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Transition Charges | 3 Months Ended
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Mar. 31, 2014
Restructuring and Related Activities [Abstract] |
Transition Charges | TRANSITION CHARGES Non-Production Expenses Related to Ceasing Enrichment at the Paducah Plant USEC ceased uranium enrichment at the Paducah GDP at the end of May 2013 and is in discussions with DOE regarding the timing of USEC’s de-lease of the facility from DOE. Under the terms of the lease, USEC can terminate the lease prior to June 2016 upon two years' notice. Also, as USEC's requirements change, USEC can de-lease portions of the property under lease upon 60 days' notice with DOE's consent, which cannot be unreasonably withheld. However, the right of partial de-lease does not include the right of USEC to terminate the lease in its entirety or with respect to the Paducah GDP, which termination is permitted only in accordance with the two-year termination provision of the lease. On August 1, 2013, USEC provided notice to DOE that USEC exercised its rights to terminate the lease with respect to the Paducah GDP and USEC has been in discussions with DOE regarding the timing of USEC’s de-lease. USEC anticipates being ready to complete the return of leased premises and to terminate the Paducah GDP lease as early as July 2014. However, based on USEC's current discussions with DOE, the return of the leased premises appears unlikely before October 2014 and USEC and DOE have not reached agreement on a lease termination date prior to August 1, 2015. DOE has indicated that its ability to agree to such an earlier date will depend on its ability to award a contract for deactivation services and be prepared to assume responsibility for the leased areas, among other things. In the event that USEC is unable to agree with DOE on a schedule for termination prior to two years, USEC plans to exercise its rights under the lease and submit a 60-day notification to return portions of the leased premises no longer required to meet its business needs. In addition, while DOE has stated that it continues to be willing to work with USEC to develop a transition plan and schedule for the safe and secure return of the Paducah GDP, DOE has taken the position that USEC is foreclosed from invoking its rights to a partial return of facilities under the lease. While USEC strongly disagrees with this DOE position, USEC believes it will be able to reach agreement with DOE on a mutually agreeable date to return the leased areas. Disputes could also arise regarding the requirements of the lease and responsibility for associated turnover costs. The Paducah GDP operated for more than 60 years. Environmental liabilities associated with plant operations by agencies of the U.S. government prior to USEC's privatization on July 28, 1998 are the responsibility of the U.S. government. The USEC Privatization Act and the lease for the plant provide that DOE remains responsible for decontamination and decommissioning of the Paducah site. As USEC accelerated the expected productive life of plant assets and ceased uranium enrichment at the Paducah GDP, USEC has incurred a number of expenses unrelated to production that have been charged directly to cost of sales. Non-production expenses totaled $34.9 million in the three months ended March 31, 2014 and $5.8 million in the corresponding period in 2013 as follows:
- | Site expenses, including lease turnover activities and Paducah and Portsmouth retiree benefit costs, of $27.0 million in the three months ended March 31, 2014. Following the cessation of enrichment at the Paducah GDP, costs for plant activities that formerly were capitalized as production costs are now charged directly to cost of sales including inventory management and disposition, ongoing regulatory compliance, utility requirements for operations, security, and other site management activities related to transition of facilities and infrastructure. Non-production expenses in the three months ended March 31, 2013 include $3.0 million of Portsmouth retiree benefit costs;
- | Accelerated asset charges of $1.3 million in the three months ended March 31, 2014 and $2.8 million in the three months ended March 31, 2013. Beginning in the fourth quarter of 2012, the expected productive life of property, plant and equipment at the Paducah GDP was reduced from the lease term ending June 2016 to an accelerated basis ending December 2014. In addition, beginning in the third quarter of 2012, costs that would have been previously treated as construction work in progress are treated similar to maintenance and repair costs because of the shorter expected productive life of the Paducah GDP. The expected productive life of the Paducah GDP was further reduced following the ceasing of enrichment at the end of May 2013. In general, these assets, depending on their continuing economic life, are now expected to be useful only through the first half of 2014; and
- | Inventory charges of $6.6 million in the three months ended March 31, 2014. These inventories are intended to be transferred to DOE upon final de-lease, including residual uranium in cylinders and inventories deployed for cascade drawdown, assay blending and repackaging. USEC determined that it was currently uneconomic to recover resulting residual quantities for resale.
USEC may incur additional non-production expense and special charges in future periods based on the results of the planning and execution of the Paducah transition and assessments of evolving business needs. Special Charges Summary A summary of special charges recorded in the year ended December 31, 2013 and the three months ended March 31, 2014, and changes in the related balance sheet accounts, follow (in millions):
| Liability Balance to Be Paid, Dec. 31, 2012 |  | 2013 Special Charges |  | 2013 Paid |  | Liability Balance to Be Paid, Dec. 31, 2013 |  | First Qtr. 2014 Special Charges |  | First Qtr. 2014 Paid |  | Liability Balance to Be Paid, Mar. 31, 2014
Workforce reductions, primarily severance payments | $ | — |  |  | $ | 25.2 |  |  | $ | (4.0 | ) |  | $ | 21.2 |  |  | $ | 0.1 |  |  | $ | (2.7 | ) |  | $ | 18.6 |
Less: Amounts billed to DOE | — |  |  | (1.2 | ) |  | na |  |  | na |  |  | (0.6 | ) |  | na |  |  | na |
Pension and postretirement benefit charges, non-cash | — |  |  | 22.2 |  |  | na |  |  | na |  |  | — |  |  | na |  |  | na |
Advisory costs | 0.1 |  |  | 11.0 |  |  | (9.9 | ) |  | 1.2 |  |  | — |  |  | (1.2 | ) |  | — |
| $ | 0.1 |  |  | $ | 57.2 |  |  | $ | (13.9 | ) |  | $ | 22.4 |  |  | $ | (0.5 | ) |  | $ | (3.9 | ) |  | $ | 18.6 |
na - not applicable Special Charges for Workforce Reductions Beginning in May 2013, USEC has notified its Paducah employees of potential layoffs following the cessation of enrichment at the Paducah GDP. The notifications are provided under the Worker Adjustment and Retraining Notification Act ("WARN Act"), a federal statute that requires an employer to provide advance notice to its employees of potential layoffs in certain circumstances. Termination benefits, consisting primarily of severance payments, are estimated to total $25.2 million. The special charge of $24.0 million in the year ended December 31, 2013 is net of $1.2 million of severance paid by USEC and invoiced to DOE. In the first quarter of 2014, an additional $0.6 million was invoiced to DOE for its portion of severance paid to date, and is reflected as a credit to special charges in the three months ended March 31, 2014. Accounts receivable as of March 31, 2014 include DOE's share of severance paid by USEC. DOE’s liability for its share of severance paid is pursuant to the USEC Privatization Act. Between June and December 2013, the Paducah GDP workforce was reduced by 202 employees through layoffs. In the first quarter of 2014, the Paducah GDP workforce was reduced by an additional 134 employees through layoffs. Additional layoffs occurred in April and are expected in stages in 2014 including at other locations, depending on business needs. Information on these additional layoffs would be communicated to affected employees in future notices and may also result in additional charges. USEC froze benefit accruals under its defined benefit pension plans, effective August 5, 2013, for active employees other than those who are covered by a collective bargaining agreement at the Paducah GDP. Pension benefits will no longer increase for these employees to reflect changes in compensation or company service. However, these employees will not lose any benefits earned through August 4, 2013 under the pension plans and continue to accrue service credits toward vesting and qualifying for early or unreduced retirement benefits under the plans. Unamortized prior service costs related to those pension plan participants were accelerated. In addition, as discussed above, layoffs of the remaining Paducah workforce are expected to occur in stages through 2014, but no later than the lease termination date of August 1, 2015. The layoffs are expected to accelerate retirement obligations in the GDP pension plan and GDP postretirement health and life benefit plans. Unamortized prior service costs related to affected plan participants were accelerated due to these terminations. Moreover, and in accordance with plan documents, certain affected plan participants were credited additional plan service credits based on their involuntary termination of employment. The net impact recorded in special charges for the year ended December 31, 2013 for these plans was $22.2 million. Special Charges for Advisory Costs Since late 2012, USEC has been engaged with advisors on the restructuring of its balance sheet. Special charges recorded for these advisors totaled $2.4 million in the three months ended March 31, 2013 and $11.0 million for the year ended December 31, 2013. In the three months ended March 31, 2014, USEC incurred $7.2 million in advisory costs related to the Bankruptcy Filing and these charges are included in Reorganization Items, Net, as detailed in Note 4.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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