For the full year, revenue was $1.67 billion, a decrease of $363.6 million from 2010. SWU volume declined 15 percent year over year reflecting the variability in timing of utility customer orders. The average SWU prices billed to customers increased 3 percent compared to 2010, reflecting the general trend of higher prices under contracts signed in recent years. The volume of uranium sold declined 53 percent and the average price billed to customers increased 20 percent. Revenue from the contract services segment was $209.1 million, a 25 percent decrease year over year due primarily to the completion of clean-up activities at the former Portsmouth GDP in September 2011.
In a number of sales transactions, USEC transfers title and collects cash from customers but does not recognize the revenue until low enriched uranium is physically delivered. At December 31, 2011, deferred revenue totaled $181.5 million, compared to $176.1 million at December 31, 2010. The gross profit associated with deferred revenue as of December 31, 2011, was $6.0 million.
A majority of reactors served by USEC are refueled on a 12-to-24-month cycle, and this can lead to significant quarterly and annual swings in SWU sales volume that reflects the mix of refueling cycles. Therefore, short-term comparisons of USEC’s financial results are not necessarily indicative of longer-term results.
Cost of Sales, Gross Profit Margin, Expenses and Other IncomeCost of sales for 2011 for SWU and uranium was $1.39 billion, a decrease of $232.1 million compared to 2010. The 14 percent change is a result of the decline in SWU and uranium sold, partially offset by higher unit costs. Cost of sales for SWU and uranium reflects monthly moving average inventory costs based on production and purchase costs. Cost of sales per SWU in 2011 was negatively impacted by higher purchase costs under the Russian Contract, higher per SWU production costs and the carry-forward effect of high costs in prior periods.
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