merchandise inventory is valued at the lower of average cost or market , utilizing the retail method . average cost includes merchandise design and sourcing costs and related expenses . the company records merchandise receipts at the time merchandise is delivered to the foreign shipping port by the manufacturer ( fob port ) . this is the point at which title and risk of loss transfer to us . we review our inventory in order to identify slow-moving merchandise and generally use markdowns to clear merchandise . additionally , we estimate a markdown reserve for future planned markdowns related to current inventory . if inventory exceeds customer demand for reasons of style , seasonal adaptation , changes in 19 customer preference , lack of consumer acceptance of fashion items , competition , or if it is determined that the inventory in stock will not sell at its currently ticketed price , additional markdowns may be necessary . these markdowns may have a material adverse impact on earnings , depending on the extent and amount of inventory affected . we estimate an inventory shrinkage reserve for anticipated losses for the period between the last physical count and the balance sheet date . the estimate for the shrinkage reserve is calculated based on historical percentages and can be affected by changes in merchandise mix and changes in actual shrinkage trends . we do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to calculate our inventory shrinkage reserve . however , if actual physical inventory losses differ significantly from our estimate , our operating results could be adversely affected . asset impairment . in accordance with financial accounting standards board ( fasb ) accounting standard codification ( asc ) 360 , property , plant , and equipment , we evaluate long-lived assets for impairment at the individual store level , which is the lowest level at which individual cash flows can be identified . impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of the assets . when events such as these occur , the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income under loss on impairment of assets . our impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values , including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows . we do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses . however , if actual results are not consistent with our estimates and assumptions , our operating results could be adversely affected . investment securities . in accordance with asc 820 , fair value measurements and disclosures ( asc 820 ) , we measure our investment securities using level 1 , level 2 and level 3 inputs . level 1 and level 2 inputs are valued using quoted market prices . in the event we hold level 3 investments , we would use a discounted cash flow ( dcf ) model to assess fair value of our level 3 investments . the assumptions in our dcf model include different recovery periods depending on the type of security and varying discount factors for yield and illiquidity . these assumptions are subjective and they are based on our current judgment and our view of current market conditions . the use of different assumptions could result in a different valuation . we evaluate our investments for impairment in accordance with asc 320 , investments  debt and equity securities ( asc 320 ) . asc 320 provides guidance for determining when an investment is considered impaired , whether impairment is other-than-temporary , and measurement of an impairment loss . an investment is considered impaired if the fair value of the investment is less than its cost . if , after consideration of all available evidence to evaluate the realizable value of its investment , impairment is determined to be other-than-temporary , then an impairment loss is recognized in the consolidated statement of operations equal to the difference between the investment 's cost and its fair value . additionally , asc 320 requires additional disclosures relating to debt and equity securities both in the interim and annual periods as well as requires us to present total other-than-temporary impairment ( otti ) with an offsetting reduction for any non-credit loss impairment amount recognized in other comprehensive income ( oci ) . share-based payments . we account for share-based payments in accordance with the provisions of asc 718 , compensation  stock compensation ( asc 718 ) . to determine the fair value of our stock option awards , we use the black-scholes option pricing model , which requires management to apply judgment and make assumptions to determine the fair value of our awards . these assumptions include estimating the length of time employees will retain their vested stock options before exercising them ( the expected term ) and the estimated volatility of the price of our common stock over the expected term . 20 we calculate a weighted-average expected term based on historical experience . expected stock price volatility is based on a combination of historical volatility of our common stock and implied volatility . we chose to use a combination of historical and implied volatility as we believe that this combination is more representative of future stock price trends than historical volatility alone . story_separator_special_tag as a rate to total net revenue , selling , general and administrative expenses improved 90 basis points to 23.0 % , compared to 23.9 % in fiscal 2010. expense reduction efforts , partially offset by new store growth , variable expense related to the sales increase and a planned investment in advertising led to the improvement in the rate . by brand , including aeo direct , american eagle outfitters contributed 80 basis points of the total sg & a improvement with aerie contributing 10 basis points of the increase . there was $ 6.5 million of share-based payment expense , consisting of time-based awards , included in selling , general and administrative expenses this year compared to $ 16.7 million in fiscal 2010. loss on impairment of assets the loss on impairment of assets of $ 19.2 million resulted from our evaluation of underperforming stores which exhibited an unanticipated increase in negative cash flow trends , driven by fourth quarter 2011 results . this impairment consisted of 57 retail stores , largely related to the aerie brand . depreciation and amortization expense depreciation and amortization expense decreased slightly to $ 138.0 million from $ 139.7 million in fiscal 2010. this decrease is primarily due to store closures during the year , partially offset by a greater property and equipment base driven by our level of capital expenditures . as a percent to total net revenue , depreciation and amortization expense decreased to 4.5 % from 4.7 % as a result of the decrease in expense and higher comparable sales for the period . realized loss on sale of investment securities there was no realized loss on sale of investment securities in fiscal 2011 , compared to $ 24.4 million , or $ 0.12 per diluted share , in fiscal 2010. the loss in fiscal 2010 was primarily due to the liquidation of 95 % of our auction rate security investment portfolio . other income , net other income , net increased to $ 5.9 million from $ 2.2 million last year . the change is primarily due to proceeds received from our ars call option in fiscal 2011 . 27 provision for income taxes the effective income tax rate from continuing operations decreased to approximately 36 % in fiscal 2011 from 38 % in fiscal 2010. the higher effective income tax rate in fiscal 2010 was primarily due to losses on the sale of certain ars investments for which no income tax benefit was recognized . refer to note 14 to the consolidated financial statements for additional information regarding our accounting for income taxes . income from continuing operations income from continuing operations for fiscal 2011 was $ 175.3 million , or $ 0.89 per diluted share , and includes $ 15.7 million , or ( $ 0.08 ) per diluted share , of after-tax store impairment and executive transition costs . income from continuing operations for fiscal 2010 was $ 195.7 million , or $ 0.97 per diluted share , and includes a ( $ 0.12 ) per diluted share loss from the sale of investment securities related to our ars liquidation . loss from discontinued operations we completed the closure of m+o stores and related e-commerce operations during fiscal 2010 and the sale of the 77kids stores and related e-commerce operations during fiscal 2012. accordingly , the after-tax operating results for m+o and 77kids appear in loss from discontinued operations on the consolidated statements of operations for all periods presented . loss from discontinued operations , net of tax , for fiscal 2011 was $ 23.6 million , which relates to 77kids operating losses only . loss from discontinued operations , net of tax , for fiscal 2010 was $ 55.1 million , of which $ 41.3 million and $ 13.8 million related to m+o and 77kids , respectively . the loss from discontinued operations for fiscal 2010 for m+o included both operating losses and closure charges , whereas 77kids relates only to operating losses . refer to note 15 to the consolidated financial statements for additional information regarding the discontinued operations of m+o and 77kids . net income net income increased to $ 151.7 million in fiscal 2011 from $ 140.6 million in fiscal 2010. as a percent to total net revenue , net income was 4.8 % and 4.7 % for fiscal 2011 and fiscal 2010 , respectively . net income per diluted share was $ 0.77 , compared to $ 0.70 in fiscal 2010. the increase in net income was attributable to the factors noted above . fair value measurements asc 820 defines fair value , establishes a framework for measuring fair value in accordance with gaap , and expands disclosures about fair value measurements . fair value is defined under asc 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date : financial instruments valuation techniques used to measure fair value under asc 820 must maximize the use of observable inputs and minimize the use of unobservable inputs . in addition , asc 820 establishes a three-tier fair value hierarchy , which prioritizes the inputs used in measuring fair value . the tiers include : level 1  quoted prices in active markets for identical assets or liabilities . level 2  inputs other than level 1 that are observable , either directly or indirectly , such as quoted prices for similar assets or liabilities ; quoted prices in markets that are not active ; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities . 28 level 3  unobservable inputs ( i.e . , projections , estimates , interpretations , etc . ) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities . as of

cash flow and liquidity  our management evaluates cash flow from operations , investing and financing in determining the sufficiency of our cash position . cash flow from operations has historically been sufficient to cover our uses of cash . our management believes that cash flow from operations will be sufficient to fund anticipated capital expenditures and working capital requirements . our management 's goals are to drive improvements to our gross profit performance , bring greater consistency to our results and to deliver profitable growth over the long term . specifically , our planned near-term financial targets are to deliver a total net revenue compounded annual growth rate ( cagr ) of 7 % to 9 % , an ebit cagr of 12 % to 15 % and a roic in the range of 14 % to 17 % , annually . 22 results of operations overview in 2012 , we made significant progress on our near-term goals . we focused on delivering results through our five near-term priorities : ( 1 ) driving a competitive top line ; ( 2 ) generating margin flow-through from improved inventory management ; ( 3 ) rebalancing our store fleet ; ( 4 ) accelerating our online business ; and ( 5 ) gaining leverage on our infrastructure . total revenue for the 53 week year increased 11 % to a record $ 3.476 billion , compared to $ 3.120 billion for the 52 week period last year . total comparable sales for the 53 week year increased 9 % over the corresponding 53 week period last year , with positive comparable sales in all quarters of the year . for the year , aeo brand comparable sales increased 7 % , aerie brand increased 6 % , and aeo direct increased 25 % . throughout the year , strong merchandise improvements led to comparable sales growth across the assortment . the strength of our brand , combined with a more distinct lifestyle point of view , is broadening our customer appeal .


 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 flow and liquidity  our management evaluates cash flow from operations , investing and financing in determining the sufficiency of our cash position . cash flow from operations has historically been sufficient to cover our uses of cash . our management believes that cash flow from operations will be sufficient to fund anticipated capital expenditures and working capital requirements . our management 's goals are to drive improvements to our gross profit performance , bring greater consistency to our results and to deliver profitable growth over the long term . specifically , our planned near-term financial targets are to deliver a total net revenue compounded annual growth rate ( cagr ) of 7 % to 9 % , an ebit cagr of 12 % to 15 % and a roic in the range of 14 % to 17 % , annually . 22 results of operations overview in 2012 , we made significant progress on our near-term goals . we focused on delivering results through our five near-term priorities : ( 1 ) driving a competitive top line ; ( 2 ) generating margin flow-through from improved inventory management ; ( 3 ) rebalancing our store fleet ; ( 4 ) accelerating our online business ; and ( 5 ) gaining leverage on our infrastructure . total revenue for the 53 week year increased 11 % to a record $ 3.476 billion , compared to $ 3.120 billion for the 52 week period last year . total comparable sales for the 53 week year increased 9 % over the corresponding 53 week period last year , with positive comparable sales in all quarters of the year . for the year , aeo brand comparable sales increased 7 % , aerie brand increased 6 % , and aeo direct increased 25 % . throughout the year , strong merchandise improvements led to comparable sales growth across the assortment . the strength of our brand , combined with a more distinct lifestyle point of view , is broadening our customer appeal .
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 Suspicious Activity Report : merchandise inventory is valued at the lower of average cost or market , utilizing the retail method . average cost includes merchandise design and sourcing costs and related expenses . the company records merchandise receipts at the time merchandise is delivered to the foreign shipping port by the manufacturer ( fob port ) . this is the point at which title and risk of loss transfer to us . we review our inventory in order to identify slow-moving merchandise and generally use markdowns to clear merchandise . additionally , we estimate a markdown reserve for future planned markdowns related to current inventory . if inventory exceeds customer demand for reasons of style , seasonal adaptation , changes in 19 customer preference , lack of consumer acceptance of fashion items , competition , or if it is determined that the inventory in stock will not sell at its currently ticketed price , additional markdowns may be necessary . these markdowns may have a material adverse impact on earnings , depending on the extent and amount of inventory affected . we estimate an inventory shrinkage reserve for anticipated losses for the period between the last physical count and the balance sheet date . the estimate for the shrinkage reserve is calculated based on historical percentages and can be affected by changes in merchandise mix and changes in actual shrinkage trends . we do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to calculate our inventory shrinkage reserve . however , if actual physical inventory losses differ significantly from our estimate , our operating results could be adversely affected . asset impairment . in accordance with financial accounting standards board ( fasb ) accounting standard codification ( asc ) 360 , property , plant , and equipment , we evaluate long-lived assets for impairment at the individual store level , which is the lowest level at which individual cash flows can be identified . impairment losses are recorded on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of the assets . when events such as these occur , the impaired assets are adjusted to their estimated fair value and an impairment loss is recorded separately as a component of operating income under loss on impairment of assets . our impairment loss calculations require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values , including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows . we do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate long-lived asset impairment losses . however , if actual results are not consistent with our estimates and assumptions , our operating results could be adversely affected . investment securities . in accordance with asc 820 , fair value measurements and disclosures ( asc 820 ) , we measure our investment securities using level 1 , level 2 and level 3 inputs . level 1 and level 2 inputs are valued using quoted market prices . in the event we hold level 3 investments , we would use a discounted cash flow ( dcf ) model to assess fair value of our level 3 investments . the assumptions in our dcf model include different recovery periods depending on the type of security and varying discount factors for yield and illiquidity . these assumptions are subjective and they are based on our current judgment and our view of current market conditions . the use of different assumptions could result in a different valuation . we evaluate our investments for impairment in accordance with asc 320 , investments  debt and equity securities ( asc 320 ) . asc 320 provides guidance for determining when an investment is considered impaired , whether impairment is other-than-temporary , and measurement of an impairment loss . an investment is considered impaired if the fair value of the investment is less than its cost . if , after consideration of all available evidence to evaluate the realizable value of its investment , impairment is determined to be other-than-temporary , then an impairment loss is recognized in the consolidated statement of operations equal to the difference between the investment 's cost and its fair value . additionally , asc 320 requires additional disclosures relating to debt and equity securities both in the interim and annual periods as well as requires us to present total other-than-temporary impairment ( otti ) with an offsetting reduction for any non-credit loss impairment amount recognized in other comprehensive income ( oci ) . share-based payments . we account for share-based payments in accordance with the provisions of asc 718 , compensation  stock compensation ( asc 718 ) . to determine the fair value of our stock option awards , we use the black-scholes option pricing model , which requires management to apply judgment and make assumptions to determine the fair value of our awards . these assumptions include estimating the length of time employees will retain their vested stock options before exercising them ( the expected term ) and the estimated volatility of the price of our common stock over the expected term . 20 we calculate a weighted-average expected term based on historical experience . expected stock price volatility is based on a combination of historical volatility of our common stock and implied volatility . we chose to use a combination of historical and implied volatility as we believe that this combination is more representative of future stock price trends than historical volatility alone . story_separator_special_tag as a rate to total net revenue , selling , general and administrative expenses improved 90 basis points to 23.0 % , compared to 23.9 % in fiscal 2010. expense reduction efforts , partially offset by new store growth , variable expense related to the sales increase and a planned investment in advertising led to the improvement in the rate . by brand , including aeo direct , american eagle outfitters contributed 80 basis points of the total sg & a improvement with aerie contributing 10 basis points of the increase . there was $ 6.5 million of share-based payment expense , consisting of time-based awards , included in selling , general and administrative expenses this year compared to $ 16.7 million in fiscal 2010. loss on impairment of assets the loss on impairment of assets of $ 19.2 million resulted from our evaluation of underperforming stores which exhibited an unanticipated increase in negative cash flow trends , driven by fourth quarter 2011 results . this impairment consisted of 57 retail stores , largely related to the aerie brand . depreciation and amortization expense depreciation and amortization expense decreased slightly to $ 138.0 million from $ 139.7 million in fiscal 2010. this decrease is primarily due to store closures during the year , partially offset by a greater property and equipment base driven by our level of capital expenditures . as a percent to total net revenue , depreciation and amortization expense decreased to 4.5 % from 4.7 % as a result of the decrease in expense and higher comparable sales for the period . realized loss on sale of investment securities there was no realized loss on sale of investment securities in fiscal 2011 , compared to $ 24.4 million , or $ 0.12 per diluted share , in fiscal 2010. the loss in fiscal 2010 was primarily due to the liquidation of 95 % of our auction rate security investment portfolio . other income , net other income , net increased to $ 5.9 million from $ 2.2 million last year . the change is primarily due to proceeds received from our ars call option in fiscal 2011 . 27 provision for income taxes the effective income tax rate from continuing operations decreased to approximately 36 % in fiscal 2011 from 38 % in fiscal 2010. the higher effective income tax rate in fiscal 2010 was primarily due to losses on the sale of certain ars investments for which no income tax benefit was recognized . refer to note 14 to the consolidated financial statements for additional information regarding our accounting for income taxes . income from continuing operations income from continuing operations for fiscal 2011 was $ 175.3 million , or $ 0.89 per diluted share , and includes $ 15.7 million , or ( $ 0.08 ) per diluted share , of after-tax store impairment and executive transition costs . income from continuing operations for fiscal 2010 was $ 195.7 million , or $ 0.97 per diluted share , and includes a ( $ 0.12 ) per diluted share loss from the sale of investment securities related to our ars liquidation . loss from discontinued operations we completed the closure of m+o stores and related e-commerce operations during fiscal 2010 and the sale of the 77kids stores and related e-commerce operations during fiscal 2012. accordingly , the after-tax operating results for m+o and 77kids appear in loss from discontinued operations on the consolidated statements of operations for all periods presented . loss from discontinued operations , net of tax , for fiscal 2011 was $ 23.6 million , which relates to 77kids operating losses only . loss from discontinued operations , net of tax , for fiscal 2010 was $ 55.1 million , of which $ 41.3 million and $ 13.8 million related to m+o and 77kids , respectively . the loss from discontinued operations for fiscal 2010 for m+o included both operating losses and closure charges , whereas 77kids relates only to operating losses . refer to note 15 to the consolidated financial statements for additional information regarding the discontinued operations of m+o and 77kids . net income net income increased to $ 151.7 million in fiscal 2011 from $ 140.6 million in fiscal 2010. as a percent to total net revenue , net income was 4.8 % and 4.7 % for fiscal 2011 and fiscal 2010 , respectively . net income per diluted share was $ 0.77 , compared to $ 0.70 in fiscal 2010. the increase in net income was attributable to the factors noted above . fair value measurements asc 820 defines fair value , establishes a framework for measuring fair value in accordance with gaap , and expands disclosures about fair value measurements . fair value is defined under asc 820 as the exit price associated with the sale of an asset or transfer of a liability in an orderly transaction between market participants at the measurement date : financial instruments valuation techniques used to measure fair value under asc 820 must maximize the use of observable inputs and minimize the use of unobservable inputs . in addition , asc 820 establishes a three-tier fair value hierarchy , which prioritizes the inputs used in measuring fair value . the tiers include : level 1  quoted prices in active markets for identical assets or liabilities . level 2  inputs other than level 1 that are observable , either directly or indirectly , such as quoted prices for similar assets or liabilities ; quoted prices in markets that are not active ; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities . 28 level 3  unobservable inputs ( i.e . , projections , estimates , interpretations , etc . ) that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities . as of

