SPECIAL CHARGES

Enrichment Cessation and Evolving Business Needs

The cessation of enrichment at the Paducah Gaseous Diffusion Plant (the “Paducah GDP”) and evolving business needs have resulted in workforce reductions since July 2013. In the three and nine months ended September 30, 2015, special charges included related termination benefits of $1.1 million and $4.9 million, respectively, less $0.3 million in the nine-month period for employee severance paid by the Company and invoiced to the U.S. Department of Energy (“DOE”) for its share of employee severance pursuant to the USEC Privatization Act.

In the second quarter of 2016, the Company commenced a project to align its corporate structure to the scale of its ongoing business operations and to update related information technology. The Company incurred advisory costs related to the reengineering project of $0.3 million in the three months and $0.8 million in the nine months ended September 30, 2016. In addition, special charges in the three and nine months ended September 30, 2016, included termination benefits of $0.3 million related to voluntary workforce reductions.

Piketon Demonstration Facility

In September 2015, Centrus completed a successful three-year demonstration of American Centrifuge technology at its facility in Piketon, Ohio, with 120 machines linked together in a cascade to simulate industrial operating conditions. The demonstration effort was primarily funded by the U.S. government. As a result of reduced program funding, Centrus incurred a special charge of $8.7 million in the third quarter of 2015 for estimated employee termination benefits, consisting primarily of payments under its pre-existing severance plan. An additional $0.1 million special charge was incurred in the second quarter of 2016 as an adjustment to accrued severance benefits for current salary levels.

A summary of termination benefit activity and related liabilities follows (in millions):



	Liability December 31, 2015		Nine Months Ended September 30, 2016					Liability September 30, 2016
	Liability December 31, 2015		Charges for Termination Benefits		Paid			Liability September 30, 2016
Workforce reductions:
Enrichment cessation and evolving business needs	$	0.3	$	0.3	$	(0.2	)	$	0.4
Piketon demonstration facility	8.4		0.1		(2.9		)	5.6
	$	8.7	$	0.4	$	(3.1	)	$	6.0

Centrus expects to make payments for these workforce reductions through 2019. Of the $6.0 million liability as of September, 30, 2016, $1.2 million is included in Accounts Payable and Accrued Liabilities and $4.8 million is included in Other Long-Term Liabilities.