Company: LEU
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001065059-25-000024
Chunk: 102

Company: CENTRUS ENERGY CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 8
Chunk 102
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 the cascade, but did not produce HALEU as it did not have 5B Cylinders to store the offtake. Due to these delays, Centrus was unable to achieve delivery of the 900 kilograms of HALEU UF6 for Phase 2. Centrus’ contractual delivery obligation of 900 kilograms by November 2024, was conditioned on DOE’s ability to provide the 5B Cylinders on a timeline that allowed for continuous production throughout Phase 2 of the contract. In light of the delays, on November 5, 2024, the HALEU Operation Contract was modified to extend the Phase 2 period of performance to June 30, 2025. DOE has increased the Phase 2 contract value and related funding to $152.3 million. Centrus began to receive deliveries of additional 5B Cylinders in October 2024 and expects to have adequate cylinders to produce the minimum amount by the end of Phase 2. The target fee for Phase 2 of the contract is estimated to $7.7 million based on the estimated costs for the contract and is subject to a contract minimum fee of $6.9 million.In accordance with the HALEU Operation Contract, the Company has submitted several change order requests for work being performed on infrastructure, facility repairs, and 5B Cylinders. The additional work is being performed under the DOE’s technical direction or contract modifications. On September 28, 2023, the DOE modified the HALEU Operation Contract to incorporate additional scope for infrastructure and facility repairs, and costs associated with 5B Cylinder refurbishment, for an estimated additional contract value of $5.8 million, without a cost-share provision. DOE is currently obligated for costs up to the current contract value of $8.5 million for the additional scope work.Costs under the HALEU Operation Contract include program costs, including direct labor and materials and associated indirect costs that are classified as Cost of Sales, and an allocation of corporate costs supporting the program that are classified as Selling, General and Administrative Expenses. The HALEU Operation Contract is funded incrementally, and the DOE currently is obligated for costs up to approximately $189.8 million of the $190.2 million estimated transaction price for Phase 1, Phase 2, and the additional scope work. The Company has received aggregate cash payments under the HALEU Operation Contract of $145.8 million through March 31, 2025.The Company does not