approximately 36 % of our net sales for 2010 were to other advanced markets and we anticipate that these markets will continue to grow and will represent a larger portion of our revenue . a significant portion of our net sales is to operations in international markets . international net sales include sales by our foreign subsidiaries , but exclude direct export sales . during the years 2010 , 2009 and 2008 , international net sales accounted for approximately 43 % , 46 % and 44 % of our net sales , respectively . a significant portion of our international net sales were sales in japan . we expect that international net sales will continue to represent a significant percentage of our total net sales . 20 critical accounting policies and estimates management 's discussion and analysis of financial condition and results of operations discusses our consolidated financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . on an on-going basis , we evaluate our estimates and judgments , including those related to revenue recognition and allowance for doubtful accounts , inventory , warranty costs , stock-based compensation expense , intangible assets , goodwill and other long-lived assets , in-process research and development and income taxes . we base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . we believe the following critical accounting policies affect the most significant judgments , assumptions and estimates we use in preparing our consolidated financial statements : revenue recognition and accounts receivable allowances . revenue from product sales is recorded upon transfer of title and risk of loss to the customer provided that there is evidence of an arrangement , the sales price is fixed or determinable , and collection of the related receivable is reasonably assured . in most transactions , we have no obligations to our customers after the date products are shipped other than pursuant to warranty obligations . in some instances , we provide installation , training , support and services to customers after the product has been shipped . we defer the fair value of any undelivered elements until the undelivered element is delivered . fair value is the price charged when the element is sold separately . shipping and handling fees billed to customers , if any , are recognized as revenue . the related shipping and handling costs are recognized in cost of sales . we monitor and track the amount of product returns , provide for accounts receivable allowances and reduce revenue at the time of shipment for the estimated amount of such future returns , based on historical experience . while product returns have historically been within our expectations and the provisions established , there is no assurance that we will continue to experience the same return rates that we have in the past . any significant increase in product return rates could have a material adverse impact on our operating results for the period or periods in which such returns materialize . while we maintain a credit approval process , significant judgments are made by management in connection with assessing our customers ' ability to pay at the time of shipment . despite this assessment , from time to time , our customers are unable to meet their payment obligations . we continuously monitor our customers ' credit worthiness , and use our judgment in establishing a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that we have identified . while such credit losses have historically been within our expectations and the provisions established , there is no assurance that we will continue to experience the same credit loss rates that we have in the past . a significant change in the liquidity or financial position of our customers could have a material adverse impact on the collectability of accounts receivable and our future operating results . inventory . we value our inventory at the lower of cost ( first-in , first-out method ) or market . we regularly review inventory quantities on hand and record a provision to write-down excess and obsolete inventory to its estimated net realizable value , if less than cost , based primarily on our estimated forecast of product demand . once our inventory value is written-down and a new cost basis has been established , the inventory value is not increased due to demand increases . demand for our products can fluctuate significantly . a significant increase in the demand for our products could result in a short-term increase in the cost of inventory purchases as a result of supply shortages or a decrease in the cost of inventory purchases as a result of volume discounts , while a significant decrease in demand could result in an increase in the charges for excess inventory quantities on hand . in addition , our industry is subject to technological change , new product development and product technological obsolescence that could result in an increase in the amount of obsolete inventory quantities on hand . therefore , any significant unanticipated changes in demand or technological developments could have a significant impact on the value of our inventory and our reported operating results . story_separator_special_tag our domestic product revenues decreased by $ 127.4 million or 40.3 % during 2009 compared to the same period for the prior year mainly due to a high concentration of sales to the semiconductor capital equipment and device manufacturer customers . our international product revenues decreased $ 85.5 million or 38.5 % during 2009. this decrease consists of a $ 39.4 million decrease in product revenues from our semiconductor customers and a decrease in product revenues of $ 46.1 million related to other markets . service revenues consisted mainly of fees for services related to the maintenance and repair of our products , software maintenance , installation services and training . service revenues increased $ 21.9 million or 32.4 % during 2010 compared to 2009 as a result of the improvement in the global economy in 2010. service revenues decreased $ 15.9 million or 19.0 % during 2009 compared to 2008 due to lower spending by our customers on these services as a result of the weakened global economic conditions in 2009. total international net revenues , including product and service , were $ 369.0 million for 2010 or 43.2 % of net sales compared to $ 180.1 million for 2009 or 45.8 % of net sales and $ 275.0 million or 44.2 % of net sales for 2008. gross profit replace_table_token_5_th gross profit on product revenues increased by 12.4 percentage points during 2010 compared to the prior year . the increase was mainly due to an increase in product revenue volumes which accounted for 8.2 percentage points of the overall increase and an increase of 1.6 percentage points due to favorable product mix . in addition , our gross profit increased by 2.4 percentage points due to lower excess and obsolete inventory related net charges . the higher excess and obsolete inventory related charges in 2009 were primarily a result of a lower inventory consumption plan in the first quarter of 2009 that we implemented in response to the weakness in the markets we served during that period . gross profit on product revenues decreased by 8.2 percentage points during 2009 compared to the prior year . the decrease was due to an unfavorable product mix of 3.1 percentage points and a reduction in product revenue volumes partially offset by lower overhead spending , which total 2.6 percentage points . in addition , a decrease of 2.2 percentage points was a result of excess and obsolete inventory related charges . the excess and obsolete inventory related charges were primarily a result of a lower inventory consumption plan in the first quarter of 2009 that we implemented in response to the weakness in the markets we served during that period . cost of service revenues consists primarily of costs of providing services for repair and training which includes salaries and related expenses and other fixed costs . service gross profit for 2010 increased 4.2 percentage points compared to the same period for the prior year . the increase is mainly a result of higher service revenue since a portion of our overhead costs are fixed . service gross profit for 2009 increased modestly compared to the same period for the prior year . 26 research and development replace_table_token_6_th research and development expenses increased $ 12.5 million or 24.8 % during 2010 compared to the prior year . the increase includes a $ 5.9 million increase in compensation expense , a $ 2.4 million increase in spending on project materials , a $ 3.0 million increase in consulting and other costs and a $ 1.1 million increase in patent and other legal related costs . the increase in compensation expense is primarily due to the restoration of both the incentive compensation plan and certain employee benefits which were suspended as part of cost control measures in 2009. our favorable operating profit levels resulted in an increase in incentive compensation expense , since our incentive compensation plan is based on achieving certain operating profit levels . research and development expenses decreased $ 22.5 million or 31.0 % during 2009 compared to the prior year . the decrease includes a $ 12.0 million decrease in compensation expense , a $ 4.7 million reduction in spending on project materials , a $ 1.4 million decrease in consulting costs and a $ 4.5 million decrease in other discretionary spending . the decrease in compensation expense is mainly due to cost reduction measures that started in the third quarter of 2008 and continued through the third quarter of 2009 , including workforce reductions that took place from the third quarter of 2008 through the first quarter of 2009. our research and development is primarily focused on developing and improving our instruments , components , subsystems and process control solutions to improve process performance and productivity . we have thousands of products and our research and development efforts primarily consist of a large number of projects related to these products and new product development , none of which is individually material to us . current projects typically have a duration of 3 to 30 months depending upon whether the product is an enhancement of existing technology or a new product . our current initiatives include projects to enhance the performance characteristics of older products , to develop new products and to integrate various technologies into subsystems . these projects support in large part the transition in the semiconductor industry to smaller integrated circuit geometries and in the flat panel display and solar markets to larger substrate sizes , which require more advanced process control technology . research and development expenses consist primarily of salaries and related expenses for personnel engaged in research and development , fees paid to consultants , material costs for prototypes and other expenses related to the design , development , testing and enhancement of our products as well as legal costs associated with maintaining and defending our intellectual property . we believe that the continued investment in research and development and ongoing development

liquidity and capital resources cash , cash equivalents and short-term marketable securities totaled $ 431.9 million at december 31 , 2010 , an increase of $ 160.1 million compared to $ 271.8 million at december 31 , 2009. this increase was mainly due to the net cash provided by operating activities as a result of our net income of $ 142.6 million . the primary driver in our current and anticipated future cash flows is and will continue to be cash generated from operations , consisting mainly of our net income and changes in operating assets and liabilities . in periods when our sales are growing , higher sales to customers will result in increased trade receivables , and inventories will generally increase as we build products for future sales . this may result in lower cash generated from operations . conversely , in periods when our sales are declining , our trade accounts receivable and inventory balances will generally decrease , resulting in increased cash from operations . net cash provided by operating activities was $ 163.5 million for 2010 and resulted mainly from net income of $ 142.6 million , a $ 52.1 million increase in operating liabilities , a $ 22.8 million decrease in income taxes receivable , non-cash charges of $ 13.2 million provision for excess or obsolete inventory , $ 13.8 million for depreciation and amortization and $ 10.6 million for stock-based compensation . these increases were partially offset by an increase of $ 94.7 million in operating assets and a $ 4.4 million gain on the disposal of two discontinued operations . the $ 52.1 million increase in operating liabilities was due to an $ 11.2 million increase in accounts payable related to inventory purchases to support our increased business levels , an increase of $ 20.6 million in accrued compensation related to increases in incentive compensation and accrued salaries and benefits , a $ 5.0 million increase in customer deposits and a $ 3.3 million increase in the product warranty reserve .


 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 capital resources cash , cash equivalents and short-term marketable securities totaled $ 431.9 million at december 31 , 2010 , an increase of $ 160.1 million compared to $ 271.8 million at december 31 , 2009. this increase was mainly due to the net cash provided by operating activities as a result of our net income of $ 142.6 million . the primary driver in our current and anticipated future cash flows is and will continue to be cash generated from operations , consisting mainly of our net income and changes in operating assets and liabilities . in periods when our sales are growing , higher sales to customers will result in increased trade receivables , and inventories will generally increase as we build products for future sales . this may result in lower cash generated from operations . conversely , in periods when our sales are declining , our trade accounts receivable and inventory balances will generally decrease , resulting in increased cash from operations . net cash provided by operating activities was $ 163.5 million for 2010 and resulted mainly from net income of $ 142.6 million , a $ 52.1 million increase in operating liabilities , a $ 22.8 million decrease in income taxes receivable , non-cash charges of $ 13.2 million provision for excess or obsolete inventory , $ 13.8 million for depreciation and amortization and $ 10.6 million for stock-based compensation . these increases were partially offset by an increase of $ 94.7 million in operating assets and a $ 4.4 million gain on the disposal of two discontinued operations . the $ 52.1 million increase in operating liabilities was due to an $ 11.2 million increase in accounts payable related to inventory purchases to support our increased business levels , an increase of $ 20.6 million in accrued compensation related to increases in incentive compensation and accrued salaries and benefits , a $ 5.0 million increase in customer deposits and a $ 3.3 million increase in the product warranty reserve .
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 Suspicious Activity Report : approximately 36 % of our net sales for 2010 were to other advanced markets and we anticipate that these markets will continue to grow and will represent a larger portion of our revenue . a significant portion of our net sales is to operations in international markets . international net sales include sales by our foreign subsidiaries , but exclude direct export sales . during the years 2010 , 2009 and 2008 , international net sales accounted for approximately 43 % , 46 % and 44 % of our net sales , respectively . a significant portion of our international net sales were sales in japan . we expect that international net sales will continue to represent a significant percentage of our total net sales . 20 critical accounting policies and estimates management 's discussion and analysis of financial condition and results of operations discusses our consolidated financial statements , which have been prepared in accordance with accounting principles generally accepted in the united states . the preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period . on an on-going basis , we evaluate our estimates and judgments , including those related to revenue recognition and allowance for doubtful accounts , inventory , warranty costs , stock-based compensation expense , intangible assets , goodwill and other long-lived assets , in-process research and development and income taxes . we base our estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances , the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources . actual results may differ from these estimates under different assumptions or conditions . we believe the following critical accounting policies affect the most significant judgments , assumptions and estimates we use in preparing our consolidated financial statements : revenue recognition and accounts receivable allowances . revenue from product sales is recorded upon transfer of title and risk of loss to the customer provided that there is evidence of an arrangement , the sales price is fixed or determinable , and collection of the related receivable is reasonably assured . in most transactions , we have no obligations to our customers after the date products are shipped other than pursuant to warranty obligations . in some instances , we provide installation , training , support and services to customers after the product has been shipped . we defer the fair value of any undelivered elements until the undelivered element is delivered . fair value is the price charged when the element is sold separately . shipping and handling fees billed to customers , if any , are recognized as revenue . the related shipping and handling costs are recognized in cost of sales . we monitor and track the amount of product returns , provide for accounts receivable allowances and reduce revenue at the time of shipment for the estimated amount of such future returns , based on historical experience . while product returns have historically been within our expectations and the provisions established , there is no assurance that we will continue to experience the same return rates that we have in the past . any significant increase in product return rates could have a material adverse impact on our operating results for the period or periods in which such returns materialize . while we maintain a credit approval process , significant judgments are made by management in connection with assessing our customers ' ability to pay at the time of shipment . despite this assessment , from time to time , our customers are unable to meet their payment obligations . we continuously monitor our customers ' credit worthiness , and use our judgment in establishing a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that we have identified . while such credit losses have historically been within our expectations and the provisions established , there is no assurance that we will continue to experience the same credit loss rates that we have in the past . a significant change in the liquidity or financial position of our customers could have a material adverse impact on the collectability of accounts receivable and our future operating results . inventory . we value our inventory at the lower of cost ( first-in , first-out method ) or market . we regularly review inventory quantities on hand and record a provision to write-down excess and obsolete inventory to its estimated net realizable value , if less than cost , based primarily on our estimated forecast of product demand . once our inventory value is written-down and a new cost basis has been established , the inventory value is not increased due to demand increases . demand for our products can fluctuate significantly . a significant increase in the demand for our products could result in a short-term increase in the cost of inventory purchases as a result of supply shortages or a decrease in the cost of inventory purchases as a result of volume discounts , while a significant decrease in demand could result in an increase in the charges for excess inventory quantities on hand . in addition , our industry is subject to technological change , new product development and product technological obsolescence that could result in an increase in the amount of obsolete inventory quantities on hand . therefore , any significant unanticipated changes in demand or technological developments could have a significant impact on the value of our inventory and our reported operating results . story_separator_special_tag our domestic product revenues decreased by $ 127.4 million or 40.3 % during 2009 compared to the same period for the prior year mainly due to a high concentration of sales to the semiconductor capital equipment and device manufacturer customers . our international product revenues decreased $ 85.5 million or 38.5 % during 2009. this decrease consists of a $ 39.4 million decrease in product revenues from our semiconductor customers and a decrease in product revenues of $ 46.1 million related to other markets . service revenues consisted mainly of fees for services related to the maintenance and repair of our products , software maintenance , installation services and training . service revenues increased $ 21.9 million or 32.4 % during 2010 compared to 2009 as a result of the improvement in the global economy in 2010. service revenues decreased $ 15.9 million or 19.0 % during 2009 compared to 2008 due to lower spending by our customers on these services as a result of the weakened global economic conditions in 2009. total international net revenues , including product and service , were $ 369.0 million for 2010 or 43.2 % of net sales compared to $ 180.1 million for 2009 or 45.8 % of net sales and $ 275.0 million or 44.2 % of net sales for 2008. gross profit replace_table_token_5_th gross profit on product revenues increased by 12.4 percentage points during 2010 compared to the prior year . the increase was mainly due to an increase in product revenue volumes which accounted for 8.2 percentage points of the overall increase and an increase of 1.6 percentage points due to favorable product mix . in addition , our gross profit increased by 2.4 percentage points due to lower excess and obsolete inventory related net charges . the higher excess and obsolete inventory related charges in 2009 were primarily a result of a lower inventory consumption plan in the first quarter of 2009 that we implemented in response to the weakness in the markets we served during that period . gross profit on product revenues decreased by 8.2 percentage points during 2009 compared to the prior year . the decrease was due to an unfavorable product mix of 3.1 percentage points and a reduction in product revenue volumes partially offset by lower overhead spending , which total 2.6 percentage points . in addition , a decrease of 2.2 percentage points was a result of excess and obsolete inventory related charges . the excess and obsolete inventory related charges were primarily a result of a lower inventory consumption plan in the first quarter of 2009 that we implemented in response to the weakness in the markets we served during that period . cost of service revenues consists primarily of costs of providing services for repair and training which includes salaries and related expenses and other fixed costs . service gross profit for 2010 increased 4.2 percentage points compared to the same period for the prior year . the increase is mainly a result of higher service revenue since a portion of our overhead costs are fixed . service gross profit for 2009 increased modestly compared to the same period for the prior year . 26 research and development replace_table_token_6_th research and development expenses increased $ 12.5 million or 24.8 % during 2010 compared to the prior year . the increase includes a $ 5.9 million increase in compensation expense , a $ 2.4 million increase in spending on project materials , a $ 3.0 million increase in consulting and other costs and a $ 1.1 million increase in patent and other legal related costs . the increase in compensation expense is primarily due to the restoration of both the incentive compensation plan and certain employee benefits which were suspended as part of cost control measures in 2009. our favorable operating profit levels resulted in an increase in incentive compensation expense , since our incentive compensation plan is based on achieving certain operating profit levels . research and development expenses decreased $ 22.5 million or 31.0 % during 2009 compared to the prior year . the decrease includes a $ 12.0 million decrease in compensation expense , a $ 4.7 million reduction in spending on project materials , a $ 1.4 million decrease in consulting costs and a $ 4.5 million decrease in other discretionary spending . the decrease in compensation expense is mainly due to cost reduction measures that started in the third quarter of 2008 and continued through the third quarter of 2009 , including workforce reductions that took place from the third quarter of 2008 through the first quarter of 2009. our research and development is primarily focused on developing and improving our instruments , components , subsystems and process control solutions to improve process performance and productivity . we have thousands of products and our research and development efforts primarily consist of a large number of projects related to these products and new product development , none of which is individually material to us . current projects typically have a duration of 3 to 30 months depending upon whether the product is an enhancement of existing technology or a new product . our current initiatives include projects to enhance the performance characteristics of older products , to develop new products and to integrate various technologies into subsystems . these projects support in large part the transition in the semiconductor industry to smaller integrated circuit geometries and in the flat panel display and solar markets to larger substrate sizes , which require more advanced process control technology . research and development expenses consist primarily of salaries and related expenses for personnel engaged in research and development , fees paid to consultants , material costs for prototypes and other expenses related to the design , development , testing and enhancement of our products as well as legal costs associated with maintaining and defending our intellectual property . we believe that the continued investment in research and development and ongoing development

