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Transition Charges | 9 Months Ended
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Sep. 30, 2014
Restructuring and Related Activities [Abstract] |
Transition Charges | TRANSITION CHARGES Non-Production Expenses Related to Ceasing Enrichment at the Paducah Plant The Company ceased uranium enrichment at the Paducah gaseous diffusion plant ("Paducah GDP") at the end of May 2013 and has subsequently completed repackaging and transferring its inventory to off-site licensed locations to meet future customer orders. On October 21, 2014, all of the leased portions of the Paducah GDP were de-leased and returned to DOE. Pursuant to a June 2014 agreement with DOE, the lease will terminate with respect to the Paducah GDP on August 1, 2015. The termination of the lease with respect to the Paducah GDP does 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 the Company'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 the Company accelerated the expected productive life of plant assets and ceased uranium enrichment at the Paducah GDP, the Company has incurred a number of expenses unrelated to production that have been charged directly to cost of sales. Non-production expenses totaled $17.5 million and $66.7 million in the three and nine months ended September 30, 2014, and $47.7 million and $123.4 million in the three and nine months ended September 30, 2013, as follows:
- | Site expenses, including lease turnover activities and Paducah and Portsmouth retiree benefit costs, of $15.6 million and $51.3 million in the three and nine months ended September 30, 2014, compared to $37.4 million and $63.8 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 have been 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 $1.8 million and $13.5 million in the three and nine months ended September 30, 2014, compared to $5.0 million and $15.0 million in the three and nine months ended September 30, 2013. The Company incurred charges for residual uranium in cylinders transferred to DOE and inventories that had been deployed for cascade drawdown, assay blending and repackaging. The Company determined that it was uneconomic to recover resulting residual quantities for resale. In the prior year periods, charges included a uranium inventory valuation adjustment of $5.0 million to reflect declines in uranium market price indicators.
- | Accelerated asset charges of $0.1 million and $1.9 million in the three and nine months ended September 30, 2014, compared to $5.3 million and $13.5 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 nine months ended September 30, 2013. As a result of falling prices in power markets, the Company incurred expenses as it ceased enrichment at the Paducah GDP and canceled remaining power purchases.
Special Charges Summary A summary of special charges recorded in the year ended December 31, 2013 and the nine months ended September 30, 2014, and changes in the related balance sheet accounts, follow (in millions):
| Predecessor |  |  | Successor
| 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, Sep. 30, 2014
Workforce reductions, primarily severance payments | $ | — |  |  | $ | 25.2 |  |  | $ | (4.0 | ) |  | $ | 21.2 |  |  | $ | 4.5 |  |  | $ | (13.6 | ) |  |  | $ | 12.1 |
Less: Amounts billed to DOE | — |  |  | (1.2 | ) |  | na |  |  | na |  |  | (2.4 | ) |  | 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 |  |  | $ | 2.1 |  |  | $ | (14.8 | ) |  |  | $ | 12.1 |
na - not applicable Special Charges for Workforce Reductions Beginning in May 2013, the Company notified its Paducah employees of potential layoffs following the cessation of enrichment at the Paducah GDP. The notifications were 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. The Company 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 the Company and invoiced to DOE. Special charges in the three and nine months ended September 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 $0.3 million in the three-month period and $4.5 million in the nine-month period, less amounts paid by the Company and invoiced to DOE for its portion of Paducah employee severance of $0.2 million in the three-month period and $2.4 million in the nine-month period. Accounts receivable as of September 30, 2014 include DOE's share of severance paid by the Company. 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 $29.7 million, less $3.6 million paid by the Company and invoiced to DOE. As of September 30, 2014, workforce reductions total 705 employees at the Paducah GDP, including 503 employees in 2014, and 28 employees at American Centrifuge and headquarters. Subsequently, nearly all of the remaining Paducah employees were terminated by early November 2014 after the leased portions of the site were turned over to DOE. The Company froze benefit accruals under its defined benefit pension plans, effective August 5, 2013, for active employees other than those who were covered by a collective bargaining agreement at the Paducah GDP. Pension benefits no longer increased for these employees to reflect changes in compensation or company service. However, these employees did not lose any benefits earned through August 4, 2013 under the pension plans and continued 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, the Paducah workforce layoffs were expected to accelerate retirement obligations in the pension and postretirement 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, the Company had been engaged with advisors on the restructuring of its balance sheet. Special charges recorded for these advisors totaled $6.7 million in the nine months ended September 30, 2013 and $11.0 million for the year ended December 31, 2013. The Company 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 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 Reference 4: 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 + Details
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