35 2012 financial and business performance 2012 was an important year for infinera . we commenced shipment of our next-generation dtn-x platform in the second quarter with first revenues recognized from the platform in the third quarter . the dtn-x platform has been well received by customers across many markets with purchase commitments received from 22 customers by the end of the year . while new deployments of high-capacity networks are now mostly occurring on the dtn-x platform , we continued to sell the dtn platform where appropriate , with nine new dtn platform customers added in 2012. dtn-x market traction and the resulting growth in revenue contributed to an improvement in our overall financial performance in the second half of 2012. we had incurred significant dtn-x related manufacturing and research and development expenditures in 2011 and early 2012 , in advance of generating revenues from the platform . this resulted in significant losses and cash consumption in those periods . in the second half of 2012 , we experienced improved financial metrics with strong sequential quarterly revenue growth , reduced spending levels and improved income statement performance . our overall gross margin for 2012 was 36 % , decreased from 41 % in 2011. this decrease in gross margins in 2012 primarily reflects the impact of early product cycle production costs for the dtn-x platform , increased levels of lower margin network footprint sales and competitive pricing pressure . the industry typically experiences downward pressure on gross margins during network footprint deployments , with higher gross margins achieved as capacity is added to deployed networks . in 2013 , we intend to focus our efforts on leveraging the dtn-x platform to win new network footprint and gain market share . these efforts will be balanced with a focus on product cost improvements and overall prudent financial management . we believe that with sustained revenue growth , we can leverage our vertically-integrated manufacturing model , which combined with selling bandwidth capacity into deployed networks , can result in improved future profitability and cash flow . future business and industry trends our goal is to be the leading provider of optical networking systems to communications service providers , internet content providers , cable operators , subsea network operators , and others . our revenue growth will depend on the continued acceptance of our products , growth of communications traffic and the proliferation of next-generation bandwidth-intensive services , which are expected to drive the need for increased levels of bandwidth . our ability to increase our revenue and achieve profitability will be directly affected by the level of acceptance of our products in the long-haul and metro wdm markets and by our ability to cost-effectively develop and sell innovative products that leverage our technology advantages on a time-to-market basis . as of december 29 , 2012 , we have sold our products for deployment in the optical networks of 111 customers worldwide , including colt , cox communications , deutsche telekom , equinix , interoute , kvh , teliasonera , level 3 , ntt , ote , pacnet and xo communications . we do not have long-term sales commitments from our customers . to date , a few of our customers have accounted for a significant portion of our revenue . no customers accounted for over 10 % of our revenue in 2012 or 2011. one customer accounted for over 10 % of our revenue in 2010. our business will be harmed if any of our key customers do not generate as much revenue as we forecast , stop purchasing from us , or substantially reduce their orders for our products . we are headquartered in sunnyvale , california , with employees located throughout the americas , europe , and the asia pacific region . we expect to continue to add some personnel in the united states and internationally to develop our products and provide additional geographic sales and technical support coverage . we primarily sell our products through our direct sales force , with a small portion sold indirectly through resellers . we derived 98 % , 97 % and 98 % of our revenue from direct sales to customers for 2012 , 2011 and 2010 , respectively . we expect to continue generating a substantial majority of our revenue from direct sales in the future . our near-term year-over-year and quarter-over-quarter revenue will likely be volatile and may be impacted by several factors including general economic and market conditions , time-to-market development of new products , acquisitions of new customers and the timing of large product deployments . 36 we will continue to make significant investments in the business , and management currently believes that operating expenses for 2013 will range from $ 235 million to $ 245 million , including stock-based compensation expense of approximately $ 30 million to $ 35 million . results of operations revenue the following table sets forth , for periods presented , certain consolidated statements of operations information ( in thousands , except % ) : replace_table_token_3_th the following table summarizes our revenue by geography and sales channel for the periods presented ( in thousands , except % ) : replace_table_token_4_th 37 2012 compared to 2011. total revenue increased to $ 438.4 million in 2012 from $ 404.9 million in 2011. revenues were positively impacted by the recognition of revenues from sales of our new dtn-x platform during the second half of 2012. these revenues included sales to existing customers transitioning their higher-capacity network deployments to the dtn-x and new customers purchasing our digital optical network solutions for the first time . story_separator_special_tag as of december 29 , 2012 , we had determined that ownership changes have occurred that would result in limitations on the current and future utilization of its net operating loss carryforwards . however , based on the work performed , the limitations are not significant enough to impact the future utilization of the tax attributes . in determining future taxable income , we make assumptions to forecast federal , state and international operating income , the reversal of temporary differences , and the implementation of any feasible and prudent tax planning strategies . the assumptions require significant judgment regarding the forecasts of future taxable income , and are consistent with our income forecasts used to manage our business . we intend to maintain the remaining valuation allowance until sufficient further positive evidence exists to support a reversal of , or decrease , in the existing valuation allowance . story_separator_special_tag anticipate that any potential lack of liquidity in our ars , even for an extended period of time , will affect our ability to finance our operations , including our continued investments in research and development and planned capital expenditures . we continue to monitor efforts by the financial markets to find alternative means for restoring the liquidity of this investment . our ars investment is classified as a non-current asset until we have better visibility as to when its liquidity will be restored . for 2013 , capital expenditures are expected to be in the range of approximately $ 20 million to $ 25 million , primarily for product development . we believe that our current cash and cash equivalents and investments will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least 12 months . if these sources of cash are insufficient to satisfy our liquidity requirements beyond 12 months , we may require additional capital from equity or debt financings to fund our operations , to respond to competitive pressures or strategic opportunities , or otherwise . we may not be able to secure timely additional financing on favorable terms , or at all . the terms of any additional financing may place limits on our financial and operating flexibility . if we raise additional funds through further issuances of equity , convertible debt securities or other securities convertible into equity , our existing stockholders could suffer dilution in their percentage ownership of us , and any new securities we issue could have rights , preferences and privileges senior to those of holders of our common stock . contractual obligations the following is a summary of our contractual obligations as of december 29 , 2012 : replace_table_token_10_th 44 ( 1 ) we have service agreements with our major production suppliers under which we are committed to purchase certain parts . ( 2 ) we lease facilities under non-cancelable operating lease agreements . these leases have varying terms , predominantly no longer than ten years each and contain leasehold improvement incentives , rent holidays and escalation clauses that range from one to ten years . in addition , some of these leases have renewal options for up to five years . we also have contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate . at the inception of a lease with such conditions , we record an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation . leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset . an assumption of lease renewal where a renewal option exists is used only when the renewal has been determined to be reasonably assured . the estimated useful life of leasehold improvements is one to ten years . ( 3 ) other contracts are related to contractual obligations for non-recurring engineering costs . ( 4 ) tax liabilities of $ 1.8 million related to uncertain tax positions are not included in the table because we are unable to determine the timing of settlement if any , of these future payments with a reasonably reliable estimate . we had $ 3.6 million of standby letters of credit outstanding as of december 29 , 2012. these consisted of $ 1.5 million related to a value added tax license , $ 1.4 million related to a customer proposal guarantee , $ 0.7 million related to property leases and $ 0.3 million related to foreign payroll . we had $ 2.7 million of standby letters of credit outstanding as of december 29 , 2011. these consisted of $ 1.4 million related to a customer proposal guarantee , $ 0.8 million related to a value added tax license and $ 0.5 million related to property leases . off-balance sheet arrangements as of december 29 , 2012 , we did not have any relationships with unconsolidated entities or financial partnerships , such as entities often referred to as structured finance or special purpose entities , which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes . critical accounting policies and estimates our consolidated financial statements are prepared in accordance with united states generally accepted accounting principles ( u.s . gaap ) . these accounting principles require us to make certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements , as well as the reported amounts of revenue and expenses during the periods presented . significant estimates and assumptions made by management include revenue recognition , stock-based compensation , inventory valuation , allowances for sales reserves , allowances for doubtful accounts , accrued warranty , cash equivalents , fair value measurement of investments , other-than-temporary impairments , derivative instruments and accounting for income taxes . by their nature , these estimates and judgments are

liquidity and capital resources replace_table_token_8_th replace_table_token_9_th cash , cash equivalents , short-term and long-term investments and short-term and long-term restricted cash consist of highly-liquid investments in certificates of deposits , money market funds , commercial paper , corporate bonds , u.s. agency notes and u.s. treasuries . as of december 29 , 2012 , long-term investments included 42 $ 3.1 million ( par value ) of available-for-sale auction rate securities ( ars ) . the restricted cash balance amounts are pledged as collateral for certain stand-by and commercial letters of credit . operating activities net cash used in operating activities for 2012 was $ 49.5 million as compared to net cash used in operating activities of $ 2.0 million in 2011 and $ 30.5 million net cash provided by operating activities in 2010. cash flow from operating activities consists of net income ( loss ) , adjusted for non-cash charges , plus or minus working capital changes . our working capital requirements can fluctuate significantly depending on the timing of deployments and the acceptance , billing and payment terms on those deployments . additionally , our ability to manage inventory turns and our ability to negotiate favorable payment terms with our vendors may also impact our working capital requirements . net loss for 2012 was $ 85.3 million , which included non-cash charges of $ 67.2 million , compared to a net loss of $ 81.7 million in the corresponding period in 2011 , including non-cash charges of $ 72.2 million . net loss for 2010 was $ 27.9 million , which included non-cash charges of $ 69.2 million . net cash used to fund working capital was $ 31.3 million for 2012. this increase in working capital requirements was primarily related to the introduction of our dtn-x platform . inventory levels increased by $ 40.6 million as we added inventory for the dtn-x platform while maintaining dtn levels .


 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 replace_table_token_8_th replace_table_token_9_th cash , cash equivalents , short-term and long-term investments and short-term and long-term restricted cash consist of highly-liquid investments in certificates of deposits , money market funds , commercial paper , corporate bonds , u.s. agency notes and u.s. treasuries . as of december 29 , 2012 , long-term investments included 42 $ 3.1 million ( par value ) of available-for-sale auction rate securities ( ars ) . the restricted cash balance amounts are pledged as collateral for certain stand-by and commercial letters of credit . operating activities net cash used in operating activities for 2012 was $ 49.5 million as compared to net cash used in operating activities of $ 2.0 million in 2011 and $ 30.5 million net cash provided by operating activities in 2010. cash flow from operating activities consists of net income ( loss ) , adjusted for non-cash charges , plus or minus working capital changes . our working capital requirements can fluctuate significantly depending on the timing of deployments and the acceptance , billing and payment terms on those deployments . additionally , our ability to manage inventory turns and our ability to negotiate favorable payment terms with our vendors may also impact our working capital requirements . net loss for 2012 was $ 85.3 million , which included non-cash charges of $ 67.2 million , compared to a net loss of $ 81.7 million in the corresponding period in 2011 , including non-cash charges of $ 72.2 million . net loss for 2010 was $ 27.9 million , which included non-cash charges of $ 69.2 million . net cash used to fund working capital was $ 31.3 million for 2012. this increase in working capital requirements was primarily related to the introduction of our dtn-x platform . inventory levels increased by $ 40.6 million as we added inventory for the dtn-x platform while maintaining dtn levels .
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 Suspicious Activity Report : 35 2012 financial and business performance 2012 was an important year for infinera . we commenced shipment of our next-generation dtn-x platform in the second quarter with first revenues recognized from the platform in the third quarter . the dtn-x platform has been well received by customers across many markets with purchase commitments received from 22 customers by the end of the year . while new deployments of high-capacity networks are now mostly occurring on the dtn-x platform , we continued to sell the dtn platform where appropriate , with nine new dtn platform customers added in 2012. dtn-x market traction and the resulting growth in revenue contributed to an improvement in our overall financial performance in the second half of 2012. we had incurred significant dtn-x related manufacturing and research and development expenditures in 2011 and early 2012 , in advance of generating revenues from the platform . this resulted in significant losses and cash consumption in those periods . in the second half of 2012 , we experienced improved financial metrics with strong sequential quarterly revenue growth , reduced spending levels and improved income statement performance . our overall gross margin for 2012 was 36 % , decreased from 41 % in 2011. this decrease in gross margins in 2012 primarily reflects the impact of early product cycle production costs for the dtn-x platform , increased levels of lower margin network footprint sales and competitive pricing pressure . the industry typically experiences downward pressure on gross margins during network footprint deployments , with higher gross margins achieved as capacity is added to deployed networks . in 2013 , we intend to focus our efforts on leveraging the dtn-x platform to win new network footprint and gain market share . these efforts will be balanced with a focus on product cost improvements and overall prudent financial management . we believe that with sustained revenue growth , we can leverage our vertically-integrated manufacturing model , which combined with selling bandwidth capacity into deployed networks , can result in improved future profitability and cash flow . future business and industry trends our goal is to be the leading provider of optical networking systems to communications service providers , internet content providers , cable operators , subsea network operators , and others . our revenue growth will depend on the continued acceptance of our products , growth of communications traffic and the proliferation of next-generation bandwidth-intensive services , which are expected to drive the need for increased levels of bandwidth . our ability to increase our revenue and achieve profitability will be directly affected by the level of acceptance of our products in the long-haul and metro wdm markets and by our ability to cost-effectively develop and sell innovative products that leverage our technology advantages on a time-to-market basis . as of december 29 , 2012 , we have sold our products for deployment in the optical networks of 111 customers worldwide , including colt , cox communications , deutsche telekom , equinix , interoute , kvh , teliasonera , level 3 , ntt , ote , pacnet and xo communications . we do not have long-term sales commitments from our customers . to date , a few of our customers have accounted for a significant portion of our revenue . no customers accounted for over 10 % of our revenue in 2012 or 2011. one customer accounted for over 10 % of our revenue in 2010. our business will be harmed if any of our key customers do not generate as much revenue as we forecast , stop purchasing from us , or substantially reduce their orders for our products . we are headquartered in sunnyvale , california , with employees located throughout the americas , europe , and the asia pacific region . we expect to continue to add some personnel in the united states and internationally to develop our products and provide additional geographic sales and technical support coverage . we primarily sell our products through our direct sales force , with a small portion sold indirectly through resellers . we derived 98 % , 97 % and 98 % of our revenue from direct sales to customers for 2012 , 2011 and 2010 , respectively . we expect to continue generating a substantial majority of our revenue from direct sales in the future . our near-term year-over-year and quarter-over-quarter revenue will likely be volatile and may be impacted by several factors including general economic and market conditions , time-to-market development of new products , acquisitions of new customers and the timing of large product deployments . 36 we will continue to make significant investments in the business , and management currently believes that operating expenses for 2013 will range from $ 235 million to $ 245 million , including stock-based compensation expense of approximately $ 30 million to $ 35 million . results of operations revenue the following table sets forth , for periods presented , certain consolidated statements of operations information ( in thousands , except % ) : replace_table_token_3_th the following table summarizes our revenue by geography and sales channel for the periods presented ( in thousands , except % ) : replace_table_token_4_th 37 2012 compared to 2011. total revenue increased to $ 438.4 million in 2012 from $ 404.9 million in 2011. revenues were positively impacted by the recognition of revenues from sales of our new dtn-x platform during the second half of 2012. these revenues included sales to existing customers transitioning their higher-capacity network deployments to the dtn-x and new customers purchasing our digital optical network solutions for the first time . story_separator_special_tag as of december 29 , 2012 , we had determined that ownership changes have occurred that would result in limitations on the current and future utilization of its net operating loss carryforwards . however , based on the work performed , the limitations are not significant enough to impact the future utilization of the tax attributes . in determining future taxable income , we make assumptions to forecast federal , state and international operating income , the reversal of temporary differences , and the implementation of any feasible and prudent tax planning strategies . the assumptions require significant judgment regarding the forecasts of future taxable income , and are consistent with our income forecasts used to manage our business . we intend to maintain the remaining valuation allowance until sufficient further positive evidence exists to support a reversal of , or decrease , in the existing valuation allowance . story_separator_special_tag anticipate that any potential lack of liquidity in our ars , even for an extended period of time , will affect our ability to finance our operations , including our continued investments in research and development and planned capital expenditures . we continue to monitor efforts by the financial markets to find alternative means for restoring the liquidity of this investment . our ars investment is classified as a non-current asset until we have better visibility as to when its liquidity will be restored . for 2013 , capital expenditures are expected to be in the range of approximately $ 20 million to $ 25 million , primarily for product development . we believe that our current cash and cash equivalents and investments will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least 12 months . if these sources of cash are insufficient to satisfy our liquidity requirements beyond 12 months , we may require additional capital from equity or debt financings to fund our operations , to respond to competitive pressures or strategic opportunities , or otherwise . we may not be able to secure timely additional financing on favorable terms , or at all . the terms of any additional financing may place limits on our financial and operating flexibility . if we raise additional funds through further issuances of equity , convertible debt securities or other securities convertible into equity , our existing stockholders could suffer dilution in their percentage ownership of us , and any new securities we issue could have rights , preferences and privileges senior to those of holders of our common stock . contractual obligations the following is a summary of our contractual obligations as of december 29 , 2012 : replace_table_token_10_th 44 ( 1 ) we have service agreements with our major production suppliers under which we are committed to purchase certain parts . ( 2 ) we lease facilities under non-cancelable operating lease agreements . these leases have varying terms , predominantly no longer than ten years each and contain leasehold improvement incentives , rent holidays and escalation clauses that range from one to ten years . in addition , some of these leases have renewal options for up to five years . we also have contractual commitments to remove leasehold improvements and return certain properties to a specified condition when the leases terminate . at the inception of a lease with such conditions , we record an asset retirement obligation liability and a corresponding capital asset in an amount equal to the estimated fair value of the obligation . leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life of the asset . an assumption of lease renewal where a renewal option exists is used only when the renewal has been determined to be reasonably assured . the estimated useful life of leasehold improvements is one to ten years . ( 3 ) other contracts are related to contractual obligations for non-recurring engineering costs . ( 4 ) tax liabilities of $ 1.8 million related to uncertain tax positions are not included in the table because we are unable to determine the timing of settlement if any , of these future payments with a reasonably reliable estimate . we had $ 3.6 million of standby letters of credit outstanding as of december 29 , 2012. these consisted of $ 1.5 million related to a value added tax license , $ 1.4 million related to a customer proposal guarantee , $ 0.7 million related to property leases and $ 0.3 million related to foreign payroll . we had $ 2.7 million of standby letters of credit outstanding as of december 29 , 2011. these consisted of $ 1.4 million related to a customer proposal guarantee , $ 0.8 million related to a value added tax license and $ 0.5 million related to property leases . off-balance sheet arrangements as of december 29 , 2012 , we did not have any relationships with unconsolidated entities or financial partnerships , such as entities often referred to as structured finance or special purpose entities , which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes . critical accounting policies and estimates our consolidated financial statements are prepared in accordance with united states generally accepted accounting principles ( u.s . gaap ) . these accounting principles require us to make certain estimates and judgments that can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements , as well as the reported amounts of revenue and expenses during the periods presented . significant estimates and assumptions made by management include revenue recognition , stock-based compensation , inventory valuation , allowances for sales reserves , allowances for doubtful accounts , accrued warranty , cash equivalents , fair value measurement of investments , other-than-temporary impairments , derivative instruments and accounting for income taxes . by their nature , these estimates and judgments are

