Greetings and welcome to the USEC Inc. second quarter 2013 conference call with investors. At this time all participants are in a listen-only mode. A question-and-answer session will follow the prepared remarks. (Operator Instructions). As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steven Wingfield, Director of Investor Relations for USEC Inc. Thank you, Mr. Wingfield, you may begin.

Good morning. And thank you for joining us for USEC's conference call regarding the second quarter of 2013. With me today are John Welch, President and Chief Executive Officer; John Barpoulis, Senior Vice President and Chief Financial Officer; Bob Van Namen, Senior Vice President; Phil Sewell, Senior Vice President; and Tracy Mey, Vice President and Chief Accounting Officer. Before turning the call over to John Welch, I'd like to welcome all of our callers as well as those listening to our webcast. This conference call follows our earnings news release issued yesterday afternoon. That news release is available on many financial websites and our corporate website, usec.com. All of our news releases and SEC filings are available on our website. We expect to file our quarterly report on Form 10-Q later today. A replay of this call will be available on the USEC website. I'd like to remind everyone that certain of the information that we may discuss on this call today may be considered forward-looking information that involves risk and uncertainties, including assumptions about the future performance of USEC. Our actual results may differ materially from those in our forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in our forward-looking statements is contained in our filings with the SEC, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Finally, the forward-looking information provided today is time-sensitive and is accurate only as of today August the 6th, 2013. This call is the property of USEC. Any redistribution, retransmission or rebroadcast of this call in any form without the expressed written consent of USEC is strictly prohibited. Thank you for your participation. And now, I'd like to turn the call over to John Welch.

Good morning and thank you for joining us today to discuss our second quarter results. Operationally, it was an eventful quarter as we took actions to cease enrichment at the 60-year old Paducah plant at the conclusion of the one year agreement with Energy Northwest, Tennessee Valley Authority and the Department of Energy. We also continued to meet program milestones for the American Centrifuge, research, development and demonstration program also known as RD&D. All 120 centrifuges in the cascade are up and spinning at design speeds as we condition the machines with uranium gas in preparation for the cascade demonstration test this fall. So we have the end of U.S. enrichment using the first generation of enrichment technology and another step towards demonstrating the technical readiness of the next generation of U.S. enrichment technology. We are in the final months of the highly successful Megatons to Megawatts program. And we’ve begun taking deliveries of low enriched uranium under the follow-on commercial contract with Russia that will provide USEC with SWU through 2022. This is an important element of our transition plan. Financially, we incurred a number of non-production expenses related to the cessation of enrichment at the Paducah plant. We accelerated depreciation of equipment and leasehold improvements, made inventory adjustments related to residual uranium in certain cylinders, retired assets and recordable loss on a power contract as well as other actions. Together, these non-production expenses resulted in higher cost of sales and along with a special charge for workforce reductions were largely responsible for the loss in the quarter. We reported a net loss of $40.9 million for the second quarter compared to a net loss of $92 million in the same quarter of 2012. For the six months period ended June 30, 2013, we reported a net loss of…

Thanks, John and good morning everyone. We reported revenue of $285 million for the second quarter, a decrease of $69 million compared to the same quarter of 2012. For the six month period, revenue was $605 million, a decrease of $291 million. The average invoiced SWU price in both periods of 2013 was 5% higher compared to the year before but SWU sales volume was 40% lower in the first half of 2013 compared to the same period of last year. In recent periods, we have had an insignificant amount of revenue from the sale of natural uranium. In the first six months of 2013, however, our revenue included $41.5 million in uranium sales compared to $3.6 million in the first half of 2012. Such sales will remain variable and are often related to a specific SWU contract where the uranium is the feedstock for LEU delivery. As we have noted in recent quarters, the contract services segment has become a small revenue contributor following the completion of services to DOE at the former Portsmouth, Ohio plant and the sale of our subsidiary NAC International. Looking at the cost side of the ledger, our two largest cost components have historically been electric power and the price we pay Russia to purchase SWU. Clearly with a cessation of enrichment at Paducah, the components of cost of sales will change significantly in the quarters ahead. Cost of sales for the second quarter was significantly increased by the non-production expenses related to the cessation of enrichment at Paducah. We provide more details and makeup of non-production expenses in the Form 10-Q that we expect to issue later today. In the second quarter of 2013, these non-production expenses totaled $70 million. These include immediate asset retirement charges for property formerly used in the enrichment…

(Operator Instructions) Thank you. Our first question comes from the line of Vladimir Jelisavcic with Bowery Investment.

Just had a couple of questions regarding cash and cash flow. Can you just give us a bridge for what sort of major positive and negative cash flow items you had to increase cash sequentially during the quarter by the $122 million? I’m looking at the cash flow section of the press release and I don't have enough figures to really bridge that.

Vlad, it's John Barpoulis. I think it was very much driven by our sales and deliveries to customers during that period. We did have -- what you'll see compared to the end of the year you will see a relatively little change in our payables to Russia, we did have a build-up of some of the Russian inventory during that quarter. And so we will be seeing based on the timing of Russian deliveries, payments to them going out in the third quarter.

Understood. And what's the location of the cash, which corporate entity is the cash located in?

That's something that we do not disclose publicly.

Understood. And you also mentioned that you began to operate under the 10 year contract that’s going to resume after the wind-down of the Megatons to Megawatts program, which USEC corporate entity owns that contract, and which operates it?

Again, we do not get into the legal entities that handle operations but for USEC, we have the subsidiary in United States Enrichment Corporation through which our businesses are primarily conducted but again everything is reported on a consolidated basis.

Understood. And when do you anticipate the completion of the RD&D testing and validation process?

The demonstration is scheduled for the fourth quarter, should be completed by the end of 2013.

Our next question comes from the line of Jason Adler with GMP Securities.

Hi. Thank you for taking the question. Just a few questions about shutting down operations at Paducah. The first is in the press release you had suggested that some of the efforts to shut down the facility would include transferring inventory. Can you talk a little bit about sort of what state the inventory is in now and what needs to be done with it to move it? And are there any different regulations for moving it within the U.S. versus internationally?

Sure, Jason ,this is Bob Van Namen. Right now we have the both low-enriched uranium and natural uranium in a variety of cylinders. Some of which are suitable and some of which are not suitable for shipping both domestically and internationally. So we'll continue to use the Paducah shipping and transfer facilities to transfer both natural and low enriched uranium into cylinders where we can ship them. You have different regulations that apply for domestic versus international but we anticipate packaging the cylinders so that we can preposition it to meet customer orders in either situation, either domestic or international shipments.

And is that -- does it take a lot of time to do that? Is that a process that will take a year plus or is that a relatively easy thing to do?

It is -- we have a volume of both natural and low enriched to work our way through. We've stated that we see these activities continuing into 2014 but then dovetailing nicely with our turnover to the Department of Energy under the DOE's plan.

My other question is GE through Global Laser has apparently expressed some interest in the Paducah facility. What parts of it are they trying to get involved in and how would that impact potential costs for USEC exiting the facility?

You would really have to address your question to GE Silex on that, they are interested in establishing a laser enrichment facility at the Paducah site. We don't know what they're interested are on ,what facilities they might use, we don't speculate on it.

Could any level of interest have an impact on your costs to exit the facility or are they separate issues?

We see them as separate issues.

Our next question comes from the line of Amer Tiwana with CRT Capital Group.

I was looking through your 10-K and you guys have provided a $1 billion of funding GAAP number in that release with respect to the completion of ACT. Have you guys updated that number and to follow-on, you were also in discussions with a number of parties with respect to getting that funding, where are we in that process?

Amer, it's John Barpoulis. To answer the question, we have not updated that information yet that $1 billion of capital number as -- to paraphrase John's comments earlier, we're in the process of developing our updated plan for the financing and commercialization of the project. Again very much being driven by several key variables, including project costs, schedule obviously market demand, market prices for LEU and our financing costs and financing terms. So we're looking at all those components now.

My next question is regarding the milestones that you have remaining. It seems like all three are supposed to be sort of completed by the end of this year. I mean, can you walk us through the process that you anticipate at year end? Will DOE be in a position to give you a verdict on the loan guarantee at that point in time or is there some other things that you would need to do to -- I mean do you have to file a new application at this point in time or your existing application is good, just walk us through what happens at year end?

Yeah, this is Bob Van Namen. I'll address the first part of your question on the milestones. Again as John Welch said, we do anticipate cascade operations in the fourth quarter and meeting three milestones as you indicated that are scheduled to be completed by December 31st. We have constant interactions with the Department of Energy throughout the testing process and the demonstration process and per the forum that we've gone through with the other milestones, we would anticipate upon completion of these milestones that we would then submit documentation to the Department of Energy about how have accomplished it.

With respect to the capital side and specifically Amer, your question around the end of the year and DOE loan guarantee, again we have some additional information outlined in our 10-Q that we expect to file later today. But again we expect to need at least $4 billion of capital to complete the project. The two key debt components include the $2 billion loan guarantee from DOE and $1 billion of Japanese export credit agency funding are both critical elements of the current financing plan. And again to the first part of your question, we also expect to need at least a $1 billion of additional capital in addition to the debt. Again that additional capital includes cash generated by the project during start-up of potentially available cash flow generated by USEC operations and then third-party capital. I mean again it's dependent on a number of factors. But as John outlined earlier, as part of our effort to commercialize the ACP technology, we expect to need additional investors in the project and to successfully raise that capital, we need to develop and validate a strong business plan that supports debt repayment and provides investors with an attractive return. I think so as we continue to evaluate our options for ACP and especially with respect to the timing of the update on our loan guarantee application that's something that we're currently evaluating. And so ultimately as we look at our paths those options may include --again continuing with the project following completion of the RD&D program, we're to take action to reduce funding for the project, further demobilize the project or delay to commercial deployment of the project or even potentially to terminate the project. So all of those things are under evaluation at the moment.

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session and with that the conclusion of today's conference call. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.