our average number of selling communities increased by 3.4 communities from 2.0 for the year ended december 31 , 2011 to 5.4 for the year ended december 31 , 2012. the increase was due to our opening seven new selling communities for the year ended december 31 , 2012 , offset by final net new home orders at two selling communities . the increase in net new home orders positively impacted our number of homes in backlog , which is discussed below . we expect that our net new home orders and backlog increases will have a positive impact on revenues and cash flow in future periods . backlog reflects the number of homes , net of actual cancellations experienced during the period , for which we have entered into a sales contract with a customer but for which we have not yet delivered the home . homes in backlog are generally closed within three to six months , although we may experience cancellations of sales contracts prior to closing . the increase in backlog units of 60 homes was driven by the 386 % increase in net new home orders during the year ended december 31 , 2012 as compared to the previous year . the dollar value of backlog increased $ 29.9 million , or 890 % , as of december 31 , 2012 from $ 3.4 million as of december 31 , 2011. the increase in dollar amount of backlog reflects an increase in the number of homes in backlog of 60 , or 750 % , to 68 homes as of december 31 , 2012 from 8 homes as of december 31 , 2011 and an increase in the average sales price of homes in backlog . we experienced an increase in the average sales price of homes in backlog of $ 69,000 , or 16 % , to $ 490,000 as of december 31 , 2012 compared to $ 421,000 as of december 31 , 2011 due to the introduction of new product at seven new communities with a shift to larger square footage homes with corresponding higher average sales prices in the 2012 period , including one move-up product . the increase in the dollar amount of backlog of homes sold but not closed as described above generally results in an increase in operating revenues in subsequent periods . home sales revenue and new homes delivered replace_table_token_7_th - 39 - new home deliveries increased 108 , or 300 % , to 144 during the year ended december 31 , 2012 from 36 during the prior year . the increase in new home deliveries was primarily attributable to the increase in net new home orders and units in backlog due to the increase in the average number of selling communities . home sales revenue increased $ 64.0 million , or 473 % , to $ 77.5 million for the year ended december 31 , 2012 from $ 13.5 million for the prior year . the increase was primarily attributable to : ( 1 ) an increase in revenue of $ 46.5 million due to a 300 % increase in homes closed to 144 for the year ended december 31 , 2012 from 36 for the prior year , and ( 2 ) an increase in revenues of $ 17.5 million related to an increase in average sales price of $ 162,000 per unit to $ 538,000 for the year ended december 31 , 2012 from $ 376,000 for the prior year . the increase in the average sales price of homes delivered was attributable to a change in product mix from the deliveries at five new communities for the year ended december 31 , 2012. homebuilding replace_table_token_8_th ( 1 ) non-gaap financial measure ( as discussed below ) . homebuilding gross margin represents home sales revenue less cost of home sales . cost of home sales increased $ 51.6 million , or 427 % , to $ 63.7 million for the year ended december 31 , 2012 from $ 12.1 million for the prior year . the increase was primarily due to a 300 % increase in the number of homes delivered and the product mix of homes delivered from new communities in 2012. our homebuilding gross margin percentage increased to 17.8 % for the year ended december 31 , 2012 as compared to 10.7 % for the prior year , primarily due to the delivery unit mix from our new communities , including the first deliveries in our northern california projects which are generating higher gross margins . excluding interest in cost of home sales , adjusted homebuilding gross margin percentage was 18.9 % for the year ended december 31 , 2012 , compared to 12.7 % for the prior year . adjusted homebuilding gross margin is a non-gaap financial measure . we believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors , who adjust gross margins in a similar fashion . see the table above reconciling this non-gaap financial measure to homebuilding gross margin , the nearest gaap equivalent . fee building replace_table_token_9_th - 40 - as of december 31 , 2012 , we had entered into two construction management agreements to build 83 homes in moorpark , california and 73 homes in carpinteria , california . in addition , we completed one fee building project in irvine , california , whereby all homes were completed and delivered to the third-party property owner , leaving three active model homes remaining unsold and scheduled to be delivered in 2013. fee building revenue , which was all recorded in southern california , decreased $ 4.7 million , or 82 % , to $ 1.1 million for the year ended december 31 , 2012 from $ 5.8 million for the prior year . story_separator_special_tag the change in the focus of our business from fee building to primarily building and selling homes for our own account . - 47 - selling , general and administrative expense replace_table_token_21_th sales and marketing expense increased $ 1.5 million , or 1,042 % , to $ 1.6 million for the year ended december 31 , 2011 from $ 0.1 million for the period from january 1 , 2010 through september 23 , 2010. the increase in sales and marketing expense was primarily attributable to 36 homes delivered for the year ended december 31 , 2011 and the twelve months of model operations for two communities for the full year 2011 as compared to no home deliveries and four months of model operations for one community for the period from january 1 , 2010 through september 23 , 2010. sales and marketing expense was 11.5 % of overall home sales revenue for the year ended december 31 , 2011 with no comparative data for the period from january 1 , 2010 through september 23 , 2010 due to no home sales revenue . general and administrative expenses increased $ 3.2 million , or 230 % , to $ 4.6 million for the year ended december 31 , 2011 from $ 1.4 million for the period from january 1 , 2010 through september 23 , 2010 primarily attributable to our growth in employees and operations for the full year 2011 as compared to the period from january 1 , 2010 through september 23 , 2010. our general and administrative expense as a percentage of home sales revenue was 34.2 % with no comparative data for the period from january 1 , 2010 through september 23 , 2010 due to no home sales revenue . other expense , net other expense , net , decreased $ 23,000 , or 53 % , to $ 20,000 for the year ended december 31 , 2011 from $ 43,000 for the period from january 1 , 2010 through september 23 , 2010. the decrease was primarily due to an increase in other income of $ 123,000 related to national contract rebates collected from closed projects and $ 11,000 of interest income , offset by an increase in other expense of $ 118,000 related to the increase in dead deal costs for the year ended december 31 , 2011 as compared to the period from january 1 , 2010 through september 23 , 2010. net income ( loss ) as a result of the foregoing factors , net loss for the year ended december 31 , 2011 was $ ( 4.6 ) million compared to net income for the period from january 1 , 2010 through september 23 , 2010 of $ 1.1 million . - 48 - lots owned and controlled the table below summarizes our lots owned and controlled as of the dates presented : replace_table_token_22_th ( 1 ) includes lots under an option contract or under non-binding letters of intent . story_separator_special_tag $ 93.5 million , of which $ 50.5 million was outstanding . the acquisition and development loans will be repaid as lots are released from the loans based upon a specific release price , as defined in each respective loan agreement . our construction loans will be repaid with proceeds from home sales based upon a specific release price , as defined in each respective loan agreement . these loans range in maturity between august 2013 and february 2015 , including the six month extensions which are at our election ( subject to certain conditions ) . interest on the loans is paid monthly at a rate based on libor or prime rate pricing , with interest rate floors ranging between 4.0 % and 6.0 % . covenant compliance under our secured revolving credit facility , our acquisition and development loans and our construction loans , we are required to comply with certain financial covenants , including but not limited to those set forth in the table below : replace_table_token_23_th ( 1 ) liquidity is defined as cash on hand plus availability under our secured revolving credit facility . as of december 31 , 2012 and 2011 , we were in compliance with all of these financial covenants . we believe that our leverage ratios provide useful information to the users of our financial statements regarding our financial position and cash and debt management . the ratio of debt-to-capital and the ratio of net debt-to-capital are calculated as follows ( dollars in thousands ) : replace_table_token_24_th ( 1 ) the ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of total debt plus members ' equity . - 51 - ( 2 ) the ratio of net debt-to-capital is computed as the quotient obtained by dividing net debt ( which is debt less cash and cash equivalents ) by the sum of net debt plus members ' equity . the most directly comparable gaap financial measure is the ratio of debt-to-capital . we believe the ratio of net debt-to-capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing . see the table above reconciling this non-gaap financial measure to the ratio of debt-to-capital . cash flowsyear ended december 31 , 2012 to year ended december 31 , 2011 for the year ended december 31 , 2012 as compared to the year ended december 31 , 2011 , the comparison of cash flows is as follows : net cash used in operating activities increased to $ 104.2 million in 2012 from a use of $ 66.4 million in 2011. the change was primarily a result of ( i ) an increase in real estate inventories of $ 112.1 million in 2012 compared to an increase of $ 67.9 million in 2011 , primarily driven by the increase in land , land development and homes under construction , offset by the

liquidity and capital resources overview our principal uses of capital for the year ended december 31 , 2012 were operating expenses , land purchases , land development , home construction and the payment of routine liabilities . we used funds generated by operations and available borrowings to meet our short-term working capital requirements . we remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and keep us poised for growth . cash flows for each of our communities depend on their stage in the development cycle , and can differ substantially from reported earnings . early stages of development or expansion require significant cash outlays for land acquisitions , entitlements and other approvals , and construction of model homes , roads , utilities , general landscaping and other amenities . because these costs are a component of our inventory and not recognized in our statement of operations until a home closes , we incur significant cash outlays prior to our recognition of earnings . in the later stages of community development , cash inflows may significantly exceed earnings reported for financial statement purposes , as the cash outflow associated with home and land construction was previously incurred . from a liquidity standpoint , we are currently actively acquiring and developing lots in our markets to maintain and grow our lot supply and active selling communities that are strategically located in core markets ,  which are in major job centers or on transportation corridors to those job centers . we are also using our cash on hand to fund expansion into colorado . as demand for new homes improves and we continue to expand our business , we expect that cash outlays for land purchases and land development to grow our lot inventory will exceed our cash generated by operations . the opportunity to purchase substantially finished lots in desired locations is becoming increasingly more limited and competitive .


 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.
     ```liquidity and capital resources overview our principal uses of capital for the year ended december 31 , 2012 were operating expenses , land purchases , land development , home construction and the payment of routine liabilities . we used funds generated by operations and available borrowings to meet our short-term working capital requirements . we remain focused on generating positive margins in our homebuilding operations and acquiring desirable land positions in order to maintain a strong balance sheet and keep us poised for growth . cash flows for each of our communities depend on their stage in the development cycle , and can differ substantially from reported earnings . early stages of development or expansion require significant cash outlays for land acquisitions , entitlements and other approvals , and construction of model homes , roads , utilities , general landscaping and other amenities . because these costs are a component of our inventory and not recognized in our statement of operations until a home closes , we incur significant cash outlays prior to our recognition of earnings . in the later stages of community development , cash inflows may significantly exceed earnings reported for financial statement purposes , as the cash outflow associated with home and land construction was previously incurred . from a liquidity standpoint , we are currently actively acquiring and developing lots in our markets to maintain and grow our lot supply and active selling communities that are strategically located in core markets ,  which are in major job centers or on transportation corridors to those job centers . we are also using our cash on hand to fund expansion into colorado . as demand for new homes improves and we continue to expand our business , we expect that cash outlays for land purchases and land development to grow our lot inventory will exceed our cash generated by operations . the opportunity to purchase substantially finished lots in desired locations is becoming increasingly more limited and competitive .
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 Suspicious Activity Report : our average number of selling communities increased by 3.4 communities from 2.0 for the year ended december 31 , 2011 to 5.4 for the year ended december 31 , 2012. the increase was due to our opening seven new selling communities for the year ended december 31 , 2012 , offset by final net new home orders at two selling communities . the increase in net new home orders positively impacted our number of homes in backlog , which is discussed below . we expect that our net new home orders and backlog increases will have a positive impact on revenues and cash flow in future periods . backlog reflects the number of homes , net of actual cancellations experienced during the period , for which we have entered into a sales contract with a customer but for which we have not yet delivered the home . homes in backlog are generally closed within three to six months , although we may experience cancellations of sales contracts prior to closing . the increase in backlog units of 60 homes was driven by the 386 % increase in net new home orders during the year ended december 31 , 2012 as compared to the previous year . the dollar value of backlog increased $ 29.9 million , or 890 % , as of december 31 , 2012 from $ 3.4 million as of december 31 , 2011. the increase in dollar amount of backlog reflects an increase in the number of homes in backlog of 60 , or 750 % , to 68 homes as of december 31 , 2012 from 8 homes as of december 31 , 2011 and an increase in the average sales price of homes in backlog . we experienced an increase in the average sales price of homes in backlog of $ 69,000 , or 16 % , to $ 490,000 as of december 31 , 2012 compared to $ 421,000 as of december 31 , 2011 due to the introduction of new product at seven new communities with a shift to larger square footage homes with corresponding higher average sales prices in the 2012 period , including one move-up product . the increase in the dollar amount of backlog of homes sold but not closed as described above generally results in an increase in operating revenues in subsequent periods . home sales revenue and new homes delivered replace_table_token_7_th - 39 - new home deliveries increased 108 , or 300 % , to 144 during the year ended december 31 , 2012 from 36 during the prior year . the increase in new home deliveries was primarily attributable to the increase in net new home orders and units in backlog due to the increase in the average number of selling communities . home sales revenue increased $ 64.0 million , or 473 % , to $ 77.5 million for the year ended december 31 , 2012 from $ 13.5 million for the prior year . the increase was primarily attributable to : ( 1 ) an increase in revenue of $ 46.5 million due to a 300 % increase in homes closed to 144 for the year ended december 31 , 2012 from 36 for the prior year , and ( 2 ) an increase in revenues of $ 17.5 million related to an increase in average sales price of $ 162,000 per unit to $ 538,000 for the year ended december 31 , 2012 from $ 376,000 for the prior year . the increase in the average sales price of homes delivered was attributable to a change in product mix from the deliveries at five new communities for the year ended december 31 , 2012. homebuilding replace_table_token_8_th ( 1 ) non-gaap financial measure ( as discussed below ) . homebuilding gross margin represents home sales revenue less cost of home sales . cost of home sales increased $ 51.6 million , or 427 % , to $ 63.7 million for the year ended december 31 , 2012 from $ 12.1 million for the prior year . the increase was primarily due to a 300 % increase in the number of homes delivered and the product mix of homes delivered from new communities in 2012. our homebuilding gross margin percentage increased to 17.8 % for the year ended december 31 , 2012 as compared to 10.7 % for the prior year , primarily due to the delivery unit mix from our new communities , including the first deliveries in our northern california projects which are generating higher gross margins . excluding interest in cost of home sales , adjusted homebuilding gross margin percentage was 18.9 % for the year ended december 31 , 2012 , compared to 12.7 % for the prior year . adjusted homebuilding gross margin is a non-gaap financial measure . we believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors , who adjust gross margins in a similar fashion . see the table above reconciling this non-gaap financial measure to homebuilding gross margin , the nearest gaap equivalent . fee building replace_table_token_9_th - 40 - as of december 31 , 2012 , we had entered into two construction management agreements to build 83 homes in moorpark , california and 73 homes in carpinteria , california . in addition , we completed one fee building project in irvine , california , whereby all homes were completed and delivered to the third-party property owner , leaving three active model homes remaining unsold and scheduled to be delivered in 2013. fee building revenue , which was all recorded in southern california , decreased $ 4.7 million , or 82 % , to $ 1.1 million for the year ended december 31 , 2012 from $ 5.8 million for the prior year . story_separator_special_tag the change in the focus of our business from fee building to primarily building and selling homes for our own account . - 47 - selling , general and administrative expense replace_table_token_21_th sales and marketing expense increased $ 1.5 million , or 1,042 % , to $ 1.6 million for the year ended december 31 , 2011 from $ 0.1 million for the period from january 1 , 2010 through september 23 , 2010. the increase in sales and marketing expense was primarily attributable to 36 homes delivered for the year ended december 31 , 2011 and the twelve months of model operations for two communities for the full year 2011 as compared to no home deliveries and four months of model operations for one community for the period from january 1 , 2010 through september 23 , 2010. sales and marketing expense was 11.5 % of overall home sales revenue for the year ended december 31 , 2011 with no comparative data for the period from january 1 , 2010 through september 23 , 2010 due to no home sales revenue . general and administrative expenses increased $ 3.2 million , or 230 % , to $ 4.6 million for the year ended december 31 , 2011 from $ 1.4 million for the period from january 1 , 2010 through september 23 , 2010 primarily attributable to our growth in employees and operations for the full year 2011 as compared to the period from january 1 , 2010 through september 23 , 2010. our general and administrative expense as a percentage of home sales revenue was 34.2 % with no comparative data for the period from january 1 , 2010 through september 23 , 2010 due to no home sales revenue . other expense , net other expense , net , decreased $ 23,000 , or 53 % , to $ 20,000 for the year ended december 31 , 2011 from $ 43,000 for the period from january 1 , 2010 through september 23 , 2010. the decrease was primarily due to an increase in other income of $ 123,000 related to national contract rebates collected from closed projects and $ 11,000 of interest income , offset by an increase in other expense of $ 118,000 related to the increase in dead deal costs for the year ended december 31 , 2011 as compared to the period from january 1 , 2010 through september 23 , 2010. net income ( loss ) as a result of the foregoing factors , net loss for the year ended december 31 , 2011 was $ ( 4.6 ) million compared to net income for the period from january 1 , 2010 through september 23 , 2010 of $ 1.1 million . - 48 - lots owned and controlled the table below summarizes our lots owned and controlled as of the dates presented : replace_table_token_22_th ( 1 ) includes lots under an option contract or under non-binding letters of intent . story_separator_special_tag $ 93.5 million , of which $ 50.5 million was outstanding . the acquisition and development loans will be repaid as lots are released from the loans based upon a specific release price , as defined in each respective loan agreement . our construction loans will be repaid with proceeds from home sales based upon a specific release price , as defined in each respective loan agreement . these loans range in maturity between august 2013 and february 2015 , including the six month extensions which are at our election ( subject to certain conditions ) . interest on the loans is paid monthly at a rate based on libor or prime rate pricing , with interest rate floors ranging between 4.0 % and 6.0 % . covenant compliance under our secured revolving credit facility , our acquisition and development loans and our construction loans , we are required to comply with certain financial covenants , including but not limited to those set forth in the table below : replace_table_token_23_th ( 1 ) liquidity is defined as cash on hand plus availability under our secured revolving credit facility . as of december 31 , 2012 and 2011 , we were in compliance with all of these financial covenants . we believe that our leverage ratios provide useful information to the users of our financial statements regarding our financial position and cash and debt management . the ratio of debt-to-capital and the ratio of net debt-to-capital are calculated as follows ( dollars in thousands ) : replace_table_token_24_th ( 1 ) the ratio of debt-to-capital is computed as the quotient obtained by dividing debt by the sum of total debt plus members ' equity . - 51 - ( 2 ) the ratio of net debt-to-capital is computed as the quotient obtained by dividing net debt ( which is debt less cash and cash equivalents ) by the sum of net debt plus members ' equity . the most directly comparable gaap financial measure is the ratio of debt-to-capital . we believe the ratio of net debt-to-capital is a relevant financial measure for investors to understand the leverage employed in our operations and as an indicator of our ability to obtain financing . see the table above reconciling this non-gaap financial measure to the ratio of debt-to-capital . cash flowsyear ended december 31 , 2012 to year ended december 31 , 2011 for the year ended december 31 , 2012 as compared to the year ended december 31 , 2011 , the comparison of cash flows is as follows : net cash used in operating activities increased to $ 104.2 million in 2012 from a use of $ 66.4 million in 2011. the change was primarily a result of ( i ) an increase in real estate inventories of $ 112.1 million in 2012 compared to an increase of $ 67.9 million in 2011 , primarily driven by the increase in land , land development and homes under construction , offset by the

