The following discussion and analysis of the financial condition and results of our operations should be read together with the condensed consolidated financial statements and the related notes of EnergySolutions included elsewhere in this Form 10-Q.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements made herein, including statements regarding our projected revenues, expenses and income and the implementation of strategic initiatives are forward-looking in nature. These forward-looking statements reflect current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, our actual results may differ materially from our expectations or projections.

While most risks affect only future revenues or expenses, some risks may relate to revenue accruals that have already been reflected in earnings. Our failure to receive payments of accrued amounts or incurrence of liabilities in excess of amounts previously recognized could result in a charge against future earnings.

Additional information concerning these and other factors can be found in our periodic filings with the Securities and Exchange Commission (the "SEC"), including our Form 10-K filed February 27, 2009 and this report under "Item 1A-Risk Factors." Our SEC filings are available publicly on the SEC's website at www.sec.gov, on EnergySolutions' website at www.energysolutions.com or upon request from EnergySolutions' Investor Relations Department at ir@energysolutions.com. We disclaim any obligation to update the forward looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a leading provider of specialized, technology-based nuclear services to government and commercial customers. Our customers rely on our expertise to address their needs throughout the lifecycle of their nuclear operations. Our broad range of nuclear services includes engineering, operation of nuclear reactors, in-plant support services, spent nuclear fuel management, decontamination and decommissioning ("D&D"), logistics, transportation, processing and disposal. We derive almost 100% of our revenues from the provision of nuclear services.

We provide our services through four segments: Federal Services, Commercial Services, Logistics, Processing and Disposal ("LP&D") and International. Our Federal Services segment derives revenues from U.S. government customers for the management and operation or clean-up of facilities with radioactive materials. Our U.S. government customers are primarily individual offices, departments and administrations within the U.S. Department of Energy ("DOE") and the U.S. Department of Defense ("DOD"). Our Commercial Services segment provides a broad range of on-site services, including D&D, to commercial customers. Our commercial customers include power and utility companies, pharmaceutical companies, research laboratories, universities, industrial facilities and other commercial entities with nuclear materials, as well as state agencies in the United States. Our LP&D segment provides a broad range of logistics, transportation, processing and disposal services to government and commercial customers. This segment also operates our facilities for the safe processing and disposal of radioactive materials, including a facility in Clive, Utah, four facilities in Tennessee and two facilities in Barnwell, South Carolina. In cases where a project involves the provision of both specialized nuclear services and processing and disposal services, our Federal Services or Commercial Services segment, depending on the type of customer, and our LP&D segment will coordinate to provide integrated services. Our International segment has contracts with the Nuclear Decommissioning Authority ("NDA") in the United Kingdom ("UK") to operate, manage and decommission 10 Magnox sites with

22 nuclear reactors. In addition, our International segment provides turn-key services for the disposal of radioactive sources from non-nuclear power generating facilities such as hospitals, research facilities and other manufacturing and industrial facilities.

During the three months ended September 30, 2009, the Company determined that it had inappropriately applied authoritative guidance related to intangible assets and goodwill denominated in foreign currencies. As such, the Company recorded an entry during the three months ended September 30, 2009 for $1.8 million to reduce amortization expense recorded in previous periods; thus, reducing segment selling, general and administrative expenses and increasing operating income in our International segment. Of this $1.8 million, $1.2 million related to previous periods in 2009 and $0.6 million related to periods prior to 2009.

Results of Operations

    The following table shows certain items from our income statements for the
three and nine months ended September 30, 2009 and 2008 (in thousands):

                                             Three Months Ended         Nine Months Ended
                                               September 30,              September 30,
                                              2009        2008         2009          2008
Revenues:
   Federal Services Segment                 $  77,007   $  84,346   $   217,809   $   202,057
   Commercial Services Segment                 21,254      19,175        66,084        75,995
   LP&D Segment                                52,681      66,159       160,299       183,318
   International Segment                      213,911     249,773       731,355       920,181

      Total revenues                          364,853     419,453     1,175,547     1,381,551
Cost of revenues:
   Federal Services Segment                    66,195      71,077       189,976       171,566
   Commercial Services Segment                 15,181      12,663        49,421        49,918
   LP&D Segment                                33,176      37,984       100,996       109,472
   International Segment                      206,358     241,238       694,285       858,601

      Total cost of revenues                  320,910     362,962     1,034,678     1,189,557
Gross profit:
   Federal Services Segment                    10,812      13,269        27,833        30,491
   Commercial Services Segment                  6,073       6,512        16,663        26,077
   LP&D Segment                                19,505      28,175        59,303        73,846
   International Segment                        7,553       8,535        37,070        61,580

      Total gross profit                       43,943      56,491       140,869       191,994
Segment selling, general and
administrative expenses:
   Federal Services Segment                     4,941       2,418        11,697         7,022
   Commercial Services Segment                  1,374       1,824         5,004         5,515
   LP&D Segment                                 1,316       2,656         5,711         7,906
   International Segment                        3,922       5,205        13,798        14,322

      Total segment selling, general and
      administrative expenses                  11,553      12,103        36,210        34,765
Segment operating income:
   Federal Services Segment                     5,871      10,851        16,136        23,469
   Commercial Services Segment                  4,699       4,688        11,659        20,562
   LP&D Segment                                18,189      25,519        53,592        65,940
   International Segment                        3,631       3,330        23,272        47,258

      Total segment operating income           32,390      44,388       104,659       157,229
Corporate selling, general and
administrative expenses                        14,078      18,602        50,520        54,227

      Total income from operations             18,312      25,786        54,139       103,002
Interest expense                               (6,368 )    (9,778 )     (21,789 )     (34,250 )
Other income (expenses), net                    2,988         (72 )       5,215        (1,891 )

      Net income before income taxes and
      noncontrolling interests                 14,932      15,936        37,565        66,861
Income tax expense                             (1,742 )    (4,827 )      (8,367 )     (23,164 )

      Net income                               13,190      11,109        29,198        43,697
Less: Net income attributable to
noncontrolling interests                         (334 )      (207 )        (885 )        (907 )

          Net income attributable to
          EnergySolutions                   $  12,856   $  10,902   $    28,313   $    42,790

Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008

Federal Services Segment

Revenues and cost of revenues from our Federal Services segment decreased $7.3 million and $4.9 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Gross profit decreased $2.5 million while gross margin decreased to 14.0% for the three months ended September 30, 2009 from 15.7% for the three months ended

September 30, 2008 primarily due decreased activity on higher margin contracts and increased activity on lower margin contracts.

Revenues and gross profit generated by our contract with the DOE to clean up the Atlas mill tailings near Moab, Utah increased $3.1 million and $0.1 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. This increase was primarily attributable to increased construction activity to support the waste excavation and disposal stage of the project. As a result, cost of revenues on the Moab contract increased $3.0 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008.

Revenues related to engineering and technology projects within Federal Services increased $3.9 million, cost of revenues increased $3.4 million and gross profit increased $0.5 million for the three months ended September 30, 2009 compared to September 30, 2008 primarily due to increased operations on two projects. These projects provide critical technical and testing support to the DOE Waste Treatment Plant in Richland, WA.

Revenues and cost of revenues from our Isotek Systems joint venture increased $3.2 million and $3.1 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. The Isotek contract allows for the reimbursement of costs plus a fee. The cost of revenues increased due to increased design and construction activities also resulting in increased revenues. Gross profit, representing the fee less unallowable costs, increased $0.1 million for the three months ended September 30, 2009 compared to September 30, 2008.

These increases were offset, in part, by a collective decrease of revenues, cost of revenues and gross profit of $5.8 million, $2.5 million and $3.3 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 related to two contracts at the DOE Hanford site and our Savannah River site operations contract due to substantial completion of the contracts at these sites in late 2008 and early 2009. However, we continue to generate income through our proportional share of income in the Washington River Protection Solutions joint venture at the Hanford site.

In addition, revenues and cost of revenues from our Uranium Disposition Services joint venture, decreased $11.8 million and $11.9 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008, due to substantial completion of the construction phase of the project. Gross profit increased $0.1 million for the three months ended September 30, 2009 compared to September 30, 2008.

Segment selling, general and administrative expenses in our Federal Services segment increased $2.5 million to $4.9 million for the three months ended September 30, 2009 from $2.4 million for the three months ended September 30, 2008. The increase is primarily attributable to higher bid and contract proposal expenses incurred for the submission of bids on two large federal proposals.

Commercial Services Segment

Revenues and cost of revenues in our Commercial Services segment increased $2.1 million and $2.5 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Gross profit decreased $0.4 million while gross margin decreased to 28.6% for the three months ended September 30, 2009 from 34.0% for the three months ended September 30, 2008 due primarily to the relative profitability of the major projects being performed in each period.

Revenues and gross profit in our large components operations increased $3.1 million and $0.2 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 due to work performed on our Duke McGuire project, which is now substantially complete.

Revenues and cost of revenues related to our commercial decommissioning services increased $1.4 million and $1.7 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 mostly due to continuing efforts on our Federated Metals project and initial work on our Pearl Harbor Navy Ship Yard project. However, gross profit decreased $0.3 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 due to additional costs incurred on projects which were delayed due to weather conditions.

In addition, revenues and gross profit in our liquid waste processing division increased $0.6 million and $0.7 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 due to a higher demand for liners and additional work on existing projects.

These increases were offset, in part, by one of our large commercial engineering and technology waste container design and fabrication projects which was completed in December 2008. This resulted in a decrease of revenues and gross profit of $1.6 million and $0.4 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008.

Revenues and gross profit in our spent fuel operations decreased $1.0 million and $0.5 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. This decrease was largely attributable to the continued decrease of work due to the closure of the Barnwell disposal site to states outside the Atlantic Compact.

Segment selling, general and administrative expenses in our Commercial Services segment decreased $0.5 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 primarily due to decreased incentive compensation expenses based on projected shortfall of 2009 performance targets.

LP&D Segment

Revenues and cost of revenues in our LP&D segment decreased $13.5 million and $4.8 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Gross profit decreased $8.7 million to 37.0% for the three months ended September 30, 2009 from 42.6% for the three months ended September 30, 2008 primarily due to lower volumes of waste disposed at our Clive, Utah facility during the quarter due to delays on shipments and funding.

Revenues and gross profit at our Clive, Utah facility decreased $10.0 million and $7.8 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 primarily due to a reduction of waste volumes received during the current fiscal quarter resulting from delays in waste shipments and release of funding and revenue recognized related to a contract termination during the three months ended September 30, 2008. Consequently, cost of revenues decreased $2.2 million due to the lower volumes of waste receipts for the three months ended September 30, 2009 compared to the three months ended September 30, 2008.

Revenues and cost of revenues related to our manufacturing division decreased $4.6 million and $2.9 million, respectively, for the three months ended September 30, 2009 compared to the three months ended September 30, 2008 primarily due to lower volume of depleted uranium tubes shipped during the three months ended September 30, 2009. As a result, gross profit decreased $1.7 million for the three months ended September 30, 2009 compared to September 30, 2008.

Revenues and cost of revenues related to our transportation services, decreased $0.4 million and $0.7 million for the three months ended September 30, 2009, respectively, compared to the three months ended September 30, 2008 due to lower levels of waste on customer contracts. However, gross

profit increased $0.3 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008, primarily due to a decrease in subcontractor and fuel costs.

These decreases were partially offset by increased revenues at our Bear Creek facility of $1.0 million for the three months ended September 30, 2009 compared to September 30, 2008 attributable to higher volume of waste processed during the current fiscal quarter. As a result, cost of revenues and gross profit increased $0.4 million and $0.6 million, respectively, for the three months ended September 30, 2009 compared to September 30, 2008.

Segment selling, general and administrative expenses in our LP&D segment decreased $1.4 million to $1.3 million for the three months ended September 30, 2009 from $2.7 million for the three months ended September 30, 2008. The decrease is mostly attributable to decreased incentive compensation expenses based on projected shortfall of 2009 performance targets.

International Segment

Revenues in our International segment decreased $35.9 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Our revenues, prior to considering the effects of fluctuations in pound sterling exchange rates, decreased $4.0 million. In addition, revenues decreased $31.9 million due to lower pound sterling exchange rates during the three months ended September 30, 2009 compared to the same period in 2008. Of the $4.0 million decrease in revenues, our revenues from the Magnox contracts decreased $10.8 million mostly due to lower reimbursable contract cost base. This decrease was offset, in part, by increased revenues of $6.8 million related to our other UK operations.

Cost of revenues in our International segment decreased $34.9 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Our cost of revenues, prior to considering the effects of fluctuations in pound sterling exchange rates, decreased $3.8 million. In addition, cost of revenues decreased $31.1 million due to lower pound sterling exchange rates during the three months ended September 30, 2009 compared to the same period in 2008. Of the $3.8 million decrease in cost of revenues, our cost of revenues from the Magnox contracts decreased $9.0 million primarily due to decreased labor and subcontractor costs. This decrease was offset, in part, by net increases in cost of revenues of $5.2 million related to our other UK operations.

Gross profit in our International segment decreased $1.0 million for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. Our gross profit, prior to considering the effects of fluctuations in pound sterling exchange rates, decreased $0.2 million. In addition, gross profit decreased $0.8 million due to lower pound sterling exchange rates during the three months ended September 30, 2009 compared to the same period in 2008. Gross profit margin in our International segment was 3.5% for the three months ended September 30, 2009 comparable to 3.4% for the three months ended September 30, 2008.

Segment selling, general and administrative expenses in our International segment decreased $1.3 million for the three months ended September 30, 2009 as compared to 2008 due to lower amortization expense of intangible assets offset by increased bid and proposal costs and stock compensation expense. Amortization expense of intangible assets decreased $2.2 million during the three months ended September 30, 2009. During the three months ended September 30, 2009, the Company determined that it had inappropriately applied authoritative guidance related to intangible assets and goodwill denominated in foreign currencies. As such, the Company recorded an entry during the three months ended September 30, 2009 for $1.8 million to reduce amortization expense recorded in previous periods, including $0.1 million of amortization expense that had been overstated in the three months ended September 30, 2008. In addition, amortization expense decreased $0.4 million due to lower pound sterling exchange rates during the three months ended September 30, 2009 compared to the three months ended September 30, 2008.

Corporate selling, general and administrative expenses

Corporate selling, general and administrative expenses decreased $4.5 million, or 24.3%, to $14.1 million for the three months ended September 30, 2009 from $18.6 million for the three months ended September 30, 2008. This decrease is primarily attributable to decreased incentive compensation expenses based on projected shortfall of 2009 performance targets.

Interest expense

Interest expense decreased $3.4 million, or 34.9% to $6.4 million for the three months ended September 30, 2009 from $9.8 million for the three months ended September 30, 2008. The decrease is primarily attributable to a decline in both our average borrowings outstanding and interest rates related to our credit facilities.

Other income (expense), net

Net other income increased $3.1 million to $3.0 million for the three months ended September 30, 2009 from net other expense of $0.1 million for the three months ended September 30, 2008. The increase is mostly attributable increases in our proportional share of income from our joint ventures in which we have noncontrolling interests.

Income taxes

We recognized income tax expense of $1.7 million and $4.8 million for the three months ended September 30, 2009 and 2008, respectively, based on an estimated annual effective tax rate on our consolidated operations of 22.8% and 35.1%, respectively. The decrease in the estimated annual effective tax rate is mostly due to the effect of research and development credits in the U.S. and the UK. During the three months ended September 30, 2009, we recognized a discrete income tax benefit, including adjustments to unrecognized tax benefits, of $1.6 million primarily related to research and development activities in the U.S. and the UK.

Nine months ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

Federal Services Segment

Revenues and cost of revenues in our Federal Services segment increased $15.8 million and $18.4 million, respectively, for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. Gross profit decreased $2.7 million while gross margin decreased to 12.8% for the nine months ended September 30, 2009 from 15.1% for the nine months ended September 30, 2008 primarily due decreased activity on higher margin contracts and increased activity on lower margin contracts.

Revenues and gross profit generated by our contract with the DOE to clean up the Atlas mill tailings near Moab, Utah increased $23.2 million and $2.4 million, respectively, for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. During the second year of the contract, the construction activity has increased to support the waste excavation and disposal stage of the project. As a result, cost of revenues on the Moab contract increased $20.8 million for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008.

Revenues related to engineering and technology projects within Federal Services increased $18.4 million, cost of revenues increased $15.7 million and gross profit increased $2.7 million for the nine months ended September 30, 2009 compared to September 30, 2008 primarily due to increased operations on two projects. These projects are providing critical technical and testing support to the DOE Waste Treatment Plant in Richland, WA.

Revenues and cost of revenues from our Isotek Systems joint venture increased $2.3 million and $2.0 million, respectively, for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. The Isotek contract allows for the reimbursement of costs plus a fee. The cost of revenues increased due to increased design and construction activities also resulting in increased revenues. Gross profit, representing the fee less unallowable costs, increased $0.3 million for the nine months ended September 30, 2009 compared to September 30, 2008.

These increases were offset, in part, by a collective decrease of revenues, cost of revenues and gross profit of $16.8 million, $9.5 million and $7.3 million, respectively, for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008 related to two contracts at the DOE Hanford site and our Savannah River site operations contract due to substantial completion of the contracts at these sites in late 2008 and early 2009. However, we continue to generate income through our proportional share of income in the Washington River Protection Solutions joint venture at the Hanford site.

In addition, revenues and cost of revenues from our Uranium Disposition Services joint venture decreased $12.8 million and $12.7 million, respectively, for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008, due to substantial completion of the construction phase of the project. Gross profit decreased $0.1 million for the nine months ended September 30, 2009 compared to September 30, 2008.

Segment selling, general and administrative expenses in our Federal Services segment increased $4.7 million to $11.7 million for the nine months ended September 30, 2009 from $7.0 million for the nine months ended September 30, 2008. The increase is primarily attributable to higher bid and proposal expenses due to work on several significant contract proposals during the nine months ended September 30, 2009.

Commercial Services Segment

Revenues and cost of revenues in our Commercial Services segment decreased $9.9 million and $0.5 million, respectively, for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. Gross . . .