintains a cybersecurity incident response plan, which includes the Company’s processes for monitoring, preventing, detecting, mitigating, remediating, and recovery from cybersecurity incidents that is updated regularly. Disclosure with regard to a cybersecurity incident will be considered by the Cybersecurity Risk Committee, with material issues raised with our Board.
In addition, the Company maintains a cybersecurity incident response plan, which includes the Company’s processes for monitoring, preventing, detecting, mitigating, remediating, and recovery from cybersecurity incidents that is updated regularly. Disclosure with regard to a cybersecurity incident will be considered by management’s Cybersecurity Risk Committee, with material issues raised with our Board. 51
To continually evaluate the sufficiency of Centrus’ cybersecurity posture, Centrus aligns with the National Institute of Standards and Technology Cybersecurity Framework, has external experts complete assessments of Centrus’ cybersecurity posture, completes internal self-assessments and engages with third-party experts for assistance in monitoring, deterring, detecting, and addressing potential breaches.
To evaluate the sufficiency of Centrus’ cybersecurity posture, Centrus aligns with the National Institute of Standards and Technology Cybersecurity Framework. We periodically (i) have external experts complete assessments of Centrus’ cybersecurity posture, (ii) complete internal self-assessments and (iii) engage with third-party experts for assistance in monitoring, deterring, detecting, and addressing potential breaches.
Added
The Board exercises its oversight of material risks from cybersecurity threats through the Board’s newly established Cyber Risk Committee. Per its charter, the Board’s Cyber Risk Committee oversees the Company’s cybersecurity policies, procedures, and plans, including the quality and effectiveness of the related security, confidentiality, availability, recoverability, integrity, and disaster or incident response programs.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe industrial buildings encompass more than 14 acres under roof and were built to contain uranium enrichment operations using centrifuge technology. Our Oak Ridge, Tennessee and Piketon, Ohio facilities support our Technical Solutions segment. We also have a short-term lease for a small area of office space in Washington, D.C. which is used by one of our corporate functions.
Biggest changeThe industrial buildings encompass more than 14 acres under roof and were built to contain uranium enrichment operations using centrifuge technology. Our Oak Ridge, Tennessee and Piketon, Ohio facilities support our Technical Solutions segment. We maintain our facilities in good operating condition and believe they are adequate for our present needs and the foreseeable future.
Removed
We maintain our facilities in good operating condition and believe they are adequate for our present needs and the foreseeable future. 46

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s certificate of incorporation authorizes 100,000,000 shares of common stock, consisting of 70,000,000 shares of Class A Common Stock and 30,000,000 shares of Class B Common Stock, As of February 1, 2024, the Company has issued 15,675,634 shares of Common Stock, consisting of 14,956,434 shares of Class A Common Stock and 719,200 shares of Class B Common Stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s certificate of incorporation authorizes 100,000,000 shares of common stock, consisting of 70,000,000 shares of Class A Common Stock and 30,000,000 shares of Class B Common Stock.
Foreign persons are defined in our certificate of incorporation to include, among others, an individual who is not a U.S. citizen, an entity that is organized under the laws of a non-U.S. jurisdiction, and an entity that is controlled by individuals who are not U.S. citizens or by entities that are organized under the laws of non-U.S. jurisdictions. 49 The occurrence of any one or more of the following events is a “foreign ownership review event” and triggers the board of directors’ right to take various actions under our certificate of incorporation: (1) the beneficial ownership by a foreign person of (a) 5% or more of the issued and outstanding shares of any class of our equity securities, (b) 5% or more in voting power of the issued and outstanding shares of all classes of our equity securities, or (c) less than 5% of the issued and outstanding shares of any class of our equity securities or less than 5% of the voting power of the issued and outstanding shares of all classes of our equity securities, if such foreign person is entitled to control the appointment and tenure of any of our management positions or any director; (2) the beneficial ownership of any shares of any class of our equity securities by or for the account of a foreign uranium enrichment provider or a foreign competitor (referred to as “contravening persons”); or (3) any ownership of, or exercise of rights with respect to, shares of any class of our equity securities or other exercise or attempt to exercise control of us that is inconsistent with, or in violation of, any regulatory restrictions, or that could jeopardize the continued operations of our facilities (an “adverse regulatory occurrence”).
Foreign persons are defined in our certificate of incorporation to include, among others, an individual who is not a U.S. citizen, an entity that is organized under the laws of a non-U.S. jurisdiction, and an entity that is controlled by individuals who are not U.S. citizens or by entities that are organized under the laws of non-U.S. jurisdictions. 54 The occurrence of any one or more of the following events is a “foreign ownership review event” and triggers the board of directors’ right to take various actions under our certificate of incorporation: (1) the beneficial ownership by a foreign person of (a) 5% or more of the issued and outstanding shares of any class of our equity securities, (b) 5% or more in voting power of the issued and outstanding shares of all classes of our equity securities, or (c) less than 5% of the issued and outstanding shares of any class of our equity securities or less than 5% of the voting power of the issued and outstanding shares of all classes of our equity securities, if such foreign person is entitled to control the appointment and tenure of any of our management positions or any director; (2) the beneficial ownership of any shares of any class of our equity securities by or for the account of a foreign uranium enrichment provider or a foreign competitor (referred to as “contravening persons”); or (3) any ownership of, or exercise of rights with respect to, shares of any class of our equity securities or other exercise or attempt to exercise control of us that is inconsistent with, or in violation of, any regulatory restrictions, or that could jeopardize the continued operations of our facilities (an “adverse regulatory occurrence”).
No cash dividends were paid in 2023 or 2022, and we have no intention to pay cash dividends in the foreseeable future. The indenture governing our 8.25% Notes, subject to certain exceptions, places certain restrictions on the ability of Enrichment Corp. to transfer cash and other assets to us.
No cash dividends were paid in 2024 or 2023, and we have no intention to pay cash dividends in the foreseeable future. The indenture governing our 8.25% Notes, subject to certain exceptions, places certain restrictions on the ability of Enrichment Corp. to transfer cash and other assets to us.
The graph reflects the investment of $100 on December 31, 2018, in Class A Common Stock, the S&P 500 Index and the S&P A&D Index, and reflects the reinvestment of dividends. The stock price performance included in the graph below is not indicative of future stock performance.
The graph reflects the investment of $100 on December 31, 2019, in Class A Common Stock, the S&P 500 Index and the S&P A&D Index, and reflects the reinvestment of dividends. The stock price performance included in the graph below is not indicative of future stock performance.
Additionally, the Company has reserved 1,900,000 shares of Class A Common Stock under its management incentive plan, of which 561,704 shares were available for future awards as of December 31, 2023, including 120,000 shares associated with awards which terminated or were cancelled without being exercised. The Class A Common Stock trades on the NYSE American LLC under the symbol “LEU”.
Additionally, the Company has reserved 1,900,000 shares of Class A Common Stock under its management incentive plan, of which 540,158 shares were available for future awards as of December 31, 2024, including 120,000 shares associated with awards which terminated or were cancelled without being exercised. The Class A Common Stock trades on the NYSE American LLC under the symbol “LEU”.
As of February 1, 2024, there were approximately 727 holders of record and approximately 23,771 beneficial owners of the Company’s Class A Common Stock. As of February 1, 2024, there were two holders of record of the Company’s Class B Common Stock.
As of January 31, 2025, there were approximately 687 holders of record and approximately 49,166 beneficial owners of the Company’s Class A Common Stock. As of January 31, 2025, there were two holders of record of the Company’s Class B Common Stock.
There were no other unregistered sales of equity securities by the Company during the years ended December 31, 2023, 2022, or 2021. 48 Stock Performance Graph The following graph shows a comparison of cumulative total returns for an investment in the Class A Common Stock of Centrus, the S&P 500 Index, and the S&P Aerospace and Defense (A&D) Index.
There were no repurchases of shares of our Common Stock pursuant to a share repurchase program in 2024. 53 Stock Performance Graph The following graph shows a comparison of cumulative total returns for an investment in the Class A Common Stock of Centrus, the S&P 500 Index, and the S&P Aerospace and Defense (A&D) Index.
Removed
This could act as a constraint on our ability to pay dividends on our Class A Common Stock. On February 2, 2021, the Company offered and sold to Kulayba LLC the Warrant to purchase 250,000 shares of Class A Common Stock, exercisable immediately at an exercise price of $21.62 per share.
Added
As of January 31, 2025, the Company has issued 16,765,116 shares of Common Stock, consisting of 16,045,916 shares of Class A Common Stock and 719,200 shares of Class B Common Stock.
Removed
On December 29, 2022, the Company amended and restated the Warrant to extend the term to February 5, 2024 (as so amended and restated, the New Warrant).
Added
This could act as a constraint on our ability to pay dividends on our Class A Common Stock. On November 7, 2024, the Company issued to several initial purchasers (the “Initial Purchasers”) $402.5 million aggregate principal amount of the Company’s 2.25% Convertible Notes, pursuant to a purchase agreement among the Company and Bank of America Securities, Inc. and J.P.
Removed
On December 18, 2023, the Company issued 149,179 net shares of Class A Common Stock in connection with the cashless exercise by Kulayba LLC of the New Warrant for 250,000 shares of Class A Common Stock at an exercise price of $21.62.
Added
Morgan Securities LLC, as representatives of the Initial Purchasers. The 2.25% Notes were offered in a private placement to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Exchange Act.
Added
The offer and sale of the 2.25% Convertible Notes and the shares of the Company’s Class A Common Stock issuable upon conversion of the 2.25% Convertible Notes, if any, have not been, and will not be, registered under the Exchange Act or the securities laws of any other jurisdiction, and unless so registered, the 2.25% Convertible Notes and such shares, if any, may not be offered or sold in the United States except pursuant to an applicable exemption from such registration requirements.
Added
The 2.25% Convertible Notes will mature on November 1, 2030, unless repurchased, redeemed or converted in accordance with their terms prior to such date.
Added
The 2.25% Convertible Notes are senior unsecured obligations of the Company and will rank senior in right of payment to any of the Company’s unsecured indebtedness that is expressly subordinated in right of payment to the Notes; rank equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively rank junior in right of payment to any of the Company’s secured indebtedness, including the Company’s 8.25% Notes, to the extent of the value of the assets securing such indebtedness; and rank structurally junior to all indebtedness and other liabilities (including trade payables, but excluding intercompany obligations (other than the secured guarantee by United States Enrichment Corporation of the Company’s 8.25% Notes) and liabilities of a type not required to be reflected on a balance sheet of such subsidiaries in accordance with GAAP) of the Company’s existing and future subsidiaries.
Added
There were no other unregistered sales of equity securities by the Company during the years ended December 31, 2024, 2023, or 2022.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

155 edited+93 added−60 removed62 unchanged
Biggest changeAmong the factors that could affect our results are the following: • Armed conflicts, including the war in Ukraine, government actions and other events or third-party actions that disrupt supply chains, production, transportation, payments, and importation of nuclear materials or other critical supplies or services; • The potential for sanctions and other measures affecting the importation, sales or purchases of SWU or uranium or goods or services required for the purchase or delivery of such SWU or uranium; 56 • The availability and terms of additional purchases or sales of SWU and uranium; • Conditions in the LEU and energy markets, including pricing, demand, operations, government restrictions on imports, exports or investments, and regulations of our business and activities and those of our customers, suppliers, contractors, and subcontractors; • Timing of customer orders, related deliveries, and purchases of LEU or LEU components; • Costs of and future funding and demand for HALEU; • Financial market conditions and other factors that may affect pension and benefit liabilities and the value of related assets; • The outcome of legal proceedings and other contingencies; • Potential use of cash for strategic or financial initiatives; • Actions taken by customers and suppliers, including actions that might affect existing contracts; • The government’s inability to satisfy its obligations, including supplying government furnished equipment under its agreements with the Company or processing security clearances due to a shutdown or other reasons; and • Market, international trade, and other conditions impacting Centrus’ customers and the industry.
Biggest changeAmong the factors that could affect our results are the following: • Our ability to obtain additional waivers to allow us to import LEU from Russia so that we may continue supplying LEU to our customers, given the enactment of the Import Ban Act in May 2024; • The ability of TENEX to obtain, or timely obtain, and the willingness of TENEX to continue to request, additional licenses to export LEU from Russia so that we may continue supplying LEU to our customers, given the enactment of the Russian Decree in November 2024; • Conditions in the LEU and energy markets, including pricing, demand, operations, government restrictions on imports, exports or investments, and regulations of our business and activities and those of our customers, suppliers, contractors, and subcontractors; • Recently enacted sanctions and the potential for additional sanctions and other measures that restrict with whom we may transact or affect the importation, sales or purchases of SWU or uranium or goods or services required for the sale, purchase, transportation or delivery of such SWU or uranium; • Our ability to be awarded any task orders under any of the HALEU Production Contract, LEU Production Contract or HALEU Deconversion Contract; • Insufficient or untimely U.S. government funding and government appropriations to support our IDIQ contracts with the U.S. federal government; • Regulatory uncertainty from new or rescinded executive order or new or changes interpretations of federal regulations; • Armed conflicts, including the war in Ukraine, government actions and other events or third-party actions that disrupt supply chains, production, transportation, payments, and importation of nuclear materials or other critical supplies or services; • The availability and terms of additional purchases or sales of SWU and uranium; • Timing of customer orders, related deliveries, and purchases of LEU or LEU components; • Costs of and future funding and demand for HALEU; • Financial market conditions and other factors that may affect pension and benefit liabilities and the value of related assets; • The outcome of legal proceedings and other contingencies; • Potential use of cash for strategic or financial initiatives; • Actions taken by customers and suppliers, including actions that might affect existing contracts; • The government’s inability to satisfy its obligations, including supplying government furnished equipment under its agreements with the Company or processing security clearances resulting from a shutdown or other reasons; and • Market, international trade, and other conditions impacting Centrus’ customers and the industry. 64 For further discussion of these risks and uncertainties, refer to Part I, Item 1A, Risk Factors .
When Russian supply is included, the uranium enrichment segment of the global nuclear fuel market is oversupplied, but without Russian supply, the global market would be undersupplied for uranium enrichment.
When Russian supply is included, the uranium enrichment segment of the global nuclear fuel market is oversupplied, but without Russian supply, the global market for uranium enrichment would be undersupplied.
We are also actively considering, and expect to consider potential strategic transactions from time to time, which at any given time may be in various stages of discussions, diligence, or negotiation. These could involve, without limitation, acquisitions and/or dispositions of businesses or assets, joint ventures or investments in businesses, products or technologies, or changes to our capital structure.
Potential Transactions We are also actively considering, and expect to consider potential strategic transactions from time to time, which at any given time may be in various stages of discussions, diligence, or negotiation. These could involve, without limitation, acquisitions and/or dispositions of businesses or assets, joint ventures or investments in businesses, products or technologies, or changes to our capital structure.
For uranium not under contract, the estimated selling price is based primarily on published price indicators at the balance sheet date. 60 Intangible assets originated from our reorganization and application of fresh start accounting as of September 30, 2014. The intangible assets represented the fair value adjustment to the assets and liabilities for our LEU segment.
For uranium not under contract, the estimated selling price is based primarily on published price indicators at the balance sheet date. Intangible assets originated from our reorganization and application of fresh start accounting as of September 30, 2014. The intangible assets represented the fair value adjustment to the assets and liabilities for our LEU segment.
Although the Company believes demand for HALEU will emerge over the next several years, there are no guarantees about whether or when government or commercial demand for HALEU will materialize, and there are a number of technical, regulatory and economic hurdles that must be overcome for these fuels and reactors to come to the market.
Although the Company believes demand for HALEU will emerge over the next several years, there are no guarantees about whether or when government or commercial demand for HALEU will materialize, and there are a number of technical, regulatory and economic hurdles that must be overcome for these fuels and the reactors that will use these fuels to come to the market.
The termination for convenience language also may be included in contracts with foreign, state and local governments. We also have contracts with customers that do not include termination for convenience provisions, including contracts with commercial customers. 74 In our LEU segment, we have long-term inventory purchase agreements with TENEX and Orano that extend to 2028 and 2030, respectively.
The termination for convenience language also may be included in contracts with foreign, state and local governments. We also have contracts with customers that do not include termination for convenience provisions, including contracts with commercial customers. In our LEU segment, we have long-term inventory purchase agreements with TENEX and Orano that extend to 2028 and 2030, respectively.
Further, sanctions by the United States, Russia or other countries may impact our ability and cost to transport, export, import, take delivery, or make payments related to the LEU we purchase and may require us to increase purchases from non-Russian sources to the extent available.
Further, sanctions or restrictions by the United States, Russia or other countries may impact our ability and cost to transport, export, import, take delivery, or make payments related to the LEU we purchase and may require us to increase purchases from non-Russian sources to the extent available.
The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed for all, or some portion, of the deferred tax assets. All available positive and negative evidence is analyzed quarterly to determine the amount of the valuation allowance.
The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed for all, or some portion, of the deferred tax assets. 71 All available positive and negative evidence is analyzed quarterly to determine the amount of the valuation allowance.
Cost of sales for SWU and uranium is based on the amount of SWU and uranium hexafluoride sold and delivered during the period and unit inventory costs. Unit inventory costs are determined using the average cost method. Changes in purchase costs have an effect on inventory costs and cost of sales.
Cost of sales for SWU and uranium is based on the amount of SWU and uranium hexafluoride sold and delivered during the period and unit inventory costs, which are determined using the average cost method. Changes in purchase costs have an effect on inventory costs and cost of sales.
A report issued by the International Atomic Energy Agency in 2023, for example, reported that while U.S. utilities may have enough inventory to cover one reload of their reactors, “truly strategic physical stockpiles are almost non-existent.” 2 Changes in the supply-demand balance and in the competitive landscape arising from the war in Ukraine may affect pricing trends, change customer spending patterns, and create uncertainty in the uranium market.
A report issued by the International Atomic Energy Agency in 2023 reported that while U.S. utilities may have enough inventory to cover one reload of their reactors, “truly strategic physical stockpiles are almost non-existent.” 2 Changes in the supply-demand balance and in the competitive landscape arising from the war in Ukraine may affect pricing trends, change customer spending patterns, and create uncertainty in the uranium market.
To address these changes, we have taken steps to adjust our cost structure; we may seek further adjustments to our cost structure and operations and evaluate opportunities to grow our business organically or through acquisitions and other strategic transactions.
To 59 address these changes, we have taken steps to adjust our cost structure; we may seek further adjustments to our cost structure and operations and evaluate opportunities to grow our business organically or through acquisitions and other strategic transactions.
Pursuant to this shelf registration statement, the Company may offer and sell up to $200 million in securities, in aggregate. The Company retains broad discretion over the use of the net proceeds from the sale of the securities offered.
Pursuant to this shelf registration statement, the Company may offer and sell up to $200.0 million in securities, in aggregate. The Company retains broad discretion over the use of the net proceeds from the sale of the securities offered.
There is a minimum annual royalty payment of $100,000 and the maximum cumulative royalty over the life of the license is $100 million. There is currently no commercial enrichment facility producing LEU using DOE centrifuge technology.
There is a minimum annual royalty payment of $100,000 and the maximum cumulative royalty over the life of the license is $100.0 million. There is currently no commercial enrichment facility producing LEU using DOE centrifuge technology.
Revenue from our LEU segment is derived primarily from: • sales of the SWU component of LEU; • sales of natural uranium hexafluoride, uranium concentrates or uranium conversion; and • sales of enriched uranium product that include both the natural uranium hexafluoride and SWU components of LEU.
Our LEU segment revenue is derived primarily from the following: • sales of the SWU component of LEU; • sales of natural uranium hexafluoride, uranium concentrates or uranium conversion; and • sales of enriched uranium product that include both the natural uranium hexafluoride and SWU components of LEU.
However, the net impact of any changes in the expected return on benefit plan assets on the final benefit cost recognized for fiscal year 2024 would be $0 since the actual return on assets would effectively be reflected at December 31, 2024, under our mark-to-market accounting methodology. • The present value of pension obligations is calculated by discounting long-term obligations using a market interest rate.
However, the net impact of any changes in the expected return on benefit plan assets on the final benefit cost recognized for fiscal year 2025 would be $0 since the actual return on assets would effectively be reflected at December 31, 2025, under our mark-to-market accounting methodology. • The present value of pension obligations is calculated by discounting long-term obligations using a market interest rate.
Phase 2 of the contract includes continued operations and maintenance, and production for a full year at an annual production rate of 900 kilograms of HALEU UF 6 .
Phase 2 of the HALEU Operation Contract includes continued operations and maintenance, and production for a full year at an annual production rate of 900 kilograms of HALEU UF 6 .
DOE Technology License We have a non-exclusive license in DOE inventions that pertains to enriching uranium using gas centrifuge technology. The license agreement with the DOE provides for annual royalty payments based on a varying percentage (1% up to 2%) of our annual revenues from sales of the SWU component of LEU produced by the Company using DOE centrifuge technology.
DOE Technology License We have a non-exclusive license in DOE inventions that pertain to enriching uranium using gas centrifuge technology. The license agreement with the DOE provides for annual royalty payments based on a varying percentage (1% up to 2%) of our annual revenues from sales of the SWU component of LEU produced by the Company using DOE centrifuge technology.
For both the years ended December 31, 2023 and 2022, annual payments of $6.1 million of interest classified as debt are classified as a financing activity. Refer to Note 8, Debt, of the Consolidated Financial Statements in Part IV of this Annual Report regarding the accounting for the 8.25% Notes.
For both the years ended December 31, 2024 and 2023, annual payments of $6.1 million of interest classified as debt are classified as a financing activity. Refer to Note 8, Debt, of the Consolidated Financial Statements in Part IV of this Annual Report regarding the accounting for the 8.25% Notes.
We are also actively considering, and expect to consider from time to time in the future, potential strategic transactions, which could involve, without limitation, acquisitions and/or dispositions of businesses or assets, joint ventures or investments in businesses, products or technologies, or changes to our capital structure.
We are also actively considering, and expect to consider potential strategic transactions from time to time, which could involve, without limitation, acquisitions and/or dispositions of businesses or assets, joint ventures or investments in businesses, products or technologies, or changes to our capital structure.
GAAP and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business are complex and involve many subjective assumptions, estimates and judgments that are, by their nature, subject to substantial risks and uncertainties.
GAAP. U.S. GAAP and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business are complex and involve many subjective assumptions, estimates and judgments that are, by their nature, subject to substantial risks and uncertainties.
However, due to lack of objectively verifiable information in later years, it was determined that forecasted future income was not sufficient to realize all the deferred tax assets. Therefore, Centrus recorded a partial release of its federal valuation allowance.
However, because of the lack of objectively verifiable information in later years, it was determined that forecasted future income was not sufficient to realize all the deferred tax assets. Therefore, Centrus recorded a partial release of its federal valuation allowance.
The base contract value is approximately $150 million in two phases through 2024. Phase 1 included an approximately $30 million cost share contribution from Centrus matched by approximately $30 million from the DOE to complete construction of the cascade, begin operations and produce the initial 20 kilograms of HALEU UF 6 by no later than December 31, 2023 .
The base contract value was approximately $150.0 million in two phases through 2024. Phase 1 included an approximately $30.0 million cost-share contribution from Centrus matched by approximately $30.0 million from the DOE to complete construction of the cascade, begin operations and produce the initial 20 kilograms of HALEU UF 6 by no later than December 31, 2023 .
The state income tax expense for the year ended December 31, 2023 and 2022, pr imarily relates to an accrual for a current unrecognized tax benefit offset by the reversal of a previously accrued unrecognized tax benefit.
The state income tax expense for the year ended December 31, 2024 and 2023, pr imarily relates to an accrual for a current unrecognized tax benefit offset by the reversal of a previously accrued unrecognized tax benefit.
Off-Balance Sheet Arrangements Other than our SWU purchase commitments and the license agreement with the DOE relating to the American Centrifuge technology, there were no material off-balance sheet arrangements at December 31, 2023.
Off-Balance Sheet Arrangements Other than our SWU purchase commitments and the license agreement with the DOE relating to the American Centrifuge technology, there were no material off-balance sheet arrangements at December 31, 2024.
New Accounting Standards Reference is made to New Accounting Standards in Note 1, Summary of Significant Accounting Policies, of the Consolidated Financial Statements in Part IV of this Annual Report for information on new accounting standards. 75
New Accounting Standards Reference is made to New Accounting Standards in Note 1, Summary of Significant Accounting Policies, of the Consolidated Financial Statements in Part IV of this Annual Report for information on new accounting standards. 84
Our ability to meet this requirement depends on the capacity or willingness of the facilities where natural uranium is supplied to us by customers, to allow us to deliver this natural uranium to TENEX. We were recently notified by one facility that it will no longer receive natural uranium for TENEX.
Our ability to meet this requirement depends on the capacity or willingness of the facilities where natural uranium is supplied to us by customers, to allow us to deliver this natural uranium to TENEX. In 2023, we were notified by one facility that it will no longer receive natural uranium for TENEX.
Finally, the HALEU Operation Contract includes options for the government to unilaterally extend performance for up to an additional nine years, comprised of three options of three years each, also on a cost-plus-incentive-fee basis. The Company also is performing additional work on infrastructure and facility repairs and costs associated with 5B Cylinder refurbishment under the DOE’s technical direction.
Finally, the HALEU Operation Contract includes options for the government to unilaterally extend performance for up to an additional nine years, comprised of three options of three years each, also on a cost-plus-incentive-fee basis. The Company also is performing additional work on infrastructure and facility repairs and costs associated with 5B Cylinder refurbishment under contract modifications or DOE technical direction.
This discount rate is the estimated rate at which the benefit obligations could be effectively settled on the measurement date and is based on yields of high quality fixed income investments whose cash flows match the timing and amount of expected benefit payments of the plan. Discount rates of approximately 5.2% were used as of December 31, 2023.
This discount rate is the estimated rate at which the benefit obligations could be effectively settled on the measurement date and is based on yields of high quality fixed income investments whose cash flows match the timing and amount of expected benefit payments of the plan. Discount rates of approximately 5.65% were used as of December 31, 2024.
The indenture also restricts the Company’s ability to engage in certain mergers or acquisitions and requires the Company to offer to repurchase all such outstanding notes at 101% of their outstanding principal amount in the event of certain change of control events. Capital expenditures of approximately $7.0 million are anticipated over the next 12 months.
The indenture also restricts the Company’s ability to engage in certain mergers or acquisitions and requires the Company to offer to repurchase all such outstanding notes at 101% of their outstanding principal amount in the event of certain change of control events. Capital expenditures of approximately $25.1 million are anticipated over the next 12 months.
NRV is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The estimated selling price for SWU and uranium under contract is based on the pricing terms of contracts in our Order Book.
NRV is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The estimated selling price for SWU and uranium under contract is based on the pricing terms of contracts in our backlog.
These medium and long-term contracts are subject to significant risks and uncertainties, including existing import laws and restrictions, such as the RSA, which limits imports of Russian uranium products into the United States and applies to our sales using material procured under the TENEX Supply Contract as well as the potential for additional sanctions and other restrictions in response to the evolving situation regarding the war in Ukraine.
However, these medium and long-term contracts are subject to significant risks and uncertainties, including existing import laws and restrictions, such as the RSA, which limits imports of Russian uranium products into the United States and applies to our sales using material procured under the TENEX Supply Contract, as well as the potential for additional sanctions and other restrictions affecting the Company or its suppliers, in response to the evolving situation regarding the war in Ukraine.
For performance obligations to provide services to the customer, revenue is recognized over time based on direct costs incurred or the right to invoice method (in situations where the value transferred matches the Company’s billing rights) as the customer receives and consumes the benefits.
Revenues are recorded proportionally as costs are incurred. For performance obligations to provide services to the customer, revenue is recognized over time based on direct costs incurred or the right to invoice method (in situations where the value transferred matches the Company’s billing rights) as the customer receives and consumes the benefits.
Amortization expense for the intangible asset related to the September 2014 sales Order Book is a function of SWU sales volume under that Order Book, and amortization expense for the intangible asset related to customer relationships is amortized on a straight-line basis.
Amortization expense for the intangible asset related to the September 2014 sales backlog is a function of SWU sales volume under that backlog, and amortization expense for the intangible asset related to customer relationships is amortized on a straight-line basis.
Refer to Note 17, Commitments and Contingencies, of the Consolidated Financial Statements in Part IV of this Annual Report for additional information. In addition, Centrus has entered into multiple inventory loans that we expect to repay from 2024 through 2026. Refer to Note 4, Inventories, of the Consolidated Financial Statements in Part IV of this Annual Report for additional information.
Refer to Note 17, Commitments and Contingencies, of the Consolidated Financial Statements in Part IV of this Annual Report for additional information. In addition, Centrus has entered into multiple inventory loans that we expect to repay in 2025 and 2026. Refer to Note 4, Inventories, of the Consolidated Financial Statements in Part IV of this Annual Report for additional information.
This sudden surge in the SWU spot price has been driven by uncertainty created as a result of Russia’s invasion of Ukraine, coupled with growing interest in nuclear power as a source of secure and carbon-free energy.
This surge in the SWU spot price beginning in 2022 has been driven by primarily by uncertainty created as a result of Russia’s invasion of Ukraine, coupled with growing interest in nuclear power as a source of secure and carbon-free energy.
We have omitted discussion of 2021 results where it would be redundant to the discussion previously included in Item 7 of our 2022 Annual Report on Form 10-K, filed with the SEC on February 22, 2023.
We have omitted discussion of 2022 results where it would be redundant to the discussion previously included in Item 7 of our 2023 Annual Report on Form 10-K, filed with the SEC on February 9, 2024.
Rights Agreement On June 20, 2023, the Company entered into a Fifth Amendment to the Rights Agreement, which amends the Rights Agreement, dated as of April 6, 2016, by and among the Company, and Computershare Trust Company, N.A. and Computershare Inc., as rights agent, as amended by (i) the First Amendment to the Rights Agreement dated as of February 14, 2017, (ii) the Second Amendment to the Rights Agreement dated as of April 3, 2019, (iii) the Third Amendment to the Rights Agreement dated as of April 13, 2020, and (iv) the Fourth Amendment to the Rights Agreement dated as of June 16, 2021.
Rights Agreement On May 28, 2024, the Company entered into a Sixth Amendment to the Section 382 Rights Agreement, which amends the Rights Agreement, dated as of April 6, 2016, by and among the Company, and Computershare Trust Company, N.A. and Computershare Inc., as rights agent, as amended by (i) the First Amendment to the Rights Agreement dated as of February 14, 2017; (ii) the Second Amendment to the Rights Agreement dated as of April 3, 2019; (iii) the Third Amendment to the Rights Agreement dated as of April 13, 2020; (iv) the Fourth Amendment to the Rights Agreement dated as of June 16, 2021; and (v) the Fifth Amendment to the Rights Agreement dated as of June 20, 2023.
In addition, the Company had $29.8 million of restricted cash related to three inventory loans, which each required a cash deposit into an escrow fund. See Note 3 , Cash, Cash Equivalents, and Restricted Cash , of the Consolidated Financial Statements in Part IV of this Report.
In addition, there was $29.8 million of restricted cash related to three inventory loans, which required a cash deposit into an escrow fund. See Note 3 , Cash, Cash Equivalents, and Restricted Cash , of the Consolidated Financial Statements in Part IV of this Report.
Contracts where we sell both the SWU and natural uranium hexafluoride components of LEU to utilities or where we sell natural uranium hexafluoride to utilities and other nuclear fuel related companies are generally shorter-term, fixed-commitment contracts. Individual customer orders for the SWU component of LEU fulfilled in 2023 averaged approximately $7.1 million per order.
Contracts where we sell both the SWU and natural uranium hexafluoride components of LEU to utilities or where we sell natural uranium hexafluoride to utilities and other nuclear fuel related companies are generally shorter-term, fixed-commitment contracts. Individual customer orders for the SWU component of LEU fulfilled in 2024 averaged approximately $9.4 million per order.
Centrus determined that the positive evidence of increased forecasted future income in the LEU segment based on existing sales Order Book and supply contracts along with commodity market forward pricing indicators, supported the release of the federal valuation allowance.
Centrus determined that the positive evidence of increased forecasted future income in the LEU segment based on existing sales backlog and supply contracts along with commodity market forward pricing indicators, supported the release of a portion of the federal valuation allowance.
The Company measures Net Income and Net Income per Share both on a GAAP basis and on an adjusted basis to exclude deemed dividends allocable to retired preferred stock shares and the warrant modification (“Adjusted Net Income” and “Adjusted Net Income per Share”).
The Company measures Net Income and Net Income per Share both on a GAAP basis and on an adjusted basis to exclude deemed dividends allocable to the warrant modification (“Adjusted Net Income” and “Adjusted Net Income per Share”).
We have a SWU supply agreement that commenced in 2023, with prices payable in a combination of U.S. dollars and euros, but with a contract-defined exchange rate. On occasion, we will accept payment for SWU in the form of natural uranium hexafluoride.
We have a SWU supply agreement, that commenced in 2023, with prices payable in a combination of U.S. dollars and euros. On occasion, we will accept payment for SWU in the form of natural uranium hexafluoride.
These limitations include a requirement that we return UF 6 to TENEX for the LEU we receive under the TENEX Supply Contract at approximately the same time that we deliver the LEU to our customers.
These limitations include a requirement that we return natural uranium to TENEX for the LEU we receive under the TENEX Supply Contract at approximately the same time that we deliver the LEU to our customers.
After expenses and commissions paid to the agents the Company’s 2023, 2022, and 2021, proceeds totaled $23.4 million, $3.6 million, and $42.4 million, respectively. Additionally, the Company recorded direct costs of $0.2 million and $0.3 million related to the issuance in 2023 and 2021, respectively.
After expenses and commissions paid to the agents, the Company’s 2024, 2023, and 2022, proceeds totaled $55.1 million, $23.4 million, and $3.6 million, respectively. Additionally, the Company recorded direct costs of $0.3 million, $0.2 million, and $0 related to the issuance in 2024, 2023, and 2022, respectively.
A one-half percentage point reduction in the discount rate would increase the valuation of pension benefit obligations by $13.0 million and postretirement health and life benefit obligations by $3.7 million, and the resulting changes in the valuations would decrease the aggregate service cost and interest cost components of annual pension costs and postretirement health and life benefit costs by $0.9 million and $0.3 million, respectively. • The healthcare costs trend rates are 7% projected in 2024 reducing to a final trend rate of 5% by 2032.
A one-half percentage point reduction in the discount rate would increase the valuation of pension benefit obligations by $1.7 million and postretirement health and life benefit obligations by $3.3 million, and the resulting changes in the valuations would decrease the aggregate service cost and interest cost components of annual pension costs and postretirement health and life benefit costs by $0 and $0.2 million, respectively. • The healthcare costs trend rates are 7% projected in 2025 reducing to a final trend rate of 5% by 2033.
The customer relationships intangible asset is amortized using the straight-line method over the estimated average useful life of 15 years, with 5 ¾ years of scheduled amortization remaining. The aggregate net balance of identifiable intangible assets was $39.4 million as of December 31, 2023.
The customer relationships intangible asset is amortized using the straight-line method over the estimated average useful life of 15 years, with 4 ¾ years of scheduled amortization remaining. The aggregate net balance of identifiable intangible assets was $29.6 million as of December 31, 2024.
The identifiable intangible assets relate to our Order Book and customer relationships. The Order Book intangible asset is amortized as the Order Book valued at emergence is reduced, principally as a result of deliveries to customers.
The identifiable intangible assets relate to our LEU segment backlog and customer relationships. The backlog intangible asset is amortized as the backlog, valued at emergence, is reduced, principally as a result of deliveries to customers.
The shares of Class A Common Stock were issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-239242), which became effective on August 5, 2020, and two prospectus supplements dated December 31, 2020 and December 5, 2022, respectively.
The shares of Class A Common Stock were issued pursuant to the Company’s shelf registration statement on Form S-3 (File No. 333-272984), which became effective on July 10, 2023, and a prospectus supplement dated February 9, 2024 and the Company’s shelf registration statement on Form S-3 (File No. 333-239242), which became effective on August 5, 2020, and two prospectus supplements dated December 31, 2020 and December 5, 2022, respectively.
We are continuing to advance our U.S. centrifuge technology that has evolved from DOE inventions at specialized technology and manufacturing facilities in Oak Ridge with a view to deploying a commercial enrichment facility over the long term once market conditions recover.
We are continuing to advance our U.S. centrifuge technology that has evolved from DOE inventions at specialized facilities in Oak Ridge, Tennessee with a view to deploying a commercial enrichment facility over the long term.
The HALEU Operation Contract also gives DOE three 3-year options to pay for up to nine additional years of production from the cascade beyond the base contract; those options are at the DOE’s sole discretion and subject to the availability of Congressional appropriations.
The HALEU Operation Contract also gives DOE the ability to exercise three optional periods to contract for up to nine additional years of production from the cascade beyond the base contract; those options are at the DOE’s sole discretion and subject to the availability of Congressional appropriations.
As a result, Centrus is exploring the opportunity to deploy LEU enrichment alongside HALEU enrichment to meet a range of commercial and U.S. government requirements, which would bring cost synergies while increasing revenue opportunities.
As a result, coupled with the Company’s contract awards for HALEU and LEU production, Centrus is exploring the opportunity to deploy LEU enrichment alongside HALEU enrichment to meet a range of commercial and U.S. government requirements, which would bring cost synergies while increasing revenue opportunities.
The Fifth Amendment to the Rights Agreement (i) increases the purchase price for each one one-thousandth (1/1000th) of a share of the Company’s Series A Participating Cumulative Preferred Stock, par value $1.00 per share, from $18.00 to $160.38; and (ii) extends the Final Expiration Date (as defined in the Rights Agreement) from June 30, 2023 to June 30, 2026.
On June 20, 2023, the Company entered into a Fifth Amendment to the Rights Agreement which (i) increased the purchase price for each one one-thousandth (1/1000th) of a share of the Company’s Series A Participating Cumulative Preferred Stock, par value $1.00 per share, from $18.00 to $160.38, and (ii) extended the Final Expiration Date (as defined in the Rights Agreement) from June 30, 2023 to June 30, 2026.
These cash inflows were partially offset by approximately $309.0 million of disbursements for operations, of which approximately $245.0 million relates to payments for LEU inventory deliveries and cash outflows for the Technical Solutions segment, with the remaining disbursements including corporate administration, benefits claims, and advanced technology costs. During 2022, net cash provided by operating activities was $20.6 million.
These cash inflows were partially offset by approximately $310.0 million of disbursements for operations, of which approximately $239.0 million relates to payments for LEU inventory deliveries and cash outflows for the Technical Solutions segment, with the remaining disbursements including corporate administration, benefits claims, and advanced technology costs. During 2023, net cash provided by operating activities was $9.1 million.
Under the HALEU Operation Contract, DOE is contractually required to provide the 5B Cylinders necessary for us to collect the output of the cascade, but supply chain challenges have created difficulties for DOE in securing 5B Cylinders for the entire production year.
Under the HALEU Operation Contract, DOE is contractually required to provide the 5B Cylinders necessary to collect the output of the cascade, but ongoing supply chain challenges had created difficulties for DOE in securing enough 5B Cylinders for the entire production year under Phase 2.
The DOE will own the HALEU produced from the demonstration cascade and Centrus will be compensated on a cost-plus-incentive-fee basis, with an expected Phase 2 contract value of approximately $90 million, subject to Congressional appropriations.
The DOE will own the HALEU produced from the demonstration cascade and Centrus will be compensated on a cost-plus-incentive-fee basis, with an initial Phase 2 contract value of approximately $90.0 million, subject to Congressional appropriations. DOE has increased the Phase 2 contract value and related funding to $129.0 million.
The war in Ukraine has contributed to a significant increase in market prices for enrichment and prompted calls for public and private investment in new, domestic uranium enrichment capacity not only for HALEU production but also for LEU production to support the existing fleet of reactors.
The war in Ukraine, along with Import Ban Act and the Russian Decree, have contributed to a significant increase in market prices for enrichment and prompted calls for public and private investment in new, domestic uranium enrichment capacity not only for HALEU production but also for LEU production to support the existing fleet of reactors.
For details on HALEU Operation and Demonstration Contract accounting, refer to Technical Solutions - Government Contracting above. Gross Profit The Company recognized a gross profit of $112.1 million and $117.9 million for the year ended December 31, 2023 and 2022, respectively, a decrease of $5.8 million (or 5%).
For details on HALEU Operation Contract accounting, refer to Technical Solutions - Government Contracting above. Gross Profit The Company recognized a gross profit of $111.5 million and $112.1 million for the year ended December 31, 2024 and 2023, respectively, a decrease of $0.6 million (or 1%).
For further discussion, please see Part I, Item 1A, Risk Factors . 69 The indenture governing the 8.25% Notes includes restrictions on the ability of Enrichment Corp. to transfer cash and other assets to the Company, which could constrain the Company’s ability to pay dividends on its Common Stock or to fund its commitments or the commitments of its other subsidiaries, subject to certain exceptions, such as the transfer of inventory and other assets in the ordinary course of business of Enrichment Corp.
The indenture governing the 8.25% Notes includes restrictions on the ability of Enrichment Corp. to transfer cash and other assets to the Company, which could constrain the Company’s ability to pay dividends on its Common Stock or to fund its commitments or the commitments of its other subsidiaries, subject to certain exceptions, such as the transfer of inventory and other assets in the ordinary course of business of Enrichment Corp.
Department of Defense, the Defense Advanced Research Projects Agency, and the DOE supporting the development of microreactors which demonstrates the focus on both the development of microreactors and the ultimate need for HALEU.
Department of Defense, the Defense Advanced Research Projects Agency, and the DOE are building small modular reactors and microreactors, which demonstrates the focus on both the development of microreactors and the ultimate need for HALEU.
Working Capital The following table summarizes the Company’s working capital (in millions): December 31, 2023 2022 Cash and cash equivalents $ 201.2 $ 179.9 Accounts receivable 49.4 38.1 Inventories, net 222.1 148.4 Current debt (6.1) (6.1) Deferred revenue and advances from customers, net of deferred costs (165.0) (137.5) Other current assets and liabilities, net (87.3) (84.9) Working capital $ 214.3 $ 137.9 We are managing our working capital to seek to improve the long-term value of our LEU and Technical Solutions segments and are planning to continue funding the Company’s qualified pension plans because we believe that is in the best interest of all stakeholders.
Working Capital The following table summarizes the Company’s working capital (in millions): December 31, 2024 2023 Cash and cash equivalents $ 671.4 $ 201.2 Accounts receivable 80.0 49.4 Inventories, net 145.4 222.1 Current debt (6.1) (6.1) Deferred revenue and advances from customers, net of deferred costs (152.5) (165.0) Other current assets and liabilities, net (69.8) (87.3) Working capital $ 668.4 $ 214.3 81 We are managing our working capital to seek to improve the long-term value of our LEU and Technical Solutions segments and are planning to continue funding the Company’s qualified pension plans because we believe these uses of working capital are in the best interest of all stakeholders.
In connection with any such transaction, we may seek additional debt or equity financing, contribute or dispose of assets, assume additional indebtedness, or partner with other parties to consummate a transaction.
In connection with any such transaction, we may seek additional debt or equity financing, contribute or dispose of assets, assume additional indebtedness, or partner with other parties to consummate a transaction. Refer to Part I, Item 1 - Business , for additional information.
In cases where the Company uses the cost-to-cost input method of progress for performance obligations, the extent of progress towards completion is measured based on the proportion of direct costs incurred to date to the total estimated direct costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred.
Under the cost-to-cost method, the extent of progress towards completion is measured based on the proportion of direct costs incurred to date to the total estimated direct costs at completion of the performance obligation. Revenues are recorded proportionally as costs are incurred.
Market prices for SWU and uranium hexafluoride significantly declined from 2011 until mid-2018, when they began to trend upward. More recently, market uncertainty in the wake of the Russian invasion of Ukraine has driven SWU and uranium hexafluoride prices sharply higher.
Our financial performance over time can be affected significantly by changes in prices for SWU and natural uranium hexafluoride. Market prices for SWU and uranium hexafluoride significantly declined from 2011 until mid-2018, when they began to trend upward. More recently, market uncertainty in the wake of the Russian invasion of Ukraine has driven SWU and uranium hexafluoride prices sharply higher.
The following chart summarizes long-term and spot SWU price indicators, and a spot price indicator for UF 6 , as published by TradeTech, LLC in Nuclear Market Review : SWU and Uranium Market Price Indicators* * Source: Nuclear Market Review , a TradeTech publication, www.uranium.info 58 Our contracts with customers are denominated primarily in U.S. dollars, and, although revenue has not been materially affected by changes in the foreign exchange rate of the U.S. dollar, we may have a competitive price advantage or disadvantage obtaining new contracts in a competitive bidding process depending upon the weakness or strength of the U.S. dollar.
Centrus is seeking public and private funding to deploy new production capacity at its Piketon, Ohio, plant to help meet the need for new, domestic supplies of enriched uranium. 66 The following chart summarizes long-term and spot SWU price indicators, and a spot price indicator for UF 6 , as published by TradeTech, LLC in Nuclear Market Review : SWU and Uranium Market Price Indicators* * Source: Nuclear Market Review , a TradeTech publication, www.uranium.info Our contracts with customers are denominated primarily in U.S. dollars, and, although revenue has not been materially affected by changes in the foreign exchange rate of the U.S. dollar, we may have a competitive price advantage or disadvantage obtaining new contracts in a competitive bidding process depending upon the weakness or strength of the U.S. dollar.
Investment Income Investment income was $8.7 million and $2.0 million for the year ended December 31, 2023 and 2022, respectively, an increase of $6.7 million (or 335%). The Company’s investment income represents interest earned on operating cash, which is primarily held in money market accounts. The increase was due primarily to an increase in interest rates.
Investment Income Investment income was $12.9 million and $8.7 million for the year ended December 31, 2024 and 2023, respectively, an increase of $4.2 million (or 48%). The Company’s investment income represents interest earned on operating cash, which is primarily held in money market accounts.
Liquidity requirements for our existing operations are affected primarily by the timing and amount of customer sales and our inventory purchases. We believe our Order Book in our LEU segment is a source of stability for our liquidity position.
Liquidity requirements for our existing operations are affected primarily by the timing and amount of customer sales and our inventory purchases. The Company believes its LEU segment backlog is a source of stability for our liquidity position.
The change in cash, cash equivalents and restricted cash from our Consolidated Statements of Cash Flows are as follows on a summarized basis (in millions): Year Ended December 31, 2023 2022 Cash provided by operating activities $ 9.1 $ 20.6 Cash used in investing activities (1.6) (0.7) Cash provided by (used in) financing activities 13.9 (4.3) Increase in cash, cash equivalents and restricted cash $ 21.4 $ 15.6 Operating Activities During 2023, net cash provided by operating activities was $9.1 million.
Cash Flow The change in cash, cash equivalents and restricted cash from our Consolidated Statements of Cash Flows are as follows on a summarized basis (in millions): Year Ended December 31, 2024 2023 Cash provided by operating activities $ 37.0 $ 9.1 Cash used in investing activities (4.1) (1.6) Cash provided by financing activities 437.1 13.9 Effect of exchange rate changes on cash, cash equivalents and restricted cash 0.2 — Increase in cash, cash equivalents and restricted cash $ 470.2 $ 21.4 80 Operating Activities During 2024, net cash provided by operating activities was $37.0 million.
For the year ended December 31, 2022, the net actuarial loss reflected unfavorable investment returns relative to the expected return assumption, partially offset by an increase in interest rates from approximately 2.8% to 5.5%, favorable investment returns relative to the expected return assumption, and healthcare claims assumption, partially offset by changes in mortality, healthcare costs trend assumptions, and claims experience.
For the year ended December 31, 2022, the net actuarial loss reflected unfavorable investment returns relative to the expected return assumption, partially offset by an increase in interest rates from approximately 2.8% to 5.5%, favorable investment returns relative to the expected return assumption, and healthcare claims assumption, partially offset by changes in mortality, healthcare costs trend assumptions, and claims experience. 70 Changes in actuarial assumptions could impact the measurement of benefit obligations and benefit costs, as follows: • The expected return on benefit plan assets is approximately 6.8% for 2025.
The increase was primarily driven by an increase in nonoperating components of net periodic benefit income of $16.6 million, a decrease in income tax expense of $15.5 million, and an increase in investment income of $6.7 million, partially offset by a decrease in gross profit of $5.8 million. 67 Net Income per Share Refer to Note 15, Net Income per Common Share, of the Consolidated Financial Statements in Part IV of this Annual Report.
The decrease was primarily driven by a decrease of $11.2 million in gross profit from the LEU segment and a decrease of $8.5 million in nonoperating components of net periodic benefit income, partially offset by an increase of $10.6 million in gross profit from the Technical Solutions segment and an increase in investment income of $4.2 million. 76 Net Income per Share Refer to Note 15, Net Income per Common Share, of the Consolidated Financial Statements in Part IV of this Annual Report.
At the same time, one large reactor is under construction, and the DOE recently released a report outlining a pathway to deployment of approximately 200 gigawatts of additional capacity by 2050 which would triple the nuclear energy capacity in the United States. The IEA projects that global nuclear energy generation will grow substantially in the next three decades.
In 2023, the DOE released a report outlining a pathway to deployment of approximately 200 gigawatts of additional capacity by 2050 which would triple the nuclear energy capacity in the United States. 60 The IEA projects that global nuclear energy generation will grow substantially in the next three decades.
The war in Ukraine has escalated tensions between Russia and the international community. As a result, the United States and other countries have imposed, and may continue imposing, additional sanctions and export controls against certain Russian products, services, organizations and/or individuals.
The war in Ukraine has escalated tensions between Russia and the international community, and particularly the United States. As a result, the United States and other countries have imposed, including through the U.S.’s enactment of the Import Ban Act discussed below, and may continue imposing, additional sanctions and export controls against certain Russian products, services, organizations and/or individuals.
If funding of gas centrifuge technology by the U.S. government is reduced or discontinued, or we are not awarded a future DOE contract to continue to operate the cascade, such actions may have a material adverse impact on our ability to deploy the American Centrifuge technology and on our liquidity.
For further discussion, refer to Part I, Item 1A, Risk Factors . If funding of gas centrifuge technology by the U.S. government is reduced or discontinued, or we are not awarded the option to continue to operate the cascade, such actions may have a material adverse impact on our ability to deploy the American Centrifuge technology and on our liquidity.
Under a customer contract that commenced deliveries in 2023, payments are denominated in euros and the payments are subject to exchange rate risk. Costs of our primary competitors are denominated in other currencies. Our contracts with suppliers are primarily denominated in U.S. dollars.
Under a customer contract that commenced deliveries in 2023, prices are payable in a combination of U.S. dollars and euros. Costs of our primary competitors are denominated in other currencies. Our contracts with suppliers are primarily denominated in U.S. dollars.
Common Stock Issuance Pursuant to a sales agreement with its agents, the Company sold through at the market offerings an aggregate of 722,568 shares, 99,090 shares, and 1,516,467 shares of its Class A Common Stock for a total of $24.4 million, $3.8 million, and $44.2 million in 2023, 2022, and 2021, respectively.
Common Stock Issuance Pursuant to a sales agreement with its agents, the Company sold through ATM offerings an aggregate of 933,987 shares, 722,568 shares, and 99,090 shares of its Class A Common Stock for a total of $56.7 million, $24.4 million, and $3.8 million in 2024, 2023, and 2022, respectively.
Overview Centrus, a Delaware corporation (the “Company”, “we” or “us”), is a trusted supplier of nuclear fuel components and services for the nuclear power industry, which provides a reliable source of carbon-free energy.
Overview Centrus Energy Corp., a Delaware corporation, is a trusted supplier of nuclear fuel components for the nuclear power industry, which provides a reliable source of carbon-free energy and provides enrichment and technical services for public and private customers.
In addition, we expect that any such other uses of working capital will be subject to compliance with contractual restrictions to which the Company and its subsidiaries are subject, including the terms and conditions of our 8.25% Notes. We continually evaluate alternatives to manage our capital structure, and may opportunistically repurchase, exchange, or redeem Company securities from time to time.
In addition, we expect that any such other uses of working capital will be subject to compliance with contractual restrictions to which the Company and its subsidiaries are subject, including the terms and conditions of our 8.25% Notes.
The DOE elected to change the scope of the HALEU Demonstration Contract and moved the operational portion of the demonstration to a new, competitively-awarded contract that would provide for operations beyond the term of the existing HALEU Demonstration Contract.
The DOE elected to change the scope of the HALEU Demonstration Contract and moved the operational portion of the demonstration to a new, competitively-awarded contract that would provide for operations beyond the term of the existing HALEU Demonstration Contract. On November 10, 2022, the Company was awarded the HALEU Operation Contract and work began December 1, 2022.
Three Months Ended December 31, Year Ended December 31, 2023 2022 2021 2023 2022 2021 Numerator (in millions): Net income $ 56.3 $ 21.3 $ 116.2 $ 84.4 $ 52.2 $ 175.0 Less: Distributed earnings allocable to warrant modification — 1.5 — — 1.5 — Less: Preferred stock dividends - undeclared and cumulative — — — — — 2.1 Less: Distributed earnings allocable to retired preferred shares — — 31.0 — — 37.6 Net income allocable to common stockholders $ 56.3 $ 19.8 $ 85.2 $ 84.4 $ 50.7 $ 135.3 Plus: Distributed earnings allocable to warrant modification $ — $ 1.5 $ — $ — $ 1.5 $ — Plus: Distributed earnings allocable to retired preferred shares — — 31.0 — — 37.6 Adjusted net income, including distributed earnings allocable to retired preferred shares and warrant modification (Non-GAAP) $ 56.3 $ 21.3 $ 116.2 $ 84.4 $ 52.2 $ 172.9 Denominator (in thousands) (a): Average common shares outstanding - basic 15,461 14,648 13,873 15,212 14,601 13,493 Average common shares outstanding - diluted 15,732 15,029 14,278 15,501 14,988 13,879 Net Income per Share (in dollars): Basic $ 3.64 $ 1.35 $ 6.14 $ 5.55 $ 3.47 $ 10.03 Diluted $ 3.58 $ 1.32 $ 5.97 $ 5.44 $ 3.38 $ 9.75 Plus: Effect of distributed earnings allocable to retired preferred shares and warrant modification, per common share (in dollars): Basic $ — $ 0.10 $ 2.24 $ — $ 0.11 $ 2.78 Diluted $ — $ 0.10 $ 2.17 $ — $ 0.10 $ 2.71 Adjusted Net Income per Share (Non-GAAP) (in dollars): Basic $ 3.64 $ 1.45 $ 8.38 $ 5.55 $ 3.58 $ 12.81 Diluted $ 3.58 $ 1.42 $ 8.14 $ 5.44 $ 3.48 $ 12.46 (a) For details related to average shares outstanding, refer to Note 15 , Net Income Per Common Share, of the Consolidated Financial Statements in Part IV of this Annual Report. 68 Liquidity and Capital Resources As of December 31, 2023, the Company had a consolidated cash balance of $201.2 million.
Three Months Ended December 31, Year Ended December 31, 2024 2023 2022 2024 2023 2022 Numerator (in millions): Net income $ 53.7 $ 56.3 $ 21.3 $ 73.2 $ 84.4 $ 52.2 Less: Distributed earnings allocable to warrant modification — — 1.5 — — 1.5 Net income allocable to common stockholders $ 53.7 $ 56.3 $ 19.8 $ 73.2 $ 84.4 $ 50.7 Plus: Distributed earnings allocable to warrant modification $ — $ — $ 1.5 $ — $ — $ 1.5 Adjusted net income, including distributed earnings allocable to warrant modification (Non-GAAP) $ 53.7 $ 56.3 $ 21.3 $ 73.2 $ 84.4 $ 52.2 Denominator (in thousands) (a): Average common shares outstanding - basic 16,716 15,461 14,648 16,309 15,212 14,601 Average common shares outstanding - diluted 16,778 15,732 15,029 16,373 15,501 14,988 Net Income per Share (in dollars): Basic $ 3.21 $ 3.64 $ 1.35 $ 4.49 $ 5.55 $ 3.47 Diluted $ 3.20 $ 3.58 $ 1.32 $ 4.47 $ 5.44 $ 3.38 Plus: Effect of distributed earnings allocable to warrant modification, per common share (in dollars): Basic $ — $ — $ 0.10 $ — $ — $ 0.11 Diluted $ — $ — $ 0.10 $ — $ — $ 0.10 Adjusted Net Income per Share (Non-GAAP) (in dollars): Basic $ 3.21 $ 3.64 $ 1.45 $ 4.49 $ 5.55 $ 3.58 Diluted $ 3.20 $ 3.58 $ 1.42 $ 4.47 $ 5.44 $ 3.48 (a) For details related to average shares outstanding, refer to Note 15 , Net Income Per Common Share, of the Consolidated Financial Statements in Part IV of this Annual Report. 77 Liquidity and Capital Resources As of December 31, 2024, the Company had a consolidated cash and cash equivalents balance of $671.4 million.
For further discussion of these risks and uncertainties, refer to Part I, Item 1A, Risk Factors - The current war in Ukraine and related international sanctions and restrictions on trade could have a material adverse impact on our business, results of operations, and financial condition.
Given all the foregoing, we continue to monitor the situation closely and assess the potential impact of any new sanctions or restrictions on the Company and possible mitigation thereof. 63 For further discussion of these risks and uncertainties, refer to Part I, Item 1A, Risk Factors - The current war in Ukraine and related international sanctions and restrictions on trade could have a material adverse impact on our business, results of operations, and financial condition.
If transaction prices are not stated in the contract for each performance obligation, contractual prices are allocated to performance obligations based on estimated relative standalone selling prices of the promised services.
The Company determines the transaction price for each contract based on the consideration it expects to receive for the products or services being provided under the contract. If transaction prices are not stated in the contract for each performance obligation, contractual prices are allocated to performance obligations based on estimated relative standalone selling prices of the promised services.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2023, we have $95.7 million of debt related to our 8.25% Notes, with a fair value of approximately $71.7 million. The terms of our 8.25% Notes do not generally allow investors to demand we pay off these obligations prior to maturity. Therefore, we do not have significant exposure to interest rate risk on our 8.25% Notes.
Biggest changeInterest Rate Risk As of December 31, 2024, we have $389.0 million and $89.6 million of debt related to our 2.25% Convertible Notes and 8.25% Notes, respectively, with a fair value of approximately $403.8 million and $73.6 million, respectively.
As such, the Company believes any changes in the prices of SWU and uranium do not create material market risk as the Company has a natural hedge in its purchase arrangements. 76
As such, the Company believes any changes in the prices of SWU and uranium do not create material market risk as the Company has a natural hedge in its purchase arrangements. 85
Furthermore, the Company also has a substantial portion of its purchase order book committed under fixed price sales agreements with more recent arrangements reflecting higher market pricing based upon improved market conditions.
Furthermore, the Company also has a substantial portion of its purchases backlog committed under fixed price sales agreements with more recent arrangements reflecting higher market pricing based upon improved market conditions.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We do not use derivative financial instruments for speculative trading purposes, nor do we currently hedge our exposure to any market risk. Interest Rate Risk We have financial instruments that are subject to interest rate risk, primarily our 8.25% Notes.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We do not use derivative financial instruments for speculative trading purposes, nor do we currently hedge our exposure to any market risk.
However, we do have exposure to fair value risk if we repurchase or exchange the 8.25% Notes prior to maturity. Inflation Risk The global macroeconomic environment has experienced, and continues to experience, extraordinary challenges, including the highest rates of inflation in recent years.
The interest rates on our existing long-term debt borrowings are fixed and as a result, interest due on borrowings are not impacted by changes in market-based interest rates. Inflation Risk The global macroeconomic environment has experienced, and continues to experience, extraordinary challenges, including the highest rates of inflation in recent years.

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