Cost of Sales, Gross Profit Margin, Expenses and Other IncomeCost of sales for 2012 for SWU and uranium was $1.72 billion, an increase of $327.4 million compared to 2011. The 24 percent change is primarily a result of the increased SWU sales volume, partially offset by lower uranium sales volume. Cost of sales per SWU was 1 percent higher in 2012 compared to 2011. 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 2012 was reduced by revisions to accruals previously included in production costs and increased by benefit costs previously charged to the contract services segment and an acceleration of depreciation of Paducah assets. Although unit production costs declined in 2012 compared to 2011, the SWU unit cost is negatively impacted by the carry-forward effect of higher production and purchase costs from prior years. Production costs declined $21.2 million or 3 percent in 2012 compared to 2011. Production volume increased 1 percent and the unit production cost declined 4 percent, reflecting the depleted uranium enrichment program that commenced in June 2012. The average cost per megawatt hour declined 3 percent in 2012 reflecting lower unit power costs under the amended power contract with the Tennessee Valley Authority. Purchase costs for the SWU component of LEU under the Russian Contract increased $13.0 million in 2012 compared to 2011 due to a 2 percent increase in the purchase cost per SWU. Purchase prices paid under the Russian Contract are set by a pricing formula that includes market-based price points. In the contract services segment, cost of sales was $61.6 million in 2012, a decrease of $134.9 million or 69 percent. The net decrease was due primarily to the substantial completion of contract work at the former Portsmouth plant in September 2011 and the transition of contract service workers to DOE’s decontamination and decommissioning contractor.