in december 2010 , the company 's shareholders approved the unification of our prior nonvoting common stock and voting class a common stock into a single class . effective december 10 , 2010 , the two classes were combined into a single voting class now known simply as our common stock . same store revenues . we believe the changes in same store revenues are a key performance indicator . the change in same store revenues is calculated by comparing revenues for the year to revenues for the prior year for all stores open for the entire 24-month period , excluding stores that received lease agreements from other acquired , closed or merged stores . 24 key components of net income in this management 's discussion and analysis section , we review the company 's consolidated results , including the five components of our revenues , costs of sales and expenses , of which depreciation of lease merchandise is a significant part . revenues . we separate our total revenues into five components : lease revenues and fees , retail sales , non-retail sales , franchise royalties and fees , and other . lease revenues and fees include all revenues derived from lease agreements at company-operated stores , including agreements that result in our customers acquiring ownership at the end of the term . retail sales represent sales of both new and returned lease merchandise from our stores . non-retail sales mainly represent new merchandise sales to our aaron 's sales & lease ownership division franchisees . franchise royalties and fees represent fees from the sale of franchise rights and royalty payments from franchisees , as well as other related income from our franchised stores . other revenues include , at times , income from gains on asset dispositions and other miscellaneous revenues . retail cost of sales . retail cost of sales represents the original or depreciated cost of merchandise sold through our company-operated stores . non-retail cost of sales . non-retail cost of sales primarily represents the cost of merchandise sold to our franchisees . operating expenses . operating expenses include personnel costs , selling costs , occupancy costs , and delivery , among other expenses . lawsuit ( income ) expense . lawsuit expense consists of the net cost of paying legal judgments and settlement amounts ; defense costs are included in operating expenses . lawsuit income results from reductions in previously accrued reserves . retirement/separation charges . retirement/separation charges represent costs associated with the retirement of the company 's founder and former chairman of the board in 2012 and the departure of the company 's former chief executive officer in 2011. depreciation of lease merchandise . depreciation of lease merchandise reflects the expense associated with depreciating merchandise held for lease and leased to customers by our company-operated stores . critical accounting policies revenue recognition . lease revenues are recognized in the month they are due on the accrual basis of accounting . for internal management reporting purposes , lease revenues from sales and lease ownership agreements are recognized by the reportable segments as revenue in the month the cash is collected . on a monthly basis , we record an accrual for lease revenues due but not yet received , net of allowances , and a deferral of revenue for lease payments received prior to the month due . our revenue recognition accounting policy matches the lease revenue with the corresponding costs , mainly depreciation , associated with the lease merchandise . at december 31 , 2012 and 2011 , we had a revenue deferral representing cash collected in advance of being due or otherwise earned totaling $ 45.3 million and $ 43.9 million , respectively , and an accrued revenue receivable , net of allowance for doubtful accounts , based on historical collection rates of $ 7.4 million and $ 5.2 million , respectively . revenues from the sale of merchandise to franchisees are recognized at the time of receipt of the merchandise by the franchisee and revenues from such sales to other customers are recognized at the time of shipment . lease merchandise . our aaron 's sales & lease ownership and homesmart divisions depreciate merchandise over the applicable agreement period , generally 12 to 24 months ( monthly agreements ) or 60 to 120 weeks ( weekly agreements ) when leased , and 36 months when not leased , to 0 % salvage value . our policies require weekly lease merchandise counts at the store and write-offs for unsalable , damaged , or missing merchandise inventories . full physical inventories are generally taken at our fulfillment and manufacturing facilities two to four times a year with appropriate provisions made for missing , damaged and unsalable merchandise . in addition , we monitor lease merchandise levels and mix by division , store and fulfillment center , as well as the average age of merchandise on hand . if unsalable lease merchandise can not be returned to vendors , its carrying value is adjusted to net realizable value or written off . all lease merchandise is available for lease and sale , excluding merchandise determined to be missing , damaged or unsalable . 25 we record lease merchandise carrying value adjustments on the allowance method , which estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period . lease merchandise adjustments totaled $ 54.9 million , $ 46.2 million , and $ 46.5 million for the years ended december 31 , 2012 , 2011 , and 2010 , respectively . the fiscal year ended december 31 , 2010 includes a write-down of $ 4.7 million related to the closure of the aaron 's office furniture stores . leases and closed store reserves . the majority of our company-operated stores are operated from leased facilities under operating lease agreements . story_separator_special_tag 30 income tax expense income tax expense increased $ 34.2 million to $ 103.8 million in 2012 , compared with $ 69.6 million in 2011 , representing a 49.1 % increase due to a 51 % increase in earnings in 2012 , offset by a slightly lower tax rate in 2012. our effective tax rate was 37.5 % in 2012 and 38.0 % in 2011. income tax expense decreased $ 2.8 million to $ 69.6 million in 2011 , compared with $ 72.4 million in 2010 , representing a 3.9 % decrease . our effective tax rate was 38.0 % in both 2011 and 2010. net earnings from continuing operations information about our earnings before income taxes by reportable segment is as follows : replace_table_token_7_th nmfcalculation is not meaningful year ended december 31 , 2012 versus year ended december 31 , 2011 earnings before income taxes increased $ 93.5 million , or 51 % , primarily due to a $ 99.8 million , or 69.5 % , increase in the sales and lease ownership segment , a $ 3.1 million , or 6.2 % , increase in the franchise segment , and a $ 321,000 increase in the homesmart segment , partially offset by a decrease of $ 2.6 million in the manufacturing segment , and $ 12.7 million in the other segment , primarily due to the closure of the aaron 's office furniture division store and retirement charges of $ 10.4 million associated with the retirement of the company 's founder and former chairman of the board . net earnings increased $ 59.3 million to $ 173.0 million in 2012 compared with $ 113.8 million in 2011 , representing a 52.1 % increase . as a percentage of total revenues , net earnings from continuing operations were 7.8 % and 5.6 % in 2012 and 2011 , respectively . additionally , net earnings for 2012 included the recognition of income of $ 35.5 million related to the alford vs. aaron rents , inc. et al case previously discussed . the company 's increased profitability of new company-operated sales and lease ownership stores added over the past several years , contributing to a 5.1 % increase in same store revenues and a 5.4 % increase in franchise royalties and fees . year ended december 31 , 2011 versus year ended december 31 , 2010 earnings before income taxes decreased $ 7.4 million , or 3.9 % , primarily due to a $ 15.7 million , or 9.9 % , decrease in the sales and lease ownership segment and a $ 7.0 million decrease in the homesmart segment , partially offset by a $ 3.6 million , or 7.9 % , increase in the franchise segment and a $ 13.3 million increase in the other segment , primarily due to the closure of 14 aaron 's office furniture division stores during 2010. net earnings decreased $ 4.6 million to $ 113.8 million in 2011 compared with $ 118.4 million in 2010 , representing a 3.9 % decrease . as a percentage of total revenues , net earnings from continuing operations were 5.6 % and 6.3 % in 2011 and 2010 , respectively . additionally , the decrease in net earnings for 2011 was impacted by litigation expense of $ 36.5 million related to the alford vs. aaron rents , inc. et al case previously discussed partially offset by an increase in profitability of new company-operated sales and lease ownership stores added over the past several years , contributing to a 4.4 % increase in same store revenues , and a 7.0 % increase in franchise royalties and fees . 31 balance sheet story_separator_special_tag style= `` font-size:6px ; margin-top:0px ; margin-bottom:0px `` > trade credit with vendors ; proceeds from the sale of lease return merchandise ; private debt offerings ; and stock offerings . at december 31 , 2012 , there was no outstanding balance under our revolving credit agreement . the credit facilities balance decreased by $ 12.0 million in 2012 , reflecting the repayment at maturity of the remaining $ 12.0 million 5.03 % senior unsecured notes due july 2012. our revolving credit facility was amended on december 13 , 2012 and extends the maturity date until december 13 , 2017. the amendment to the company 's revolving credit agreement is discussed in further detail in note 6 to our consolidated financial statements . the total available credit under the facility as of december 31 , 2012 is $ 140.0 million . on december 19 , 2012 , the company entered into amendment no . 1 to a note purchase agreement with several insurance companies . the amendment amends the note purchase agreement dated as of july 5 , 2011 , pursuant to which the company and its subsidiaries , aaron investment company , aaron 's production company and 99lto , llc , as co-obligors , issued $ 125 million in senior unsecured notes to the purchasers in a private placement . the notes bear interest at the rate of 3.75 % per year and mature on april 27 , 2018. payments of interest are due quarterly , commencing july 27 , 2011 , with principal payments of $ 25.0 million each due annually commencing april 27 , 2014 . 33 our revolving credit agreement and senior unsecured notes , and our franchise loan program discussed below , contain certain financial covenants . these covenants include requirements that we maintain ratios of : ( 1 ) ebitda plus lease expense to fixed charges of no less than 2:1 ; and ( 2 ) total debt to ebitda of no greater than 3:1 ; ebitda in each case means consolidated net income before interest and tax expense , depreciation ( other than lease merchandise depreciation ) and amortization expense , and other non-cash charges . the company is also required to maintain a minimum amount of shareholders ' equity . see the full text of the covenants in our

cash and cash equivalents . the company 's cash balance decreased to $ 129.5 million at december 31 , 2012 from $ 176.3 million at december 31 , 2011. the $ 46.7 million decrease in our cash balance is due to cash flow generated from operations , less cash used by investing and financing activities . for additional information , refer to the liquidity and capital resources section below . investment securities . our investment securities balance was $ 85.9 million at december 31 , 2012 primarily as a result of purchases of corporate bonds in 2011 and an investment in bonds issued by a privately-held rent-to-own company based in the united kingdom . the securities are recorded at amortized cost in the consolidated balance sheets and mature at various dates through 2014. lease merchandise , net . the increase of $ 101.8 million in lease merchandise , net of accumulated depreciation , to $ 964.1 million at december 31 , 2012 from $ 862.3 million at december 31 , 2011 , is primarily the result of a net increase in lease merchandise of $ 92.7 million in the sales and lease ownership segment and $ 6.4 million in the homesmart segment . goodwill . the $ 14.9 million increase in goodwill , to $ 234.2 million on december 31 , 2012 from $ 219.3 million on december 31 , 2011 , is the result of a series of acquisitions of sales and lease ownership businesses . during 2012 , the company acquired 44 sales and lease ownership stores with an aggregate purchase price of $ 29.7 million . the company acquired four stores that were converted to homesmart with an aggregate purchase price of $ 1.3 million . the principal tangible assets acquired consisted of lease merchandise , vehicles and fixtures and equipment . prepaid expenses and other assets .


 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.
     ```cash and cash equivalents . the company 's cash balance decreased to $ 129.5 million at december 31 , 2012 from $ 176.3 million at december 31 , 2011. the $ 46.7 million decrease in our cash balance is due to cash flow generated from operations , less cash used by investing and financing activities . for additional information , refer to the liquidity and capital resources section below . investment securities . our investment securities balance was $ 85.9 million at december 31 , 2012 primarily as a result of purchases of corporate bonds in 2011 and an investment in bonds issued by a privately-held rent-to-own company based in the united kingdom . the securities are recorded at amortized cost in the consolidated balance sheets and mature at various dates through 2014. lease merchandise , net . the increase of $ 101.8 million in lease merchandise , net of accumulated depreciation , to $ 964.1 million at december 31 , 2012 from $ 862.3 million at december 31 , 2011 , is primarily the result of a net increase in lease merchandise of $ 92.7 million in the sales and lease ownership segment and $ 6.4 million in the homesmart segment . goodwill . the $ 14.9 million increase in goodwill , to $ 234.2 million on december 31 , 2012 from $ 219.3 million on december 31 , 2011 , is the result of a series of acquisitions of sales and lease ownership businesses . during 2012 , the company acquired 44 sales and lease ownership stores with an aggregate purchase price of $ 29.7 million . the company acquired four stores that were converted to homesmart with an aggregate purchase price of $ 1.3 million . the principal tangible assets acquired consisted of lease merchandise , vehicles and fixtures and equipment . prepaid expenses and other assets .
```    
 Suspicious Activity Report : in december 2010 , the company 's shareholders approved the unification of our prior nonvoting common stock and voting class a common stock into a single class . effective december 10 , 2010 , the two classes were combined into a single voting class now known simply as our common stock . same store revenues . we believe the changes in same store revenues are a key performance indicator . the change in same store revenues is calculated by comparing revenues for the year to revenues for the prior year for all stores open for the entire 24-month period , excluding stores that received lease agreements from other acquired , closed or merged stores . 24 key components of net income in this management 's discussion and analysis section , we review the company 's consolidated results , including the five components of our revenues , costs of sales and expenses , of which depreciation of lease merchandise is a significant part . revenues . we separate our total revenues into five components : lease revenues and fees , retail sales , non-retail sales , franchise royalties and fees , and other . lease revenues and fees include all revenues derived from lease agreements at company-operated stores , including agreements that result in our customers acquiring ownership at the end of the term . retail sales represent sales of both new and returned lease merchandise from our stores . non-retail sales mainly represent new merchandise sales to our aaron 's sales & lease ownership division franchisees . franchise royalties and fees represent fees from the sale of franchise rights and royalty payments from franchisees , as well as other related income from our franchised stores . other revenues include , at times , income from gains on asset dispositions and other miscellaneous revenues . retail cost of sales . retail cost of sales represents the original or depreciated cost of merchandise sold through our company-operated stores . non-retail cost of sales . non-retail cost of sales primarily represents the cost of merchandise sold to our franchisees . operating expenses . operating expenses include personnel costs , selling costs , occupancy costs , and delivery , among other expenses . lawsuit ( income ) expense . lawsuit expense consists of the net cost of paying legal judgments and settlement amounts ; defense costs are included in operating expenses . lawsuit income results from reductions in previously accrued reserves . retirement/separation charges . retirement/separation charges represent costs associated with the retirement of the company 's founder and former chairman of the board in 2012 and the departure of the company 's former chief executive officer in 2011. depreciation of lease merchandise . depreciation of lease merchandise reflects the expense associated with depreciating merchandise held for lease and leased to customers by our company-operated stores . critical accounting policies revenue recognition . lease revenues are recognized in the month they are due on the accrual basis of accounting . for internal management reporting purposes , lease revenues from sales and lease ownership agreements are recognized by the reportable segments as revenue in the month the cash is collected . on a monthly basis , we record an accrual for lease revenues due but not yet received , net of allowances , and a deferral of revenue for lease payments received prior to the month due . our revenue recognition accounting policy matches the lease revenue with the corresponding costs , mainly depreciation , associated with the lease merchandise . at december 31 , 2012 and 2011 , we had a revenue deferral representing cash collected in advance of being due or otherwise earned totaling $ 45.3 million and $ 43.9 million , respectively , and an accrued revenue receivable , net of allowance for doubtful accounts , based on historical collection rates of $ 7.4 million and $ 5.2 million , respectively . revenues from the sale of merchandise to franchisees are recognized at the time of receipt of the merchandise by the franchisee and revenues from such sales to other customers are recognized at the time of shipment . lease merchandise . our aaron 's sales & lease ownership and homesmart divisions depreciate merchandise over the applicable agreement period , generally 12 to 24 months ( monthly agreements ) or 60 to 120 weeks ( weekly agreements ) when leased , and 36 months when not leased , to 0 % salvage value . our policies require weekly lease merchandise counts at the store and write-offs for unsalable , damaged , or missing merchandise inventories . full physical inventories are generally taken at our fulfillment and manufacturing facilities two to four times a year with appropriate provisions made for missing , damaged and unsalable merchandise . in addition , we monitor lease merchandise levels and mix by division , store and fulfillment center , as well as the average age of merchandise on hand . if unsalable lease merchandise can not be returned to vendors , its carrying value is adjusted to net realizable value or written off . all lease merchandise is available for lease and sale , excluding merchandise determined to be missing , damaged or unsalable . 25 we record lease merchandise carrying value adjustments on the allowance method , which estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period . lease merchandise adjustments totaled $ 54.9 million , $ 46.2 million , and $ 46.5 million for the years ended december 31 , 2012 , 2011 , and 2010 , respectively . the fiscal year ended december 31 , 2010 includes a write-down of $ 4.7 million related to the closure of the aaron 's office furniture stores . leases and closed store reserves . the majority of our company-operated stores are operated from leased facilities under operating lease agreements . story_separator_special_tag 30 income tax expense income tax expense increased $ 34.2 million to $ 103.8 million in 2012 , compared with $ 69.6 million in 2011 , representing a 49.1 % increase due to a 51 % increase in earnings in 2012 , offset by a slightly lower tax rate in 2012. our effective tax rate was 37.5 % in 2012 and 38.0 % in 2011. income tax expense decreased $ 2.8 million to $ 69.6 million in 2011 , compared with $ 72.4 million in 2010 , representing a 3.9 % decrease . our effective tax rate was 38.0 % in both 2011 and 2010. net earnings from continuing operations information about our earnings before income taxes by reportable segment is as follows : replace_table_token_7_th nmfcalculation is not meaningful year ended december 31 , 2012 versus year ended december 31 , 2011 earnings before income taxes increased $ 93.5 million , or 51 % , primarily due to a $ 99.8 million , or 69.5 % , increase in the sales and lease ownership segment , a $ 3.1 million , or 6.2 % , increase in the franchise segment , and a $ 321,000 increase in the homesmart segment , partially offset by a decrease of $ 2.6 million in the manufacturing segment , and $ 12.7 million in the other segment , primarily due to the closure of the aaron 's office furniture division store and retirement charges of $ 10.4 million associated with the retirement of the company 's founder and former chairman of the board . net earnings increased $ 59.3 million to $ 173.0 million in 2012 compared with $ 113.8 million in 2011 , representing a 52.1 % increase . as a percentage of total revenues , net earnings from continuing operations were 7.8 % and 5.6 % in 2012 and 2011 , respectively . additionally , net earnings for 2012 included the recognition of income of $ 35.5 million related to the alford vs. aaron rents , inc. et al case previously discussed . the company 's increased profitability of new company-operated sales and lease ownership stores added over the past several years , contributing to a 5.1 % increase in same store revenues and a 5.4 % increase in franchise royalties and fees . year ended december 31 , 2011 versus year ended december 31 , 2010 earnings before income taxes decreased $ 7.4 million , or 3.9 % , primarily due to a $ 15.7 million , or 9.9 % , decrease in the sales and lease ownership segment and a $ 7.0 million decrease in the homesmart segment , partially offset by a $ 3.6 million , or 7.9 % , increase in the franchise segment and a $ 13.3 million increase in the other segment , primarily due to the closure of 14 aaron 's office furniture division stores during 2010. net earnings decreased $ 4.6 million to $ 113.8 million in 2011 compared with $ 118.4 million in 2010 , representing a 3.9 % decrease . as a percentage of total revenues , net earnings from continuing operations were 5.6 % and 6.3 % in 2011 and 2010 , respectively . additionally , the decrease in net earnings for 2011 was impacted by litigation expense of $ 36.5 million related to the alford vs. aaron rents , inc. et al case previously discussed partially offset by an increase in profitability of new company-operated sales and lease ownership stores added over the past several years , contributing to a 4.4 % increase in same store revenues , and a 7.0 % increase in franchise royalties and fees . 31 balance sheet story_separator_special_tag style= `` font-size:6px ; margin-top:0px ; margin-bottom:0px `` > trade credit with vendors ; proceeds from the sale of lease return merchandise ; private debt offerings ; and stock offerings . at december 31 , 2012 , there was no outstanding balance under our revolving credit agreement . the credit facilities balance decreased by $ 12.0 million in 2012 , reflecting the repayment at maturity of the remaining $ 12.0 million 5.03 % senior unsecured notes due july 2012. our revolving credit facility was amended on december 13 , 2012 and extends the maturity date until december 13 , 2017. the amendment to the company 's revolving credit agreement is discussed in further detail in note 6 to our consolidated financial statements . the total available credit under the facility as of december 31 , 2012 is $ 140.0 million . on december 19 , 2012 , the company entered into amendment no . 1 to a note purchase agreement with several insurance companies . the amendment amends the note purchase agreement dated as of july 5 , 2011 , pursuant to which the company and its subsidiaries , aaron investment company , aaron 's production company and 99lto , llc , as co-obligors , issued $ 125 million in senior unsecured notes to the purchasers in a private placement . the notes bear interest at the rate of 3.75 % per year and mature on april 27 , 2018. payments of interest are due quarterly , commencing july 27 , 2011 , with principal payments of $ 25.0 million each due annually commencing april 27 , 2014 . 33 our revolving credit agreement and senior unsecured notes , and our franchise loan program discussed below , contain certain financial covenants . these covenants include requirements that we maintain ratios of : ( 1 ) ebitda plus lease expense to fixed charges of no less than 2:1 ; and ( 2 ) total debt to ebitda of no greater than 3:1 ; ebitda in each case means consolidated net income before interest and tax expense , depreciation ( other than lease merchandise depreciation ) and amortization expense , and other non-cash charges . the company is also required to maintain a minimum amount of shareholders ' equity . see the full text of the covenants in our

