from january 1 , 2008 , through december 31 , 2012 , we have purchased 41 franchises with expected annual revenues at the time of acquisition of $ 1.6 billion and been granted nine new franchises by our manufacturers , with expected annual revenues at the time of acquisition of $ 119.7 million . in 2012 alone , we acquired one domestic , eight import , and seven luxury franchises with expected annual revenues at the time of acquisition of $ 715.0 million . we make disposition decisions based principally on the rate of return on our capital investment , the location of the dealership , our ability to leverage our cost structure , the brand , and existing real estate obligations . from january 1 , 2008 through december 31 , 2012 , we disposed of or terminated 41 franchises with annual revenues of approximately $ 503.6 million . specifically , during 2012 , we disposed of three luxury and three import franchises with annual revenues of approximately $ 127.9 million . in the following discussion and analysis , we report certain performance measures of our newly acquired and disposed dealerships separately from those of our existing dealerships . our operating results reflect the combined performance of each of our interrelated business activities , which include the sale of new vehicles , used vehicles , finance and insurance products , and parts , as well as service and collision repair services . historically , each of these activities has been directly or indirectly impacted by a variety of supply/demand factors , including vehicle inventories , consumer confidence , consumer discretionary spending , availability and affordability of consumer credit , manufacturer incentives , weather patterns , fuel prices , and interest rates . for example , during periods of sustained economic downturn or significant supply/demand imbalances , new vehicle sales may be negatively impacted as consumers tend to shift their purchases to used vehicles . some consumers may even delay their purchasing decisions altogether , electing instead to repair their existing vehicles . in such cases , however , we believe the new vehicle sales impact on our overall business is mitigated by our ability to offer other products and services , such as used vehicles and parts , service and collision repair services , as well as our ability to reduce our costs in response to lower sales . we generally experience higher volumes of vehicle sales and service in the second and third calendar quarters of each year . this seasonality is generally attributable to consumer buying trends and the timing of manufacturer new vehicle model introductions . in addition , in some regions of the u.s. , vehicle purchases decline during the winter months due to inclement weather . as a result , our revenues and operating income are typically lower in the first and fourth quarters and higher in the second and third quarters . other factors unrelated to seasonality , such as changes in economic condition and manufacturer incentive programs , may exaggerate seasonal or cause counter-seasonal fluctuations in our revenues and operating income . according to industry experts , the annual new unit sales for 2012 increased 1.7 million units , or 13.3 % , to 14.5 million units , compared to 12.8 million units in 2011 . for the year ended december 31 , 2012 , our total revenues increased 23.0 % from 2011 to $ 7.5 billion and gross profit improved 16.3 % to $ 1.1 billion . for the years ended december 31 , 2011 and 2010 , total revenues were $ 6.1 billion and $ 5.5 billion , respectively . for the years ended december 31 , 2011 and 2010 , gross profits were $ 960.6 million and 877.0 million , respectively . for the year ended december 31 , 2012 , we realized net income of $ 100.2 million , or $ 4.19 per diluted common share , and for the years ended december 31 , 2011 and 2010 , we realized net income of $ 82.4 million , or $ 3.47 per diluted share , and $ 50.3 million , or $ 2.09 per diluted share , respectively . in addition to the matters described above , the following factors impacted our financial condition and results of operations in 2012 , 2011 , and 2010 : 31 year ended december 31 , 2012 : asset impairments : we determined that the fair value of indefinite-lived intangible franchise rights related to three of our franchises did not exceed their carrying value and an impairment charge was required . accordingly , we recorded a $ 7.0 million pretax non-cash impairment charge during the fourth quarter of 2012. we also recognized a total of $ 0.3 million in pretax non-cash asset impairment charges related to impairment of various long-lived assets . non-cash interest expense : our 2012 results were negatively impacted by $ 9.9 million of non-cash interest expense relative to the amortization of the discount associated with our 2.25 % notes and 3.00 % notes representing the impact of the accounting for convertible debt as required by financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) 470 , debt ( “ asc 470 ” ) . year ended december 31 , 2011 : asset impairments : we recognized a total of $ 4.8 million in pretax non-cash asset impairment charges , primarily related to the impairment of held-for-sale assets of $ 3.2 million and other various long-lived assets of $ 1.6 million . story_separator_special_tag in addition , we receive fees from the sale of insurance and vehicle service contracts to customers . further , through agreements with certain vehicle service contract administrators , we earn volume incentive rebates and interest income on reserves , as well as participate in the underwriting profits of the products . we may be charged back for unearned financing , insurance contract or vehicle service contract fees in the event of early termination of the contracts by customers . revenues from these fees are recorded at 35 the time of the sale of the vehicles and a reserve for future amounts which might be charged back is established based on our historical chargeback results and the termination provisions of the applicable contracts . while chargeback results vary depending on the type of contract sold , a 10 % change in the historical chargeback results used in determining estimates of future amounts which might be charged back would have changed the reserve at december 31 , 2012 , by $ 2.2 million . self-insured property and casualty reserves . we purchase insurance policies for worker 's compensation , liability , auto physical damage , property , pollution , employee medical benefits and other risks consisting of large deductibles and or self-insured retentions . annually we engage a third-party actuary to conduct a study of the exposures under the self-insured portion of our worker 's compensation and general liability insurance programs for all open policy years . in the interim , we review the estimates within the study and monitor actual experience for unusual variances . the appropriate adjustments are made to the accrual , based upon these procedures . actuarial estimates for the portion of claims not covered by insurance are based on historical claims experience adjusted for loss trending and loss development factors . changes in the frequency or severity of claims from historical levels could influence our reserve for claims and our financial position , results of operations and cash flows . a 10 % change in the actuarially determined estimate of aggregate future losses would have changed the reserve for these losses at december 31 , 2012 , by $ 2.7 million . our auto physical damage insurance coverage contains an annual aggregate retention ( stop loss ) limit . for policy years ended prior to october 31 , 2005 , our workers ' compensation and general liability insurance coverage included aggregate retention ( stop loss ) limits in addition to a per claim deductible limit ( “ stop loss plans ” ) . due to historical experience in both claims frequency and severity , the likelihood of breaching the aggregate retention limits described above was deemed remote , and as such , we elected not to purchase this stop loss coverage for the policy year beginning november 1 , 2005 and for each subsequent year ( “ no stop loss plans ” ) . our exposure per claim under the no stop loss plans is limited to $ 1.0 million per occurrence , with unlimited exposure on the number of claims up to $ 1.0 million that we may incur . our maximum potential exposure under all of the stop loss plans totaled $ 40.4 million at december 31 , 2012 , before consideration of amounts previously paid or accruals recorded related to our loss projections . after consideration of the amounts paid or accrued , the remaining potential loss exposure under the stop loss plans totaled $ 16.7 million at december 31 , 2012 . fair value of assets acquired and liabilities assumed . the values of assets acquired and liabilities assumed in business combinations are estimated using various assumptions . the most significant assumptions , and those requiring the most judgment , involve the estimated fair values of property and equipment and intangible franchise rights , with the remaining attributable to goodwill , if any . we utilize third-party experts to determine the fair values of property and equipment purchased and our fair value model to determine the fair value of our franchise rights . derivative financial instruments . one of our primary market risk exposures is increasing interest rates . interest rate derivatives are used to adjust interest rate exposures when appropriate based on market conditions . we follow the requirements of guidance primarily codified within asc 815 , derivatives and hedging ( “ asc 815 ” ) pertaining to the accounting for derivatives and hedging activities . asc 815 requires us to recognize all derivative instruments on our consolidated balance sheet at fair value . the related gains or losses on these transactions are deferred in stockholders ' equity as a component of accumulated other comprehensive loss . these deferred gains and losses are recognized in income in the period in which the related items being hedged are recognized in interest expense . however , to the extent that the change in value of a derivative contract does not perfectly offset the change in the value of the items being hedged , that ineffective portion is immediately recognized in interest expense . all of our interest rate hedges were designated as cash flow hedges and were deemed to be effective at december 31 , 2012 , 2011 , and 2010 . we measure interest rate derivative instruments utilizing an income approach valuation technique , converting future amounts of cash flows to a single present value in order to obtain a transfer exit price within the bid and ask spread that is most representative of the fair value of our derivative instruments . in measuring fair value , the option-pricing black-scholes present value technique is utilized for all of our derivative instruments . this option-pricing technique utilizes a one-month london interbank offered rate ( “ libor ” ) forward yield curve , obtained from an independent external service provider , matched to the identical maturity term of the instrument being measured . observable inputs utilized in the income approach valuation technique incorporate identical

real estate related debt . we have entered into separate term mortgage loans with four of our manufacturer-affiliated finance partners and several third party financial institutions ( collectively , “ real estate notes ” ) . the real estate notes may be expanded for borrowings related to specific buildings and or properties and are guaranteed by us . each loan was made in connection with , and is secured by mortgage liens , on the relevant real property owned by us that is mortgaged under the real estate notes . the real estate notes bear interest at fixed rates between 3.67 % and 9.0 % , and at variable indexed rates plus between 2.25 % and 3.35 % per annum . as of december 31 , 2012 , the aggregate outstanding balance under these real estate notes was $ 244.7 million . purchase of convertible note hedge . in connection with the issuance of the 3.00 % notes during 2010 , we purchased ten-year call options on our common stock ( “ 3.00 % purchased options ” ) . the total cost of the 3.00 % purchased options was $ 45.9 million . the future income-tax deductions relating to the cost of the 3.00 % purchased options will result in a tax benefit of approximately $ 17.2 million . the 3.00 % purchased options have the economic benefit of decreasing the dilutive effect of the 3.00 % notes . under the terms of the 3.00 % purchased options , which become exercisable upon conversion of the 3.00 % notes , we have the right to receive a total of 3.1 million shares of our common stock at the conversion price then in effect . the exercise price is subject to certain adjustments that mirror the adjustments to the conversion price of the 3.00 % notes ( including payment of cash dividends ) . as of december 31 , 2012 , the conversion price was $ 37.67 . in addition to the purchase of the 3.00 % purchased options , we sold warrants in separate transactions ( “ 3.00 % warrants ” ) .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```real estate related debt . we have entered into separate term mortgage loans with four of our manufacturer-affiliated finance partners and several third party financial institutions ( collectively , “ real estate notes ” ) . the real estate notes may be expanded for borrowings related to specific buildings and or properties and are guaranteed by us . each loan was made in connection with , and is secured by mortgage liens , on the relevant real property owned by us that is mortgaged under the real estate notes . the real estate notes bear interest at fixed rates between 3.67 % and 9.0 % , and at variable indexed rates plus between 2.25 % and 3.35 % per annum . as of december 31 , 2012 , the aggregate outstanding balance under these real estate notes was $ 244.7 million . purchase of convertible note hedge . in connection with the issuance of the 3.00 % notes during 2010 , we purchased ten-year call options on our common stock ( “ 3.00 % purchased options ” ) . the total cost of the 3.00 % purchased options was $ 45.9 million . the future income-tax deductions relating to the cost of the 3.00 % purchased options will result in a tax benefit of approximately $ 17.2 million . the 3.00 % purchased options have the economic benefit of decreasing the dilutive effect of the 3.00 % notes . under the terms of the 3.00 % purchased options , which become exercisable upon conversion of the 3.00 % notes , we have the right to receive a total of 3.1 million shares of our common stock at the conversion price then in effect . the exercise price is subject to certain adjustments that mirror the adjustments to the conversion price of the 3.00 % notes ( including payment of cash dividends ) . as of december 31 , 2012 , the conversion price was $ 37.67 . in addition to the purchase of the 3.00 % purchased options , we sold warrants in separate transactions ( “ 3.00 % warrants ” ) .
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 Suspicious Activity Report : from january 1 , 2008 , through december 31 , 2012 , we have purchased 41 franchises with expected annual revenues at the time of acquisition of $ 1.6 billion and been granted nine new franchises by our manufacturers , with expected annual revenues at the time of acquisition of $ 119.7 million . in 2012 alone , we acquired one domestic , eight import , and seven luxury franchises with expected annual revenues at the time of acquisition of $ 715.0 million . we make disposition decisions based principally on the rate of return on our capital investment , the location of the dealership , our ability to leverage our cost structure , the brand , and existing real estate obligations . from january 1 , 2008 through december 31 , 2012 , we disposed of or terminated 41 franchises with annual revenues of approximately $ 503.6 million . specifically , during 2012 , we disposed of three luxury and three import franchises with annual revenues of approximately $ 127.9 million . in the following discussion and analysis , we report certain performance measures of our newly acquired and disposed dealerships separately from those of our existing dealerships . our operating results reflect the combined performance of each of our interrelated business activities , which include the sale of new vehicles , used vehicles , finance and insurance products , and parts , as well as service and collision repair services . historically , each of these activities has been directly or indirectly impacted by a variety of supply/demand factors , including vehicle inventories , consumer confidence , consumer discretionary spending , availability and affordability of consumer credit , manufacturer incentives , weather patterns , fuel prices , and interest rates . for example , during periods of sustained economic downturn or significant supply/demand imbalances , new vehicle sales may be negatively impacted as consumers tend to shift their purchases to used vehicles . some consumers may even delay their purchasing decisions altogether , electing instead to repair their existing vehicles . in such cases , however , we believe the new vehicle sales impact on our overall business is mitigated by our ability to offer other products and services , such as used vehicles and parts , service and collision repair services , as well as our ability to reduce our costs in response to lower sales . we generally experience higher volumes of vehicle sales and service in the second and third calendar quarters of each year . this seasonality is generally attributable to consumer buying trends and the timing of manufacturer new vehicle model introductions . in addition , in some regions of the u.s. , vehicle purchases decline during the winter months due to inclement weather . as a result , our revenues and operating income are typically lower in the first and fourth quarters and higher in the second and third quarters . other factors unrelated to seasonality , such as changes in economic condition and manufacturer incentive programs , may exaggerate seasonal or cause counter-seasonal fluctuations in our revenues and operating income . according to industry experts , the annual new unit sales for 2012 increased 1.7 million units , or 13.3 % , to 14.5 million units , compared to 12.8 million units in 2011 . for the year ended december 31 , 2012 , our total revenues increased 23.0 % from 2011 to $ 7.5 billion and gross profit improved 16.3 % to $ 1.1 billion . for the years ended december 31 , 2011 and 2010 , total revenues were $ 6.1 billion and $ 5.5 billion , respectively . for the years ended december 31 , 2011 and 2010 , gross profits were $ 960.6 million and 877.0 million , respectively . for the year ended december 31 , 2012 , we realized net income of $ 100.2 million , or $ 4.19 per diluted common share , and for the years ended december 31 , 2011 and 2010 , we realized net income of $ 82.4 million , or $ 3.47 per diluted share , and $ 50.3 million , or $ 2.09 per diluted share , respectively . in addition to the matters described above , the following factors impacted our financial condition and results of operations in 2012 , 2011 , and 2010 : 31 year ended december 31 , 2012 : asset impairments : we determined that the fair value of indefinite-lived intangible franchise rights related to three of our franchises did not exceed their carrying value and an impairment charge was required . accordingly , we recorded a $ 7.0 million pretax non-cash impairment charge during the fourth quarter of 2012. we also recognized a total of $ 0.3 million in pretax non-cash asset impairment charges related to impairment of various long-lived assets . non-cash interest expense : our 2012 results were negatively impacted by $ 9.9 million of non-cash interest expense relative to the amortization of the discount associated with our 2.25 % notes and 3.00 % notes representing the impact of the accounting for convertible debt as required by financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) 470 , debt ( “ asc 470 ” ) . year ended december 31 , 2011 : asset impairments : we recognized a total of $ 4.8 million in pretax non-cash asset impairment charges , primarily related to the impairment of held-for-sale assets of $ 3.2 million and other various long-lived assets of $ 1.6 million . story_separator_special_tag in addition , we receive fees from the sale of insurance and vehicle service contracts to customers . further , through agreements with certain vehicle service contract administrators , we earn volume incentive rebates and interest income on reserves , as well as participate in the underwriting profits of the products . we may be charged back for unearned financing , insurance contract or vehicle service contract fees in the event of early termination of the contracts by customers . revenues from these fees are recorded at 35 the time of the sale of the vehicles and a reserve for future amounts which might be charged back is established based on our historical chargeback results and the termination provisions of the applicable contracts . while chargeback results vary depending on the type of contract sold , a 10 % change in the historical chargeback results used in determining estimates of future amounts which might be charged back would have changed the reserve at december 31 , 2012 , by $ 2.2 million . self-insured property and casualty reserves . we purchase insurance policies for worker 's compensation , liability , auto physical damage , property , pollution , employee medical benefits and other risks consisting of large deductibles and or self-insured retentions . annually we engage a third-party actuary to conduct a study of the exposures under the self-insured portion of our worker 's compensation and general liability insurance programs for all open policy years . in the interim , we review the estimates within the study and monitor actual experience for unusual variances . the appropriate adjustments are made to the accrual , based upon these procedures . actuarial estimates for the portion of claims not covered by insurance are based on historical claims experience adjusted for loss trending and loss development factors . changes in the frequency or severity of claims from historical levels could influence our reserve for claims and our financial position , results of operations and cash flows . a 10 % change in the actuarially determined estimate of aggregate future losses would have changed the reserve for these losses at december 31 , 2012 , by $ 2.7 million . our auto physical damage insurance coverage contains an annual aggregate retention ( stop loss ) limit . for policy years ended prior to october 31 , 2005 , our workers ' compensation and general liability insurance coverage included aggregate retention ( stop loss ) limits in addition to a per claim deductible limit ( “ stop loss plans ” ) . due to historical experience in both claims frequency and severity , the likelihood of breaching the aggregate retention limits described above was deemed remote , and as such , we elected not to purchase this stop loss coverage for the policy year beginning november 1 , 2005 and for each subsequent year ( “ no stop loss plans ” ) . our exposure per claim under the no stop loss plans is limited to $ 1.0 million per occurrence , with unlimited exposure on the number of claims up to $ 1.0 million that we may incur . our maximum potential exposure under all of the stop loss plans totaled $ 40.4 million at december 31 , 2012 , before consideration of amounts previously paid or accruals recorded related to our loss projections . after consideration of the amounts paid or accrued , the remaining potential loss exposure under the stop loss plans totaled $ 16.7 million at december 31 , 2012 . fair value of assets acquired and liabilities assumed . the values of assets acquired and liabilities assumed in business combinations are estimated using various assumptions . the most significant assumptions , and those requiring the most judgment , involve the estimated fair values of property and equipment and intangible franchise rights , with the remaining attributable to goodwill , if any . we utilize third-party experts to determine the fair values of property and equipment purchased and our fair value model to determine the fair value of our franchise rights . derivative financial instruments . one of our primary market risk exposures is increasing interest rates . interest rate derivatives are used to adjust interest rate exposures when appropriate based on market conditions . we follow the requirements of guidance primarily codified within asc 815 , derivatives and hedging ( “ asc 815 ” ) pertaining to the accounting for derivatives and hedging activities . asc 815 requires us to recognize all derivative instruments on our consolidated balance sheet at fair value . the related gains or losses on these transactions are deferred in stockholders ' equity as a component of accumulated other comprehensive loss . these deferred gains and losses are recognized in income in the period in which the related items being hedged are recognized in interest expense . however , to the extent that the change in value of a derivative contract does not perfectly offset the change in the value of the items being hedged , that ineffective portion is immediately recognized in interest expense . all of our interest rate hedges were designated as cash flow hedges and were deemed to be effective at december 31 , 2012 , 2011 , and 2010 . we measure interest rate derivative instruments utilizing an income approach valuation technique , converting future amounts of cash flows to a single present value in order to obtain a transfer exit price within the bid and ask spread that is most representative of the fair value of our derivative instruments . in measuring fair value , the option-pricing black-scholes present value technique is utilized for all of our derivative instruments . this option-pricing technique utilizes a one-month london interbank offered rate ( “ libor ” ) forward yield curve , obtained from an independent external service provider , matched to the identical maturity term of the instrument being measured . observable inputs utilized in the income approach valuation technique incorporate identical

