The following discussion should be read in conjunction with, and is qualified in
its entirety by reference to, the unaudited consolidated financial statements
and related notes appearing elsewhere in this report.

This discussion contains forward-looking statements that involve risks and uncertainties. Actual results could differ materially from results discussed in forward-looking statements, particularly in light of the economic, social and market uncertainty created by, among other things, the COVID-19 pandemic, including emerging variants, and the war in Ukraine. See “Forward-Looking Statements” at the beginning of this Quarterly Report on Form 10-Q.

Overview

Centrus Energy Corp., a Delaware corporation ("Centrus," the "Company", "we" or
"us"), 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-owned subsidiaries as well as the predecessor to Centrus, unless the
context indicates otherwise.

Centrus operates two business segments: (a) low-enriched uranium ("LEU"), which
supplies various components of nuclear fuel to commercial 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 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 that 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 and long-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 medium and long-term sales contracts with major
utilities and other customers to 2029. We have secured cost-competitive supplies
of SWU under medium and long-term contracts through the end of this decade to
help 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. As of December 31, 2021, spot price indicators for SWU were at $56,
approximately a 65% increase since bottoming out at $34 in August 2018.

In the first quarter of 2022, the spot price indicators for SWU rose to $80
which is an increase of 43% in a single quarter. This sudden surge in the spot
price indicators for SWU is due to the volatility of the situation in Europe,
and the dependency of the global economy on energy. The recent actions of
Russian military forces in Ukraine have escalated tensions between Russia and
the U.S. and Europe. As a result, the U.S. has imposed, and may continue
imposing additional, financial and economic sanctions and export controls
against certain Russian organizations and/or individuals. While sanctions
imposed to date do not preclude imports of Russian uranium products, it is
possible that additional restrictions could be added in the future that would
affect our ability to purchase and re-sell Russian uranium enrichment, which
could have a negative material impact on our business. Further, even if
sanctions or other restrictions are not imposed, the current events in Ukraine
could impact our ability to make future
                                       20
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sales. For example, customers may be unwilling to accept material we purchase
from TENEX. Further, since a portion of the price paid under the supply contract
is based on commodity indices, an increase or decrease in market prices will
have a corresponding impact on our cost of sales.

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 price
levels are still below the prices before the Fukushima disaster. When Russian
supply is included, the uranium enrichment segment of the nuclear fuel market is
oversupplied, but without Russian supply, the global market is undersupplied for
uranium enrichment. Changes in the supply-demand balance and 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.

Our technical solutions segment is deploying uranium enrichment and other
capabilities necessary for production of advanced nuclear fuel to meet the
evolving needs of the global nuclear industry and the U.S. government, while
also 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 is dedicated to the restoration of America's
domestic uranium enrichment capability to play a critical role in meeting U.S.
national security and energy security requirements, and advancing America's
nonproliferation and climate objectives. Our technical solutions segment is also
focused on repairing broken and vulnerable supply chains, providing clean energy
jobs and supporting the communities in which we operate. Our goal is to deliver
the next-generation nuclear fuels that will power the future of nuclear energy
as it provides reliable carbon-free power around the world.

The 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. Longstanding U.S. policy and
binding nonproliferation agreements prohibit the use of foreign-origin
enrichment technology for U.S. national security missions. Our AC100M centrifuge
is currently the only deployment-ready U.S. uranium enrichment technology in the
United States that can meet these national security requirements.

Centrus is working to pioneer 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 that is expected to be required by a
number of advanced reactor and fuel designs, which are now under development for
commercial and government uses. While existing reactors typically operate on LEU
with the uranium-235 isotope concentration below 5%, HALEU is further enriched
so that the uranium-235 concentration is between 5% and 20%. The higher U-235
concentration offers a number of potential advantages, which may include better
fuel utilization, improved performance, fewer refueling outages, simpler reactor
designs, reduced waste volumes, and greater nonproliferation resistance.

The lack of a domestic HALEU supply is widely viewed as a major obstacle to the
successful commercialization of these new reactors. For example, in surveys
conducted by the U.S. Nuclear Industry Council in 2021 and 2020, advanced
reactor developers indicated that the number one issue that "keeps you up at
night" was access to HALEU. As the only company with a license from the Nuclear
Regulatory Commission ("NRC") to enrich up to 20% uranium-235 assay HALEU,
Centrus is uniquely positioned to fill a critical gap in the supply chain and
facilitate the deployment of these promising next-generation reactors.

Under a three-year contract with DOE that began in 2019, Centrus has been
constructing a cascade of 16 AC100M centrifuges in Piketon, Ohio to demonstrate
HALEU production. The DOE has experienced a COVID-19 related supply chain delay
in obtaining the HALEU storage cylinders it was supposed to provide under the
contract. Since it is not possible to begin HALEU production without the storage
cylinders, it would not be possible to complete the operational portion of the
HALEU demonstration under the existing HALEU Contract, which in April
                                       21
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2022, was extended to November 30, 2022, with authorization to work through
August 31, 2022. As a result, the DOE elected to change the scope of the HALEU
Contract and move the operational portion of the demonstration to a new,
competitively-awarded contract that would provide for operations beyond the term
of the existing HALEU Contract. On February 7, 2022, DOE issued a
pre-solicitation notice for a request for proposal to complete the HALEU
demonstration facility and to produce HALEU, noting that the "the Administration
supports longer-term demonstration of production capability." The
pre-solicitation notice outlines a two-phase approach. Phase 1 consists of
completing installation of the centrifuges, which DOE expects will take up to
one year from contract signing, followed by one full year of cascade operations.
The second phase consists of three optional, three-year extensions to produce
HALEU, so that the prospective contract could help support a total of one to ten
years of cascade operations in addition to completing construction and
centrifuge installation.

Centrus believes it is well-positioned to compete for the follow-on contract to
operate the machines in Piketon but there is no assurance that DOE will award
such contract to the Company. DOE has not yet issued a Request for Proposals on
the operations contract, but in the interim has continued to fund the existing
contract and has incrementally increased the government's cost share ceiling
under the HALEU Contract as funds have become available. Currently, DOE has
provided additional funding, and increased the government's cost share ceiling
to $142.0 million.

Additional COVID-19-related impacts, delays in DOE's furnishing equipment, or
changes to the existing scope of the HALEU Contract could result in further
material increases to our estimate of the costs required to complete the
existing HALEU Contract, as well as delay completion of the contract. The
Company does not currently have a contractual obligation to perform work in
excess of the funding provided by DOE and, therefore, no additional loss has
been accrued as of March 31, 2022. If the DOE does not commit to fully fund the
additional costs, and the Company nevertheless commits to a plan to complete the
demonstration cascade and produce HALEU, we will incur costs or losses in future
periods that, if material, could have an adverse impact on our financial
condition and liquidity.

We believe our investment in the HALEU technology will position the Company to
meet the needs of government and commercial customers in the future as they
deploy advanced reactors and next generation fuels. At present, there are a
number of advanced reactors under development that would use HALEU fuel. For
example, of the ten advanced reactor designs selected by the DOE for its
Advanced Reactor Demonstration Program, nine will require HALEU. In addition,
the first non-light water reactor to have begun active NRC-license review
requires HALEU. The U.S. Department of Defense also plans to construct a
prototype HALEU-fueled mobile microreactor in the next three to four years as
part of a program called "Project Pele." The U.S. Air Force also announced plans
to deploy a microreactor at Eielson Air Force Base in Alaska that uses HALEU
fuel. While the use of HALEU is not an express requirement of the Air Force
program, the vast majority of microreactor designs are expected to need HALEU.

Advanced nuclear reactors promise to provide an important source of reliable
carbon-free power. By investing in HALEU technology now, and as the only
American-based company with an NRC license currently pursuing HALEU enrichment
capability, we believe the Company is well positioned to capitalize on a
potential new market as the demand for HALEU-based fuels is expected to increase
in the mid- to late-2020s with the development of advanced reactors. However,
there are no guarantees 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. Also, foreign government-owned, government-operated, and other new
competitors could seek to enter the market and offer HALEU at more competitive
prices. There is one known foreign government-owned source which currently has
the capability to produce HALEU, although this source is currently subject to
trade restrictions that limit the amount of material from this source which may
be imported into the United States with more restrictions currently being
proposed by some in the U.S. Congress. Other foreign government-owned entities
which are not currently subject to U.S. trade restrictions, however, may enter
the market. One such foreign-government owned entity has expressed an interest
in and potential capability for HALEU production but has not committed publicly
to enter the market to enrich above 10%
                                       22
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uranium 235 enrichment tests. This entity has publicly indicated that it would take six to seven years to be able to produce HALEU.

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.

COVID-19 Update

The Company has taken actions to protect its workforce and to maintain critical
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 continue to work with our suppliers,
fabricators, and customers to monitor the situation closely, including with
respect to the impact of emerging variants. However, over the course of the
HALEU Contract, our technical solutions segment has been impacted by supply
chain disruptions and increased costs as a result of the 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. Some of these
restrictions remain in place and we continue to monitor and adjust as necessary.
The Company has issued 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 its workforce, to comply with government orders, and to maintain
critical operations. We are working closely with DOE and we are continuing to
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 project. We are
experiencing delays by our suppliers and increased costs from them as a result
of the impact of the COVID-19.

For further discussion, refer to Part I, Item 1A - Risk Factors in our Annual
Report on Form 10-K for the year ended December 31, 2021, as updated by Part II,
Item 1A, Risk Factors, in this Quarterly Report on Form 10-Q for the period
ending March 31, 2022.

Market conditions and outlook

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.

According to the World Nuclear Association, as of January 2022, there were 57
reactors under construction worldwide, almost a third of which are in China. The
United States, with 93 operating reactors, remains the world's largest market
for nuclear fuel. The nuclear industry in the United States, Japan, and Europe
faces headwinds as well as opportunities. In the United States, the industry has
been under pressure from lower cost natural gas resources, until recently as gas
prices have been rising, and the expansion of subsidized renewable energy. Eight
U.S. reactors have prematurely shut down in recent years and several others
could shut down in the 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.

                                       23
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As a consequence of the March 2011 earthquake and tsunami in Japan, over 60
reactors in Japan and Germany were taken offline, and other countries curtailed
or slowed their construction of new reactors or accelerated the retirement of
existing plants. While ten reactors in Japan have restarted and more are
expected to restart, supply and demand dynamics for nuclear fuel continue to be
impacted. Due to the war in Ukraine, the European Union is encouraging its
member countries to reconsider the early retirement of existing plants in order
to reduce reliance on Russian gas imports.


In October 2020, the U.S. Department of Commerce reached agreement with the
Russian Federation on an extension of the 1992 Russian Suspension Agreement, a
trade agreement which allows for Russian-origin nuclear fuel to be exported to
the United States in limited quantities. The two parties agreed to extend the
agreement through 2040 and to set aside a significant portion of the quota for
Centrus' shipments to the United States through 2028 to perform under our
long-term supply (purchase) agreement (the "TENEX Supply Contract") with the
Russian government entity, TENEX, Joint-Stock Company ("TENEX"). This outcome
allowed for sufficient quota for Centrus to continue serving its utility
customers.

The war in Ukraine has escalated tensions between Russia and the United States.
In response to the war and the actions of Russian forces in Ukraine, the U.S.
government and other governments have imposed financial and economic sanctions
and export controls against a wide range of Russian organizations and/or
individuals, and may impose additional sanctions in the future. Our contract
counterparty in Russia is not subject to sanctions as of the date of this
filing.

In response to the war in Ukraine, there have been proposals in U.S. Congress
and elsewhere to ban imports of uranium that could affect our ability to import
LEU in one or more years under the Russian Suspension Agreement but none of
these have been adopted as of the date of this filing.

The extension of the sanctions imposed by the Office of Foreign Assets Control of the United States Department of the Treasury and foreign governments on the mechanisms used to make payments to Russia have increased the risk that the implementation of the TENEX supply contract will be interrupted in the future. Therefore, we continue to monitor the situation closely and assess the potential impact of any new sanctions and how the impact on the Company could be mitigated.

Operating results

Our revenues, operating results, and cash flows can fluctuate significantly from
quarter to quarter and year to year. Our sales order book in the LEU segment
consists primarily of long-term, fixed commitment contracts, and we have
visibility on a significant portion of our revenue for 2022-2026. Operating
results for the three months ended March 31, 2022, are not necessarily
indicative of the results that may be expected for the year ending December 31,
2022.

Given the current uncertainty and disruption in the market, due to among other
things, the war in Ukraine, we are no longer providing guidance on our results
of operations for 2022. Please see Forward Looking Statements at the beginning
of this Quarterly Report on Form 10-Q.

With respect to our technical solutions segment, work under the HALEU Contract
currently remains on schedule but we have been experiencing increased delays
from vendors and increased costs due to the continuing COVID-19 pandemic. We are
working with DOE to minimize the impacts and to obtain funding for these
increased costs. Additional funding commitments from DOE and a contract
amendment will be required to complete the project. Refer to Overview above for
additional details.

                                       24
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Our order book of sales under contract in the LEU segment extends to 2029. As of
March 31, 2022 and December 31, 2021, our order book was approximately $1.0
billion. The order book is the estimated aggregate dollar amount of revenue for
future SWU and uranium deliveries, and includes approximately $0.3 billion of
deferred revenue and advances from customers as of March 31, 2022, whereby
customers have made advance payments to be applied against future deliveries. We
estimate that approximately 2% of our order book is at risk related to customer
operations. These medium and long-term contracts are subject to significant
risks and uncertainties, including existing import laws and restrictions under
current contracts such as, the Russian Suspension Agreement, which limits
imports of Russian uranium products into the United States and applies to our
sales using material procured under the TENEX Supply Contract as well as the
potential for sanctions and other restrictions on trade with Russia or in
dealings with Russian persons and entities, in response to the evolving
situation regarding the war in Ukraine.

Our future operating results are subject to a number of uncertainties that could
affect results either positively or negatively. Among the factors that could
affect our results are the following:

•Armed conflicts, including the war in Ukraine, government actions and other
events or third-party actions that disrupt supply chains, production,
transportation, payments and importation of nuclear materials or other critical
supplies or services;

• The potential for sanctions and other measures affecting SWU or uranium purchases;

•The availability and terms of additional purchases or sales of SWUs and uranium;

• Conditions in the LEU and energy markets, including prices, demand, operations, government restrictions on imports, exports or investments, and regulations of our business and those of our customers, suppliers, contractors and subcontractors;

• Timing of customer orders, associated deliveries and purchases of LEU or components;

•Costs, future funding and demand for HALEU;

• Financial market conditions and other factors that may affect pension and employee benefit liabilities and the value of related assets;

•The outcome of legal proceedings and other contingencies;

•Potential use of cash for strategic or financial initiatives;

•Actions taken by customers, including actions that may affect existing contracts;

• Market, international trade and other conditions affecting Centrus’ customers and industry; and

•The duration and severity of the COVID-19 pandemic and its impact on our operations.

For further discussion of these uncertainties, refer to Part I, Item 1A, Risk
Factors, in our Annual Report on Form 10-K for the year ended December 31, 2021,
as updated by Part II, Item 1A, Risk Factors, in this Quarterly Report.

Revenue

We have two segments to present: the LEU segment and the technical solutions segment.

Revenues from our LEU segment are primarily derived from the following:

•sales of the SWU component of LEU;

•sales of natural uranium, and

•sales of enriched uranium products comprising both the natural uranium and SWU components of LEU.


                                       25
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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.

SWU and Uranium Sales

Revenue from our LEU segment accounted for approximately 50% of our total
revenue for the three months ended March 31, 2022. The majority of our customers
are domestic and international utilities that operate nuclear power plants, with
international sales constituting approximately 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 averaged approximately $6.1 million per
order in the three months ended March 31, 2022. As a result, a relatively small
change in the timing of customer orders for LEU may cause significant
variability in our operating results year over year.

Utility customers, in general, have the option to make payment but defer receipt
of SWU and uranium products purchased from Centrus beyond the contractual sale
period, resulting in the deferral of costs and revenue recognition. Refer to
Note 2, Revenue and Contracts with Customers, in the unaudited consolidated
financial statements for further details.

Our financial performance over time can be affected significantly by changes in
prices for SWU and natural uranium. Market prices for SWU and uranium
significantly declined from 2011 until mid-2018, when they began to trend
upward. More recently, market uncertainty in the wake of the Russian invasion of
Ukraine has driven SWU and uranium prices sharply higher. 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.

Recent proposals to severely limit or cut off suppliers of LEU from Russia have
drawn attention to the potential for significant tightening of supplies in the
market. Russian enrichment plants represent 46% of the world's capacity, and
Russian capacity significantly exceeds its domestic needs. Without Russian
supply it is estimated that demand for enrichment for reactors outside of Russia
would far exceed supply, which potentially threatens the viability of some
reactors, including those in the United States. While inventories and increased
production at non-Russian plants may mitigate the shortfall, these options would
not fully replace Russian supply. Deployment of new capacity ultimately could
replace Russian enrichment but this capacity will take a number of years and
significant funding from private or government sources to come on line.

                                       26
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The following chart summarizes long-term and spot SWU price indicators, and a
spot price indicator for natural uranium hexafluoride ("UF6"), as published by
TradeTech, LLC in Nuclear Market Review:

                    SWU and Uranium Market Price Indicators*
                     [[Image Removed: leu-20220331_g1.jpg]]

*Source: Nuclear Market Review, a TradeTech publication, www.uranium.info

Our contracts with customers are denominated primarily in U.S. dollars, and
although revenue has not been materially affected by changes in the foreign
exchange rate of the U.S. dollar, we may have a competitive price advantage or
disadvantage obtaining new contracts in a competitive bidding process depending
upon the weakness or strength of the U.S. dollar. On occasion, we will accept
payment in euros for spot sales that may be subject to short-term exchange rate
risk. Costs of our primary competitors are denominated in other currencies. Our
contracts with suppliers are primarily denominated in U.S. dollars. We have a
SWU supply agreement, nominally commencing in 2023, with prices payable in a
combination of U.S. dollars and euros, but with a contract-defined exchange
rate.

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. 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.

                                       27
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Technical solutions

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.

Public markets

On October 31, 2019, we signed the cost-share HALEU Contract with DOE to deploy
a cascade of centrifuges to demonstrate production of HALEU for advanced
reactors. The three-year program has been under way since May 31, 2019, when the
Company and DOE signed an interim HALEU letter agreement that allowed work to
begin while the full contract was being finalized. The Company entered into this
cost-share contract with DOE as a critical first step on the road back to the
commercial production of enriched uranium, which the Company had terminated in
2013 with the closure of the Paducah GDP. The HALEU Contract, if fully
implemented, is expected to result in the Company having constructed the AC100M
technology and prepared the systems to enrich uranium to the 20% concentration
in the uranium-235 isotope that is required by many of the advanced reactor
concepts now under development. Centrus is the only company with an NRC license
to enrich HALEU.

As discussed under the caption Overview, the DOE experienced a COVID-related
delay that prevented it from obtaining the HALEU storage cylinders it was to
provide under the contract. Since it is not possible to operate the cascade
without the cylinders from DOE, it will not be possible to complete the
operational portion of the demonstration prior to the November 30, 2022,
expiration of the current contract. As a result, DOE changed the scope of the
existing contract and indicated that it intends to move the operational portion
of the demonstration into a separate, competitively-awarded contract that will
allow for a longer period of demonstration and operations. Centrus believes it
is well-positioned to compete for a follow-on contract to operate the machines
in Piketon but a Request for Proposals has not been issued yet and there is no
assurance that DOE will award such a contract to the Company. While we believe
demand for HALEU will emerge over the next several years, there are no
guarantees about whether or when government or commercial demand for HALEU will
materialize. There are also a number of technical, regulatory and economic
hurdles that must be overcome for these fuels and reactors to come to the
market.

Additional COVID-19-related impacts, delays in DOE furnishing equipment, or
changes to the existing scope of the HALEU Contract could result in further
material increases to our estimate of the costs required to complete the
demonstration cascade and produce HALEU, as well as delay completion of the
HALEU Contract. The Company does not currently have a contractual obligation to
perform work in excess of the funding provided by DOE and, therefore, no
additional costs have been accrued as of March 31, 2022. 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 or losses in future periods that could have an adverse impact
on our financial condition and liquidity.

Commercial contracting

Since March of 2018, Centrus has provided design, technical, and resource
support for X-energy related to its Tri-Structural Isotropic ("TRISO") fuel
manufacturing process. Currently, work is being performed under a services
agreement with X-energy signed in August 2021 to provide services for detailed
design of the TRISO fuel fabrication 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
                                       28
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(“ARDP”). At our discretion, task orders under the new agreement may include in-kind contributions that we currently do not, but may provide in the future.


Results of Operations

Segment Information

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

                                                Three Months Ended March 31,
                                                  2022                  2021              $ Change              % Change
LEU segment
Revenue:
SWU revenue                                $          12.8          $     38.1          $    (25.3)                    (66) %
Uranium revenue                                        4.9                   -                 4.9                        n/a
Total                                                 17.7                38.1               (20.4)                    (54) %
Cost of sales                                         14.8                25.4               (10.6)                    (42) %
Gross profit                               $           2.9          $     12.7          $     (9.8)

Technical solutions segment
Revenue                                    $          17.6          $     17.5          $      0.1                       1  %
Cost of sales                                         14.2                18.5                (4.3)                    (23) %
Gross profit (loss)                        $           3.4          $     (1.0)         $      4.4

Total
Revenue                                    $          35.3          $     55.6          $    (20.3)                    (37) %
Cost of sales                                         29.0                43.9               (14.9)                    (34) %
Gross profit                               $           6.3          $     11.7          $     (5.4)



Revenue

Revenue from the LEU segment decreased $20.4 million (or 54%) in the three
months ended March 31, 2022, compared to the corresponding period in 2021. The
volume of SWU sold decreased 21% for the three months ended March 31, 2022 and
the average SWU price decreased 58% largely due to the variability in timing of
utility customer orders and the particular contracts under which SWU were sold
during the periods.

Revenues from uranium sales increased to $4.9 million within three months
March 31, 2022compared to no sales during the corresponding period in 2021.

Revenue in the technical solutions segment increased slightly by $0.1 million (or 1%) in the three months ended March 31, 2022compared to the corresponding period in 2021.

Cost of sales

Cost of sales for the LEU segment decreased $10.6 million (or 42%) in the three
months ended March 31, 2022, compared to the corresponding period in 2021,
largely reflecting decreases in SWU sales volume, and decreases in the average
SWU unit cost. The volume of SWU sold decreased 21% for the three-month period
and the average SWU unit cost decreased 44%.
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Cost of sales in the three months ended March 31, 2022 and 2021 included $0 and
$15.9 million, respectively, of previously deferred costs from Deferred Costs
Associated with Deferred Revenue that reflected higher inventory costs from
2017-2018. Cost of sales also includes legacy costs related to former employees
of the Portsmouth GDP and Paducah GDP of $0.6 million in the three months ended
March 31, 2022 compared to $0.7 million in the corresponding period in 2021.

Cost of sales for the technical solutions segment decreased $4.3 million (or
23%) in the three months ended March 31, 2022, compared to the corresponding
period in 2021, which included a rent credit related to the Piketon facility of
approximately $1.6 million. The remainder of the decrease was due to a reduction
in costs of approximately $6.9 million associated with the HALEU Contract,
offset by new contract work of approximately $5.2 million. For details on HALEU
Contract accounting, refer to "Technical Solutions - Government Contracting"
above.

Gross Profit

We made a gross profit of $6.3 million within three months March 31, 2022compared to $11.7 million in the corresponding period in 2021.

Our LEU segment realized a gross profit of $2.9 million in the three months
ended March 31, 2022, compared to $12.7 million in the corresponding period in
2021. The decrease in gross profit was due primarily to a decrease in SWU sales
volume as well as decreases in the average profit margin per SWU unit.

For the technical solutions segment, we realized a gross profit of $3.4 million
in the three months ended March 31, 2022, compared to a gross loss of $1.0
million for the corresponding period in 2021. The increase in gross profit was
primarily related to a $1.6 million rent credit for the Piketon Facility, with
the remainder of the increase primarily attributable to the Company's HALEU
costs being fully recoverable in the current year as it has contributed its
contractually required cost share as of December 31, 2021.

Non-segment information

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

                                                       Three Months Ended March 31,
                                                           2022              2021            $ Change             % Change
Gross profit                                           $     6.3          $  11.7          $    (5.4)                   (46) %
Advanced technology costs                                    1.1              0.5                0.6                    120  %
Selling, general and administrative                          7.5              8.2               (0.7)                    (9) %
Amortization of intangible assets                            1.1              2.1               (1.0)                   (48) %
Operating income (loss)                                     (3.4)             0.9               (4.3)                  (478) %

Non-operating components of net periodic benefit income (3.3)

  (4.3)               1.0                     23  %

Income (loss) before income taxes                           (0.1)             5.2               (5.3)                  (102) %
Income tax expense                                           0.3              0.1                0.2                    200  %
Net income (loss)                                      $    (0.4)         $   5.1          $    (5.5)




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Amortization of intangible assets

Amortization of intangible assets decreased $1.0 million (or 48%) in the three
months ended March 31, 2022, compared to the corresponding period in 2021.
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.

Non-operating components of net periodic benefit expenditure (revenue)

Nonoperating components of net periodic benefit expense (income) netted to
income of $3.3 million for the three months ended March 31, 2022, compared to
income of $4.3 million in the corresponding period in 2021. Nonoperating
components of net periodic benefit expense (income) consist primarily of the
expected return on plan assets, offset by interest cost as the discounted
present value of benefit obligations nears payment.

Net profit (net loss)

Net loss was $0.4 million in the three months ended March 31, 2022, compared to
net income of $5.1 million in the corresponding period in the prior year. The
decrease in net income was primarily due to a $9.8 million decrease in the gross
profit in the LEU segment, partially offset by a $4.4 million increase in the
gross profit in the technical solutions segment, as discussed above.

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Net earnings (loss) per share

See Note 9, Net earnings (loss) per share.

The Company measures Net Income (Loss) and Net Income (Loss) 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 (Loss)" and "Adjusted Net
Income (Loss) per Share"). We believe Adjusted Net Income (Loss) and Adjusted
Net Income (Loss) per Share, which are non-GAAP financial measures, 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.

                                                                            

Three months completed March, 31st,

                                                                                2022                 2021
Numerator (in millions):
Net income (loss)                                                         $         (0.4)         $    5.1
Less: Preferred stock dividends - undeclared and cumulative                               -               0.7
Less: Distributed earnings allocable to retired preferred shares                          -               6.6
Net loss allocable to common stockholders                                 $ 

(0.4) $(2.2)

Plus: Distributed earnings attributable to withdrawn preferred shares $

            -          $    6.6

Adjusted net income (loss), including distributed earnings attributable to withdrawn preferred shares (non-GAAP)

                                       $ 

(0.4) $4.4

Denominator (in thousands) (a):
Average common shares outstanding - basic                                         14,547            12,818
Average common shares outstanding - diluted (b)                                   14,547            12,818

Net loss per share (in dollars):
Basic                                                                     $        (0.03)         $  (0.17)
Diluted                                                                   $        (0.03)         $  (0.17)

Plus: Effect of distributed earnings allocable to retired preferred
shares, per common share (in dollars):
Basic                                                                     $            -          $   0.51
Diluted                                                                   $            -          $   0.50

Adjusted Net Income (Loss) per Share (Non-GAAP) (in dollars):
Basic                                                                     $        (0.03)         $   0.34
Diluted                                                                   $        (0.03)         $   0.33

(a) For further details on the average number of shares outstanding, refer to Note 9, Net earnings (loss) per share of the unaudited consolidated financial statements.

(b) For purposes of calculating the Adjusted Net Income (Loss) per Share of
$0.33, for the three months ended March 31, 2021, average common shares
outstanding - diluted are 13,196,000 shares. No dilutive effect is recognized in
a period in which a net loss has occurred and thus Net Loss per Share of $(0.17)
for the three months ended March 31, 2021, was calculated using average common
shares outstanding of 12,818,000.



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Cash and capital resources

We ended the first quarter of 2022 with a consolidated cash balance of $168.5
million. We anticipate having adequate liquidity to support our business
operations for at least the next 12 months from the date of this Quarterly
Report. Our view of liquidity is dependent on, among other things, conditions
affecting our operations, including market, international trade restrictions,
COVID-19 and other conditions, the level of expenditures and government funding
for our services contracts and the timing of customer payments. Liquidity
requirements for our existing operations are affected primarily by the timing
and amount of customer sales and our inventory purchases.

We believe our sales order book in our LEU segment is a source of stability for
our liquidity position. Subject to market conditions, we see the potential for
growing uncommitted demand for LEU during the next few years with accelerated
open demand in 2025 and beyond.

Cash resources and net sales proceeds from our LEU segment fund technology costs
that are outside of our customer contracts in the technical solutions segment
and general corporate expenses, including cash interest payments on our debt. We
believe our investment in advanced U.S. uranium enrichment technology will
position the Company to meet the needs of our customers as they deploy advanced
reactors and next generation fuels. We signed the three-year HALEU Contract with
DOE in October 2019. Under the HALEU Contract, the Company is contributing a
portion of the program costs. The program has been under way since May 31, 2019,
when Centrus and DOE signed a preliminary letter agreement that allowed work to
begin while the full contract was being finalized.

The Company entered into this cost-share contract with DOE as a critical first
step on the road back to the commercial production of enriched uranium, which
the Company had terminated in 2013 with the closure of the Paducah GDP. HALEU is
expected to be required by many of the advanced reactor designs now under
development, including nine out of the ten reactor designs that were selected in
2020 for the ARDP. Our HALEU Contract expires in November 2022, and although we
believe demand for HALEU will emerge over the next several years, there are no
guarantees 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. If we are able to win a contract from DOE to operate the cascade, our
goal is to scale up the facility in modular fashion as demand for HALEU grows in
the commercial and government sectors, subject to the availability of funding
and/or contracts to purchase the output of the plant. At this time, however,
there is no assurance that sufficient government or commercial funding or demand
for material will be timely secured, or that we will be awarded a contract by
the DOE to operate or that we will be permitted by DOE to expand the
demonstration cascade. For further discussion, refer to Part I, Item 1A, Risk
Factors, in our Annual Report on Form 10-K for the year ended December 31, 2021,
as updated by Part II, Item 1A. Risk Factors, in this Quarterly Report on Form
10-Q.

In the event that funding by the U.S. government for research, development and
demonstration of gas centrifuge technology is reduced or discontinued, or we are
not awarded a DOE contract to operate the cascade we are now constructing under
the HALEU Contract, such actions may have a material adverse impact on our
ability to deploy the American Centrifuge technology and on our liquidity.

Capital expenditures of approximately $1.0 million are planned for the next 12 months.

We are actively considering, and expect to consider from time to time in the
future, potential strategic transactions, which at any given time may be in
various stages of discussions, diligence, or negotiation. If we pursue
opportunities that require capital, we believe we would seek to satisfy these
needs through a combination of working capital, cash generated from operations
or additional debt or equity financing.
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The change in cash, cash equivalents and restricted cash from our unaudited
consolidated statements of cash flows are as follows on a summarized basis (in
millions):
                                                                       Three Months Ended March 31,
                                                                        2022                    2021
Cash used in operating activities                                $          (12.6)         $       (8.5)
Cash used in investing activities                                            (0.1)                 (0.4)
Cash provided by (used in) financing activities                              (3.2)                 20.2
Increase (decrease) in cash, cash equivalents and restricted
cash                                                             $          (15.9)         $       11.3



Operating Activities

Within three months March 31, 2022net cash used in operating activities was $12.6 million. The net decrease is largely due to the decrease in payables under the SWU purchase contracts of $28.3 million and a decrease in pension and post-employment benefit obligations of $5.1 millionwhich was partially offset by a $16.6 million decrease in accounts receivable.

In the three months ended March 31, 2021, net cash used in operating activities
was $8.5 million. The increase in inventories of $10.3 million and decrease in
payables under SWU purchase agreements of $4.4 million reflect a significant use
of cash. The net decrease in cash year-over-year is also the result of a net
reduction of $12.5 million in deferred revenue and advances from customers which
reflects revenue recognized in the current period related to payments received
in advance in a prior period. Uses of cash are also reflected in the decrease in
pension and postretirement benefit liabilities of $7.4 million. The net income
of $5.1 million in the three months ended March 31, 2021, net of non-cash
expenses, and the $14.2 million decrease in accounts receivable reflect sources
of cash.
Investing Activities

Capital expenditures were $0.1 million and $0.4 million within three months March 31, 2022 and 2021, respectively.

Fundraising activities

In both the three months ended March 31, 2022 and 2021, payments of $3.1 million
of interest classified as debt are classified as a financing activity. Refer to
Note 6, Debt, of the unaudited consolidated financial statements regarding the
accounting for the 8.25% notes (the "8.25% Notes") maturing in February 2027. In
the three months ended March 31, 2021, net cash provided by financing activities
also included net proceeds of $23.2 million from the issuance of common stock
pursuant to a Registration Statement on Form S-3.

Working capital

The following table summarizes the Company’s working capital (in millions):

                                                                  March 31,            December 31,
                                                                    2022                   2021
Cash and cash equivalents                                      $      168.5          $       193.8
Accounts receivable                                                    12.5                   29.1
Inventories, net                                                       89.1                   82.7
Current debt                                                           (6.1)                  (6.1)

Deferred revenue and customer advances, net of deferred charges

                                                                (159.5)                (159.8)
Other current assets and liabilities, net                             (33.9)                 (67.1)
Working capital                                                $       70.6          $        72.6



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We are managing our working capital to seek to improve the long-term value of
our LEU and technical solutions businesses and are planning to continue funding
the Company's qualified pension plans in the ordinary course because we believe
that is in the best interest of all stakeholders. We expect that any other uses
of working capital will be undertaken in light of these strategic priorities and
will be based on the Company's determination as to the relative strength of its
operating performance and prospects, financial position and expected liquidity
requirements. In addition, we expect that any such other uses of working capital
will be subject to compliance with contractual restrictions to which the Company
and its subsidiaries are subject, including the terms and conditions of our
8.25% Notes. We continually evaluate alternatives to manage our capital
structure, and may opportunistically repurchase, exchange, or redeem Company
securities from time to time.

Capital structure and financial resources

Interest on the 8.25% Notes is payable semi-annually in arrears as of February
28 and August 31 based on a 360-day year consisting of twelve 30-day months. The
8.25% Notes are guaranteed on a subordinated and limited basis by, and secured
by substantially all assets of, Enrichment Corp. The 8.25% Notes mature on
February 28, 2027. Additional terms and conditions of the 8.25% Notes are
described in Note 6, Debt, of the unaudited consolidated financial statements
and Note 8, Debt, of the consolidated financial statements in the Company's
Annual Report on Form 10-K for the year ended December 31, 2021.

Commitments under SWU’s long-term purchase contracts

Refer to Note 11, Commitments and contingencies, to the unaudited consolidated financial statements for additional information.

DOE Technology License

We have a non-exclusive license in DOE inventions that pertain to enriching
uranium using gas centrifuge technology. The license agreement with DOE provides
for annual royalty payments based on a varying percentage (1% up to 2%) of our
annual revenues from sales of the SWU component of LEU produced by us using DOE
centrifuge technology. There is a minimum annual royalty payment of $100,000 and
the maximum cumulative royalty over the life of the license is $100 million.
There is currently no commercial enrichment facility producing LEU using DOE
centrifuge technology. We are continuing to advance our U.S. centrifuge
technology that has evolved from DOE inventions at specialized facilities in Oak
Ridge, Tennessee, with a view to deploying a commercial enrichment facility over
the long term once market conditions recover.

Off-balance sheet arrangements

In addition to our commitments to purchase SWU and the license agreement with DOE
regarding the American Centrifuge technology, there were no significant off-balance sheet arrangements March 31, 2022or December 31, 2021.

Estimates of critical accounting policies

There have been no material changes to the critical accounting estimates disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Form 10-K.

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