Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Jun. 30, 2014 | Jan. 31, 2015 |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | NU SKIN ENTERPRISES INC | ||
Entity Central Index Key | 1021561 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $4.30 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Class A common [Member] | |||
Statement [Line Items] | |||
Entity Common Stock, Shares Outstanding | 59,445,344 | ||
Class B common [Member] | |||
Statement [Line Items] | |||
Entity Common Stock, Shares Outstanding | 0 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $288,415 | $525,153 |
Current investments | 11,793 | 21,974 |
Accounts receivable | 35,834 | 68,652 |
Inventories, net | 338,491 | 339,669 |
Prepaid expenses and other | 160,134 | 162,886 |
Total Current Assets | 834,667 | 1,118,334 |
Property and equipment, net | 464,783 | 396,042 |
Goodwill | 112,446 | 112,446 |
Other intangible assets, net | 75,062 | 83,168 |
Other assets | 127,476 | 111,072 |
Total assets | 1,614,434 | 1,821,062 |
Current liabilities | ||
Accounts payable | 34,712 | 82,684 |
Accrued expenses | 300,847 | 626,284 |
Current portion of long-term debt | 82,770 | 67,824 |
Total Current Liabilities | 418,329 | 776,792 |
Long-term debt | 164,567 | 113,852 |
Other liabilities | 89,100 | 71,799 |
Total liabilities | 671,996 | 962,443 |
Commitments and contingencies (Notes 10 and 20) | ||
Stockholders' equity | ||
Class A common stock - 500 million shares authorized, $.001 par value, 90.6 million shares issued | 91 | 91 |
Additional paid-in capital | 414,394 | 397,383 |
Treasury stock, at cost - 31.6 million shares | -862,608 | -826,904 |
Accumulated other comprehensive loss | -51,521 | -46,228 |
Retained earnings | 1,442,082 | 1,334,277 |
Total stockholders' equity | 942,438 | 858,619 |
Total liabilities and stockholders' equity | $1,614,434 | $1,821,062 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, except Per Share data, unless otherwise specified | ||
Stockholders' equity: | ||
Common stock - authorized (in shares) | 500 | 500 |
Common stock - par value (in dollars per share) | $0.00 | $0.00 |
Common stock - issued (in shares) | 90.6 | 90.6 |
Treasury stock, at cost (in shares) | 31.6 | 31.6 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Income [Abstract] | |||
Revenue | $2,569,495 | $3,176,718 | $2,132,257 |
Cost of sales | 478,434 | 505,806 | 353,152 |
Gross profit | 2,091,061 | 2,670,912 | 1,779,105 |
Operating expenses: | |||
Selling expenses | 1,116,572 | 1,476,772 | 932,812 |
General and administrative expenses | 622,301 | 640,028 | 505,449 |
Total operating expenses | 1,738,873 | 2,116,800 | 1,438,261 |
Operating income | 352,188 | 554,112 | 340,844 |
Other income (expense), net (Note 23) | -53,681 | 2,828 | 4,398 |
Consolidated income before provision for income taxes | 298,507 | 556,940 | 345,242 |
Provision for income taxes | 109,331 | 192,052 | 123,597 |
Net income | $189,176 | $364,888 | $221,645 |
Net income per share: | |||
Basic (in dollars per share) | $3.20 | $6.23 | $3.66 |
Diluted (in dollars per share) | $3.11 | $5.94 | $3.52 |
Weighted-average common shares outstanding (000s): | |||
Basic (in shares) | 59,073 | 58,606 | 60,600 |
Diluted (in shares) | 60,887 | 61,448 | 63,025 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $189,176 | $364,888 | $221,645 |
Other comprehensive income, net of tax: | |||
Foreign currency translation adjustment, net of taxes of $(3,949), $(650) and $420, respectively | -5,113 | 6,251 | 7,843 |
Net unrealized gains/(losses) on foreign currency cash flow hedges, net of taxes of $(1,870), $(1,470) and $(869), respectively | 1,578 | 2,650 | 3,299 |
Less: Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of $222, $1,842 and $968, respectively | -1,758 | -3,307 | -399 |
Total | -5,293 | 5,594 | 10,743 |
Comprehensive income | $183,883 | $370,482 | $232,388 |
Consolidated_Statements_of_Com1
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Other comprehensive income, net of tax: | |||
Foreign currency translation adjustment, tax | ($3,949) | ($650) | ($420) |
Net unrealized gains/(losses) on foreign currency cash flow hedges, tax | -1,870 | -1,470 | -869 |
Reclassification adjustment for realized losses/(gains) in current earnings, tax | $222 | $1,842 | $968 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss | Retained Earnings [Member] | Total | Class A [Member] |
In Thousands, unless otherwise specified | Class A [Member] | ||||||
Balance at beginning of period at Dec. 31, 2011 | $91 | $292,240 | ($522,162) | ($62,565) | $866,632 | $574,236 | |
Stockholders' equity [Roll Forward] | |||||||
Net income | 0 | 0 | 0 | 0 | 221,645 | 221,645 | |
Other comprehensive income, net of tax | 0 | 0 | 0 | 10,743 | 0 | 10,743 | |
Repurchase of Class A common stock (Note 11) | 0 | 0 | -201,471 | 0 | 0 | -201,471 | -201,471 |
Exercise of employee stock options/vesting of stock awards | 0 | -4,214 | 8,780 | 0 | 0 | 4,566 | |
Excess tax benefit from equity awards | 0 | 7,909 | 0 | 0 | 0 | 7,909 | |
Stock-based compensation | 0 | 21,358 | 0 | 0 | 0 | 21,358 | |
Cash dividends | 0 | 0 | 0 | 0 | -48,374 | -48,374 | |
Balance at end of period at Dec. 31, 2012 | 91 | 317,293 | -714,853 | -51,822 | 1,039,903 | 590,612 | |
Stockholders' equity [Roll Forward] | |||||||
Net income | 0 | 0 | 0 | 0 | 364,888 | 364,888 | |
Other comprehensive income, net of tax | 0 | 0 | 0 | 5,594 | 0 | 5,594 | |
Repurchase of Class A common stock (Note 11) | 0 | 0 | -140,865 | 0 | 0 | -140,865 | -140,865 |
Exercise of employee stock options/vesting of stock awards | 0 | 5,556 | 28,814 | 0 | 0 | 34,370 | |
Excess tax benefit from equity awards | 0 | 41,914 | 0 | 0 | 0 | 41,914 | |
Stock-based compensation | 0 | 32,620 | 0 | 0 | 0 | 32,620 | |
Cash dividends | 0 | 0 | 0 | 0 | -70,514 | -70,514 | |
Balance at end of period at Dec. 31, 2013 | 91 | 397,383 | -826,904 | -46,228 | 1,334,277 | 858,619 | |
Stockholders' equity [Roll Forward] | |||||||
Net income | 0 | 0 | 0 | 0 | 189,176 | 189,176 | |
Other comprehensive income, net of tax | 0 | 0 | 0 | -5,293 | 0 | -5,293 | |
Repurchase of Class A common stock (Note 11) | 0 | 0 | -45,724 | 0 | 0 | -45,724 | -45,724 |
Exercise of employee stock options/vesting of stock awards | 0 | -12,440 | 10,020 | 0 | 0 | -2,420 | |
Excess tax benefit from equity awards | 0 | 11,947 | 0 | 0 | 0 | 11,947 | |
Stock-based compensation | 0 | 17,504 | 0 | 0 | 0 | 17,504 | |
Cash dividends | 0 | 0 | 0 | 0 | -81,371 | -81,371 | |
Balance at end of period at Dec. 31, 2014 | $91 | $414,394 | ($862,608) | ($51,521) | $1,442,082 | $942,438 |
Consolidated_Statements_of_Sto1
Consolidated Statements of Stockholder's Equity (Parenthetical) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders' equity [Roll Forward] | |||
Employee stock options (in shares) | 0.8 | 2.2 | 0.8 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income | $189,176 | $364,888 | $221,645 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 54,924 | 34,923 | 33,412 |
Foreign currency (gains)/losses | 53,828 | -1,077 | -3,874 |
Stock-based compensation | 17,504 | 32,620 | 21,358 |
Deferred taxes | 10,399 | -41,748 | 4,692 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 30,766 | -34,304 | -7,884 |
Inventories, net | -16,518 | -207,436 | -22,605 |
Prepaid expenses and other | -25,167 | -23,317 | -2,358 |
Other assets | -16,219 | -22,619 | -11,579 |
Accounts payable | -45,953 | 32,643 | 15,831 |
Accrued expenses | -309,180 | 389,093 | 62,056 |
Other liabilities | -24 | 6,510 | 282 |
Net cash provided by (used in) operating activities | -56,464 | 530,176 | 310,976 |
Cash flows from investing activities: | |||
Purchases of property and equipment | -101,476 | -185,103 | -96,645 |
Proceeds on investment sales | 27,328 | 13,075 | 20,086 |
Purchases of investments | -17,522 | -21,671 | -15,737 |
Acquisition (Note 24) | 0 | 0 | -12,562 |
Net cash used in investing activities | -91,670 | -193,699 | -104,858 |
Cash flows from financing activities: | |||
Payment of cash dividends | -81,371 | -70,514 | -48,374 |
Repurchase of shares of common stock | -45,724 | -140,865 | -201,471 |
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards | -2,420 | 34,370 | 4,565 |
Income tax benefit of equity awards | 11,801 | 45,187 | 7,750 |
Payments on long-term debt | -333,803 | -37,903 | -28,279 |
Payment of debt issuance costs | -5,739 | 0 | 0 |
Proceeds from long-term debt | 416,180 | 49,000 | 101,922 |
Net cash used in financing activities | -41,076 | -120,725 | -163,887 |
Effect of exchange rate changes on cash | -47,528 | -10,624 | 4,820 |
Net increase (decrease) in cash and cash equivalents | -236,738 | 205,128 | 47,051 |
Cash and cash equivalents, beginning of period | 525,153 | 320,025 | 272,974 |
Cash and cash equivalents, end of period | $288,415 | $525,153 | $320,025 |
The_Company
The Company | 12 Months Ended |
Dec. 31, 2014 | |
The Company [Abstract] | |
The Company | 1. The Company |
Nu Skin Enterprises, Inc. (the "Company") is a leading, global direct selling company that develops and distributes premium-quality, innovative personal care products and nutritional supplements that are sold worldwide under the Nu Skin and Pharmanex brands and a small number of other products and services. Over the last several years, the Company has introduced new Pharmanex nutritional supplements and Nu Skin personal care products under its ageLOC anti-aging brand. The Company reports revenue from five geographic regions: Greater China, which consists of Mainland China, Hong Kong, Macau and Taiwan; North Asia, which consists of Japan and South Korea; Americas, which consists of the United States, Canada and Latin America; South Asia/Pacific, which consists of Australia, Brunei, French Polynesia, Indonesia, Malaysia, New Caledonia, New Zealand, the Philippines, Singapore, Thailand and Vietnam; and Europe, Middle East and Africa ("EMEA"), which consists of several markets in Europe as well as Israel, Russia and South Africa (the Company's subsidiaries operating in these countries in each region are collectively referred to as the "Subsidiaries"). |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||||||
Consolidation | |||||||||||||
The consolidated financial statements include the accounts of the Company and the Subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. | |||||||||||||
Use of estimates | |||||||||||||
The preparation of these financial statements, in conformity with accounting principles generally accepted in the United States of America, required management to make estimates and assumptions that affected the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates. | |||||||||||||
Cash and cash equivalents | |||||||||||||
Cash equivalents are short-term, highly liquid instruments with original maturities of 90 days or less. | |||||||||||||
Inventories | |||||||||||||
Inventories consist primarily of merchandise purchased for resale and are stated at the lower of standard cost or market, using a standard cost method which approximates the first-in, first-out method. The Company had adjustments to its inventory carrying value totaling $5.9 million and $56.0 million as of December 31, 2013 and 2014, respectively. During the second quarter of 2014, the Company made a determination to adjust its inventory carrying value. Heightened media and regulatory scrutiny in Mainland China in the first part of 2014, and the voluntary actions the Company took in response to such scrutiny, had a negative impact on the size of the Company's limited-time offer in June, which significantly reduced its expectations for plans to sell ageLOC TR90 in a limited-time offer later in 2014 or the beginning of 2015. This resulted in a $50 million write-down of estimated surplus inventory primarily in Mainland China. | |||||||||||||
Inventories consist of the following (U.S. dollars in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Raw materials | $ | 117,982 | $ | 101,479 | |||||||||
Finished goods | 221,687 | 237,012 | |||||||||||
$ | 339,669 | $ | 338,491 | ||||||||||
Adjustments to inventories consist of the following (U.S. dollars in millions): | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Beginning balance, adjustments to inventory carrying value | $ | 7.1 | $ | 5.5 | $ | 5.9 | |||||||
Additions | 11.6 | 12.3 | 77.4 | ||||||||||
Write-offs | (13.2 | ) | (11.9 | ) | (27.3 | ) | |||||||
Ending balance, adjustments to inventory carrying value | $ | 5.5 | $ | 5.9 | $ | 56 | |||||||
Property and equipment | |||||||||||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the following estimated useful lives: | |||||||||||||
Buildings | 20 - 39 years | ||||||||||||
Furniture and fixtures | 5 - 7 years | ||||||||||||
Computers and equipment | 3 - 5 years | ||||||||||||
Leasehold improvements | Shorter of estimated useful life or lease term | ||||||||||||
Scanners | 3 years | ||||||||||||
Vehicles | 3 - 5 years | ||||||||||||
Expenditures for maintenance and repairs are charged to expense as incurred. When an asset is sold or otherwise disposed of, the cost and associated accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of income. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. An impairment loss is recognized if the carrying amount of the asset exceeds its fair value. | |||||||||||||
Goodwill and other intangible assets | |||||||||||||
Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill and intangible assets with indefinite useful lives are not amortized, but are assessed for impairment annually. In addition, impairment testing is conducted when events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill and intangible assets with indefinite useful lives would be written down to fair value if considered impaired. Guidance under Accounting Standards Codification ("ASC") 350, Intangibles - Goodwill and Other, requires an entity to test goodwill for impairment on at least an annual basis. The Company had the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If under the quantitative assessment the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured. The Company used the quantitative assessment for all periods presented. Intangible assets with finite useful lives are amortized to their estimated residual values over such finite lives using the straight-line method and reviewed for impairment whenever events or circumstances warrant such a review. | |||||||||||||
No impairment charges were recorded for goodwill or intangibles during the periods presented. | |||||||||||||
Revenue recognition | |||||||||||||
Revenue is recognized when products are shipped, which is when title and risk of loss pass to the purchaser of the products. A reserve for product returns is accrued based on historical experience totaling $11.0 million and $10.1 million as of December 31, 2013 and 2014, respectively. During the years ended December 31, 2012, 2013 and 2014, the Company recorded sales returns of $56.1 million, $79.4 million and $83.6 million, respectively. The Company generally requires cash or credit card payment at the point of sale. Accounts receivable generally represents amounts due from credit card companies and are generally collected within a few days of the purchase. As such, the Company has determined that no allowance for doubtful accounts is necessary. Amounts received prior to shipment of products and title passage to the purchaser of the products are recorded as deferred revenue. The Company's sales compensation plans generally do not provide rebates or selling discounts for purchasing its products and services. The Company classifies selling discounts and rebates, if any, as a reduction of revenue at the time the sale is recorded. | |||||||||||||
Through the Company's product subscription and loyalty programs, which can vary from market to market, participants who commit to purchases on a monthly basis receive a discount from suggested retail or wholesale prices, as applicable. The Company applies this discount at the time of each purchase and not through a larger discount on the initial purchase. Participants may cancel their commitment at any time, however some markets charge a one-time early cancellation fee. All purchases under these programs are subject to the Company's standard product payment and return policies. In accordance with ASC 605-50, the Company classifies selling discounts and rebates, as a reduction of revenue at the time the sale is recorded. | |||||||||||||
Shipping and handling costs | |||||||||||||
Shipping and handling costs are recorded as cost of sales and are expensed as incurred. | |||||||||||||
Advertising expenses | |||||||||||||
Advertising costs are expensed as incurred. Advertising expense incurred for the years ended December 31, 2012, 2013 and 2014 totaled $5.1 million, $11.3 million and $19.6 million, respectively. | |||||||||||||
Selling expenses | |||||||||||||
Selling expenses are the Company's most significant expense and are classified as operating expenses. Selling expenses include distributor commissions as well as wages, benefits, bonuses and other labor and unemployment expenses the Company pays to its sales force in Mainland China. In each of the Company's markets, except Mainland China, Sales Leaders can earn "multi-level" compensation under the Company's global sales compensation plan, including commissions for product sales to their consumer groups as well as the product sales made through the sales network they have developed and trained. The Company does not pay commissions on sales materials. | |||||||||||||
Outside of Mainland China, the Company's distributors may make profits by purchasing the products from the Company at a discount and selling them to consumers with a mark-up. The Company does not account for nor pay additional commissions on these mark-ups received by distributors. In many markets, the Company also allows individuals who are not members of its sales force, referred to as "preferred customers," to buy products directly from the Company at a discount. The Company pays commissions on preferred customer purchases to the referring member of its sales force. | |||||||||||||
Research and development | |||||||||||||
Research and development costs are included in general and administrative expenses in the accompanying consolidated statements of income and are expensed as incurred and totaled $14.9 million, $18.0 million and $18.9 million in 2012, 2013 and 2014, respectively. | |||||||||||||
Deferred tax assets and liabilities | |||||||||||||
The Company accounts for income taxes in accordance with the Income Taxes Topic of the Financial Accounting Standards Codification. These standards establish financial accounting and reporting standards for the effects of income taxes that result from an enterprise's activities during the current and preceding years. The Company takes an asset and liability approach for financial accounting and reporting of income taxes. The Company pays income taxes in many foreign jurisdictions based on the profits realized in those jurisdictions, which can be significantly impacted by terms of intercompany transactions between the Company and its foreign affiliates. Deferred tax assets and liabilities are created in this process. The Company has netted these deferred tax assets and deferred tax liabilities by jurisdiction. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized. | |||||||||||||
Uncertain Tax Positions | |||||||||||||
The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. In 2013, the Company entered into a closing agreement with the United States Internal Revenue Service (the "IRS") for all adjustments for the 2009 and 2010 tax years. As a result of entering into the closing agreement, the Company is no longer subject to tax examinations from the IRS for all years for which tax returns have been filed except for 2011. With a few exceptions, the Company is no longer subject to state and local income tax examination by tax authorities for the years before 2010. In 2009, the Company entered into a voluntary program with the IRS called Compliance Assurance Process ("CAP"). The objective of CAP is to contemporaneously work with the IRS to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company has elected to participate in the CAP program for 2015 and may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. In major foreign jurisdictions, the Company is no longer subject to income tax examinations for years before 2009. However, statutes in certain countries may be as long as ten years for transfer pricing related issues. Along with the IRS examination of 2011, the Company is currently under examination in certain foreign jurisdictions; however, the outcomes of those reviews are not yet determinable. | |||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands): | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Gross balance at January 1 | $ | 7,387 | $ | 9,045 | $ | 7,484 | |||||||
Increases related to current year tax positions | 2,430 | 1,188 | 2,700 | ||||||||||
Settlements | - | (1,671 | ) | - | |||||||||
Decreases due to lapse of statutes of limitations | (854 | ) | (1,086 | ) | (4,106 | ) | |||||||
Currency adjustments | 82 | 8 | (91 | ) | |||||||||
Gross balance at December 31 | $ | 9,045 | $ | 7,484 | $ | 5,987 | |||||||
At December 31, 2014, the Company had $6.0 million in unrecognized tax benefits of which $1.1 million, if recognized, would affect the effective tax rate. In comparison, at December 31, 2013, the Company had $7.5 million in unrecognized tax benefits of which $2.1 million, if recognized, would affect the effective tax rate. The Company's unrecognized tax benefits relate to multiple foreign and domestic jurisdictions. Due to potential increases in unrecognized tax benefits from the multiple jurisdictions in which the Company operates, as well as the expiration of various statutes of limitation, it is reasonably possible that the Company's gross unrecognized tax benefits, net of foreign currency adjustments, may increase within the next 12 months by a range of approximately $1 to $2 million. | |||||||||||||
During each of the years ended December 31, 2012, 2013 and 2014, the Company recognized $0.3 million, $(0.1) million and $0.4 million, respectively in interest and penalties expenses/(benefits). The Company had $1.1 million, $0.9 million and $1.3 million of accrued interest and penalties related to uncertain tax positions at December 31, 2012, 2013 and 2014, respectively. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. | |||||||||||||
Net income per share | |||||||||||||
Net income per share is computed based on the weighted-average number of common shares outstanding during the periods presented. Additionally, diluted earnings per share data gives effect to all potentially dilutive common shares that were outstanding during the periods presented (Note 11). | |||||||||||||
Foreign currency translation | |||||||||||||
A significant portion of the Company's business operations occur outside of the United States. The local currency of each of the Company's Subsidiaries is considered its functional currency, except for the Company's subsidiaries in Singapore and Venezuela where the U.S. dollar is used. All assets and liabilities are translated into U.S. dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders' equity is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders' equity in the consolidated balance sheets and transaction gains and losses are included in other income and expense in the consolidated financial statements. Net of tax, the accumulated other comprehensive income related to the foreign currency translation adjustments are $54.7 million (net of tax of $12.2 million), $47.6 million (net of tax of $10.4 million) and $52.6 million (net of tax of $10.8 million) at December 31, 2012, 2013 and 2014, respectively. | |||||||||||||
Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its Currency | |||||||||||||
The Company commenced operations in Venezuela in 2007, where it markets a variety of personal care and nutritional products. Total assets in Venezuela as of December 31, 2013 and 2014 are $38.8 million and $14.6 million, of which $34.0 million and $8.2 million are monetary assets in each year respectively. The Venezuela subsidiary also had a $37.9 million and $34.8 million intercompany balance to its parent company as of December 31, 2013 and 2014, with respect to charges for inventory, commissions, license fees and service fees. The Company imports all of its products into Venezuela from the United States. Venezuela represents a very small portion of the Company's overall business with sales during 2012, 2013 and 2014 representing approximately 0.7%, 1.1% and 1.0% of the Company's overall revenue, respectively. | |||||||||||||
Since November of 2009, Venezuela has been considered a highly inflationary economy. A country is considered to have a highly inflationary economy if it has a cumulative inflation rate of approximately 100% or more over a three-year period as well as other qualitative factors including historic inflation rate trends (increasing and decreasing), the capital intensiveness of the operation and other pertinent economic factors. The functional currency in highly inflationary economies is required to be the functional currency of the entity's parent company (which for our Venezuela subsidiary is the U.S. dollar), and transactions denominated in the local currency are remeasured to the functional currency. The remeasurement of bolivars into U.S. dollars creates foreign currency transaction gains or losses, which the Company includes in its consolidated statement of income. | |||||||||||||
The Venezuela subsidiary did not transition to highly inflationary status until the first quarter of 2014. As a result, the Company continued to account for the Venezuela subsidiary as a bolivar functional currency entity, rather than a U.S. dollar functional currency entity. In the first quarter of 2014, the Company began to account for this subsidiary as highly inflationary, and therefore changed the functional currency of the entity to the U.S. dollar. The consolidated statement of income for the year ended December 31, 2014, includes an out-of-period adjustment of $6.3 million to correct this error as it was not deemed to be material to the current or prior period financial statements. | |||||||||||||
The current operating environment in Venezuela continues to be challenging, with high inflation in the country, government restrictions on foreign exchange and pricing controls, and the possibility of the government announcing further devaluations to its currency. Currency restrictions enacted by the Venezuelan government have impacted the ability of the Company to exchange foreign currency at the official rate to pay for imported products, license fees, commissions and other service fees. The Company has been unsuccessful in obtaining U.S. dollars at the official exchange rates and under alternative exchange mechanisms described below. As a result, these foreign exchange controls in Venezuela have limited the Company's ability to repatriate earnings and settle the Company's intercompany obligations, which has resulted in the accumulation of bolivar-denominated cash and cash equivalents in Venezuela. | |||||||||||||
During the first quarter of 2014, two new foreign exchange mechanisms ("SICAD I" and "SICAD II") became available in Venezuela. As of March 31, 2014, the Company determined it would be most appropriate for it to utilize the SICAD I rate, which was approximately 10.7 bolivars per U.S. dollar. As a result of the adoption of this rate during the period ended March 31, 2014, the Company recorded a $14.7 million charge in Other Income (Expense) to reflect foreign currency transaction losses on its net monetary assets denominated in bolivar, which is reflected in the year ended December 31, 2014. | |||||||||||||
As of June 30, 2014, the Company determined that it would be most appropriate for it to utilize the SICAD II rate, which was approximately 50 bolivars per U.S. dollar, as the Company had not been successful in getting approval under SICAD I and believed the SICAD II rate better reflects the rate at which the Company will be able to convert bolivars to U.S. dollars. As a result of the adoption of this rate during the three months ended June 30, 2014, the Company recorded an additional $25.3 million charge in Other Income (Expense) to reflect additional foreign currency translation losses on its net monetary assets denominated in bolivar, which is reflected in the year ended December 31, 2014. | |||||||||||||
In the first quarter of 2015, a new foreign exchange mechanism ("SIMADI") was announced, which utilizes a variable exchange rate that was initially approximately 170 bolivars per U.S. dollar. | |||||||||||||
Fair value of financial instruments | |||||||||||||
The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term nature of these instruments. The Company's current investments as of December 31, 2014 include certificates of deposits and pre-refunded municipal bonds that are classified by management as held-to-maturity as the Company had the positive intent and ability to hold to maturity. The carrying value of these current investments approximate fair values due to the short-term nature of these instruments. As of December 31, 2013 and 2014, the long-term debt fair value is $188.3 million and $252.8 million, respectively. The estimated fair value of the Company's debt is based on interest rates available for debt with similar terms and remaining maturities. The Company has classified these instruments as Level 2 in the fair value hierarchy. Fair value estimates are made at a specific point in time, based on relevant market information. | |||||||||||||
The FASB Codification defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. On a quarterly basis, the Company measures at fair value certain financial assets, including cash equivalents. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair-value hierarchy: | |||||||||||||
▪ Level 1 – quoted prices in active markets for identical assets or liabilities; | |||||||||||||
▪ Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; | |||||||||||||
▪ Level 3 – unobservable inputs based on the Company's own assumptions. | |||||||||||||
Accounting standards permit companies, at their option, to measure many financial instruments and certain other items at fair value. The Company has elected not to apply the fair value option to existing eligible items. | |||||||||||||
Stock-based compensation | |||||||||||||
All share-based payments, including grants of stock options and restricted stock units, are required to be recognized in our financial statements based upon their respective grant date fair values. The Black-Scholes option-pricing model is used to estimate the fair value of stock options. The determination of the fair value of stock options is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We use historical volatility as the expected volatility assumption required in the Black-Scholes model. The expected life of the stock options is based on historical data trended into the future. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected terms of our stock options. The fair value of our restricted stock units is based on the closing market price of our stock on the date of grant less our expected dividend yield. We recognize stock-based compensation net of any estimated forfeitures over the requisite service period of the award. | |||||||||||||
The total compensation expense related to equity compensation plans was $21.4 million, $32.6 million and $17.5 million for the years ended December 31, 2012, 2013 and 2014. For the years ended December 31, 2012, 2013 and 2014, all stock-based compensation expense was recorded within general and administrative expenses. | |||||||||||||
Reporting comprehensive income | |||||||||||||
Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, and it includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. | |||||||||||||
Accounting for derivative instruments and hedging activities | |||||||||||||
The Company recognizes all derivatives as either assets or liabilities, with the instruments measured at fair value. | |||||||||||||
Portions of the Company's Japanese yen borrowings prior to its October 2014 refinancing were designated, and were effective as, economic hedges of the net investment in its foreign operations. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on these debt instruments were included in foreign currency translation adjustments within other comprehensive income. Included in the cumulative translation adjustment are $7.3 million of pretax net gains, $10.5 million of pretax net losses and $1.4 million of pretax net gains for the years ended December 31, 2012, 2013 and 2014, respectively, from Japanese yen borrowings. | |||||||||||||
Additionally, the Company's Subsidiaries enter into significant transactions with each other and third parties that may not be denominated in the respective Subsidiaries' functional currencies. The Company regularly monitors its foreign currency risks and seeks to reduce its exposure to fluctuations in foreign exchange rates using foreign currency exchange contracts and through certain intercompany loans of foreign currency. | |||||||||||||
Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting treatment. Changes in fair value associated with hedge ineffectiveness, if any, are recorded in the results of operations currently. In the event that an anticipated transaction is no longer likely to occur, the Company recognizes the change in fair value of the derivative in its results of operations currently. | |||||||||||||
Changes in the fair value of derivatives are recorded in current earnings or accumulated other comprehensive loss, depending on the intended use of the derivative and its resulting designation. The gains and losses in accumulated other comprehensive loss stemming from these derivatives will be reclassified into earnings in the period during which the hedged forecasted transaction affects earnings. The fair value of the receivable and payable amounts related to these unrealized gains and losses is classified as other current assets and liabilities. The Company does not use such derivative financial instruments for trading or speculative purposes. Gains and losses on certain intercompany loans of foreign currency are recorded as other income and expense in the consolidated statements of income. | |||||||||||||
Recent accounting pronouncements | |||||||||||||
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU changes the threshold for a disposal to qualify as a discontinued operation. To be considered a discontinued operation a disposal now must represent a strategic shift that has or will have a major effect on an entity's operations and financial results. This ASU also requires new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This update will be applied prospectively and is effective for annual periods, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted provided the disposal was not previously disclosed. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. | |||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2016 and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |||||||||||||
In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. This ASU is effective for annual periods, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. This ASU may be applied either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |||||||||||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40). The purpose of this ASU is to incorporate into U.S. GAAP management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern within one year after the date that the financial statements are issued, and to provide related footnote disclosures. This update is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. |
Prepaid_Expenses_and_Other
Prepaid Expenses and Other | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Prepaid Expenses and Other [Abstract] | |||||||||
Prepaid Expenses and Other | 3. Prepaid Expenses and Other | ||||||||
Prepaid expenses and other consist of the following (U.S. dollars in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Deferred tax assets | $ | 73,456 | $ | 40,840 | |||||
Intercompany deferred charges | 15,108 | 26,776 | |||||||
Prepaid income taxes | - | 37,113 | |||||||
Prepaid inventory and import costs | 43,755 | 21,060 | |||||||
Prepaid rent, insurance and other occupancy costs | 11,486 | 10,400 | |||||||
Prepaid promotion and event cost | 6,030 | 4,275 | |||||||
Prepaid other taxes | 3,340 | 3,037 | |||||||
Forward contracts | 1,939 | 1,661 | |||||||
Deposits | 1,081 | 1,244 | |||||||
Other | 6,691 | 13,728 | |||||||
$ | 162,886 | $ | 160,134 | ||||||
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and Equipment [Abstract] | |||||||||
Property and Equipment | 4. Property and Equipment | ||||||||
Property and equipment are comprised of the following (U.S. dollars in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Land | $ | 34,442 | $ | 34,087 | |||||
Buildings | 156,734 | 230,934 | |||||||
Construction in progress | 78,556 | 63,941 | |||||||
Furniture and fixtures | 56,160 | 61,643 | |||||||
Computers and equipment | 115,551 | 118,248 | |||||||
Leasehold improvements | 87,635 | 110,539 | |||||||
Scanners | 18,408 | 14,594 | |||||||
Vehicles | 2,226 | 2,725 | |||||||
549,712 | 636,711 | ||||||||
Less: accumulated depreciation | (153,670 | ) | (171,928 | ) | |||||
$ | 396,042 | $ | 464,783 | ||||||
Depreciation of property and equipment totaled $25.5 million, $27.1 million and $46.5 million for the years ended December 31, 2012, 2013 and 2014. | |||||||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Goodwill and Other Intangible Assets [Abstract] | ||||||||||||||||||
Goodwill and Other Intangible Assets | 5. Goodwill and Other Intangible Assets | |||||||||||||||||
Goodwill and other intangible assets consist of the following (U.S. dollars in thousands): | ||||||||||||||||||
Carrying Amount at | ||||||||||||||||||
December 31, | ||||||||||||||||||
Goodwill and indefinite life intangible assets: | 2013 | 2014 | ||||||||||||||||
Goodwill | $ | 112,446 | $ | 112,446 | ||||||||||||||
Trademarks and trade names | 24,599 | 24,599 | ||||||||||||||||
$ | 137,045 | $ | 137,045 | |||||||||||||||
31-Dec-13 | 31-Dec-14 | |||||||||||||||||
Finite life intangible assets: | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | Weighted-average | |||||||||||||
Amortization Period | ||||||||||||||||||
Scanner technology | $ | 46,482 | $ | 27,533 | $ | 46,482 | $ | 30,557 | 18 years | |||||||||
Developed technology | 22,500 | 15,909 | 22,500 | 16,734 | 20 years | |||||||||||||
Distributor network | 11,598 | 10,093 | 11,598 | 10,594 | 15 years | |||||||||||||
Trademarks | 14,086 | 11,660 | 14,404 | 12,461 | 15 years | |||||||||||||
Other | 53,540 | 24,442 | 45,006 | 19,181 | 8 years | |||||||||||||
$ | 148,206 | $ | 89,637 | $ | 139,990 | $ | 89,527 | 15 years | ||||||||||
Amortization of finite-life intangible assets totaled $7.9 million, $7.8 million and $8.4 million for the years ended December 31, 2012, 2013 and 2014, respectively. Annual estimated amortization expense is expected to approximate $8.0 million for each of the five succeeding fiscal years. | ||||||||||||||||||
All of the Company's goodwill is based in the U.S. Goodwill and indefinite life intangible assets are not amortized, rather they are subject to annual impairment tests. Annual impairment tests were completed resulting in no impairment charges for any of the periods shown. Finite life intangibles are amortized over their useful lives unless circumstances occur that cause the Company to revise such lives or review such assets for impairment. |
Other_Assets
Other Assets | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Assets [Abstract] | |||||||||
Other Assets | 6. Other Assets | ||||||||
Other assets consist of the following (U.S. dollars in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Deferred taxes | $ | 5,174 | $ | 15,128 | |||||
Deposits for noncancelable operating leases | 24,406 | 29,957 | |||||||
Deposit for customs assessment (Note 20) | 40,181 | 31,825 | |||||||
Cash surrender value for life insurance policies | 23,172 | 26,280 | |||||||
Other | 18,139 | 24,286 | |||||||
$ | 111,072 | $ | 127,476 | ||||||
Accrued_Expenses
Accrued Expenses | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses [Abstract] | |||||||||
Accrued Expenses | 7. Accrued Expenses | ||||||||
Accrued expenses consist of the following (U.S. dollars in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Accrued sales force commissions and other payments | $ | 330,870 | $ | 167,914 | |||||
Accrued income taxes | 46,006 | - | |||||||
Accrued other taxes | 63,823 | 32,246 | |||||||
Accrued payroll and other employee expenses | 68,695 | 29,220 | |||||||
Accrued payable to vendors | 42,447 | 28,341 | |||||||
Accrued royalties | 17,673 | 10,475 | |||||||
Sales return reserve | 10,734 | 10,118 | |||||||
Deferred revenue | 13,596 | 6,160 | |||||||
Other | 32,440 | 16,373 | |||||||
$ | 626,284 | $ | 300,847 | ||||||
Other_Liabilities
Other Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Liabilities [Abstract] | |||||||||
Other Liabilities | 8. Other Liabilities | ||||||||
Other liabilities consist of the following (U.S. dollars in thousands): | |||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Deferred tax liabilities | $ | 13,952 | $ | 16,017 | |||||
Reserve for other tax liabilities | 8,786 | 7,324 | |||||||
Reserve for customs assessment | 9,810 | 4,727 | |||||||
Liability for deferred compensation plan | 28,544 | 32,398 | |||||||
Pension plan benefits reserve | 6,176 | 5,844 | |||||||
Build to suit – financing obligation | - | 10,421 | |||||||
Deferred rent and deferred tenant incentives | - | 7,102 | |||||||
Asset retirement obligation | 4,090 | 4,611 | |||||||
Other | 441 | 656 | |||||||
$ | 71,799 | $ | 89,100 | ||||||
9. Long Term Debt |
LongTerm_Debt
Long-Term Debt | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Long Term Debt [Abstract] | |||||||||
Long Term Debt | The following table summarizes the Company's debt facilities as of December 31, 2014. The Company's book value for both the individual and consolidated debt included in the table approximates fair value. The estimated fair value of its debt is based on interest rates available for debt with similar terms and remaining maturities. The Company has classified these instruments as Level 2 in the fair value hierarchy. | ||||||||
Facility or | Original Principal Amount | Balance as of | Interest Rate | Repayment terms | |||||
Arrangement | December 31, 2014(1)(2) | ||||||||
Credit Agreement term loan facility: | |||||||||
U.S. dollar | $127.5 million | $125.9 million | Variable 30 day: 2.9117% | One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term. | |||||
denominated: | |||||||||
Japanese yen | 6.6 billion yen | 6.5 billion yen ($54.4 million as of December 31, 2014) | Variable 30 day: 2.8243% | One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term. | |||||
denominated: | |||||||||
Credit Agreement revolving credit facility: | |||||||||
$72.5 million | Variable 30 day: 2.9117% | Revolving line of credit expires October 2019. | |||||||
Korean subsidiary loan: | $20.0 million | ─ | 2.50% | Paid in full. | |||||
-1 | As of December 31, 2014, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $79.7 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility and $3.1 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility. The Company has classified the amounts borrowed under the revolving line of credit as short term because it is the Company's intention to use the line of credit to borrow and pay back funds over short periods of time. | ||||||||
-2 | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $5.5 million, which is not reflected in this table. | ||||||||
As of December 31, 2013, the Company had debt pursuant to various credit facilities and other borrowings. The following table summarizes the Company's debt facilities as of December 31, 2013. The Company's book value for both the individual and consolidated debt included in the table approximates fair value. The estimated fair value of its debt is based on interest rates available for debt with similar terms and remaining maturities. The Company has classified these instruments as Level 2 in the fair value hierarchy. | |||||||||
Facility or | Original Principal Amount | Balance as of | Interest Rate | Repayment terms | |||||
Arrangement | December 31, 2013 | ||||||||
Multi-currency uncommitted | |||||||||
shelf facility: | |||||||||
U.S. dollar | $40.0 million | $17.1 million | 6.20% | Paid in full on October 10, 2014. | |||||
denominated: | |||||||||
$20.0 million | $11.4 million | 6.20% | Paid in full on October 10, 2014. | ||||||
Japanese yen | 3.1 billion yen | 0.4 billion yen ($4.1 million as of December 31, 2013) | 1.70% | Paid in full on October 10, 2014. | |||||
denominated: | |||||||||
2.3 billion yen | 1.3 billion yen ($12.3 million as of December 31, 2013) | 2.60% | Paid in full on October 10, 2014. | ||||||
2.2 billion yen | 1.2 billion yen ($11.8 million as of December 31, 2013) | 3.30% | Paid in full on October 10, 2014. | ||||||
8.0 billion yen | 8.0 billion yen ($75.8 million as of December 31, 2013) | 1.70% | Paid in full on October 10, 2014. | ||||||
Revolving credit facilities | |||||||||
2010 | $35.0 million | Variable 30 day: 0.670% | Revolving line of credit paid in full prior to August 8, 2014. | ||||||
2013 | $14.0 million | Variable 30 day: 0.5933% | Revolving line of credit paid in full on October 10, 2014. | ||||||
Interest expense relating to debt totaled $5.2 million, $3.0 million and $5.7 million for the years ended December 31, 2012, 2013 and 2014, respectively. | |||||||||
Maturities of all long-term debt at December 31, 2014, based on the year-end exchange rate, are as follows (U.S. dollars in thousands): | |||||||||
Year Ending December 31, | |||||||||
2015 | $ | 82,770 | |||||||
2016 | 14,834 | ||||||||
2017 | 19,398 | ||||||||
2018 | 23,963 | ||||||||
2019 | 111,826 | ||||||||
Thereafter | - | ||||||||
Total (1) | $ | 252,791 | |||||||
-1 | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $5.5 million, which is not reflected in this table. |
Lease_and_Financing_Obligation
Lease and Financing Obligations | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Lease Obligations [Abstract] | |||||||||
Lease Obligations | 10. Lease and Financing Obligations | ||||||||
In 2014, the Company's subsidiary in South Korea entered into a lease agreement (the "Lease") with a third-party landlord for a new regional headquarters. As part of the Lease, the landlord agreed to renovate an existing building (the "Existing Building") and construct a new building (the "New Building") adjacent to the Existing Building. The Lease provides that when such renovations and construction are completed, the Company and the landlord will enter into a new lease agreement (the "New Lease") for the Existing Building and the New Building. | |||||||||
The Company accounts for its lease of the Existing Building as an operating lease, and it expects to continue doing so under the New Lease. As an inducement to enter into the Lease, the landlord agreed to make certain improvements on behalf of the Company to the Existing Building. The improvements have been accounted for by the Company as a tenant incentive. | |||||||||
The Company has concluded that it is the deemed owner (for accounting purposes only) of the New Building during the construction period under build-to-suit lease accounting. Construction of the New Building began in June 2014. Since construction began, the Company has recorded estimated project construction costs as a construction in progress asset in "Property and equipment, net" and a corresponding long-term liability in "Other liabilities," respectively, in its consolidated balance sheets. The Company will continue to increase the asset and corresponding long-term liability as additional building costs are incurred by the landlord during the construction period. In addition, the amounts that the Company has paid or incurred for normal tenant improvements have also been recorded to the construction-in-progress asset. | |||||||||
Construction of the New Building is expected to be completed in June 2015. Once the landlord completes the construction of the New Building, the Company will evaluate whether the New Lease of the New Building meets the criteria for "sale-leaseback" accounting treatment under U.S. GAAP. If the New Lease of the New Building meets the "sale-leaseback" criteria, the Company will remove the asset and the related liability from its consolidated balance sheets and classify and account for the New Lease of the New Building as either an operating or capital lease. However, the Company currently expects that upon completion of construction, the New Lease of the New Building will not meet the "sale-leaseback" criteria. | |||||||||
If the New Lease of the New Building does not meet "sale-leaseback" criteria, the asset and obligation recognized during construction will remain recorded in the Company's consolidated balance sheets. The Company will account for the New Lease of the New Building as a financing with the associated lease payments allocated between the New Building and the underlying parcel of land on a relative fair value basis. Rent expense attributed to the underlying parcel of land, and representing the imputed cost to lease the land, will be accounted for on a straight-line basis as the land element will be considered an operating lease. Although the Company will not begin making lease payments pursuant to the New Lease until the renovations to the Existing Building and construction of the New Building are completed, the portion of the lease obligation attributed to the underlying parcel of land will be deemed to have commenced on the date construction of the New Building began. | |||||||||
Lease payments attributed to the New Building will be allocated between principal and interest expense using the effective interest method. The principal portion of the lease payment attributed to the New Building is reflected as a principal reduction of the financing obligation. In addition, the asset, which represents the total estimated cost of construction of the New Building at the end of the construction period, will be depreciated over the initial term of the New Lease to its expected residual value. At the conclusion of the New Lease, the Company will de-recognize both the net book value of the asset and the unamortized portion of the financing obligation. The amount of asset depreciation and financing obligation amortization is structured at the outset such that the remaining residual book value of the asset is always equal to or less than the remaining financing obligation at the end of the lease term. If the remaining financing obligation is greater than the residual book value of the asset at the end of the lease term, the Company will recognize a gain at the end of the lease term. The Company currently does not expect to recognize a gain at the conclusion of the New Lease. | |||||||||
At December 31, 2014, the Company had recognized $13.1 million in estimated project costs associated with the construction of the New Building as part of construction-in-progress and a financing obligation in the amount of $10.4 million, net of a $2.7 million deposit paid directly to the landlord, as part of Other liabilities in its consolidated balance sheets. The Company expects to recognize an additional $8.6 million in project costs associated with the construction of the New Building and an additional financing obligation of $1.3 million, net of $7.3 million in deposits to be paid directly to the landlord. | |||||||||
The Company had also recognized a $6.4 million tenant incentive asset and deferred tenant incentive liability associated with the Existing Building at December 31, 2014. | |||||||||
In addition to the lease arrangements described above, the Company leases office space and computer hardware under noncancelable long-term operating leases. Most leases include renewal options of at least three years. | |||||||||
Minimum future operating leases and financing obligations at December 31, 2014 are as follows (U.S. dollars in thousands): | |||||||||
Year Ending December 31, | Operating | Financing | |||||||
Leases | Obligations | ||||||||
2015 | $ | 29,382 | $ | 386 | |||||
2016 | 24,980 | 673 | |||||||
2017 | 21,396 | 693 | |||||||
2018 | 18,285 | 714 | |||||||
2019 | 12,183 | 735 | |||||||
Thereafter | 678 | 4,382 | |||||||
Total minimum lease payments | $ | 106,904 | $ | 7,583 | |||||
Rent expense for operating leases totaled $27.7 million, $34.6 million and $52.3 million for the years ended December 31, 2012, 2013 and 2014, respectively. Interest expense associated with the financing obligations was nil for the years ended December 31, 2012, 2013 and 2014. |
Capital_Stock
Capital Stock | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Capital Stock [Abstract] | |||||||||||||
Capital Stock | 11. Capital Stock | ||||||||||||
The Company's authorized capital stock consists of 25 million shares of preferred stock, par value $.001 per share, 500 million shares of Class A common stock, par value $.001 per share, and 100 million shares of Class B common stock, par value $.001 per share. The shares of Class A common stock and Class B common stock are identical in all respects, except for voting rights and certain conversion rights and transfer restrictions, as follows: (1) each share of Class A common stock entitles the holder to one vote on matters submitted to a vote of the Company's stockholders and each share of Class B common stock entitles the holder to ten votes on each such matter; (2) stock dividends of Class A common stock may be paid only to holders of Class A common stock and stock dividends of Class B common stock may be paid only to holders of Class B common stock; (3) if a holder of Class B common stock transfers such shares to a person other than a permitted transferee, as defined in the Company's Certificate of Incorporation, such shares will be converted automatically into shares of Class A common stock; and (4) Class A common stock has no conversion rights; however, each share of Class B common stock is convertible into one share of Class A common stock, in whole or in part, at any time at the option of the holder. All outstanding Class B shares have been converted to Class A shares. As of December 31, 2013 and 2014, there were no preferred or Class B common shares outstanding. | |||||||||||||
Weighted-average common shares outstanding | |||||||||||||
The following is a reconciliation of the weighted-average common shares outstanding for purposes of computing basic and diluted net income per share (in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Basic weighted-average common shares outstanding | 60,600 | 58,606 | 59,073 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock awards and options | 2,425 | 2,842 | 1,814 | ||||||||||
Diluted weighted-average common shares outstanding | 63,025 | 61,448 | 60,887 | ||||||||||
For the years ended December 31, 2012, 2013 and 2014, other stock options totaling 0.1 million, 1.2 million and 2.7 million, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. | |||||||||||||
Repurchases of common stock | |||||||||||||
The board of directors has approved a stock repurchase program authorizing the Company to repurchase the Company's outstanding shares of Class A common stock on the open market or in private transactions. The repurchases are used primarily to offset dilution from the Company's equity incentive plans and for strategic initiatives. During the years ended December 31, 2012, 2013 and 2014, the Company repurchased 4.6 million, 1.7 million and 0.8 million shares of Class A common stock for an aggregate price of $201.5 million, $140.9 million and $45.7 million, respectively. In May 2012 and July 2013, the Company's board of directors authorized an increase of $250.0 million and $400.0 million, respectively, in the amount available under the Company's ongoing stock repurchase program. At December 31, 2014, $348.8 million was available for repurchases under the stock repurchase program. | |||||||||||||
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stock Based Compensation [Abstract] | |||||||||||||||||
Stock Based Compensation | 12. Stock–Based Compensation | ||||||||||||||||
At December 31, 2014, the Company had the following stock-based employee compensation plans: | |||||||||||||||||
Equity Incentive Plans | |||||||||||||||||
In April 2010, the Company's Board of Directors approved the Nu Skin Enterprises, Inc. 2010 Omnibus Incentive Plan (the "2010 Omnibus Incentive Plan"). This plan was approved by the Company's stockholders at the Company's 2010 Annual Meeting of Stockholders held in May of 2010. The 2010 Omnibus Incentive Plan provides for granting of a variety of equity based awards including stock options, stock appreciation rights, restricted stock, restricted stock units, other share based awards, performance cash, performance shares and performance units to executives, other employees, independent consultants and directors of the Company and its subsidiaries. Options granted under the 2010 Omnibus Incentive Plan are generally non-qualified stock options, but the 2010 Omnibus Incentive Plan permits some stock options granted to qualify as "incentive stock options" under the U.S. Internal Revenue Code. The exercise price of a stock option generally is equal to the fair market value of the Company's common stock on the stock option grant date. The contractual term of a stock option granted under the 2010 Omnibus Incentive Plan is seven years. Currently, all shares issued upon the exercise of stock options are from the Company's treasury shares. Subject to certain adjustments, 7.0 million shares,were authorized for issuance under the 2010 Omnibus Incentive Plan. On June 3, 2013, the Company's stockholders approved an Amended and Restated 2010 Omnibus Incentive Plan which among other things increased the number of shares available for awards by 3.2 million shares. | |||||||||||||||||
In November 2010, the compensation committee of the board of directors approved the grant of performance stock options to certain key employees under the 2010 Omnibus Incentive Plan. Vesting for the options is performance based, with the options vesting in three installments if the Company's earnings per share equal or exceed the three established performance levels, measured in terms of diluted earnings per share. One third of the options will vest upon earnings per share meeting or exceeding the first performance level, one third of the options will vest upon earnings per share meeting or exceeding the second performance level and one third of the options will vest upon earnings per share meeting or exceeding the third performance level. During the second quarter of 2012, first quarter of 2013 and third quarter of 2013 the first, second and third performance levels were fully achieved. | |||||||||||||||||
In July 2013, the compensation committee of the board of directors approved the grant of performance stock options to certain key employees under the Amended and Restated 2010 Omnibus Incentive Plan. Vesting for the options is performance based, with the options vesting in four installments if the Company's earnings per share equal or exceed the four established performance levels, measured in terms of diluted earnings per share. One fourth of the options will vest upon earnings per share meeting or exceeding the first performance level, one fourth of the options will vest upon earnings per share meeting or exceeding the second performance level, one fourth of the options will vest upon earnings per share meeting or exceeding the third performance level and one fourth of the options will vest upon earnings per share meeting or exceeding the fourth performance level. The unvested options will terminate upon the Company's failure to meet certain performance thresholds for each of years 2013 through 2019. In addition, all unvested options will terminate on March 30, 2020. The Company records an expense each period for the estimated amount of expense associated with the Company's projected achievement of the performance based targets. | |||||||||||||||||
The Company has also issued other performance based awards to a limited number of participants that similarly vest, or become eligible for vesting, upon achievement of various performance targets. | |||||||||||||||||
The fair value of stock option awards was estimated using the Black-Scholes option-pricing model with the following assumptions and weighted-average fair values as follows: | |||||||||||||||||
December 31, | |||||||||||||||||
Stock Options: | 2012 | 2013 | 2014 | ||||||||||||||
Weighted average grant date fair value of grants | $ | 13.31 | $ | 22.1 | $ | 23.01 | |||||||||||
Risk-free interest rate(1) | 0.80% | 1.40% | 1.70% | ||||||||||||||
Dividend yield(2) | 2.70% | 3.10% | 1.90% | ||||||||||||||
Expected volatility(3) | 46.80% | 41.70% | 45.40% | ||||||||||||||
Expected life in months(4) | 58 months | 62 months | 62 months | ||||||||||||||
-1 | The risk-free interest rate is based upon the rate on a zero coupon U.S. Treasury bill, for periods within the contractual life of the option, in effect at the time of the grant. | ||||||||||||||||
-2 | The dividend yield is based on the average of historical stock prices and actual dividends paid. | ||||||||||||||||
-3 | Expected volatility is based on the historical volatility of the Company's stock price, over a period similar to the expected life of the option. | ||||||||||||||||
-4 | The expected term of the option is based on the historical employee exercise behavior, the vesting terms of the respective option, and a contractual life of either seven or ten years. | ||||||||||||||||
Options under the plans as of December 31, 2014 and changes during the year ended December 31, 2014 were as follows: | |||||||||||||||||
Shares | Weighted-average Exercise Price | Weighted- average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
(in thousands) | (in years) | (in thousands) | |||||||||||||||
Options activity – service based | |||||||||||||||||
Outstanding at December 31, 2013 | 2,159.80 | $ | 26.01 | ||||||||||||||
Granted | 90.6 | 65.43 | |||||||||||||||
Exercised | (326.2 | ) | 18.83 | ||||||||||||||
Forfeited/cancelled/expired | - | - | |||||||||||||||
Outstanding at December 31, 2014 | 1,924.20 | 29.08 | 2.31 | $ | 39,897 | ||||||||||||
Exercisable at December 31, 2014 | 1,618.50 | 21.22 | 1.7 | 39,310 | |||||||||||||
Options activity – performance based | |||||||||||||||||
Outstanding at December 31, 2013 | 4,483.10 | $ | 57.25 | ||||||||||||||
Granted | 68.8 | 65.7 | |||||||||||||||
Exercised | (425.0 | ) | 22.42 | ||||||||||||||
Forfeited/cancelled/expired | (88.6 | ) | 78.1 | ||||||||||||||
Outstanding at December 31, 2014 | 4,038.30 | 60.61 | 4.6 | $ | 18,790 | ||||||||||||
Exercisable at December 31, 2014 | 1,459.20 | 31.21 | 2.92 | 18,680 | |||||||||||||
Options activity – all options | |||||||||||||||||
Outstanding at December 31, 2013 | 6,642.90 | $ | 47.1 | ||||||||||||||
Granted | 159.4 | 65.55 | |||||||||||||||
Exercised | (751.2 | ) | 20.86 | ||||||||||||||
Forfeited/cancelled/expired | (88.6 | ) | 78.1 | ||||||||||||||
Outstanding at December 31, 2014 | 5,962.50 | 50.43 | 3.86 | $ | 58,657 | ||||||||||||
Exercisable at December 31, 2014 | 3,077.70 | 25.95 | 2.28 | 57,989 | |||||||||||||
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company's closing stock price on the last trading day of the respective years and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2014. This amount varies based on the fair market value of the Company's stock. The total fair value of options vested and expensed was $4.2 million, net of tax, for the year ended December 31, 2014. | |||||||||||||||||
Cash proceeds, tax benefits, and intrinsic value related to total stock options exercised during 2012, 2013 and 2014, were as follows (in millions): | |||||||||||||||||
December 31, | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
Cash proceeds from stock options exercised | $ | 8 | $ | 37.9 | $ | 11.1 | |||||||||||
Tax benefit realized for stock options exercised | 6.3 | 41.9 | 11.9 | ||||||||||||||
Intrinsic value of stock options exercised | 10.6 | 241.7 | 17.2 | ||||||||||||||
Nonvested restricted stock awards as of December 31, 2014 and changes during the year ended December 31, 2014 were as follows: | |||||||||||||||||
Number of Shares | Weighted-average Grant Date Fair Value | ||||||||||||||||
(in thousands) | |||||||||||||||||
Nonvested at December 31, 2013 | 729.6 | $ | 42.48 | ||||||||||||||
Granted | 289.9 | 82.66 | |||||||||||||||
Vested | (325.8 | ) | 40.74 | ||||||||||||||
Forfeited | (19.9 | ) | 58.55 | ||||||||||||||
Nonvested at December 31, 2014 | 673.8 | 60.14 | |||||||||||||||
The Company recognizes stock-based compensation on a straight-line basis, except for performance based awards for which expense is recognized using a graded-attribution method if the results are materially different than the straight-line method. As of December 31, 2014, there was $19.9 million of unrecognized stock-based compensation expense related to nonvested restricted stock awards. That cost is expected to be recognized over a weighted-average period of 2.7 years. As of December 31, 2014, there was $16.9 million of unrecognized stock-based compensation expense related to nonvested stock option awards. That cost is expected to be recognized over a weighted-average period of 4.0 years. |
Fair_Value
Fair Value | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value [Abstract] | |||||||||||||||||
Fair Value | 13. Fair Value | ||||||||||||||||
Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. | |||||||||||||||||
The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 and 2014 (U.S. dollars in thousands): | |||||||||||||||||
Fair Value at December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Financial assets (liabilities): | |||||||||||||||||
Cash equivalents and current investments | $ | 61,136 | $ | - | $ | - | $ | 61,136 | |||||||||
Forward contracts | - | 1,939 | - | 1,939 | |||||||||||||
Life insurance contracts | - | - | 23,172 | 23,172 | |||||||||||||
Total | $ | 61,136 | $ | 1,939 | $ | 23,172 | $ | 86,247 | |||||||||
Fair Value at December 31, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Financial assets (liabilities): | |||||||||||||||||
Cash equivalents and current investments | $ | 86,574 | $ | - | $ | - | $ | 86,574 | |||||||||
Forward contracts | - | 1,661 | - | 1,661 | |||||||||||||
Life insurance contracts | - | - | 26,280 | 26,280 | |||||||||||||
Total | $ | 86,574 | $ | 1,661 | $ | 26,280 | $ | 114,515 | |||||||||
The following methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair value in the consolidated balance sheets: | |||||||||||||||||
Cash equivalents and current investments: Cash equivalents and current investments primarily consist of highly rated money market funds with maturities of three months or less, and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, the Company considers all cash equivalents and current investments as Level 1. Current investments include $22.0 million and $11.8 million as of December 31, 2013 and 2014, respectively, that is restricted for the Company's voluntary participation in a consumer protection cooperative in South Korea. | |||||||||||||||||
Forward contracts: To hedge foreign currency risks, the Company uses foreign currency exchange forward contracts, where possible and practical. These forward contracts are valued using standard valuation formulas with assumptions about foreign currency exchange rates derived from existing exchange rates as discussed in Note 17 "Derivative Financial Instruments". | |||||||||||||||||
Life insurance contracts: ASC 820 preserves practicability exceptions to fair value measurements provided by other applicable GAAP. The guidance in ASC 715-30-35-60 allows a reporting entity, as a practical expedient, to use cash surrender value or conversion value as an expedient for fair value when it is present. Accordingly, the Company determines the fair value of its life insurance contracts as the cash-surrender value of life insurance policies held in its Rabbi Trust as disclosed in Note 16 "Executive Deferred Compensation Plan". | |||||||||||||||||
The following table provides a summary of changes in fair value of the Company's Level 3 marketable securities (U.S. dollars in thousands): | |||||||||||||||||
Life Insurance Contracts | 2013 | 2014 | |||||||||||||||
Beginning balance at January 1 | $ | 18,605 | $ | $23,172 | |||||||||||||
Actual return on plan assets: | |||||||||||||||||
Relating to assets still held at the reporting date | 2,568 | 1,249 | |||||||||||||||
Purchases and issuances | 3,408 | 2,798 | |||||||||||||||
Sales and settlements | (1,409 | ) | (939 | ) | |||||||||||||
Transfers into Level 3 | - | - | |||||||||||||||
Ending balance at December 31 | $ | 23,172 | $ | 26,280 |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Taxes [Abstract] | |||||||||||||
Income Taxes | 14. Income Taxes | ||||||||||||
Consolidated income before provision for income taxes consists of the following for the years ended December 31, 2012, 2013 and 2014 (U.S. dollars in thousands): | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
U.S. | $ | 259,309 | $ | 307,994 | $ | 184,476 | |||||||
Foreign | 85,933 | 248,946 | 114,031 | ||||||||||
Total | $ | 345,242 | $ | 556,940 | $ | 298,507 | |||||||
The provision for current and deferred taxes for the years ended December 31, 2012, 2013 and 2014 consists of the following (U.S. dollars in thousands): | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Current | |||||||||||||
Federal | $ | 70,727 | $ | 81,871 | $ | 37,402 | |||||||
State | 2,425 | 361 | 2,095 | ||||||||||
Foreign | 45,851 | 148,310 | 48,904 | ||||||||||
119,003 | 230,542 | 88,401 | |||||||||||
Deferred | |||||||||||||
Federal | 12,918 | (2,831 | ) | (380 | ) | ||||||||
State | 656 | 551 | 444 | ||||||||||
Foreign | (8,980 | ) | (36,210 | ) | 20,866 | ||||||||
4,594 | (38,490 | ) | 20,930 | ||||||||||
Provision for income taxes | $ | 123,597 | $ | 192,052 | $ | 109,331 | |||||||
The Company's foreign taxes paid are high relative to foreign operating income and the Company's U.S. taxes paid are low relative to U.S. operating income due largely to the flow of funds among the Company's Subsidiaries around the world. As payments for services, management fees, license arrangements and royalties are made from the Company's foreign affiliates to its U.S. corporate headquarters, these payments often incur withholding and other forms of tax that are generally creditable for U.S. tax purposes. Therefore, these payments lead to increased foreign effective tax rates and lower U.S. effective tax rates. Variations occur in the Company's foreign and U.S. effective tax rates from year to year depending on several factors. These factors include the impact of global transfer prices, the timing and level of remittances from foreign affiliates, profits and losses in various markets, the valuation of deferred tax assets or liabilities, or changes in tax laws, regulations, accounting principles, or interpretations thereof. | |||||||||||||
The principal components of deferred taxes are as follows (U.S. dollars in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Deferred tax assets: | |||||||||||||
Inventory differences | $ | 2,927 | $ | 12,362 | |||||||||
Foreign tax credit and other foreign benefits | 120,534 | 116,603 | |||||||||||
Stock-based compensation | 18,132 | 17,211 | |||||||||||
Accrued expenses not deductible until paid | 88,465 | 48,189 | |||||||||||
Foreign currency exchange | 13,734 | 10,774 | |||||||||||
Net operating losses | 10,808 | 17,530 | |||||||||||
Capitalized research and development | 6,202 | 3,362 | |||||||||||
Exchange gains and losses | - | 41,542 | |||||||||||
Other | 739 | 841 | |||||||||||
Gross deferred tax assets | 261,541 | 268,414 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Exchange gains and losses | 9,924 | - | |||||||||||
Intangibles step-up | 16,375 | 15,106 | |||||||||||
Overhead allocation to inventory | 2,523 | 10,781 | |||||||||||
Amortization of intangibles | 17,360 | 18,374 | |||||||||||
Foreign outside basis in controlled foreign corporation | 76,470 | 100,016 | |||||||||||
Other | 63,409 | 48,187 | |||||||||||
Gross deferred tax liabilities | 186,061 | 192,464 | |||||||||||
Valuation allowance | (10,803 | ) | (35,999 | ) | |||||||||
Deferred taxes, net | $ | 64,677 | $ | 39,951 | |||||||||
At December 31, 2014, the Company had foreign operating loss carryforwards of $74.2 million for tax purposes, which will be available to offset future taxable income. If not used, $49.6 million of carryforwards will expire between 2015 and 2024, while $24.6 million do not expire. A valuation allowance has been placed on foreign operating loss carryforwards of $31.0 million. | |||||||||||||
The valuation allowance primarily represents amounts for foreign operating loss carryforwards and unrealized foreign exchange losses for which it is more likely than not some portion or all of the deferred tax asset will not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary difference, projected future taxable income, tax planning strategies and recent financial operations. When the Company determines that there is sufficient taxable income to utilize the net operating losses, the valuation will be released which would reduce the provision for income taxes. | |||||||||||||
The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Net current deferred tax assets | $ | 73,456 | $ | 40,840 | |||||||||
Net noncurrent deferred tax assets | 5,174 | 15,128 | |||||||||||
Total net deferred tax assets | 78,630 | 55,968 | |||||||||||
Net current deferred tax liabilities | 1 | - | |||||||||||
Net noncurrent deferred tax liabilities | 13,952 | 16,017 | |||||||||||
Total net deferred tax liabilities | 13,953 | 16,017 | |||||||||||
Deferred taxes, net | $ | 64,677 | $ | 39,951 | |||||||||
The Company is subject to regular audits by federal, state and foreign tax authorities. These audits may result in proposed assessments that may result in additional tax liabilities. | |||||||||||||
The actual tax rate for the years ended December 31, 2012, 2013 and 2014 compared to the statutory U.S. Federal tax rate is as follows: | |||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Income taxes at statutory rate | 35 | % | 35 | % | 35 | % | |||||||
Indefinitely invested earnings of non-U.S. subsidiaries | – | (0.76 | ) | – | |||||||||
Non-deductible expenses | 0.12 | 0.12 | 0.12 | ||||||||||
Controlled foreign corporation losses | – | – | 1.48 | ||||||||||
Other | 0.68 | 0.12 | 0.03 | ||||||||||
35.8 | % | 34.48 | % | 36.63 | % | ||||||||
The lower effective tax rate in 2013 compared to 2012 and 2014 was primarily attributable to indefinitely invested earnings of non-U.S. Subsidiaries. The effective tax rate in 2014 was also impacted by the foreign currency charge relating to Venezuela, for which a valuation allowance was recognized, offset by the re-measurement of Venezuela's books due to the highly inflationary accounting treatment under U.S. GAAP. | |||||||||||||
The cumulative amount of undistributed earnings of the Company's non-U.S. Subsidiaries held for indefinite reinvestment is approximately $50.0 million at December 31, 2013 and 2014. If this amount were repatriated to the United States, the amount of incremental taxes would be approximately $5.3 million. |
Employee_Benefit_Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2014 | |
Employee Benefit Plan [Abstract] | |
Employee Benefit Plan | 15. Employee Benefit Plan |
The Company has a 401(k) defined contribution plan which permits participating employees to defer up to a maximum of 100% of their compensation, subject to limitations established by the Internal Revenue Service. Employees age 18 and older are eligible to contribute to the plan starting the first day of employment. After completing at least one day of service, employees are eligible to receive matching contributions from the Company. In 2012, 2013, and 2014 the Company matched employees' base pay up to 4% each year. The Company's matching contributions cliff vest after two years of service. The Company recorded compensation expense of $2.4 million, $2.7 million and $2.7 million for the years ended December 31, 2012, 2013 and 2014, respectively, related to its contributions to the plan. The Company may make additional discretionary contributions to the plan of up to 10% of employees' base pay. The Company's discretionary contributions vest 20% per year for an employee's first five years of service. For the years ended December 31, 2012 and 2013, the Company made additional discretionary contributions of $3.5 million and $6.2 million. For the year ended December 31, 2014, the Company did not make an additional discretionary contribution. | |
The Company has a defined benefit pension plan for its employees in Japan. All employees of Nu Skin Japan, after certain years of service, are entitled to pension plan benefits when they terminate employment with Nu Skin Japan. The accrued pension liability was $7.6 million, $6.2 million and $5.8 million as of December 31, 2012, 2013 and 2014, respectively. Although Nu Skin Japan has not specifically funded this obligation, as it is not required to do so, Nu Skin Japan believes it maintains adequate cash balances for this defined benefit pension plan. The Company recorded pension expense of $1.1 million, $0.8 million and $0.9 million for the years ended December 31, 2012, 2013 and 2014, respectively. |
Executive_Deferred_Compensatio
Executive Deferred Compensation Plan | 12 Months Ended |
Dec. 31, 2014 | |
Executive Deferred Compensation Plan [Abstract] | |
Executive Deferred Compensation Plan | 16. Executive Deferred Compensation Plan |
The Company has an executive deferred compensation plan for select management personnel. Under this plan, the Company may make a contribution of up to 10% of a participant's salary. In addition, each participant has the option to defer a portion of their compensation up to a maximum of 80% of their base salary and 100% of their bonuses. Participant contributions are immediately vested. Company contributions vest 50% after ten years of service and 5% each year of service thereafter. In addition, any unvested company contributions will fully vest on the earlier of: (a) the participant attaining 60 years of age; and (b) death or disability. | |
The Company recorded compensation expense of $1.2 million, $3.1 million and $0.3 million for the years ended December 31, 2012, 2013 and 2014, respectively, related to its contributions to the plan. The total long-term deferred compensation liability under the deferred compensation plan was $28.5 million and $32.4 million for the years ended December 31, 2013 and 2014, respectively, related to its contributions to the plan and is included in other long-term liabilities. | |
All benefits under the deferred compensation plan are unsecured obligations of the Company. The Company has contributed assets to a "rabbi trust" for the payment of benefits under the deferred compensation plan. As the assets of the trust are available to satisfy the claims of general creditors if the Company becomes insolvent, the amounts held in the trust are accounted for as an investment on the Company's consolidated balance sheet of $23.2 million and $26.3 million for the years ended December 31, 2013 and 2014, respectively. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2014 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | 17. Derivative Financial Instruments |
The Company held mark-to-market forward contracts designated as foreign currency cash flow hedges with notional amounts totaling 2.1 billion Japanese yen and 4.0 million euros ($17.5 million and $4.8 million, respectively) as of December 31, 2014 and 2.5 billion Japanese yen and 12.0 million euros ($23.7 million and $16.5 million, respectively) as of December 31, 2013 to hedge forecasted foreign-currency-denominated intercompany transactions. The fair value of these hedges were $1.9 million and $1.7 million as of December 31, 2013 and 2014, respectively. | |
The contracts held at December 31, 2014 have maturities through September 2015, and accordingly, all unrealized gains and losses on foreign currency cash flow hedges included in accumulated other comprehensive loss will be recognized in current earnings over the next 12 months. The pre-tax net losses/gains on foreign currency cash flow hedges reclassified from accumulated other comprehensive loss to revenue were $0.5 million of pre-tax net gains, $5.1 million of pre-tax net gains and $2.7 million of pre-tax net losses for the years ended December 31, 2012, 2013 and 2014, respectively. The corresponding tax effects of these transactions were recorded in provision for income tax expense. As of December 31, 2013 and 2014, there were $1.3 million and $1.1 million of unrealized gains included in accumulated other comprehensive loss related to foreign currency cash flow hedges. The remaining $47.5 million and $52.6 million as of December 31, 2013 and 2014, respectively, in accumulated other comprehensive income are related to cumulative translation adjustments. |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2014 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 18. Supplemental Cash Flow Information |
Cash paid for interest totaled $5.1 million, $4.8 million and $5.3 million for the years ended December 31, 2012, 2013 and 2014, respectively. Cash paid for income taxes totaled $95.2 million, $130.1 million and $171.4 million for the years ended December 31, 2012, 2013 and 2014, respectively. There was a non-cash item for the year ended December 31, 2012 of $7.0 million in deferred tax liabilities and intangibles in conjunction with the NOX Technologies, Inc. acquisition. For the years ended December 31, 2012 and 2013, there were non-cash additions of fixed assets of $5.5 million and $9.2 million, respectively, associated with the construction of the Company's worldwide headquarters. | |
For the year ended December 31, 2014, the Company had non-cash charges associated with the accounting of its Nu Skin Korea building lease increasing both fixed assets by $19.4 million and long-term liabilities by $16.7 million, and decreasing long-term assets by $2.7 million. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Information [Abstract] | |||||||||||||
Segment Information | 19. Segment Information | ||||||||||||
The Company operates in a single operating segment by selling products through a global network of independent distributors that operates in a seamless manner from market to market, except for its operations in Mainland China. In Mainland China, the Company utilizes sales employees, contractual sales promoters, independent direct sellers and independent marketers to distribute its products. Contractual sales promoters sell products in similar fashion to the Company's sales employees, but act as independent agents, to sell products through its retail stores and website. Independent direct sellers can sell away from the Company's stores where the Company has obtained a direct selling license to do so. Independent marketers are licensed business owners who are authorized to sell the Company's products either at their own approved premises or through the Company's stores. Selling expenses are the Company's largest expense comprised of the commissions paid to its worldwide independent distributors as well as remuneration to its sales force in Mainland China. The Company manages its business primarily by managing its sales force. The Company does not use profitability reports on a regional or divisional basis for making business decisions. However, the Company does report revenue in five geographic regions: Greater China, North Asia, Americas, South Asia/Pacific and EMEA. | |||||||||||||
Revenue generated in each of these regions is set forth below (U.S. dollars in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
Revenue: | 2012 | 2013 | 2014 | ||||||||||
Greater China | $ | 550,690 | $ | 1,363,182 | $ | 948,523 | |||||||
North Asia | 785,302 | 869,400 | 782,985 | ||||||||||
Americas | 285,283 | 370,087 | 329,027 | ||||||||||
South Asia/Pacific | 328,597 | 378,988 | 328,388 | ||||||||||
EMEA | 182,385 | 195,061 | 180,572 | ||||||||||
Total | $ | 2,132,257 | $ | 3,176,718 | $ | 2,569,495 | |||||||
Revenue generated by each of the Company's product lines is set forth below (U.S. dollars in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
Revenue: | 2012 | 2013 | 2014 | ||||||||||
Nu Skin | $ | 1,158,213 | $ | 1,641,618 | $ | 1,562,595 | |||||||
Pharmanex | 966,572 | 1,529,211 | 1,000,279 | ||||||||||
Other | 7,472 | 5,889 | 6,621 | ||||||||||
Total | $ | 2,132,257 | $ | 3,176,718 | $ | 2,569,495 | |||||||
Additional information as to the Company's operations in the most significant geographical areas is set forth below (U.S. dollars in thousands): | |||||||||||||
Year Ended December 31, | |||||||||||||
Revenue: | 2012 | 2013 | 2014 | ||||||||||
Japan | $ | 489,302 | $ | 402,580 | $ | 315,265 | |||||||
Mainland China | 256,833 | 1,005,395 | 675,082 | ||||||||||
South Korea | 296,000 | 466,820 | 467,720 | ||||||||||
United States | 227,872 | 268,232 | 230,767 | ||||||||||
December 31, | |||||||||||||
Long-lived assets: | 2013 | 2014 | |||||||||||
Japan | $ | 9,970 | $ | 13,768 | |||||||||
Mainland China | 82,726 | 103,445 | |||||||||||
South Korea | 14,345 | 46,626 | |||||||||||
United States | 273,388 | 287,103 | |||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 20. Commitments and Contingencies |
The Company is subject to government regulations pertaining to product formulation, labeling and packaging, product claims and advertising and to the Company's direct selling system. The Company is also subject to the jurisdiction of numerous foreign tax and customs authorities. Any assertions or determination that either the Company or the Company's sales force is not in compliance with existing statutes, laws, rules or regulations could have a material adverse effect on the Company's operations. In addition, in any country or jurisdiction, the adoption of new statutes, laws, rules or regulations or changes in the interpretation of existing statutes, laws, rules or regulations could have a material adverse effect on the Company and its operations. Although management believes that the Company is in compliance in all material respects with the statutes, laws, rules and regulations of every jurisdiction in which it operates, no assurance can be given that the Company's compliance with applicable statutes, laws, rules and regulations will not be challenged by foreign authorities or that such challenges will not have a material adverse effect on the Company's financial position or results of operations or cash flows. The Company and its Subsidiaries are defendants in litigation and proceedings involving various matters. Except as noted below, in the opinion of the Company's management, based upon advice of its counsel handling such litigation and proceedings, adverse outcomes, if any, will not likely result in a material effect on the Company's consolidated financial condition, results of operations or cash flows. | |
The Company is subject to regular audits by federal, state and foreign tax authorities. These audits may result in additional tax liabilities. The Company believes it has appropriately provided for income taxes for all years. Several factors drive the calculation of its tax reserves. Some of these factors include: (i) the expiration of various statutes of limitations; (ii) changes in tax law and regulations; (iii) issuance of tax rulings; and (iv) settlements with tax authorities. Changes in any of these factors may result in adjustments to the Company's reserves, which would impact its reported financial results. | |
The Company is currently involved in a dispute related to customs assessments by Yokohama Customs on several of the Company's products for the period of October 2006 through September 2009 in connection with post-importation audits, as well as the disputed portion of the Company's import duties from October 2009 to the present, which the Company has or will hold in bond or pay under protest. Additional assessments related to any prior period are barred by applicable statutes of limitations. The aggregate amount of these assessments and disputed duties was approximately 4.5 billion Japanese yen as of December 31, 2014 (approximately $37.6 million), net of recovery of consumption taxes. The issue in this case is whether a United States entity utilizing a commissionaire agent in Japan to import its products can use the manufacturer's invoice pursuant to the transaction value method under the World Trade Organization Customs Valuation Agreement or whether it must use one of the alternative valuation methods provided in that agreement, and, if an alternative method must be used, what the allowable deductions would be in determining the proper valuation. Following the Company's review of the assessments and after consulting with the Company's legal and customs advisors, the Company believes that use of the manufacturer's invoice is the appropriate valuation method and that the additional assessments are improper and are not supported by applicable customs laws because they are based on an alternative valuation method. The Company filed letters of protest with the applicable Customs authorities, which were rejected. The Company then appealed the matter to the Ministry of Finance in Japan. In the second quarter of 2011, the Ministry of Finance in Japan denied the Company's administrative appeal. The Company disagrees with the Ministry of Finance's administrative decision. The Company is now pursuing the matter in Tokyo District Court, which is not required to give deference to the decision made by the Ministry of Finance and which the Company believes will provide a more independent determination of the matter. We currently anticipate the Tokyo District Court will close the proceedings and render a decision sometime this year. In addition, the Company is currently being required to post a bond or make a deposit to secure any additional duties that may be due and payable on current imports. Because the Company believes that the assessment of higher duties by the customs authorities is an improper application of the regulations, the Company is currently expensing the portion of the duties the Company believes is supported under applicable customs law, and recording the additional deposit or payment as a receivable within long-term assets on its consolidated financial statements. If the Company is unsuccessful in recovering the amounts assessed and paid, the Company will record a non-cash expense for the full amount of the disputed assessments. The Company anticipates that additional disputed duties will be limited going forward as the Company purchases a majority of the affected products in Japan from a Japanese company that purchases and imports the products from the manufacturers. | |
The Company is also currently being sued in a purported class action lawsuit and derivative claim relating to negative media and regulatory scrutiny regarding the Company's business in Mainland China and the associated decline in the Company's stock price. Beginning in January 2014, six purported class action complaints were filed in the United States District Court for the District of Utah. On April 10, 2014, the plaintiffs filed a stipulated motion requesting that the court consolidate the various purported class actions, appoint State-Boston Retirement System as lead plaintiff in the consolidated action and appoint the law firm Labaton Sucharow as lead counsel for the purported class in the consolidated action. On May 1, 2014, that stipulated motion was granted and on June 30, 2014, a consolidated class action complaint was filed. On August 29, 2014, the Company filed a motion to dismiss the case and on October 28, 2014, the plaintiffs filed their opposition to the Company's motion to dismiss. A hearing on the motion to dismiss was held on February 18, 2015, and an order denying the motion was issued on February 26, 2015. The consolidated class action complaint purports to assert claims on behalf of certain of the Company's stockholders under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against Nu Skin Enterprises, Ritch N. Wood, and M. Truman Hunt and to assert claims under Section 20(a) of the Securities Exchange Act of 1934 against Messrs. Wood and Hunt. The consolidated class action complaint alleges that, inter alia, the Company made materially false and misleading statements regarding its sales operations in and financial results derived from Mainland China, including purportedly operating a pyramid scheme based on illegal multi-level marketing activities. The Company believes that the claims asserted in the consolidated class action complaint are without merit and intends to vigorously defend itself. | |
In addition, beginning in February 2014, five purported shareholder derivative complaints were filed in the United States District Court for the District of Utah. On April 17, 2014, the plaintiffs filed a joint motion to consolidate the derivative actions, to appoint plaintiffs Amos. C. Acoff and Analisa Suderov as co-lead plaintiffs in the consolidated action, and to appoint the law firms Bernstein Litowitz Berger & Grossmann LLP and The Weiser Law Firm, P.C. as co-lead counsel for the plaintiffs in the consolidated action. On May 1, 2014, that joint motion was granted. On July 25, 2014, a consolidated derivative complaint was filed. On September 25, 2014, we filed a motion to dismiss or stay the case, and on November 25, 2014, the plaintiffs filed their opposition to our motion. Defendants filed a reply brief on January 6, 2015. The consolidated derivative complaint purports to assert claims on behalf of Nu Skin Enterprises for, inter alia, breach of fiduciary duties for disseminating false and misleading information, failing to maintain adequate internal controls, unjust enrichment, abuse of control, and gross mismanagement against M. Truman Hunt, Ritch N. Wood, Steven J. Lund, Nevin N. Andersen, Neil Offen, Daniel W. Campbell, Andrew W. Lipman, Patricia A. Negrón, Thomas R. Pisano, and nominally against Nu Skin Enterprises. The consolidated derivative complaint also purports to assert claims on behalf of Nu Skin Enterprises for breach of fiduciary duty for insider selling and misappropriation of information against Messrs. Wood, Lund and Campbell. The consolidated derivative complaint alleges that, inter alia, the defendants allowed materially false and misleading statements to be made regarding their sales operations in and financial results derived from Mainland China, including purportedly operating a pyramid scheme based on illegal multi-level marketing activities, and that certain defendants sold common stock on the basis of material, adverse non-public information. | |
The purported class action lawsuit and derivative claim, or others filed alleging similar facts, could result in monetary or other penalties that may affect the Company's operating results and financial condition. | |
Dividends_per_Share
Dividends per Share | 12 Months Ended |
Dec. 31, 2014 | |
Dividends per Share [Abstract] | |
Dividends per Share | 21. Dividends per Share |
Quarterly cash dividends for the years ended December 31, 2013 and 2014 totaled $70.5 million and $81.4 million or $0.30 per share in all quarters of 2013 and $0.345 for all quarters of 2014. The board of directors has declared a quarterly cash dividend of $0.35 per share for all classes of common stock to be paid on March 18, 2015 to stockholders of record on February 27, 2015. |
Quarterly_Results
Quarterly Results | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Quarterly Results [Abstract] | |||||||||||||||||||||||||||||||||
Quarterly Results | 22. Quarterly Results | ||||||||||||||||||||||||||||||||
The following table sets forth selected unaudited quarterly data for the periods shown as revised (U.S. dollars in millions, except per share amounts): | |||||||||||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | 2nd | 3rd | 4th | ||||||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||||
Revenue | $ | 541.3 | $ | 671.3 | $ | 908.3 | $ | 1,055.80 | $ | 671.1 | $ | 650 | $ | 638.8 | $ | 609.6 | |||||||||||||||||
Gross profit | 451.3 | 560 | 768.5 | 891.1 | 564.4 | 494 | 529.5 | 503.1 | |||||||||||||||||||||||||
Operating income | 82.6 | 114.6 | 168.3 | 188.6 | 101.2 | 54.7 | 105 | 91.3 | |||||||||||||||||||||||||
Net income | 54.3 | 74.4 | 110.9 | 125.3 | 54.9 | 19.5 | 68.3 | 46.5 | |||||||||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||||||
Basic | 0.93 | 1.27 | 1.89 | 2.13 | 0.93 | 0.33 | 1.15 | 0.79 | |||||||||||||||||||||||||
Diluted | 0.9 | 1.22 | 1.8 | 2.02 | 0.9 | 0.32 | 1.12 | 0.77 |
Other_Income_Expense_Net
Other Income (Expense), Net | 12 Months Ended |
Dec. 31, 2014 | |
Other Income (Expense), Net [Abstract] | |
Other income (expense), net | 23. Other Income (Expense), Net |
Other income (expense), net was $4.4 million of income in 2012, $2.8 million of income in 2013 and $53.7 million of expense in 2014. In 2014, a $46.3 million foreign currency charge was taken by the Company related to the impact of the devaluation of the Venezuelan currency on monetary assets and liabilities of its Venezuela entity and a charge of $7.4 million was recorded related to the prepayment of debt during the fourth quarter of 2014. Foreign currency translation expenses related to the strengthening of the U.S. dollar were offset by tax incentives related to the Company's new China headquarters. Other income (expense), net also includes $5.2 million, $3.0 million and $5.7 million in interest expense during 2012, 2013 and 2014, respectively. The Company cannot estimate the degree to which its operations will be impacted in the future, but it remains subject to these currency risks. However, the majority of these transaction losses are non-cash, non-operating losses. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2014 | |
Acquisitions [Abstract] | |
Acquisitions | 24. Acquisition |
In the fourth quarter of 2012, a subsidiary of the Company acquired NOX Technologies, Inc. ("NOX"), a biotechnology and biodiagnostic company based in Malvern, Pennsylvania, for approximately $12.6 million in cash. The NOX acquisition included patents and previously licensed technology utilized in connection with the Company's research efforts and incorporated into some of the Company's products. As the acquisition was deemed to be an asset acquisition, the Company has allocated the purchase price to the patents and will amortize the patents over their remaining lives, which were approximately 8 years. | |
-106- |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||
Consolidation | Consolidation | ||||||||||||
The consolidated financial statements include the accounts of the Company and the Subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation. | |||||||||||||
Use of estimates | Use of estimates | ||||||||||||
The preparation of these financial statements, in conformity with accounting principles generally accepted in the United States of America, required management to make estimates and assumptions that affected the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from these estimates. | |||||||||||||
Cash and cash equivalents | Cash and cash equivalents | ||||||||||||
Cash equivalents are short-term, highly liquid instruments with original maturities of 90 days or less. | |||||||||||||
Inventories | Inventories | ||||||||||||
Inventories consist primarily of merchandise purchased for resale and are stated at the lower of standard cost or market, using a standard cost method which approximates the first-in, first-out method. The Company had adjustments to its inventory carrying value totaling $5.9 million and $56.0 million as of December 31, 2013 and 2014, respectively. During the second quarter of 2014, the Company made a determination to adjust its inventory carrying value. Heightened media and regulatory scrutiny in Mainland China in the first part of 2014, and the voluntary actions the Company took in response to such scrutiny, had a negative impact on the size of the Company's limited-time offer in June, which significantly reduced its expectations for plans to sell ageLOC TR90 in a limited-time offer later in 2014 or the beginning of 2015. This resulted in a $50 million write-down of estimated surplus inventory primarily in Mainland China. | |||||||||||||
Inventories consist of the following (U.S. dollars in thousands): | |||||||||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Raw materials | $ | 117,982 | $ | 101,479 | |||||||||
Finished goods | 221,687 | 237,012 | |||||||||||
$ | 339,669 | $ | 338,491 | ||||||||||
Adjustments to inventories consist of the following (U.S. dollars in millions): | |||||||||||||
December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Beginning balance, adjustments to inventory carrying value | $ | 7.1 | $ | 5.5 | $ | 5.9 | |||||||
Additions | 11.6 | 12.3 | 77.4 | ||||||||||
Write-offs | (13.2 | ) | (11.9 | ) | (27.3 | ) | |||||||
Ending balance, adjustments to inventory carrying value | $ | 5.5 | $ | 5.9 | $ | 56 | |||||||
Property and equipment | Property and equipment | ||||||||||||
Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the following estimated useful lives: | |||||||||||||
Buildings | 20 - 39 years | ||||||||||||
Furniture and fixtures | 5 - 7 years | ||||||||||||
Computers and equipment | 3 - 5 years | ||||||||||||
Leasehold improvements | Shorter of estimated useful life or lease term | ||||||||||||
Scanners | 3 years | ||||||||||||
Vehicles | 3 - 5 years | ||||||||||||
Expenditures for maintenance and repairs are charged to expense as incurred. When an asset is sold or otherwise disposed of, the cost and associated accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the statement of income. Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. An impairment loss is recognized if the carrying amount of the asset exceeds its fair value. | |||||||||||||
Goodwill and other intangible assets | Goodwill and other intangible assets | ||||||||||||
Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill and intangible assets with indefinite useful lives are not amortized, but are assessed for impairment annually. In addition, impairment testing is conducted when events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill and intangible assets with indefinite useful lives would be written down to fair value if considered impaired. Guidance under Accounting Standards Codification ("ASC") 350, Intangibles - Goodwill and Other, requires an entity to test goodwill for impairment on at least an annual basis. The Company had the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If under the quantitative assessment the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, must be measured. The Company used the quantitative assessment for all periods presented. Intangible assets with finite useful lives are amortized to their estimated residual values over such finite lives using the straight-line method and reviewed for impairment whenever events or circumstances warrant such a review. | |||||||||||||
No impairment charges were recorded for goodwill or intangibles during the periods presented. | |||||||||||||
Revenue recognition | Revenue recognition | ||||||||||||
Revenue is recognized when products are shipped, which is when title and risk of loss pass to the purchaser of the products. A reserve for product returns is accrued based on historical experience totaling $11.0 million and $10.1 million as of December 31, 2013 and 2014, respectively. During the years ended December 31, 2012, 2013 and 2014, the Company recorded sales returns of $56.1 million, $79.4 million and $83.6 million, respectively. The Company generally requires cash or credit card payment at the point of sale. Accounts receivable generally represents amounts due from credit card companies and are generally collected within a few days of the purchase. As such, the Company has determined that no allowance for doubtful accounts is necessary. Amounts received prior to shipment of products and title passage to the purchaser of the products are recorded as deferred revenue. The Company's sales compensation plans generally do not provide rebates or selling discounts for purchasing its products and services. The Company classifies selling discounts and rebates, if any, as a reduction of revenue at the time the sale is recorded. | |||||||||||||
Through the Company's product subscription and loyalty programs, which can vary from market to market, participants who commit to purchases on a monthly basis receive a discount from suggested retail or wholesale prices, as applicable. The Company applies this discount at the time of each purchase and not through a larger discount on the initial purchase. Participants may cancel their commitment at any time, however some markets charge a one-time early cancellation fee. All purchases under these programs are subject to the Company's standard product payment and return policies. In accordance with ASC 605-50, the Company classifies selling discounts and rebates, as a reduction of revenue at the time the sale is recorded. | |||||||||||||
Shipping and handling costs | Shipping and handling costs | ||||||||||||
Shipping and handling costs are recorded as cost of sales and are expensed as incurred. | |||||||||||||
Advertising expenses | Advertising expenses | ||||||||||||
Advertising costs are expensed as incurred. Advertising expense incurred for the years ended December 31, 2012, 2013 and 2014 totaled $5.1 million, $11.3 million and $19.6 million, respectively. | |||||||||||||
Selling expenses | Selling expenses | ||||||||||||
Selling expenses are the Company's most significant expense and are classified as operating expenses. Selling expenses include distributor commissions as well as wages, benefits, bonuses and other labor and unemployment expenses the Company pays to its sales force in Mainland China. In each of the Company's markets, except Mainland China, Sales Leaders can earn "multi-level" compensation under the Company's global sales compensation plan, including commissions for product sales to their consumer groups as well as the product sales made through the sales network they have developed and trained. The Company does not pay commissions on sales materials. | |||||||||||||
Outside of Mainland China, the Company's distributors may make profits by purchasing the products from the Company at a discount and selling them to consumers with a mark-up. The Company does not account for nor pay additional commissions on these mark-ups received by distributors. In many markets, the Company also allows individuals who are not members of its sales force, referred to as "preferred customers," to buy products directly from the Company at a discount. The Company pays commissions on preferred customer purchases to the referring member of its sales force. | |||||||||||||
Research and development | Research and development | ||||||||||||
Research and development costs are included in general and administrative expenses in the accompanying consolidated statements of income and are expensed as incurred and totaled $14.9 million, $18.0 million and $18.9 million in 2012, 2013 and 2014, respectively. | |||||||||||||
Deferred tax assets and liabilities | Deferred tax assets and liabilities | ||||||||||||
The Company accounts for income taxes in accordance with the Income Taxes Topic of the Financial Accounting Standards Codification. These standards establish financial accounting and reporting standards for the effects of income taxes that result from an enterprise's activities during the current and preceding years. The Company takes an asset and liability approach for financial accounting and reporting of income taxes. The Company pays income taxes in many foreign jurisdictions based on the profits realized in those jurisdictions, which can be significantly impacted by terms of intercompany transactions between the Company and its foreign affiliates. Deferred tax assets and liabilities are created in this process. The Company has netted these deferred tax assets and deferred tax liabilities by jurisdiction. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be ultimately realized. | |||||||||||||
Uncertain Tax Positions | Uncertain Tax Positions | ||||||||||||
The Company files income tax returns in the U.S. federal jurisdiction, and in various state and foreign jurisdictions. In 2013, the Company entered into a closing agreement with the United States Internal Revenue Service (the "IRS") for all adjustments for the 2009 and 2010 tax years. As a result of entering into the closing agreement, the Company is no longer subject to tax examinations from the IRS for all years for which tax returns have been filed except for 2011. With a few exceptions, the Company is no longer subject to state and local income tax examination by tax authorities for the years before 2010. In 2009, the Company entered into a voluntary program with the IRS called Compliance Assurance Process ("CAP"). The objective of CAP is to contemporaneously work with the IRS to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company has elected to participate in the CAP program for 2015 and may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. In major foreign jurisdictions, the Company is no longer subject to income tax examinations for years before 2009. However, statutes in certain countries may be as long as ten years for transfer pricing related issues. Along with the IRS examination of 2011, the Company is currently under examination in certain foreign jurisdictions; however, the outcomes of those reviews are not yet determinable. | |||||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands): | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Gross balance at January 1 | $ | 7,387 | $ | 9,045 | $ | 7,484 | |||||||
Increases related to current year tax positions | 2,430 | 1,188 | 2,700 | ||||||||||
Settlements | - | (1,671 | ) | - | |||||||||
Decreases due to lapse of statutes of limitations | (854 | ) | (1,086 | ) | (4,106 | ) | |||||||
Currency adjustments | 82 | 8 | (91 | ) | |||||||||
Gross balance at December 31 | $ | 9,045 | $ | 7,484 | $ | 5,987 | |||||||
At December 31, 2014, the Company had $6.0 million in unrecognized tax benefits of which $1.1 million, if recognized, would affect the effective tax rate. In comparison, at December 31, 2013, the Company had $7.5 million in unrecognized tax benefits of which $2.1 million, if recognized, would affect the effective tax rate. The Company's unrecognized tax benefits relate to multiple foreign and domestic jurisdictions. Due to potential increases in unrecognized tax benefits from the multiple jurisdictions in which the Company operates, as well as the expiration of various statutes of limitation, it is reasonably possible that the Company's gross unrecognized tax benefits, net of foreign currency adjustments, may increase within the next 12 months by a range of approximately $1 to $2 million. | |||||||||||||
During each of the years ended December 31, 2012, 2013 and 2014, the Company recognized $0.3 million, $(0.1) million and $0.4 million, respectively in interest and penalties expenses/(benefits). The Company had $1.1 million, $0.9 million and $1.3 million of accrued interest and penalties related to uncertain tax positions at December 31, 2012, 2013 and 2014, respectively. Interest and penalties related to uncertain tax positions are recognized as a component of income tax expense. | |||||||||||||
Net income per share | Net income per share | ||||||||||||
Net income per share is computed based on the weighted-average number of common shares outstanding during the periods presented. Additionally, diluted earnings per share data gives effect to all potentially dilutive common shares that were outstanding during the periods presented (Note 11). | |||||||||||||
Foreign currency translation | Foreign currency translation | ||||||||||||
A significant portion of the Company's business operations occur outside of the United States. The local currency of each of the Company's Subsidiaries is considered its functional currency, except for the Company's subsidiaries in Singapore and Venezuela where the U.S. dollar is used. All assets and liabilities are translated into U.S. dollars at exchange rates existing at the balance sheet dates, revenue and expenses are translated at weighted-average exchange rates and stockholders' equity is recorded at historical exchange rates. The resulting foreign currency translation adjustments are recorded as a separate component of stockholders' equity in the consolidated balance sheets and transaction gains and losses are included in other income and expense in the consolidated financial statements. Net of tax, the accumulated other comprehensive income related to the foreign currency translation adjustments are $54.7 million (net of tax of $12.2 million), $47.6 million (net of tax of $10.4 million) and $52.6 million (net of tax of $10.8 million) at December 31, 2012, 2013 and 2014, respectively. | |||||||||||||
Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its currency | Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its Currency | ||||||||||||
The Company commenced operations in Venezuela in 2007, where it markets a variety of personal care and nutritional products. Total assets in Venezuela as of December 31, 2013 and 2014 are $38.8 million and $14.6 million, of which $34.0 million and $8.2 million are monetary assets in each year respectively. The Venezuela subsidiary also had a $37.9 million and $34.8 million intercompany balance to its parent company as of December 31, 2013 and 2014, with respect to charges for inventory, commissions, license fees and service fees. The Company imports all of its products into Venezuela from the United States. Venezuela represents a very small portion of the Company's overall business with sales during 2012, 2013 and 2014 representing approximately 0.7%, 1.1% and 1.0% of the Company's overall revenue, respectively. | |||||||||||||
Since November of 2009, Venezuela has been considered a highly inflationary economy. A country is considered to have a highly inflationary economy if it has a cumulative inflation rate of approximately 100% or more over a three-year period as well as other qualitative factors including historic inflation rate trends (increasing and decreasing), the capital intensiveness of the operation and other pertinent economic factors. The functional currency in highly inflationary economies is required to be the functional currency of the entity's parent company (which for our Venezuela subsidiary is the U.S. dollar), and transactions denominated in the local currency are remeasured to the functional currency. The remeasurement of bolivars into U.S. dollars creates foreign currency transaction gains or losses, which the Company includes in its consolidated statement of income. | |||||||||||||
The Venezuela subsidiary did not transition to highly inflationary status until the first quarter of 2014. As a result, the Company continued to account for the Venezuela subsidiary as a bolivar functional currency entity, rather than a U.S. dollar functional currency entity. In the first quarter of 2014, the Company began to account for this subsidiary as highly inflationary, and therefore changed the functional currency of the entity to the U.S. dollar. The consolidated statement of income for the year ended December 31, 2014, includes an out-of-period adjustment of $6.3 million to correct this error as it was not deemed to be material to the current or prior period financial statements. | |||||||||||||
The current operating environment in Venezuela continues to be challenging, with high inflation in the country, government restrictions on foreign exchange and pricing controls, and the possibility of the government announcing further devaluations to its currency. Currency restrictions enacted by the Venezuelan government have impacted the ability of the Company to exchange foreign currency at the official rate to pay for imported products, license fees, commissions and other service fees. The Company has been unsuccessful in obtaining U.S. dollars at the official exchange rates and under alternative exchange mechanisms described below. As a result, these foreign exchange controls in Venezuela have limited the Company's ability to repatriate earnings and settle the Company's intercompany obligations, which has resulted in the accumulation of bolivar-denominated cash and cash equivalents in Venezuela. | |||||||||||||
During the first quarter of 2014, two new foreign exchange mechanisms ("SICAD I" and "SICAD II") became available in Venezuela. As of March 31, 2014, the Company determined it would be most appropriate for it to utilize the SICAD I rate, which was approximately 10.7 bolivars per U.S. dollar. As a result of the adoption of this rate during the period ended March 31, 2014, the Company recorded a $14.7 million charge in Other Income (Expense) to reflect foreign currency transaction losses on its net monetary assets denominated in bolivar, which is reflected in the year ended December 31, 2014. | |||||||||||||
As of June 30, 2014, the Company determined that it would be most appropriate for it to utilize the SICAD II rate, which was approximately 50 bolivars per U.S. dollar, as the Company had not been successful in getting approval under SICAD I and believed the SICAD II rate better reflects the rate at which the Company will be able to convert bolivars to U.S. dollars. As a result of the adoption of this rate during the three months ended June 30, 2014, the Company recorded an additional $25.3 million charge in Other Income (Expense) to reflect additional foreign currency translation losses on its net monetary assets denominated in bolivar, which is reflected in the year ended December 31, 2014. | |||||||||||||
In the first quarter of 2015, a new foreign exchange mechanism ("SIMADI") was announced, which utilizes a variable exchange rate that was initially approximately 170 bolivars per U.S. dollar. | |||||||||||||
Fair value of financial instruments | |||||||||||||
Fair value of financial instruments | The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair values due to the short-term nature of these instruments. The Company's current investments as of December 31, 2014 include certificates of deposits and pre-refunded municipal bonds that are classified by management as held-to-maturity as the Company had the positive intent and ability to hold to maturity. The carrying value of these current investments approximate fair values due to the short-term nature of these instruments. As of December 31, 2013 and 2014, the long-term debt fair value is $188.3 million and $252.8 million, respectively. The estimated fair value of the Company's debt is based on interest rates available for debt with similar terms and remaining maturities. The Company has classified these instruments as Level 2 in the fair value hierarchy. Fair value estimates are made at a specific point in time, based on relevant market information. | ||||||||||||
The FASB Codification defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. On a quarterly basis, the Company measures at fair value certain financial assets, including cash equivalents. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair-value hierarchy: | |||||||||||||
▪ Level 1 – quoted prices in active markets for identical assets or liabilities; | |||||||||||||
▪ Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; | |||||||||||||
▪ Level 3 – unobservable inputs based on the Company's own assumptions. | |||||||||||||
Accounting standards permit companies, at their option, to measure many financial instruments and certain other items at fair value. The Company has elected not to apply the fair value option to existing eligible items. | |||||||||||||
Stock-based compensation | Stock-based compensation | ||||||||||||
All share-based payments, including grants of stock options and restricted stock units, are required to be recognized in our financial statements based upon their respective grant date fair values. The Black-Scholes option-pricing model is used to estimate the fair value of stock options. The determination of the fair value of stock options is affected by our stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. We use historical volatility as the expected volatility assumption required in the Black-Scholes model. The expected life of the stock options is based on historical data trended into the future. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected terms of our stock options. The fair value of our restricted stock units is based on the closing market price of our stock on the date of grant less our expected dividend yield. We recognize stock-based compensation net of any estimated forfeitures over the requisite service period of the award. | |||||||||||||
The total compensation expense related to equity compensation plans was $21.4 million, $32.6 million and $17.5 million for the years ended December 31, 2012, 2013 and 2014. For the years ended December 31, 2012, 2013 and 2014, all stock-based compensation expense was recorded within general and administrative expenses. | |||||||||||||
Reporting comprehensive income | Reporting comprehensive income | ||||||||||||
Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, and it includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. | |||||||||||||
Accounting for derivative instruments and hedging activities | Accounting for derivative instruments and hedging activities | ||||||||||||
The Company recognizes all derivatives as either assets or liabilities, with the instruments measured at fair value. | |||||||||||||
Portions of the Company's Japanese yen borrowings prior to its October 2014 refinancing were designated, and were effective as, economic hedges of the net investment in its foreign operations. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on these debt instruments were included in foreign currency translation adjustments within other comprehensive income. Included in the cumulative translation adjustment are $7.3 million of pretax net gains, $10.5 million of pretax net losses and $1.4 million of pretax net gains for the years ended December 31, 2012, 2013 and 2014, respectively, from Japanese yen borrowings. | |||||||||||||
Additionally, the Company's Subsidiaries enter into significant transactions with each other and third parties that may not be denominated in the respective Subsidiaries' functional currencies. The Company regularly monitors its foreign currency risks and seeks to reduce its exposure to fluctuations in foreign exchange rates using foreign currency exchange contracts and through certain intercompany loans of foreign currency. | |||||||||||||
Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting treatment. Changes in fair value associated with hedge ineffectiveness, if any, are recorded in the results of operations currently. In the event that an anticipated transaction is no longer likely to occur, the Company recognizes the change in fair value of the derivative in its results of operations currently. | |||||||||||||
Changes in the fair value of derivatives are recorded in current earnings or accumulated other comprehensive loss, depending on the intended use of the derivative and its resulting designation. The gains and losses in accumulated other comprehensive loss stemming from these derivatives will be reclassified into earnings in the period during which the hedged forecasted transaction affects earnings. The fair value of the receivable and payable amounts related to these unrealized gains and losses is classified as other current assets and liabilities. The Company does not use such derivative financial instruments for trading or speculative purposes. Gains and losses on certain intercompany loans of foreign currency are recorded as other income and expense in the consolidated statements of income. | |||||||||||||
Recent Accounting Pronouncements | Recent accounting pronouncements | ||||||||||||
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU changes the threshold for a disposal to qualify as a discontinued operation. To be considered a discontinued operation a disposal now must represent a strategic shift that has or will have a major effect on an entity's operations and financial results. This ASU also requires new disclosures for individually material disposal transactions that do not meet the definition of a discontinued operation. This update will be applied prospectively and is effective for annual periods, and interim periods within those years, beginning after December 15, 2014. Early adoption is permitted provided the disposal was not previously disclosed. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. | |||||||||||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This ASU is effective for annual periods beginning after December 15, 2016 and shall be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |||||||||||||
In June 2014, the FASB issued ASU No. 2014-12, Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards with performance conditions that affect vesting to account for such awards. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. This ASU is effective for annual periods, and interim periods within those years, beginning after December 15, 2015. Early adoption is permitted. This ASU may be applied either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |||||||||||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40). The purpose of this ASU is to incorporate into U.S. GAAP management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern within one year after the date that the financial statements are issued, and to provide related footnote disclosures. This update is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Significant Accounting Policies [Abstract] | |||||||||||||
Components of Inventories | Inventories consist of the following (U.S. dollars in thousands): | ||||||||||||
December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Raw materials | $ | 117,982 | $ | 101,479 | |||||||||
Finished goods | 221,687 | 237,012 | |||||||||||
$ | 339,669 | $ | 338,491 | ||||||||||
Adjustments to Inventories | Adjustments to inventories consist of the following (U.S. dollars in millions): | ||||||||||||
December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Beginning balance, adjustments to inventory carrying value | $ | 7.1 | $ | 5.5 | $ | 5.9 | |||||||
Additions | 11.6 | 12.3 | 77.4 | ||||||||||
Write-offs | (13.2 | ) | (11.9 | ) | (27.3 | ) | |||||||
Ending balance, adjustments to inventory carrying value | $ | 5.5 | $ | 5.9 | $ | 56 | |||||||
Schedule of Property and Equipment Estimated Useful Lives | Depreciation is recorded using the straight-line method over the following estimated useful lives: | ||||||||||||
Buildings | 20 - 39 years | ||||||||||||
Furniture and fixtures | 5 - 7 years | ||||||||||||
Computers and equipment | 3 - 5 years | ||||||||||||
Leasehold improvements | Shorter of estimated useful life or lease term | ||||||||||||
Scanners | 3 years | ||||||||||||
Vehicles | 3 - 5 years | ||||||||||||
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands): | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
Gross balance at January 1 | $ | 7,387 | $ | 9,045 | $ | 7,484 | |||||||
Increases related to current year tax positions | 2,430 | 1,188 | 2,700 | ||||||||||
Settlements | - | (1,671 | ) | - | |||||||||
Decreases due to lapse of statutes of limitations | (854 | ) | (1,086 | ) | (4,106 | ) | |||||||
Currency adjustments | 82 | 8 | (91 | ) | |||||||||
Gross balance at December 31 | $ | 9,045 | $ | 7,484 | $ | 5,987 | |||||||
Prepaid_Expenses_and_Other_Tab
Prepaid Expenses and Other (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Prepaid Expenses and Other [Abstract] | |||||||||
Prepaid Expenses and Other | Prepaid expenses and other consist of the following (U.S. dollars in thousands): | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Deferred tax assets | $ | 73,456 | $ | 40,840 | |||||
Intercompany deferred charges | 15,108 | 26,776 | |||||||
Prepaid income taxes | - | 37,113 | |||||||
Prepaid inventory and import costs | 43,755 | 21,060 | |||||||
Prepaid rent, insurance and other occupancy costs | 11,486 | 10,400 | |||||||
Prepaid promotion and event cost | 6,030 | 4,275 | |||||||
Prepaid other taxes | 3,340 | 3,037 | |||||||
Forward contracts | 1,939 | 1,661 | |||||||
Deposits | 1,081 | 1,244 | |||||||
Other | 6,691 | 13,728 | |||||||
$ | 162,886 | $ | 160,134 | ||||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property and Equipment [Abstract] | |||||||||
Components of Property and Equipment | Property and equipment are comprised of the following (U.S. dollars in thousands): | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Land | $ | 34,442 | $ | 34,087 | |||||
Buildings | 156,734 | 230,934 | |||||||
Construction in progress | 78,556 | 63,941 | |||||||
Furniture and fixtures | 56,160 | 61,643 | |||||||
Computers and equipment | 115,551 | 118,248 | |||||||
Leasehold improvements | 87,635 | 110,539 | |||||||
Scanners | 18,408 | 14,594 | |||||||
Vehicles | 2,226 | 2,725 | |||||||
549,712 | 636,711 | ||||||||
Less: accumulated depreciation | (153,670 | ) | (171,928 | ) | |||||
$ | 396,042 | $ | 464,783 | ||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||
Goodwill and Other Intangible Assets [Abstract] | ||||||||||||||||||
Schedule of Intangible Assets and Goodwill | Goodwill and other intangible assets consist of the following (U.S. dollars in thousands): | |||||||||||||||||
Carrying Amount at | ||||||||||||||||||
December 31, | ||||||||||||||||||
Goodwill and indefinite life intangible assets: | 2013 | 2014 | ||||||||||||||||
Goodwill | $ | 112,446 | $ | 112,446 | ||||||||||||||
Trademarks and trade names | 24,599 | 24,599 | ||||||||||||||||
$ | 137,045 | $ | 137,045 | |||||||||||||||
Schedule of Finite Life Intangible Assets | 31-Dec-13 | 31-Dec-14 | ||||||||||||||||
Finite life intangible assets: | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | Weighted-average | |||||||||||||
Amortization Period | ||||||||||||||||||
Scanner technology | $ | 46,482 | $ | 27,533 | $ | 46,482 | $ | 30,557 | 18 years | |||||||||
Developed technology | 22,500 | 15,909 | 22,500 | 16,734 | 20 years | |||||||||||||
Distributor network | 11,598 | 10,093 | 11,598 | 10,594 | 15 years | |||||||||||||
Trademarks | 14,086 | 11,660 | 14,404 | 12,461 | 15 years | |||||||||||||
Other | 53,540 | 24,442 | 45,006 | 19,181 | 8 years | |||||||||||||
$ | 148,206 | $ | 89,637 | $ | 139,990 | $ | 89,527 | 15 years | ||||||||||
Other_Assets_Tables
Other Assets (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Assets [Abstract] | |||||||||
Components of Other Assets | Other assets consist of the following (U.S. dollars in thousands): | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Deferred taxes | $ | 5,174 | $ | 15,128 | |||||
Deposits for noncancelable operating leases | 24,406 | 29,957 | |||||||
Deposit for customs assessment (Note 20) | 40,181 | 31,825 | |||||||
Cash surrender value for life insurance policies | 23,172 | 26,280 | |||||||
Other | 18,139 | 24,286 | |||||||
$ | 111,072 | $ | 127,476 | ||||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accrued Expenses [Abstract] | |||||||||
Components of Accrued Expenses | Accrued expenses consist of the following (U.S. dollars in thousands): | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Accrued sales force commissions and other payments | $ | 330,870 | $ | 167,914 | |||||
Accrued income taxes | 46,006 | - | |||||||
Accrued other taxes | 63,823 | 32,246 | |||||||
Accrued payroll and other employee expenses | 68,695 | 29,220 | |||||||
Accrued payable to vendors | 42,447 | 28,341 | |||||||
Accrued royalties | 17,673 | 10,475 | |||||||
Sales return reserve | 10,734 | 10,118 | |||||||
Deferred revenue | 13,596 | 6,160 | |||||||
Other | 32,440 | 16,373 | |||||||
$ | 626,284 | $ | 300,847 | ||||||
Other_Liabilities_Tables
Other Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Other Liabilities [Abstract] | |||||||||
Other Liabilities | Other liabilities consist of the following (U.S. dollars in thousands): | ||||||||
December 31, | |||||||||
2013 | 2014 | ||||||||
Deferred tax liabilities | $ | 13,952 | $ | 16,017 | |||||
Reserve for other tax liabilities | 8,786 | 7,324 | |||||||
Reserve for customs assessment | 9,810 | 4,727 | |||||||
Liability for deferred compensation plan | 28,544 | 32,398 | |||||||
Pension plan benefits reserve | 6,176 | 5,844 | |||||||
Build to suit – financing obligation | - | 10,421 | |||||||
Deferred rent and deferred tenant incentives | - | 7,102 | |||||||
Asset retirement obligation | 4,090 | 4,611 | |||||||
Other | 441 | 656 | |||||||
$ | 71,799 | $ | 89,100 |
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Long Term Debt [Abstract] | |||||||||
Summary of Long-Term Debt Arrangements | The following table summarizes the Company's debt facilities as of December 31, 2014. The Company's book value for both the individual and consolidated debt included in the table approximates fair value. The estimated fair value of its debt is based on interest rates available for debt with similar terms and remaining maturities. The Company has classified these instruments as Level 2 in the fair value hierarchy. | ||||||||
Facility or | Original Principal Amount | Balance as of | Interest Rate | Repayment terms | |||||
Arrangement | December 31, 2014(1)(2) | ||||||||
Credit Agreement term loan facility: | |||||||||
U.S. dollar | $127.5 million | $125.9 million | Variable 30 day: 2.9117% | One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term. | |||||
denominated: | |||||||||
Japanese yen | 6.6 billion yen | 6.5 billion yen ($54.4 million as of December 31, 2014) | Variable 30 day: 2.8243% | One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term. | |||||
denominated: | |||||||||
Credit Agreement revolving credit facility: | |||||||||
$72.5 million | Variable 30 day: 2.9117% | Revolving line of credit expires October 2019. | |||||||
Korean subsidiary loan: | $20.0 million | ─ | 2.50% | Paid in full. | |||||
-1 | As of December 31, 2014, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $79.7 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility and $3.1 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility. The Company has classified the amounts borrowed under the revolving line of credit as short term because it is the Company's intention to use the line of credit to borrow and pay back funds over short periods of time. | ||||||||
-2 | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $5.5 million, which is not reflected in this table. | ||||||||
As of December 31, 2013, the Company had debt pursuant to various credit facilities and other borrowings. The following table summarizes the Company's debt facilities as of December 31, 2013. The Company's book value for both the individual and consolidated debt included in the table approximates fair value. The estimated fair value of its debt is based on interest rates available for debt with similar terms and remaining maturities. The Company has classified these instruments as Level 2 in the fair value hierarchy. | |||||||||
Facility or | Original Principal Amount | Balance as of | Interest Rate | Repayment terms | |||||
Arrangement | December 31, 2013 | ||||||||
Multi-currency uncommitted | |||||||||
shelf facility: | |||||||||
U.S. dollar | $40.0 million | $17.1 million | 6.20% | Paid in full on October 10, 2014. | |||||
denominated: | |||||||||
$20.0 million | $11.4 million | 6.20% | Paid in full on October 10, 2014. | ||||||
Japanese yen | 3.1 billion yen | 0.4 billion yen ($4.1 million as of December 31, 2013) | 1.70% | Paid in full on October 10, 2014. | |||||
denominated: | |||||||||
2.3 billion yen | 1.3 billion yen ($12.3 million as of December 31, 2013) | 2.60% | Paid in full on October 10, 2014. | ||||||
2.2 billion yen | 1.2 billion yen ($11.8 million as of December 31, 2013) | 3.30% | Paid in full on October 10, 2014. | ||||||
8.0 billion yen | 8.0 billion yen ($75.8 million as of December 31, 2013) | 1.70% | Paid in full on October 10, 2014. | ||||||
Revolving credit facilities | |||||||||
2010 | $35.0 million | Variable 30 day: 0.670% | Revolving line of credit paid in full prior to August 8, 2014. | ||||||
2013 | $14.0 million | Variable 30 day: 0.5933% | Revolving line of credit paid in full on October 10, 2014. | ||||||
Maturities of Long-term Debt | Maturities of all long-term debt at December 31, 2014, based on the year-end exchange rate, are as follows (U.S. dollars in thousands): | ||||||||
Year Ending December 31, | |||||||||
2015 | $ | 82,770 | |||||||
2016 | 14,834 | ||||||||
2017 | 19,398 | ||||||||
2018 | 23,963 | ||||||||
2019 | 111,826 | ||||||||
Thereafter | - | ||||||||
Total (1) | $ | 252,791 | |||||||
-1 | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $5.5 million, which is not reflected in this table. |
Lease_and_Financing_Obligation1
Lease and Financing Obligations (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Lease Obligations [Abstract] | |||||||||
Minimum Future Lease Obligations | Minimum future operating leases and financing obligations at December 31, 2014 are as follows (U.S. dollars in thousands): | ||||||||
Year Ending December 31, | Operating | Financing | |||||||
Leases | Obligations | ||||||||
2015 | $ | 29,382 | $ | 386 | |||||
2016 | 24,980 | 673 | |||||||
2017 | 21,396 | 693 | |||||||
2018 | 18,285 | 714 | |||||||
2019 | 12,183 | 735 | |||||||
Thereafter | 678 | 4,382 | |||||||
Total minimum lease payments | $ | 106,904 | $ | 7,583 |
Capital_Stock_Tables
Capital Stock (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Capital Stock [Abstract] | |||||||||||||
Weighted average common shares outstanding for computing EPS | The following is a reconciliation of the weighted-average common shares outstanding for purposes of computing basic and diluted net income per share (in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Basic weighted-average common shares outstanding | 60,600 | 58,606 | 59,073 | ||||||||||
Effect of dilutive securities: | |||||||||||||
Stock awards and options | 2,425 | 2,842 | 1,814 | ||||||||||
Diluted weighted-average common shares outstanding | 63,025 | 61,448 | 60,887 | ||||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Stock Based Compensation [Abstract] | |||||||||||||||||
Schedule of option-pricing model assumptions and weighted-average fair values | The fair value of stock option awards was estimated using the Black-Scholes option-pricing model with the following assumptions and weighted-average fair values as follows: | ||||||||||||||||
December 31, | |||||||||||||||||
Stock Options: | 2012 | 2013 | 2014 | ||||||||||||||
Weighted average grant date fair value of grants | $ | 13.31 | $ | 22.1 | $ | 23.01 | |||||||||||
Risk-free interest rate(1) | 0.80% | 1.40% | 1.70% | ||||||||||||||
Dividend yield(2) | 2.70% | 3.10% | 1.90% | ||||||||||||||
Expected volatility(3) | 46.80% | 41.70% | 45.40% | ||||||||||||||
Expected life in months(4) | 58 months | 62 months | 62 months | ||||||||||||||
-1 | The risk-free interest rate is based upon the rate on a zero coupon U.S. Treasury bill, for periods within the contractual life of the option, in effect at the time of the grant. | ||||||||||||||||
-2 | The dividend yield is based on the average of historical stock prices and actual dividends paid. | ||||||||||||||||
-3 | Expected volatility is based on the historical volatility of the Company's stock price, over a period similar to the expected life of the option. | ||||||||||||||||
-4 | The expected term of the option is based on the historical employee exercise behavior, the vesting terms of the respective option, and a contractual life of either seven or ten years. | ||||||||||||||||
Schedule of option activity | Options under the plans as of December 31, 2014 and changes during the year ended December 31, 2014 were as follows: | ||||||||||||||||
Shares | Weighted-average Exercise Price | Weighted- average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||
(in thousands) | (in years) | (in thousands) | |||||||||||||||
Options activity – service based | |||||||||||||||||
Outstanding at December 31, 2013 | 2,159.80 | $ | 26.01 | ||||||||||||||
Granted | 90.6 | 65.43 | |||||||||||||||
Exercised | (326.2 | ) | 18.83 | ||||||||||||||
Forfeited/cancelled/expired | - | - | |||||||||||||||
Outstanding at December 31, 2014 | 1,924.20 | 29.08 | 2.31 | $ | 39,897 | ||||||||||||
Exercisable at December 31, 2014 | 1,618.50 | 21.22 | 1.7 | 39,310 | |||||||||||||
Options activity – performance based | |||||||||||||||||
Outstanding at December 31, 2013 | 4,483.10 | $ | 57.25 | ||||||||||||||
Granted | 68.8 | 65.7 | |||||||||||||||
Exercised | (425.0 | ) | 22.42 | ||||||||||||||
Forfeited/cancelled/expired | (88.6 | ) | 78.1 | ||||||||||||||
Outstanding at December 31, 2014 | 4,038.30 | 60.61 | 4.6 | $ | 18,790 | ||||||||||||
Exercisable at December 31, 2014 | 1,459.20 | 31.21 | 2.92 | 18,680 | |||||||||||||
Options activity – all options | |||||||||||||||||
Outstanding at December 31, 2013 | 6,642.90 | $ | 47.1 | ||||||||||||||
Granted | 159.4 | 65.55 | |||||||||||||||
Exercised | (751.2 | ) | 20.86 | ||||||||||||||
Forfeited/cancelled/expired | (88.6 | ) | 78.1 | ||||||||||||||
Outstanding at December 31, 2014 | 5,962.50 | 50.43 | 3.86 | $ | 58,657 | ||||||||||||
Exercisable at December 31, 2014 | 3,077.70 | 25.95 | 2.28 | 57,989 | |||||||||||||
Schedule of cash proceeds, tax benefits, and intrinsic value related to total stock options exercised | Cash proceeds, tax benefits, and intrinsic value related to total stock options exercised during 2012, 2013 and 2014, were as follows (in millions): | ||||||||||||||||
December 31, | |||||||||||||||||
2012 | 2013 | 2014 | |||||||||||||||
Cash proceeds from stock options exercised | $ | 8 | $ | 37.9 | $ | 11.1 | |||||||||||
Tax benefit realized for stock options exercised | 6.3 | 41.9 | 11.9 | ||||||||||||||
Intrinsic value of stock options exercised | 10.6 | 241.7 | 17.2 | ||||||||||||||
Schedule of non-vested restricted stock awards and changes | Nonvested restricted stock awards as of December 31, 2014 and changes during the year ended December 31, 2014 were as follows: | ||||||||||||||||
Number of Shares | Weighted-average Grant Date Fair Value | ||||||||||||||||
(in thousands) | |||||||||||||||||
Nonvested at December 31, 2013 | 729.6 | $ | 42.48 | ||||||||||||||
Granted | 289.9 | 82.66 | |||||||||||||||
Vested | (325.8 | ) | 40.74 | ||||||||||||||
Forfeited | (19.9 | ) | 58.55 | ||||||||||||||
Nonvested at December 31, 2014 | 673.8 | 60.14 |
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value [Abstract] | |||||||||||||||||
Assets and liabilities measured at fair value on a recurring basis | The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 and 2014 (U.S. dollars in thousands): | ||||||||||||||||
Fair Value at December 31, 2013 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Financial assets (liabilities): | |||||||||||||||||
Cash equivalents and current investments | $ | 61,136 | $ | - | $ | - | $ | 61,136 | |||||||||
Forward contracts | - | 1,939 | - | 1,939 | |||||||||||||
Life insurance contracts | - | - | 23,172 | 23,172 | |||||||||||||
Total | $ | 61,136 | $ | 1,939 | $ | 23,172 | $ | 86,247 | |||||||||
Fair Value at December 31, 2014 | |||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||
Financial assets (liabilities): | |||||||||||||||||
Cash equivalents and current investments | $ | 86,574 | $ | - | $ | - | $ | 86,574 | |||||||||
Forward contracts | - | 1,661 | - | 1,661 | |||||||||||||
Life insurance contracts | - | - | 26,280 | 26,280 | |||||||||||||
Total | $ | 86,574 | $ | 1,661 | $ | 26,280 | $ | 114,515 | |||||||||
Summary of changes in fair value of marketable securities | The following table provides a summary of changes in fair value of the Company's Level 3 marketable securities (U.S. dollars in thousands): | ||||||||||||||||
Life Insurance Contracts | 2013 | 2014 | |||||||||||||||
Beginning balance at January 1 | $ | 18,605 | $ | $23,172 | |||||||||||||
Actual return on plan assets: | |||||||||||||||||
Relating to assets still held at the reporting date | 2,568 | 1,249 | |||||||||||||||
Purchases and issuances | 3,408 | 2,798 | |||||||||||||||
Sales and settlements | (1,409 | ) | (939 | ) | |||||||||||||
Transfers into Level 3 | - | - | |||||||||||||||
Ending balance at December 31 | $ | 23,172 | $ | 26,280 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Taxes [Abstract] | |||||||||||||
Consolidated income before provision for income taxes | Consolidated income before provision for income taxes consists of the following for the years ended December 31, 2012, 2013 and 2014 (U.S. dollars in thousands): | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
U.S. | $ | 259,309 | $ | 307,994 | $ | 184,476 | |||||||
Foreign | 85,933 | 248,946 | 114,031 | ||||||||||
Total | $ | 345,242 | $ | 556,940 | $ | 298,507 | |||||||
Provisions for current and deferred taxes | The provision for current and deferred taxes for the years ended December 31, 2012, 2013 and 2014 consists of the following (U.S. dollars in thousands): | ||||||||||||
2012 | 2013 | 2014 | |||||||||||
Current | |||||||||||||
Federal | $ | 70,727 | $ | 81,871 | $ | 37,402 | |||||||
State | 2,425 | 361 | 2,095 | ||||||||||
Foreign | 45,851 | 148,310 | 48,904 | ||||||||||
119,003 | 230,542 | 88,401 | |||||||||||
Deferred | |||||||||||||
Federal | 12,918 | (2,831 | ) | (380 | ) | ||||||||
State | 656 | 551 | 444 | ||||||||||
Foreign | (8,980 | ) | (36,210 | ) | 20,866 | ||||||||
4,594 | (38,490 | ) | 20,930 | ||||||||||
Provision for income taxes | $ | 123,597 | $ | 192,052 | $ | 109,331 | |||||||
Principal components of deferred taxes | The principal components of deferred taxes are as follows (U.S. dollars in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Deferred tax assets: | |||||||||||||
Inventory differences | $ | 2,927 | $ | 12,362 | |||||||||
Foreign tax credit and other foreign benefits | 120,534 | 116,603 | |||||||||||
Stock-based compensation | 18,132 | 17,211 | |||||||||||
Accrued expenses not deductible until paid | 88,465 | 48,189 | |||||||||||
Foreign currency exchange | 13,734 | 10,774 | |||||||||||
Net operating losses | 10,808 | 17,530 | |||||||||||
Capitalized research and development | 6,202 | 3,362 | |||||||||||
Exchange gains and losses | - | 41,542 | |||||||||||
Other | 739 | 841 | |||||||||||
Gross deferred tax assets | 261,541 | 268,414 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Exchange gains and losses | 9,924 | - | |||||||||||
Intangibles step-up | 16,375 | 15,106 | |||||||||||
Overhead allocation to inventory | 2,523 | 10,781 | |||||||||||
Amortization of intangibles | 17,360 | 18,374 | |||||||||||
Foreign outside basis in controlled foreign corporation | 76,470 | 100,016 | |||||||||||
Other | 63,409 | 48,187 | |||||||||||
Gross deferred tax liabilities | 186,061 | 192,464 | |||||||||||
Valuation allowance | (10,803 | ) | (35,999 | ) | |||||||||
Deferred taxes, net | $ | 64,677 | $ | 39,951 | |||||||||
Components of deferred taxes, net on a jurisdiction basis | The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2014 | ||||||||||||
Net current deferred tax assets | $ | 73,456 | $ | 40,840 | |||||||||
Net noncurrent deferred tax assets | 5,174 | 15,128 | |||||||||||
Total net deferred tax assets | 78,630 | 55,968 | |||||||||||
Net current deferred tax liabilities | 1 | - | |||||||||||
Net noncurrent deferred tax liabilities | 13,952 | 16,017 | |||||||||||
Total net deferred tax liabilities | 13,953 | 16,017 | |||||||||||
Deferred taxes, net | $ | 64,677 | $ | 39,951 | |||||||||
Actual tax rate compared to statutory U.S federal tax rate | The actual tax rate for the years ended December 31, 2012, 2013 and 2014 compared to the statutory U.S. Federal tax rate is as follows: | ||||||||||||
Year Ended December 31, | |||||||||||||
2012 | 2013 | 2014 | |||||||||||
Income taxes at statutory rate | 35 | % | 35 | % | 35 | % | |||||||
Indefinitely invested earnings of non-U.S. subsidiaries | – | (0.76 | ) | – | |||||||||
Non-deductible expenses | 0.12 | 0.12 | 0.12 | ||||||||||
Controlled foreign corporation losses | – | – | 1.48 | ||||||||||
Other | 0.68 | 0.12 | 0.03 | ||||||||||
35.8 | % | 34.48 | % | 36.63 | % | ||||||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Information [Abstract] | |||||||||||||
Revenue by Region | Revenue generated in each of these regions is set forth below (U.S. dollars in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
Revenue: | 2012 | 2013 | 2014 | ||||||||||
Greater China | $ | 550,690 | $ | 1,363,182 | $ | 948,523 | |||||||
North Asia | 785,302 | 869,400 | 782,985 | ||||||||||
Americas | 285,283 | 370,087 | 329,027 | ||||||||||
South Asia/Pacific | 328,597 | 378,988 | 328,388 | ||||||||||
EMEA | 182,385 | 195,061 | 180,572 | ||||||||||
Total | $ | 2,132,257 | $ | 3,176,718 | $ | 2,569,495 | |||||||
Revenue by Product Lines | Revenue generated by each of the Company's product lines is set forth below (U.S. dollars in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
Revenue: | 2012 | 2013 | 2014 | ||||||||||
Nu Skin | $ | 1,158,213 | $ | 1,641,618 | $ | 1,562,595 | |||||||
Pharmanex | 966,572 | 1,529,211 | 1,000,279 | ||||||||||
Other | 7,472 | 5,889 | 6,621 | ||||||||||
Total | $ | 2,132,257 | $ | 3,176,718 | $ | 2,569,495 | |||||||
Significant Geographical Areas and Long Lived Assets | Additional information as to the Company's operations in the most significant geographical areas is set forth below (U.S. dollars in thousands): | ||||||||||||
Year Ended December 31, | |||||||||||||
Revenue: | 2012 | 2013 | 2014 | ||||||||||
Japan | $ | 489,302 | $ | 402,580 | $ | 315,265 | |||||||
Mainland China | 256,833 | 1,005,395 | 675,082 | ||||||||||
South Korea | 296,000 | 466,820 | 467,720 | ||||||||||
United States | 227,872 | 268,232 | 230,767 | ||||||||||
December 31, | |||||||||||||
Long-lived assets: | 2013 | 2014 | |||||||||||
Japan | $ | 9,970 | $ | 13,768 | |||||||||
Mainland China | 82,726 | 103,445 | |||||||||||
South Korea | 14,345 | 46,626 | |||||||||||
United States | 273,388 | 287,103 | |||||||||||
Quarterly_Results_Tables
Quarterly Results (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Quarterly Results [Abstract] | |||||||||||||||||||||||||||||||||
Quarterly data | The following table sets forth selected unaudited quarterly data for the periods shown as revised (U.S. dollars in millions, except per share amounts): | ||||||||||||||||||||||||||||||||
2013 | 2014 | ||||||||||||||||||||||||||||||||
1st | 2nd | 3rd | 4th | 1st | 2nd | 3rd | 4th | ||||||||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||||||||||
Revenue | $ | 541.3 | $ | 671.3 | $ | 908.3 | $ | 1,055.80 | $ | 671.1 | $ | 650 | $ | 638.8 | $ | 609.6 | |||||||||||||||||
Gross profit | 451.3 | 560 | 768.5 | 891.1 | 564.4 | 494 | 529.5 | 503.1 | |||||||||||||||||||||||||
Operating income | 82.6 | 114.6 | 168.3 | 188.6 | 101.2 | 54.7 | 105 | 91.3 | |||||||||||||||||||||||||
Net income | 54.3 | 74.4 | 110.9 | 125.3 | 54.9 | 19.5 | 68.3 | 46.5 | |||||||||||||||||||||||||
Net income per share: | |||||||||||||||||||||||||||||||||
Basic | 0.93 | 1.27 | 1.89 | 2.13 | 0.93 | 0.33 | 1.15 | 0.79 | |||||||||||||||||||||||||
Diluted | 0.9 | 1.22 | 1.8 | 2.02 | 0.9 | 0.32 | 1.12 | 0.77 |
The_Company_Details
The Company (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Region | |
The Company [Abstract] | |
Number of geographic regions | 5 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | Venezuela | Venezuela | Venezuela | Venezuela | Venezuela | Venezuela | Venezuela | Venezuela | Other Income (Expense), Net [Member] | Other Income (Expense), Net [Member] | Correct Certain Accounting Errors for Hyper-Inflationary Adjustments with Respect to Operations in Venezuela [Member] | Minimum [Member] | Building [Member] | Building [Member] | Furniture and Fixtures [Member] | Furniture and Fixtures [Member] | Computer Equipment [Member] | Computer Equipment [Member] | Leasehold Improvements [Member] | Scanners [Member] | Vehicles [Member] | Vehicles [Member] | |
Mechanism | USD ($) | USD ($) | SICAD I [Member] | SICAD I [Member] | SIMADI [Member] | Venezuela | Venezuela | USD ($) | Correct Certain Accounting Errors for Hyper-Inflationary Adjustments with Respect to Operations in Venezuela [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | |||||||||
VEB | VEB | VEB | USD ($) | USD ($) | ||||||||||||||||||||||
Inventories [Abstract] | ||||||||||||||||||||||||||
Write-down of estimated surplus intentory | $50,000,000 | |||||||||||||||||||||||||
Raw materials | 101,479,000 | 117,982,000 | ||||||||||||||||||||||||
Finished goods | 237,012,000 | 221,687,000 | ||||||||||||||||||||||||
Inventories | 338,491,000 | 339,669,000 | ||||||||||||||||||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||||||||||||||||||||||||||
Beginning balance, adjustments to inventory carrying value | 5,900,000 | 5,500,000 | 7,100,000 | |||||||||||||||||||||||
Additions | 77,400,000 | 12,300,000 | 11,600,000 | |||||||||||||||||||||||
Write-offs | -27,300,000 | -11,900,000 | -13,200,000 | |||||||||||||||||||||||
Ending balance, adjustments to inventory carrying value | 56,000,000 | 5,900,000 | 5,500,000 | 7,100,000 | ||||||||||||||||||||||
Property and equipment [Abstract] | ||||||||||||||||||||||||||
Estimated useful life description | Shorter of estimated useful life or lease term | |||||||||||||||||||||||||
Useful life | 20 years | 39 years | 5 years | 7 years | 3 years | 5 years | 3 years | 3 years | 5 years | |||||||||||||||||
Revenue recognition [Abstract] | ||||||||||||||||||||||||||
Accrued reserve for product returns | 10,100,000 | 11,000,000 | ||||||||||||||||||||||||
Sales returns | 83,600,000 | 79,400,000 | 56,100,000 | |||||||||||||||||||||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax [Abstract] | ||||||||||||||||||||||||||
Cumulative translation adjustment related to foreign currency adjustment | 52,600,000 | 47,600,000 | 54,700,000 | 6,300,000 | ||||||||||||||||||||||
Cumulative translation adjustment related to foreign currency adjustment, tax | 10,800,000 | 10,400,000 | 12,200,000 | |||||||||||||||||||||||
Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its Currency [Abstract] | ||||||||||||||||||||||||||
Total assets | 1,614,434,000 | 1,821,062,000 | 38,800,000 | 14,600,000 | ||||||||||||||||||||||
Monetary assets | 288,415,000 | 525,153,000 | 320,025,000 | 272,974,000 | 34,000,000 | 8,200,000 | ||||||||||||||||||||
Payable to parent company | 37,900,000 | 34,800,000 | ||||||||||||||||||||||||
Percentage of revenue from subsidiary (in hundredths) | 10.00% | 11.00% | 7.00% | |||||||||||||||||||||||
Cumulative inflation rate (n hundredths) | 100.00% | |||||||||||||||||||||||||
Period used to determine highly inflationary economy | 3 years | |||||||||||||||||||||||||
Adjustment to accumulated other comprehensive income (equity) | 52,600,000 | 47,600,000 | 54,700,000 | 6,300,000 | ||||||||||||||||||||||
Out-of-period adjustment to income statement | 6,300,000 | |||||||||||||||||||||||||
Number of foreign exchange mechanisms | 2 | |||||||||||||||||||||||||
Foreign currency exchange rate | 50 | 10.7 | 170 | |||||||||||||||||||||||
Translation of monetary assets and liabilities | 14,700,000 | 25,300,000 | ||||||||||||||||||||||||
Fair value of financial instruments [Abstract] | ||||||||||||||||||||||||||
Long-term debt, fair value | 252,800,000 | 188,300,000 | ||||||||||||||||||||||||
Advertising expense [Abstract] | ||||||||||||||||||||||||||
Advertising expense incurred | 19,600,000 | 11,300,000 | 5,100,000 | |||||||||||||||||||||||
Research and development [Abstract] | ||||||||||||||||||||||||||
Research and development expense | 18,900,000 | 18,000,000 | 14,900,000 | |||||||||||||||||||||||
Deferred tax assets and liabilities [Abstract] | ||||||||||||||||||||||||||
Net deferred tax assets | 39,951,000 | 64,677,000 | ||||||||||||||||||||||||
Uncertain Tax Positions [Abstract] | ||||||||||||||||||||||||||
Gross balance at beginning of year | 7,484,000 | 9,045,000 | 7,387,000 | |||||||||||||||||||||||
Decreases related to prior year tax positions | 0 | 0 | 0 | |||||||||||||||||||||||
Increases related to current year tax positions | 2,700,000 | 1,188,000 | 2,430,000 | |||||||||||||||||||||||
Settlements | 0 | -1,671,000 | 0 | |||||||||||||||||||||||
Decreases due to lapse of statutes of limitations | -4,106,000 | -1,086,000 | -854,000 | |||||||||||||||||||||||
Currency adjustments | -91,000 | 8,000 | 82,000 | |||||||||||||||||||||||
Gross balance at end of year | 5,987,000 | 7,484,000 | 9,045,000 | 7,387,000 | ||||||||||||||||||||||
Unrecognized tax benefits that would impact effective tax rate | 1,100,000 | 2,100,000 | ||||||||||||||||||||||||
Estimate of change in gross unrecognized tax benefits, net of foreign adjustments, minimum | 1,000,000 | |||||||||||||||||||||||||
Estimate of change in gross unrecognized tax benefits, net of foreign currency adjustments, maximum | 2,000,000 | |||||||||||||||||||||||||
Interest and penalties expenses/(benefits) | 400,000 | -100,000 | 300,000 | |||||||||||||||||||||||
Accrued interest and penalties related to uncertain tax positions | 1,300,000 | 900,000 | 1,100,000 | |||||||||||||||||||||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||||||||||||||||||||||||
Total compensation expense related to equity compensation plans | 17,500,000 | 32,600,000 | 21,400,000 | |||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||
Cumulative translation adjustment related to foreign currency adjustment | 52,600,000 | 47,600,000 | 54,700,000 | 6,300,000 | ||||||||||||||||||||||
Unrealized Gain (Loss) on Foreign Currency Derivatives, Net, before Tax | $1,400,000 | ($10,500,000) | $7,300,000 |
Prepaid_Expenses_and_Other_Det
Prepaid Expenses and Other (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Prepaid Expenses and Other [Abstract] | ||
Deferred tax assets | $40,840 | $73,456 |
Intercompany deferred charges | 26,776 | 15,108 |
Prepaid income taxes | 37,113 | 0 |
Prepaid inventory and import costs | 21,060 | 43,755 |
Prepaid rent, insurance and other occupancy costs | 10,400 | 11,486 |
Prepaid promotion and event cost | 4,275 | 6,030 |
Prepaid other taxes | 3,037 | 3,340 |
Forward contracts | 1,661 | 1,939 |
Deposits | 1,244 | 1,081 |
Other | 13,728 | 6,691 |
Total prepaid expenses and other | $160,134 | $162,886 |
Property_and_Equipment_Details
Property and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $636,711,000 | $549,712,000 | |
Less: accumulated depreciation | -171,928,000 | -153,670,000 | |
Property and equipment, net | 464,783,000 | 396,042,000 | |
Depreciation expense | 46,500,000 | 27,100,000 | 25,500,000 |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 34,087,000 | 34,442,000 | |
Buildings [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 230,934,000 | 156,734,000 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 63,941,000 | 78,556,000 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 61,643,000 | 56,160,000 | |
Computers and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 118,248,000 | 115,551,000 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 110,539,000 | 87,635,000 | |
Scanners [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 14,594,000 | 18,408,000 | |
Vehicles [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $2,725,000 | $2,226,000 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Goodwill and indefinite life intangible assets: | |||
Goodwill | $112,446,000 | $112,446,000 | |
Trademarks and trade names | 24,599,000 | 24,599,000 | |
Total goodwill and trademarks and trade names | 137,045,000 | 137,045,000 | |
Finite life intangible assets [Abstract] | |||
Gross carrying amount | 139,990,000 | 148,206,000 | |
Accumulated amortization | 89,527,000 | 89,637,000 | |
Weighted average | 15 years | ||
Amortization expense | 8,400,000 | 7,800,000 | 7,900,000 |
Annual estimated amortization expense [Abstract] | |||
2013 | 8,000,000 | ||
2014 | 8,000,000 | ||
2015 | 8,000,000 | ||
2016 | 8,000,000 | ||
2017 | 8,000,000 | ||
Scanner technology [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | 46,482,000 | 46,482,000 | |
Accumulated amortization | 30,557,000 | 27,533,000 | |
Weighted average | 18 years | ||
Developed technology [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | 22,500,000 | 22,500,000 | |
Accumulated amortization | 16,734,000 | 15,909,000 | |
Weighted average | 20 years | ||
Distribution network [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | 11,598,000 | 11,598,000 | |
Accumulated amortization | 10,594,000 | 10,093,000 | |
Weighted average | 15 years | ||
Trademarks [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | 14,404,000 | 14,086,000 | |
Accumulated amortization | 12,461,000 | 11,660,000 | |
Weighted average | 15 years | ||
Other [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | 45,006,000 | 53,540,000 | |
Accumulated amortization | $19,181,000 | $24,442,000 | |
Weighted average | 8 years |
Other_Assets_Details
Other Assets (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Components of other assets [Abstract] | ||
Deferred taxes | $15,128 | $5,174 |
Deposits for noncancelable operating leases | 29,957 | 24,406 |
Deposit for customs assessment (Note 20) | 31,825 | 40,181 |
Cash surrender value for life insurance policies | 26,280 | 23,172 |
Other | 24,286 | 18,139 |
Total other assets | $127,476 | $111,072 |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued Expenses [Abstract] | ||
Accrued commissions and other payments to distributors | $167,914 | $330,870 |
Accrued income taxes | 0 | 46,006 |
Other taxes payable | 32,246 | 63,823 |
Accrued payroll and payroll taxes | 29,220 | 68,695 |
Accrued payable to vendors | 28,341 | 42,447 |
Accrued royalties | 10,475 | 17,673 |
Sales return reserve | 10,118 | 10,734 |
Deferred revenue | 6,160 | 13,596 |
Other | 16,373 | 32,440 |
Total accrued expenses | $300,847 | $626,284 |
Other_Liabilities_Details
Other Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Liabilities [Abstract] | ||
Deferred tax liabilities | $16,017 | $13,952 |
Reserve for other tax liabilities | 7,324 | 8,786 |
Reserve for customs assessment | 4,727 | 9,810 |
Cash surrender value for life insurance policies | 32,398 | 28,544 |
Pension plan benefits reserve | 5,844 | 6,176 |
Build to suit - financing obligation | 10,421 | 0 |
Deferred rent and deferred tenant incentives | 7,102 | 0 |
Asset retirement obligation | 4,611 | 4,090 |
Other | 656 | 441 |
Total other liabilities | $89,100 | $71,799 |
LongTerm_Debt_Details
Long-Term Debt (Details) | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | |||||||
USD ($) | USD ($) | USD ($) | Credit Agreement term loan facility U.S. dollar denominated [Member] | Credit Agreement term loan facility Japanese Yen denominated [Member] | Credit Agreement term loan facility Japanese Yen denominated [Member] | Credit Agreement revolving credit facility [Member] | Korea Subsidiary Loan [Member] | 2003 multi-currency uncommitted shelf facility, U.S. dollar denominated 1 [Member] | 2003 multi-currency uncommitted shelf facility, U.S. dollar denominated 1 [Member] | 2003 multi-currency uncommitted shelf facility, U.S. dollar denominated 2 [Member] | 2003 multi-currency uncommitted shelf facility, U.S. dollar denominated 2 [Member] | 2003 multi-currency uncommitted shelf facility, total U.S. dollar-denominated debt [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 1 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 1 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 1 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 1 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 2 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 2 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 2 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 2 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 3 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 3 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 3 [Member] | 2003 multi-currency uncommitted shelf facility, Japanese yen denominated 3 [Member] | 2003 multi-currency uncommitted shelf facility, total Japanese yen-denominated debt [Member] | 2010 Revolving Credit Facility Member [Member] | 2013 Revolving Credit Facility [Member] | 2010 committed loan, U.S. dollar denominated [Member] | Multi-Currency Uncommitted Shelf Facility, Japanese Yen Denominated 3 [Member] | Multi-Currency Uncommitted Shelf Facility, Japanese Yen Denominated 3 [Member] | Multi-Currency Uncommitted Shelf Facility, Japanese Yen Denominated 3 [Member] | Multi-Currency Uncommitted Shelf Facility, Japanese Yen Denominated 3 [Member] | |||||||
USD ($) | USD ($) | JPY (¥) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | JPY (¥) | USD ($) | JPY (¥) | JPY (¥) | USD ($) | JPY (¥) | JPY (¥) | USD ($) | JPY (¥) | USD ($) | USD ($) | USD ($) | USD ($) | JPY (¥) | USD ($) | JPY (¥) | ||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||
Original principal amount - facilities | $127,500,000 | $54,400,000 | [1],[2] | ¥ 6,600,000,000 | $20,000,000 | $40,000,000 | $20,000,000 | ¥ 3,100,000,000 | ¥ 2,300,000,000 | ¥ 2,200,000,000 | $35,000,000 | $14,000,000 | ¥ 8,000,000,000 | ||||||||||||||||||||||||||
Balance - facilities | 125,900,000 | [1],[2] | 6,500,000,000 | [1],[2] | 72,500,000 | [1],[2] | 0 | [1],[2] | 17,100,000 | 11,400,000 | 4,100,000 | 400,000,000 | 12,300,000 | 1,300,000,000 | 11,800,000 | 1,200,000,000 | 75,800,000 | 8,000,000,000 | |||||||||||||||||||||
Interest rate - facilities (in hundredths) | 291.17% | 282.43% | 282.43% | 291.17% | 250.00% | 6.20% | 6.20% | 1.70% | 1.70% | 2.60% | 2.60% | 3.30% | 3.30% | 1.70% | 1.70% | ||||||||||||||||||||||||
Repayment terms | One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term. | One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term. | One half of the principal amount payable in increasing quarterly installments over a five-year period beginning on December 31, 2014, with the remainder payable at the end of the five-year term. | Revolving line of credit expires October 2019. | Paid in full. | Paid in full on October 10, 2014 | Paid in full on October 10, 2014 | Paid in full on October 10, 2014 | Paid in full on October 10, 2014 | Paid in full on October 10, 2014 | Paid in full on October 10, 2014 | Paid in full on October 10, 2014 | Paid in full on October 10, 2014 | Revolving line of credit paid in full prior to August 8, 2014. | Revolving line of credit paid in full on October 10, 2014. | Paid in full on October 10, 2014 | Paid in full on October 10, 2014 | ||||||||||||||||||||||
Interest rate description - other borrowings | Variable 30 day: 2.9117% | Variable 30 day: 2.8243% | Variable 30 day: 2.8243% | Variable 30 day: 2.9117% | Variable 30 day: 0.670% | Variable 30 day: 0.5933 | |||||||||||||||||||||||||||||||||
Interest rate - other borrowings (in hundredths) | 67.00% | 59.33% | |||||||||||||||||||||||||||||||||||||
Amortization per month | |||||||||||||||||||||||||||||||||||||||
Current portion of long-term debt | 82,770,000 | 67,824,000 | 0 | 3,100,000 | 79,700,000 | ||||||||||||||||||||||||||||||||||
Interest expense | 5,700,000 | 3,000,000 | 5,200,000 | ||||||||||||||||||||||||||||||||||||
Minimum cash compensating balance per loan covenant | 0 | ||||||||||||||||||||||||||||||||||||||
Committed amount | 0 | ||||||||||||||||||||||||||||||||||||||
Debt discount | 5,500,000 | ||||||||||||||||||||||||||||||||||||||
Maturities of Long-term Debt [Abstract] | |||||||||||||||||||||||||||||||||||||||
2013 | 82,770,000 | ||||||||||||||||||||||||||||||||||||||
2014 | 14,834,000 | ||||||||||||||||||||||||||||||||||||||
2015 | 19,398,000 | ||||||||||||||||||||||||||||||||||||||
2016 | 23,963,000 | ||||||||||||||||||||||||||||||||||||||
2017 | 111,826,000 | ||||||||||||||||||||||||||||||||||||||
Thereafter | 0 | ||||||||||||||||||||||||||||||||||||||
Total | $252,791,000 | [2] | |||||||||||||||||||||||||||||||||||||
[1] | As of December 31, 2014, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $79.7 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility and $3.1 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility. The Company has classified the amounts borrowed under the revolving line of credit as short term because it is the Company's intention to use the line of credit to borrow and pay back funds over short periods of time. | ||||||||||||||||||||||||||||||||||||||
[2] | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $5.7 million, which is not reflected in this table. |
Lease_and_Financing_Obligation2
Lease and Financing Obligations (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
New Building [Abstract] | |||
Deposit paid to landlord | $29,957,000 | $24,406,000 | |
Typical term of lease renewal options | 3 years | ||
Minimum future operating lease obligations [Abstract] | |||
2015 | 29,382,000 | ||
2016 | 24,980,000 | ||
2017 | 21,396,000 | ||
2018 | 18,285,000 | ||
2019 | 12,183,000 | ||
Thereafter | 678,000 | ||
Total | 106,904,000 | ||
Minimum future financing obligations [Abstract] | |||
2015 | 386,000 | ||
2016 | 673,000 | ||
2017 | 693,000 | ||
2018 | 714,000 | ||
2019 | 735,000 | ||
Thereafter | 4,382,000 | ||
Total minimum lease payments | 7,583,000 | ||
Rent expense for operating leases | 52,300,000 | 34,600,000 | 27,700,000 |
Interest expense associated with financing obligation | 0 | 0 | 0 |
Lease Agreement for New Regional Headquarters Building [Member] | |||
New Building [Abstract] | |||
Construction-in-progress | 13,100,000 | ||
Financing obligation of other long term liabilities | 10,400,000 | ||
Deposit paid to landlord | 2,700,000 | ||
Additional project costs associated with construction of New Building to be recognized | 8,600,000 | ||
Additional financing obligation associated with construction of building to be recognized | 1,300,000 | ||
Additional deposits to be paid to landlord associated with construction of building | 7,300,000 | ||
Tenant incentive asset | 6,400,000 | ||
Deferred tenant incentive liability | $6,400,000 |
Capital_Stock_Details
Capital Stock (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 | |
Common stock, par value (in dollars per share) | $0.00 | $0.00 | |
Weighted average share outstanding [Abstract] | |||
Basic weighted-average common shares outstanding (in shares) | 59,073,000 | 58,606,000 | 60,600,000 |
Effect of dilutive securities: Stock awards and options (in shares) | 1,814,000 | 2,842,000 | 2,425,000 |
Diluted weighted-average common shares outstanding (in shares) | 60,887,000 | 61,448,000 | 63,025,000 |
Securities excluded from the calculation of diluted earnings per share | 2,700,000 | 1,200,000 | 100,000 |
Common stock repurchased | $45,724,000 | $140,865,000 | $201,471,000 |
Increment authorized by the Company's board of directors under the stock repurchase program | 400,000,000 | 250,000,000 | |
Amount available for repurchases | 348,800,000 | ||
Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, authorized (in shares) | 25,000,000 | ||
Preferred stock, par value (in dollars per share) | $0.00 | ||
Shares outstanding (in shares) | 0 | 0 | |
Common Class A [Member] | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 500,000,000 | ||
Common stock, par value (in dollars per share) | $0.00 | ||
Number of votes class is entitled to | 1 | ||
Number of shares of class A common stock issued after conversion of Class B common stock | 1 | ||
Weighted average share outstanding [Abstract] | |||
Shares repurchased (in shares) | 800,000 | 1,700,000 | 4,600,000 |
Common stock repurchased | $45,724,000 | $140,865,000 | $201,471,000 |
Common Class B [Member] | |||
Class of Stock [Line Items] | |||
Common stock, authorized (in shares) | 100,000,000 | ||
Common stock, par value (in dollars per share) | $0.00 | ||
Shares outstanding (in shares) | 0 | ||
Number of votes class is entitled to | 10 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (2010 Omnibus Incentive Plan [Member], USD $) | 12 Months Ended | |||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized for issuance (in shares) | 7,000,000 | |||||
Number of additional shares authorized for issuance (in shares) | 3,200,000 | |||||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | Vesting for the options is performance based, with the options vesting in two installments if the Company's earnings per share equal or exceed the two established performance levels, measured in terms of diluted earnings per share. Fifty percent of the options vest upon earnings per share meeting or exceeding the first performance level and fifty percent of the options vest upon earnings per share meeting or exceeding the second performance level. | |||||
Fair Value Assumptions and Methodology [Abstract] | ||||||
Weighted average grant date fair value of grants (in dollars per share) | $23.01 | $22.10 | $13.31 | |||
Risk-free interest rate (in hundredths) | 1.70% | [1] | 1.40% | [1] | 0.80% | [1] |
Dividend yield (in hundredths) | 1.90% | [2] | 3.10% | [2] | 2.70% | [2] |
Expected volatility (in hundredths) | 45.40% | [3] | 41.70% | [3] | 46.80% | [3] |
Expected life in months | 62 months | [4] | 58 months | [4] | 63 months | [4] |
Options, Outstanding [Roll Forward] | ||||||
Outstanding, beginning balance (in shares) | 6,642,900 | |||||
Granted (in shares) | 159,400 | |||||
Exercised (in shares) | -751,200 | |||||
Forfeited/cancelled/expired (in shares) | -88,600 | |||||
Outstanding, Ending (in shares) | 5,962,500 | 6,642,900 | ||||
Exercisable (in shares) | 3,077,700 | |||||
Weighted-average Exercise Price [Abstract] | ||||||
Outstanding, beginning balance (in dollars per share) | $47.10 | |||||
Granted (in dollars per share) | $65.55 | |||||
Exercised (in dollars per share) | $20.86 | |||||
Forfeited/cancelled/expired (in dollars per share) | $78.10 | |||||
Outstanding, Ending (in dollars per share) | $50.43 | $47.10 | ||||
Exercisable (in dollars per share) | $25.95 | |||||
Outstanding options, weighted-average remaining contractual term | 3 years 10 months 10 days | |||||
Exercisable options, weighted-average remaining contractual term | 2 years 3 months 11 days | |||||
Aggregate intrinsic value | $58,657,000 | |||||
Aggregate intrinsic value, exercisable | 57,989,000 | |||||
Total fair value of options vested and expensed, net of tax | 4,200,000 | |||||
Cash proceeds from stock options exercised | 11,100,000 | 37,900,000 | 8,000,000 | |||
Tax benefit realized for stock options exercised | 11,900,000 | 41,900,000 | 6,300,000 | |||
Intrinsic value of stock options exercised | 17,200,000 | 241,700,000 | 10,600,000 | |||
Weighted-average Grant Date Fair Value [Abstract] | ||||||
Granted (in dollars per share) | $65.55 | |||||
Unrecognized stock-based compensation expense | 16,900,000 | |||||
Unrecognized stock-based compensation expense, period for recognition | 4 years | |||||
Stock Options [Member] | Minimum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Contractual term of stock options granted (in years) | 7 years | |||||
Stock Options [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Contractual term of stock options granted (in years) | 10 years | |||||
Service-Based Options [Member] | ||||||
Options, Outstanding [Roll Forward] | ||||||
Outstanding, beginning balance (in shares) | 2,159,800 | |||||
Granted (in shares) | 90,600 | |||||
Exercised (in shares) | -326,200 | |||||
Forfeited/cancelled/expired (in shares) | 0 | |||||
Outstanding, Ending (in shares) | 1,924,200 | |||||
Exercisable (in shares) | 1,618,500 | |||||
Weighted-average Exercise Price [Abstract] | ||||||
Outstanding, beginning balance (in dollars per share) | $26.01 | |||||
Granted (in dollars per share) | $65.43 | |||||
Exercised (in dollars per share) | $18.83 | |||||
Forfeited/cancelled/expired (in dollars per share) | $0 | |||||
Outstanding, Ending (in dollars per share) | $29.08 | |||||
Exercisable (in dollars per share) | $21.22 | |||||
Outstanding options, weighted-average remaining contractual term | 2 years 3 months 22 days | |||||
Exercisable options, weighted-average remaining contractual term | 1 year 8 months 12 days | |||||
Aggregate intrinsic value | 39,897,000 | |||||
Aggregate intrinsic value, exercisable | 39,310,000 | |||||
Weighted-average Grant Date Fair Value [Abstract] | ||||||
Granted (in dollars per share) | $65.43 | |||||
Performance-Based Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | Vesting for the options is performance based, with the options vesting in three installments if the Company's earnings per share equal or exceed the three established performance levels, measured in terms of diluted earnings per share. One third of the options will vest upon earnings per share meeting or exceeding the first performance level, one third of the options will vest upon earnings per share meeting or exceeding the second performance level and one third of the options will vest upon earnings per share meeting or exceeding the third performance level. | |||||
Options, Outstanding [Roll Forward] | ||||||
Outstanding, beginning balance (in shares) | 4,483,100 | |||||
Granted (in shares) | 68,800 | |||||
Exercised (in shares) | -425,000 | |||||
Forfeited/cancelled/expired (in shares) | -88,600 | |||||
Outstanding, Ending (in shares) | 4,038,300 | |||||
Exercisable (in shares) | 1,459,200 | |||||
Weighted-average Exercise Price [Abstract] | ||||||
Outstanding, beginning balance (in dollars per share) | $57.25 | |||||
Granted (in dollars per share) | $65.70 | |||||
Exercised (in dollars per share) | $22.42 | |||||
Forfeited/cancelled/expired (in dollars per share) | $78.10 | |||||
Outstanding, Ending (in dollars per share) | $60.61 | |||||
Exercisable (in dollars per share) | $31.21 | |||||
Outstanding options, weighted-average remaining contractual term | 4 years 7 months 6 days | |||||
Exercisable options, weighted-average remaining contractual term | 2 years 11 months 1 day | |||||
Aggregate intrinsic value | 18,790,000 | |||||
Aggregate intrinsic value, exercisable | 18,680,000 | |||||
Weighted-average Grant Date Fair Value [Abstract] | ||||||
Granted (in dollars per share) | $65.70 | |||||
Non-Vested Restricted Stock [Member] | ||||||
Weighted-average Exercise Price [Abstract] | ||||||
Granted (in dollars per share) | $82.66 | |||||
Number of shares [Roll forward] | ||||||
Nonvested, beginning balance (in shares) | 729,600 | |||||
Granted (in shares) | 289,900 | |||||
Vested (in shares) | -325,800 | |||||
Forfeited (in shares) | -19,900 | |||||
Nonvested, Ending Balance (in shares) | 673,800 | |||||
Weighted-average Grant Date Fair Value [Abstract] | ||||||
Nonvested, beginning balance (in dollars per share) | $42.48 | |||||
Granted (in dollars per share) | $82.66 | |||||
Vested (in dollars per share) | $40.74 | |||||
Forfeited (in dollars per share) | $58.55 | |||||
Nonvested, Ending Balance (in dollars per share) | $60.14 | |||||
Unrecognized stock-based compensation expense | $19,900,000 | |||||
Unrecognized stock-based compensation expense, period for recognition | 2 years 8 months 12 days | |||||
[1] | The risk-free interest rate is based upon the rate on a zero coupon U.S. Treasury bill, for periods within the contractual life of the option, in effect at the time of the grant. | |||||
[2] | The dividend yield is based on the average of historical stock prices and actual dividends paid. | |||||
[3] | Expected volatility is based on the historical volatility of the Company's stock price, over a period similar to the expected life of the option. | |||||
[4] | The expected term of the option is based on the historical employee exercise behavior, the vesting terms of the respective option, and a contractual life of either seven or ten years. |
Fair_Value_Details
Fair Value (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Summary of changes in fair value of marketable securities [Roll Forward] | ||
Balance, beginning of period | $23,172,000 | $18,605,000 |
Actual return on plan assets: [Abstract] | ||
Relating to assets still held at the reporting date | 1,249,000 | 2,568,000 |
Purchases and issuances | 2,798,000 | 3,408,000 |
Sales and settlements | -939,000 | -1,409,000 |
Transfers into Level 3 | 0 | 0 |
Balance, End of period | 26,280,000 | 23,172,000 |
Fair Value on a Recurring Basis [Member] | ||
Financial assets (liabilities) [Abstract] | ||
Cash equivalents and current investments | 86,574,000 | 61,136,000 |
Forward contracts | 1,661,000 | 1,939,000 |
Insurance company contracts | 26,280,000 | 23,172,000 |
Total | 114,515,000 | 86,247,000 |
Restricted current investments | 11,800 | 22,000 |
Fair Value on a Recurring Basis [Member] | Level 1 [Member] | ||
Financial assets (liabilities) [Abstract] | ||
Cash equivalents and current investments | 86,574,000 | 61,136,000 |
Forward contracts | 0 | 0 |
Insurance company contracts | 0 | 0 |
Total | 86,574,000 | 61,136,000 |
Fair Value on a Recurring Basis [Member] | Level 2 [Member] | ||
Financial assets (liabilities) [Abstract] | ||
Cash equivalents and current investments | 0 | 0 |
Forward contracts | 1,661,000 | 1,939,000 |
Insurance company contracts | 0 | 0 |
Total | 1,661,000 | 1,939,000 |
Fair Value on a Recurring Basis [Member] | Level 3 [Member] | ||
Financial assets (liabilities) [Abstract] | ||
Cash equivalents and current investments | 0 | 0 |
Forward contracts | 0 | 0 |
Insurance company contracts | 26,280,000 | 23,172,000 |
Total | $26,280,000 | $23,172,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Consolidated income before provision for income taxes [Abstract] | |||
U.S. | $184,476,000 | $307,994,000 | $259,309,000 |
Foreign | 114,031,000 | 248,946,000 | 85,933,000 |
Consolidated income before provision for income taxes | 298,507,000 | 556,940,000 | 345,242,000 |
Current [Abstract] | |||
Federal | 37,402,000 | 81,871,000 | 70,727,000 |
State | 2,095,000 | 361,000 | 2,425,000 |
Foreign | 48,904,000 | 148,310,000 | 45,851,000 |
Current income tax expense (benefit) | 88,401,000 | 230,542,000 | 119,003,000 |
Deferred [Abstract] | |||
Federal | -380,000 | -2,831,000 | 12,918,000 |
State | 444,000 | 551,000 | 656,000 |
Foreign | 20,866,000 | -36,210,000 | -8,980,000 |
Deferred income tax expense (benefit) | 20,930,000 | -38,490,000 | 4,594,000 |
Provision for income taxes | 109,331,000 | 192,052,000 | 123,597,000 |
Deferred tax assets [Abstract] | |||
Inventory differences | 12,362,000 | 2,927,000 | |
Foreign tax credit and other foreign benefits | 116,603,000 | 120,534,000 | |
Stock-based compensation | 17,211,000 | 18,132,000 | |
Accrued expenses not deductible until paid | 48,189,000 | 88,465,000 | |
Foreign currency exchange | 10,774,000 | 13,734,000 | |
Net operating losses | 17,530,000 | 10,808,000 | |
Capitalized research and development | 3,362,000 | 6,202,000 | |
Exchange gains and losses | 41,542,000 | 0 | |
Other | 841,000 | 739,000 | |
Gross deferred tax assets | 268,414,000 | 261,541,000 | |
Deferred tax liabilities [Abstract] | |||
Exchange gains and losses | 0 | 9,924,000 | |
Intangibles step-up | 15,106,000 | 16,375,000 | |
Overhead allocation to inventory | 10,781,000 | 2,523,000 | |
Amortization of intangibles | 18,374,000 | 17,360,000 | |
Foreign outside basis in controlled foreign corporation | 100,016,000 | 76,470,000 | |
Other | 48,187,000 | 63,409,000 | |
Gross deferred tax liabilities | 192,464,000 | 186,061,000 | |
Valuation allowance | -35,999,000 | -10,803,000 | |
Deferred taxes, net | 39,951,000 | 64,677,000 | |
Deferred tax assets, net, classification [Abstract] | |||
Net current deferred tax assets | 40,840,000 | 73,456,000 | |
Net noncurrent deferred tax assets | 15,128,000 | 5,174,000 | |
Total net deferred tax assets | 55,968,000 | 78,630,000 | |
Deferred tax liabilities, classification [Abstract] | |||
Net current deferred tax liabilities | 0 | 1,000 | |
Net noncurrent deferred tax liabilities | 16,017,000 | 13,952,000 | |
Total net deferred tax liabilities | 16,017,000 | 13,953,000 | |
Effective income tax rate, continuing operations, tax rate reconciliation [Abstract] | |||
Income taxes at statutory rate (in hundredths) | 35.00% | 35.00% | 35.00% |
Indefinitely invested earnings of non-U.S. subsidiaries (in hundredths) | 0.00% | -0.76% | 0.00% |
Non-deductible expenses (in hundredths) | 0.12% | 0.12% | 0.12% |
Extraterritorial income tax credit (in hundredths) | 1.48% | 0.00% | 0.00% |
Other (in hundredths) | 0.03% | 0.12% | 0.68% |
Effective income tax rate, continuing operations (in hundredths) | 36.63% | 34.48% | 35.80% |
Undistributed earnings of foreign subsidiaries | 50,000,000 | ||
Deferred tax liabilities undistributed foreign earnings | 5,300,000 | ||
Minimum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Years in which foreign operating loss carryforwards will expire | 31-Dec-14 | ||
Maximum [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Years in which foreign operating loss carryforwards will expire | 31-Dec-23 | ||
Foreign Country [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 74,200,000 | ||
Operating loss carryforwards scheduled to expire | 49,600,000 | ||
Operating loss carrying that will not expire | 24,600,000 | ||
Operating loss carryforwards, valuation allowance | $31,000,000 |
Employee_Benefit_Plan_Details
Employee Benefit Plan (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Defined Benefit Pension Plan [Member] | Japan [Member] | |||
Defined Benefit Pension Plan [Abstract] | |||
Accrued pension liability | $5.80 | $6.20 | $7.60 |
Pension expense | 0.9 | 0.8 | 1.1 |
401(k) Defined Contribution Plan [Member] | |||
401(k) Defined Contribution Plan [Abstract] | |||
Maximum percentage of compensation deferred, subject to limitations (in hundredths) | 100.00% | ||
Description of deferred compensation arrangement with individual | Employees age 18 and older are eligible to contribute to the plan starting the first day of employment | ||
Requisite service period | 1 day | ||
Percent of employees' base pay matched by employer (in hundredths) | 4.00% | 4.00% | 4.00% |
Vesting period for Company's matching contributions | 2 years | ||
Compensation expense | $2.70 | $2.70 | $2.40 |
Additional discretionary contribution by employer, maximum percentage of employees' base pay (in hundredths) | 10.00% | ||
Additional discretionary contribution by employer, annual vesting percentage (in hundredths) | 20.00% | ||
Vesting period for Company's additional discretionary contributions | 5 years |
Executive_Deferred_Compensatio1
Executive Deferred Compensation Plan (Details) (Executive [Member], USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Executive [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Percentage of matching contribution maximum (in hundredths) | 10.00% | ||
Percentage of compensation deferred, maximum (in hundredths) | 80.00% | ||
Percentage of bonus deferred, maximum (in hundredths) | 100.00% | ||
Compensation expense | $0.30 | $3.10 | $1.20 |
Compensation cost accrued related to executive deferred compensation plan | 32.4 | 28.5 | |
Investment in Rabbi Trust | $26.30 | $23.20 | |
Percentage vested after ten years of service (in hundredths) | 50.00% | ||
Number of years of service to attain fifty percent vesting | 10 years | ||
Percentage vested per year after ten years of service (in hundredths) | 5.00% | ||
Minimum age for automatic fully vesting (in years) | 60 |
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Details) | 3 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Accumulated Unrealized Gains (Losses) on Foreign Currency Cash Flow Hedges [Member] | Accumulated Unrealized Gains (Losses) on Foreign Currency Cash Flow Hedges [Member] | Accumulated Unrealized Gains (Losses) on Foreign Currency Cash Flow Hedges [Member] | Accumulated Unrealized Gains (Losses) on Foreign Currency Cash Flow Hedges [Member] | Accumulated Unrealized Gains (Losses) on Foreign Currency Cash Flow Hedges [Member] | Accumulated Translation Adjustment [Member] | Accumulated Translation Adjustment [Member] | Forward Contracts [Member] | Forward Contracts [Member] | Forward Contracts [Member] | Forward Contracts [Member] | Forward Contracts [Member] | Forward Contracts [Member] | Forward Contracts [Member] | Forward Contracts [Member] | |
USD ($) | USD ($) | Reclassification out of Accumulated Other Comprehensive Income [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | USD ($) | USD ($) | Cash Flow Hedges [Member] | Cash Flow Hedges [Member] | Cash Flow Hedges [Member] | Cash Flow Hedges [Member] | Cash Flow Hedges [Member] | Cash Flow Hedges [Member] | Cash Flow Hedges [Member] | Cash Flow Hedges [Member] | ||||||||||||
USD ($) | USD ($) | USD ($) | Japanese Yen [Member] | Japanese Yen [Member] | Japanese Yen [Member] | Japanese Yen [Member] | Euros [Member] | Euros [Member] | Euros [Member] | Euros [Member] | ||||||||||||||||
USD ($) | JPY (¥) | USD ($) | JPY (¥) | USD ($) | EUR (€) | USD ($) | EUR (€) | |||||||||||||||||||
Derivative [Line Items] | ||||||||||||||||||||||||||
Notional amount | $17,500,000 | ¥ 2,100,000,000 | $23,700,000 | ¥ 2,500,000,000 | $4,800,000 | € 4,000,000 | $16,500,000 | € 12,000,000 | ||||||||||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||||||||||||||||||||||||
Revenue | 609,600,000 | 638,800,000 | 650,000,000 | 671,100,000 | 1,055,800,000 | 908,300,000 | 671,300,000 | 541,300,000 | 2,569,495,000 | 3,176,718,000 | 2,132,257,000 | 2,700,000 | 5,100,000 | 500,000 | ||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||||||||
Accumulated other comprehensive income (loss) | ($51,521,000) | ($46,228,000) | ($51,521,000) | ($46,228,000) | $1,100,000 | $1,300,000 | $52,600,000 | ($47,500,000) |
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | $5.30 | $4.80 | $5.10 |
Cash paid for income taxes | 171.4 | 130.1 | 95.2 |
Non-cash item in deferred tax liabilities and intangibles in conjunction with acquisition | 7 | ||
Non-cash addition of fixed assets | 9.2 | 5.5 | |
Noncash charges to fixed assets associated with Korea building lease | 19.4 | ||
Noncash increase of long term liabilities | 16.7 | ||
Noncash decrease of long term assets | ($2.70) |
Segment_Information_Revenue_by
Segment Information, Revenue by Region (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Region | |||||||||||
Segment Information [Abstract] | |||||||||||
Number of geographic regions | 5 | ||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | $609,600 | $638,800 | $650,000 | $671,100 | $1,055,800 | $908,300 | $671,300 | $541,300 | $2,569,495 | $3,176,718 | $2,132,257 |
Greater China [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | 948,523 | 1,363,182 | 550,690 | ||||||||
North Asia [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | 782,985 | 869,400 | 785,302 | ||||||||
South Asia Pacific [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | 328,388 | 378,988 | 328,597 | ||||||||
Americas [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | 329,027 | 370,087 | 285,283 | ||||||||
EMEA [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | $180,572 | $195,061 | $182,385 |
Segment_Information_Revenue_by1
Segment Information, Revenue by Product Lines (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $609,600 | $638,800 | $650,000 | $671,100 | $1,055,800 | $908,300 | $671,300 | $541,300 | $2,569,495 | $3,176,718 | $2,132,257 |
Nu Skin [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 1,562,595 | 1,641,618 | 1,158,213 | ||||||||
Pharmanex [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | 1,000,279 | 1,529,211 | 966,572 | ||||||||
Other [Member] | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Revenue | $6,621 | $5,889 | $7,472 |
Segment_Information_Significan
Segment Information, Significant Geographical Areas and Long Lived Assets (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | $609,600 | $638,800 | $650,000 | $671,100 | $1,055,800 | $908,300 | $671,300 | $541,300 | $2,569,495 | $3,176,718 | $2,132,257 |
Japan [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 315,265 | 402,580 | 489,302 | ||||||||
Long-lived assets | 13,768 | 9,970 | 13,768 | 9,970 | |||||||
Mainland China [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 675,082 | 1,005,395 | 256,833 | ||||||||
Long-lived assets | 103,445 | 82,726 | 103,445 | 82,726 | |||||||
South Korea [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 467,720 | 466,820 | 296,000 | ||||||||
Long-lived assets | 46,626 | 14,345 | 46,626 | 14,345 | |||||||
United States [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenue | 230,767 | 268,232 | 227,872 | ||||||||
Long-lived assets | $287,103 | $273,388 | $287,103 | $273,388 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Customs and Disputed Duties in Japan [Member]) | Dec. 31, 2014 | Dec. 31, 2014 |
In Millions, unless otherwise specified | USD ($) | JPY (¥) |
Loss Contingencies [Line Items] | ||
Aggregate amount additional assessments | $37.60 | ¥ 4,500 |
Dividends_Per_Share_Details
Dividends Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | |||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Jun. 30, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 13, 2013 |
Dividends Payable [Line Items] | |||||||||||
Cash dividend declared (in dollars per share) | $0.35 | $0.35 | $0.35 | $0.30 | $0.30 | $0.30 | $0.35 | $0.30 | |||
Payment of cash dividends | $81,371 | $70,514 | $48,374 | ||||||||
Dividend Declared [Member] | |||||||||||
Dividends Payable [Line Items] | |||||||||||
Cash dividend declared (in dollars per share) | $0.35 | ||||||||||
Date dividend to be paid | 18-Mar-15 | ||||||||||
Date of record of stockholders to whom dividends will be paid | 27-Feb-15 |
Quarterly_Results_Details
Quarterly Results (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Results [Abstract] | |||||||||||
Revenue | $609,600 | $638,800 | $650,000 | $671,100 | $1,055,800 | $908,300 | $671,300 | $541,300 | $2,569,495 | $3,176,718 | $2,132,257 |
Gross profit | 503,100 | 529,500 | 494,000 | 564,400 | 891,100 | 768,500 | 560,000 | 451,300 | 2,091,061 | 2,670,912 | 1,779,105 |
Operating income | 91,300 | 105,000 | 54,700 | 101,200 | 188,600 | 168,300 | 114,600 | 82,600 | 352,188 | 554,112 | 340,844 |
Net income | $46,500 | $68,300 | $19,500 | $54,900 | $125,300 | $110,900 | $74,400 | $54,300 | $189,176 | $364,888 | $221,645 |
Net income per share: | |||||||||||
Basic (in dollars per share) | $0.79 | $1.15 | $0.33 | $0.93 | $2.13 | $1.89 | $1.27 | $0.93 | $3.20 | $6.23 | $3.66 |
Diluted (in dollars per share) | $0.77 | $1.12 | $0.32 | $0.90 | $2.02 | $1.80 | $1.22 | $0.90 | $3.11 | $5.94 | $3.52 |
Other_Income_Expense_Net_Detai
Other Income (Expense), Net (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Other Income (Expense), Net [Abstract] | |||
Other income (expense), net | ($53,681,000) | $2,828,000 | $4,398,000 |
Foreign currency devaluation charge | 46,300,000 | ||
Expense related to prepayment of debt | 7,400,000 | ||
Interest expense included in Other income (expense), net | $5,700,000 | $3,000,000 | $5,200,000 |
Acquisitions_Details
Acquisitions (Details) (USD $) | 12 Months Ended | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 |
Acquisitions [Abstract] | ||||
Cost of acquired entity | $0 | $0 | $12,562 | |
NOX Technologies, Inc. [Member] | ||||
Acquisitions [Abstract] | ||||
Cost of acquired entity | $12,562 | |||
NOX Technologies, Inc. [Member] | Patents [Member] | ||||
Acquisitions [Abstract] | ||||
Estimated remaining lives | 8 years |