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Transition Charges | 6 Months Ended
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Jun. 30, 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. Since that time USEC has continued limited operations at the Paducah site in order to manage inventory, continue to meet customer orders and to meet the turnover requirements of our lease with DOE. USEC has completed repackaging and transferring its inventory to off-site NRC-licensed locations to meet future customer orders. USEC has been in extended discussions with DOE regarding the timing of our de-lease of the Paducah GDP from DOE. On August 1, 2013, the Company provided notice to DOE exercising its rights to terminate the GDP lease with respect to the Paducah GDP upon two years prior notice as permitted under the lease. On June 17, 2014, Enrichment signed an agreement with DOE establishing a framework (the “Framework Agreement”) for the orderly de-lease and return of the Paducah GDP in accordance with the GDP lease. The Framework Agreement provides for the de-lease and return of the leased areas at the Paducah GDP on October 1, 2014, conditioned upon: (i) DOE’s new deactivation contractor at Paducah completing mobilization and being ready to take control of the entire leased areas, including the ability to safely and securely manage the leased areas following their return to DOE; (ii) sufficient funding being appropriated for the deactivation contractor and DOE to perform activities necessary to enable DOE to accept the leased areas in accordance with applicable laws and regulations; and (iii) USEC complying with the agreed-upon plan to meet the GDP lease turnover requirements at the Paducah GDP. To the extent these conditions have not been satisfied by October 1, the return of the leased areas will be completed as quickly as possible after October 1, 2014, on a date mutually agreed to by DOE and Enrichment. Under the terms of the Framework Agreement, Enrichment has agreed to complete certain activities to accomplish the turnover of leased areas in accordance with the GDP lease and DOE has agreed to accept such areas and certain materials and other personal property in accordance with the GDP lease. The Framework Agreement, the de-lease of areas at the Paducah GDP, and the termination of the GDP lease with respect to the Paducah GDP do not affect the Company’s right to lease portions of the DOE-owned site in Piketon, Ohio needed for the American Centrifuge program. 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 $14.3 million and $49.2 million in the three and six months ended June 30, 2014, and $70.0 million and $75.7 million in the three and six months ended June 30, 2013, as follows:
- | Site expenses, including lease turnover activities and Paducah and Portsmouth retiree benefit costs, of $8.7 million and $35.7 million in the three and six months ended June 30, 2014, compared to $23.4 million and $26.4 million in the corresponding periods of 2013. 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;
- | Inventory charges of $5.1 million and $11.7 million in the three and six months ended June 30, 2014, compared to $10.0 million in the three and six months ended June 30, 2013. 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.
- | Accelerated asset charges of $0.5 million and $1.8 million in the three and six months ended June 30, 2014, compared to $5.5 million and $8.2 million in the corresponding periods of 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. Beginning in the third quarter of 2012, costs that would have been previously treated as construction work in progress were 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, and the depreciation of property, plant and equipment at the Paducah site was completed as of June 30, 2014. Additionally, an immediate asset retirement charge of $19.3 million was incurred in the second quarter of 2013 for property, plant and equipment formerly used in the enrichment process at the Paducah GDP; and
- | Power contract losses of $11.8 million in the three and six months ended June 30, 2013. As a result of falling prices in power markets, the Company incurred expenses of approximately $11.8 million as it ceased enrichment at the Paducah GDP and canceled remaining power purchases.
USEC may incur additional non-production expenses and special charges in future periods based on the results of the 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 six months ended June 30, 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 |  | Year-to-Date 2014 Special Charges |  | Year-to-Date 2014 Paid |  | Liability Balance to Be Paid, Jun. 30, 2014
Workforce reductions, primarily severance payments | $ | — |  |  | $ | 25.2 |  |  | $ | (4.0 | ) |  | $ | 21.2 |  |  | $ | 4.2 |  |  | $ | (11.8 | ) |  | $ | 13.6 |
Less: Amounts billed to DOE | — |  |  | (1.2 | ) |  | na |  |  | na |  |  | (2.2 | ) |  | 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 |  |  | $ | 2.0 |  |  | $ | (13.0 | ) |  | $ | 13.6 |
na - not applicable Special Charges for Workforce Reductions Beginning in May 2013, USEC 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. USEC recorded a special charge in 2013 for termination benefits, consisting primarily of severance payments, of $25.2 million less $1.2 million of severance paid by USEC and invoiced to DOE. Special charges in the three and six months ended June 30, 2014 consist of charges for termination benefits for workforce reductions in American Centrifuge development and headquarters operations, as well as severance accrual refinements for Paducah workforce reductions occurring in 2014. Special charges for termination benefits consist of $4.1 million in the three-month period and $4.2 million in the six-month period, less amounts paid by USEC and invoiced to DOE for its portion of Paducah employee severance of $1.6 million in the three-month period and $2.2 million in the six-month period. Accounts receivable as of June 30, 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. Cumulative charges for termination benefits since ceasing enrichment total $29.4 million, less $3.4 million paid by USEC and invoiced to DOE. As of June 30, 2014, workforce reductions total 668 employees at the Paducah GDP, including 466 employees in 2014, and 25 employees at American Centrifuge and headquarters. Additional layoffs are expected in stages in 2014, 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. 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 $4.7 million in the six months ended June 30, 2013 and $11.0 million for the year ended December 31, 2013. USEC has incurred advisory costs related to the Bankruptcy Filing in 2014 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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