Revenue from the contract services segment was $11.0 million in the third quarter and $48.6 million in the nine-month period of 2012 compared to $55.3 million and $169.6 million in the respective periods of 2011. The decrease was due to a reduction in contract services revenue at the former Portsmouth Gaseous Diffusion Plant site as work was transferred to DOE’s decontamination and decommissioning contractor over the course of 2011. Revenue in the segment is now dominated by our subsidiary NAC International. Revenue by NAC decreased $7.7 million in the three-month period and increased $0.6 million in the nine-month period primarily as a result of timing in sales related to NAC’s dry cask storage systems.
In a number of sales transactions, USEC transfers title and collects cash from customers but does not recognize the revenue until the LEU is physically delivered. At September 30, 2012, deferred revenue totaled $105.0 million compared to $139.4 million at June 30, 2012. The gross profit associated with deferred revenue as of September 30, 2012, was $12.4 million.
A majority of reactors served by USEC are refueled on an 18-to-24-month cycle, which 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 and Gross Profit MarginCost of sales for the quarter ended September 30, 2012, for the LEU segment was $522.8 million, an increase of $224.3 million compared to the same quarter in 2011, primarily due to higher SWU sales volumes and unit costs, partially offset by no uranium sales in the 2012 period. Cost of sales for the segment increased $390.1 million in the nine months ended September 30, 2012, compared to the corresponding period in 2011, primarily due to the same explanations for the quarter results. Cost of sales per SWU was 2 percent higher in the third quarter and 1 percent higher for the nine months ended September 30, 2012, compared to the corresponding periods in 2011.