Revenue and Contracts with Customers

12 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

REVENUE AND CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following table presents revenue from SWU and uranium sales disaggregated by geographical region, including foreign countries representing 10% or more of revenue, based on the billing addresses of customers (in millions):


	Year Ended December 31,
	2020		2019
United States	$	115.0	$	112.1
Foreign:
Belgium	35.8		21.5
Japan	23.4		23.4
Other	16.3		12.4
Total foreign	75.5		57.3
Revenue - SWU and uranium	$	190.5	$	169.4

Refer to Note 19, Revenue by Geographic Area, Major Customers and Segment Information for disaggregation of revenue by segment. Disaggregation by end-market is provided in Note 19 and the consolidated statements of operations. SWU sales are made primarily to electric utility customers and uranium sales are primarily made to other nuclear fuel related companies. Technical solutions revenue resulted primarily from services provided to the government and its contractors. SWU and uranium revenue is recognized at point of sale and technical solutions revenue is generally recognized over time.

SWU revenue in 2020 includes $32.6 million collected from a customer in settlement of a supply contract that was subject to the customer’s bankruptcy proceeding. Refer to Note 17, Commitments and Contingencies - Legal Matters, for details.

Accounts Receivable


	December 31,
	2020		2019
	($ millions)
Accounts receivable:
Billed	$	23.0	$	13.2
Unbilled *	6.6		7.9
Accounts receivable	$	29.6	$	21.1

* Billings under certain contracts in the technical services segment are invoiced based on approved provisional billing rates. Unbilled revenue represents difference between actual costs incurred and invoiced amounts. The Company expects to invoice and collect the unbilled amounts after actual rates are submitted to the customer and approved. Unbilled revenue also includes unconditional rights to payment that are not yet billable under applicable contracts pending the compilation of supporting documentation.

Contract Liabilities

The following table presents changes in contract liability balances (in millions):


	December 31,
	2020		2019		Change
Accrued loss on HALEU Contract:
Current - Accounts payable and accrued liabilities	$	7.0	$	10.0	$	(3.0)
Noncurrent - Other long-term liabilities	$	0.7	$	8.3	$	(7.6)
Deferred revenue - current	$	281.7	$	243.0	$	38.7
Advances from customers - current	$	1.5	$	23.3	$	(21.8)
Advances from customers - noncurrent	$	45.2	$	29.4	$	15.8

Deferred sales totaled $38.7 million and $49.2 million in the years ended December 31, 2020, and 2019, respectively. Previously deferred sales recognized in revenue totaled $0 and $10.7 million in the years ended December 31, 2020, and 2019, respectively.

LEU Segment

The SWU component of LEU is typically bought and sold under contracts with deliveries over several years. The Company’s agreements for natural uranium sales are generally shorter-term, fixed-commitment contracts. The Company’s order book of sales under contract in the LEU segment (“order book”) extends to 2030. As of December 31, 2020, the order book was approximately $960 million. The order book represents the estimated aggregate dollar amount of revenue for future SWU and uranium deliveries under contract and includes approximately $328 million of Deferred Revenue and Advances from Customers. Refer to Contract Liabilities table above. As of December 31, 2019, the order book was approximately $1.0 billion.

Most of the Company’s enrichment contracts provide for fixed purchases of SWU during a given year. The Company’s order book is partially based on customers’ estimates of the timing and size of their fuel requirements and other assumptions that are subject to change. For example, depending on the terms of specific contracts, the customer may be able to increase or decrease the quantity delivered within an agreed range. The Company’s order book estimate is also based on the Company’s estimates of selling prices, which may be subject to change. For example, depending on the terms of specific contracts, prices may be adjusted based on escalation using a general inflation index, published SWU price indicators prevailing at the time of delivery, and other factors, all of which are variable. The Company uses external composite forecasts of future market prices and inflation rates in its pricing estimates.

Under the terms of certain contracts with customers in the LEU segment, the Company will accept payment for SWU in the form of uranium. Revenue from the sale of SWU under such contracts is recognized at the time LEU is delivered and is based on the fair value of the uranium at contract inception, or as the quantity of uranium is finalized, if variable. In both 2019 and 2020, SWU revenue of $23.4 million was recognized under such contracts based on the fair market value of uranium acquired in exchange for SWU delivered. Uranium received from customers as advance payments for the future sales of SWU totaled $44.4 million as of December 31, 2020. The advance payments are included in either Advances from Customers, Current or Advances from Customers, Noncurrent, based on the anticipated SWU sales period.

In 2020, the Company borrowed SWU inventory valued at $11.2 million from a customer and recorded the SWU and the related liability using an average purchase price over the borrowing period. The cumulative liability to the customer of $20.7 million for borrowed inventory is included in Other Long-Term Liabilities.

Technical Solutions Segment

Revenue for the technical solutions segment, representing the Company’s technical, manufacturing, engineering, procurement, construction and operations services offered to public and private sector customers, is recognized over the contractual period as services are rendered. For details, refer to Note 1, Summary of Significant Accounting Policies — Revenue —Technical Solutions Revenue.

On October 31, 2019, the Company signed a three-year cost-share contract with the U.S. Department of Energy (“DOE”) (“the HALEU Contract”) to deploy a cascade of centrifuges to demonstrate production of high-assay, low-enriched uranium (“HALEU”) for advanced reactors. HALEU is a component of an advanced nuclear reactor fuel that is not commercially available today and may be required for a number of advanced reactor designs currently under development in both the commercial and government sectors. The program has been under way since May 31, 2019, when the Company and DOE signed a preliminary letter agreement that allowed work to begin while the full contract was being finalized.

Under the HALEU Contract, DOE agreed to reimburse the Company for 80% of its costs incurred in performing the contract, up to a maximum of $115 million. The Company’s cost share is the corresponding 20% and any costs incurred above these amounts. Costs under the HALEU Contract include program costs, including internal labor, third-party services and materials and associated indirect costs that are classified as Cost of Sales, and an allocation of corporate costs supporting the program that are classified as Selling, General and Administrative Expenses. Services to be provided over the three-year contract include constructing and assembling centrifuge machines and related infrastructure in a cascade formation. When estimates of total costs at completion for such an integrated, construction-type contract exceed estimates of total revenue to be earned, a provision for the remaining loss on the contract is recorded to Cost of Sales in the period the loss is determined. The Company’s corporate costs supporting the program are recognized as expense as incurred over the duration of the contract term. As of December 31, 2019, the portion of the Company’s anticipated cost share under the HALEU Contract representing the Company’s share of remaining projected program costs was recognized in Cost of Sales as an accrued loss of $18.3 million, The accrued loss on the contract is being adjusted over the remaining contract term based on actual results and remaining program cost projections. As of December 31, 2020, the accrued contract loss balance was $7.7 million, consisting of $7.0 million included in Accounts Payable and Accrued Liabilities and $0.7 million included in Other Long-Term Liabilities. Cost of sales in the year ended December 31, 2020 benefited by $10.6 million for previously accrued contract losses attributable to work performed in 2020.

The HALEU Contract is incrementally funded and DOE is currently obligated for costs up to approximately $87.4 million of the $115 million. The Company received cash payments of $55.8 million through December 31, 2020. Of the $115 million of anticipated revenue over the three-year contract term, approximately $4.9 million is anticipated to be recognized as revenue in 2022 (beyond twelve months from the fiscal year ended December 31, 2020).