SOURCE: EnergySolutions

March 17, 2008 21:21 ET

EnergySolutions Announces Strong Full Year 2007 Results

Full Year Pro Forma Revenues of $1.8 Billion; Full Year Pro Forma EBITDA of $184.8 Million; Full Year Pro Forma Net Income Before the Impact of Amortization of Intangible Assets of $75.7 Million or $0.85 per Share

SALT LAKE CITY, UT--(Marketwire - March 17, 2008) - EnergySolutions, Inc. (NYSE: ES) ("EnergySolutions" or the "Company"), a leading provider of specialized, technology-based nuclear services to government and commercial customers, today announced financial results for the Company's fourth quarter and fiscal year ended December 31, 2007. The Company priced its initial public offering on the New York Stock Exchange on November 14, 2007.

Full Year Results

Revenues for the year ended December 31, 2007 were $1.1 billion, compared to $427.1 million for the same period in 2006. The increase in revenues was primarily the result of the acquisitions of Reactor Sites Management Company Limited ("RSMC") and Duratek, Inc. ("Duratek") in June 2007 and June 2006, respectively. Net loss for the year ended December 31, 2007 was $8.9 million, compared to net income of $26.9 million for the same period in 2006.

Pro Forma Full Year Results

During 2007, the Company acquired RSMC, a reactor operator and manager of multiple nuclear sites in the United Kingdom, which significantly expanded the Company's international capabilities. The Company financed this acquisition with debt, which was paid off with the proceeds of the Company's initial public offering in November. Proceeds from the initial public offering were also used to pay down $108.2 million of additional debt and to pay certain amounts owed to current and former management pursuant to provisions in their employment agreements. In connection with the initial public offering, the Company also completed a reorganization to change its corporate structure from a limited liability company to a "C" corporation.

Accordingly, to assist investors, the Company has presented "pro forma" financial statements (table 4 below) to illustrate the estimated full-year and fourth-quarter pro forma effects of the RSMC acquisition, the reorganization of the Company into a "C" corporation, the initial public offering and other transactions related to the offering as if such events had occurred on January 1, 2007. These pro forma results are discussed in this release, together with a reconciliation to the historic financial information (table 5 below). Pro forma results are presented and discussed because the Company considers them useful for investors as more indicative of the underlying performance of the business as currently constituted for the year ended December 31, 2007.

Pro forma revenues for the year ended December 31, 2007 were $1.8 billion, pro forma gross profit was $249.8 million and pro forma selling, general and administrative expenses were $114.1 million. Pro forma net income for the 2007 fiscal year was $57.0 million, or $0.64 per share, and pro forma net income before the impact of amortization of intangible assets for the year ended December 31, 2007 was $75.7 million, or $0.85 per share, based on 88.7 million fully-diluted shares outstanding. Pro forma EBITDA for the year ended December 31, 2007 was $184.8 million. The Company defines EBITDA as earnings before interest expense, income taxes, depreciation and amortization. The Company defines net income before the impact of amortization of intangible assets as net income plus amortization expense of intangible assets, net of the related income tax expense. The reconciliation of EBITDA, pro forma EBITDA and net income before the impact of amortization of intangible assets to the most directly comparable GAAP measure is set forth in table 5 in the accompanying tables.

"We are pleased with our financial results for 2007. They confirm a strong year across our businesses and exceeded our expectations at the time of our initial public offering," said R Steve Creamer, the Company's Chief Executive Officer. "The advantages of our increased size, breadth and geographic scope have significantly strengthened our strategic position as a leading supplier of specialized technology-based nuclear services worldwide. Together with financial strength from reduced leverage following our initial public offering, and our wider access to capital that comes with a listing on the NYSE, we are positioned well for future organic and acquisition-based growth."

Business Segments - Pro Forma Full Year Results

Table 6 in the accompanying schedules presents the pro forma results for the Company's four business segments and table 7 presents a reconciliation to the GAAP amounts.

Federal Services pro forma revenues were $151.4 million, and segment pro forma income from operations was $31.2 million, resulting in a pro forma operating margin of 21%. In 2007, this segment benefited primarily from continued cleanup work at several U.S. Department of Energy ("DOE") sites. In June 2007, EnergySolutions was awarded the contract to clean up the Atlas mill tailings located in southeastern Utah on the banks of the Colorado River. The Company also incurred expenses in this segment during the year to prepare several large bids for federal contracts that have the potential to sustain growth well into the future. The bids submitted included two bids for contracts for the DOE's Hanford site in Washington.

Commercial Services pro forma revenues were $137.4 million, and segment pro forma income from operations was $20.2 million, resulting in a pro forma operating margin of 15%. In December 2007, the Company finalized a contract with Exelon Corporation to decommission two nuclear reactors in Zion, Illinois. This contract successfully launches the Company's licensed stewardship program which enables it to efficiently and cost-effectively decommission nuclear reactors. This paradigm-shifting contract provides long-term revenues, and positions EnergySolutions well to pursue similar arrangements with the remaining 11 reactors that are currently in "SAFESTOR" status around the U.S.

Logistics, Processing and Disposal pro forma revenues were $262.8 million, and pro forma income from operations was $99.4 million, resulting in a pro forma operating margin of 38%. In May 2007, EnergySolutions submitted a rulemaking request to the U.S. Nuclear Regulatory Commission ("NRC") requesting that the NRC consider allowing the use of decommissioning funds for the transportation and disposal of large components located at nuclear power sites around the country. The public comment process was completed in December 2007. The Company believes this is an important environmental initiative that will allow these components to be safely disposed at its licensed landfill at Clive, Utah, in a much more expeditious timeframe than would otherwise be possible.

International pro forma revenues were $1.3 billion, and pro forma income from operations was $51.9 million, resulting in a pro forma operating margin of 4%. The acquisition of RSMC in the United Kingdom in June 2007 was a significant accomplishment for the Company. It provided a large base of highly-qualified employees that positions EnergySolutions well to pursue other opportunities in the United Kingdom and throughout Europe.

Fourth Quarter Results

Revenues for the quarter ended December 31, 2007 were $427.9 million, compared to $132.8 million for the same period in 2006. The increase in revenues was primarily the result of the acquisition of RSMC in June of 2007. Net loss for the quarter ended December 31, 2007 was $4.8 million, compared to net income of $9.5 million for the same period in 2006.

Pro Forma Fourth Quarter Results

Pro forma revenues for the quarter ended December 31, 2007, were $427.9 million, pro forma gross profit was $61.5 million and pro forma selling, general and administrative expenses were $32.6 million. Pro forma net income for the quarter ended December 31, 2007 was $10.4 million, or $0.12 per share, and pro forma net income before the impact of amortization of intangible assets for the quarter ended December 31, 2007 was $14.9 million, or $0.17 per share, based on 88.7 million fully-diluted shares outstanding. Pro forma EBITDA for the fourth quarter ended December 31, 2007 was $40.6 million.

Outlook for 2008

"As we look forward, the nuclear services sector remains robust and we see significant opportunities for us to grow in each of our business segments," said Mr. Creamer. "We estimate there are $55 billion of DOE contracts coming up for bid in the next three years for maintenance, operation, decontamination and decommissioning. Our services to U.S. commercial nuclear customers will continue to benefit from our provision of recurring on-site services across the active nuclear reactors, complemented by paradigm changing decommissioning solutions we are able to offer to our customers such as our large components removal services and our license stewardship program. Internationally, as countries endeavor to expand nuclear power generation, many seek to address the clean-up associated with legacy nuclear infrastructure. With our major presence in the U.S. and Europe we are in an excellent position to benefit from that trend."

The Company expects full year 2008 revenues to be in the range of $1.8 billion to $1.9 billion and earnings per share to be in the range of $0.69 to $0.74. Earnings per share before the impact of amortization of intangible assets, which is calculated as earnings per share plus the per share impact of amortization expense of intangible assets, net of related income tax expense, is expected to be in the range of $0.89 to $0.94. When calculating per share amounts, the Company assumes a weighted average fully-diluted share count for the year of 89 million shares. EBITDA for the year ending December 31, 2008 is expected to be between $195 million and $205 million. Amortization expense of intangible assets, net of related income tax expense, is expected to be $17.8 million for 2008. Compensation expense related to stock option grants is expected to be $9.1 million for 2008. Capital expenditures for the year are expected to be approximately $37 million, primarily relating to the one-time purchases of equipment for the Company's Atlas mill tailings contract awarded in June 2007 as well as the general maintenance of the Company's facilities.

Based on the expected timing of the license transfer of the Zion license stewardship contract, the large U.S. DOE contract awards and the NRC rulemaking change for major components, the Company expects revenues and earnings for 2008 to be weighted towards the second half of the year.

Forward-Looking Statements

Statements in this news release regarding future financial and operating results and any other statements about the Company's future expectations, beliefs or prospects expressed by management constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including economic conditions generally. Additional information on potential factors that could affect the Company's results and other risks and uncertainties are set forth in the EnergySolutions, Inc. final prospectus dated as of November 14, 2007, filed with the Securities and Exchange Commission (the "SEC") pursuant to Rule 424(b)(4). We do not undertake any obligation to release publicly any revision to any of these forward-looking statements.

Conference Call

The Company will conduct a conference call at 10:00 a.m. EDT on Tuesday, March 18, 2008, to discuss financial results for the year ended December 31, 2007.

Hosting the call will be Steve Creamer, Chairman and Chief Executive Officer, and Philip Strawbridge, Chief Financial Officer.

To participate in the event by telephone, please dial (888)-679-8018 five to 10 minutes prior to the start time (to allow time for registration) and reference the conference passcode 79449805. International callers should dial (617)-213-4845 and use the same passcode.

A replay of the call will be available on Tuesday, March 18, 2008, at 12:00 p.m. EDT through Tuesday, March 25, 2008, at 2:00 pm EDT. To access the replay, dial (888)-286-8010 and enter passcode 80852752. International callers should dial (617)-801-6888 and enter the same passcode.

The conference call will be broadcast live over the Internet and can be accessed by all interested parties through the Company's Web site at www.energysolutions.com by clicking on the "investor relations" tab at the top of the home page. To listen to the live call, please visit the Web site at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. An audio replay of the event will be archived on EnergySolutions' Web site for 90 days.

Please use the following link to pre-register for this conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. You should pre-register prior to the conference call. To pre-register please go to:

https://www.theconferencingservice.com/prereg/key.process?key=PQBY8RPDK

About EnergySolutions

EnergySolutions offers customers a full range of integrated services and solutions, including nuclear operations, characterization, decommissioning, decontamination, site closure, transportation, nuclear materials management, the safe, secure disposition of nuclear waste, and research and engineering services across the fuel cycle.


Table 1

                          ENERGYSOLUTIONS, INC.
            CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
              (Dollars in thousands, except per share data)

                             For the Quarter            For the Year
                            Ended December 31,        Ended December 31,
                          2007 (1)     2006 (2)     2007 (1)     2006 (2)
                        -----------  -----------  -----------  -----------

Revenues                $   427,860  $   132,798  $ 1,092,613  $   427,103
Cost of revenues            366,212       78,972      898,339      235,867
                        -----------  -----------  -----------  -----------

  Gross profit               61,648       53,826      194,274      191,236

Selling, general and
 administrative
 expenses                    42,005       33,102      122,438      101,262
                        -----------  -----------  -----------  -----------

  Income from
   operations                19,643       20,724       71,836       89,974

Interest expense            (20,903)     (15,291)     (72,689)     (68,566)
Other income, net             4,767          333        3,364        3,113
                        -----------  -----------  -----------  -----------

  Income before
   minority interests
   and income taxes           3,507        5,766        2,511       24,521

Minority interests              (92)           -          (92)           -
Income tax (expense)
 benefit                     (8,184)       3,765      (11,318)       2,342
                        -----------  -----------  -----------  -----------

  Net income (loss)     $    (4,769) $     9,531  $    (8,899) $    26,863
                        ===========  ===========  ===========  ===========

Net income (loss) per
 share:
       Basic            $     (0.11)              $     (0.79)
       Diluted          $     (0.11)              $     (0.79)

Number of shares used
 in per share
 calculations (in
 thousands):
       Basic                 44,730                    11,274
       Diluted               44,730                    11,274


(1) Includes the results of operations of Parallax, Inc., Reactor Sites
    Management Company Limited and its subsidiaries, NUKEM Corporation and
    Monserco Limited from the dates of their acquisitions in January 2007,
    June 2007, July 2007 and December 2007, respectively.
(2) Includes the results of operations of BNG America, LLC and its
    subsidiaries, Duratek, Inc. and its subsidiaries and Safeguard
    International Solutions, Ltd. from the dates of their acquisitions in
    February 2006, June 2006 and December 2006, respectively.



Table 2

                       ENERGYSOLUTIONS, INC.
          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                       (Dollars in thousands)

                                                 December 31,  December 31,
                                                    2007          2006
                                                ------------- -------------
Assets
    Current assets:
      Cash and cash equivalents                 $      36,366 $       4,641
      Accounts receivable, net of allowance for
       doubtful accounts                              366,083        82,965
      Other current assets                            103,233       100,229
                                                ------------- -------------
         Total current assets                         505,682       187,835

    Property, plant and equipment, net                110,688       128,845
    Goodwill                                          526,040       462,389
    Other intangible assets, net                      383,812       296,226
    Other noncurrent assets                            98,728        81,910
                                                ------------- -------------
         Total assets                           $   1,624,950 $   1,157,205
                                                ============= =============

Liabilities and Shareholders' / Member's Equity
    Current liabilities:
      Current portion of long-term debt         $       1,557 $      11,565
      Accounts payable                                155,663        23,357
      Accrued expenses and other current
       liabilities                                    233,588        67,872
      Other current liabilities                        45,135        52,905
                                                ------------- -------------
         Total current liabilities                    435,943       155,699

    Long-term debt, less current portion              605,410       749,602
    Other noncurrent liabilities                      178,206       102,924
                                                ------------- -------------
         Total liabilities                          1,219,559     1,008,225
                                                ------------- -------------

    Minority interest                                      68             -

    Shareholders' / member's equity                   405,323       148,980
                                                ------------- -------------

         Total liabilities and shareholders' /
          member's equity                       $   1,624,950 $   1,157,205
                                                ============= =============


Table 3

                          ENERGYSOLUTIONS, INC.
        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                          (Dollars in thousands)


                                  For the Quarter        For the Year
                                 Ended December 31,    Ended December 31,
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------

Cash Provided by Operating
 Activities                     $  39,958  $  14,700  $ 152,796  $  69,756
                                ---------  ---------  ---------  ---------

Investing Activities
   Purchases of businesses, net
    of cash acquired               (2,705)   (12,993)  (199,105)  (447,912)
   Purchases of property, plant
    and equipment                  (7,670)    (5,082)   (13,312)   (23,910)
   Proceeds from disposition of
    property, plant and
    equipment                         579         55        579         58
                                ---------  ---------  ---------  ---------
Cash Used in Investing
 Activities                        (9,796)   (18,020)  (211,838)  (471,764)
                                ---------  ---------  ---------  ---------

Financing Activities
   Net borrowings (repayments)
    of long-term debt            (270,200)    (1,908)  (154,200)   211,167
   Member's capital
    contributions                       -          -          -    175,000
   Proceeds from issuance of
    common stock, net of
    issuance costs                271,142          -    271,142          -
   Other items                     (5,470)     2,854    (25,008)   (14,316)
                                ---------  ---------  ---------  ---------
Cash Provided by (Used in)
 Financing Activities              (4,528)       946     91,934    371,851
                                ---------  ---------  ---------  ---------

Effect of Exchange Rate on
 Cash                                (380)         -     (1,167)         -
                                ---------  ---------  ---------  ---------

Increase (Decrease) in Cash
 and Cash Equivalents           $  25,254  $  (2,374) $  31,725  $ (30,157)
                                =========  =========  =========  =========

Amortization of Intangible
 Assets                         $   7,027  $   4,822  $  24,147  $  16,589
                                =========  =========  =========  =========
Depreciation                    $   4,571  $   4,685  $  19,083  $  12,039
                                =========  =========  =========  =========


Table 4

                          ENERGYSOLUTIONS, INC.
        PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
              (Dollars in thousands, except per share data)


                                            For the Quarter  For the Year
                                                  Ended          Ended
                                              December 31,   December 31,
                                                  2007           2007
                                              -------------  -------------

Revenues                                      $     427,860  $   1,804,626
Cost of revenues                                    366,334      1,554,849
                                              -------------  -------------

  Gross profit                                       61,526        249,777

Selling, general and administrative expenses         32,564        114,107
                                              -------------  -------------

  Income from operations                             28,962        135,670

Interest expense                                    (12,304)       (53,379)
Other income, net                                       171          1,361
                                              -------------  -------------

  Income before minority interests and income
   taxes                                             16,829         83,652

Minority interests                                      (92)           (92)
Income tax expense                                   (6,386)       (26,599)
                                              -------------  -------------

  Net income                                         10,351         56,961

Amortization of intangible assets                     7,027         28,728
Income tax expense                                   (2,453)       (10,000)
                                              -------------  -------------

  Net income before the impact of
   amortization of intangible assets          $      14,925  $      75,689
                                              =============  =============

  EBITDA                                      $      40,639  $     184,750
                                              =============  =============

Net income per share:
       Basic                                  $        0.12  $        0.65
       Diluted                                $        0.12  $        0.64

Net income before the impact of amortization
 of intangible assets per share:
       Basic                                  $        0.17  $        0.86
       Diluted                                $        0.17  $        0.85

Number of shares used in per share calculations
 (in thousands):
       Basic                                         88,306         88,306
       Diluted                                       88,720         88,720


Table 4 (Continued)

   The unaudited pro forma financial information set forth above is derived
from the Company's historical financial information, as adjusted to give
pro forma effect to the following transactions as if each had occurred as
of January 1, 2007:

-- the Company's acquisition of RSMC
-- the reorganization of the Company from a limited liability company to a
   "C" corporation
-- the Company's sale of 13,153,500 shares of common stock at the initial
   public offering price of $23.00 per share and the use of the net
   proceeds to acquire RSMC, pay down debt and make payments to certain
   executives for termination of certain bonus payments in accordance with
   their employment agreements
-- the elimination of the advisory fees that the Company had paid to its
   equity sponsors under advisory services agreements that have been
   terminated following the Company's initial public offering;
-- the elimination of non-cash compensation expense related to stock
   options granted to employees on the date of the Company's initial
   public offering;

 The pro forma financial information has been prepared based upon available
 information and assumptions that the Company believes are reasonable.
 However, the pro forma financial information is presented for
 illustrative and informational purposes only and does not purport to
 represent what the Company's results of operations or financial condition
 would have been if the pro forma transactions had occurred on the
 assumed dates nor are they necessarily indicative of the Company's
 future performance.



Table 5

                         ENERGYSOLUTIONS, INC.
              RECONCILIATION OF GAAP TO PRO FORMA CONSOLIDATED
                    STATEMENTS OF OPERATIONS (UNAUDITED)
              (Dollars in thousands, except per share data)


                                 For the Quarter Ended December 31, 2007
                               -------------------------------------------
                                   GAAP     Adjustments         Pro Forma
                               -----------  -----------        -----------

Revenues                       $   427,860  $         -        $   427,860
Cost of revenues                   366,212          122    (1)     366,334
                               -----------  -----------        -----------

  Gross profit                      61,648         (122)            61,526

Selling, general and
 administrative expenses            42,005       (9,441)   (2)      32,564
                               -----------  -----------        -----------

  Income from operations            19,643        9,319             28,962

Interest expense                   (20,903)       8,599    (3)     (12,304)
Other income, net                    4,767       (4,596)   (4)         171
                               -----------  -----------        -----------

  Income before minority
   interests and income taxes        3,507       13,322             16,829

Minority interests                     (92)           -                (92)
Income tax (expense) benefit        (8,184)       1,798    (5)      (6,386)
                               -----------  -----------        -----------

  Net income (loss)            $    (4,769) $    15,120        $    10,351
                               ===========  ===========        ===========

Reconciliation of net income
 (loss) to EBITDA:
  Net income (loss)            $    (4,769)                    $    10,351
  Interest expense                  20,903                          12,304
  Income tax expense                 8,184                           6,386
  Depreciation expense               4,571                           4,571
  Amortization of intangible
   assets                            7,027                           7,027
                               -----------                     -----------
    EBITDA                     $    35,916                     $    40,639
                               ===========                     ===========

Reconciliation of net income
 (loss) to Net income (loss)
 before the impact of
 amortization of
 intangible assets:
  Net income (loss)            $    (4,769)                    $    10,351
  Amortization of intangible
   assets                            7,027                           7,027
  Income tax expense related to
   the reconciling items            (2,453)                         (2,453)
                               -----------                     -----------
   Net income (loss) before the
    impact of amortization of
    intangible assets          $      (195)                    $    14,925
                               ===========                     ===========

Net income (loss) per share:
       Basic                   $     (0.11)                    $      0.12
       Diluted                 $     (0.11)                    $      0.12

Net income before the impact
 of amortization of
 intangible assets per share:
       Basic                   $     (0.00)                    $      0.17
       Diluted                 $     (0.00)                    $      0.17

Number of shares used in per
 share calculations (in
 thousands):
       Basic                        44,730                          88,306
       Diluted                      45,145                          88,720



                                   For the Year Ended December 31, 2007
                               -------------------------------------------
                                   GAAP     Adjustments         Pro Forma
                               -----------  -----------        -----------

Revenues                       $ 1,092,613  $   712,013    (6) $ 1,804,626
Cost of revenues                   898,339      656,510    (7)   1,554,849
                               -----------  -----------        -----------

  Gross profit                     194,274       55,503            249,777

Selling, general and
 administrative expenses           122,438       (8,331)   (8)     114,107
                               -----------  -----------        -----------

  Income from operations            71,836       63,834            135,670

Interest expense                   (72,689)      19,310    (3)     (53,379)
Other income, net                    3,364       (2,003)   (4)       1,361
                               -----------  -----------        -----------

  Income before minority
   interests and income taxes        2,511       81,141             83,652

Minority interests                     (92)           -                (92)
Income tax (expense) benefit       (11,318)     (15,281)   (5)     (26,599)
                               -----------  -----------        -----------

  Net income (loss)            $    (8,899) $    65,860        $    56,961
                               ===========  ===========        ===========

Reconciliation of net income
 (loss) to EBITDA:
  Net income (loss)            $    (8,899)                    $    56,961
  Interest expense                  72,689                          53,379
  Income tax expense                11,318                          26,599
  Depreciation expense              19,083                          19,083
  Amortization of intangible
   assets                           24,147                          28,728
                               -----------                     -----------
    EBITDA                     $   118,338                     $   184,750
                               ===========                     ===========

Reconciliation of net income
 (loss) to Net income (loss)
 before the impact of
 amortization of
 intangible assets:
  Net income (loss)            $    (8,899)                    $    56,961
  Amortization of intangible
   assets                           24,147                          28,728
  Income tax expense related to
   the reconciling items            (8,718)                        (10,000)
                               -----------                     -----------
   Net income (loss) before the
    impact of amortization of
    intangible assets          $     6,530                     $    75,689
                               ===========                     ===========
Net income (loss) per share:
       Basic                   $     (0.79)                    $      0.65
       Diluted                 $     (0.79)                    $      0.64

Net income before the impact
 of amortization of
 intangible assets per share:
       Basic                   $      0.58                     $      0.86
       Diluted                 $      0.56                     $      0.85

Number of shares used in per
 share calculations (in
 thousands):
       Basic                        11,274                          88,306
       Diluted                      11,689                          88,720


(1)  Pro forma adjustment due to the following:
Non-cash accretion income of decontamination and
 decommissioning liabilities                                   $       494
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                             (372)
                                                               -----------
                                                               $       122
                                                               ===========

(2)  Pro forma adjustment due to the following:
Advisory fees to equity sponsors prior to termination of
 advisory services agreements in connection with the Company's
 initial public offering                                       $      (639)
Non-cash equity compensation related to profit interests              (596)
Compensation paid to certain executives in connection with the
 Company's initial public offering to terminate certain bonus
 arrangements in accordance with their employment agreements        (6,945)
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                           (1,261)
                                                               -----------
                                                               $    (9,441)
                                                               ===========

(3) Pro forma adjustment to reflect reduction of interest
 expense as a result of paydown of debt from use of proceeds
 from the Company's initial public offering as if paydown
 occurred on January 1, 2007 and increase in interest expense
 for amortization of deferred loan costs related to costs
 incurred to obtain an amendment to the debt agreement related
 to the initial public offering as if the amendment occurred
 on January 1, 2007.

(4) Pro forma adjustment to eliminate interest and investment
 income (balance represents joint venture income only).

(5) Adjustment to reflect non-GAAP pro forma income tax
 expense using an assumed income tax rate of 38% and 28% of
 U.S. and UK pre-tax income, respectively, as a result of the
 reorganization of the Company from a limited liability
 company to a "C" corporation from January 1, 2007.

(6) Represents revenues of RSMC from January 1, 2007 to the
 acquisition on June 26, 2007.

(7)  Pro forma adjustment due to the following:
Cost of revenues of RSMC from January 1, 2007 to the
 acquisition on June 26, 2007                                  $   666,272
To eliminate overhead charges allocated to RSMC from its
 former parent prior to acquisition on June 26, 2007                (8,000)
Non-cash accretion expense of decontamination and
 decommissioning liabilities                                        (1,390)
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                             (372)
                                                               -----------
                                                               $   656,510
                                                               ===========

(8)  Pro forma adjustment due to the following:
Selling, general and administrative expenses of RSMC from
 January 1, 2007 to the acquisition on June 26, 2007           $     5,070
Advisory fees to equity sponsors prior to termination of
 advisory services agreements in connection with the Company's
 initial public offering                                            (2,477)
Non-cash equity compensation related to profit interests            (2,718)
Compensation paid to certain executives in connection with the
 Company's initial public offering to terminate certain bonus
 arrangements in accordance with their employment agreements        (6,945)
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                           (1,261)
                                                               -----------
                                                               $    (8,331)
                                                               ===========


Table 5 (Continued)

The Company defines EBITDA as earnings before interest expense, income
taxes, depreciation and amortization. The Company uses EBITDA to
facilitate a comparison of its operating performance on a consistent
basis from period to period that, when viewed with its GAAP results and
the above reconciliation, management believes it provides a more complete
understanding of factors and trends affecting its business than GAAP
measures alone. EBITDA assists management in comparing its operating
performance on a consistent basis because it removes the impact of its
capital structure (primarily interest charges), asset base (primarily
depreciation and amortization) and items outside the control of its
management team (taxes) from its results of operations. EBITDA should not
be considered as a substitute for net income or income from operations,
as determined in accordance with GAAP. EBITDA is not defined by GAAP,
and you should not consider it in isolation or as a substitute for
analyzing the Company's results as reported under GAAP.

The Company defines net income before the impact of amortization of
intangible assets as net income plus amortization expense of intangible
assets, net of the related income tax expense. Net income before the
impact of amortization of intangible assets and net income before the
impact of amortization of intangible assets per share are not computed
in accordance with GAAP. These non-GAAP measures may be useful to
investors seeking to compare the operating performance on a consistent
basis from period to period that, when viewed with its GAAP results
and the above reconciliation, management believes provides a more
complete understanding of factors and trends affecting the Company's
business than GAAP measures alone. Net income before the impact of
amortization of intangible assets and net income before the impact
of amortization of intangible assets per share should not be
considered as a substitute for net income or net income per share,
as determined in accordance with GAAP. Net income before the impact
of amortization of intangible assets and net income before the impact
of amortization of intangible assets per share are not defined by
GAAP, and you should not consider them in isolation or as a substitute
for analyzing the Company's results as reported under GAAP.



Table 6

                          ENERGYSOLUTIONS, INC.
                REPORTING SEGMENT INFORMATION (UNAUDITED)
                          (Dollars in thousands)

                                    GAAP                     PRO FORMA
                     ----------------------------------  -----------------
                                                         For the Quarter
                            For the Quarter                  Ended
                           Ended December 31,              December
                         2007             2006             31, 2007
                     -----------        ---------        -----------
Revenues
Federal Services     $    40,101        $  28,542        $    40,101
Commercial Services       39,862           22,976             39,862
LP&D                      75,619           81,280             75,619
International            272,278                -            272,278
                     -----------        ---------        -----------
Total Revenues       $   427,860        $ 132,798        $   427,860
                     ===========        =========        ===========


Gross Profit and
 Margin
Federal Services     $     8,769  21.9% $   8,052  28.2% $     8,769  21.9%
Commercial Services        8,122  20.4%     7,373  32.1%       8,213  20.6%
LP&D                      36,526  48.3%    38,401  47.2%      36,072  47.7%
International
 Operations                8,231   3.0%         -              8,472   3.1%
                     -----------        ---------        -----------
Total Gross Profit   $    61,648  14.4% $  53,826  40.5% $    61,526  14.4%
                     ===========        =========        ===========

Income from
 Operations and
 Margin
Federal Services     $     6,376  15.9% $   5,783  20.3% $     6,518  16.3%
Commercial Services        8,704  21.8%     3,327  14.5%       8,838  22.2%
LP&D                      34,270  45.3%    35,159  43.3%      33,826  44.7%
International               (194) -0.1%         -                 88   0.0%
                     -----------        ---------        -----------
Total Income from
 Operations before
 corporate
 unallocated items        49,156  11.5%    44,269  33.3%      49,270  11.5%
Corporate
 unallocated items       (29,513)         (23,545)           (20,308)
                     -----------        ---------        -----------
Total Income from
 Operations          $    19,643        $  20,724        $    28,962
                     ===========        =========        ===========


                                    GAAP                     PRO FORMA
                     ----------------------------------  -----------------
                                                         For the Year
                              For the Year                   Ended
                           Ended December 31,              December
                         2007             2006             31, 2007
                     -----------        ---------        -----------

Revenues
Federal Services     $   151,355        $  79,941        $   151,355
Commercial Services      137,378           54,137            137,378
LP&D                     262,801          293,025            262,801
International            541,079                -          1,253,092
                     -----------        ---------        -----------
Total Revenues       $ 1,092,613        $ 427,103        $ 1,804,626
                     ===========        =========        ===========


Gross Profit and
 Margin
Federal Services     $    42,383  28.0% $  24,820  31.0% $    42,383  28.0%
Commercial Services       27,812  20.2%    14,558  26.9%      27,903  20.3%
LP&D                     106,510  40.5%   151,858  51.8%     107,940  41.1%
International
 Operations               17,569   3.2%         -             71,551   5.7%
                     -----------        ---------        -----------
Total Gross Profit   $   194,274  17.8% $ 191,236  44.8% $   249,777  13.8%
                     ===========        =========        ===========


Income from
 Operations and
 Margin
Federal Services     $    31,077  20.5% $  20,634  25.8% $    31,219  20.6%
Commercial Services       20,082  14.6%     7,092  13.1%      20,216  14.7%
LP&D                      97,991  37.3%   144,251  49.2%      99,431  37.8%
International              2,930   0.5%         -             51,884   4.1%
                     -----------        ---------        -----------
Total Income from
 Operations before
 corporate
 unallocated items       152,080  13.9%   171,977  40.3%     202,750  11.2%
Corporate
 unallocated items       (80,244)         (82,003)           (67,080)
                     -----------        ---------        -----------
Total Income from
 Operations          $    71,836        $  89,974        $   135,670
                     ===========        =========        ===========


Table 7

                          ENERGYSOLUTIONS, INC.
    RECONCILIATION OF GAAP TO PRO FORMA REPORTING SEGMENT INFORMATION
                                (UNAUDITED)
                           (Dollars in thousands)


                                 For the Quarter Ended December 31, 2007
                               -------------------------------------------
                                   GAAP     Adjustments         Pro Forma
                               -----------  -----------        -----------

Revenues
Federal Services               $    40,101  $         -        $    40,101
Commercial Services                 39,862            -             39,862
LP&D                                75,619            -             75,619
International                      272,278            -            272,278
                               -----------  -----------        -----------
Total Revenues                 $   427,860  $         -        $   427,860
                               ===========  ===========        ===========


Gross Profit and Margin
Federal Services               $     8,769  $         -        $     8,769
Commercial Services                  8,122           91    (1)       8,213
LP&D                                36,526         (454)   (2)      36,072
International Operations             8,231          241    (1)       8,472
                               -----------  -----------        -----------
Total Gross Profit             $    61,648  $      (122)       $    61,526
                               ===========  ===========        ===========


Income from Operations and
 Margin
Federal Services               $     6,376  $       142    (1) $     6,518
Commercial Services                  8,704          134    (1)       8,838
LP&D                                34,270         (444)   (3)      33,826
International                         (194)         282    (1)          88
                               -----------  -----------        -----------
Total Income from Operations
 before corporate unallocated
 items                              49,156          114             49,270
Corporate unallocated items        (29,513)       9,205    (4)     (20,308)
                               -----------  -----------        -----------
Total Income from Operations   $    19,643  $     9,319        $    28,962
                               ===========  ===========        ===========



                                   For the Year Ended December 31, 2007
                               -------------------------------------------
                                   GAAP     Adjustments         Pro Forma
                               -----------  ------------       -----------

Revenues
Federal Services               $   151,355  $          -       $   151,355
Commercial Services                137,378             -           137,378
LP&D                               262,801             -           262,801
International                      541,079       712,013   (5)   1,253,092
                               -----------  ------------       -----------
Total Revenues                 $ 1,092,613  $    712,013       $ 1,804,626
                               ===========  ============       ===========


Gross Profit and Margin
Federal Services               $    42,383  $          -       $    42,383
Commercial Services                 27,812            91   (1)      27,903
LP&D                               106,510         1,430   (6)     107,940
International Operations            17,569        53,982   (7)      71,551
                               -----------  ------------       -----------
Total Gross Profit             $   194,274  $     55,503       $   249,777
                               ===========  ============       ===========


Income from Operations and
 Margin
Federal Services               $    31,077  $        142   (1) $    31,219
Commercial Services                 20,082           134   (1)      20,216
LP&D                                97,991         1,440   (8)      99,431
International                        2,930        48,954   (9)      51,884
                               -----------  ------------       -----------
Total Income from Operations
 before corporate unallocated
 items                             152,080        50,670           202,750
Corporate unallocated items        (80,244)       13,164  (10)     (67,080)
                               -----------  ------------       -----------
Total Income from Operations   $    71,836  $     63,834       $   135,670
                               ===========  ============       ===========

(1) Pro forma adjustment reflects the add back of non-cash
 compensation expense related to stock options granted to
 employees on the date of the Company's initial public
 offering.

(2)  Pro forma adjustment due to the following:
Non-cash accretion income of decontamination and
 decommissioning liabilities                                   $      (494)
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                               40
                                                               -----------
                                                               $      (454)
                                                               ===========

(3)  Pro forma adjustment due to the following:
Non-cash accretion income of decontamination and
 decommissioning liabilities                                   $      (494)
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                               50
                                                               -----------
                                                               $      (444)
                                                               ===========

(4)  Pro forma adjustment due to the following:
Advisory fees to equity sponsors prior to termination of
 advisory services agreements in connection with the Company's
 initial public offering                                       $       639
Non-cash equity compensation related to profit interests               597
Compensation paid to certain executives in connection with the
 Company's initial public offering to terminate certain bonus
 arrangements in accordance with their employment agreements         6,945
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                            1,024
                                                               -----------
                                                               $     9,205
                                                               ===========

(5) Represents revenues of RSMC from January 1, 2007 to the
 acquisition on June 26, 2007.

(6)  Pro forma adjustment due to the following:
Non-cash accretion expense of decontamination and
 decommissioning liabilities                                   $     1,390
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                               40
                                                               -----------
                                                               $     1,430
                                                               ===========

(7)  Pro forma adjustment due to the following:
Gross profit of RSMC from January 1, 2007 to the acquisition
 on June 26, 2007                                              $    45,741
To eliminate overhead charges allocated to RSMC from its
 former parent prior to acquisition on June 26, 2007                 8,000
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                              241
                                                               -----------
                                                               $    53,982
                                                               ===========

(8)  Pro forma adjustment due to the following:
Non-cash accretion expense of decontamination and
 decommissioning liabilities                                   $     1,390
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                               50
                                                               -----------
                                                               $     1,440
                                                               ===========

(9)  Pro forma adjustment due to the following:
Income of operations of RSMC from January 1, 2007 to the
 acquisition on June 26, 2007                                  $    40,672
To eliminate overhead charges allocated to RSMC from its
 former parent prior to acquisition on June 26, 2007                 8,000
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                              282
                                                               -----------
                                                               $    48,954
                                                               ===========

(10)  Pro forma adjustment due to the following:
Advisory fees to equity sponsors prior to termination of
 advisory services agreements in connection with the Company's
 initial public offering                                       $     2,477
Non-cash equity compensation related to profit interests             2,718
Compensation paid to certain executives in connection with the
 Company's initial public offering to terminate certain bonus
 arrangements in accordance with their employment agreements         6,945
Non-cash compensation expense related to stock options granted
 to employees on the date of the Company's initial public
 offering                                                            1,024
                                                               -----------
                                                               $    13,164
                                                               ===========

Contact Information

  • Contact:
    For more information, please contact:
    Tim Barney
    (801) 649-2233
    Email Contact