as further discussed in the direct-to-consumer operations section , the 2014 change in classification of retail concession fees improved gross margin by 20 basis points and increased the ratio of selling , general and administration expenses to revenues compared to 2013. in 2013 , gross margin increased 160 basis points to 48.1 % compared with 46.5 % in 2012 , with improvements in nearly every coalition . the increase in gross margin reflects lower product costs and the continued shift in the revenue mix towards higher margin businesses , including outdoor & action sports , international and direct-to-consumer . selling , general and administrative expenses as a percentage of total revenues were 30 basis points higher in 2014 compared with 2013. excluding the impact of the aforementioned change in classification of retail concession fees , the percentage of selling , general and administrative expenses to revenues did not change in 2014 compared with 2013 , as the impact from increased investments in direct-to-consumer businesses and marketing was offset by the leverage of operating expenses on higher revenues . selling , general and administrative expenses as a percentage of total revenues were 50 basis points higher in 2013 compared with 2012 due to additional marketing and direct-to-consumer investments to support future growth for our largest and fastest growing businesses , partially offset by the leverage of operating expenses on higher revenues and lower acquisition-related expenses for the timberland company ( timberland ) . as part of its annual impairment testing performed in the fourth quarter of 2014 , vf recorded a $ 396.4 million pre-tax , noncash impairment charge to reduce the carrying value of the goodwill and intangible assets related to our 7 for all mankind ® , splendid ® and ella moss ® brands to their respective estimated fair values . no impairment charge was required in 2013 or 2012. for additional information , see notes f , g and t to the consolidated financial statements and the critical accounting policies and estimates section below . in 2014 , operating margin declined 270 basis points , to 11.7 % from 14.4 % in 2013. the decrease in operating margin for 2014 reflects gross margin expansion and a 320 basis point decrease from the noncash impairment charge for goodwill and intangible assets . in 2013 , operating margin increased 90 basis points , to 14.4 % from 13.5 % in 2012. the increase in operating margin for 2013 was due to improved gross margin and the leverage of operating expenses on higher revenues , partially offset by increased marketing and direct-to-consumer investments in 2013. net interest expense decreased $ 0.8 million to $ 79.8 million in 2014 , due to the repayment of $ 400 million of floating rate notes during the third quarter of 2013 and increased interest income on cash equivalents , partially offset by higher average levels of short-term borrowings in 2014. net interest expense decreased $ 9.6 million to $ 80.6 million in 2013 due to ( i ) lower average levels of short-term borrowings , ( ii ) the repayment of $ 400.0 million of floating rate notes during the third quarter of 2013 , and ( iii ) increased amounts of interest capitalized for significant projects . outstanding interest-bearing debt averaged $ 1.8 billion for 2014 , $ 1.9 billion for 2013 and $ 2.5 billion for 2012 , with short-term borrowings representing 22 % , 10 % and 25 % of average debt outstanding for the respective years . the weighted average interest rate on outstanding debt was 4.6 % for 2014 , 4.5 % for 2013 and 3.7 % for 2012. the weighted average interest rate increased slightly in 2014 compared with 2013 primarily due to higher interest rates on international short-term borrowings . the weighted average interest rate increased in 2013 from 2012 primarily due to ( i ) lower average levels of short-term borrowings , which have lower interest rates than the average of all outstanding debt , and ( ii ) fewer months outstanding of the $ 400 million floating rate debt , which had a lower interest rate than the average of all outstanding debt , and was repaid during the year . other income ( expense ) netted to expense of $ 5.5 million in 2014 compared with expense of $ 4.0 million in 2013. the expense in both 2014 and 2013 was primarily due to foreign currency exchange losses . 30 other income ( expense ) netted to expense of $ 4.0 million in 2013 compared with income of $ 46.9 million in 2012. the expense in 2013 was primarily due to foreign currency exchange losses . the income in 2012 was primarily due to the $ 42.0 million gain on the sale of vf 's 80 % ownership in john varvatos enterprises , inc. ( john varvatos ) . the effective income tax rate was 22.5 % in 2014 compared with 22.6 % in 2013. the 2014 tax rate included a net discrete tax benefit of $ 13.8 million , primarily related to the retroactive impact of the tax increase prevention act of 2014 discussed below ( $ 5.3 million tax benefit ) and unrecognized tax benefits and interest ( net $ 11.4 million tax benefit ) , partially offset by other discrete tax items ( net $ 2.9 million tax expense ) . these discrete items collectively lowered the 2014 annual tax rate by 1.0 % compared with 1.7 % in 2013. without discrete items , the effective tax rate during 2014 decreased by approximately 0.7 % . the international effective tax rate was 12.7 % and 12.1 % for 2014 and 2013 , respectively . story_separator_special_tag the current year service cost component of pension expense is allocated to the coalitions , while the remaining cost components totaling $ 32.0 million for 2014 , $ 60.9 million for 2013 and $ 67.2 million for 2012 , are reported in corporate and other expenses . the decrease in other expenses in 2014 compared with 2013 was driven by lower pension expense in 2014 compared with 2013. the increase in other expenses in 2013 compared with 2012 was driven by the $ 42.0 million gain on the sale of john varvatos , which was recorded as an offset to other expense in 2012. in addition , an increase in deferred compensation expense in 2013 was partially offset by lower pension expense compared with 2012. international operations international revenues grew 9 % in 2014 compared with 2013. revenues in europe rose 8 % with positive results from most vf brands sold in that region . in the asia pacific region , revenues increased 17 % primarily driven by growth in china . revenues in the americas ( non-u.s. ) region increased 5 % . international revenues represented 38 % of total vf revenues in both 2014 and 2013. foreign currency translation negatively impacted international revenues by $ 90.6 million in 2014. direct-to-consumer operations direct-to-consumer revenues grew 19 % in 2014 with double-digit increases in all regions and growth in nearly every vf brand with a retail format . new store openings , comparable store growth and an expanding e-commerce business all contributed to the direct-to-consumer revenue growth . vf opened 188 stores in 2014 , bringing the total number of vf-owned retail stores to 1,401 at december 2014. direct-to-consumer revenues were 26 % of total vf revenues in 2014 compared with 24 % in 2013 ( 22 % in 2013 prior to the concession classification change discussed below ) . concessions are retail store locations , which are all outside the u.s. , where vf is responsible for all aspects of operations without ownership of the retail space . under typical concession arrangements , vf pays a concession fee for use of the space based on a percentage of retail sales . beginning in 2014 , we have included all revenues from concession retail stores in our direct-to-consumer revenues . in addition , we began classifying all concession fees as a component of selling , general and administrative expenses instead of the previous treatment as an offset to revenue in the consolidated statements of income . we made these changes to better represent the operations of our direct-to-consumer business . these changes in classification did not impact operating income . the 2013 and 2012 reported balances have not been restated in the consolidated statements of income because the impact is immaterial . however , comparative references to direct-to-consumer and wholesale revenue growth rates reflect the reclassification of concession revenues to the direct-to-consumer channel as if the change had occurred at the beginning of each reporting period . 37 analysis of financial condition balance sheets the following discussion refers to significant changes in balances at december 2014 compared with december 2013 : decrease in accounts receivable  resulting from the impact of the 53 rd week which included strong cash collections from our wholesale customers . increase in inventory  driven by expected revenue growth in the first quarter of 2015 compared with the prior year . increase in other current assets  primarily due to higher prepaid income taxes and unrealized hedging gains . decrease in intangible assets  driven by ( i ) impairment charges for 7 for all mankind ® and splendid ® and ella moss ® to reduce the carrying values of their customer relationship assets and indefinite-lived trademarks to fair value , ( ii ) the impact of foreign currency fluctuations , and ( iii ) amortization expense . see notes f and t to the consolidated financial statements for additional information . decrease in goodwill  due to the impairment charge related to the splendid ® and ella moss ® reporting unit and the impact of foreign currency fluctuations . see notes g and t to the consolidated financial statements for additional information . increase in other assets  primarily due to higher deferred software costs related to i ) system implementations , and ii ) a new software license agreement that supports our e-commerce infrastructure and other key business functions . increase in other liabilities  resulting from an increase in the underfunded status of the defined benefit pension plans in 2014 , as discussed below , partially offset by lower deferred income taxes . the funded status of the defined benefit pension plans is reflected in the balance sheet as the excess ( or deficiency ) of pension plan assets compared with projected benefit obligations payable to plan participants . the underfunded status of the defined benefit pension plans was $ 371.7 million at the end of 2014 compared with $ 221.2 million at the end of 2013. the decline in the funded status as of december 2014 was due to an increase in the projected benefit obligations caused primarily by lower discount rates and increased mortality expectations , partially offset by an increase in pension plan assets due to a $ 50.0 million discretionary contribution to the domestic qualified plan in december 2014. vf made an additional $ 250.0 million discretionary contribution to the domestic qualified plan in january 2015 which significantly improved the underfunded status subsequent to year-end . see the critical accounting policies and estimates section below and note m to the consolidated financial statements for additional discussion of the defined benefit pension plans . story_separator_special_tag net of foreign taxes already paid . following is a summary of vf 's contractual obligations and commercial commitments at the end of 2014 that will require the use of funds : replace_table_token_16_th ( 1 ) long-term debt consists of required principal payments on long-term debt and capital lease obligations . 40 ( 2

liquidity and cash flows the financial condition of vf is reflected in the following : replace_table_token_14_th for the ratio of debt to total capital , debt is defined as short-term and long-term debt , and total capital is defined as debt plus stockholders ' equity . the ratio of net debt to total net capital ( with net debt defined as debt less cash and equivalents and total net capital defined as total capital less cash and equivalents ) was 7.8 % at december 2014 and 10.0 % at december 2013 . 38 in summary , our cash flows were as follows : replace_table_token_15_th cash provided by operating activities vf 's primary source of liquidity is the strong cash flow provided by operating activities , which is dependent on the level of net income and changes in working capital . cash provided by operating activities was $ 1.7 billion in 2014 , $ 1.5 billion in 2013 and $ 1.3 billion in 2012. although net income decreased in 2014 due to the impairment charge for goodwill and intangible assets , cash provided by operations increased in 2014 compared with 2013 primarily due to i ) improved operating performance , ii ) increased accounts receivable collections during the 53rd week , and iii ) the net impact of changes in noncash adjustments , primarily related to pension obligations , impairment charges , depreciation and amortization , and deferred taxes . these cash flow increases were partially offset by the impact of higher inventory levels at the end of 2014 compared with 2013 due to anticipated revenue growth in the first quarter of 2015. the improvement in cash provided by operations in 2013 compared with 2012 is due to the increase in net income and higher levels of noncash adjustments related to ( i ) pension and deferred compensation obligations , ( ii ) depreciation and amortization , and ( iii ) the 2012 gain on the sale of john varvatos . the net change in operating assets and liabilities was essentially the same in 2013 and 2012 , reflecting a slightly improved use of working capital considering the growth in the business .


 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 cash flows the financial condition of vf is reflected in the following : replace_table_token_14_th for the ratio of debt to total capital , debt is defined as short-term and long-term debt , and total capital is defined as debt plus stockholders ' equity . the ratio of net debt to total net capital ( with net debt defined as debt less cash and equivalents and total net capital defined as total capital less cash and equivalents ) was 7.8 % at december 2014 and 10.0 % at december 2013 . 38 in summary , our cash flows were as follows : replace_table_token_15_th cash provided by operating activities vf 's primary source of liquidity is the strong cash flow provided by operating activities , which is dependent on the level of net income and changes in working capital . cash provided by operating activities was $ 1.7 billion in 2014 , $ 1.5 billion in 2013 and $ 1.3 billion in 2012. although net income decreased in 2014 due to the impairment charge for goodwill and intangible assets , cash provided by operations increased in 2014 compared with 2013 primarily due to i ) improved operating performance , ii ) increased accounts receivable collections during the 53rd week , and iii ) the net impact of changes in noncash adjustments , primarily related to pension obligations , impairment charges , depreciation and amortization , and deferred taxes . these cash flow increases were partially offset by the impact of higher inventory levels at the end of 2014 compared with 2013 due to anticipated revenue growth in the first quarter of 2015. the improvement in cash provided by operations in 2013 compared with 2012 is due to the increase in net income and higher levels of noncash adjustments related to ( i ) pension and deferred compensation obligations , ( ii ) depreciation and amortization , and ( iii ) the 2012 gain on the sale of john varvatos . the net change in operating assets and liabilities was essentially the same in 2013 and 2012 , reflecting a slightly improved use of working capital considering the growth in the business .
```    
 Suspicious Activity Report : as further discussed in the direct-to-consumer operations section , the 2014 change in classification of retail concession fees improved gross margin by 20 basis points and increased the ratio of selling , general and administration expenses to revenues compared to 2013. in 2013 , gross margin increased 160 basis points to 48.1 % compared with 46.5 % in 2012 , with improvements in nearly every coalition . the increase in gross margin reflects lower product costs and the continued shift in the revenue mix towards higher margin businesses , including outdoor & action sports , international and direct-to-consumer . selling , general and administrative expenses as a percentage of total revenues were 30 basis points higher in 2014 compared with 2013. excluding the impact of the aforementioned change in classification of retail concession fees , the percentage of selling , general and administrative expenses to revenues did not change in 2014 compared with 2013 , as the impact from increased investments in direct-to-consumer businesses and marketing was offset by the leverage of operating expenses on higher revenues . selling , general and administrative expenses as a percentage of total revenues were 50 basis points higher in 2013 compared with 2012 due to additional marketing and direct-to-consumer investments to support future growth for our largest and fastest growing businesses , partially offset by the leverage of operating expenses on higher revenues and lower acquisition-related expenses for the timberland company ( timberland ) . as part of its annual impairment testing performed in the fourth quarter of 2014 , vf recorded a $ 396.4 million pre-tax , noncash impairment charge to reduce the carrying value of the goodwill and intangible assets related to our 7 for all mankind ® , splendid ® and ella moss ® brands to their respective estimated fair values . no impairment charge was required in 2013 or 2012. for additional information , see notes f , g and t to the consolidated financial statements and the critical accounting policies and estimates section below . in 2014 , operating margin declined 270 basis points , to 11.7 % from 14.4 % in 2013. the decrease in operating margin for 2014 reflects gross margin expansion and a 320 basis point decrease from the noncash impairment charge for goodwill and intangible assets . in 2013 , operating margin increased 90 basis points , to 14.4 % from 13.5 % in 2012. the increase in operating margin for 2013 was due to improved gross margin and the leverage of operating expenses on higher revenues , partially offset by increased marketing and direct-to-consumer investments in 2013. net interest expense decreased $ 0.8 million to $ 79.8 million in 2014 , due to the repayment of $ 400 million of floating rate notes during the third quarter of 2013 and increased interest income on cash equivalents , partially offset by higher average levels of short-term borrowings in 2014. net interest expense decreased $ 9.6 million to $ 80.6 million in 2013 due to ( i ) lower average levels of short-term borrowings , ( ii ) the repayment of $ 400.0 million of floating rate notes during the third quarter of 2013 , and ( iii ) increased amounts of interest capitalized for significant projects . outstanding interest-bearing debt averaged $ 1.8 billion for 2014 , $ 1.9 billion for 2013 and $ 2.5 billion for 2012 , with short-term borrowings representing 22 % , 10 % and 25 % of average debt outstanding for the respective years . the weighted average interest rate on outstanding debt was 4.6 % for 2014 , 4.5 % for 2013 and 3.7 % for 2012. the weighted average interest rate increased slightly in 2014 compared with 2013 primarily due to higher interest rates on international short-term borrowings . the weighted average interest rate increased in 2013 from 2012 primarily due to ( i ) lower average levels of short-term borrowings , which have lower interest rates than the average of all outstanding debt , and ( ii ) fewer months outstanding of the $ 400 million floating rate debt , which had a lower interest rate than the average of all outstanding debt , and was repaid during the year . other income ( expense ) netted to expense of $ 5.5 million in 2014 compared with expense of $ 4.0 million in 2013. the expense in both 2014 and 2013 was primarily due to foreign currency exchange losses . 30 other income ( expense ) netted to expense of $ 4.0 million in 2013 compared with income of $ 46.9 million in 2012. the expense in 2013 was primarily due to foreign currency exchange losses . the income in 2012 was primarily due to the $ 42.0 million gain on the sale of vf 's 80 % ownership in john varvatos enterprises , inc. ( john varvatos ) . the effective income tax rate was 22.5 % in 2014 compared with 22.6 % in 2013. the 2014 tax rate included a net discrete tax benefit of $ 13.8 million , primarily related to the retroactive impact of the tax increase prevention act of 2014 discussed below ( $ 5.3 million tax benefit ) and unrecognized tax benefits and interest ( net $ 11.4 million tax benefit ) , partially offset by other discrete tax items ( net $ 2.9 million tax expense ) . these discrete items collectively lowered the 2014 annual tax rate by 1.0 % compared with 1.7 % in 2013. without discrete items , the effective tax rate during 2014 decreased by approximately 0.7 % . the international effective tax rate was 12.7 % and 12.1 % for 2014 and 2013 , respectively . story_separator_special_tag the current year service cost component of pension expense is allocated to the coalitions , while the remaining cost components totaling $ 32.0 million for 2014 , $ 60.9 million for 2013 and $ 67.2 million for 2012 , are reported in corporate and other expenses . the decrease in other expenses in 2014 compared with 2013 was driven by lower pension expense in 2014 compared with 2013. the increase in other expenses in 2013 compared with 2012 was driven by the $ 42.0 million gain on the sale of john varvatos , which was recorded as an offset to other expense in 2012. in addition , an increase in deferred compensation expense in 2013 was partially offset by lower pension expense compared with 2012. international operations international revenues grew 9 % in 2014 compared with 2013. revenues in europe rose 8 % with positive results from most vf brands sold in that region . in the asia pacific region , revenues increased 17 % primarily driven by growth in china . revenues in the americas ( non-u.s. ) region increased 5 % . international revenues represented 38 % of total vf revenues in both 2014 and 2013. foreign currency translation negatively impacted international revenues by $ 90.6 million in 2014. direct-to-consumer operations direct-to-consumer revenues grew 19 % in 2014 with double-digit increases in all regions and growth in nearly every vf brand with a retail format . new store openings , comparable store growth and an expanding e-commerce business all contributed to the direct-to-consumer revenue growth . vf opened 188 stores in 2014 , bringing the total number of vf-owned retail stores to 1,401 at december 2014. direct-to-consumer revenues were 26 % of total vf revenues in 2014 compared with 24 % in 2013 ( 22 % in 2013 prior to the concession classification change discussed below ) . concessions are retail store locations , which are all outside the u.s. , where vf is responsible for all aspects of operations without ownership of the retail space . under typical concession arrangements , vf pays a concession fee for use of the space based on a percentage of retail sales . beginning in 2014 , we have included all revenues from concession retail stores in our direct-to-consumer revenues . in addition , we began classifying all concession fees as a component of selling , general and administrative expenses instead of the previous treatment as an offset to revenue in the consolidated statements of income . we made these changes to better represent the operations of our direct-to-consumer business . these changes in classification did not impact operating income . the 2013 and 2012 reported balances have not been restated in the consolidated statements of income because the impact is immaterial . however , comparative references to direct-to-consumer and wholesale revenue growth rates reflect the reclassification of concession revenues to the direct-to-consumer channel as if the change had occurred at the beginning of each reporting period . 37 analysis of financial condition balance sheets the following discussion refers to significant changes in balances at december 2014 compared with december 2013 : decrease in accounts receivable  resulting from the impact of the 53 rd week which included strong cash collections from our wholesale customers . increase in inventory  driven by expected revenue growth in the first quarter of 2015 compared with the prior year . increase in other current assets  primarily due to higher prepaid income taxes and unrealized hedging gains . decrease in intangible assets  driven by ( i ) impairment charges for 7 for all mankind ® and splendid ® and ella moss ® to reduce the carrying values of their customer relationship assets and indefinite-lived trademarks to fair value , ( ii ) the impact of foreign currency fluctuations , and ( iii ) amortization expense . see notes f and t to the consolidated financial statements for additional information . decrease in goodwill  due to the impairment charge related to the splendid ® and ella moss ® reporting unit and the impact of foreign currency fluctuations . see notes g and t to the consolidated financial statements for additional information . increase in other assets  primarily due to higher deferred software costs related to i ) system implementations , and ii ) a new software license agreement that supports our e-commerce infrastructure and other key business functions . increase in other liabilities  resulting from an increase in the underfunded status of the defined benefit pension plans in 2014 , as discussed below , partially offset by lower deferred income taxes . the funded status of the defined benefit pension plans is reflected in the balance sheet as the excess ( or deficiency ) of pension plan assets compared with projected benefit obligations payable to plan participants . the underfunded status of the defined benefit pension plans was $ 371.7 million at the end of 2014 compared with $ 221.2 million at the end of 2013. the decline in the funded status as of december 2014 was due to an increase in the projected benefit obligations caused primarily by lower discount rates and increased mortality expectations , partially offset by an increase in pension plan assets due to a $ 50.0 million discretionary contribution to the domestic qualified plan in december 2014. vf made an additional $ 250.0 million discretionary contribution to the domestic qualified plan in january 2015 which significantly improved the underfunded status subsequent to year-end . see the critical accounting policies and estimates section below and note m to the consolidated financial statements for additional discussion of the defined benefit pension plans . story_separator_special_tag net of foreign taxes already paid . following is a summary of vf 's contractual obligations and commercial commitments at the end of 2014 that will require the use of funds : replace_table_token_16_th ( 1 ) long-term debt consists of required principal payments on long-term debt and capital lease obligations . 40 ( 2

