these components are received at one of our distribution centers and then , based upon production needs , the components are sent to one of several third party fillers , which manufacture the finished product for us and then deliver them to one of our distribution centers . as with any global business , many aspects of our operations are subject to influences outside our control . we believe we have a strong brand portfolio with global reach and potential . as part of our strategy , we plan to continue to make investments behind fast-growing markets and channels to grow market share . during 2013 , the economic uncertainty and financial market volatility taking place in certain european countries did not have a significant impact on our business , and at this time we do not believe it will have a significant impact on our business for the foreseeable future . this is due in part to our belief that we are well positioned as a result of our strategy to manage our business effectively and efficiently . however , if the degree of uncertainty or volatility worsens or is prolonged , then there will likely be a negative effect on ongoing consumer confidence , demand and spending and as a result , our business . currently , we believe general economic and other uncertainties still exist in select markets in which we do business and we continue to monitor global economic uncertainties and other risks that may affect our business . our reported net sales are impacted by changes in foreign currency exchange rates . a weak u.s. dollar has a positive impact on our net sales . however , earnings are negatively affected by a weak dollar because approximately 40 % of net sales of our european operations are denominated in u.s. dollars , while all costs of our european operations are incurred in euro . our company addresses certain financial exposures through a controlled program of risk management that includes the use of derivative financial instruments . we primarily enter into foreign currency forward exchange contracts to reduce the effects of fluctuating foreign currency exchange rates . 39 recent important events burberry burberry exercised its option to buy-out the license rights effective december 31 , 2012. on october 11 , 2012 , the company and burberry entered into a transition agreement that provided for certain license rights and obligations to continue through march 31 , 2013. the company continued to operate certain aspects of the business for the brand including product development , testing , and distribution . the transition agreement provided for non-exclusivity for manufacturing , a cap on sales of burberry products , a reduced advertising requirement and no minimum royalty amounts . the transition agreement provided that burberry inventories at march 31 , 2013 should be less than $ 20.0 million in the aggregate . actual burberry inventory as of march 31 , 2013 aggregated approximately $ 18 million . during the second quarter of 2013 , the company and burberry reached an agreement regarding inventory and burberry agreed to purchase $ 7.8 million of inventory at cost . remaining inventories were sold off in the ordinary course of business pursuant to our sell-off rights , destroyed or given to burberry at no charge . as of september 30 , 2013 , the $ 10 million inventory reserve , recorded in december 2012 upon recognition of the license termination gain of $ 198.8 million , was fully consumed during 2013. accounts receivables and accounts payables were collected and paid in the ordinary course of business . in addition , burberry purchased fixed assets for $ 2.8 million as agreed in the transition agreement . shanghai tang in july 2013 , the company created a wholly-owned hong kong subsidiary , inter parfums usa hong kong limited , which entered into a 12-year exclusive worldwide license to create , produce and distribute perfumes and related products under china 's leading luxury brand , shanghai tang . the agreement commenced on july 1 , 2013 and is subject to certain minimum sales , advertising expenditures and royalty payments as are customary in our industry . the company plans to launch its first fragrance under the shanghai tang brand in spring 2014 . 40 agent provocateur in july 2013 , the company entered into a 10.5-year exclusive worldwide license to create , produce and distribute perfumes and related products under london-based luxury lingerie brand , agent provocateur . the agreement commenced on august 1 , 2013 and is subject to certain minimum advertising expenditures as is customary in our industry . the company plans to launch its first fragrance under the agent provocateur brand in 2014. in addition , the company has taken over distribution of selected fragrances within the brand 's current perfume portfolio , and plans to revitalize the agent provocateur signature scent . oscar de la renta in october 2013 , the company entered into a 12-year exclusive worldwide license to create , produce and distribute perfumes and related products under the oscar de la renta brand , the agreement closed on december 2 , 2013 and is subject to certain minimum advertising expenditures as is customary in our industry . we purchased certain inventories and paid an up-front entry fee of $ 5.0 million . the company has taken over distribution of fragrances within the brand 's current perfume portfolio , and plan to launch its first fragrance under the oscar de la renta brand in 2014. discussion of critical accounting policies we make estimates and assumptions in the preparation of our financial statements in conformity with accounting principles generally accepted in the united states of america . actual results could differ significantly from those estimates under different assumptions and conditions . we believe the following discussion addresses our most critical accounting policies , which are those that are most important to the portrayal of our financial condition and results of operations . story_separator_special_tag we expect each of these brands to further enhance the performance of our u.s.-based operations in the coming year . united states prestige brand and specialty retail product sales increased 31 % in 2012. the initial launch of our first nine west fragrance and the commencement of sales pursuant to our anna sui license were the primary contributors to 2012 sales growth . with a high concentration of customers in the far east , first year sales of anna sui products reached approximately $ 20.0 million . in january 2012 , love fury , a women 's fragrance created for nine west launched at macy 's stores and nine west stores in the u.s. and internationally . as this line was met with mixed reviews , it was discontinued in 2013. consolidated net sales to customers by region replace_table_token_10_th in 2013 , the declines are primarily the result of the termination of the burberry license . however , sales of ongoing brands remained strong in north america , latin america , asia and eastern europe , while weakness continued in western europe . in 2012 , top line growth was especially strong in north america where sales ran 17 % ahead of 2011. growth continued in the middle east which saw a 9 % increase in sales , while sales were down 3 % and 13 % in western europe and central and south america , respectively . with the addition of the anna sui brand in our portfolio , the asian market grew 21 % in 2012. gross margins replace_table_token_11_th 47 as a percentage of net sales , gross profit margins were 58.3 % , 62.2 % , and 62.3 % in 2013 , 2012 and 2011 , respectively . for european operations , gross profit margin was 61 % , 64 % and 65 % in 2013 , 2012 and 2011 , respectively . the gross margin decline in 2013 is directly related to the resolution of the burberry inventory and the termination of the burberry license . although reserves were established and used to cover losses on the disposition of inventory , the sale of certain inventory to burberry at cost , resulted in a lower gross margin . in addition , the discontinuance of burberry product sales , which were sold at higher margins than ongoing brand sales , had a negative effect on margins . for u.s. operations , gross profit margin was 46 % for both 2013 and 2012 and 40 % in 2011. the increase since 2011 is the result of prestige product sales for the anna sui and alfred dunhill fragrance brands . we carefully watch movements in foreign currency exchange rates as approximately 40 % of our european based operations net sales are denominated in dollars , while our costs are incurred in euro . from a profit standpoint , a stronger u.s. dollar has a positive effect on our gross margin while a weak dollar has a negative effect . the average dollar/euro exchange rate was 1.33 in 2013 , as compared to 1.28 in 2012. as such , there was only a minor effect on gross margin in 2013 from changes in currency exchange rates . costs relating to purchase with purchase and gift with purchase promotions are reflected in cost of sales and aggregated $ 25.7 million , $ 46.5 million and $ 48.4 million in 2013 , 2012 and 2011 , respectively , and represented 4.6 % , 7.1 % and 7.9 % of net sales , respectively . the decline in 2013 is the result of the discontinuance of burberry product sales . generally , we do not bill customers for shipping and handling costs and such costs , which aggregated $ 6.1 million , $ 8.4 million and $ 8.8 million in 2013 , 2012 and 2011 , respectively , and are included in selling , general and administrative expenses in the consolidated statements of income . as such , our company 's gross margins may not be comparable to other companies , which may include these expenses as a component of cost of goods sold . selling , general & administrative expenses replace_table_token_12_th selling , general and administrative expenses decreased 23 % for the year ended december 31 , 2013 , as compared to 2012 and increased 3 % for the year ended december 31 , 2012 as compared to 2011. as a percentage of sales , selling , general and administrative expenses were 44 % , 50 % and 51 % for the years ended december 31 , 2013 , 2012 and 2011 , respectively . for european operations , selling , general and administrative expenses decreased 27 % in 2013 , as compared to 2012 and represented 46 % of sales in 2013 as compared to 52 % in 2012. for u.s. operations , while sales increased 21 % in 2013 , as compared to 2012 , selling , general and administrative expenses increased 16 % for the same period and represented 34 % of sales , as compared to 36 % in 2012 . 48 promotion and advertising included in selling , general and administrative expenses aggregated $ 94.0 million , $ 132.7 million and $ 127.8 million for the years ended december 31 , 2013 , 2012 and 2011 , respectively . promotion and advertising as a percentage of sales represented 16.7 % , 20.3 % and 20.8 % of net sales for the years ended december 31 , 2013 , 2012 and 2011 , respectively . in 2013 , pursuant to the requirements of the transition agreement with burberry , advertising requirements were reduced . almost all promotional spending in 2013 was for continuing brands and represented approximately 22 % on continuing brand sales . as planned , we invested heavily in promotional spending in the latter part of 2013 to support new product launches and continued worldwide development of our brand portfolio . royalty expense included in selling

liquidity and capital resources having received the proceeds in december 2012 from the termination of the burberry license , our financial position remains strong . at december 31 , 2013 , working capital aggregated $ 399 million and we had a working capital ratio of over 4.0 to 1. cash and cash equivalents and short-term investments aggregated $ 307 million all of which is held in euro by our european operations and is readily convertible into u.s. dollars . we have not had any liquidity issues to date , and do not expect any liquidity issues relating to such cash and cash equivalents and short-term investments held by our european operations . approximately 90 % of the company 's total assets are held by european operations . in addition to the cash and cash equivalents and short-term investments referred to above , approximately $ 104 million of trademarks , licenses and other intangible assets are held by european operations . as previously disclosed , burberry exercised its option to buy-out the license rights effective december 31 , 2012. on october 11 , 2012 , the company and burberry entered into a transition agreement that provided for certain license rights and obligations to continue through march 31 , 2013. the company continued to operate certain aspects of the business for the brand including product development , testing , and distribution . the transition agreement provided for non-exclusivity for manufacturing , a cap on sales of burberry products , a reduced advertising requirement and no minimum royalty amounts . the transition agreement provided that burberry inventories at march 31 , 2013 should be less than $ 20.0 million in the aggregate . actual burberry inventory as of march 31 , 2013 aggregated approximately $ 18 million . during the second quarter of 2013 , the company and burberry reached an agreement regarding inventory and burberry agreed to purchase $ 7.8 million of inventory at cost . remaining inventories were sold off in the ordinary course of business pursuant to our sell-off rights , destroyed or given to burberry at no charge .


 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 having received the proceeds in december 2012 from the termination of the burberry license , our financial position remains strong . at december 31 , 2013 , working capital aggregated $ 399 million and we had a working capital ratio of over 4.0 to 1. cash and cash equivalents and short-term investments aggregated $ 307 million all of which is held in euro by our european operations and is readily convertible into u.s. dollars . we have not had any liquidity issues to date , and do not expect any liquidity issues relating to such cash and cash equivalents and short-term investments held by our european operations . approximately 90 % of the company 's total assets are held by european operations . in addition to the cash and cash equivalents and short-term investments referred to above , approximately $ 104 million of trademarks , licenses and other intangible assets are held by european operations . as previously disclosed , burberry exercised its option to buy-out the license rights effective december 31 , 2012. on october 11 , 2012 , the company and burberry entered into a transition agreement that provided for certain license rights and obligations to continue through march 31 , 2013. the company continued to operate certain aspects of the business for the brand including product development , testing , and distribution . the transition agreement provided for non-exclusivity for manufacturing , a cap on sales of burberry products , a reduced advertising requirement and no minimum royalty amounts . the transition agreement provided that burberry inventories at march 31 , 2013 should be less than $ 20.0 million in the aggregate . actual burberry inventory as of march 31 , 2013 aggregated approximately $ 18 million . during the second quarter of 2013 , the company and burberry reached an agreement regarding inventory and burberry agreed to purchase $ 7.8 million of inventory at cost . remaining inventories were sold off in the ordinary course of business pursuant to our sell-off rights , destroyed or given to burberry at no charge .
```    
 Suspicious Activity Report : these components are received at one of our distribution centers and then , based upon production needs , the components are sent to one of several third party fillers , which manufacture the finished product for us and then deliver them to one of our distribution centers . as with any global business , many aspects of our operations are subject to influences outside our control . we believe we have a strong brand portfolio with global reach and potential . as part of our strategy , we plan to continue to make investments behind fast-growing markets and channels to grow market share . during 2013 , the economic uncertainty and financial market volatility taking place in certain european countries did not have a significant impact on our business , and at this time we do not believe it will have a significant impact on our business for the foreseeable future . this is due in part to our belief that we are well positioned as a result of our strategy to manage our business effectively and efficiently . however , if the degree of uncertainty or volatility worsens or is prolonged , then there will likely be a negative effect on ongoing consumer confidence , demand and spending and as a result , our business . currently , we believe general economic and other uncertainties still exist in select markets in which we do business and we continue to monitor global economic uncertainties and other risks that may affect our business . our reported net sales are impacted by changes in foreign currency exchange rates . a weak u.s. dollar has a positive impact on our net sales . however , earnings are negatively affected by a weak dollar because approximately 40 % of net sales of our european operations are denominated in u.s. dollars , while all costs of our european operations are incurred in euro . our company addresses certain financial exposures through a controlled program of risk management that includes the use of derivative financial instruments . we primarily enter into foreign currency forward exchange contracts to reduce the effects of fluctuating foreign currency exchange rates . 39 recent important events burberry burberry exercised its option to buy-out the license rights effective december 31 , 2012. on october 11 , 2012 , the company and burberry entered into a transition agreement that provided for certain license rights and obligations to continue through march 31 , 2013. the company continued to operate certain aspects of the business for the brand including product development , testing , and distribution . the transition agreement provided for non-exclusivity for manufacturing , a cap on sales of burberry products , a reduced advertising requirement and no minimum royalty amounts . the transition agreement provided that burberry inventories at march 31 , 2013 should be less than $ 20.0 million in the aggregate . actual burberry inventory as of march 31 , 2013 aggregated approximately $ 18 million . during the second quarter of 2013 , the company and burberry reached an agreement regarding inventory and burberry agreed to purchase $ 7.8 million of inventory at cost . remaining inventories were sold off in the ordinary course of business pursuant to our sell-off rights , destroyed or given to burberry at no charge . as of september 30 , 2013 , the $ 10 million inventory reserve , recorded in december 2012 upon recognition of the license termination gain of $ 198.8 million , was fully consumed during 2013. accounts receivables and accounts payables were collected and paid in the ordinary course of business . in addition , burberry purchased fixed assets for $ 2.8 million as agreed in the transition agreement . shanghai tang in july 2013 , the company created a wholly-owned hong kong subsidiary , inter parfums usa hong kong limited , which entered into a 12-year exclusive worldwide license to create , produce and distribute perfumes and related products under china 's leading luxury brand , shanghai tang . the agreement commenced on july 1 , 2013 and is subject to certain minimum sales , advertising expenditures and royalty payments as are customary in our industry . the company plans to launch its first fragrance under the shanghai tang brand in spring 2014 . 40 agent provocateur in july 2013 , the company entered into a 10.5-year exclusive worldwide license to create , produce and distribute perfumes and related products under london-based luxury lingerie brand , agent provocateur . the agreement commenced on august 1 , 2013 and is subject to certain minimum advertising expenditures as is customary in our industry . the company plans to launch its first fragrance under the agent provocateur brand in 2014. in addition , the company has taken over distribution of selected fragrances within the brand 's current perfume portfolio , and plans to revitalize the agent provocateur signature scent . oscar de la renta in october 2013 , the company entered into a 12-year exclusive worldwide license to create , produce and distribute perfumes and related products under the oscar de la renta brand , the agreement closed on december 2 , 2013 and is subject to certain minimum advertising expenditures as is customary in our industry . we purchased certain inventories and paid an up-front entry fee of $ 5.0 million . the company has taken over distribution of fragrances within the brand 's current perfume portfolio , and plan to launch its first fragrance under the oscar de la renta brand in 2014. discussion of critical accounting policies we make estimates and assumptions in the preparation of our financial statements in conformity with accounting principles generally accepted in the united states of america . actual results could differ significantly from those estimates under different assumptions and conditions . we believe the following discussion addresses our most critical accounting policies , which are those that are most important to the portrayal of our financial condition and results of operations . story_separator_special_tag we expect each of these brands to further enhance the performance of our u.s.-based operations in the coming year . united states prestige brand and specialty retail product sales increased 31 % in 2012. the initial launch of our first nine west fragrance and the commencement of sales pursuant to our anna sui license were the primary contributors to 2012 sales growth . with a high concentration of customers in the far east , first year sales of anna sui products reached approximately $ 20.0 million . in january 2012 , love fury , a women 's fragrance created for nine west launched at macy 's stores and nine west stores in the u.s. and internationally . as this line was met with mixed reviews , it was discontinued in 2013. consolidated net sales to customers by region replace_table_token_10_th in 2013 , the declines are primarily the result of the termination of the burberry license . however , sales of ongoing brands remained strong in north america , latin america , asia and eastern europe , while weakness continued in western europe . in 2012 , top line growth was especially strong in north america where sales ran 17 % ahead of 2011. growth continued in the middle east which saw a 9 % increase in sales , while sales were down 3 % and 13 % in western europe and central and south america , respectively . with the addition of the anna sui brand in our portfolio , the asian market grew 21 % in 2012. gross margins replace_table_token_11_th 47 as a percentage of net sales , gross profit margins were 58.3 % , 62.2 % , and 62.3 % in 2013 , 2012 and 2011 , respectively . for european operations , gross profit margin was 61 % , 64 % and 65 % in 2013 , 2012 and 2011 , respectively . the gross margin decline in 2013 is directly related to the resolution of the burberry inventory and the termination of the burberry license . although reserves were established and used to cover losses on the disposition of inventory , the sale of certain inventory to burberry at cost , resulted in a lower gross margin . in addition , the discontinuance of burberry product sales , which were sold at higher margins than ongoing brand sales , had a negative effect on margins . for u.s. operations , gross profit margin was 46 % for both 2013 and 2012 and 40 % in 2011. the increase since 2011 is the result of prestige product sales for the anna sui and alfred dunhill fragrance brands . we carefully watch movements in foreign currency exchange rates as approximately 40 % of our european based operations net sales are denominated in dollars , while our costs are incurred in euro . from a profit standpoint , a stronger u.s. dollar has a positive effect on our gross margin while a weak dollar has a negative effect . the average dollar/euro exchange rate was 1.33 in 2013 , as compared to 1.28 in 2012. as such , there was only a minor effect on gross margin in 2013 from changes in currency exchange rates . costs relating to purchase with purchase and gift with purchase promotions are reflected in cost of sales and aggregated $ 25.7 million , $ 46.5 million and $ 48.4 million in 2013 , 2012 and 2011 , respectively , and represented 4.6 % , 7.1 % and 7.9 % of net sales , respectively . the decline in 2013 is the result of the discontinuance of burberry product sales . generally , we do not bill customers for shipping and handling costs and such costs , which aggregated $ 6.1 million , $ 8.4 million and $ 8.8 million in 2013 , 2012 and 2011 , respectively , and are included in selling , general and administrative expenses in the consolidated statements of income . as such , our company 's gross margins may not be comparable to other companies , which may include these expenses as a component of cost of goods sold . selling , general & administrative expenses replace_table_token_12_th selling , general and administrative expenses decreased 23 % for the year ended december 31 , 2013 , as compared to 2012 and increased 3 % for the year ended december 31 , 2012 as compared to 2011. as a percentage of sales , selling , general and administrative expenses were 44 % , 50 % and 51 % for the years ended december 31 , 2013 , 2012 and 2011 , respectively . for european operations , selling , general and administrative expenses decreased 27 % in 2013 , as compared to 2012 and represented 46 % of sales in 2013 as compared to 52 % in 2012. for u.s. operations , while sales increased 21 % in 2013 , as compared to 2012 , selling , general and administrative expenses increased 16 % for the same period and represented 34 % of sales , as compared to 36 % in 2012 . 48 promotion and advertising included in selling , general and administrative expenses aggregated $ 94.0 million , $ 132.7 million and $ 127.8 million for the years ended december 31 , 2013 , 2012 and 2011 , respectively . promotion and advertising as a percentage of sales represented 16.7 % , 20.3 % and 20.8 % of net sales for the years ended december 31 , 2013 , 2012 and 2011 , respectively . in 2013 , pursuant to the requirements of the transition agreement with burberry , advertising requirements were reduced . almost all promotional spending in 2013 was for continuing brands and represented approximately 22 % on continuing brand sales . as planned , we invested heavily in promotional spending in the latter part of 2013 to support new product launches and continued worldwide development of our brand portfolio . royalty expense included in selling

