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Convertible Preferred Stock and Common Stock Warrants | 12 Months Ended
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Dec. 31, 2011
Features of Convertible Preferred Stock [Abstract] |
Convertible Preferred Stock and Common Stock Warrants | 8. CONVERTIBLE PREFERRED STOCK AND COMMON STOCK WARRANTS In May 2010, Toshiba and B&W signed a securities purchase agreement to make a $200 million investment in USEC. Under the terms of the agreement, Toshiba and B&W each agreed to invest $100 million in USEC over three phases, each of which is subject to specific closing conditions. Closing for the first phase occurred in September 2010 and USEC received $75 million. Closing on the second phase of $50 million is subject to closing conditions, including obtaining a conditional commitment for a $2 billion loan guarantee from DOE. Closing on the third phase of $75 million is subject to additional closing conditions, including closing on a $2 billion loan guarantee. At the first closing, Toshiba and B&W purchased 75,000 shares of Series B-1 12.75% convertible preferred stock, and warrants to purchase 6.25 million shares of common stock at an exercise price of $7.50 per share, which will be exercisable in the future. The estimated fair value of the preferred stock at issuance was $75.0 million using a discount rate of 12.75%, and was equal to the redemption value of $1,000 per share or $75.0 million. The preferred stock is classified as a liability since it is convertible for a variable number of shares of common stock based on a fixed monetary value known at the issuance date. Since the preferred stock is classified as a liability, the proceeds of $75.0 million were first allocated to the liability instrument's full fair value, and no residual proceeds remained to be assigned to the warrants. Upfront costs and fees paid or accrued of $6.6 million related to the planned $200 million investment were expensed in 2010 and classified as preferred stock issuance costs. The issuance costs were expensed in the period of issuance, rather than deferred and amortized, since the preferred stock is classified as a liability and was initially recorded at fair value. Currently, USEC and the investors (as to such investor's obligations) have the right to terminate the securities purchase agreement. During 2011, USEC agreed several times with the investors through a standstill agreement not to exercise their respective rights to terminate the securities purchase agreement and USEC continues to have discussions with the investors regarding their investment. As of December 31, 2011, the convertible preferred stock can be converted or sold at the holder's option and is classified as a current liability at the redemption value. As of December 31, 2011, the convertible preferred stock balance of $88.6 million includes additional shares of convertible preferred stock totaling $13.6 million representing dividends paid-in-kind either issued or payable. The dividend amounts through the third quarter of 2011 were capitalized as interest to construction work in progress for the American Centrifuge Plant. The dividend amounts in the fourth quarter of 2011 were expensed as interest expense. The effect of dilutive securities on net income per share is provided in Note 14. The convertible preferred stock balance of $88.6 million equates to 73.3 million shares of common stock based on the arithmetic average of the daily volume-weighted average share price for USEC common stock as of December 31, 2011 for the preceding 20 trading days, or $1.21 per share. In the calculation of diluted net income per share for 2011 (Note 14), the effect of the convertible preferred stock is 19.2 million shares since the daily volume-weighted average share price is determined as of the beginning of the period for purposes of calculating diluted earnings per share. Prior to obtaining shareholder approval, the preferred stock may not be converted into an aggregate number of shares of common stock in excess of 19.99% of the shares of our common stock outstanding on May 25, 2010 (approximately 22.8 million shares), in compliance with the rules of the New York Stock Exchange. If a share issuance limitation were to exist at the time of share conversion, any preferred stock shares subject to the share issuance limitation would be subject to optional or mandatory redemption for, at USEC's option, cash or SWU consideration.

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