Centrus Energy Corp., a Delaware corporation, (“Centrus” or the “Company”), is a trusted supplier of enriched uranium for nuclear fuel and services for the nuclear power industry, which provides a reliable source of carbon freecarbon-free energy. References to “Centrus”, the “Company”, “our”, or “we” include Centrus Energy Corp. and its wholly ownedwholly-owned subsidiaries as well as the predecessor to Centrus, unless the context otherwise indicates. We were incorporated in 1998 as part of the privatization of the United States Enrichment Corporation.

Centrus operates two business segments: (a) low-enriched uranium (“LEU”), which supplies various components of nuclear fuel to utilitiescommercial customers from our global network of suppliers, and (b) technical solutions, which provides advanced engineering, design, and manufacturing services to government and private sector customers and is deploying uranium enrichment and other capabilities necessary for production of advanced nuclear fuel production capabilities to power existing and next-generation reactors around the world.

Our LEU segment provides most of the Company’s revenue and involves the sale of enriched uranium for nuclear fuel to customers that are primarily utilities operatingwhich operate commercial nuclear power plants. The majority of these sales are for the enrichment component of LEU, which is measured in separative work units (“SWU”). Centrus also sells natural uranium (the raw material needed to produce LEU) and occasionally sells LEU with the natural uranium, uranium conversion, and SWU components combined into one sale.

LEU is a critical component in the production of nuclear fuel for reactors that produce electricity. We supply LEU and its components to both domestic and international utilities for use in nuclear reactors worldwide. We provide LEU from multiple sources, including our inventory, medium-medium and long- termlong-term supply contracts, and spot purchases. As a long-term supplier of LEU to our customers, our objective is to provide value through the reliability and diversity of our supply sources.

OurUnder a contract with the U.S. Department of Energy (“DOE”), our technical solutions segment is deploying uranium enrichment and other capabilities necessary for production of advanced nuclear fuel production capabilities to meet the evolving needs of the global nuclear industry and the U.S. government, whilegovernment. We also leveringare leveraging our unique technical expertise, operational experience, and specialized facilities to expand and diversify our business beyond uranium enrichment, offering new services to existing and new customers in complementary markets.

Our technical solutions segment has as its goal the restoration ofis working to restore America’s domestic uranium enrichment capability, to play a critical role in meeting U.S. national security and energy security requirements, in advancing America’s nonproliferation objectives and in delivering the next-generation nuclear fuels that will power the future of nuclear energy providingas it provides reliable carbon freecarbon-free power around the world.

The U.S.United States has not had a domestic uranium enrichment capability suitable to meet U.S. national security requirements since the aging Paducah Gaseous Diffusion Plant (“Paducah GDP”) shut down in 2013. CentrusLongstanding U.S. policy and binding nonproliferation agreements prohibit the use of foreign-origin enrichment technology for U.S. national security missions. Our AC100M centrifuge currently is the only American company working to deploy an enrichment technology and our AC100M centrifuge is the only deployment-ready U.S. uranium enrichment technology that can meet these requirements.national security requirements, albeit requiring one minor change in sourcing of materials.

Centrus is uniquely positionedworking to lead the transition to a new nuclear fuel known aspioneer U.S. production of High-Assay, Low-Enriched Uranium (“HALEU”), enabling the deployment of a new generation of HALEU-fueled reactors to meet the world’s growing need for carbon-free power. HALEU is a high-performance nuclear fuel component which is expected to be required by the commercial and/or government sectors for a number of advanced reactor and fuel designs currentlythat are now under development.development for commercial and government uses. While existing reactors typically operate on LEU with the uranium-235 isotope concentration below 5%, HALEU has ais further enriched so that the uranium-235 concentration ranging fromis between 5% toand 20%, giving it several. The higher U-235 concentration offers a number of potential technicaladvantages, which may include better fuel utilization, improved performance, fewer refueling outages, simpler reactor designs, reduced waste volumes, and economic advantages. For example, the higher concentration of uranium-235 means that fuel assemblies and reactors can be smaller and reactors will require less frequent refueling. Reactors can also achieve higher “burnup” rates, meaning that a smaller volume of fuel will be required overall and less waste will be produced. HALEU may also be used in the future to fabricate next-generation fuel forms for the existing fleet of reactors in the U.S. and around the world. These new HALEU-based fuels could improve the economics of nuclear reactors and inherent safety features while increasing the amount of electricity that can be generated at existing reactors. HALEU fuel may also ultimately be used in new commercial and government applications in the future, such as reactors for the military.greater nonproliferation resistance.

Revenue from ourOur LEU segment accounted for approximately 77%62% of our total revenue in 2020.2021. Our customers are primarily domestic and international utilities that operate nuclear power plants. Our agreements with electric utilities are primarily medium and long-term, fixed-commitment contracts under which our customers are obligated to purchase a specified quantity of the SWU component of LEU from us. Our agreements for natural uranium and enriched uranium product sales, where we sell both the SWU and uranium component of LEU, are generally shorter-term, fixed-commitment contracts.

While in some cases customers purchase both the SWU and uranium components of LEU from us, utility customers typically provide the natural uranium to us as part of their enrichment contracts and in exchange we deliver LEU to these customers and charge for the SWU component. Title to natural uranium provided by customers generally remains with the customer until delivery ofCentrus delivers the LEU, at which time title to LEU is transferred to the customer, and we takeCentrus takes title to the natural uranium.

The following outlines the steps for converting natural uranium into LEU fuel, commonly known as the nuclear fuel cycle:

Our order book of sales under contract in the LEU segment (“order book”) extends to 2030. As of2029. For the years ended December 31, 2021 and 2020, our order book was approximately $986 million and $960 million.million, respectively. The order book is the estimated aggregate dollar amount of revenue for future SWU and uranium deliveries, and includes approximately $328$348.2 million of deferred revenue and advances from customers as of December 31, 2020,2021, whereby customers have made advance payments to be applied against future deliveries. We estimate that approximately 2%3% of our order book is at risk related to customer operations. We anticipate our SWU and uranium revenue from sales currently under contract in our order book will be in a range of $130 million to $140 million during 2021. As of December 31, 2019, our order book was approximately $1.0 billion.

We have and will seekaim to continue to further diversify this base of supply and take advantage of opportunities to obtain additional short and long-term supplies of LEU.

We also have an agreement with Orano (the “Orano Supply Agreement”) for the long-term supply of SWU contained in LEU, nominally commencing in 2023. Under the Orano Supply Agreement, we will purchase SWU contained in LEU received from Orano, and then deliver natural uranium to Orano for the natural uranium feed material component of LEU. We havehad the option to extend the six-year purchase period for an additional two years.years and have recently elected to take the additional supply in 2029. The Orano Supply Agreement provides significant flexibility to adjust purchase volumes, subject to annual minimums and maximums, in fixed amounts that vary year by year. The pricing for the SWU purchased by usSWU is determined by a formula that uses a combination of market-related price points and other factors, and is subject to certain floors and ceilings. Prices are payable in a combination of U.S. dollars and euros.

Market prices for SWU fell substantially in the aftermath of the nuclear incident at Fukushima, Japan in 2011.2011, bottoming out in August of 2018. While prices have been rising, they are still lower than market prices prior to Fukushima. Recent purchases of SWU and our long-term contract with Orano reflect this decline inthese lower market prices. We signed our large, long-term supply agreement with TENEX in 2011. PricesAdditionally, prices under the TENEX Supply Contract also have been adjusted to reflect lower market prices based on a one-time market related price reset that was agreed to when we signed the contract in 2011. The reset occurred in 2018, reducing the unit cost per SWU for our purchases we made in 2019-2020 and will make for the duration of the contract.from 2019 through 2028.

All of our current competitors are owned or controlled, in whole or in part, by foreign governments, and operate enrichment technologies developed with the financial support of foreign governments. These competitors may make business decisions in both domestic and international markets that are influenced by political or economic policy considerations rather than exclusively by commercial considerations.

LEU also may be produced by down-blending government stockpiles of highly-enriched uranium. Governments control the timing and availability of highly-enriched uranium released for this purpose, and the release of this material to the market could impact market conditions. Given the current oversupplied nuclear fuel market, any additional LEU from down-blended highly-enriched uranium released into the market would have a negative effect on prices for LEU.

Our LEU we supply to foreign customers is exported under the terms of international agreements governing nuclear cooperation between the United States and the government of the country of destination or other entities, such as the European Union or the International Atomic Energy Agency. The LEU supplied to us is subject to the terms of cooperation agreements between the country in which the material is produced and the country of destination or other entities.

The limits imposed under the legislationUnder this law and the RSA, apply to the Company’s imports of Russian uranium products procured from TENEX underwill peak in 2023 at 24% of the TENEX Supply Contract, but as outlined below,forecasted U.S. demand for enrichment and then begin to decline, reaching 15% by 2028. Despite the fact that overall limits will ramp down, the RSA extension agreement explicitly sets aside sufficient quota in 2021-2028 for Centrus. The RSA and the legislation provide for a portionrevision of the availablequotas in 2023, 2029, and 2035 to take account of SWU demand forecasts that will be published by the WNA in the future. Any quota so that it can be used to fulfill Centrus’ supply contract. Any changesadjustment or other change to the agreementRSA could affect our ability to implement the TENEX Supply Contract through sales to customers who take delivery in the United States, which is our most significant market.

The amendment to the RSA signed on October 5, 2020 (and now adopted into law) limits shipments of Russian LEU to the United States to amounts that represent the following percentages of U.S. demand for SWU, as measured using an agreed formula in the RSA that relies upon the lower scenario for SWU demand published by the World Nuclear Association in its 2019 publication, “The Nuclear Fuel Report, Global Scenarios for Demand and Supply Availability 2019-2040”:

We lease facilities and related personal property innear Piketon, Ohio from DOE. In connection with a letter agreement that preceded the HALEU letter agreement,Contract, DOE and Centrus amended the lease agreement, which was scheduled to expire by its terms on June 30, 2019. The lease was renewed and extended until May 31, 2022. In September 2021, the Company and the DOE renewed and extended the lease until December 31, 2025. Any facilities or equipment constructed or installed under the HALEU Contract, or other contract with DOE will be owned by DOE and may be returned to DOE in an “as is” condition at the end of the lease term. DOE will be responsible for the D&D of any returned facilities or equipment. If we determine the equipment and facilities may benefit Centrus after completion of the HALEU program, we can extend the facility lease and ownership of the equipment will be transferred to us, subject to mutual agreement regarding D&D and other issues.issues, including those impacted by DOE’s recent decision to competitively award a separate contract for operations of the HALEU cascade following the expiration of our HALEU Contract, which may be awarded to a third party.

Our employees in Maryland, Ohio, and Tennessee are dedicated to our corporate philosophy based in honesty, trust, and with the highest levels of integrity, safety and security. Every day these values drive how we operate our business; govern how we interact with each other and our customers, partners, and suppliers; guide the way that we treat our workforce; and determine how we connect with our communities. Our commitment to ethical business practices is outlined in our Code of Business Conduct. Each employee is askedrequired to acknowledge receipt, understanding of, and compliance with our standards.

Due to the highly specialized nature of our business we are requiredneed to hire and train skilled and qualified personnel to design, build, and operate our state of the art equipment, as welland to perform a diversebroad range of services to support our country and our customers. Our work requires that we attract people who are dedicated to consistently performing quality work and, for many of our positions, are able to obtain a security clearance. We recognize that our success as a company depends on our ability to attract, develop, and retain oursuch a workforce. As such, we promoteWe are dedicated to promoting the health, welfare and safety of our employees. Part of our responsibility includes treating all employees with dignity and respect and providing them with fair, market-based, competitive, and equitable compensation. We recognize and reward the performance of our employees in line with our pay-for-performance philosophy and provide a comprehensive suite of benefit options that enables our employees and their dependents to live healthy and productive lives.

Safety in our workplaces is paramount. We take measures to prevent workplace hazards, encourage safe behaviors and enforce a culture of continuous improvement to ensure our processes help eliminate incidents and illnessesinjuries and comply with governing health and safety laws. This was never more important than in 2020 given the challenges presented by the COVID-19 pandemic.

We are committed to promoting diversity of thought, experience, perspectives, backgrounds, and capabilities to drive innovation and to strengthen the solutions we deliver to our customers because we believe the results leadthis diversity leads to a better outcome.outcomes. We proudly support a culture of inclusion and encourage a work environment that respects diverse opinions, values individual skills, and celebrates the unique experiences our employees bring.possess. To ensure a diverse group of candidates is considered for each opening we enlist the services of a Human Resource Consulting firm that provides services and products related to Affirmative Action Programs (“AAPs”) and equal employment opportunity as required by the U.S. Department of Labor's Office of Federal Contract Compliance Programs (“OFCCP”).

Our values motivate us to promote strong workplace practices with opportunities for development and training. Our training and development efforts focus on ensuring that the workforce is appropriately trained on critical job skills as well as leadership behaviorsattributes that are consistent with our philosophy.

A summary of our employees by location is as follows:

On January 16, 2020, members of the United Steelworkers (“USW”) Local 689-5 ratified a new collective bargaining agreement for the employees represented by the USW at the advanced technology facility innear Piketon, Ohio. The contract term is through October 1, 2022.

Executive officers are elected by and serve at the discretion of the Board of Directors. The Executive officers at March 22,as of December 31, 2021, follow:are as follows:

Philip O. Strawbridge has been Senior Vice President, Chief Financial Officer, Chief Administrative Officer and Treasurer since September 2019. Prior to joining the Company, Mr. Strawbridge served as an executive adviser at Court Square Capital from 2010 to 2013. Mr. Strawbridge served in various executive positions including Chief Financial Officer at EnergySolutions, a nuclear services and technology company, from 2006 to 2010. He was Chief Executive Officer and Chief Operating Officer of BNG America, which provided nuclear waste management services and technology to U.S. Government and commercial clients, from 1999 until BNG America was acquired by EnergySolutions in early 2006. 

John M.A. Donelson has been Senior Vice President and Chief Marketing Officer since October 2019 and was Vice President, Sales and Chief Marketing Officer from January 2018 through October 2019. Mr. Donelson was Vice President, Marketing, Sales and Power from April 2011 through December 2017, Vice President, Marketing and Sales from December 2005 to April 2011, Director, North American and European Sales from June 2004 to December 2005, Director, North American Sales from August 2000 to June 2004 and Senior Sales Executive from July 1999 to August 2000.

Our website is www.centrusenergy.com. We make available on our website, or upon request, without charge, access to our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed with, or furnished to, the Securities and Exchange Commission, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission.

Our code of business conduct (the “Code of Business Conduct”) provides a brief summary of the standards of conduct that are at the foundation of our business operations. The codeCode of business conductBusiness Conduct states that we conduct our business in strict compliance with all applicable laws. Each employee must read the codeCode of business conductBusiness Conduct and sign a form stating that he or she has read, understands and agrees to comply with the codeCode of business conduct.Business Conduct. A copy of the codeCode of business conductBusiness Conduct is available on our website or upon request without charge. We will disclose on the website any amendments to, or waivers from, the code of business conduct that are required to be publicly disclosed.

We also make available on our website or upon request, free of charge, our codeCode of business conduct,Business Conduct, Board of Directors Governance Guidelines, and our Board committee charters.

The following discussion sets forth the material risk factors that could affect our financial condition and operations. Readers should not consider any descriptions to be a complete set of all potential risks that could affect us.

These events could adversely affect us to the extent they result in a reduction or elimination of customers’ contractual requirements to purchase from us,us; the suspension or reduction of nuclear reactor operations,operations; the reduction or blocking of supplies of raw materials, natural or enriched uranium or separative work units (SWU), lower demand, burdensome regulation, disruptions of shipments, production importation or production,payment (including the blocking or restriction of transportation services or hardware); increased competition from third parties,parties; and increased costs or difficulties or increased liability for actual or threatened property damage or personal injury. Additionally, customers may face financial difficulties, including from factors unrelated to the nuclear industry, that could affect their willingness or ability to make purchases. We cannot provide any assurance that events will not preclude us from making deliveries to our customers, increase our costs or that our customers, suppliers, or contractors will not default on their obligations to us or file for bankruptcy protection. If a customer files for bankruptcy protection, for example, we likely would be unable to collect all, or even a significant portion, of amounts that are owed to us. A customer default and bankruptcy filing by one or more customers or suppliers, or events (such as government actions) which prevent or limit our ability to obtain or sell material or services, could have a material adverse effect on our business, financial position, results of operations, or cash flows.

Events related to the March 2011 earthquake and tsunami that caused irreparable damage to four reactors in Fukushima, Japan created an over-supply of nuclear fuel that continues to heavily influence market prices. In addition, reactor operators facing aggressive price competition from natural gas and subsidized renewable generation like wind and solar, and other factors, have closed or are planning to close reactors, further reducing demand for our product and services. Despite the decrease in demand, some of our competitors supported by foreign governments continued to expand their capacity. Market uncertainty, and reduced demand, coupled with excess capacity and supply has adversely affected our ability to sell LEU and SWU and could adversely affect our business, results of operations, and prospects.

The timing and scope of potential changesFurther, currently evolving international events, including the war in duties, restrictionsUkraine could result in new or additional sanctions are difficultor other U.S. or foreign government actions that could directly or indirectly limit or prevent our purchase, importation, or ability to predict but could have adverse impacts on us and depending on such changes, we might not be able to fully satisfy our obligationssell material under our supplyTENEX Supply Agreement. Even absent such restrictions, some of our U.S. and foreign customers are unable or sales contracts. For example, future reviews of the quotas provided for in the RSAunwilling to accept Russian SWU and other potential future actions by the United States or other governments could reduce the amount of material we can import or sell under our Tenex Supply Agreement or from our other sources of supply. uranium.

Geopolitical events, including domestic or international reactions or responses to such events, as well as concerns about national security or other issues, also could lead to U.S. or foreign government or international actions that could disrupt our ability to purchase, or to sell, or make deliveries of LEU, SWU, or other uranium products, or even to continue to do business with one or more of our suppliers or their affiliates. Our inability to meet thoseour purchase or sales obligations, or to earn revenues from U.S. and international sales, would adversely affect Centrus’our financial condition, results of operations, cash flows, and the viability of our business. All of these outcomes, individually and collectively, could cause us to incur significant financial losses, in addition to impeding or preventing us from fulfilling our existing contracts, or winning new contracts, and could adversely affect our profitability and the viability of our business.

We may not achieve the anticipated benefits from supply agreements we enter into. The prices we are charged under some supply agreements are determined by formulas that may not be aligned with the prevailing market prices at the time we enter into contracts with customers. As a result, the sales prices in our contracts may not cover our purchase costs, or those purchase costs may limit our ability to secure profitable sales.

We are currently dependent on purchases from suppliers to meet our obligations to customers.customers, including purchases from the Russian government entity, TENEX. A significant delay in, or stoppage or termination of, deliveries of material to us under our supply agreements, could adversely affect our ability to make deliveries to customers. The recent action of Russian military forces in Ukraine has escalated tensions between Russia and the U.S. The U.S. has imposed, and is likely to impose additional, financial and economic sanctions and export controls against certain Russian organizations and/or individuals. Sanctions and export controls, as well as any actions by Russia, could adversely affect our supply and our ability to meet our obligations to customers.

We also rely on third-partiesthird parties to provide essential services to the Company, such as the storage and management of inventory, transportation, and radiation protection. Those service providers may not perform on time, with the desired quality, or at all for a variety of reasons, many of which are outside our control. An interruption of deliveries from our suppliers or the provision of essential services by third parties, could adversely impact our business, results of operations, and prospects.

We compete with major producers of LEU, all of which are wholly or substantially owned by governments: Orano (France), Rosatom/TENEX (Russia), Urenco (the Netherlands, the United Kingdom and two German utilities), and CNEIC (China). Our competitors have greater financial resources than we do. Foreign competitors enjoy financial and other support from their government owners, which may enable them to be less cost-cost or profit-sensitive than we are. In addition, decisions by foreign competitors may be influenced by political and economic policy considerations rather than commercial considerations. For example, foreign competitors may elect to increase their production or exports of LEU, SWU, or other uranium products, including HALEU, even when not justified by market conditions, thereby depressing prices and reducing demand for our LEU, whichSWU, and other uranium products. This could adversely affect our business, results of operations, and prospects.

Doing business in foreign markets poses additional risks and challenges. For example, agreements for cooperation between the U.S. government and various foreign governments or governmental agencies control the export of nuclear materials from the United States. We are unable to supply fuel for foreign reactors unless there is an agreement for cooperation in force. If an agreement with a country in which one or more of our customers is located were to lapse, terminate, or be amended, our sales or deliveries could be curtailed or terminated, adversely affecting our business, results of operations, and prospects. Moreover, the lack of such agreements for cooperation between the United States government and those governments or agencies in emerging markets may restrict our ability to sell into such markets. Additionally, countries may impose other restrictions on the import or export of material.material or services.

Purchases of LEU and SWU by customers in the European Union are subject to a policy of the Euratom Supply Agency that seeks to limit foreign enriched uranium to no more than 20% of European Union consumption per year. Similarly, China has a policy of using Chinese sources of LEU.LEU and SWU. Such policies limit our ability to sell in those countries.

Certain foreign markets lack a comprehensive nuclear liability law that protects suppliers by channeling liability for injury and property damage suffered by third persons from nuclear incidents at a nuclear facility to the facility’s operator. The lack of legal protection for suppliers could adversely affect our ability to compete for sales to meet the growing demand for LEU or SWU in these markets and our prospects for future revenue from such salessales.

Our order book of sales is the estimated aggregate dollar amount of SWU and uranium sales that we expect to recognize as revenue in future periods under existing contracts with customers. It includes deferred revenue for sales in which we have been paid but still have a delivery obligation, which means we will not receive cash in the future from those deliveries. There is no assurance that the revenues projected will be realized, or, if realized, will result in profits. Our estimate of the order book is based on a number of factors including customers’ estimates of the timing and size of their fuel requirements and estimates of future selling prices. For example, depending on the terms of specific contracts, prices may be adjusted based on escalation using a general inflation index, published SWU or uranium market price indicators prevailing at the time of delivery, and other factors, all of which are unpredictable. Any inaccuracy in estimates of future prices would add to the imprecision of the order book estimate. From time to time, we have worked with customers to modify contracts that have delivery, scheduling, origin or other terms that may require modifications to address our anticipated supply sources. If we were to initiate such discussions in the future, we have no assurance that our customers would agree to revise existing contracts or would not require concessions, which could adversely affect the value of our order book and our prospects.

In 2019, Centrus began work on a three-year, $115 million cost-shared contract with the U.S. Department of EnergyDOE to deploy a cascade of 16 of our AC100M centrifuges to demonstrate production of HALEU with domestic technology. AtAs a result of the conclusionon-going supply chain disruptions due to the COVID-19 pandemic and other factors, DOE has been unable to provide the cylinders required to begin HALEU production under the current contract. Consequently, operation of the demonstration program fundingcascade will be performed pursuant to a separate subsequent, competitively-awarded contract which may not be awarded to us. Although we believe we are well positioned to compete for the subsequent contract to operate the cascade beginning in 2022, ourthere is no assurance that we will be awarded such contract.

Our goal is to be in a position to begin commercial production and scale up the facility in modular fashion as demand for HALEU grows in the commercial and/or government sectors. It is uncertain, however, whether or when such demand will materialize. To continue operatingHowever, our right to operate the facility afterwe are building depends on the conclusionaward of one or more follow-on contracts by the current contract with DOE, we need U.S. government, as well as continued

If we are required to delease the facility afterwhere we are deploying the existing contract funding runs out in 2022, it can deleaseHALEU cascade under the facilityHALEU Contract and return it, along with the centrifuges and supporting equipment, to the Department. ThisDOE at the expirations of our contract, this would likely result in terminating the termination of our NRC operating license and us laying off our Piketon workforce. Alternatively,However, if we are able to continue operating the facility, we would incur additional costs and liabilities.liabilities associated with the facility.

If the Company’s operation of the Piketon facility were terminated, there can be no assurance that we could regain use of the Piketon facility or obtain a new NRC license in the future at the Piketon site or an alternative site, in which event we would be unable to begin commercial production of HALEU. We may also incur additional costs related to reducing our workforce or closing the Piketon facility. Failure to secure U.S. government or other funding and/or contracts to purchasesupport the outputcontinued operation of the plantPiketon facility, and retain our NRC license, could have a material adverse effect on our business and financial condition along with our plans for future growth.

The technical solutions segment conducts business under various types of contracts, including fixed-price contracts and cost-share contracts, where costs must be estimated in advance of our performance. These types of contracts are priced, in part, on cost and scheduling estimates that are based on assumptions including prices and availability of experienced labor, equipment and materials, and estimates of the amount of other contract work we expect to perform. In the event we have cost overruns, we may not be able to obtain compensation for additional work performed or expenses incurred. Our failure to accurately estimate the resources and time required for fixed-price or cost-share contracts or our failure to complete our contractual obligations within the time frame and costs committed could result in reduced profits, greater costs, or a loss for that contract. If the cost overrun on a contract is significant, or we encounter issues that affect multiple contracts, the cost overrun could have a material adverse effect on our business, financial condition, and results of operations.

We continue to have significant long-term liabilities, including the indebtedness under our 8.25% Notes, which mature in February 2027. We also still have substantial pension and postretirement health and life benefit obligations and other long-term liabilities.

Centrus and its subsidiary, Enrichment Corp., maintain qualified defined benefit pension plans that are guaranteed by the Pension Benefit Guaranty Corporation (“PBGC”), a wholly ownedwholly-owned U.S. government corporation that was created by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Centrus also maintains non-qualified defined benefit pension plans for certain executive officers. These plans are anticipated to require material cash contributions in the future, which may divert funds from other uses and could adversely impact our liquidity depending on the timing of any required contributions or payments in relation to our sources of cash and other payment obligations.

Further, earnings may be positively or negatively impacted by the amount of expense we record for employee benefit plans. Generally accepted accounting principles in the United States (“U.S. GAAP”) require a company to calculate expenseexpenses for these plans using actuarial valuations. The IRS and the Pension Protection Act of 2006 regulate the minimum amount we contribute to our pension plans. The amount we are required to contribute to pension plans could have an adverse effect on our cash flows.

Revenue is recognized when or as we transfer control of the promised LEU or uranium to the customer. Customer demand is affected by, among other things, electricity markets, reactor operations, maintenance, and the timing of refueling outages. As a result, a relatively small change in the timing, amount, or other terms of customer orders for LEU due to a change in a customer’s refueling schedule or other reasons may cause operating results to be substantially above or below expectations, which could have an adverse effect on our cash flows.

The carrying values of the intangible assets are subject to impairment tests whenever adverse conditions or changes in circumstances indicate a possible impairment loss. If impairment is indicated, the asset carrying value will be reduced to its fair value. Inherent in our fair value determinations are certain judgments and estimates,

Substantially all of our revenue-generating operations are conducted at our subsidiary, Enrichment Corp. The financing obtained from Enrichment Corp. funds our general corporate expenses, including interest payments on the 8.25% Notes, which are guaranteed on a limited and subordinated basis by Enrichment Corp. As a wholly ownedwholly-owned subsidiary of Centrus, Enrichment Corp. has its own set of creditors and a separate board of directors (the “Enrichment Board”), who are elected by Centrus. Current and future funding and support are conditional and dependent on Enrichment Corp.’s own financial condition and a determination by the Enrichment Board that such funding is in the interest of Enrichment Corp.

The price of our Class A Common Stock remains subject to volatility. The market price and level of trading of our Class A Common Stock could be subject to wide fluctuations in response to numerous factors, many of which are beyond our control. These factors include, among other things, our limited trading history, our limited trading volume, the concentration of holdings of our Class A Common Stock, actual or anticipated variations in our operating results and cash flow, the nature and content of our earnings releases, announcements or events that impact our products, customers, competitors or markets, business conditions in our markets and the general state of the securities markets and the market for energy-related stocks, as well as general economic and market conditions and other factors that may affect our future results. Additionally, future sales of our common stock or instruments convertible into our common stock, in public or private offerings may depress our stock price.

OurHolders of our Class B stockholdersCommon Stock, par value $0.10 per share (“Class B Common Stock” and together with the Class A Common Stock, “Common Stock”) may make decisions regarding their investment in the Company based upon factors that are unrelated to the Company’s performance. Any sales of shares by holders of our Class B stockholderCommon Stock would result in automatic conversion (with limited exceptions) of Class B Common Stock into Class A Common Stock, upon the sale of Class B Common Stock, which in turn could significantly adversely impact the trading price of the Class A Common Stock.

Our 8.25% Notes and the Series B Preferred Stock are not listed on any securities exchange. No assurance can be given as to the liquidity of the trading market for the 8.25% Notes or the Series B Preferred Stock.Notes. The 8.25% Notes and the Series B Preferred Stock may only be traded only infrequently in transactions arranged through brokers or otherwise, and reliable market quotations for the 8.25% Notes and the Series B Preferred Stock may not be available. In addition, the trading prices of the 8.25% Notes and the Series B Preferred Stock will depend on many factors, including prevailing interest rates, the limited trading volumes, and the other factors discussed above with respect to the Class A Common Stock.

As of December 31, 2020,2021, based solely on amounts reported in Schedule 13D and 13G filings with the SEC, two principal stockholders (those stockholders with beneficial ownership of more than 10%the largest holdings of our Class A Common Stock)Stock collectively beneficially own approximately 25%19% of our Class A Common Stock. As a result, these stockholders may be able to exert significant influence over all matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger of the Company, or sale of substantially all of the Company’s assets. These stockholders may have interests that differ from, and may vote in a way adverse to, other holders of Class A Common Stock, or adverse to the recommendations of the Company’s management. This concentration of ownership may make it more difficult for other stockholders to effect substantial changes in the Company, may limit the ability of the Company to pass

Currently, a small number of persons who also are stockholders collectively own greater than 50% of our Series B Preferred Stock and 25% of our 8.25% Notes. As a result, these stockholders may have interests that differ from the remainder of the holders of our Class A stockholders,Common Stock, and, as a result, may vote or take other actions in a way adverse to other holders of Class A Common Stock.

Our ability to fully utilize our existing net operating losses (“NOLs”) or net unrealized built-in losses could be limited or eliminated in the event (i) we undergo an “ownership change” as described under Section 382 of the Internal Revenue Code, (ii) we do not reach profitability or are only marginally profitable, or (iii) there are changes in U.S. government laws and regulations. An “ownership change” is generally defined as a greater than 50% change in equity ownership by value over a rolling three-year period. Past or future ownership changes, some of which may be beyond our control, as well as differences and fluctuations in the value of our equity securities may adversely affect our ability to utilize our NOLs and could reduce our flexibility to raise capital in future equity financings or other transactions, or we may determinedecide to pursue transactions even if they would result in an ownership change and impair our ability to use our NOLs. In addition, the Section“Section 382 Rights AgreementAgreement” we have adopted with respect to our common stock and the transfer restrictions in the Series B Preferred Stock containcontains limitations on transferability intended to prevent the possibility of experiencing an “ownership change,” but we cannot assure yoube certain that these measures will be effective or weeffective. We also may determinedecide to pursue transactions even if they would result in an ownership change and impair our ability to use our NOLs. In addition, any changes to tax rules and regulations or the interpretation of tax rules and regulations (including recent tax legislation) could negatively impact our ability to recognize any potential benefits from our NOLs or net unrealized built-in losses.

Our operations, including the facilities we lease innear Piketon, Ohio, are subject to regulation by the U.S Nuclear Regulatory Commission (“NRC”). The NRC has granted us two licenses for the Piketon facility, i.e.facility: a license for thea Lead Cascade test facility that was granted in February 2004, and a separate license to construct and operate a commercial plant that was granted in April 2007. Our license to construct and operate a commercial plant will expire on April 13, 2037. In June 2021, the NRC approved an amendment to permit HALEU production as a subset of the larger commercial plant license. We are currently performing work under a three-year contract with DOE for the construction and operations of a cascade to produce HALEU. We are pursuing modificationsThis contract is currently set to our NRC license for our commercial plant necessary to perform the contract. There is no assurance that we will be able to institute the programs and processes necessary to perform the work in a timely and cost efficient manner. Further we may be unable to gain NRC approval of the necessary license modifications, or gaining such approval may take longer and increase costs.expire on June 1, 2022.

The NRC also could refuse to renew our license to construct and operate a commercial plant if it determines that: (1) we are foreign owned, controlled, or dominated; (2) the issuance of a renewed license would be inimical to the maintenance of a reliable and economic domestic source of enrichment; (3) the issuance of a renewed license would be adverse to U.S. defense or security objectives; or (4) the issuance of a renewed license is otherwise not consistent with applicable laws or regulations in effect at the time of renewal.

The NRC has the authority to issue notices of violation for violations of the Atomic Energy Act of 1954, as amended (the “Atomic Energy Act”), the NRC regulations and conditions of licenses, certificates of compliance, or orders. The NRC has the authority to impose civil penalties or additional requirements and to order cessation of operations for violations of its regulations. Penalties under the NRC regulations could include substantial fines, imposition of additional requirements, or withdrawal or suspension of licenses or certificates. Any penalties

In addition, certain of our operations are subject to DOE regulation or contractual requirements. Our facility in Oak Ridge is also regulated by the State of Tennessee under NRC’s agreement state program andAgreement State Program as well as applicable state laws. Our operations at the facility innear Piketon also are subject to regulation by various agencies of the Ohio state government. These state and federal agencies may have the authority to impose civil penalties and additional requirements, which could adversely affect our results of operations. Further, changes in federal, state or local government policies and priorities can impact our operations and the nuclear industry. This includes changes in interpretations of regulatory requirements, increased inspection or enforcement activities, changes in budgetary priorities, changes in tax laws and regulations and other actions or in-actions governments can take.

We lease facilities from DOE innear Piketon, Ohio. Pursuant to the Price-Anderson Act, as well as the HALEU Contract, DOE has agreed to indemnify the Company’s subsidiaries who are party to those agreements, and other Company entities who fall under the definition of a person indemnified under the CompanyAtomic Energy Act of 1954, against claims for public liability (as defined in the Atomic Energy Act) arising out of or in connection with activities under those leases and the HALEU Contract, as applicable, resulting from a nuclear incident or precautionary evacuation.evacuation including transportation. If an incident or evacuation is not covered under DOE indemnification, we could be financially liable for damages arising from such incident or evacuation, which could have an adverse effect on our results of operations and financial condition. The

While DOE has provided indemnification pursuant to the Price-Anderson Act, there could be delays in obtaining reimbursement for costs from DOE and DOE may also determine that some or all costs are not reimbursable under the indemnification. In addition, the Price-Anderson Act indemnification does not cover loss or damage due to a nuclear incident to property located on the leased facilities due to a nuclear incident. For example, facilities.

In our contracts, we seek to protect ourselves from liability, but there is no assurance that such contractual limitations on liability will be effective in all cases. The costs of defending against a claim arising out of a nuclear

Our certificate of incorporation gives us certain rights with respect to shares of our common stock held (beneficially or of record) by foreign persons. Foreign persons are defined in our certificate of incorporation to include, among others, an individual who is not a U.S. citizen, an entity that is organized under the laws of a non-U.S. jurisdiction and an entity that is controlled by individuals who are not U.S. citizens, or by entities that are organized under the laws of non-U.S. jurisdictions.

The occurrence of any one or more of the following events is a “foreign ownership review event” and triggers the board of directors’ right to take various actions under our certificate of incorporation: (1) the beneficial ownership by a foreign person of (a) 5% or more of the issued and outstanding shares of any class of our equity securities, (b) 5% or more in voting power of the issued and outstanding shares of all classes of our equity securities, or (c) less than 5% of the issued and outstanding shares of any class of our equity securities or less than 5% of the voting power of the issued and outstanding shares of all classes of our equity securities, if such foreign person is entitled to control the appointment and tenure of any of our management positions or any director; (2) the beneficial ownership of any shares of any class of our equity securities by or for the account of a foreign uranium enrichment provider or a foreign competitor (defined in our certificate of incorporation as a “Contravening Person”); or (3) any ownership of, or exercise of rights with respect to, shares of any class of our equity securities or other exercise or attempt to exercise control of us that is inconsistent with, or in violation of, any regulatory restrictions, or that could jeopardize the continued operations of our facilities (defined in our certificate of incorporation as an “Adverse Regulatory Occurrence”). These rights include requesting information from holders (or proposed holders) of our securities, refusing to permit the transfer of securities by such holders, suspending or limiting voting rights of such holders, redeeming or exchanging shares of our stock owned by such holders on terms set forth in our certificate of incorporation, and taking other actions that we deem necessary or appropriate to ensure compliance with the foreign ownership restrictions.

Accordingly, there are situations in which a foreign stockholder or Contravening Person could lose the right to vote its shares or in which we may redeem or exchange shares held by a foreign person or Contravening Person and

Our corporate headquarters is located at 6901 Rockledge Drive, Suite 800, Bethesda, Maryland 20817, where we lease 24,000 square feet of office space through October 2027. We own a 440,000 square foot manufacturing facility, including supporting office space, on 72 acres at 400 Centrifuge Way, Oak Ridge, Tennessee 37830. We also lease industrial buildings and 110,000 square feet of supporting office space from DOE at 3930 U.S. Route 23, Piketon, Ohio 45661. The industrial buildings encompass more than 14 acres under roof and were built to contain uranium enrichment operations using centrifuge technology. In May 2017, we entered into a lease through July 2021 for 6,000 square feet of office space at 14074 U.S. Highway 23, Waverly, Ohio. We also have a short-term leaseslease for a small areasarea of office space in Washington, DC and Tokyo, Japan.D.C.

None.

The Company’s certificate of incorporation authorizes 100,000,000 shares of common stock, consisting of 70,000,000 shares of Class A common stock,Common Stock, $0.10 par value per share (the “Class A Common Stock”) and 30,000,000 shares of Class B common stock,Common Stock, $0.10 par value per share (the “Class B Common Stock,” and together with the Class A Common Stock, the “Common Stock”)., As of March 1, 2021,2022, the Company has issued 13,379,87614,393,133 shares of Common Stock, consisting of 12,660,67613,673,933 shares of Class A Common Stock and 719,200 shares of Class B Common Stock. The Class B Common Stock was issued to Toshiba America Nuclear Energy Corporation (“Toshiba”) and Babcock & Wilcox Investment Company (“B&W”) and has the same rights, powers, preferences and restrictions and ranks equally in all matters with the Class A Common Stock, except voting. Holders of Class B Common Stock are entitled to elect, in the aggregate, two members of the Board of Directors of the Company, subject to certain holding requirements. Additionally, the Company has reserved 1,200,0001,900,000 shares of Class A Common Stock under its management incentive plan, of which 374,478844,293 shares were available for future awards as of December 31, 2020,2021, including 120,000 shares associated with awards which terminated or were cancelled without being exercised.

The Class A Common Stock trades on the NYSE American LLC (the “NYSE American”) under the symbol “LEU”.

As of March 1, 2021,2022, there were 12,660,67613,673,933 shares of Class A Common Stock outstanding. As of March 1, 2021,2022, there were approximately 890850 holders of record and approximately 10,44014,360 beneficial owners of the Company’s Class A Common Stock. As of March 1, 2021,2022, there were two holders of record of the Company’s Class B Common Stock.

No cash dividends were paid in 20192021 or 2020, and we have no intention to pay cash dividends in the foreseeable future. Our Series B Preferred Stock provides that so long as any shares of our Series B Preferred Stock are outstanding, we may not pay dividends on our Class A Common Stock (other than dividends payable in shares of Class A Common Stock). In addition, theThe indenture governing our 8.25% Notes, subject to certain exceptions, places certain restrictions on the ability of Enrichment Corp. to transfer cash and other assets to us. This could act as an additionala constraint on our ability to pay dividends on our Class A Common Stock.

There were no unregistered sales of equity securities by the Company during the years ended December 31, 20202021 or 2019.2020.

On November 17, 2020,23, 2021, pursuant to a tender offer announced on October 19, 2020,20, 2021, the Company completed the purchase of 62,85436,867 shares of its outstanding Series B Senior Preferred Stock, par value $1.00 per share, at a price per share of $954.59,$1,145.20, less any applicable withholding taxes, for an aggregate purchase price of approximately $60$42.2 million. The accepted shares represent 97.4% of the Company’s outstanding Series B Senior Preferred Stock as of September 30, 2021. Based on the final results, the requisite consent of at least 90% of the outstanding Series B Senior Preferred Stock required to approve the Series B Preferred Amendment was obtained. On November 23, 2021, the Company issued a Notice of Full Redemption providing for the redemption of any and all shares of the Company’s Series B Senior Preferred Stock outstanding after consummation of the Company’s tender offer to purchase all of its issued and outstanding Series B Senior Preferred Stock. On December 15, 2021, the Company completed the redemption of all 980 outstanding Series B Senior Preferred Stock for aggregate cash consideration of $1.1 million. The purchase price per share represented a 25%15% discount from the aggregate liquidation preference, includingincluded accrued but unpaid dividends, of $1,272.78$1,347.29 per share as of September 30, 2020.2021. These shares represented approximately 60%all of the Company'sCompany’s remaining outstanding Series B Senior Preferred Shares as of September 30, 2020. The remaining Series B Preferred shares outstanding after the transaction was 41,720 shares. Stock.

 

In order to aid in our compliance with our NRC license, our certificate of incorporation gives us certain rights with respect to shares of our Common Stock held (beneficially or of record) by foreign persons. Foreign persons are defined in our certificate of incorporation to include, among others, an individual who is not a U.S. citizen, an entity that is organized under the laws of a non-U.S. jurisdiction, and an entity that is controlled by individuals who are not U.S. citizens or by entities that are organized under the laws of non-U.S. jurisdictions.

The occurrence of any one or more of the following events is a “foreign ownership review event” and triggers the board of directors’ right to take various actions under our certificate of incorporation: (1) the beneficial ownership by a foreign person of (a) 5% or more of the issued and outstanding shares of any class of our equity securities, (b) 5% or more in voting power of the issued and outstanding shares of all classes of our equity securities, or (c) less than 5% of the issued and outstanding shares of any class of our equity securities or less than 5% of the voting power of the issued and outstanding shares of all classes of our equity securities, if such foreign person is entitled to control the appointment and tenure of any of our management positions or any director; (2) the beneficial ownership of any shares of any class of our equity securities by or for the account of a foreign uranium enrichment provider or a foreign competitor (referred to as “contravening persons”); or (3) any ownership of, or exercise of rights with respect to, shares of any class of our equity securities or other exercise or attempt to exercise control of us that is inconsistent with, or in violation of, any regulatory restrictions, or that could jeopardize the continued operations of our facilities (an “adverse regulatory occurrence”). These rights include requesting information from holders (or proposed holders) of our securities, refusing to permit the transfer of securities by such holders, suspending or limiting voting rights of such holders, redeeming or exchanging shares of our stock owned by such holders on terms set forth in our certificate of incorporation, and taking other actions that we deem necessary or appropriate to ensure compliance with the foreign ownership restrictions.

Centrus Energy Corp., a Delaware corporation (“Centrus” or the “Company”), is a trusted supplier of nuclear fuel and services for the nuclear power industry, which provides a reliable source of carbon free energy. References to “Centrus”, the “Company”, “our”, or “we” include Centrus Energy Corp. and its wholly ownedwholly-owned subsidiaries as well as the predecessor to Centrus, unless the context otherwise indicates.indicates otherwise.

Centrus operates two business segments: (a) low-enriched uranium (“LEU”), which supplies various components of nuclear fuel to utilitiescommercial customers from our global network of suppliers, and (b) technical solutions, which provides advanced engineering, design, and manufacturing services to government and private sector customers and is deploying uranium enrichment and other capabilities necessary for production of advanced nuclear fuel production capabilities to power existing and next-generation reactors around the world.

Our LEU segment provides most of the Company’s revenue and involves the sale of nuclear fuel to customers that are primarily utilities operatingthat operate commercial nuclear power plants. The majority of these sales are for the enrichment component of LEU, which is measured in separative work units (“SWU”). Centrus also sells natural uranium (the raw material needed to produce LEU) and occasionally sells LEU with the natural uranium, uranium conversion, and SWU components combined into one sale.

LEU is a critical component in the production of nuclear fuel for reactors that produce electricity. We supply LEU and its components to both domestic and international utilities for use in nuclear reactors worldwide. We provide LEU from multiple sources, including our inventory, medium-medium and long- termlong-term supply contracts, and spot purchases. As a long-term supplier of LEU to our customers, our objective is to provide value through the reliability and diversity of our supply sources.

Our global order book includes long-term sales contracts with major utilities through 2030.2029. We have secured cost-competitive supplies of SWU under long-term contracts through the end of this decade to allow us to fill our existing customer orders and make new sales. A market-related price reset provision in our largest supply contract took effect at the beginning of 2019 – when market prices for SWU were near historic lows – which has significantly lowered our cost of sales and contributed to improved margins. Spot price indicators for SWU have risen by approximately 56%65% to $56 as of December 31, 2021, since bottoming out in August 2018. Our sales team secured over $100 million in new commitments in November through the end of January.

The Company continues to look atreview opportunities to improve its capital structure and to enhance shareholder value. As a result, on September 1, 2020,pursuant to a sales agreement with its agents, the Company completedsold at the salemarket price an aggregate of 2,537,5001,516,467 shares of the Company’sits Class A Common Stock pursuantin 2021, for a total of $44.2 million. After expenses and commissions paid to the Registration Statement on Form S-3 that became effective on August 5, 2020, as supplemented byagents the prospectus supplement filed withCompany’s proceeds total $42.4 million. Additionally, the SEC on August 21, 2020. The priceCompany recorded direct costs of $0.3 million related to the public in the offering was $10.00 per share. The aggregate gross proceeds from the offering were approximately $25.4 million, before deducting underwriting discounts and commissions and other estimated offering expenses payable by the Company of $2.3 million. The Company currently intends to use the net proceeds from this offering for general working capital purposes, to invest in technology development and to repay outstanding debt or retire shares of its Series B Senior Preferred Stock.

The nuclear industry in general, and the nuclear fuel industry in particular, is in a period of significant change, which continues to affect the competitive landscape. In the years following the 2011 Fukushima accident in Japan, the published market prices for uranium enrichment declined more than 75% through mid-2018. While the monthly price indicators have since increased, the uranium enrichment segment of the nuclear fuel market remains oversupplied (including because foreign-owned enrichers continued to expand even as demand fell) and faces uncertainty about future demand for nuclear power generation. Changes in the competitive landscape affect pricing trends, change customer spending patterns, and create uncertainty. To address these changes, we have taken steps to adjust our cost structure; we may seek further adjustments to our cost structure and operations and evaluate opportunities to grow our business organically or through acquisitions and other strategic transactions.

We are also actively considering, and expect to consider from time to time in the future, potential strategic transactions, which could involve, without limitation, acquisitions and/or dispositions of businesses or assets, joint ventures or investments in businesses, products or technologies, or changes to our capital structure. In connection with any such transaction, we may seek additional debt or equity financing, contribute or dispose of assets, assume additional indebtedness, or partner with other parties to consummate a transaction.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. The Company has taken actions to protect its workforce and to maintain critical operations.operations during the COVID-19 pandemic. Travel, operational, and other restrictions imposed by the U.S. and foreign governments may impact our ability to make future sales and may impact the ability of our suppliers, including our suppliers of low enriched uranium, to perform under their contracts. As of the date of this filing, our LEU segment operations have not been materially affected by the COVID-19 pandemic and we are working with our suppliers, fabricators, and customers to monitor the situation closely.closely, including with respect to the impact of emerging variants. However, our technical solutions segment has been impacted by supply chain disruptions and increased costs as a result of the COVID-19 pandemic.

Further, the governments of states and counties in which we operate have from time to time issued orders imposing various restrictions, including prohibiting holding gatherings and closing nonessential businesses. Many of these restrictions remain in place and we continue to monitor and adjust as necessary. As a result, theThe Company has institutedissued a policy requiring vaccinations subject to medical, religious and other exemptions as required by law. In some cases, state laws preclude us from fully implementing our vaccination policy. The Company has also continued other measures to protect its workforce such as expanded telework to protect our workforce, to comply with government orders, and to maintain critical operations. Not all work, however, can be performed remotely. Consequently,We are working closely with DOE and we have instituted limited operations for personnel working on the HALEU programare continuing to maintain critical systems and security.make progress while implementing measures to protect our workforce. Further, the actions taken by our suppliers and government regulatory agencies to protect their workforces may impact our ability to obtain the necessary supplies and governmental reviews and approvals to timely complete the HALEU

The global nuclear industry outlook has begun to improve after many years of decline or stagnation. The development of advanced small and large-scale reactors, innovative advanced fuel types, and the commitment of nations to begin deploying or to increase the share of nuclear power in their nations has created optimism in the market. Part of the momentum has resulted from efforts to lower greenhouse gas emissions to combat climate change and improve health and safety. The industry continues to face headwinds, however, as low cost electricity generation sources, resistance to nuclear power, and the high costs of deploying nuclear power impede expansion of the nuclear industry. Threats of trade actions that could impact the nuclear fuel supply chain is an overhang on the industry.

WhileAccording to the World Nuclear Association, as of January 2022, there were 57 reactors under construction worldwide, almost a majoritythird of the growth of nuclear power remains centeredwhich are in China, India and Russia, the U.S.,China. The United States, with 96 commercial93 operating reactors, in operation, remains the world’s largest market for nuclear fuel, butfuel. The nuclear industry in the U.S.United States, Japan, and Europe faces headwinds as well as opportunities. In the United States, the industry remainsis under some duress due to lowpressure from lower cost natural gas pricesresources and an increase in the expansion of subsidized renewable sources, all of which have put financial pressure on some reactor operators.energy. Eight U.S. reactors have beenprematurely shut down in the U.S. in recent years and several more face the prospect of prematureothers could shut down in the near-term.next few years. At the same time, there are active efforts to develop, demonstrate, and deploy next generation reactors in the United States, many of which are expected to require HALEU.

    

The nuclear fuel industry continues to attempt to recover from the March 2011 incident in Fukushima, Japan, that occurred from an earthquake and tsunami thatwhich caused irreparable damage to four reactors in Fukushima. As a consequence, approximately 60 reactors in Japan and Germany were taken offline, and other countries curtailed or slowed their construction of new reactors or accelerated theirthe retirement of existing plants. While someten reactors in Japan have restarted and manymore are expected to restart, during the next five years, supply and demand dynamics for nuclear fuel continue to be somewhat depressed.impacted.

In 2021 and 2020, we benefited from collections of $43.5 million and $32.6 million, respectively. In 2021, we collected $43.5 million related to the one time collectionsettlement of the Company’s claims for reimbursements for certain pension and postretirement benefits costs incurred in connection with a past cost-reimbursable contract performed at the Portsmouth GDP, recognized as revenue within our technical solutions segment. In 2020, we collected $32.6 million from a customer of $32.6 million in settlement of a supply contract that was subject to the customer’s bankruptcy proceeding. proceeding, recognized as revenue within our LEU segment.

Our technical solutions segment reflects our technical, manufacturing, engineering, and operations services offered to public and private sector customers, including engineering and testing activities as well as technical and resource support currently being performed by the Company. This includes the HALEU Contract and a variety of other contracts with public and private sector customers.

Revenue from our LEU segment accounted for approximately 77%62% of our total revenue in 2020.2021. The majority of our customers are domestic and international utilities that operate nuclear power plants, with international sales constituting approximatelyover one-third of revenue from our LEU segment in recent years. Our agreements with electric utilities are primarily medium and long-term fixed-commitment contracts under which our customers are obligated to purchase a specified quantity of the SWU component of LEU from us. Contracts where we sell both the SWU and natural uranium component of LEU to utilities or where we sell natural uranium to utilities and other nuclear fuel related companies are generally shorter-term, fixed-commitment contracts.

Revenue is recognized at the time LEU or uranium is delivered under the terms of our contracts. The timing of customer deliveries is affected by, among other things, electricity markets, reactor operations, maintenance and refueling outages, and customer inventories. Based on customers’ individual needs, some customers are building inventories and may choose to take deliveries under annual purchase obligations later in the year or in subsequent years. Customer payments for the SWU component of LEU average roughly $10$7.4 million per order. As a result, a relatively small changeshift in the timing of customer orders for LEU may cause significant variability in operating results.results year over year.

Our financial performance over time can be significantly affected by changes in prices for SWU and natural uranium. Since 2011, market prices for SWU and uranium significantly declined until mid-2018, when they began to trend upward. Since our sales order book includes contracts awarded to us in previous years, the average SWU price billed to customers typically lags behind published price indicators by several years. While newer sales reflect the low prices prevalent in recent years, certain older contracts included in our order book have sales prices that are significantly above current market prices.

On occasion, we will accept payment for SWU in the form of natural 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 natural uranium at contract inception, or as the quantity of natural uranium is finalized, if variable.

Cost of sales for SWU and natural uranium is based on the amount of SWU and natural uranium sold and delivered during the period and unit inventory costs. Unit inventory costs are determined using the average cost method. Changes in purchase costs have an effect on inventory costs and cost of sales over current and future periods.sales. Cost of sales includes costs for inventory management at off-site licensed locations. Cost of sales also includes certain legacy costs related to former employees of the Portsmouth GDP and Paducah GDP.

Our technical solutions segment reflects our technical, manufacturing, engineering and operations services offered to public and private sector customers, including the American Centrifuge engineering, procurement, construction, manufacturing and operations services being performed under the HALEU Contract. With our government and private sector customers, we seek to leverage our domestic enrichment experience, engineering know-how, and precision manufacturing facility to assist customers with a range of engineering, design, and advanced manufacturing projects, including the production of fuel for next-generation nuclear reactors and the development of related facilities. We continue to invest in advanced technology because of the potential for future growth into new areas of business for the Company, while also preserving our unique workforce at our Technology and Manufacturing Center in Oak Ridge, Tennessee, and our production facility near Piketon, Ohio.

Our HALEU Contract expires inJune 1, 2022, and although we believe demand for HALEU will emerge over the next several years thereafter, there are no guarantees that we will be awarded a contract to operate the demonstration facility plant or about whether or when government or commercial demand for HALEU will materialize, and there are a number of technical, regulatory, and economic hurdles that must be overcome for these fuels and reactors to come to the market.

While the existing contract ends on June 1, 2019,2022, the DOE has unilaterally changed the scope of the existing contract and plans to compete the operational portion of the demonstration in a new, competitively-awarded contract, with operations to begin in mid-2022. Centrus believes it is well-positioned to compete for a follow-on contract to operate the commencementmachines in Piketon but there is no assurance that DOE will award such a contract to the Company. Congress has not yet adopted a Fiscal Year 2022 appropriations bill for the Department, and there is no assurance that the proposed program, which would go beyond the scope and expiration of our existing contract, will be approved and funded.

Additional COVID-19-related impacts, delays in DOE furnishing equipment, or changes to the existing scope of the HALEU work, ongoing costsContract could result in further material increases to our estimate of the Piketon facility that were included in Advanced Technology Costs oncosts required to complete the consolidated statement of operations prior to June 1, 2019, are included in Cost of Sales demonstration cascade and produce HALEU, as well as delay completion of the technical solutions segment withHALEU Contract. The Company does not currently have a contractual obligation to perform work in excess of the exceptionfunding provided by DOE and, therefore, no additional costs have been accrued as of December 31, 2021. If the DOE elects not to provide funding for production and the Company nonetheless commits to a plan to complete the demonstration cascade and produce HALEU, we may incur material additional costs for two minor itemsor losses in future periods that were repaired under a previous agreement with DOE.could have an adverse impact on our financial condition and liquidity.

In March 2018, we entered into an initial services agreement with X Energy, LLC (“X-energy”)X-energy to provide technical and resource support for conceptual design of its Tri-Structural Isotropic (TRISO)TRISO fuel manufacturing process. In November 2018, we entered into a second services agreement with X-energy to proceed with Preliminary Designpreliminary design of the TRSIOTRISO facility. Under both agreements, which were funded by two separate cooperative agreement awards by DOE, we provideprovided X-energy with non-cash in-kind contributions pursuant to X-energy’s obligations under those agreements. Both of these contracts have been completed. In November 2020, the parties extended the period of performance through August 2021. In August 2021, we entered into a new services agreement with X-energy to provide design services for detailed design of the TRISO fuel manufacturing facility and various support services for establishing their TRISO Research and Development Center. X-energy is funded under the current DOE cooperative agreement titled Advanced Reactor Demonstration Program (ARDP). The task orders under the new agreement may include in-kind contributions that we are not currently, but may provide, at our discretion.

Under the X-energy agreements, Centrus performs services are performed pursuant to separate task orders issued andthat provide for time-and-materials based pricing. The cumulative task orders issued through October 2020December 31, 2021 under the three agreements provided for payments to us of $13.7$26.3 million and in-kind contributions provided by us of $7.5$10.4 million. Under the current agreement effective November 2020, the cumulative value of the additional task orders issued provides for payments to us of $6.5 million and in-kind contributions to be provided by us of $2.8 million.

Revenue for the technical solutions segment principally representing 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. The Company recognizes revenue over time as it performs on these contracts because of the continuous transfer of control to the customer. For public sector contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay the Company for costs incurred plus a reasonable profit, and assume control of any work in progress. The Company’s private sector contracts generally contain contractual termination clauses or entitle the Company to paymentspayment for work performed to date for goods and services that do not have an alternative use. With control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. A contract may contain one or more performance obligations. Two or more promises to transfer goods or services to a customer may be considered a single performance obligation if the goods or services are highly interdependent or highly interrelated such that utility of the promised goods or services to the customer includes integration services provided by the Company.

The Company determines the transaction price for each contract based on the consideration it expects to receive for the products or services being provided under the contract. If transaction prices are not stated in the contract for each performance obligation, contractual prices are allocated to performance obligations based on estimated relative standalone selling prices of the promised services.

The Company generally uses the cost-to-cost input method of progress for performance obligations to deliver products with continual transfer of control to the customer, because it best depicts the transfer of control to the customer that occurs as the Company incurs costs. Under the cost-to-cost method, the extent of

Use of the cost-to-cost method requires the Company to make reasonably dependable estimates of costs at completion associated with the design, manufacture and delivery of products and services in order to calculate revenue. Significant judgment is used to estimate total revenue and costs at completion, particularly in the assumptions related to internal labor hours and third-party services for which a vendor invoice or quote is not yet available. As a significant change in one or more estimates could affect the profitability of the Company’s contracts, the Company reviews and updates its contract-related estimates regularly. Adjustments in estimated profits/losses are recognized under the cumulative catch-up method. Under this method, the impact of the adjustments is recognized in the period the adjustment is recognized. When estimates of total costs at completion for such an integrated, construction type contract exceed total estimates of revenue to be earned on a performance obligation related to complex equipment or related services, a provision for the remaining loss on the performance obligation is recognized in the period the loss is determined.

Intangible assets originated from our reorganization and application of fresh start accounting as of September 30, 2014. The intangible assets represented the fair value adjustment to the assets and liabilities for our LEU segment. The identifiable intangible assets relate to our order book and customer relationships. The order book intangible asset is amortized as the order book valued at emergence is reduced, principally as a result of deliveries to customers. The customer relationships intangible asset is amortized using the straight-line method over the estimated average useful life of 15 years, with 87 ¾ years of scheduled amortization remaining. The aggregate net balance of identifiable intangible assets was $69.5$54.7 million as of December 31, 2020.2021.

The carrying values of the intangible assets are subject to impairment tests whenever events or changes in business circumstances indicate that the carrying amount of the intangible assets may not be fully recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment loss is measured as the amount by which the carrying amount of a long-lived asset, or asset group exceeds its fair value.

Inherent in our fair value determinations are certain judgments and estimates, including projections of future cash flows, the discount rate reflecting the risk inherent in future cash flows, the interpretation of current economic indicators and market valuations, and strategic plans with regard to operations. A change in these underlying assumptions would cause a change in the results of the tests, which could cause the fair value of the intangible asset to be less than its respective carrying amount.

The following table presents elements of the accompanying consolidated statements of operations that are categorized by segment (dollar amounts in millions):

Revenue from the LEU segment increased $21.1decreased $4.4 million (or 12%or (2%) in 20202021 compared to 2019.2020. SWU revenue increased $27.8$11.8 million (or 22%)or 8% in 20202021 compared to 2019.2020. The volume of SWU sales increased 64%. 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. Excluding these proceeds,this payment, the average SWU price billed to customers increased 13%decreased 16%, reflecting the particular contracts under which SWU were sold during the periods. The volume of SWU sales decreased 15%. Uranium revenue decreased $6.7$16.2 million (or 15%or (42%) in 20202021 compared to 2019.2020. The volume of uranium sales decreased 23% and the average uranium price billed to customers increased 10%(46%).

Revenue from the technical solutions segment increased $16.4$55.5 million (or 41%)or 98% in 20202021 compared to 2019. The increase was primarily2020. Revenue in 2021 included $43.5 million related to the resultsettlement of the Company’s claims for reimbursements for certain pension and postretirement benefits costs incurred in connection with a past cost-reimbursable contract performed at the Portsmouth GDP. Excluding this payment, revenue from the technical solutions segment increased $12.0 million or 21% in 2021, due to increased work performed under the HALEU Contract. Revenue in 2020 included work performed under the UT-Battelle contract and revenue in 2019 included work performed under an agreement with DOE to decontaminate and decommission its K-1600 facility in Tennessee. The K-1600 contract was completed in October 2019 on time and budget.other contracts.

Cost of sales for the LEU segment decreased $25.9increased $20.4 million (oror 22%) in 20202021 compared to 2019,2020, reflecting the decreasesincrease in SWU andsales volume, partially offset by the decrease in uranium sales volumes and a decrease in thevolume. The average cost of sales per SWU. In 2020, the average cost of sales

We recognized a gross profit of $97.6$114.5 million in 2020,2021, an improvement of $65.1$16.9 million compared to the gross profit of $32.5$97.6 million in 2019.2020.

For the technical solutions segment, we recognized a gross lossprofit of $0.2$41.5 million in 20202021 compared to a gross loss of $18.3$0.2 million in 2019. The2020. Excluding the settlement with DOE, gross loss for 2019 reflectsprofit (loss) from the accrued contracttechnical solutions segment increased to a loss of $18.3$2.0 million related to projected costs for the HALEU program.in 2021 from a loss of $0.2 million in 2020.

The following table presents elements of the accompanying consolidated statements of operations that are not categorized by segment (dollar amounts in millions):

Selling, general and administrative (“SG&A”) expenses increased $2.3 million (or 7%) in 2020 compared to 2019. Incentive compensation expense increased $2.9 million, primarily related to a remeasurement of obligations under long-term incentive plans which are based on our stock price, which has increased over 500% in the past two years. Consulting costs related to capital financing evaluation, claim recoveries and international trade increased $1.5were $36.0 million in 2020 compared to 2019each of 2021 and other consulting costs decreased $1.2 million. Salary and benefit costs decreased $0.6 million, travel2020. These expenses decreased by $0.5 million, and other SG&A expenses increased by a net $0.2 million.remained flat year over year.

Amortization of intangible assets increased $0.3$1.3 million (or 5%)or 19% in 20202021 compared to 2019.2020. Amortization expense for the intangible asset related to the September 2014 sales order book is a function of SWU sales volume under that order book, and amortization expense for the intangible asset related to customer relationships is amortized on a straight-line basis.

There were no special charges in 2021. Special charges increased $2.5of $0.6 million (or 132%) in 2020 compared to 2019. Special charges in 2020 consisted of estimated employee termination benefits of $0.6 million. Special charges in 2019 included a credit of $2.9 million for the reversal of accrued termination benefits for employees who were retained with the signing of the HALEU letter agreement in May 2019.

Nonoperating components of net periodic benefit expense (income) netted to income of $1.6was ($67.6) million in 2020,2021, compared to income of $4.3($1.6) million in 2019.2020. Nonoperating components of net periodic benefit expense (income) consistincome in 2021 consists primarily of thea return on plan assets of ($58.2) million and future impacts of the change in the discount rate of ($31.0) million, offset by interest cost of $21.5 million, as the discounted present value of benefit obligations nears payment. Results also reflect claims experience, changesNonoperating components of net periodic benefit income in 2020 consists primarily of a return on plan assets of ($85.8) million offset by future impacts of the change in the discount rate of $74.0 million, interest cost of $29.1 million, as the discounted present value of benefit obligations nears payment, and other actuarial items, which includes mortality and healthcare claim assumptions and changes in market interest rates.which net to ($18.9) million.

Interest expense declined $2.9was $0.1 million (or 97%) in 2020, compared to 2019, primarily as a result of the repayment of the Company’s outstanding 8% paid-in-kind (“PIK”) toggle notes (the “8% PIK Toggle Notes”) that matured on September 30, 2019.2021 and 2020.

Net income was $175.0 million in 2021, compared to $54.4 million in 2020, compared to a net loss of $16.5 million in 2019.2020. The favorable variance of $70.9$120.6 million was primarily a result of a $65.1$66.0 million favorable variance in gross profit, a $11.5 million decrease in advanced technology costs, and a $2.9 decrease in interest expense, partially offset by a $2.7 million unfavorable variance in nonoperating components of net periodic benefit expense (income), a $2.5income, $16.9 million unfavorablefavorable variance in special charges (credits)gross profit and a $2.3$37.7 million increasefavorable variance in selling, general and administrative expenses.

The Company measures Net Income and Net Income per Share both on a GAAP basis and on an adjusted basis to exclude deemed dividends allocable to retired preferred stock shares (“Adjusted Net Income” and “Adjusted Net Income per Share”). We believe Adjusted Net Income and Adjusted Net Income per Share. The non-GAAP financial measure is used in addition to and in conjunction with results presented in accordance with our GAAP results. The non-GAAP financial measure should be viewed in addition to, and not as a substitute for, or superior to, the financial measure calculated in accordance with GAAP. The non-GAAP financial measure used by the Company may be calculated differently from, and therefore may not be comparable to,Share, which are non-GAAP financial measures, used by other companies.provide investors with additional understanding of the Company’s financial performance as well as its strategic financial planning analysis and period-to-period comparability. These metrics are useful to investors because they reflect how management evaluates the Company’s ongoing operating performance from period-to-period after removing certain transactions and activities that affect comparability of the metrics and are not reflective of the Company’s core operations.