we believe land supply provides us with the opportunity to increase community count prospectively . we also currently own or have an option to purchase the majority of the land on which we expect to close homes during 2015. during the next twelve months we expect to open communities in geographic markets in line with consumer demand . 39 our approach in allocating capital and managing our land portfolio has been to acquire assets that have attractive characteristics , including good access to schools , shopping , recreation and transportation facilities . in connection with our overall land inventory management process , our management team reviews these considerations , as well as other financial metrics , in order to decide the highest and best use of our capital . we intend to maintain a consistent approach to land positioning within our regions , markets and communities in the foreseeable future in an effort to concentrate a greater amount of our land inventory in areas that have the attractive characteristics referred to above . we also intend to continue to combine our land development expertise with our homebuilding operations to increase the flexibility of our business , to enhance our margin performance and to control the timing of delivery of lots . from time to time , we may sell land in our communities if we believe it is best for our overall operations . we do not expect such sales to have a significant effect on our overall results , but they may impact our overall gross margins . we will continue to identify the preferences of our customer and demographic groups and offer them innovative , high-quality homes that are efficient and profitable to build . to achieve this goal , we conduct market research to determine preferences of our customer groups . we will also seek to grow through selective acquisitions in both existing markets and new markets that exhibit positive long-term fundamentals . 2014 highlights key financial results as of and for the year ended december 31 , 2014 are as follows : u.s. community count increased 30 % to 206 average communities from 158 year-over-year net sales orders in the u.s. increased 14 % to 5,728 u.s. average monthly absorption pace was 2.3 compared to 2.6 in the prior year u.s. cancellations as a percentage of gross sales orders was 13.2 % compared to 14.3 % in the prior year home closings in our u.s. operations increased 20 % to 5,642 average prices of homes closed in the u.s. increased 18 % to $ 464,000 mortgage operations reported gross profit of $ 16 million on revenue of $ 35 million factors affecting comparability of results you should read this management 's discussion and analysis of our financial condition and results of operations in conjunction with our historical consolidated financial statements included elsewhere in this annual report . the primary factor that affects the comparability of our results operations is the disposal of our monarch business . for all periods presented , the results and assets and liabilities of monarch are included in discontinued operations . in addition to the impact of the matters discussed in the risk factors listed in item 1a of this annual report , our future results could differ materially from our historical results due to the disposition of our monarch business in early 2015 , our ipo in 2013 and the acquisition of darling in 2012. non-gaap measures in addition to the results reported in accordance with accounting principles generally accepted in the united states ( gaap ) , we have provided information in this annual report relating to adjusted home closings gross margins. adjusted home closings gross margins we calculate adjusted home closings gross margin from u.s. gaap gross margin by adding impairment charges , if any , attributable to the write-down of communities , and the amortization of capitalized interest through cost of home closings . we evaluate adjusted home closings gross margin , which is calculated by adding back to home closings gross 40 margin the capitalized interest amortization related to the homes closed . management uses adjusted home closings gross margin to evaluate our operational and economic performance on a consolidated basis as well as the operational and economic performance of our segments . we believe adjusted home closings gross margin is relevant and useful to investors for evaluating our overall financial performance . this measure is considered a non-gaap financial measure and should be considered in addition to , rather than as a substitute for , the comparable u.s. gaap financial measure as a measure of our operating performance . although other companies in the homebuilding industry report similar information , the methods used may differ . we urge investors to understand the methods used by other companies in the homebuilding industry to calculate gross margins and any adjustments to such amounts before comparing our measures to those of such other companies . critical accounting policies general the discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements , which have been prepared in accordance with u.s. gaap . the preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities , revenue and expenses , and related disclosures of contingent assets and liabilities at the date of our financial statements . actual results may differ from these estimates under different assumptions or conditions , impacting our reported results of operations and financial condition . certain accounting policies involve significant judgments and assumptions by management , which have a material impact on the carrying value of assets and liabilities and the recognition of income and expenses . the estimates and assumptions used by management are based on historical experience and other factors , which are believed to be reasonable under the circumstances . story_separator_special_tag sales order cancellationsunits replace_table_token_16_th ( 1 ) cancellation rate represents the number of cancelled sales orders divided by gross sales orders . we believe a favorable financing market , our use of prequalification criteria through tmhf and increased earnest money deposits help us maintain a low cancellation rate . our overall cancellation rate decreased from 2013 to 2014. the decrease in the cancellation rate from 2013 to 2014 was most notably related to higher deposit requirements year over year throughout our texas divisions , primarily in new communities and or new phases within existing communities . sales order backlog replace_table_token_17_th ( 1 ) sales order backlog represents homes under contract for which revenue has not yet been recognized at the end of the period ( including homes sold but not yet started ) . some of the contracts in our sales order backlog are subject to contingencies including mortgage loan approval and buyers selling their existing homes , which can result in cancellations . consolidated : backlog value and units increased as a result of an increase in average sales price and increase in net sales orders . east : in the east segment , backlog value increased as a result of price appreciation , maximizing lot premiums , controlled lot releases in certain communities and a product mix change to homes with a higher sales value . the east increase in backlog is consistent with our increases in homes sold and new community openings year over year . 46 west : backlog units and dollars decreased year over year due to a decline in sales pace . backlog in phoenix is down year over year due to a decline in sales pace from 2013 as a result of moderating growth . backlog in southern california decreased year over year due to an increase in average selling prices which have slower selling paces than lower priced product . home closings revenue replace_table_token_18_th ( 1 ) home closings revenue represents homes where possession has transferred to the buyer . consolidated : for the year ended december 31 , 2014 compared to 2013 , there was an increase in the number of homes closed , the sales value of homes closed and average selling price . east : the number of homes closed increased as a result of the increase in homes sold during the same period , which was partially attributable to the volume of new community openings . due to continued improvement throughout the east segment markets in 2014 , we were able to increase the average selling price of homes closed in the east segment by 11.7 % to $ 420,000 , resulting in an increase in sales value of homes closed of 37.4 % . this increase is a result of a combination of product mix and price appreciation . these market improvements , as well as favorable homebuyer reception of communities opened subsequent to december 31 , 2013 , contributed to closing revenue increases . in particular , homes closed in 2014 in our west florida , houston and dallas markets surpassed that in the prior year period by a significant amount , driving both units and dollars higher as consumer demand for move-up product benefited our communities in these markets . overall , the improvement in east segment home closings revenue and sales value has been due primarily to our well-located land positions , an increase in active selling communities and our consumer-driven offerings . management in the region continues to maximize sales prices where possible through market-driven product offerings as market conditions allow . west : the sales value of homes closed increased by 46.1 % , driven by an increase in average selling price . homes closed in 2014 in our northern and southern california markets surpassed those in the prior year period by a significant amount , driving both units and dollars higher as consumer demand for move-up product benefited our communities in these markets . in the segment as a whole , we were able to increase our average selling price of homes closed by 27.7 % , to $ 540,000 in the year ended december 31 , 2014 , driven primarily by a shift to more move up and higher priced product . we continue to optimize sales prices where possible through market-driven product offerings as market conditions allow . land closings revenue replace_table_token_19_th 47 since we generally do not purchase land for future sales , land and lot sales occur at various intervals and varying degrees of profitability depending on the need for such property in our business strategy . therefore , the revenue and gross margin from land closings will fluctuate from period to period . segment home closings gross margins the following table sets forth a reconciliation between our home closings segment gross margins and our corresponding segment adjusted home closings gross margins . see  non-gaap measures  adjusted home closings gross margins . replace_table_token_20_th consolidated : our consolidated 2014 adjusted home closings gross margin percentage , decreased slightly compared to 2013. product mix continues to impact margin , as an increase in sales in our california divisions generated significantly higher home closings gross margin dollars per home but lower margin rate . we are also experiencing higher land and development costs as we close homes related to legacy holdings . the legacy holdings have lower carrying costs and as a result home closings gross margin percentage is decreasing as those legacy holdings are at a reduced proportion of our overall mix . east : we experienced increases in home closings gross margin and adjusted home closings gross margin dollars and rates in our dallas , houston ( taylor morrison and darling ) , west florida and north florida markets . the recovery and stabilization of the west florida market has generated sustained customer demand in the tampa and ft. myers areas , which has allowed us to leverage a low cost basis land supply and home

loss on extinguishment of debt during 2012 , we prepaid $ 350.0 million of the sponsor loan with proceeds from the 2020 senior notes issued in april 2012. the remaining $ 150.0 million of the sponsor loan was exchanged for equity interests . the amount of the sponsor loan that was retired had been borrowed at a discount of 2.5 % and , consequently , the $ 7.9 million of unamortized portion of the discount was written off during 2012 to expense . see item 1  business  2011 acquisition by our principal equityholders of this annual report . on april 12 , 2013 , we used $ 204.3 million of the net proceeds of the ipo to redeem $ 189.6 million aggregate principal amount of 2020 senior notes ( at a purchase price equal to 103.875 % of their principal amount , plus accrued and unpaid interest of $ 7.3 million through the date of redemption ) . we wrote off $ 4.6 million of unamortized issuance costs , expensed $ 1.8 million of original issue premium and incurred a call premium of $ 7.3 million related to the redemption . these costs are included in the $ 10.1 million loss on extinguishment of debt in the accompanying consolidated statements of operations for the year ended december 31 , 2013 . 55 indemnification and transaction expense the predecessor parent company indemnified tmm holdings for specific uncertain tax positions existing as of the date of the acquisition . an indemnification receivable of $ 129.7 million was recorded at the time of the acquisition . the indemnification receivable included a periodic increase for accrued interest , penalties , and additional identified tax issues covered by the indemnity , offset by periodic decreases as uncertain tax matters and related tax obligations are resolved . the receivable due from the predecessor parent company for the indemnification was valued at the same amount as the estimated income tax liability .


 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.
     ```loss on extinguishment of debt during 2012 , we prepaid $ 350.0 million of the sponsor loan with proceeds from the 2020 senior notes issued in april 2012. the remaining $ 150.0 million of the sponsor loan was exchanged for equity interests . the amount of the sponsor loan that was retired had been borrowed at a discount of 2.5 % and , consequently , the $ 7.9 million of unamortized portion of the discount was written off during 2012 to expense . see item 1  business  2011 acquisition by our principal equityholders of this annual report . on april 12 , 2013 , we used $ 204.3 million of the net proceeds of the ipo to redeem $ 189.6 million aggregate principal amount of 2020 senior notes ( at a purchase price equal to 103.875 % of their principal amount , plus accrued and unpaid interest of $ 7.3 million through the date of redemption ) . we wrote off $ 4.6 million of unamortized issuance costs , expensed $ 1.8 million of original issue premium and incurred a call premium of $ 7.3 million related to the redemption . these costs are included in the $ 10.1 million loss on extinguishment of debt in the accompanying consolidated statements of operations for the year ended december 31 , 2013 . 55 indemnification and transaction expense the predecessor parent company indemnified tmm holdings for specific uncertain tax positions existing as of the date of the acquisition . an indemnification receivable of $ 129.7 million was recorded at the time of the acquisition . the indemnification receivable included a periodic increase for accrued interest , penalties , and additional identified tax issues covered by the indemnity , offset by periodic decreases as uncertain tax matters and related tax obligations are resolved . the receivable due from the predecessor parent company for the indemnification was valued at the same amount as the estimated income tax liability .
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 Suspicious Activity Report : we believe land supply provides us with the opportunity to increase community count prospectively . we also currently own or have an option to purchase the majority of the land on which we expect to close homes during 2015. during the next twelve months we expect to open communities in geographic markets in line with consumer demand . 39 our approach in allocating capital and managing our land portfolio has been to acquire assets that have attractive characteristics , including good access to schools , shopping , recreation and transportation facilities . in connection with our overall land inventory management process , our management team reviews these considerations , as well as other financial metrics , in order to decide the highest and best use of our capital . we intend to maintain a consistent approach to land positioning within our regions , markets and communities in the foreseeable future in an effort to concentrate a greater amount of our land inventory in areas that have the attractive characteristics referred to above . we also intend to continue to combine our land development expertise with our homebuilding operations to increase the flexibility of our business , to enhance our margin performance and to control the timing of delivery of lots . from time to time , we may sell land in our communities if we believe it is best for our overall operations . we do not expect such sales to have a significant effect on our overall results , but they may impact our overall gross margins . we will continue to identify the preferences of our customer and demographic groups and offer them innovative , high-quality homes that are efficient and profitable to build . to achieve this goal , we conduct market research to determine preferences of our customer groups . we will also seek to grow through selective acquisitions in both existing markets and new markets that exhibit positive long-term fundamentals . 2014 highlights key financial results as of and for the year ended december 31 , 2014 are as follows : u.s. community count increased 30 % to 206 average communities from 158 year-over-year net sales orders in the u.s. increased 14 % to 5,728 u.s. average monthly absorption pace was 2.3 compared to 2.6 in the prior year u.s. cancellations as a percentage of gross sales orders was 13.2 % compared to 14.3 % in the prior year home closings in our u.s. operations increased 20 % to 5,642 average prices of homes closed in the u.s. increased 18 % to $ 464,000 mortgage operations reported gross profit of $ 16 million on revenue of $ 35 million factors affecting comparability of results you should read this management 's discussion and analysis of our financial condition and results of operations in conjunction with our historical consolidated financial statements included elsewhere in this annual report . the primary factor that affects the comparability of our results operations is the disposal of our monarch business . for all periods presented , the results and assets and liabilities of monarch are included in discontinued operations . in addition to the impact of the matters discussed in the risk factors listed in item 1a of this annual report , our future results could differ materially from our historical results due to the disposition of our monarch business in early 2015 , our ipo in 2013 and the acquisition of darling in 2012. non-gaap measures in addition to the results reported in accordance with accounting principles generally accepted in the united states ( gaap ) , we have provided information in this annual report relating to adjusted home closings gross margins. adjusted home closings gross margins we calculate adjusted home closings gross margin from u.s. gaap gross margin by adding impairment charges , if any , attributable to the write-down of communities , and the amortization of capitalized interest through cost of home closings . we evaluate adjusted home closings gross margin , which is calculated by adding back to home closings gross 40 margin the capitalized interest amortization related to the homes closed . management uses adjusted home closings gross margin to evaluate our operational and economic performance on a consolidated basis as well as the operational and economic performance of our segments . we believe adjusted home closings gross margin is relevant and useful to investors for evaluating our overall financial performance . this measure is considered a non-gaap financial measure and should be considered in addition to , rather than as a substitute for , the comparable u.s. gaap financial measure as a measure of our operating performance . although other companies in the homebuilding industry report similar information , the methods used may differ . we urge investors to understand the methods used by other companies in the homebuilding industry to calculate gross margins and any adjustments to such amounts before comparing our measures to those of such other companies . critical accounting policies general the discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements , which have been prepared in accordance with u.s. gaap . the preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities , revenue and expenses , and related disclosures of contingent assets and liabilities at the date of our financial statements . actual results may differ from these estimates under different assumptions or conditions , impacting our reported results of operations and financial condition . certain accounting policies involve significant judgments and assumptions by management , which have a material impact on the carrying value of assets and liabilities and the recognition of income and expenses . the estimates and assumptions used by management are based on historical experience and other factors , which are believed to be reasonable under the circumstances . story_separator_special_tag sales order cancellationsunits replace_table_token_16_th ( 1 ) cancellation rate represents the number of cancelled sales orders divided by gross sales orders . we believe a favorable financing market , our use of prequalification criteria through tmhf and increased earnest money deposits help us maintain a low cancellation rate . our overall cancellation rate decreased from 2013 to 2014. the decrease in the cancellation rate from 2013 to 2014 was most notably related to higher deposit requirements year over year throughout our texas divisions , primarily in new communities and or new phases within existing communities . sales order backlog replace_table_token_17_th ( 1 ) sales order backlog represents homes under contract for which revenue has not yet been recognized at the end of the period ( including homes sold but not yet started ) . some of the contracts in our sales order backlog are subject to contingencies including mortgage loan approval and buyers selling their existing homes , which can result in cancellations . consolidated : backlog value and units increased as a result of an increase in average sales price and increase in net sales orders . east : in the east segment , backlog value increased as a result of price appreciation , maximizing lot premiums , controlled lot releases in certain communities and a product mix change to homes with a higher sales value . the east increase in backlog is consistent with our increases in homes sold and new community openings year over year . 46 west : backlog units and dollars decreased year over year due to a decline in sales pace . backlog in phoenix is down year over year due to a decline in sales pace from 2013 as a result of moderating growth . backlog in southern california decreased year over year due to an increase in average selling prices which have slower selling paces than lower priced product . home closings revenue replace_table_token_18_th ( 1 ) home closings revenue represents homes where possession has transferred to the buyer . consolidated : for the year ended december 31 , 2014 compared to 2013 , there was an increase in the number of homes closed , the sales value of homes closed and average selling price . east : the number of homes closed increased as a result of the increase in homes sold during the same period , which was partially attributable to the volume of new community openings . due to continued improvement throughout the east segment markets in 2014 , we were able to increase the average selling price of homes closed in the east segment by 11.7 % to $ 420,000 , resulting in an increase in sales value of homes closed of 37.4 % . this increase is a result of a combination of product mix and price appreciation . these market improvements , as well as favorable homebuyer reception of communities opened subsequent to december 31 , 2013 , contributed to closing revenue increases . in particular , homes closed in 2014 in our west florida , houston and dallas markets surpassed that in the prior year period by a significant amount , driving both units and dollars higher as consumer demand for move-up product benefited our communities in these markets . overall , the improvement in east segment home closings revenue and sales value has been due primarily to our well-located land positions , an increase in active selling communities and our consumer-driven offerings . management in the region continues to maximize sales prices where possible through market-driven product offerings as market conditions allow . west : the sales value of homes closed increased by 46.1 % , driven by an increase in average selling price . homes closed in 2014 in our northern and southern california markets surpassed those in the prior year period by a significant amount , driving both units and dollars higher as consumer demand for move-up product benefited our communities in these markets . in the segment as a whole , we were able to increase our average selling price of homes closed by 27.7 % , to $ 540,000 in the year ended december 31 , 2014 , driven primarily by a shift to more move up and higher priced product . we continue to optimize sales prices where possible through market-driven product offerings as market conditions allow . land closings revenue replace_table_token_19_th 47 since we generally do not purchase land for future sales , land and lot sales occur at various intervals and varying degrees of profitability depending on the need for such property in our business strategy . therefore , the revenue and gross margin from land closings will fluctuate from period to period . segment home closings gross margins the following table sets forth a reconciliation between our home closings segment gross margins and our corresponding segment adjusted home closings gross margins . see  non-gaap measures  adjusted home closings gross margins . replace_table_token_20_th consolidated : our consolidated 2014 adjusted home closings gross margin percentage , decreased slightly compared to 2013. product mix continues to impact margin , as an increase in sales in our california divisions generated significantly higher home closings gross margin dollars per home but lower margin rate . we are also experiencing higher land and development costs as we close homes related to legacy holdings . the legacy holdings have lower carrying costs and as a result home closings gross margin percentage is decreasing as those legacy holdings are at a reduced proportion of our overall mix . east : we experienced increases in home closings gross margin and adjusted home closings gross margin dollars and rates in our dallas , houston ( taylor morrison and darling ) , west florida and north florida markets . the recovery and stabilization of the west florida market has generated sustained customer demand in the tampa and ft. myers areas , which has allowed us to leverage a low cost basis land supply and home

