A NEW ERA IN U.S. URANIUM ENRICHMENT

Complex market conditions, including lower than anticipated electrical growth rates, creation of a large spot market of enriched uranium, fluctuations in currency exchange rates, and certain political considerations, have created an unstable market for all primary producers, including the United States. In response to these conditions, the Department of Energy made significant changes to the U.S. program including the issuance of the Utility Services contract on January 18, 1984. Other major changes include redirecting research and development efforts on the advanced gas centrifuge and atomic vapor laser isotope separation processes, rescoping of the Gas Centrifuge Enrichment Plant project, and reevaluation of the operational mode of the three gaseous diffusion plants. Taken together, we believe these actions will retain the U.S. position of leadership in uranium enrichment. In summary, we plan to compete—through introduction of the world's most advanced, lowest cost technology and through responsiveness to our customers' needs.