under the bipartisan budget act of 2015 , the obama administration will receive $ 33.0 billion of the $ 38.0 billion national defense spending increase it sought in fy 2016. in summary the budget agreement : extends the bca out to 2025 ; suspends the u.s. debt limit/ceiling until march 2017 ; increased spending caps for fy 2016 and fy 2017 , by $ 80.0 billion , including $ 50.0 billion in fy 2016 and $ 30.0 billion in fy 2017 , split evenly between defense and domestic priorities ; and includes a fy 2016 dod base budget of $ 548.0 billion ; and includes a fy 2016 overseas contingency operation budget of $ 59.0 billion . current reporting segments the company operates in three reportable segments . the kgs reportable segment is comprised of an aggregation of kgs operating segments , including our microwave electronic products , satellite communications , modular systems and rocket support operating segments . the us reportable segment consists of our unmanned aerial system and unmanned ground and seaborne system businesses . the pss reportable segment provides independent integrated solutions for advanced homeland security , public safety , critical infrastructure , and security and surveillance systems for government and commercial applications . we organize our business segments based primarily on the nature of the products , solutions and services offered . for additional information regarding our reportable segments , see note 13 of the notes to consolidated financial statements . from a customer and solutions perspective , we view our business as an integrated whole , leveraging skills and assets wherever possible . discontinued operations on august 21 , 2015 , the company completed the sale of the u.s. and u.k. operations of its electronic products division to ultra and the buyer in the transaction . pursuant to the terms of the purchase agreement , the company sold to the buyer all of the issued and outstanding capital stock of its wholly owned subsidiary herley and the herley entities , for $ 260.0 million and $ 5.0 million for taxes incurred as part of the transaction , less a $ 2.0 million escrow to satisfy any purchase price adjustments and a working capital adjustment of approximately $ 8.3 million . in november 2015 , the company and ultra settled the working capital adjustment at $ 8.1 million , and the net cash position at closing , resulting in a net payment to the company of $ 2.7 million . this represents the payment from escrow to the company of $ 2.0 million , as well as the payment from ultra of $ 0.7 million , reflecting the difference in the estimated working capital and actual working capital and the net cash position at the close of the transaction . in december 2015 , the company submitted to ultra for reimbursement the maximum $ 5.0 million for taxes incurred as part of the transaction , which was reimbursed in january 2016 . 33 the company 's december 27 , 2015 consolidated financial statements have been recast for all periods presented to reflect the disposition of the herley entities which are reported in discontinued operations . the company 's comparison of results and liquidity and capital resources in its management 's discussion and analysis of financial condition and results of operations for the years ended december 29 , 2013 , december 28 , 2014 and december 27 , 2015 also reflect the recast . see note 8 of the notes to consolidated financial statements for a further discussion of our discontinued operations . key financial statement concepts as of december 27 , 2015 , we consider the following factors to be important in understanding our financial statements . kgs ' and us ' business with the u.s. government and prime contractors is generally performed under fixed-price , cost reimbursable , or time and materials contracts . cost reimbursable contracts for the u.s. government provide for reimbursement of costs plus the payment of a fee . some cost reimbursable contracts include incentive fees that are awarded based on performance on the contract . under time and materials contracts , we are reimbursed for labor hours at negotiated hourly billing rates and reimbursed for travel and other direct expenses at actual costs plus applied general and administrative expenses . in accounting for our long-term contracts for production of products and services provided to the u.s. government and provided to our pss segment customers under fixed-price contracts , we utilize both cost-to-cost and units delivered measures under the percentage-of-completion method of accounting in accordance with the provisions of financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) topic 605 , revenue recognition . under the units delivered measure of the percentage-of-completion method of accounting , sales are recognized as the units are accepted by the customer generally using sales values for units in accordance with the contract terms . we estimate profit as the difference between total estimated revenue and total estimated cost of a contract and recognize that profit over the life of the contract based on deliveries or as computed on the basis of the estimated final average unit costs plus profit . we classify contract revenues as product sales or service revenues depending upon the predominant attributes of the relevant underlying contracts . we consider the following factors when determining if collection of a receivable is reasonably assured : comprehensive collection history ; results of our communications with customers ; the current financial position of the customer ; and the relevant economic conditions in the customer 's country . if we have had no prior experience with the customer , we may review reports from various credit organizations to ensure that the customer has a history of paying its creditors in a reliable and effective manner . story_separator_special_tag as a percentage of total revenue , product revenues were 47.4 % for the year ended december 29 , 2013 as compared to 48.8 % for the year ended december 28 , 2014. service revenues decreased by $ 52.8 million from $ 443.6 million for the year ended december 29 , 2013 to $ 390.8 million for the year ended december 28 , 2014. the decrease was primarily related to reductions in the legacy government service revenues and other service contracts in the kgs segment , which reductions were being experienced industry wide as a result of declining dod budgets , changes in certain dod procurement rules and other factors , as well as due to the expected completion of two sizable satellite communications projects . as described in our “ critical accounting principles and estimates ” below and in the notes to consolidated financial statements contained within this annual report , we utilize both the cost-to-cost and units delivered measures under the percentage-of-completion method of accounting for recognizing revenue as provided for in topic 605 . when revenue is calculated using the percentage-of-completion method , total costs incurred to date are compared to total estimated costs to complete the contract . these estimates are reviewed monthly on a contract-by-contract basis , and are revised periodically throughout the life of the contract such that adjustments to profit resulting from revisions are made cumulative to the date of the revision . significant management judgments and estimates , including the estimated costs to complete projects , which determine the project 's percentage of completion , must be made and used in connection with the revenue recognized in any accounting period . material differences may result in the amount and timing of our revenue for any period if management makes different judgments or utilizes different estimates . during the reporting periods contained herein , we did experience revenue and margin adjustments on certain projects based on the aforementioned factors , but the effect of such adjustments , both positive and negative , when evaluated in total were determined to be immaterial to our consolidated financial statements contained within this annual report . cost of revenues . cost of revenues decreased from $ 639.6 million for the year ended december 29 , 2013 to $ 583.6 million for the year ended december 28 , 2014. the $ 56.0 million decrease in cost of revenues was primarily a result of decreased revenue discussed above . gross margin percentage declined from 24.2 % for the year ended december 29 , 2013 compared to 23.5 % for the year ended december 28 , 2014. margins on services decreased from 24.4 % for the year ended december 29 , 2013 to 22.1 % for the year ended december 28 , 2014 , due primarily to an unfavorable mix of revenues and decreased margins in our pss segment . margins on product sales increased for the year ended december 29 , 2013 as compared to december 28 , 2014 from 24.0 % to 25.0 % , respectively , primarily as a result of a change in mix of products sold . margins in the kgs segment increased from 24.7 % for the year ended december 29 , 2013 to 25.3 % for the year ended december 28 , 2014 , primarily as a result of change in the mix of products sold . margins in the us segment increased from 19.4 % for the year ended december 29 , 2013 to 23.2 % for the year ended december 28 , 2014 , primarily as a result of increased costs recorded of approximately $ 5.5 million on certain aerial target contracts to reflect retrofits necessary to address design changes recorded in the year ended december 29 , 2013 , compared to net increased costs recorded of $ 3.1 million for similar retrofit related matters and a contract conversion adjustment on certain of our unmanned aerial platforms recorded in the year ended december 28 , 2014. margins in the pss segment decreased from 25.8 % for the year ended december 29 , 2013 to 19.3 % for the year ended december 28 , 2014 as a result of decreased service margins and due to costs incurred on two sizable projects , which were completed in 2014 or were near-completion , under which we were in the process of submitting or had submitted change orders to customers to reimburse us for the work we performed at our customers ' request , but for which we had not completed negotiations for such change orders , and therefore had not reflected the estimated value of these change orders in our revenues . selling , general and administrative expenses . sg & a decreased $ 19.2 million from $ 172.8 million for the year ended december 29 , 2013 to $ 153.6 million for the year ended december 28 , 2014. the decrease was primarily the result of a $ 13.7 million reduction of amortization of intangibles in 2014 , as a result of certain intangible assets being fully amortized , as well as cost reduction actions taken by the company . as a percentage of revenues , sg & a decreased from 20.5 % for fiscal 2013 to 20.1 % for fiscal 2014. excluding amortization of intangibles of $ 32.8 million for the year ended december 29 , 2013 and amortization of intangibles of $ 19.1 million for the year ended december 28 , 2014 , sg & a increased as a percentage of revenues from 16.6 % to 17.6 % for the year ended december 29 , 2013 and december 28 , 2014 , respectively , primarily as a result of the decline in revenues discussed previously , and increased compliance costs including internal cyber security costs 38 incurred to protect the company 's assets , and sarbanes oxley act of 2002 and audit compliance costs including internal audit and external audit costs . merger and acquisition related items . merger and acquisition

debt acquired in acquisition of herley we assumed a $ 10.0 million ten-year term loan with a bank in israel that herley entered into on september 16 , 2008 in connection with the acquisition of one of its wholly owned subsidiaries . the balance as of december 27 , 2015 was $ 2.7 million , and the loan is payable in quarterly installments of $ 0.3 million plus interest at libor plus a margin of 1.5 % . the loan agreement contains various covenants including a minimum net equity covenant as defined in the loan agreement . we were in compliance with the financial covenants of the loan agreement as of december 27 , 2015 . off balance sheet arrangements we have no off-balance sheet arrangements as defined in regulation s-k , item 303 ( a ) ( 4 ) ( ii ) . 44 contractual obligations and commitments the following table summarizes our contractual obligations and other commitments at december 27 , 2015 , and the effect such obligations could have on our liquidity and cash flow in future periods ( in millions ) : replace_table_token_10_th ( 1 ) the notes in the aggregate outstanding principal amount of $ 450.0 million are due may 15 , 2019. see note 4 in the notes to consolidated financial statements contained within this annual report for further details . ( 2 ) includes interest payments based on current interest rates for variable rate debt and the notes . see note 4 in the notes to consolidated financial statements contained within in this annual report for further details . ( 3 ) purchase orders include commitments in which a written purchase order has been issued to a vendor , but the goods have not been received or services have not been performed . ( 4 ) we have entered into or acquired various non-cancelable operating lease agreements that expire on various dates through 2025. the amounts include $ 5.5 million in excess facility costs and exclude expected sublease income . see note 5 in the notes to consolidated financial statements contained within this annual report for further details .


 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.
     ```debt acquired in acquisition of herley we assumed a $ 10.0 million ten-year term loan with a bank in israel that herley entered into on september 16 , 2008 in connection with the acquisition of one of its wholly owned subsidiaries . the balance as of december 27 , 2015 was $ 2.7 million , and the loan is payable in quarterly installments of $ 0.3 million plus interest at libor plus a margin of 1.5 % . the loan agreement contains various covenants including a minimum net equity covenant as defined in the loan agreement . we were in compliance with the financial covenants of the loan agreement as of december 27 , 2015 . off balance sheet arrangements we have no off-balance sheet arrangements as defined in regulation s-k , item 303 ( a ) ( 4 ) ( ii ) . 44 contractual obligations and commitments the following table summarizes our contractual obligations and other commitments at december 27 , 2015 , and the effect such obligations could have on our liquidity and cash flow in future periods ( in millions ) : replace_table_token_10_th ( 1 ) the notes in the aggregate outstanding principal amount of $ 450.0 million are due may 15 , 2019. see note 4 in the notes to consolidated financial statements contained within this annual report for further details . ( 2 ) includes interest payments based on current interest rates for variable rate debt and the notes . see note 4 in the notes to consolidated financial statements contained within in this annual report for further details . ( 3 ) purchase orders include commitments in which a written purchase order has been issued to a vendor , but the goods have not been received or services have not been performed . ( 4 ) we have entered into or acquired various non-cancelable operating lease agreements that expire on various dates through 2025. the amounts include $ 5.5 million in excess facility costs and exclude expected sublease income . see note 5 in the notes to consolidated financial statements contained within this annual report for further details .
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 Suspicious Activity Report : under the bipartisan budget act of 2015 , the obama administration will receive $ 33.0 billion of the $ 38.0 billion national defense spending increase it sought in fy 2016. in summary the budget agreement : extends the bca out to 2025 ; suspends the u.s. debt limit/ceiling until march 2017 ; increased spending caps for fy 2016 and fy 2017 , by $ 80.0 billion , including $ 50.0 billion in fy 2016 and $ 30.0 billion in fy 2017 , split evenly between defense and domestic priorities ; and includes a fy 2016 dod base budget of $ 548.0 billion ; and includes a fy 2016 overseas contingency operation budget of $ 59.0 billion . current reporting segments the company operates in three reportable segments . the kgs reportable segment is comprised of an aggregation of kgs operating segments , including our microwave electronic products , satellite communications , modular systems and rocket support operating segments . the us reportable segment consists of our unmanned aerial system and unmanned ground and seaborne system businesses . the pss reportable segment provides independent integrated solutions for advanced homeland security , public safety , critical infrastructure , and security and surveillance systems for government and commercial applications . we organize our business segments based primarily on the nature of the products , solutions and services offered . for additional information regarding our reportable segments , see note 13 of the notes to consolidated financial statements . from a customer and solutions perspective , we view our business as an integrated whole , leveraging skills and assets wherever possible . discontinued operations on august 21 , 2015 , the company completed the sale of the u.s. and u.k. operations of its electronic products division to ultra and the buyer in the transaction . pursuant to the terms of the purchase agreement , the company sold to the buyer all of the issued and outstanding capital stock of its wholly owned subsidiary herley and the herley entities , for $ 260.0 million and $ 5.0 million for taxes incurred as part of the transaction , less a $ 2.0 million escrow to satisfy any purchase price adjustments and a working capital adjustment of approximately $ 8.3 million . in november 2015 , the company and ultra settled the working capital adjustment at $ 8.1 million , and the net cash position at closing , resulting in a net payment to the company of $ 2.7 million . this represents the payment from escrow to the company of $ 2.0 million , as well as the payment from ultra of $ 0.7 million , reflecting the difference in the estimated working capital and actual working capital and the net cash position at the close of the transaction . in december 2015 , the company submitted to ultra for reimbursement the maximum $ 5.0 million for taxes incurred as part of the transaction , which was reimbursed in january 2016 . 33 the company 's december 27 , 2015 consolidated financial statements have been recast for all periods presented to reflect the disposition of the herley entities which are reported in discontinued operations . the company 's comparison of results and liquidity and capital resources in its management 's discussion and analysis of financial condition and results of operations for the years ended december 29 , 2013 , december 28 , 2014 and december 27 , 2015 also reflect the recast . see note 8 of the notes to consolidated financial statements for a further discussion of our discontinued operations . key financial statement concepts as of december 27 , 2015 , we consider the following factors to be important in understanding our financial statements . kgs ' and us ' business with the u.s. government and prime contractors is generally performed under fixed-price , cost reimbursable , or time and materials contracts . cost reimbursable contracts for the u.s. government provide for reimbursement of costs plus the payment of a fee . some cost reimbursable contracts include incentive fees that are awarded based on performance on the contract . under time and materials contracts , we are reimbursed for labor hours at negotiated hourly billing rates and reimbursed for travel and other direct expenses at actual costs plus applied general and administrative expenses . in accounting for our long-term contracts for production of products and services provided to the u.s. government and provided to our pss segment customers under fixed-price contracts , we utilize both cost-to-cost and units delivered measures under the percentage-of-completion method of accounting in accordance with the provisions of financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) topic 605 , revenue recognition . under the units delivered measure of the percentage-of-completion method of accounting , sales are recognized as the units are accepted by the customer generally using sales values for units in accordance with the contract terms . we estimate profit as the difference between total estimated revenue and total estimated cost of a contract and recognize that profit over the life of the contract based on deliveries or as computed on the basis of the estimated final average unit costs plus profit . we classify contract revenues as product sales or service revenues depending upon the predominant attributes of the relevant underlying contracts . we consider the following factors when determining if collection of a receivable is reasonably assured : comprehensive collection history ; results of our communications with customers ; the current financial position of the customer ; and the relevant economic conditions in the customer 's country . if we have had no prior experience with the customer , we may review reports from various credit organizations to ensure that the customer has a history of paying its creditors in a reliable and effective manner . story_separator_special_tag as a percentage of total revenue , product revenues were 47.4 % for the year ended december 29 , 2013 as compared to 48.8 % for the year ended december 28 , 2014. service revenues decreased by $ 52.8 million from $ 443.6 million for the year ended december 29 , 2013 to $ 390.8 million for the year ended december 28 , 2014. the decrease was primarily related to reductions in the legacy government service revenues and other service contracts in the kgs segment , which reductions were being experienced industry wide as a result of declining dod budgets , changes in certain dod procurement rules and other factors , as well as due to the expected completion of two sizable satellite communications projects . as described in our “ critical accounting principles and estimates ” below and in the notes to consolidated financial statements contained within this annual report , we utilize both the cost-to-cost and units delivered measures under the percentage-of-completion method of accounting for recognizing revenue as provided for in topic 605 . when revenue is calculated using the percentage-of-completion method , total costs incurred to date are compared to total estimated costs to complete the contract . these estimates are reviewed monthly on a contract-by-contract basis , and are revised periodically throughout the life of the contract such that adjustments to profit resulting from revisions are made cumulative to the date of the revision . significant management judgments and estimates , including the estimated costs to complete projects , which determine the project 's percentage of completion , must be made and used in connection with the revenue recognized in any accounting period . material differences may result in the amount and timing of our revenue for any period if management makes different judgments or utilizes different estimates . during the reporting periods contained herein , we did experience revenue and margin adjustments on certain projects based on the aforementioned factors , but the effect of such adjustments , both positive and negative , when evaluated in total were determined to be immaterial to our consolidated financial statements contained within this annual report . cost of revenues . cost of revenues decreased from $ 639.6 million for the year ended december 29 , 2013 to $ 583.6 million for the year ended december 28 , 2014. the $ 56.0 million decrease in cost of revenues was primarily a result of decreased revenue discussed above . gross margin percentage declined from 24.2 % for the year ended december 29 , 2013 compared to 23.5 % for the year ended december 28 , 2014. margins on services decreased from 24.4 % for the year ended december 29 , 2013 to 22.1 % for the year ended december 28 , 2014 , due primarily to an unfavorable mix of revenues and decreased margins in our pss segment . margins on product sales increased for the year ended december 29 , 2013 as compared to december 28 , 2014 from 24.0 % to 25.0 % , respectively , primarily as a result of a change in mix of products sold . margins in the kgs segment increased from 24.7 % for the year ended december 29 , 2013 to 25.3 % for the year ended december 28 , 2014 , primarily as a result of change in the mix of products sold . margins in the us segment increased from 19.4 % for the year ended december 29 , 2013 to 23.2 % for the year ended december 28 , 2014 , primarily as a result of increased costs recorded of approximately $ 5.5 million on certain aerial target contracts to reflect retrofits necessary to address design changes recorded in the year ended december 29 , 2013 , compared to net increased costs recorded of $ 3.1 million for similar retrofit related matters and a contract conversion adjustment on certain of our unmanned aerial platforms recorded in the year ended december 28 , 2014. margins in the pss segment decreased from 25.8 % for the year ended december 29 , 2013 to 19.3 % for the year ended december 28 , 2014 as a result of decreased service margins and due to costs incurred on two sizable projects , which were completed in 2014 or were near-completion , under which we were in the process of submitting or had submitted change orders to customers to reimburse us for the work we performed at our customers ' request , but for which we had not completed negotiations for such change orders , and therefore had not reflected the estimated value of these change orders in our revenues . selling , general and administrative expenses . sg & a decreased $ 19.2 million from $ 172.8 million for the year ended december 29 , 2013 to $ 153.6 million for the year ended december 28 , 2014. the decrease was primarily the result of a $ 13.7 million reduction of amortization of intangibles in 2014 , as a result of certain intangible assets being fully amortized , as well as cost reduction actions taken by the company . as a percentage of revenues , sg & a decreased from 20.5 % for fiscal 2013 to 20.1 % for fiscal 2014. excluding amortization of intangibles of $ 32.8 million for the year ended december 29 , 2013 and amortization of intangibles of $ 19.1 million for the year ended december 28 , 2014 , sg & a increased as a percentage of revenues from 16.6 % to 17.6 % for the year ended december 29 , 2013 and december 28 , 2014 , respectively , primarily as a result of the decline in revenues discussed previously , and increased compliance costs including internal cyber security costs 38 incurred to protect the company 's assets , and sarbanes oxley act of 2002 and audit compliance costs including internal audit and external audit costs . merger and acquisition related items . merger and acquisition

