2018 Annual Report

2018 Annual Report UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 Commission file number 1-14287 Centrus Energy Corp. Delaware 52-2107911 (State of incorporation) (IRS Employer Identification No.) 6901 Rockledge Drive, Suite 800, Bethesda, Maryland 20817 (301) 564-3200 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Class A Common Stock, par value $0.10 per share NYSE American Rights to purchase Series A Participating Cumulative Preferred Stock, par value $1.00 per share NYSE American Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes . No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes . No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Smaller reporting company Accelerated filer Emerging growth company Non-accelerated filer If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No The aggregate market value of Common Stock held by non-affiliates computed by reference to the price at which the Common Stock was last sold as reported on the New York Stock Exchange as of June 30, 2018, was $17.8 million. As of March 1, 2019, there were 8,031,307 shares of the registrant’s Class A Common Stock and 1,406,082 shares of the registrant’s Class B Common Stock, par value $0.10 per share, outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive proxy statement for the 2019 annual meeting of shareholders to be filed subsequent to the date hereof are incorporated by reference into Part III of this Annual Report on Form 10-K. TABLE OF CONTENTS Page PART I Items 1. Business ...................................................................................................................................... 4 Item 1A. Risk Factors ............................................................................................................................... 16 Item 1B. Unresolved Staff Comments ................................................................................................... 32 Item 2. Properties ................................................................................................................................... 33 Item 3. Legal Proceedings ..................................................................................................................... 33 Item 4. Mine Safety Disclosures .......................................................................................................... 33 Executive Officers of the Registrant ...................................................................................... 34 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities .......................................................................................... 35 Item 6. Selected Financial Data ............................................................................................................ 36 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ............................................................................................................................. 37 Item 8. Financial Statements and Supplementary Data .................................................................... 56 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ............................................................................................................................. 56 Item 9A. Controls and Procedures .......................................................................................................... 56 Item 9B. Other Information ..................................................................................................................... 57 PART III Item 10. Directors, Executive Officers and Corporate Governance .................................................. 58 Item 11. Executive Compensation ......................................................................................................... 58 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ............................................................................................................ 58 Item 13. Certain Relationships and Related Transactions, and Director Independence ................. 58 Item 14. Principal Accounting Fees and Services ................................................................................ 58 PART IV Item 15. Exhibits and Financial Statement Schedules ...................................................................... 59 Item 16. Form 10-K Summary.............................................................................................................. 59 Exhibit Index ........................................................................................................................................................ 60 Signatures ............................................................................................................................................................. 65 Consolidated Financial Statements ................................................................................................................... 66 FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7, contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 - that is, statements related to future events. In this context, forward-looking statements may address 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. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For Centrus Energy Corp., particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include: risks related to our significant long-term liabilities, including material unfunded defined benefit pension plan obligations and postretirement health and life benefit obligations; risks relating to our outstanding 8.0% paid-in-kind (“PIK”) toggle notes (the “8% PIK Toggle Notes”) maturing in September 2019, our 8.25% notes (the “8.25% Notes”) maturing in February 2027 and our Series B Senior Preferred Stock, including the potential termination of the guarantee by our principal subsidiary United States Enrichment Corporation (“Enrichment Corp.”) of the 8% PIK Toggle Notes; risks related to the use of our net operating loss (“NOLs”) carryforwards and net unrealized built-in losses (“NUBILs”) to offset future taxable income and the use of the Rights 2 Agreement (as defined herein) to prevent an “ownership change” as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) and our ability to generate taxable income to utilize all or a portion of the NOLs and NUBILs prior to the expiration thereof; risks related to the limited trading markets in our

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