under the lifo inventory costing method , changes in the cost of raw materials and production activities are recognized in cost of sales in the current period even though these materials may have been acquired at potentially significantly different values due to the length of time from the acquisition of the raw materials to the sale of the processed finished goods to the customers . in a period of rising raw material costs , the lifo inventory valuation normally results in higher cost of sales . conversely , in a period of decreasing raw material costs , the lifo inventory valuation normally results in lower cost of sales . the volatility of the costs of raw materials has impacted our operations over the past several years . we , and others in our industry , generally have been able to pass cost increases on major raw materials through to our customers using surcharges that are structured to recover increases in raw material costs . generally , the formula used to calculate a surcharge is based on published prices of the respective raw materials for the previous month which correlates to the prices we pay for our raw material purchases . however , a portion of our surcharges to customers may be calculated using a different surcharge formula or may be based on the raw material prices at the time of order , which creates a lag between surcharge revenue and corresponding raw material costs recognized in cost of sales . the surcharge mechanism protects our net income on such sales except for the lag effect discussed above . however , surcharges have had a dilutive effect on our gross margin and operating margin percentages as described later in this report . approximately 25 percent of our net sales are sales to customers under firm price sales arrangements . firm price sales arrangements involve a risk of profit margin fluctuations , particularly when raw material prices are volatile . in order to reduce the risk of fluctuating profit margins on these sales , we enter into commodity forward contracts to purchase certain critical raw materials necessary to produce the related products sold . firm price sales arrangements generally include certain annual purchasing commitments and consumption schedules agreed to by the customers at selling prices based on raw material prices at the time the arrangements are established . if a customer fails to meet the volume commitments ( or the consumption schedule deviates from the agreed-upon terms of the firm price sales arrangements ) , the company may need to absorb the gains or losses associated with the commodity forward contracts on a temporary basis . gains or losses associated with commodity forward contracts are reclassified to earnings/loss when earnings are impacted by the hedged transaction . because we value most of our inventory under the lifo costing methodology , changes in the cost of raw materials and production activities are recognized in cost of sales in the current period attempting to match the most recently incurred costs with revenues . gains and or losses on the commodity forward contracts are reclassified from other comprehensive income together with the actual purchase price of the underlying commodities when the underlying commodities are purchased and recorded in inventory . to the extent that the total purchase price of the commodities , inclusive of the gains or losses on the commodity forward contracts , are higher or lower relative to the beginning of year costs , our cost of goods sold reflects such amounts . accordingly , the gains and or losses associated with commodity forward contracts may not impact the same period that the firm price sales arrangements revenue is recognized , and comparisons of gross profit from period to period may be impacted . these firm price sales arrangements are expected to continue as we look to strengthen our long-term customer relationships by expanding , renewing and in certain cases extending to a longer term , our customer long-term arrangements . we produce hundreds of grades of materials , with a wide range of pricing and profit levels depending on the grade . in addition , our product mix within a period is subject to the fluctuating order patterns of our customers as well as decisions we may make on participation in certain products based on available capacity including the impacts of capacity commitments we may have under existing customer agreements . while we expect to see positive contribution from a more favorable product mix in our margin performance over time , the impact by period may fluctuate , and period-to-period comparisons may vary . net pension expense net pension expense , as we define it below , includes the net periodic benefit costs related to both our pension and other postretirement plans . the net periodic benefit costs are determined annually based on beginning of year balances and are recorded ratably throughout the fiscal year , unless a significant re-measurement event occurs . the following is a summary of the net periodic benefit costs for the years ended june 30 , 2016 , 2015 and 2014 : replace_table_token_8_th 18 the service cost component of net pension expense represents the estimated cost of future pension liabilities earned associated with active employees . the pension earnings , interest and deferrals ( “ pension eid ” ) is comprised of the expected return on plan assets , interest costs on the projected benefit obligations of the plans and amortization of actuarial gains and losses and prior service costs . during the year ended june 30 , 2016 , we offered an early retirement incentive to certain employees . as a result of the incentive , $ 9.4 million was paid from the company 's qualified pension plan consisting of various personnel-related costs to cover severance payments . during the year ended june 30 , 2015 , in connection with a restructuring plan , we reduced approximately 200 salaried positions . story_separator_special_tag our fiscal year 2015 results reflect the impact of increasing sales by 2 percent in a challenging market environment which was more than offset by the weakness in the oil and gas businesses , increased operating costs and the restructuring plan implemented in the third quarter of fiscal year 2015. net sales net sales for fiscal year 2015 were $ 2,226.7 million , which was a 2 percent increase from fiscal year 2014. excluding surcharge revenue , sales were 2 percent higher than fiscal year 2014 on 4 percent lower volume . the results reflect sales increasing in the aerospace and defense , medical and transportation end-use markets , partially offset by the weakness in the energy end-use market due to weak market conditions . the increase in sales combined with lower shipment volume reflects a favorable shift in product mix . geographically , sales outside the united states increased 2 percent from fiscal year 2014 to $ 646.8 million . international sales as a percentage of our total net sales represented 29 percent for both fiscal years 2015 and 2014 . 25 sales by end-use markets we sell to customers across diversified end-use markets . the following table includes comparative information for our net sales , which includes surcharge revenue , by principal end-use markets which we believe is helpful supplemental information in analyzing the performance of the business from period to period : replace_table_token_17_th the following table includes comparative information for our net sales by the same principal end-use markets , but excluding surcharge revenue : replace_table_token_18_th sales to the aerospace and defense end-use market increased 5 percent from fiscal year 2014 to $ 1,053.8 million . excluding surcharge revenue , sales increased 4 percent on 2 percent higher shipment volume . the results reflect an increase in sales of fastener materials and a stronger demand for engine materials , partially offset by lower demand for structural and defense materials . sales to the energy end-use market of $ 285.6 million reflected an 8 percent decrease from fiscal year 2014. excluding surcharge revenue , sales decreased 9 percent on 9 percent lower shipment volume . the results reflect demand softness in materials used in oil and gas drilling and completions in the second half of fiscal year 2015. also , north american average directional and horizontal rig count decreased 46 percent from the prior year . these declines were partially offset by a moderate increase in power generation sales . transportation end-use market sales increased 11 percent from fiscal year 2014 to $ 171.0 million . excluding surcharge revenue , sales increased 9 percent on 5 percent higher shipment volume . the results reflect a strengthening mix for our materials used in engine fasteners , valve and fuel system materials . low fuel prices drove up sales for vehicle platforms with higher carpenter material content . in addition , sales of light trucks increased from the year ago period . also , fiscal year 2015 backlog is experiencing growth due to an improved mix compared to fiscal year 2014. sales to the medical end-use market increased 10 percent to $ 129.4 million from fiscal year 2014. excluding surcharge revenue , sales increased 10 percent on 13 percent higher shipment volume . the results reflect strength in demand for materials used for surgical instruments , as well as increased sales of titanium materials used in orthopedic implant procedures . however , the medical market pricing environment remains extremely competitive . industrial and consumer end-use market sales were $ 450.0 million for fiscal year 2015. excluding surcharge revenue , sales increased 1 percent on 14 percent lower shipment volume . the results reflect a favorable shift in product mix related to high-end consumer electronics and industrial capital goods . 26 distribution end-use market sales decreased 1 percent from the same period a year ago to $ 136.9 million . excluding surcharge revenue , sales decreased 1 percent from the same period a year ago . gross profit gross profit in fiscal year 2015 decreased to $ 318.3 million , or 14.3 percent of net sales ( 17.6 percent of net sales excluding surcharge revenue ) , from $ 398.9 million , or 18.4 percent of net sales ( 22.4 percent of net sales excluding surcharge revenue ) , for fiscal year 2014. the results reflect a stronger product mix which was more than offset by higher operating costs , unfavorable cost absorption as a result of reducing inventory and incremental depreciation expense due to the athens facility which was placed into service late in fiscal year 2014. our surcharge mechanism is structured to recover increases in raw material costs , although in certain cases with a lag effect as discussed above . while the surcharge generally protects the absolute gross profit dollars , it does have a dilutive effect on gross margin as a percent of sales . the following represents a summary of the dilutive impact of the surcharge on gross margin for fiscal years 2015 and 2014. we present and discuss these financial measures because management believes removing the impact of these items provides a more consistent and meaningful basis for comparing results of operations from period to period . see the section “ non-gaap financial measures ” below for further discussion of these financial measures . replace_table_token_19_th selling , general and administrative expenses selling , general and administrative expenses in fiscal year 2015 were $ 177.7 million , or 8.0 percent of net sales ( 9.8 percent of net sales excluding surcharge revenue ) , compared to $ 186.9 million , or 8.6 percent of net sales ( 10.5 percent of net sales excluding surcharge revenue ) , in fiscal year 2014. selling , general and administrative expenses decreased from the same period last year primarily due to lower depreciation and amortization expense of $ 4.3 million , lower variable compensation expense of $ 3.5 million , a reduction in pension eid expense of $ 3.1 million

liquidity and financial resources we ended fiscal year 2016 with $ 82.0 million of cash , an increase of $ 12.0 million from fiscal year 2015 . during fiscal year 2016 our cash from operations was $ 256.9 million as compared with $ 282.6 million in fiscal year 2015 . our free cash flow , which we define under “ non-gaap financial measures ” below , was positive $ 138.6 million as compared to positive $ 74.4 million for the same period a year ago . the increase in free cash flow reflects significantly lower capital spending levels largely related to the winding down in capital expenditures associated with the construction of our athens , alabama facility . capital expenditures for property , equipment and software were $ 95.2 million for fiscal year 2016 as compared to $ 170.5 million for the fiscal year 2015. in fiscal year 2017 , we expect capital expenditures to be approximately $ 120 million . during fiscal year 2016 , we used $ 123.9 million to purchase 3,762,200 shares of common stock pursuant to the terms of the share repurchase program authorized by our board of directors in october 2014. to date we used $ 248.4 million to purchase 6,757,472 shares .


 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 financial resources we ended fiscal year 2016 with $ 82.0 million of cash , an increase of $ 12.0 million from fiscal year 2015 . during fiscal year 2016 our cash from operations was $ 256.9 million as compared with $ 282.6 million in fiscal year 2015 . our free cash flow , which we define under “ non-gaap financial measures ” below , was positive $ 138.6 million as compared to positive $ 74.4 million for the same period a year ago . the increase in free cash flow reflects significantly lower capital spending levels largely related to the winding down in capital expenditures associated with the construction of our athens , alabama facility . capital expenditures for property , equipment and software were $ 95.2 million for fiscal year 2016 as compared to $ 170.5 million for the fiscal year 2015. in fiscal year 2017 , we expect capital expenditures to be approximately $ 120 million . during fiscal year 2016 , we used $ 123.9 million to purchase 3,762,200 shares of common stock pursuant to the terms of the share repurchase program authorized by our board of directors in october 2014. to date we used $ 248.4 million to purchase 6,757,472 shares .
```    
 Suspicious Activity Report : under the lifo inventory costing method , changes in the cost of raw materials and production activities are recognized in cost of sales in the current period even though these materials may have been acquired at potentially significantly different values due to the length of time from the acquisition of the raw materials to the sale of the processed finished goods to the customers . in a period of rising raw material costs , the lifo inventory valuation normally results in higher cost of sales . conversely , in a period of decreasing raw material costs , the lifo inventory valuation normally results in lower cost of sales . the volatility of the costs of raw materials has impacted our operations over the past several years . we , and others in our industry , generally have been able to pass cost increases on major raw materials through to our customers using surcharges that are structured to recover increases in raw material costs . generally , the formula used to calculate a surcharge is based on published prices of the respective raw materials for the previous month which correlates to the prices we pay for our raw material purchases . however , a portion of our surcharges to customers may be calculated using a different surcharge formula or may be based on the raw material prices at the time of order , which creates a lag between surcharge revenue and corresponding raw material costs recognized in cost of sales . the surcharge mechanism protects our net income on such sales except for the lag effect discussed above . however , surcharges have had a dilutive effect on our gross margin and operating margin percentages as described later in this report . approximately 25 percent of our net sales are sales to customers under firm price sales arrangements . firm price sales arrangements involve a risk of profit margin fluctuations , particularly when raw material prices are volatile . in order to reduce the risk of fluctuating profit margins on these sales , we enter into commodity forward contracts to purchase certain critical raw materials necessary to produce the related products sold . firm price sales arrangements generally include certain annual purchasing commitments and consumption schedules agreed to by the customers at selling prices based on raw material prices at the time the arrangements are established . if a customer fails to meet the volume commitments ( or the consumption schedule deviates from the agreed-upon terms of the firm price sales arrangements ) , the company may need to absorb the gains or losses associated with the commodity forward contracts on a temporary basis . gains or losses associated with commodity forward contracts are reclassified to earnings/loss when earnings are impacted by the hedged transaction . because we value most of our inventory under the lifo costing methodology , changes in the cost of raw materials and production activities are recognized in cost of sales in the current period attempting to match the most recently incurred costs with revenues . gains and or losses on the commodity forward contracts are reclassified from other comprehensive income together with the actual purchase price of the underlying commodities when the underlying commodities are purchased and recorded in inventory . to the extent that the total purchase price of the commodities , inclusive of the gains or losses on the commodity forward contracts , are higher or lower relative to the beginning of year costs , our cost of goods sold reflects such amounts . accordingly , the gains and or losses associated with commodity forward contracts may not impact the same period that the firm price sales arrangements revenue is recognized , and comparisons of gross profit from period to period may be impacted . these firm price sales arrangements are expected to continue as we look to strengthen our long-term customer relationships by expanding , renewing and in certain cases extending to a longer term , our customer long-term arrangements . we produce hundreds of grades of materials , with a wide range of pricing and profit levels depending on the grade . in addition , our product mix within a period is subject to the fluctuating order patterns of our customers as well as decisions we may make on participation in certain products based on available capacity including the impacts of capacity commitments we may have under existing customer agreements . while we expect to see positive contribution from a more favorable product mix in our margin performance over time , the impact by period may fluctuate , and period-to-period comparisons may vary . net pension expense net pension expense , as we define it below , includes the net periodic benefit costs related to both our pension and other postretirement plans . the net periodic benefit costs are determined annually based on beginning of year balances and are recorded ratably throughout the fiscal year , unless a significant re-measurement event occurs . the following is a summary of the net periodic benefit costs for the years ended june 30 , 2016 , 2015 and 2014 : replace_table_token_8_th 18 the service cost component of net pension expense represents the estimated cost of future pension liabilities earned associated with active employees . the pension earnings , interest and deferrals ( “ pension eid ” ) is comprised of the expected return on plan assets , interest costs on the projected benefit obligations of the plans and amortization of actuarial gains and losses and prior service costs . during the year ended june 30 , 2016 , we offered an early retirement incentive to certain employees . as a result of the incentive , $ 9.4 million was paid from the company 's qualified pension plan consisting of various personnel-related costs to cover severance payments . during the year ended june 30 , 2015 , in connection with a restructuring plan , we reduced approximately 200 salaried positions . story_separator_special_tag our fiscal year 2015 results reflect the impact of increasing sales by 2 percent in a challenging market environment which was more than offset by the weakness in the oil and gas businesses , increased operating costs and the restructuring plan implemented in the third quarter of fiscal year 2015. net sales net sales for fiscal year 2015 were $ 2,226.7 million , which was a 2 percent increase from fiscal year 2014. excluding surcharge revenue , sales were 2 percent higher than fiscal year 2014 on 4 percent lower volume . the results reflect sales increasing in the aerospace and defense , medical and transportation end-use markets , partially offset by the weakness in the energy end-use market due to weak market conditions . the increase in sales combined with lower shipment volume reflects a favorable shift in product mix . geographically , sales outside the united states increased 2 percent from fiscal year 2014 to $ 646.8 million . international sales as a percentage of our total net sales represented 29 percent for both fiscal years 2015 and 2014 . 25 sales by end-use markets we sell to customers across diversified end-use markets . the following table includes comparative information for our net sales , which includes surcharge revenue , by principal end-use markets which we believe is helpful supplemental information in analyzing the performance of the business from period to period : replace_table_token_17_th the following table includes comparative information for our net sales by the same principal end-use markets , but excluding surcharge revenue : replace_table_token_18_th sales to the aerospace and defense end-use market increased 5 percent from fiscal year 2014 to $ 1,053.8 million . excluding surcharge revenue , sales increased 4 percent on 2 percent higher shipment volume . the results reflect an increase in sales of fastener materials and a stronger demand for engine materials , partially offset by lower demand for structural and defense materials . sales to the energy end-use market of $ 285.6 million reflected an 8 percent decrease from fiscal year 2014. excluding surcharge revenue , sales decreased 9 percent on 9 percent lower shipment volume . the results reflect demand softness in materials used in oil and gas drilling and completions in the second half of fiscal year 2015. also , north american average directional and horizontal rig count decreased 46 percent from the prior year . these declines were partially offset by a moderate increase in power generation sales . transportation end-use market sales increased 11 percent from fiscal year 2014 to $ 171.0 million . excluding surcharge revenue , sales increased 9 percent on 5 percent higher shipment volume . the results reflect a strengthening mix for our materials used in engine fasteners , valve and fuel system materials . low fuel prices drove up sales for vehicle platforms with higher carpenter material content . in addition , sales of light trucks increased from the year ago period . also , fiscal year 2015 backlog is experiencing growth due to an improved mix compared to fiscal year 2014. sales to the medical end-use market increased 10 percent to $ 129.4 million from fiscal year 2014. excluding surcharge revenue , sales increased 10 percent on 13 percent higher shipment volume . the results reflect strength in demand for materials used for surgical instruments , as well as increased sales of titanium materials used in orthopedic implant procedures . however , the medical market pricing environment remains extremely competitive . industrial and consumer end-use market sales were $ 450.0 million for fiscal year 2015. excluding surcharge revenue , sales increased 1 percent on 14 percent lower shipment volume . the results reflect a favorable shift in product mix related to high-end consumer electronics and industrial capital goods . 26 distribution end-use market sales decreased 1 percent from the same period a year ago to $ 136.9 million . excluding surcharge revenue , sales decreased 1 percent from the same period a year ago . gross profit gross profit in fiscal year 2015 decreased to $ 318.3 million , or 14.3 percent of net sales ( 17.6 percent of net sales excluding surcharge revenue ) , from $ 398.9 million , or 18.4 percent of net sales ( 22.4 percent of net sales excluding surcharge revenue ) , for fiscal year 2014. the results reflect a stronger product mix which was more than offset by higher operating costs , unfavorable cost absorption as a result of reducing inventory and incremental depreciation expense due to the athens facility which was placed into service late in fiscal year 2014. our surcharge mechanism is structured to recover increases in raw material costs , although in certain cases with a lag effect as discussed above . while the surcharge generally protects the absolute gross profit dollars , it does have a dilutive effect on gross margin as a percent of sales . the following represents a summary of the dilutive impact of the surcharge on gross margin for fiscal years 2015 and 2014. we present and discuss these financial measures because management believes removing the impact of these items provides a more consistent and meaningful basis for comparing results of operations from period to period . see the section “ non-gaap financial measures ” below for further discussion of these financial measures . replace_table_token_19_th selling , general and administrative expenses selling , general and administrative expenses in fiscal year 2015 were $ 177.7 million , or 8.0 percent of net sales ( 9.8 percent of net sales excluding surcharge revenue ) , compared to $ 186.9 million , or 8.6 percent of net sales ( 10.5 percent of net sales excluding surcharge revenue ) , in fiscal year 2014. selling , general and administrative expenses decreased from the same period last year primarily due to lower depreciation and amortization expense of $ 4.3 million , lower variable compensation expense of $ 3.5 million , a reduction in pension eid expense of $ 3.1 million

