XML 19 R8.htm IDEA: XBRL DOCUMENT v3.21.2
Revenue and Contracts with Customers
 6 Months Ended
Jun. 30, 2021
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer REVENUE AND CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue

The following table presents revenue from separative work units (“SWU”) and uranium sales disaggregated by geographical region based on the billing addresses of customers (in millions):

Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
United States$45.2 $43.1 $54.8 $50.4 
Foreign
— 20.3 28.5 43.7 
Revenue - SWU and uranium$45.2 $63.4 $83.3 $94.1 

Refer to Note 12, Segment Information, for disaggregation of revenue by segment. Disaggregation by end-market is provided in Note 12 and the unaudited condensed 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.

Accounts Receivable
June 30,
2021		December 31,
2020
($ millions)
Accounts receivable:
Billed
$11.8 $23.0 
Unbilled *
7.2 6.6 
Accounts receivable
$19.0 $29.6 
* Billings under certain contracts in the technical services segment are invoiced based on approved provisional billing rates. Unbilled revenue represents the 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 revenue 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):
June 30,
2021		December 31, 2020Year-To-Date Change
Accrued loss on HALEU Contract:
Current - Accounts payable and accrued liabilities
$3.1 $7.0 $(3.9)
Noncurrent - Other long-term liabilities
$— $0.7 $(0.7)
Deferred revenue - current
$259.1 $281.7 $(22.6)
Advances from customers - current
$16.9 $1.5 $15.4 
Advances from customers - noncurrent
$45.1 $45.2 $(0.1)

Previously deferred sales recognized in revenue totaled $28.5 million and $0 million in the six months ended June 30, 2021 and 2020, respectively.
LEU Segment

The SWU component of low-enriched uranium (“LEU”) typically is bought and sold under contracts with deliveries over several years. The Company’s agreements for natural uranium sales generally are 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 June 30, 2021, the order book was approximately $1 billion. The order book represents the estimated aggregate dollar amount of revenue for future SWU and uranium deliveries under contract and includes approximately $321 million of Deferred Revenue and Advances from Customers. Refer to Contract Liabilities table above. As of December 31, 2020, the order book was approximately $960 million.

Most of the Company’s enrichment contracts provide for fixed purchases of SWU during a given year. The Company’s order book partially is 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 also is 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 adjust 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.

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.

On October 31, 2019, the Company signed a cost-share contract with the U.S. Department of Energy (“DOE”) to deploy a cascade of centrifuges to demonstrate production of high-assay, low-enriched uranium (“HALEU”) for advanced reactors (“the HALEU Contract”). HALEU is a component of an advanced nuclear reactor fuel that is not commercially produced in the United States today and may be required for a number of advanced reactor and fuel designs currently under development in both the commercial and government sectors. The three-year 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 the Company elects to incur above these amounts. Costs under the HALEU Contract include program costs, including direct labor 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 and production of a small quantity of HALEU. When estimates of remaining program costs to be incurred 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. In 2019, the portion of the Company’s anticipated cost share under the HALEU Contract representing the Company’s share of 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, remaining program cost projections and the Company’s anticipated cost-share. Cost of sales in the six months ended June 30, 2021 and 2020 benefited by $4.6 million and $5.3 million, respectively, for previously accrued contract losses attributable to work performed in the periods. As of June 30, 2021, a total of $15.2 million of previously accrued contract losses have been realized and the accrued contract loss balance included in Accounts Payable and Accrued Liabilities was $3.1 million.
The HALEU Contract is funded incrementally and DOE currently is obligated for costs up to approximately $113.4 million of the $115 million. The Company has received aggregate cash payments of $86.5 million through June 30, 2021.

At present, work under the HALEU Contract remains on schedule but we have been experiencing increased delays from vendors and increased costs due to the continuing effects of the COVID-19 pandemic. Additionally, COVID-19 related supply chain difficulties may also affect DOE in its supply of equipment that it is required to furnish under the contract. As a result, we currently estimate that costs to complete the existing scope of the HALEU Contract have increased approximately $8.8 million over the 2019 initial estimate. Additional COVID-19 related impacts, delays in DOE furnishing equipment, or changes to the existing scope of the HALEU Contract could result in material further increases to our estimate of the costs required to complete the demonstration cascade and produce HALEU, as well as delay completion of the HALEU Contract. The Company does not currently have a contractual obligation to perform work in excess of the 2019 initial cost estimate for the HALEU Contract and therefore, no additional costs have been accrued as of June 30, 2021. We have informed DOE that we currently estimate the cost to complete the demonstration cascade and produce HALEU has increased from the 2019 initial cost estimate and we plan to seek additional funding commitments from DOE for the additional costs. If the Company commits to a plan to complete the demonstration cascade and produce HALEU and DOE does not commit to fully fund the additional costs, we may incur material additional costs or losses in future periods that could have an adverse impact on our financial condition and liquidity.

Centrus and DOE have yet to settle fully the Company’s claims for reimbursements for certain pension and postretirement benefits costs related to past contract work performed for DOE unrelated to the HALEU Contract. There is the potential for additional income to be recognized for this work pending the outcome of legal proceedings related to the Company’s claims for payment and the potential release of previously established valuation allowances on receivables. As a result of the application of fresh start accounting following the Company’s emergence from Chapter 11 bankruptcy on September 30, 2014, the receivables related to the Company’s claims for payment are carried at fair value as of September 30, 2014, which is net of the valuation allowances. Refer to Note 11, Commitments and Contingencies -- Legal Matters.