for a further discussion of factors that could impact operating results , including the current economic environment and the steps we are taking to address this environment , see the section entitled “ factors that may affect future performance ” included within this section and in item 1a under part i of this report . 33 strategy our goal is to become the world 's favorite mattress and pillow brand . in order to achieve this long-term goal while managing through the current economic and competitive environment , we plan to complete the proposed acquisition of sealy , and to continue to pursue certain key tempur-pedic ® strategic goals using the related strategies discussed below . ● make sure everyone knows that they would sleep better on a tempur-pedic ® mattress – we plan to continue to invest in our global brand awareness through advertising campaigns that further associate our brand name with overall sleep and premium quality products . ● make sure there is a tempur-pedic ® bed and pillow that appeals to everyone – we plan to continue to maintain our focus on premium products at the high end of the category price range that are preferred by consumers . ● make sure that tempur-pedic ® products are available to everyone – we plan to expand our points of distribution and the effectiveness of our distribution channels by ensuring our retailers are provided attractive incentives to sell our products . ● make sure that tempur-pedic ® bedding products continue to deliver the best sleep – we plan to continue to invest in product research and development to systematically innovate and improve our products in consumer relevant ways . in pursuing these strategic goals , we expect to continue to optimize our cost structure in order to enable these marketing and product development investments . on september 27 , 2012 , we announced we had entered into an agreement and plan of merger ( “ merger agreement ” ) to acquire sealy corporation ( “ sealy ” ) , by merging sealy with a newly-formed subsidiary of the company ( the “ merger ” ) ( collectively , the “ sealy acquisition ” ) . sealy , headquartered in trinity , north carolina , owns one of the largest bedding brands in the world , and manufactures and markets a complete line of bedding products . subject to the terms and conditions of the merger agreement , at the effective time and as a result of the merger , each share of common stock of sealy issued and outstanding immediately prior to the effective time of the merger will be cancelled and ( other than shares held by sealy or tempur-pedic or their subsidiaries or sealy stockholders who properly exercise appraisal rights ) converted into the right to receive $ 2.20 in cash . the company anticipates that the total consideration to be paid , including payments on account of existing sealy options and equity share units and the assumption of outstanding indebtedness of sealy less cash assumed , will be approximately $ 1,300.0 million . the transaction is expected to be completed in the first half of calendar 2013 and is subject to regulatory clearance under the hart-scott-rodino antitrust improvements act of 1976 and other customary conditions . the merger agreement contains certain termination rights for both the company and sealy and further provides that , upon termination of the merger agreement under certain circumstances , sealy may be obligated to pay the company a termination fee of $ 25.0 million . in addition , if antitrust enforcement agencies either commence or inform the parties that they intend to commence an action to enjoin the merger , ( i ) the company may be required to pay sealy a termination fee of $ 90.0 million if both parties elect to terminate the merger agreement or ( ii ) a termination fee of $ 90.0 million ( or $ 40.0 million if the company elects to terminate the merger agreement but sealy does not so elect to terminate ) if the merger does not close due to a failure to receive antitrust approval in the nine months following the execution of the merger agreement , subject to certain extensions . in order to finance the sealy acquisition , on december 12 , 2012 , tempur-pedic international and certain subsidiaries of tempur-pedic international as borrowers and guarantors , entered into the 2012 credit agreement with a syndicate of banks . the 2012 credit agreement provides for ( i ) the $ 350.0 million revolver , ( ii ) the term a facility of $ 550.0 million and ( iii ) the term b facility of $ 870.0 million . the revolver includes a sublimit for letters of credit and swingline loans , subject to certain conditions and limits . the revolver and the term a facility will mature on the fifth anniversary of the closing and the term b facility will mature on the seventh anniversary of the closing . the revolver , the term a facility and the term b facility are expected to close and fund in connection with the sealy acquisition . the obligations of the lenders to the 2012 credit agreement to make the initial loans at the closing of the sealy acquisition and the loans subsequent to closing are subject to certain customary closing conditions . our existing credit facilities will remain in place until the closing of the sealy acquisition . in addition , on december 19 , 2012 , tempur-pedic international issued $ 375.0 million aggregate principal amount of 6.875 % senior notes ( the “ senior notes ” ) to qualified institutional buyers pursuant to rule 144a of the securities act , and to certain non-u.s. persons in accordance with regulation s under the securities act . story_separator_special_tag 38 general , administrative and other expenses . general , administrative and other expenses include management salaries , information technology , professional fees , depreciation of furniture and fixtures , leasehold improvements and computer equipment , expenses for administrative functions , and research and development costs . general , administrative and other expenses as a percentage of net sales was 10.5 % for the year ended december 31 , 2012 as compared to 8.9 % for the same period in 2011. general , administrative and other expenses increased to $ 147.2 million for the year ended december 31 , 2012 as compared to $ 125.7 million for the year ended december 31 , 2011 , an increase of $ 21.5 million , or 17.1 % . the increase in general , administrative and other expenses are primarily a result of increased legal and professional fees of $ 16.1 million , driven by transaction costs related to the sealy acquisition of $ 8.9 million and integration costs of $ 2.2 million , along with an increase of $ 5.0 million related to increased litigation costs and strategic initiatives . during 2012 , we also incurred an additional $ 5.2 million related to incremental investments in information technology and associated depreciation expense . also , in 2011 , we recorded a benefit for favorable settlements of indirect taxes with certain regulatory authorities of $ 3.5 million that did not recur in 2012. these increases were offset by an $ 8.0 million benefit recorded for prsus following our re-evaluation of the probability of meeting certain required financial metrics related to the grants . we expect general , administrative and other expenses to continue to be impacted by transaction and integration costs related to the proposed sealy acquisition . research and development expenses for the year ended december 31 , 2012 were $ 15.6 million compared to $ 9.9 million for the same period in 2011 , an increase of $ 5.7 million , or 57.6 % . consistent with our strategy , we continue to invest in research and development in order to improve our existing product line and continue to introduce new and differentiated products . interest expense , net . interest expense , net includes the interest costs associated with our borrowings and the amortization of deferred financing costs related to those borrowings . interest expense , net , increased to $ 18.8 million for the year ended december 31 , 2012 as compared to $ 11.9 million for the year ended december 31 , 2011 , an increase of $ 6.9 million , or 58.0 % . the increase in interest expense is primarily attributable to an increase in our debt outstanding at december 31 , 2012 compared to our debt outstanding at december 31 , 2011 and an increase in our effective interest rate . the senior notes also contributed $ 0.9 million of interest expense in 2012. income before income taxes . income before income taxes for the year ended december 31 , 2012 decreased to $ 229.2 million from $ 328.4 million for the same period in 2011 , a decrease of $ 99.2 million , or 30.2 % . north america income before income taxes for the year ended december 31 , 2012 decreased to $ 126.2 million from $ 224.6 million for the same period in 2011 , a decrease of $ 98.4 million , or 43.8 % . international income before income taxes for the year ended december 31 , 2012 decreased to $ 103.0 million from $ 103.8 million for the same period in 2011 , a decrease of $ 0.8 million , or 0.8 % . the decrease in income before income taxes was a result of the items discussed above . income tax provision . income tax provision includes income taxes associated with taxes currently payable and deferred taxes , and includes the impact of net operating losses for certain of our foreign operations . our effective tax rate was 53.4 % and 33.1 % for the years ended december 31 , 2012 and 2011 , respectively . during the three months ended september 30 , 2012 , we changed the classification of our undistributed earnings from non-u.s. operations on which no historical provision for u.s. federal and or state income tax and foreign withholdings had been provided because we intended to reinvest such earnings indefinitely outside of the united states . the tax of our undistributed earnings reflects a change in management 's strategic objectives that could require the repatriation of foreign earnings . as a result of this change , we recognized $ 48.1 million of additional income tax expense during the six months ended december 31 , 2012 to record the applicable u.s. deferred income tax liability . we expect to repatriate non-u.s. cash holdings upon the closing of the proposed sealy acquisition . 39 year ended december 31 , 2011 compared with year ended december 31 , 2010 a summary of net sales , by channel and by segment , is set forth below : replace_table_token_7_th a summary of net sales , by product and by segment , is set forth below : replace_table_token_8_th 40 net sales . net sales for the year ended december 31 , 2011 increased to $ 1,417.9 million from $ 1,105.4 million , an increase of $ 312.5 million , or 28.3 % . we believe our revenues have continued gaining momentum primarily as a result of investments made in marketing , the ongoing success of new product introductions and expanding points of distribution . consolidated mattress sales increased $ 208.8 million , or 28.4 % , compared to the full year 2010. the increase in mattress sales occurred primarily in our retail channel with net sales increasing to $ 1,245.6 million from $ 953.2 million in the same period in 2010 , an increase of $ 292.4 million , or 30.7 % . consolidated pillow sales increased approximately $ 21.2 million

liquidity our principal sources of funds are cash flows from operations , borrowings made pursuant to our debt arrangements and cash and cash equivalents on hand . principal uses of funds consist of share repurchases made from time to time pursuant to share repurchase authorizations , payments of principal and interest on our debt agreements , acquisition of certain former third party distributors , capital expenditures and working capital . at december 31 , 2012 , we had working capital of $ 609.0 million , including cash and cash equivalents of $ 179.3 million as compared to working capital of $ 212.2 million including $ 111.4 million in cash and cash equivalents as of december 31 , 2011. working capital increased primarily due to the receipt and deposit into escrow of the gross proceeds from the sale of the senior notes and the increase in cash and cash equivalents . cash provided by operating activities decreased $ 58.8 million to $ 189.9 million for the year ended december 31 , 2012 , as compared to $ 248.7 million for the same period in 2011. the decrease in cash provided by operating activities was due to a decrease in net income of $ 112.8 million , and a decrease in stock-based compensation amortization of $ 11.0 million primarily related to our re-evaluation of the probability of meeting certain required financial metrics related to our prsu grants , partially offset by increased deferred income taxes related to the repatriation of foreign cash strategy and an increase in changes in operating assets and liabilities .


 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 our principal sources of funds are cash flows from operations , borrowings made pursuant to our debt arrangements and cash and cash equivalents on hand . principal uses of funds consist of share repurchases made from time to time pursuant to share repurchase authorizations , payments of principal and interest on our debt agreements , acquisition of certain former third party distributors , capital expenditures and working capital . at december 31 , 2012 , we had working capital of $ 609.0 million , including cash and cash equivalents of $ 179.3 million as compared to working capital of $ 212.2 million including $ 111.4 million in cash and cash equivalents as of december 31 , 2011. working capital increased primarily due to the receipt and deposit into escrow of the gross proceeds from the sale of the senior notes and the increase in cash and cash equivalents . cash provided by operating activities decreased $ 58.8 million to $ 189.9 million for the year ended december 31 , 2012 , as compared to $ 248.7 million for the same period in 2011. the decrease in cash provided by operating activities was due to a decrease in net income of $ 112.8 million , and a decrease in stock-based compensation amortization of $ 11.0 million primarily related to our re-evaluation of the probability of meeting certain required financial metrics related to our prsu grants , partially offset by increased deferred income taxes related to the repatriation of foreign cash strategy and an increase in changes in operating assets and liabilities .
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 Suspicious Activity Report : for a further discussion of factors that could impact operating results , including the current economic environment and the steps we are taking to address this environment , see the section entitled “ factors that may affect future performance ” included within this section and in item 1a under part i of this report . 33 strategy our goal is to become the world 's favorite mattress and pillow brand . in order to achieve this long-term goal while managing through the current economic and competitive environment , we plan to complete the proposed acquisition of sealy , and to continue to pursue certain key tempur-pedic ® strategic goals using the related strategies discussed below . ● make sure everyone knows that they would sleep better on a tempur-pedic ® mattress – we plan to continue to invest in our global brand awareness through advertising campaigns that further associate our brand name with overall sleep and premium quality products . ● make sure there is a tempur-pedic ® bed and pillow that appeals to everyone – we plan to continue to maintain our focus on premium products at the high end of the category price range that are preferred by consumers . ● make sure that tempur-pedic ® products are available to everyone – we plan to expand our points of distribution and the effectiveness of our distribution channels by ensuring our retailers are provided attractive incentives to sell our products . ● make sure that tempur-pedic ® bedding products continue to deliver the best sleep – we plan to continue to invest in product research and development to systematically innovate and improve our products in consumer relevant ways . in pursuing these strategic goals , we expect to continue to optimize our cost structure in order to enable these marketing and product development investments . on september 27 , 2012 , we announced we had entered into an agreement and plan of merger ( “ merger agreement ” ) to acquire sealy corporation ( “ sealy ” ) , by merging sealy with a newly-formed subsidiary of the company ( the “ merger ” ) ( collectively , the “ sealy acquisition ” ) . sealy , headquartered in trinity , north carolina , owns one of the largest bedding brands in the world , and manufactures and markets a complete line of bedding products . subject to the terms and conditions of the merger agreement , at the effective time and as a result of the merger , each share of common stock of sealy issued and outstanding immediately prior to the effective time of the merger will be cancelled and ( other than shares held by sealy or tempur-pedic or their subsidiaries or sealy stockholders who properly exercise appraisal rights ) converted into the right to receive $ 2.20 in cash . the company anticipates that the total consideration to be paid , including payments on account of existing sealy options and equity share units and the assumption of outstanding indebtedness of sealy less cash assumed , will be approximately $ 1,300.0 million . the transaction is expected to be completed in the first half of calendar 2013 and is subject to regulatory clearance under the hart-scott-rodino antitrust improvements act of 1976 and other customary conditions . the merger agreement contains certain termination rights for both the company and sealy and further provides that , upon termination of the merger agreement under certain circumstances , sealy may be obligated to pay the company a termination fee of $ 25.0 million . in addition , if antitrust enforcement agencies either commence or inform the parties that they intend to commence an action to enjoin the merger , ( i ) the company may be required to pay sealy a termination fee of $ 90.0 million if both parties elect to terminate the merger agreement or ( ii ) a termination fee of $ 90.0 million ( or $ 40.0 million if the company elects to terminate the merger agreement but sealy does not so elect to terminate ) if the merger does not close due to a failure to receive antitrust approval in the nine months following the execution of the merger agreement , subject to certain extensions . in order to finance the sealy acquisition , on december 12 , 2012 , tempur-pedic international and certain subsidiaries of tempur-pedic international as borrowers and guarantors , entered into the 2012 credit agreement with a syndicate of banks . the 2012 credit agreement provides for ( i ) the $ 350.0 million revolver , ( ii ) the term a facility of $ 550.0 million and ( iii ) the term b facility of $ 870.0 million . the revolver includes a sublimit for letters of credit and swingline loans , subject to certain conditions and limits . the revolver and the term a facility will mature on the fifth anniversary of the closing and the term b facility will mature on the seventh anniversary of the closing . the revolver , the term a facility and the term b facility are expected to close and fund in connection with the sealy acquisition . the obligations of the lenders to the 2012 credit agreement to make the initial loans at the closing of the sealy acquisition and the loans subsequent to closing are subject to certain customary closing conditions . our existing credit facilities will remain in place until the closing of the sealy acquisition . in addition , on december 19 , 2012 , tempur-pedic international issued $ 375.0 million aggregate principal amount of 6.875 % senior notes ( the “ senior notes ” ) to qualified institutional buyers pursuant to rule 144a of the securities act , and to certain non-u.s. persons in accordance with regulation s under the securities act . story_separator_special_tag 38 general , administrative and other expenses . general , administrative and other expenses include management salaries , information technology , professional fees , depreciation of furniture and fixtures , leasehold improvements and computer equipment , expenses for administrative functions , and research and development costs . general , administrative and other expenses as a percentage of net sales was 10.5 % for the year ended december 31 , 2012 as compared to 8.9 % for the same period in 2011. general , administrative and other expenses increased to $ 147.2 million for the year ended december 31 , 2012 as compared to $ 125.7 million for the year ended december 31 , 2011 , an increase of $ 21.5 million , or 17.1 % . the increase in general , administrative and other expenses are primarily a result of increased legal and professional fees of $ 16.1 million , driven by transaction costs related to the sealy acquisition of $ 8.9 million and integration costs of $ 2.2 million , along with an increase of $ 5.0 million related to increased litigation costs and strategic initiatives . during 2012 , we also incurred an additional $ 5.2 million related to incremental investments in information technology and associated depreciation expense . also , in 2011 , we recorded a benefit for favorable settlements of indirect taxes with certain regulatory authorities of $ 3.5 million that did not recur in 2012. these increases were offset by an $ 8.0 million benefit recorded for prsus following our re-evaluation of the probability of meeting certain required financial metrics related to the grants . we expect general , administrative and other expenses to continue to be impacted by transaction and integration costs related to the proposed sealy acquisition . research and development expenses for the year ended december 31 , 2012 were $ 15.6 million compared to $ 9.9 million for the same period in 2011 , an increase of $ 5.7 million , or 57.6 % . consistent with our strategy , we continue to invest in research and development in order to improve our existing product line and continue to introduce new and differentiated products . interest expense , net . interest expense , net includes the interest costs associated with our borrowings and the amortization of deferred financing costs related to those borrowings . interest expense , net , increased to $ 18.8 million for the year ended december 31 , 2012 as compared to $ 11.9 million for the year ended december 31 , 2011 , an increase of $ 6.9 million , or 58.0 % . the increase in interest expense is primarily attributable to an increase in our debt outstanding at december 31 , 2012 compared to our debt outstanding at december 31 , 2011 and an increase in our effective interest rate . the senior notes also contributed $ 0.9 million of interest expense in 2012. income before income taxes . income before income taxes for the year ended december 31 , 2012 decreased to $ 229.2 million from $ 328.4 million for the same period in 2011 , a decrease of $ 99.2 million , or 30.2 % . north america income before income taxes for the year ended december 31 , 2012 decreased to $ 126.2 million from $ 224.6 million for the same period in 2011 , a decrease of $ 98.4 million , or 43.8 % . international income before income taxes for the year ended december 31 , 2012 decreased to $ 103.0 million from $ 103.8 million for the same period in 2011 , a decrease of $ 0.8 million , or 0.8 % . the decrease in income before income taxes was a result of the items discussed above . income tax provision . income tax provision includes income taxes associated with taxes currently payable and deferred taxes , and includes the impact of net operating losses for certain of our foreign operations . our effective tax rate was 53.4 % and 33.1 % for the years ended december 31 , 2012 and 2011 , respectively . during the three months ended september 30 , 2012 , we changed the classification of our undistributed earnings from non-u.s. operations on which no historical provision for u.s. federal and or state income tax and foreign withholdings had been provided because we intended to reinvest such earnings indefinitely outside of the united states . the tax of our undistributed earnings reflects a change in management 's strategic objectives that could require the repatriation of foreign earnings . as a result of this change , we recognized $ 48.1 million of additional income tax expense during the six months ended december 31 , 2012 to record the applicable u.s. deferred income tax liability . we expect to repatriate non-u.s. cash holdings upon the closing of the proposed sealy acquisition . 39 year ended december 31 , 2011 compared with year ended december 31 , 2010 a summary of net sales , by channel and by segment , is set forth below : replace_table_token_7_th a summary of net sales , by product and by segment , is set forth below : replace_table_token_8_th 40 net sales . net sales for the year ended december 31 , 2011 increased to $ 1,417.9 million from $ 1,105.4 million , an increase of $ 312.5 million , or 28.3 % . we believe our revenues have continued gaining momentum primarily as a result of investments made in marketing , the ongoing success of new product introductions and expanding points of distribution . consolidated mattress sales increased $ 208.8 million , or 28.4 % , compared to the full year 2010. the increase in mattress sales occurred primarily in our retail channel with net sales increasing to $ 1,245.6 million from $ 953.2 million in the same period in 2010 , an increase of $ 292.4 million , or 30.7 % . consolidated pillow sales increased approximately $ 21.2 million

