Centrus Energy Corp. Files 10-Q for Q1 2024

TL;DR

<b>Centrus Energy Corp. filed its Q1 2024 10-Q, detailing its approach to deferred taxes and a partial release of its federal valuation allowance in Q3 2023.</b>

AI Summary

CENTRUS ENERGY CORP (LEU) filed a Quarterly Report (10-Q) with the SEC on May 8, 2024. Centrus Energy Corp. filed a 10-Q for the period ending March 31, 2024. The company follows an asset and liability approach for deferred taxes. A valuation allowance is provided if deferred tax assets may not be realized. In Q3 2023, Centrus released $7.7 million of the valuation allowance against federal net deferred taxes. This release was supported by increased forecasted future income in the LEU segment.

Why It Matters

For investors and stakeholders tracking CENTRUS ENERGY CORP, this filing contains several important signals. The filing provides insight into Centrus's tax accounting policies, specifically concerning deferred taxes and valuation allowances, which can impact future profitability. The partial release of the valuation allowance suggests improved near-term financial outlook for the LEU segment, driven by existing contracts and market indicators.

Risk Assessment

Risk Level: — CENTRUS ENERGY CORP shows moderate risk based on this filing. The company's realization of net deferred tax assets is dependent on generating sufficient taxable income in future years, and the lack of objectively verifiable information for later years necessitates a remaining valuation allowance, indicating ongoing uncertainty.

Analyst Insight

Monitor future filings for updates on the valuation allowance, as changes could signal shifts in the company's financial performance and outlook.

Key Numbers

• 7.7 — million (Amount of valuation allowance released in Q3 2023)

Key Players & Entities

• Centrus Energy Corp. (company) — Filer of the 10-Q
• USEC INC (company) — Former name of Centrus Energy Corp.

FAQ

Risk Factors

• Valuation Allowance for Deferred Tax Assets [medium — financial]: The ultimate realization of net deferred tax assets depends on generating sufficient taxable income in future years, and a valuation allowance is provided if it's not more likely than not that they will be realized.

Industry Context

Centrus Energy Corp. operates in the energy sector, with a focus on uranium enrichment services (LEU) and technology solutions, including HALEU.

Regulatory Implications

The company's tax reporting and accounting for deferred taxes are subject to U.S. federal and state tax regulations.

What Investors Should Do

1. Review the full 10-Q filing for detailed financial statements and segment information.
2. Analyze the company's future revenue forecasts and contract pipeline for the LEU and technical solutions segments.
3. Monitor any further changes to the valuation allowance in subsequent filings.

Glossary

Deferred Taxes

Taxes that are deferred until a future period. They arise from temporary differences between accounting income and taxable income. (Understanding deferred taxes is crucial for assessing a company's future tax liabilities and their impact on net income.)

Valuation Allowance

A reserve against deferred tax assets that is established when it is more likely than not that some or all of the deferred tax assets will not be realized. (The presence or release of a valuation allowance directly impacts the reported value of deferred tax assets and can signal changes in a company's profitability outlook.)

Year-Over-Year Comparison

This filing is a 10-Q for the first quarter of 2024, providing an update on the company's financial position and operations since the last periodic filing.

Key Financial Figures

• $0.10 — stered Class A Common Stock, par value $0.10 per share LEU NYSE American Indicate
• $115 million — ALEU Demonstration Contract Three-year, $115 million cost-share contract with DOE signed in

Filing Documents

• leu-20240331.htm (10-Q) — 922KB
• exhibit_101x03312024xhal.htm (EX-10.1) — 7KB
• exhibit_102x03312024xhal.htm (EX-10.2) — 8KB
• exhibit_311x20240331.htm (EX-31.1) — 10KB
• exhibit_312x20240331.htm (EX-31.2) — 10KB
• exhibit_321x20240331.htm (EX-32.1) — 7KB
• exhibit_101x03312024xhal001.jpg (GRAPHIC) — 232KB
• exhibit_101x03312024xhal002.jpg (GRAPHIC) — 155KB
• exhibit_102x03312024xhal001.jpg (GRAPHIC) — 220KB
• exhibit_102x03312024xhal002.jpg (GRAPHIC) — 162KB
• exhibit_102x03312024xhal003.jpg (GRAPHIC) — 66KB
• leu-20240331_g1.jpg (GRAPHIC) — 51KB
• leu-20240331_g2.jpg (GRAPHIC) — 136KB
• 0001065059-24-000031.txt (&nbsp;) — 6698KB
• leu-20240331.xsd (EX-101.SCH) — 42KB
• leu-20240331_cal.xml (EX-101.CAL) — 53KB
• leu-20240331_def.xml (EX-101.DEF) — 231KB
• leu-20240331_lab.xml (EX-101.LAB) — 469KB
• leu-20240331_pre.xml (EX-101.PRE) — 338KB
• leu-20240331_htm.xml (XML) — 616KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION Item 1.

Financial Statements (Unaudited)

Financial Statements (Unaudited): Consolidated Balance Sheets at March 3 1 , 202 4 and December 31, 202 3 9 Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 3 1 , 202 4 and 202 3 10 Consolidated Statements of Cash Flows for the Three Months Ended March 31 , 202 4 and 202 3 11 Consolidated Statements of Stockholders' Equity ( Deficit ) for the Three Months Ended March 3 1 , 202 4 and 202 3 12

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 13 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 46 Item 4.

Controls and Procedures

Controls and Procedures 46

– OTHER INFORMATION

PART II – OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 47 Item 1A.

Risk Factors

Risk Factors 47 Item 5. Other Information 47 Item 6. Exhibits 48

Signatures

Signatures 49 2 Glossary of Certain Terms and Abbreviations Centrus Energy Corp. and Related Entities Board Centrus Energy Corp.'s Board of Directors Centrus Centrus Energy Corp. Enrichment Corp. United States Enrichment Corporation Oak Ridge Technology and Manufacturing Center in Oak Ridge, Tennessee Paducah GDP Paducah Gaseous Diffusion Plant, an enrichment plant in Paducah, Kentucky formerly operated by Enrichment Corp. Piketon Production facility in Piketon, Ohio Portsmouth GDP Portsmouth Gaseous Diffusion Plant, an enrichment plant near Portsmouth, Ohio, formerly operated by Enrichment Corp. USEC-Government Enrichment Corp. prior to 1993, when it was a wholly-owned government corporation Other Terms and Abbreviations 2002 DOE-USEC Agreement June 17, 2002 agreement between Centrus (then known as USEC Inc.) and the DOE 5B Cylinders Storage cylinders for HALEU UF 6 produced by the cascade 8.25% Notes 8.25% Notes, maturing February 2027 ARDP DOE's Advanced Reactor Demonstration Program ATM At the Market Class A Common Stock Class A common stock, $0.10 par value per share Class B Common Stock Class B common stock, $0.10 par value per share Common Stock Class A Common Stock and Class B Common Stock D&D Decontamination & Decommissioning DOC U.S. Department of Commerce DOE U.S. Department of Energy EU European Union Exchange Act Securities Exchange Act of 1934, as amended HALEU High Assay Low-Enriched Uranium HALEU Demonstration Contract Three-year, $115 million cost-share contract with DOE signed in 2019 by Centrus' subsidiary, ACO HALEU Operation Contract HALEU production contract with DOE signed in 2022 IEA International Energy Agency LEU Low-Enriched Uranium; term is also used to refer to the Centrus Energy Corp. business segment which supplies commercial customers with various components of nuclear fuel Natural Uranium Raw material needed to produce LEU and HALEU NOL Net Operating Loss NRC U.S. Nuclear Regulatory

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION This Quarterly Report on Form 10-Q of Centrus (the "Company," "we" or "us") contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements mean statements related to future events, which may impact our expected future business and financial performance, and often contain words such as "expects", "anticipates", "intends", "plans", "believes", "will", "should", "could", "would" or "may" and other words of similar meaning. These forward-looking statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q and represent management's current views and assumptions with respect to future events and operational, economic and financial performance. Forward-looking statements are not guarantees of future performance, events or results and involve known and unknown risks, uncertainties and other factors, which may be beyond our control. The factors that could cause actual results to differ materially from the forward-looking statements made by us include those factors discussed herein, including those factors discussed in (a) Part I, Item 1. Financial Statements (Unaudited) : Note 11, Commitments and Contingencies , (b) Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, (c) Part II, Item 1A. Risk Factors , and (d) other factors discussed in the Company's filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. The Company does not undertake any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances that may arise after the date of this Quarterly Report on Form 10-Q unless requi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION Basis of Presentation and Principles of Consolidation The unaudited Consolidated Financial Statements of Centrus (the "Company"), which include the accounts of the Company, its principal subsidiary, Enrichment Corp., and its other subsidiaries, as of March 31, 2024, and for the three months ended March 31, 2024, and 2023, have been prepared pursuant to the rules and regulations of the SEC. The unaudited Consolidated Balance Sheet as of December 31, 2023, was derived from audited Consolidated Financial Statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, the unaudited Consolidated Financial Statements reflect all adjustments, including normal recurring adjustments, necessary for a fair statement of the financial results for the interim period. Certain prior year amounts have been reclassified for consistency with the current year presentation. Certain information and notes normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to such rules and regulations. All material intercompany transactions have been eliminated. The Company's components of comprehensive income for the three months ended March 31, 2024 and 2023, are insignificant. Operating results for the three months ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2023. Significant Accounting Policies The accounting policies of the Company are set forth in Note 1, Summary of Significant Accounting Policies , of the Consolidated Financial Statements in the Company's Annual Report

View Full Filing

View this 10-Q filing on SEC EDGAR