Company: LEU
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-049844
Chunk: 145

Company: CENTRUS ENERGY CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 145
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 December 31, 2024, the Company merged its two qualified defined benefit pension plans in order to achieve financial and administrative efficiencies. Actuarial gains and losses of the merged plan will be amortized over the average remaining life expectancy of participants. The merger is not expected to result in any benefit reduction to participants in either plan.

9.  INCOME TAXES

Centrus follows the asset and liability approach to account for deferred taxes. Deferred tax assets and liabilities are recognized for the anticipated future tax consequences of temporary differences between the balance sheet carrying amounts of assets and liabilities and their respective tax bases. A valuation allowance is provided if it is more likely than not that all, or some portion, of the deferred tax assets may not be realized. The ultimate realization of the net deferred tax assets is dependent upon generating sufficient taxable income in future years when deferred tax assets are recoverable or are expected to reverse.

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Centrus evaluated both positive and negative evidence that was objectively verifiable to determine the amount of the federal valuation allowance that was required on Centrus’ federal deferred tax assets. Centrus has visibility on a significant portion of revenue in the LEU segment for 2025 through 2028, primarily from its long-term sales contracts. Additionally, Centrus’ investment income forecast increased based upon increased liquidity. Centrus determined that the positive evidence of increased future investment income supported the release of the federal valuation allowance. However, because of the lack of objectively verifiable information in later years, it was determined that forecasted future income was not sufficient to realize all the deferred tax assets. Therefore, Centrus released $10.2 million of the valuation allowance against its federal net deferred tax assets in the three and nine months ended September 30, 2025. There was no release of valuation allowance in the three and nine months ended September 30, 2024.Going forward, Centrus will continue to evaluate both positive and negative evidence that would support any further changes to the remaining federal and state valuation allowances. Such evidence in the Company’s Technical Solutions segment may include events that could have a significant impact on pre-tax income, such as signing new contracts with significantly higher or lower margins than currently forecasted, follow-on work related to the HALEU program, or abandonment of the commercial deployment of the centrifuge technology. Such evidence in the Company’s LEU segment may include renewing SWU sales contracts with existing customers and/or signing new sales or purchase contracts with significantly higher or lower margins than currently forecasted. Additional evidence in the