Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2015 | Jan. 29, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | NU SKIN ENTERPRISES INC | ||
Entity Central Index Key | 1,021,561 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 2.7 | ||
Entity Common Stock, Shares Outstanding | 55,819,162 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 289,354 | $ 288,415 |
Current investments | 14,371 | 11,793 |
Accounts receivable | 35,464 | 35,834 |
Inventories, net | 265,256 | 338,491 |
Prepaid expenses and other | 101,947 | 160,134 |
Total Current Assets | 706,392 | 834,667 |
Property and equipment, net | 454,537 | 464,783 |
Goodwill | 112,446 | 112,446 |
Other intangible assets, net | 67,009 | 75,062 |
Other assets | 165,459 | 127,476 |
Total assets | 1,505,843 | 1,614,434 |
Current liabilities | ||
Accounts payable | 28,832 | 34,712 |
Accrued expenses | 310,916 | 300,847 |
Current portion of long-term debt | 67,849 | 82,770 |
Total Current Liabilities | 407,597 | 418,329 |
Long-term debt | 181,745 | 164,567 |
Other liabilities | 90,880 | 89,100 |
Total liabilities | $ 680,222 | $ 671,996 |
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 | 419,921 | 414,394 |
Treasury stock, at cost - 31.6 million and 34.6 million shares | (1,017,063) | (862,608) |
Accumulated other comprehensive loss | (71,269) | (51,521) |
Retained earnings | 1,493,941 | 1,442,082 |
Total stockholders' equity | 825,621 | 942,438 |
Total liabilities and stockholders' equity | $ 1,505,843 | $ 1,614,434 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Stockholders' equity: | ||
Common stock - authorized (in shares) | 500 | 500 |
Common stock - par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock - issued (in shares) | 90.6 | 90.6 |
Treasury stock, at cost (in shares) | 34.6 | 31.6 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Income [Abstract] | |||
Revenue | $ 2,247,047 | $ 2,569,495 | $ 3,176,718 |
Cost of sales | 489,510 | 478,434 | 505,806 |
Gross profit | 1,757,537 | 2,091,061 | 2,670,912 |
Operating expenses: | |||
Selling expenses | 951,372 | 1,116,572 | 1,476,772 |
General and administrative expenses | 561,463 | 622,301 | 640,028 |
Total operating expenses | 1,512,835 | 1,738,873 | 2,116,800 |
Operating income | 244,702 | 352,188 | 554,112 |
Other income (expense), net (Note 23) | (32,743) | (53,681) | 2,828 |
Income before provision for income taxes | 211,959 | 298,507 | 556,940 |
Provision for income taxes | 78,913 | 109,331 | 192,052 |
Net income | $ 133,046 | $ 189,176 | $ 364,888 |
Net income per share [Abstract] | |||
Basic (in dollars per share) | $ 2.29 | $ 3.20 | $ 6.23 |
Diluted (in dollars per share) | $ 2.25 | $ 3.11 | $ 5.94 |
Weighted-average common shares outstanding (000s): | |||
Basic (in shares) | 57,997 | 59,073 | 58,606 |
Diluted (in shares) | 59,057 | 60,887 | 61,448 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 133,046 | $ 189,176 | $ 364,888 |
Other comprehensive income: | |||
Foreign currency translation adjustment, net of taxes of $(650), $420 and $114, respectively | (18,967) | (5,113) | 6,251 |
Net unrealized gains/(losses) on foreign currency cash flow hedges, net of taxes of $(1,470), $(869) and $(325), respectively | 590 | 1,578 | 2,650 |
Less: Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of $1,842, $968 and $756, respectively | (1,371) | (1,758) | (3,307) |
Total other comprehensive income | (19,748) | (5,293) | 5,594 |
Comprehensive income | $ 113,298 | $ 183,883 | $ 370,482 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other comprehensive income: | |||
Foreign currency translation adjustment, tax | $ 114 | $ 420 | $ (650) |
Net unrealized gains/(losses) on foreign currency cash flow hedges, tax | (325) | (869) | (1,470) |
Reclassification adjustment for realized losses/(gains) in current earnings, tax | $ 756 | $ 968 | $ 1,842 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member]Class A [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Total | Class A [Member] |
Balance at beginning 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 | |
Stockholders' equity [Roll Forward] | |||||||
Net income | 0 | 0 | 0 | 0 | 133,046 | 133,046 | |
Other comprehensive income, net of tax | 0 | 0 | 0 | (19,748) | 0 | (19,748) | |
Repurchase of Class A common stock (Note 11) | 0 | 0 | (164,094) | 0 | 0 | (164,094) | $ (164,100) |
Exercise of employee stock options/vesting of stock awards | 0 | (6,324) | 9,639 | 0 | 0 | 3,315 | |
Excess tax benefit from equity awards | 0 | 4,451 | 0 | 0 | 0 | 4,451 | |
Stock-based compensation | 0 | 7,400 | 0 | 0 | 0 | 7,400 | |
Cash dividends | 0 | 0 | 0 | 0 | (81,187) | (81,187) | |
Balance at end of period at Dec. 31, 2015 | $ 91 | $ 419,921 | $ (1,017,063) | $ (71,269) | $ 1,493,941 | $ 825,621 |
Consolidated Statements of Sto8
Consolidated Statements of Stockholder's Equity (Parenthetical) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stockholders' equity [Roll Forward] | |||
Employee stock options (in shares) | 0.7 | 0.8 | 2.2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 133,046 | $ 189,176 | $ 364,888 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 71,365 | 54,924 | 34,923 |
Foreign currency (gains)/losses | 27,235 | 53,828 | (1,077) |
Stock-based compensation | 7,400 | 17,504 | 32,620 |
Deferred taxes | 17,362 | 10,399 | (41,748) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (2,246) | 30,766 | (34,304) |
Inventories, net | 59,652 | (16,518) | (207,436) |
Prepaid expenses and other | 13,572 | (25,167) | (23,317) |
Other assets | (15,752) | (16,219) | (22,619) |
Accounts payable | (4,297) | (45,953) | 32,643 |
Accrued expenses | 15,902 | (309,180) | 389,093 |
Other liabilities | (1,130) | (24) | 6,510 |
Net cash provided by (used in) operating activities | 322,109 | (56,464) | 530,176 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (56,622) | (101,476) | (185,103) |
Proceeds on investment sales | 11,526 | 27,328 | 13,075 |
Purchases of investments | (15,750) | (17,522) | (21,671) |
Net cash used in investing activities | (60,846) | (91,670) | (193,699) |
Cash flows from financing activities: | |||
Payment of cash dividends | (81,187) | (81,371) | (70,514) |
Repurchase of shares of common stock | (164,094) | (45,724) | (140,865) |
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards | 3,315 | (2,420) | 34,370 |
Income tax benefit of equity awards | 5,337 | 11,801 | 45,187 |
Payments on long-term debt | (35,508) | (333,803) | (37,903) |
Payment of debt issuance costs | 0 | (5,739) | 0 |
Proceeds from long-term debt | 36,217 | 416,180 | 49,000 |
Net cash used in financing activities | (235,920) | (41,076) | (120,725) |
Effect of exchange rate changes on cash | (24,404) | (47,528) | (10,624) |
Net increase (decrease) in cash and cash equivalents | 939 | (236,738) | 205,128 |
Cash and cash equivalents, beginning of period | 288,415 | 525,153 | 320,025 |
Cash and cash equivalents, end of period | $ 289,354 | $ 288,415 | $ 525,153 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2015 | |
The Company [Abstract] | |
The Company | The accompanying notes are an integral part of these consolidated financial statements. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
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 $56.0 million and $20.7 million as of December 31, 2014 and 2015, 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 2014, which significantly reduced its expectations for plans to sell ageLOC TR90 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Inventories consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Raw materials $ 101,479 $ 114,193 Finished goods 237,012 151,063 $ 338,491 $ 265,256 Adjustments to inventories consist of the following (U.S. dollars in thousands): 2013 2014 2015 Beginning balance, adjustments to inventory carrying value $ 5,461 $ 5,934 $ 56,034 Additions 12,311 77,379 38,605 Write-offs (11,838 ) (27,279 ) (73,895 ) Ending balance, adjustments to inventory carrying value $ 5,934 $ 56,034 $ 20,744 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 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 on June 30. 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 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 $10.1 million and $7.8 million as of December 31, 2014 and 2015, respectively. During the years ended December 31, 2013, 2014 and 2015, the Company recorded sales returns of $79.4 million, $83.6 million and $65.6 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, 2013, 2014 and 2015 totaled $11.3 million, $19.6 million and $11.0 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of income and totaled $18.0 million, $18.9 million and $20.1 million in 2013, 2014 and 2015, 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. 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 2011. 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 2016 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 generally no longer subject to income tax examinations for years before 2010. 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands): 2013 2014 2015 Gross balance at January 1 $ 9,045 $ 7,484 $ 5,987 Increases related to prior year tax positions ─ ─ 1,677 Increases related to current year tax positions 1,188 2,700 1,119 Settlements (1,671 ) ─ ─ Decreases due to lapse of statutes of limitations (1,086 ) (4,106 ) (667 ) Currency adjustments 8 (91 ) (344 ) Gross balance at December 31 $ 7,484 $ 5,987 $ 7,772 At December 31, 2015, the Company had $7.8 million in unrecognized tax benefits of which $0.9 million, if recognized, would affect the effective tax rate. In comparison, 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. 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 $0 to $1 million. During the years ended December 31, 2013, 2014 and 2015, the Company recognized $(0.1) million, $0.4 million and $0.4 million, respectively in interest and penalties expenses/(benefits). The Company had $0.9 million, $1.3 million and $1.7 million of accrued interest and penalties related to uncertain tax positions at December 31, 2013, 2014 and 2015, 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 $47.6 million (net of tax of $10.4 million), $52.6 million (net of tax of $10.8 million) and $71.6 million (net of tax of $10.9 million), at December 31, 2013, 2014 and 2015, respectively. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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, 2014 and 2015 are $14.6 million and $7.9 million, of which $8.2 million and $4.3 million are monetary assets in each year, respectively. The Venezuela subsidiary also had a $34.8 million and $33.7 million intercompany balance to its parent company as of December 31, 2014 and 2015, respectively, 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 2013, 2014 and 2015 representing approximately 1.1%, 1.0% and 0.2% of the Company's overall revenue, respectively. Since 2010, 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. 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 approximately 193 bolivars per U.S. dollar. As a result of this new exchange mechanism, in 2015, the Company recorded charges totaling $10.2 million in other income (expense) to reflect additional foreign currency translation losses on its net monetary assets denominated in bolivars. NU SKIN ENTERPRISES, INC. Notes to Consolidated 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. 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, 2015 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, 2014 and 2015, the long-term debt fair value is $252.8 million and $252.4 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 $32.6 million, $17.5 million and $7.4 million for the years ended December 31, 2013, 2014 and 2015, respectively. In 2014 and 2015, these amounts reflect the reversal of $4.7 million and $7.6 million, respectively, for certain performance based awards that were no longer expected to vest. For the years ended December 31, 2013, 2014 and 2015, 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 $10.5 million of pretax net losses, $1.4 million of pretax net gains and zero pretax net gains for the years ended December 31, 2013, 2014 and 2015, 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) 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) NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40). In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs associated with Line-of-Credit Arrangements In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements |
Prepaid Expenses and Other
Prepaid Expenses and Other | 12 Months Ended |
Dec. 31, 2015 | |
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, 2014 2015 Deferred tax assets $ 40,840 $ ─ Intercompany deferred charges 26,776 14,940 Prepaid income taxes 37,113 40,407 Prepaid inventory and import costs 21,060 10,573 Prepaid rent, insurance and other occupancy costs 10,400 11,590 Prepaid promotion and event cost 4,275 4,486 Prepaid other taxes 3,037 4,146 Forward contracts 1,661 485 Deposits 1,244 1,513 Other 13,728 13,807 $ 160,134 $ 101,947 4. Property and Equipment |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and equipment are comprised of the following (U.S. dollars in thousands): December 31, 2014 2015 Land $ 34,087 $ 33,610 Buildings 230,934 272,208 Construction in progress 63,941 7,827 Furniture and fixtures 61,643 81,274 Computers and equipment 118,248 141,079 Leasehold improvements 110,539 116,120 Scanners 14,594 11,805 Vehicles 2,725 2,207 636,711 666,130 Less: accumulated depreciation (171,928 ) (211,593 ) $ 464,783 $ 454,537 Depreciation of property and equipment totaled $27.1 million, $46.5 million and $61.6 million for the years ended December 31, 2013, 2014 and 2015, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
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: 2014 2015 Goodwill $ 112,446 $ 112,446 Trademarks and trade names 24,599 24,599 $ 137,045 $ 137,045 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements December 31, 2014 December 31, 2015 Finite life intangible assets: Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Weighted-average Amortization Period Scanner technology $ 46,482 $ 30,557 $ 46,482 $ 33,590 18 years Developed technology 22,500 16,734 22,500 17,558 20 years Distributor network 11,598 10,594 11,598 11,096 15 years Trademarks 14,404 12,461 2,409 879 15 years Other 45,006 19,181 45,315 22,771 8 years $ 139,990 $ 89,527 $ 128,304 $ 85,894 15 years Amortization of finite-life intangible assets totaled $7.8 million, $8.4 million and $8.6 million for the years ended December 31, 2013, 2014 and 2015, respectively. Annual estimated amortization expense is expected to approximate $8.0 million for each of the five succeeding fiscal years. In the year ended December 31, 2015, the Company wrote-off approximately $12.0 million of fully amortized intangible assets. 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, 2015 | |
Other Assets [Abstract] | |
Other Assets | 6. Other Assets Other assets consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Deferred taxes $ 15,128 $ 40,373 Deposits for noncancelable operating leases 29,957 39,016 Deposit for customs assessment (Note 20) 31,825 35,424 Cash surrender value for life insurance policies 26,280 27,292 Other 24,286 23,354 $ 127,476 $ 165,459 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Accrued expenses consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Accrued sales force commissions and other payments $ 167,914 $ 166,273 Accrued other taxes 32,246 35,922 Accrued payroll and other employee expenses 29,220 24,390 Accrued payable to vendors 28,341 40,914 Accrued royalties 10,475 9,701 Sales return reserve 10,118 7,752 Deferred revenue 6,160 6,644 Other 16,373 19,320 $ 300,847 $ 310,916 |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities [Abstract] | |
Other Liabilities | 8. Other Liabilities Other liabilities consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Deferred tax liabilities $ 16,017 $ 16,177 Reserve for other tax liabilities 7,324 9,463 Reserve for customs assessment 4,727 3,600 Liability for deferred compensation plan 32,398 33,456 Pension plan benefits reserve 5,844 4,859 Build to suit – financing obligation 10,421 10,238 Deferred rent and deferred tenant incentives 7,102 6,336 Asset retirement obligation 4,611 4,682 Other 656 2,069 $ 89,100 $ 90,880 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 9. Long-Term Debt |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2015 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | On October 9, 2014, the Company entered into a Credit Agreement (the "Credit Agreement") with various financial institutions, and Bank of America, N.A. as administrative agent. The Credit Agreement provides for a $127.5 million term loan facility, a 6.6 billion Japanese yen term loan facility and a $187.5 million revolving credit facility, each with a term of five years. On October 10, 2014, the Company drew the full amount of the term loan facilities, and as of December 31, 2014 and 2015, the Company had outstanding balances of $72.5 million and $47.5 million on the revolving credit facility. Any additional amounts drawn under the revolving credit facility will bear interest at rates that will be determined in accordance with the Credit Agreement. The Credit Agreement requires that the Company maintains a consolidated leverage ratio not exceeding 2.25 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00. The Company believes these covenants provide it with greater flexibility to pay dividends and repurchase stock. The Company is in compliance with its debt covenants. The following table summarizes the Company's debt facilities as of December 31, 2014 and 2015: Facility or Arrangement Original Principal Amount Balance as of December 31, 2014 Balance as of December 31, 2015 (1)(2) Interest Rate Repayment terms Credit Agreement term loan facility: U.S. dollar denominated: $127.5 million $125.9 million $118.7 million Variable 30 day: 2.4815% 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. Japanese yen denominated: 6.6 billion yen 6.5 billion yen ($54.4 million as of December 31, 2014) 6.1 billion yen ($51.1 million as of December 31, 2015) Variable 30 day: 2.30% 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. Credit Agreement revolving credit facility: $72.5 million $47.5 million Variable 30 day: 2.4815% Revolving line of credit expires October 2019. Korean subsidiary loan: $20.0 million ─ $20.0 million 1.12% One half of the principal amount payable on March 17, 2017 and the remainder payable on March 16, 2018. Japan subsidiary loan: 2.0 billion yen ─ 2.0 billion yen ($16.6 million as of December 31, 2015) 0.66% Payable in semi-annual installments over three years that began on January 31, 2016. (1) As of December 31, 2015, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $57.8 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility, $4.5 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility and $5.5 million of the Japan subsidiary loan. 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 $4.3 million, which is not reflected in this table. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Interest expense relating to debt totaled $3.0 million, $5.7 million and $7.9 million for the years ended December 31, 2013, 2014 and 2015, respectively. Maturities of all long-term debt at December 31, 2015, based on the year-end exchange rate, are as follows (U.S. dollars in thousands): Year Ending December 31, 2016 $ 67,849 2017 34,905 2018 39,481 2019 111,664 2020 ─ Thereafter ─ Total (1) $ 253,899 (1) The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $4.3 million, which is not reflected in this table. |
Lease and Financing Obligations
Lease and Financing Obligations | 12 Months Ended |
Dec. 31, 2015 | |
Lease and Financing Obligations [Abstract] | |
Lease and Financing 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 provided that when such renovations and construction were completed, the Company and the landlord would enter into a new lease agreement (the "New Lease") for the Existing Building and the New Building. In April 2015, the Company and the landlord entered into the New Lease on terms generally consistent with the 2014 lease. The New Lease term is for the period May 1, 2015 through April 30, 2025, with an option to extend the agreement for 10 years. The Company accounts for its lease of the Existing Building as an operating 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 and was completed in June 2015. During the construction period, the Company 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. In addition, the amounts that the Company has paid or incurred for normal tenant improvements were also recorded to the construction-in-progress asset. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements At the end of the construction period in June 2015, the Company concluded that the New Lease of the New Building did not meet "sale-leaseback" criteria; therefore, the asset and obligation recognized during construction will remain recorded in the Company's consolidated balance sheets. As of December 31, 2015, the completed building and normal tenant improvements under the lease have been reclassified from construction in progress to buildings and leasehold improvements, respectively. The Company accounts 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, is accounted for on a straight-line basis as the land element is an operating lease. Lease payments attributed to the New Building are 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, is being depreciated over the initial ten-year 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 equal to the remaining financing obligation at the end of the lease term. 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 sheet. As of December 31, 2015, the Company had recognized $19.9 million as the value of the New Building offset by accumulated depreciation of $0.3 million and a financing obligation in the amount of $10.6 million, net of a $9.3 million deposit paid directly to the landlord, as part of Other liabilities in its consolidated balance sheet. As of December 31, 2014, the tenant incentive asset and deferred tenant incentive liability associated with the Existing Building each totaled $6.4 million. As of December 31, 2015, the tenant incentive asset and deferred tenant incentive liability associated with the Existing Building totaled $5.6 million and $5.1 million, respectively. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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, 2015 are as follows (U.S. dollars in thousands): Year Ending December 31, Operating Leases Financing Obligations 2016 $ 36,627 $ 630 2017 29,970 649 2018 24,201 669 2019 16,221 689 2020 8,927 709 Thereafter 1,921 3,290 Total minimum lease payments $ 117,867 $ 6,636 Rent expense for operating leases totaled $34.6 million, $52.3 million, and $52.4 million for the years ended December 31, 2013, 2014 and 2015, respectively. Interest expense associated with the financing obligations was nil for the years ended December 31, 2013 and 2014 and $0.1 million for the year ended December 31, 2015 |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2015 | |
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, 2014 and 2015, 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 (U.S. dollars in thousands): Year Ended December 31, 2013 2014 2015 Basic weighted-average common shares outstanding 58,606 59,073 57,997 Effect of dilutive securities: Stock awards and options 2,842 1,814 1,060 Diluted weighted-average common shares outstanding 61,448 60,887 59,057 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements For the years ended December 31, 2013, 2014 and 2015, other stock options totaling 1.2 million, 2.7 million and 1.8 million, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. Repurchases of common stock In 1998, the Company's board of directors approved a stock repurchase plan authorizing the Company to repurchase $10.0 million of its outstanding shares of Class A common stock on the open market or in private transactions. The Company's board from time to time increased the amount authorized under the 1998 stock repurchase plan, including an increase of $400.0 million announced in August 2013. In October 2015, the Company's board terminated the 1998 stock repurchase plan and approved a new repurchase plan with an initial authorization amount of $500.0 million. The repurchases are used primarily to offset dilution from our equity incentive plans and for strategic initiatives. During the years ended December 31, 2013, 2014 and 2015, the Company repurchased 1.7 million, 0.8 million and 3.8 million shares of Class A common stock for an aggregate price of $140.9 million, $45.7 million and $164.1 million, respectively. At December 31, 2015, $446.9 million was available for repurchases under the 2015 stock repurchase plan. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | 12. Stock–Based Compensation At December 31, 2015, 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 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 recognized $23.2 million of expense, $5.2 million of expense and $6.4 million of income related to these awards in 2013, 2014 and 2015, respectively. The amounts in 2014 and 2015 reflect the reversal of stock compensation for awards no longer expected to vest. 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 2013 2014 2015 Weighted average grant date fair value of grants $ 22.10 $ 23.01 $ 16.26 Risk-free interest rate (1) 1.4% 1.7% 1.7% Dividend yield (2) 3.1% 1.9% 2.1% Expected volatility (3) 41.7% 45.4% 46.8% Expected life in months (4) 62 months 62 months 65 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Options under the plans as of December 31, 2015 and changes during the year ended December 31, 2015 were as follows: Shares (in thousands) Weighted-average Exercise Price Weighted- average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Options activity – service based Outstanding at December 31, 2014 1,924.2 $ 29.08 Granted 179.7 42.51 Exercised (545.0 ) 18.14 Forfeited/cancelled/expired (89.2 ) 60.99 Outstanding at December 31, 2015 1,469.7 32.85 2.33 $ 20,228 Exercisable at December 31, 2015 1,175.3 26.68 1.43 20,191 Options activity – performance based Outstanding at December 31, 2014 4,038.3 $ 60.61 Granted 38.8 54.97 Exercised (175.4 ) 30.35 Forfeited/cancelled/expired (303.0 ) 71.58 Outstanding at December 31, 2015 3,598.7 61.10 3.64 $ 9,177 Exercisable at December 31, 2015 1,286.3 31.31 1.93 9,177 Options activity – all options Outstanding at December 31, 2014 5,962.5 $ 50.43 Granted 218.5 44.72 Exercised (720.4 ) 21.11 Forfeited/cancelled/expired (392.2 ) 69.17 Outstanding at December 31, 2015 5,068.4 52.91 3.26 $ 29,406 Exercisable at December 31, 2015 2,461.6 29.10 1.70 29,369 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, 2015. This amount varies based on the fair market value of the Company's stock. The total fair value of options vested was $13.2 million, $4.2 million and $2.8 million in income, net of tax, for the years ended December 31, 2013, 2014 and 2015, respectively. Cash proceeds, tax benefits and intrinsic value related to total stock options exercised during 2013, 2014 and 2015, were as follows (U.S. dollars in thousands): December 31, 2013 2014 2015 Cash proceeds from stock options exercised $ 37,869 $ 11,042 $ 13,041 Tax benefit realized for stock options exercised 41,914 11,947 4,451 Intrinsic value of stock options exercised 241,700 17,159 12,085 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Nonvested restricted stock awards as of December 31, 2015 and changes during the year ended December 31, 2015 were as follows: Number of Shares (in thousands) Weighted-average Grant Date Fair Value Nonvested at December 31, 2014 673.8 $ 60.14 Granted 358.1 54.80 Vested (249.1 ) 52.52 Forfeited (120.6 ) 56.03 Nonvested at December 31, 2015 662.2 60.87 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, 2015, there was 22.2 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 2.5 years. As of December 31, 2015, there was $4.4 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 2.6 years. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2015 | |
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, 2014 and 2015 (U.S. dollars in thousands): 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 Fair Value at December 31, 2015 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 47,121 $ ─ $ ─ $ 47,121 Forward contracts ─ 485 ─ 485 Life insurance contracts ─ ─ 27,292 27,292 Total $ 47,121 $ 485 $ 27,292 $ 74,898 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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: Forward contracts: Life insurance contracts: 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 2014 2015 Beginning balance at January 1 $ 23,172 $ 26,280 Actual return on plan assets: Relating to assets still held at the reporting date 1,249 (1,597 ) Purchases and issuances 2,798 3,025 Sales and settlements (939 ) (416 ) Transfers into Level 3 ─ ─ Ending balance at December 31 $ 26,280 $ 27,292 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
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, 2013, 2014 and 2015 (U.S. dollars in thousands): 2013 2014 2015 U.S. $ 307,994 $ 184,476 $ 134,473 Foreign 248,946 114,031 77,486 Total $ 556,940 $ 298,507 $ 211,959 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements The provision for current and deferred taxes for the years ended December 31, 2013, 2014 and 2015 consists of the following (U.S. dollars in thousands): 2013 2014 2015 Current Federal $ 81,871 $ 37,402 $ 6,328 State 361 2,095 1,483 Foreign 148,310 48,904 50,403 230,542 88,401 58,214 Deferred Federal (2,831 ) (380 ) 16,556 State 551 444 (674 ) Foreign (36,210 ) 20,866 4,817 (38,490 ) 20,930 20,699 Provision for income taxes $ 192,052 $ 109,331 $ 78,913 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements The principal components of deferred taxes are as follows (U.S. dollars in thousands): Year Ended December 31, 2014 2015 Deferred tax assets: Inventory differences $ 12,362 $ 5,222 Foreign tax credit and other foreign benefits 116,603 86,729 Stock-based compensation 17,211 13,842 Accrued expenses not deductible until paid 48,189 46,597 Foreign currency exchange 10,774 8,976 Net operating losses 17,530 10,994 Capitalized research and development 3,362 1,632 Exchange gains and losses 41,542 55,643 Other 841 964 Gross deferred tax assets 268,414 230,599 Deferred tax liabilities: Intangibles step-up 15,106 13,607 Overhead allocation to inventory 10,781 5,101 Amortization of intangibles 18,374 18,733 Foreign outside basis in controlled foreign corporation 100,016 84,434 Other 48,187 35,257 Gross deferred tax liabilities 192,464 157,132 Valuation allowance (35,999 ) (49,271 ) Deferred taxes, net $ 39,951 $ 24,196 At December 31, 2015, the Company had foreign operating loss carryforwards of $34.7 million for tax purposes, which will be available to offset future taxable income. If not used, $15.0 million of carryforwards will expire between 2016 and 2025, while $19.7 million do not expire. A valuation allowance has been placed on foreign operating loss carryforwards of $28.4 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements The deferred tax asset valuation adjustments for the years ended December 31, 2013, 2014 and 2015 are as follows (U.S. dollars in thousands): Year Ended December 31, 2013 2014 2015 Balance at the beginning of period $ 10,522 $ 10,803 $ 35,999 Additions charged to cost and expenses 278 28,687 12,948 Decreases (165 ) (1) (3,546 ) (1) (2,943 ) (1) Adjustments 168 (2) 55 (2) 3,267 (2) Balance at the end of the period $ 10,803 $ 35,999 (3) $ 49,271 (3) (1) Decreases in valuation allowance due to lapse in statute of limitation of the net operating losses carryforward which had no impact to the income statement. (2) Represents the net currency effects of translating valuation allowances at current rates of exchange. (3) The increase was due primarily to the deferred tax assets created by the unrealized loss in Venezuela for which the Company set up a full valuation allowance. The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands): Year Ended December 31, 2014 2015 Net current deferred tax assets $ 40,840 $ ─ Net noncurrent deferred tax assets 15,128 40,373 Total net deferred tax assets 55,968 40,373 Net current deferred tax liabilities ─ ─ Net noncurrent deferred tax liabilities 16,017 16,177 Total net deferred tax liabilities 16,017 16,177 Deferred taxes, net $ 39,951 $ 24,196 Effective December 31, 2015, the Company elected to early adopt ASU 2015-17, which requires entities to classify deferred tax liabilities and assets as noncurrent. This guidance has been applied prospectively for the year ended December 31, 2015. The Company has not adjusted the balances for the year ended December 31, 2014. 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, 2013, 2014 and 2015 compared to the statutory U.S. Federal tax rate is as follows: Year Ended December 31, 2013 2014 2015 Income taxes at statutory rate 35.00 % 35.00 % 35.00 % Foreign tax rate differential (0.76 ) ─ .92 Non-deductible expenses 0.12 0.12 0.09 Controlled foreign corporation losses ─ 1.48 1.09 Other 0.12 0.03 0.13 34.48 % 36.63 % 37.23 % The lower effective tax rate in 2013 compared to 2014 and 2015 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 year-over-year increase in the effective tax rate for 2015 was due largely to the lower than anticipated profits in China caused by the charge to inventory. Consequently, a deferred tax asset associated with China could not be recognized, thereby impacting the annual effective tax rate. The cumulative amount of undistributed earnings of the Company's non-U.S. Subsidiaries held for indefinite reinvestment is approximately $50.0 million, $50.0 million and $70.0 million at December 31, 2013, 2014 and 2015, respectively. If this amount were repatriated to the United States, the amount of incremental taxes would be approximately $3.4 million. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2015 | |
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 2013, 2014, and 2015 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 $2.7 million, $2.7 million and $2.8 million for the years ended December 31, 2013, 2014 and 2015, 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 year ended December 31, 2013, the Company made additional discretionary contributions of $6.2 million. For the years ended December 31, 2014 and 2015, the Company did not make any additional discretionary contributions. 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 $6.2 million, $5.8 million and $4.8 million as of December 31, 2013, 2014 and 2015, 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 $0.8 million, $0.9 million and $0.7 million for the years ended December 31, 2013, 2014 and 2015, respectively. |
Executive Deferred Compensation
Executive Deferred Compensation Plan | 12 Months Ended |
Dec. 31, 2015 | |
Executive Deferred Compensation Plan [Abstract] | |
Executive Deferred Compensation Plan | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 $3.1 million, $0.3 million and $2.3 million for the years ended December 31, 2013, 2014 and 2015, respectively, related to its contributions to the plan. The total long-term deferred compensation liability under the deferred compensation plan was $32.4 million and $33.5 million for the years ended December 31, 2014 and 2015, 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 $26.3 million and $27.3 million for the years ended December 31, 2014 and 2015, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | 17. Derivative Financial Instruments As of December 31, 2015, the Company held mark-to-market forward derivative contracts to hedge foreign denominated intercompany positions with notional amounts of 500.0 million Japanese yen ($4.2 million), 9.0 million Canadian dollars ($6.5 million), and 5.8 billion Korean won ($4.9 million), with related gains and losses being recorded as part of Other Income (Expense); in addition the Company held mark-to-market forward contracts designated as foreign currency cash flow hedges with notional amounts totaling 1.9 billion Japanese yen and 15.0 million euros ($15.8 million and $16.3 million, respectively) as of December 31, 2015 and 2.1 billion Japanese yen and 4.0 million euros ($17.5 million and $4.8 million, respectively) as of December 31, 2014 to hedge forecasted foreign-currency-denominated intercompany transactions. The fair value of these hedges were $1.7 million and $0.5 million as of December 31, 2014 and 2015, respectively. The contracts held at December 31, 2015 have maturities through March 2017, 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 15 months. The pre-tax net losses/gains on foreign currency cash flow hedges reclassified from accumulated other comprehensive loss to revenue were $5.1 million of pre-tax net gains, $2.7 million of pre-tax net losses and $2.1 million of pre-tax net gains for the years ended December 31, 2013, 2014 and 2015, respectively. The corresponding tax effects of these transactions were recorded in provision for income tax expense. As of December 31, 2014 and 2015, there were $1.1 million and $0.3 million of unrealized gains included in accumulated other comprehensive loss related to foreign currency cash flow hedges. The remaining $52.6 million and $71.6 million as of December 31, 2014 and 2015, respectively, in accumulated other comprehensive income are related to cumulative translation adjustments. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 18. Supplemental Cash Flow Information |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | Cash paid for interest totaled $4.8 million, $5.3 million and $7.0 million for the years ended December 31, 2013, 2014 and 2015, respectively. Cash paid for income taxes totaled $130.1 million, $171.4 million and $49.8 million for the years ended December 31, 2013, 2014 and 2015, respectively. For the year ended December 31, 2013, there was a non-cash addition of fixed assets of $9.2 million 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, 2015 | |
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, independent direct sellers and independent marketers to distribute its products. 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 sales compensation and incentives paid to its sales force. 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, 2013 2014 2015 Greater China $ 1,363,182 $ 948,523 $ 771,667 North Asia 869,400 782,985 686,555 Americas 370,087 329,027 329,668 South Asia/Pacific 378,988 328,388 321,971 EMEA 195,061 180,572 137,186 Total $ 3,176,718 $ 2,569,495 $ 2,247,047 Revenue generated by each of the Company's product lines is set forth below (U.S. dollars in thousands): Year Ended December 31, 2013 2014 2015 Nu Skin $ 1,641,618 $ 1,562,595 $ 1,363,539 Pharmanex 1,529,211 1,000,279 877,924 Other 5,889 6,621 5,584 Total $ 3,176,718 $ 2,569,495 $ 2,247,047 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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: 2013 2014 2015 Japan $ 402,580 $ 315,265 $ 264,214 Mainland China 1,005,395 675,082 565,527 South Korea 466,820 467,720 422,341 United States 268,232 230,767 243,748 December 31, Long-lived assets: 2014 2015 Japan $ 13,768 $ 13,587 Mainland China 103,445 110,839 South Korea 46,626 48,702 United States 287,103 271,057 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
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 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 (the Company was previously required to post a bond or make a deposit to secure any additional duties that may have been due and payable on current imports, but it is no longer required to do so). 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 4.3 billion Japanese yen as of December 31, 2015 (approximately $35.4 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. 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. 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. In June 2015, the Tokyo District Court closed the proceedings, and we currently anticipate a decision on the matter during the first quarter of 2016. If the Company is unsuccessful in recovering the amounts assessed and paid, the Company will record a non-cash expense in Cost of sales 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 May 1, 2014, the court consolidated the various purported class actions, appointed State-Boston Retirement System as lead plaintiff in the consolidated action and appointed the law firm Labaton Sucharow as lead counsel for the purported class in the consolidated action. In June 2014, a consolidated class action complaint was filed. In February 2015, the court denied the Company's motion to dismiss the case. 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 parties are engaging in a mediation process in an effort to resolve this matter. The Company believes the claims are without merit, but has entered into this process in an effort to avoid potentially lengthy, costly, distracting and time-consuming litigation. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements In addition, beginning in February 2014, five purported shareholder derivative complaints were filed in the United States District Court for the District of Utah. In May 2014, the court issued an order consolidating the derivative actions, appointing plaintiffs Amos. C. Acoff and Analisa Suderov as co-lead plaintiffs in the consolidated action, and appointing 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. In July 2014, a consolidated derivative complaint was filed. In July 2015, the court stayed the derivative action pending a resolution in the securities class action lawsuit and denied the Company's motion to dismiss without prejudice to renewing the motion when the stay is lifted. The consolidated derivative complaint purports to assert claims on behalf of Nu Skin Enterprises, Inc. 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 H. Offen, Daniel W. Campbell, Andrew W. Lipman, Patricia A. Negrón, Thomas R. Pisano, and nominally against Nu Skin Enterprises, Inc. The consolidated derivative complaint also purports to assert claims on behalf of Nu Skin Enterprises, Inc. 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 materially affect the Company's operating results and financial condition. At this stage of the proceedings, the Company is unable to make an estimate of the potential loss, if any, arising from these matters. |
Dividends per Share
Dividends per Share | 12 Months Ended |
Dec. 31, 2015 | |
Dividends per Share [Abstract] | |
Dividends per Share | 21. Dividends per Share Quarterly cash dividends for the years ended December 31, 2014 and 2015 totaled $81.4 million and $81.2 million or $0.345 per share in all quarters of 2014 and $0.35 for all quarters of 2015. The board of directors has declared a quarterly cash dividend of $0.355 per share for all classes of common stock to be paid on March 16, 2016 to stockholders of record on February 26, 2016. |
Quarterly Results
Quarterly Results | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Results [Abstract] | |
Quarterly Results | 22. Quarterly Results (unaudited) The following table sets forth selected unaudited quarterly data for the periods shown as revised (U.S. dollars in millions, except per share amounts): 2014 2015 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Revenue $ 671.1 $ 650.0 $ 638.8 $ 609.6 $ 543.3 $ 560.2 $ 571.3 $ 572.2 Gross profit 564.4 494.0 529.5 503.1 438.3 449.9 418.6 450.8 Operating income 101.2 54.7 105.0 91.3 68.6 71.8 42.5 61.7 Net income 54.9 19.5 68.3 46.5 36.3 44.7 16.3 35.8 Net income per share: Basic 0.93 0.33 1.15 0.79 0.62 0.76 0.28 0.63 Diluted 0.90 0.32 1.12 0.77 0.60 0.75 0.28 0.62 |
Other Income (Expense), Net
Other Income (Expense), Net | 12 Months Ended |
Dec. 31, 2015 | |
Other Income (Expense), Net [Abstract] | |
Other Income (Expense), Net | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 23. Other Income (Expense), Net Other income (expense), net |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
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 $56.0 million and $20.7 million as of December 31, 2014 and 2015, 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 2014, which significantly reduced its expectations for plans to sell ageLOC TR90 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Inventories consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Raw materials $ 101,479 $ 114,193 Finished goods 237,012 151,063 $ 338,491 $ 265,256 Adjustments to inventories consist of the following (U.S. dollars in thousands): 2013 2014 2015 Beginning balance, adjustments to inventory carrying value $ 5,461 $ 5,934 $ 56,034 Additions 12,311 77,379 38,605 Write-offs (11,838 ) (27,279 ) (73,895 ) Ending balance, adjustments to inventory carrying value $ 5,934 $ 56,034 $ 20,744 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 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 on June 30. 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 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements |
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 $10.1 million and $7.8 million as of December 31, 2014 and 2015, respectively. During the years ended December 31, 2013, 2014 and 2015, the Company recorded sales returns of $79.4 million, $83.6 million and $65.6 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, 2013, 2014 and 2015 totaled $11.3 million, $19.6 million and $11.0 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of income and totaled $18.0 million, $18.9 million and $20.1 million in 2013, 2014 and 2015, 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. 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 2011. 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 2016 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 generally no longer subject to income tax examinations for years before 2010. 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands): 2013 2014 2015 Gross balance at January 1 $ 9,045 $ 7,484 $ 5,987 Increases related to prior year tax positions ─ ─ 1,677 Increases related to current year tax positions 1,188 2,700 1,119 Settlements (1,671 ) ─ ─ Decreases due to lapse of statutes of limitations (1,086 ) (4,106 ) (667 ) Currency adjustments 8 (91 ) (344 ) Gross balance at December 31 $ 7,484 $ 5,987 $ 7,772 At December 31, 2015, the Company had $7.8 million in unrecognized tax benefits of which $0.9 million, if recognized, would affect the effective tax rate. In comparison, 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. 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 $0 to $1 million. During the years ended December 31, 2013, 2014 and 2015, the Company recognized $(0.1) million, $0.4 million and $0.4 million, respectively in interest and penalties expenses/(benefits). The Company had $0.9 million, $1.3 million and $1.7 million of accrued interest and penalties related to uncertain tax positions at December 31, 2013, 2014 and 2015, 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 $47.6 million (net of tax of $10.4 million), $52.6 million (net of tax of $10.8 million) and $71.6 million (net of tax of $10.9 million), at December 31, 2013, 2014 and 2015, respectively. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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, 2014 and 2015 are $14.6 million and $7.9 million, of which $8.2 million and $4.3 million are monetary assets in each year, respectively. The Venezuela subsidiary also had a $34.8 million and $33.7 million intercompany balance to its parent company as of December 31, 2014 and 2015, respectively, 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 2013, 2014 and 2015 representing approximately 1.1%, 1.0% and 0.2% of the Company's overall revenue, respectively. Since 2010, 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. 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 approximately 193 bolivars per U.S. dollar. As a result of this new exchange mechanism, in 2015, the Company recorded charges totaling $10.2 million in other income (expense) to reflect additional foreign currency translation losses on its net monetary assets denominated in bolivars. NU SKIN ENTERPRISES, INC. Notes to Consolidated 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. |
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, 2015 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, 2014 and 2015, the long-term debt fair value is $252.8 million and $252.4 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 | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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 $32.6 million, $17.5 million and $7.4 million for the years ended December 31, 2013, 2014 and 2015, respectively. In 2014 and 2015, these amounts reflect the reversal of $4.7 million and $7.6 million, respectively, for certain performance based awards that were no longer expected to vest. For the years ended December 31, 2013, 2014 and 2015, 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 $10.5 million of pretax net losses, $1.4 million of pretax net gains and zero pretax net gains for the years ended December 31, 2013, 2014 and 2015, 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. NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) 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) NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40). In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs Interest - Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs associated with Line-of-Credit Arrangements In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes |
Summary of Significant Accoun34
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies [Abstract] | |
Inventories | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Inventories consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Raw materials $ 101,479 $ 114,193 Finished goods 237,012 151,063 $ 338,491 $ 265,256 |
Adjustments to Inventories | Adjustments to inventories consist of the following (U.S. dollars in thousands): 2013 2014 2015 Beginning balance, adjustments to inventory carrying value $ 5,461 $ 5,934 $ 56,034 Additions 12,311 77,379 38,605 Write-offs (11,838 ) (27,279 ) (73,895 ) Ending balance, adjustments to inventory carrying value $ 5,934 $ 56,034 $ 20,744 Property and equipment |
Estimated Useful Lives | 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 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 | 2013 2014 2015 Gross balance at January 1 $ 9,045 $ 7,484 $ 5,987 Increases related to prior year tax positions ─ ─ 1,677 Increases related to current year tax positions 1,188 2,700 1,119 Settlements (1,671 ) ─ ─ Decreases due to lapse of statutes of limitations (1,086 ) (4,106 ) (667 ) Currency adjustments 8 (91 ) (344 ) Gross balance at December 31 $ 7,484 $ 5,987 $ 7,772 At December 31, 2015, the Company had $7.8 million in unrecognized tax benefits of which $0.9 million, if recognized, would affect the effective tax rate. In comparison, 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. 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 $0 to $1 million. |
Prepaid Expenses and Other (Tab
Prepaid Expenses and Other (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Prepaid Expenses and Other [Abstract] | |
Prepaid Expenses and Other | Prepaid expenses and other consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Deferred tax assets $ 40,840 $ ─ Intercompany deferred charges 26,776 14,940 Prepaid income taxes 37,113 40,407 Prepaid inventory and import costs 21,060 10,573 Prepaid rent, insurance and other occupancy costs 10,400 11,590 Prepaid promotion and event cost 4,275 4,486 Prepaid other taxes 3,037 4,146 Forward contracts 1,661 485 Deposits 1,244 1,513 Other 13,728 13,807 $ 160,134 $ 101,947 4. Property and Equipment |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and equipment are comprised of the following (U.S. dollars in thousands): December 31, 2014 2015 Land $ 34,087 $ 33,610 Buildings 230,934 272,208 Construction in progress 63,941 7,827 Furniture and fixtures 61,643 81,274 Computers and equipment 118,248 141,079 Leasehold improvements 110,539 116,120 Scanners 14,594 11,805 Vehicles 2,725 2,207 636,711 666,130 Less: accumulated depreciation (171,928 ) (211,593 ) $ 464,783 $ 454,537 |
Goodwill and Other Intangible37
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Other Intangible Assets [Abstract] | |
Goodwill and Indefinite Life Intangible Asset | 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: 2014 2015 Goodwill $ 112,446 $ 112,446 Trademarks and trade names 24,599 24,599 $ 137,045 $ 137,045 |
Finite Life Intangible Assets | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements December 31, 2014 December 31, 2015 Finite life intangible assets: Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Weighted-average Amortization Period Scanner technology $ 46,482 $ 30,557 $ 46,482 $ 33,590 18 years Developed technology 22,500 16,734 22,500 17,558 20 years Distributor network 11,598 10,594 11,598 11,096 15 years Trademarks 14,404 12,461 2,409 879 15 years Other 45,006 19,181 45,315 22,771 8 years $ 139,990 $ 89,527 $ 128,304 $ 85,894 15 years |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Assets [Abstract] | |
Other Assets | Other assets consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Deferred taxes $ 15,128 $ 40,373 Deposits for noncancelable operating leases 29,957 39,016 Deposit for customs assessment (Note 20) 31,825 35,424 Cash surrender value for life insurance policies 26,280 27,292 Other 24,286 23,354 $ 127,476 $ 165,459 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Accrued expenses consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Accrued sales force commissions and other payments $ 167,914 $ 166,273 Accrued other taxes 32,246 35,922 Accrued payroll and other employee expenses 29,220 24,390 Accrued payable to vendors 28,341 40,914 Accrued royalties 10,475 9,701 Sales return reserve 10,118 7,752 Deferred revenue 6,160 6,644 Other 16,373 19,320 $ 300,847 $ 310,916 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities [Abstract] | |
Other Liabilities | Other liabilities consist of the following (U.S. dollars in thousands): December 31, 2014 2015 Deferred tax liabilities $ 16,017 $ 16,177 Reserve for other tax liabilities 7,324 9,463 Reserve for customs assessment 4,727 3,600 Liability for deferred compensation plan 32,398 33,456 Pension plan benefits reserve 5,844 4,859 Build to suit – financing obligation 10,421 10,238 Deferred rent and deferred tenant incentives 7,102 6,336 Asset retirement obligation 4,611 4,682 Other 656 2,069 $ 89,100 $ 90,880 NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 9. Long-Term Debt |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Long-Term Debt [Abstract] | |
Debt Facilities | Facility or Arrangement Original Principal Amount Balance as of December 31, 2014 Balance as of December 31, 2015 (1)(2) Interest Rate Repayment terms Credit Agreement term loan facility: U.S. dollar denominated: $127.5 million $125.9 million $118.7 million Variable 30 day: 2.4815% 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. Japanese yen denominated: 6.6 billion yen 6.5 billion yen ($54.4 million as of December 31, 2014) 6.1 billion yen ($51.1 million as of December 31, 2015) Variable 30 day: 2.30% 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. Credit Agreement revolving credit facility: $72.5 million $47.5 million Variable 30 day: 2.4815% Revolving line of credit expires October 2019. Korean subsidiary loan: $20.0 million ─ $20.0 million 1.12% One half of the principal amount payable on March 17, 2017 and the remainder payable on March 16, 2018. Japan subsidiary loan: 2.0 billion yen ─ 2.0 billion yen ($16.6 million as of December 31, 2015) 0.66% Payable in semi-annual installments over three years that began on January 31, 2016. (1) As of December 31, 2015, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $57.8 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility, $4.5 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility and $5.5 million of the Japan subsidiary loan. 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 $4.3 million, which is not reflected in this table. |
Maturities of Long-Term Debt | Maturities of all long-term debt at December 31, 2015, based on the year-end exchange rate, are as follows (U.S. dollars in thousands): Year Ending December 31, 2016 $ 67,849 2017 34,905 2018 39,481 2019 111,664 2020 ─ Thereafter ─ Total (1) $ 253,899 (1) The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $4.3 million, which is not reflected in this table. |
Lease and Financing Obligatio42
Lease and Financing Obligations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Lease and Financing Obligations [Abstract] | |
Minimum Future Operating Leases and Financing Obligations | Year Ending December 31, Operating Leases Financing Obligations 2016 $ 36,627 $ 630 2017 29,970 649 2018 24,201 669 2019 16,221 689 2020 8,927 709 Thereafter 1,921 3,290 Total minimum lease payments $ 117,867 $ 6,636 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Capital Stock [Abstract] | |
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 (U.S. dollars in thousands): Year Ended December 31, 2013 2014 2015 Basic weighted-average common shares outstanding 58,606 59,073 57,997 Effect of dilutive securities: Stock awards and options 2,842 1,814 1,060 Diluted weighted-average common shares outstanding 61,448 60,887 59,057 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock Based Compensation [Abstract] | |
Stock Option Valuation Assumptions | 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 2013 2014 2015 Weighted average grant date fair value of grants $ 22.10 $ 23.01 $ 16.26 Risk-free interest rate (1) 1.4% 1.7% 1.7% Dividend yield (2) 3.1% 1.9% 2.1% Expected volatility (3) 41.7% 45.4% 46.8% Expected life in months (4) 62 months 62 months 65 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. |
Stock Options | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Options under the plans as of December 31, 2015 and changes during the year ended December 31, 2015 were as follows: Shares (in thousands) Weighted-average Exercise Price Weighted- average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Options activity – service based Outstanding at December 31, 2014 1,924.2 $ 29.08 Granted 179.7 42.51 Exercised (545.0 ) 18.14 Forfeited/cancelled/expired (89.2 ) 60.99 Outstanding at December 31, 2015 1,469.7 32.85 2.33 $ 20,228 Exercisable at December 31, 2015 1,175.3 26.68 1.43 20,191 Options activity – performance based Outstanding at December 31, 2014 4,038.3 $ 60.61 Granted 38.8 54.97 Exercised (175.4 ) 30.35 Forfeited/cancelled/expired (303.0 ) 71.58 Outstanding at December 31, 2015 3,598.7 61.10 3.64 $ 9,177 Exercisable at December 31, 2015 1,286.3 31.31 1.93 9,177 Options activity – all options Outstanding at December 31, 2014 5,962.5 $ 50.43 Granted 218.5 44.72 Exercised (720.4 ) 21.11 Forfeited/cancelled/expired (392.2 ) 69.17 Outstanding at December 31, 2015 5,068.4 52.91 3.26 $ 29,406 Exercisable at December 31, 2015 2,461.6 29.10 1.70 29,369 |
Stock Options Exercised | Cash proceeds, tax benefits and intrinsic value related to total stock options exercised during 2013, 2014 and 2015, were as follows (U.S. dollars in thousands): December 31, 2013 2014 2015 Cash proceeds from stock options exercised $ 37,869 $ 11,042 $ 13,041 Tax benefit realized for stock options exercised 41,914 11,947 4,451 Intrinsic value of stock options exercised 241,700 17,159 12,085 |
Nonvested Restricted Stock Awards | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Nonvested restricted stock awards as of December 31, 2015 and changes during the year ended December 31, 2015 were as follows: Number of Shares (in thousands) Weighted-average Grant Date Fair Value Nonvested at December 31, 2014 673.8 $ 60.14 Granted 358.1 54.80 Vested (249.1 ) 52.52 Forfeited (120.6 ) 56.03 Nonvested at December 31, 2015 662.2 60.87 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2014 and 2015 (U.S. dollars in thousands): 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 Fair Value at December 31, 2015 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 47,121 $ ─ $ ─ $ 47,121 Forward contracts ─ 485 ─ 485 Life insurance contracts ─ ─ 27,292 27,292 Total $ 47,121 $ 485 $ 27,292 $ 74,898 |
Changes in Fair Value of Level 3 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 2014 2015 Beginning balance at January 1 $ 23,172 $ 26,280 Actual return on plan assets: Relating to assets still held at the reporting date 1,249 (1,597 ) Purchases and issuances 2,798 3,025 Sales and settlements (939 ) (416 ) Transfers into Level 3 ─ ─ Ending balance at December 31 $ 26,280 $ 27,292 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2013, 2014 and 2015 (U.S. dollars in thousands): 2013 2014 2015 U.S. $ 307,994 $ 184,476 $ 134,473 Foreign 248,946 114,031 77,486 Total $ 556,940 $ 298,507 $ 211,959 |
Provisions for Current and Deferred Taxes | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements The provision for current and deferred taxes for the years ended December 31, 2013, 2014 and 2015 consists of the following (U.S. dollars in thousands): 2013 2014 2015 Current Federal $ 81,871 $ 37,402 $ 6,328 State 361 2,095 1,483 Foreign 148,310 48,904 50,403 230,542 88,401 58,214 Deferred Federal (2,831 ) (380 ) 16,556 State 551 444 (674 ) Foreign (36,210 ) 20,866 4,817 (38,490 ) 20,930 20,699 Provision for income taxes $ 192,052 $ 109,331 $ 78,913 |
Principal Components of Deferred Taxes | Year Ended December 31, 2014 2015 Deferred tax assets: Inventory differences $ 12,362 $ 5,222 Foreign tax credit and other foreign benefits 116,603 86,729 Stock-based compensation 17,211 13,842 Accrued expenses not deductible until paid 48,189 46,597 Foreign currency exchange 10,774 8,976 Net operating losses 17,530 10,994 Capitalized research and development 3,362 1,632 Exchange gains and losses 41,542 55,643 Other 841 964 Gross deferred tax assets 268,414 230,599 Deferred tax liabilities: Intangibles step-up 15,106 13,607 Overhead allocation to inventory 10,781 5,101 Amortization of intangibles 18,374 18,733 Foreign outside basis in controlled foreign corporation 100,016 84,434 Other 48,187 35,257 Gross deferred tax liabilities 192,464 157,132 Valuation allowance (35,999 ) (49,271 ) Deferred taxes, net $ 39,951 $ 24,196 |
Deferred Tax Asset Valuation Adjustments | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements The deferred tax asset valuation adjustments for the years ended December 31, 2013, 2014 and 2015 are as follows (U.S. dollars in thousands): Year Ended December 31, 2013 2014 2015 Balance at the beginning of period $ 10,522 $ 10,803 $ 35,999 Additions charged to cost and expenses 278 28,687 12,948 Decreases (165 ) (1) (3,546 ) (1) (2,943 ) (1) Adjustments 168 (2) 55 (2) 3,267 (2) Balance at the end of the period $ 10,803 $ 35,999 (3) $ 49,271 (3) (1) Decreases in valuation allowance due to lapse in statute of limitation of the net operating losses carryforward which had no impact to the income statement. (2) Represents the net currency effects of translating valuation allowances at current rates of exchange. (3) The increase was due primarily to the deferred tax assets created by the unrealized loss in Venezuela for which the Company set up a full valuation allowance. The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands): |
Components of Deferred Taxes, Net | Year Ended December 31, 2014 2015 Net current deferred tax assets $ 40,840 $ ─ Net noncurrent deferred tax assets 15,128 40,373 Total net deferred tax assets 55,968 40,373 Net current deferred tax liabilities ─ ─ Net noncurrent deferred tax liabilities 16,017 16,177 Total net deferred tax liabilities 16,017 16,177 Deferred taxes, net $ 39,951 $ 24,196 |
Reconciliation of Actual to Statutory U.S. Federal Tax Rate | The actual tax rate for the years ended December 31, 2013, 2014 and 2015 compared to the statutory U.S. Federal tax rate is as follows: Year Ended December 31, 2013 2014 2015 Income taxes at statutory rate 35.00 % 35.00 % 35.00 % Foreign tax rate differential (0.76 ) ─ .92 Non-deductible expenses 0.12 0.12 0.09 Controlled foreign corporation losses ─ 1.48 1.09 Other 0.12 0.03 0.13 34.48 % 36.63 % 37.23 % |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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, 2013 2014 2015 Greater China $ 1,363,182 $ 948,523 $ 771,667 North Asia 869,400 782,985 686,555 Americas 370,087 329,027 329,668 South Asia/Pacific 378,988 328,388 321,971 EMEA 195,061 180,572 137,186 Total $ 3,176,718 $ 2,569,495 $ 2,247,047 |
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, 2013 2014 2015 Nu Skin $ 1,641,618 $ 1,562,595 $ 1,363,539 Pharmanex 1,529,211 1,000,279 877,924 Other 5,889 6,621 5,584 Total $ 3,176,718 $ 2,569,495 $ 2,247,047 |
Significant Geographical Areas and Long-Lived Assets | NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 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: 2013 2014 2015 Japan $ 402,580 $ 315,265 $ 264,214 Mainland China 1,005,395 675,082 565,527 South Korea 466,820 467,720 422,341 United States 268,232 230,767 243,748 December 31, Long-lived assets: 2014 2015 Japan $ 13,768 $ 13,587 Mainland China 103,445 110,839 South Korea 46,626 48,702 United States 287,103 271,057 |
Quarterly Results (Tables)
Quarterly Results (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
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): 2014 2015 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter 1 st Quarter 2 nd Quarter 3 rd Quarter 4 th Quarter Revenue $ 671.1 $ 650.0 $ 638.8 $ 609.6 $ 543.3 $ 560.2 $ 571.3 $ 572.2 Gross profit 564.4 494.0 529.5 503.1 438.3 449.9 418.6 450.8 Operating income 101.2 54.7 105.0 91.3 68.6 71.8 42.5 61.7 Net income 54.9 19.5 68.3 46.5 36.3 44.7 16.3 35.8 Net income per share: Basic 0.93 0.33 1.15 0.79 0.62 0.76 0.28 0.63 Diluted 0.90 0.32 1.12 0.77 0.60 0.75 0.28 0.62 |
The Company (Details)
The Company (Details) | 12 Months Ended |
Dec. 31, 2015Region | |
The Company [Abstract] | |
Number of geographic regions | 5 |
Summary of Significant Accoun50
Summary of Significant Accounting Policies, Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Inventories [Abstract] | |||||
Raw materials | $ 114,193 | $ 101,479 | |||
Finished goods | 151,063 | 237,012 | |||
Inventories | 265,256 | 338,491 | |||
Inventory Valuation Reserve [Member] | |||||
Valuation Allowance [Roll Forward] | |||||
Beginning balance, adjustments to inventory carrying value | 56,034 | 5,934 | $ 5,461 | ||
Additions | $ 37,900 | $ 50,000 | 38,605 | 77,379 | 12,311 |
Write-offs | (73,895) | (27,279) | (11,838) | ||
Ending balance, adjustments to inventory carrying value | $ 20,744 | $ 56,034 | $ 5,934 |
Summary of Significant Accoun51
Summary of Significant Accounting Policies, Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2015 | |
Building [Member] | |
Property and equipment [Abstract] | |
Useful life | 39 years |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property and equipment [Abstract] | |
Useful life | 5 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property and equipment [Abstract] | |
Useful life | 7 years |
Computer Equipment [Member] | Minimum [Member] | |
Property and equipment [Abstract] | |
Useful life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Property and equipment [Abstract] | |
Useful life | 5 years |
Leasehold Improvements [Member] | |
Property and equipment [Abstract] | |
Estimated useful life description | Shorter of estimated useful life or lease term |
Scanners [Member] | |
Property and equipment [Abstract] | |
Useful life | 3 years |
Vehicles [Member] | Minimum [Member] | |
Property and equipment [Abstract] | |
Useful life | 3 years |
Vehicles [Member] | Maximum [Member] | |
Property and equipment [Abstract] | |
Useful life | 5 years |
Summary of Significant Accoun52
Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue recognition [Abstract] | |||
Accrued reserve for product returns | $ 7.8 | $ 10.1 | |
Sales returns | $ 65.6 | $ 83.6 | $ 79.4 |
Summary of Significant Accoun53
Summary of Significant Accounting Policies, Advertising Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Advertising expense [Abstract] | |||
Advertising expense incurred | $ 11 | $ 19.6 | $ 11.3 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies, Research and Development (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Research and development [Abstract] | |||
Research and development expense | $ 20.1 | $ 18.9 | $ 18 |
Summary of Significant Accoun55
Summary of Significant Accounting Policies, Uncertain Tax Positions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Minimum [Member] | |||
Uncertain Tax Positions [Abstract] | |||
Estimate of change in gross unrecognized tax benefits, net of foreign adjustments | $ 0 | ||
Maximum [Member] | |||
Uncertain Tax Positions [Abstract] | |||
Estimate of change in gross unrecognized tax benefits, net of foreign adjustments | 1,000 | ||
U.S. Federal, State and Foreign Jurisdictions [Member] | |||
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Gross balance at beginning of year | 5,987 | $ 7,484 | $ 9,045 |
Increases related to prior year tax positions | 1,677 | 0 | 0 |
Increases related to current year tax positions | 1,119 | 2,700 | 1,188 |
Settlements | 0 | 0 | (1,671) |
Decreases due to lapse of statutes of limitations | (667) | (4,106) | (1,086) |
Currency adjustments | 8 | ||
Currency adjustments | (344) | (91) | |
Gross balance at end of year | 7,772 | 5,987 | 7,484 |
Unrecognized tax benefits that would impact effective tax rate | 900 | 1,100 | |
Uncertain Tax Positions [Abstract] | |||
Interest and penalties expenses/(benefits) | 400 | 400 | (100) |
Accrued interest and penalties | $ 1,700 | $ 1,300 | $ 900 |
Summary of Significant Accoun56
Summary of Significant Accounting Policies, Foreign Currency Translation (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Foreign Currency Translation [Abstract] | |||
Cumulative translation adjustment related to foreign currency adjustment | $ 71.6 | $ 52.6 | $ 47.6 |
Cumulative translation adjustment related to foreign currency adjustment, tax | $ 10.9 | $ 10.8 | $ 10.4 |
Summary of Significant Accoun57
Summary of Significant Accounting Policies, Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its Currency (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Jun. 30, 2014USD ($)VEB / $ | Mar. 31, 2014USD ($)VEB / $Mechanism | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Mar. 31, 2015VEB / $ | Dec. 31, 2012USD ($) | |
Operations in Venezuela [Abstract] | |||||||
Total assets | $ 1,505,843 | $ 1,614,434 | |||||
Monetary assets | 289,354 | 288,415 | $ 525,153 | $ 320,025 | |||
Operations in Venezuela [Abstract] | |||||||
Foreign currency transaction losses on net monetary assets denominated in bolivar | 10,200 | 46,300 | |||||
Other Income (Expense), Net [Member] | |||||||
Operations in Venezuela [Abstract] | |||||||
Foreign currency transaction losses on net monetary assets denominated in bolivar | $ 25,300 | $ 14,700 | 10,200 | ||||
Venezuela [Member] | |||||||
Operations in Venezuela [Abstract] | |||||||
Total assets | 7,900 | 14,600 | |||||
Monetary assets | 4,300 | 8,200 | |||||
Operations in Venezuela [Abstract] | |||||||
Number of foreign exchange mechanisms | Mechanism | 2 | ||||||
SICAD I [Member] | Venezuela [Member] | |||||||
Operations in Venezuela [Abstract] | |||||||
Foreign currency exchange rate | VEB / $ | 10.7 | ||||||
SICAD II [Member] | Venezuela [Member] | |||||||
Operations in Venezuela [Abstract] | |||||||
Foreign currency exchange rate | VEB / $ | 50 | ||||||
SIMADI [Member] | Venezuela [Member] | |||||||
Operations in Venezuela [Abstract] | |||||||
Foreign currency exchange rate | VEB / $ | 193 | ||||||
Correct Certain Accounting Errors for Hyper-Inflationary Adjustments with Respect to Operations in Venezuela [Member] | |||||||
Operations in Venezuela [Abstract] | |||||||
Out-of-period adjustment to income statement | 6,300 | ||||||
Subsidiary [Member] | Venezuela [Member] | |||||||
Operations in Venezuela [Abstract] | |||||||
Payable to parent company | $ 33,700 | $ 34,800 | |||||
Sales Revenue [Member] | Geographic Concentration Risk [Member] | |||||||
Operations in Venezuela [Abstract] | |||||||
Concentration risk percentage | 0.20% | 1.00% | 1.10% |
Summary of Significant Accoun58
Summary of Significant Accounting Policies, Fair Value of Financial Iinstruments (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value of financial instruments [Abstract] | ||
Long-term debt, fair value | $ 252.4 | $ 252.8 |
Summary of Significant Accoun59
Summary of Significant Accounting Policies, Stock-Based Compensation (Details) - General and Administrative Expense [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-Based Compensation [Abstract] | |||
Compensation expense related to equity compensation plans | $ 7.4 | $ 17.5 | $ 32.6 |
Reversal of compensation expense for certain performance based awards no longer expected to vest | $ 7.6 | $ 4.7 |
Summary of Significant Accoun60
Summary of Significant Accounting Policies, Accounting for Derivative Instruments and Hedging Activities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||
Pretax net gains (losses) related to foreign currency translation adjustments | $ 0 | $ 1.4 | $ (10.5) |
Prepaid Expenses and Other (Det
Prepaid Expenses and Other (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Prepaid Expenses and Other [Abstract] | ||
Deferred tax assets | $ 0 | $ 40,840 |
Intercompany deferred charges | 14,940 | 26,776 |
Prepaid income taxes | 40,407 | 37,113 |
Prepaid inventory and import costs | 10,573 | 21,060 |
Prepaid rent, insurance and other occupancy costs | 11,590 | 10,400 |
Prepaid promotion and event cost | 4,486 | 4,275 |
Prepaid other taxes | 4,146 | 3,037 |
Forward contracts | 485 | 1,661 |
Deposits | 1,513 | 1,244 |
Other | 13,807 | 13,728 |
Total prepaid expenses and other | $ 101,947 | $ 160,134 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment [Abstract] | |||
Property and equipment, gross | $ 666,130 | $ 636,711 | |
Less: accumulated depreciation | (211,593) | (171,928) | |
Property and equipment, net | 454,537 | 464,783 | |
Depreciation expense | 61,600 | 46,500 | $ 27,100 |
Land [Member] | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 33,610 | 34,087 | |
Buildings [Member] | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 272,208 | 230,934 | |
Construction in Progress [Member] | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 7,827 | 63,941 | |
Furniture and Fixtures [Member] | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 81,274 | 61,643 | |
Computers and Equipment [Member] | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 141,079 | 118,248 | |
Leasehold Improvements [Member] | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 116,120 | 110,539 | |
Scanners [Member] | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | 11,805 | 14,594 | |
Vehicles [Member] | |||
Property and Equipment [Abstract] | |||
Property and equipment, gross | $ 2,207 | $ 2,725 |
Goodwill and Other Intangible63
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill and indefinite life intangible assets: | |||
Goodwill | $ 112,446 | $ 112,446 | |
Trademarks and trade names | 24,599 | 24,599 | |
Total goodwill and trademarks and trade names | 137,045 | 137,045 | |
Finite life intangible assets [Abstract] | |||
Gross carrying amount | 128,304 | 139,990 | |
Accumulated amortization | $ 85,894 | 89,527 | |
Weighted average amortization period | 15 years | ||
Amortization expense | $ 8,600 | 8,400 | $ 7,800 |
Annual estimated amortization expense [Abstract] | |||
2,016 | 8,000 | ||
2,017 | 8,000 | ||
2,018 | 8,000 | ||
2,019 | 8,000 | ||
2,020 | 8,000 | ||
Writeoff of fully amortized intangible assets | 12,000 | ||
Scanner technology [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | 46,482 | 46,482 | |
Accumulated amortization | $ 33,590 | 30,557 | |
Weighted average amortization period | 18 years | ||
Developed technology [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | $ 22,500 | 22,500 | |
Accumulated amortization | $ 17,558 | 16,734 | |
Weighted average amortization period | 20 years | ||
Distribution network [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | $ 11,598 | 11,598 | |
Accumulated amortization | $ 11,096 | 10,594 | |
Weighted average amortization period | 15 years | ||
Trademarks [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | $ 2,409 | 14,404 | |
Accumulated amortization | $ 879 | 12,461 | |
Weighted average amortization period | 15 years | ||
Other [Member] | |||
Finite life intangible assets [Abstract] | |||
Gross carrying amount | $ 45,315 | 45,006 | |
Accumulated amortization | $ 22,771 | $ 19,181 | |
Weighted average amortization period | 8 years |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Components of other assets [Abstract] | ||
Deferred taxes | $ 40,373 | $ 15,128 |
Deposits for noncancelable operating leases | 39,016 | 29,957 |
Deposit for customs assessment (Note 20) | 35,424 | 31,825 |
Cash surrender value for life insurance policies | 27,292 | 26,280 |
Other | 23,354 | 24,286 |
Total other assets | $ 165,459 | $ 127,476 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Expenses [Abstract] | ||
Accrued sales force commissions and other payments | $ 166,273 | $ 167,914 |
Accrued other taxes | 35,922 | 32,246 |
Accrued payroll and other employee expenses | 24,390 | 29,220 |
Accrued payable to vendors | 40,914 | 28,341 |
Accrued royalties | 9,701 | 10,475 |
Sales return reserve | 7,752 | 10,118 |
Deferred revenue | 6,644 | 6,160 |
Other | 19,320 | 16,373 |
Total accrued expenses | $ 310,916 | $ 300,847 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Other Liabilities [Abstract] | ||
Deferred tax liabilities | $ 16,177 | $ 16,017 |
Reserve for other tax liabilities | 9,463 | 7,324 |
Reserve for customs assessment | 3,600 | 4,727 |
Liability for deferred compensation plan | 33,456 | 32,398 |
Pension plan benefits reserve | 4,859 | 5,844 |
Build to suit - financing obligation | 10,238 | 10,421 |
Deferred rent and deferred tenant incentives | 6,336 | 7,102 |
Asset retirement obligation | 4,682 | 4,611 |
Other | 2,069 | 656 |
Total other liabilities | $ 90,880 | $ 89,100 |
Long-Term Debt (Details)
Long-Term Debt (Details) $ in Thousands, ¥ in Billions | 12 Months Ended | |||||||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015JPY (¥) | Dec. 31, 2014JPY (¥) | ||||
Long-term Debt [Abstract] | ||||||||
Current portion of long-term debt | $ 67,849 | $ 82,770 | ||||||
Debt discount | 4,300 | |||||||
Interest expense | 7,900 | 5,700 | $ 3,000 | |||||
Maturities of Long-term Debt [Abstract] | ||||||||
2,016 | 67,849 | |||||||
2,017 | 34,905 | |||||||
2,018 | 39,481 | |||||||
2,019 | 111,664 | |||||||
2,020 | 0 | |||||||
Thereafter | 0 | |||||||
Total | [1] | $ 253,899 | ||||||
Maximum [Member] | ||||||||
Long-term Debt [Abstract] | ||||||||
Consolidated leverage ratio | 2.25 | |||||||
Minimum [Member] | ||||||||
Long-term Debt [Abstract] | ||||||||
Consolidated interest coverage ratio | 3 | |||||||
Term Loan Facility [Member] | ||||||||
Long-term Debt [Abstract] | ||||||||
Original principal amount | $ 127,500 | |||||||
Balance | [1],[2] | $ 118,700 | 125,900 | |||||
Interest rate | Variable 30 day: 2.4815% | |||||||
Interest rate | 2.4815% | 2.4815% | ||||||
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. | |||||||
Term of variable rate | 30 days | |||||||
Percentage of principal payable in installments | 50.00% | |||||||
Frequency of payment | Quarterly | |||||||
Current portion of long-term debt | $ 57,800 | |||||||
Japanese Yen Term Loan Facility [Member] | ||||||||
Long-term Debt [Abstract] | ||||||||
Original principal amount | $ 51,100 | [1],[2] | 54,400 | [1],[2] | ¥ 6.6 | |||
Balance | ¥ | [1],[2] | ¥ 6.1 | ¥ 6.5 | |||||
Interest rate | Variable 30 day: 2.30% | |||||||
Interest rate | 2.30% | 2.30% | ||||||
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. | |||||||
Term of variable rate | 30 days | |||||||
Percentage of principal payable in installments | 50.00% | |||||||
Frequency of payment | Quarterly | |||||||
Current portion of long-term debt | $ 4,500 | |||||||
Revolving Credit Facility [Member] | ||||||||
Long-term Debt [Abstract] | ||||||||
Borrowing capacity | $ 187,500 | |||||||
Term of loan | 5 years | |||||||
Balance | [1],[2] | $ 47,500 | 72,500 | |||||
Interest rate | Variable 30 day: 2.4815% | |||||||
Interest rate | 2.4815% | 2.4815% | ||||||
Repayment terms | Revolving line of credit expires October 2019. | |||||||
Term of variable rate | 30 days | |||||||
Korean Subsidiary Loan [Member] | ||||||||
Long-term Debt [Abstract] | ||||||||
Original principal amount | $ 20,000 | |||||||
Balance | [1],[2] | $ 20,000 | 0 | |||||
Interest rate | 1.12% | 1.12% | ||||||
Repayment terms | One half of the principal amount payable on March 17, 2017 and the remainder payable on March 16, 2018. | |||||||
Percentage of principal payable in installments | 50.00% | |||||||
Japan Subsidiary Loan [Member] | ||||||||
Long-term Debt [Abstract] | ||||||||
Term of loan | 3 years | |||||||
Original principal amount | ¥ | ¥ 2 | |||||||
Balance | [1],[2] | $ 16,600 | $ 0 | ¥ 2 | ||||
Interest rate | 0.66% | 0.66% | ||||||
Repayment terms | Payable in semi-annual installments over three years that began on January 31, 2016. | |||||||
Frequency of payment | Semi-annual | |||||||
Current portion of long-term debt | $ 5,000 | |||||||
[1] | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $4.3 million, which is not reflected in this table. | |||||||
[2] | As of December 31, 2015, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $57.8 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility, $4.5 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility and $5.5 million of the Japan subsidiary loan. The Company has classified the amounts borrowed under the revolving line of credit as short term because it is the Company's intention to use the line of credit to borrow and pay back funds over short periods of time. |
Lease and Financing Obligatio68
Lease and Financing Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
New Building [Abstract] | |||
Deposit paid to landlord | $ 39,016 | $ 29,957 | |
Value of New Building | 666,130 | 636,711 | |
Accumulated depreciation | 211,593 | 171,928 | |
Operating Leases, Minimum Future Obligations [Abstract] | |||
2,016 | 36,627 | ||
2,017 | 29,970 | ||
2,018 | 24,201 | ||
2,019 | 16,221 | ||
2,020 | 8,927 | ||
Thereafter | 1,921 | ||
Total | 117,867 | ||
Financing Obligations, Minimum Future Obligations [Abstract] | |||
2,016 | 630 | ||
2,017 | 649 | ||
2,018 | 669 | ||
2,019 | 689 | ||
2,020 | 709 | ||
Thereafter | 3,290 | ||
Total minimum lease payments | 6,636 | ||
Rent expense for operating leases | 52,400 | 52,300 | $ 34,600 |
Interest expense associated with financing obligation | $ 100 | 0 | $ 0 |
New Regional Headquarters Building [Member] | |||
New Building [Abstract] | |||
Extension period for lease | 10 years | ||
Initial term of lease | 10 years | ||
Construction-in-progress | 13,100 | ||
Financing obligation | $ 10,600 | 10,400 | |
Deposit paid to landlord | 9,300 | 2,700 | |
Value of New Building | 19,900 | ||
Accumulated depreciation | 300 | ||
Tenant incentive asset | 5,600 | 6,400 | |
Deferred tenant incentive liability | $ 5,100 | $ 6,100 | |
Office Space and Computer Hardware [Member] | |||
New Building [Abstract] | |||
Extension period for lease | 3 years |
Capital Stock (Details)
Capital Stock (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2015USD ($)Vote$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)shares | Oct. 31, 2015USD ($) | Aug. 31, 2013USD ($) | Dec. 31, 1998USD ($) | |
Capital stock [Abstract] | ||||||
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Weighted average share outstanding [Abstract] | ||||||
Basic weighted-average common shares outstanding (in shares) | 57,997,000 | 59,073,000 | 58,606,000 | |||
Effect of dilutive securities: Stock awards and options (in shares) | 1,060,000 | 1,814,000 | 2,842,000 | |||
Diluted weighted-average common shares outstanding (in shares) | 59,057,000 | 60,887,000 | 61,448,000 | |||
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares) | 1,800,000 | 2,700,000 | 1,200,000 | |||
Repurchases of common stock [Abstract] | ||||||
Common stock repurchased | $ | $ 164,094 | $ 45,724 | $ 140,865 | |||
Amount available for repurchases | $ | $ 446,900 | |||||
Preferred Stock [Member] | ||||||
Capital stock [Abstract] | ||||||
Preferred stock, authorized (in shares) | 25,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
Shares outstanding (in shares) | 0 | 0 | ||||
Common Class A [Member] | ||||||
Capital stock [Abstract] | ||||||
Common stock, authorized (in shares) | 500,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
Number of votes per share | Vote | 1 | |||||
Number of shares of class A common stock issued after conversion of Class B common stock | 1 | |||||
Repurchases of common stock [Abstract] | ||||||
Shares repurchased (in shares) | 3,800,000 | 800,000 | 1,700,000 | |||
Common stock repurchased | $ | $ 164,100 | $ 45,724 | $ 140,865 | |||
Authorized amount | $ | $ 10,000 | $ 500,000 | ||||
Increase in authorized amount | $ | $ 400,000 | |||||
Common Class B [Member] | ||||||
Capital stock [Abstract] | ||||||
Common stock, authorized (in shares) | 100,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
Shares outstanding (in shares) | 0 | 0 | ||||
Number of votes per share | Vote | 10 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) $ / shares in Units, $ in Thousands | Jun. 03, 2013shares | Dec. 31, 2015USD ($)InstallmentLevel$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / shares | Apr. 30, 2010shares | |
Stock-Based Compensation [Abstract] | ||||||
Stock-based compensation expense (income) | $ | $ 7,400 | $ 17,504 | $ 32,620 | |||
Performance-Based Options [Member] | ||||||
Stock-Based Compensation [Abstract] | ||||||
Stock-based compensation expense (income) | $ | $ (6,400) | $ 5,200 | $ 23,200 | |||
2010 Omnibus Incentive Plan [Member] | ||||||
Stock-Based Compensation [Abstract] | ||||||
Number of shares authorized for issuance (in shares) | shares | 7,000,000 | |||||
Number of additional shares authorized for issuance (in shares) | shares | 3,200,000 | |||||
2010 Omnibus Incentive Plan [Member] | Stock Options [Member] | ||||||
Fair Value Assumptions [Abstract] | ||||||
Weighted average grant date fair value of grants (in dollars per share) | $ 16.26 | $ 23.01 | $ 22.10 | |||
Risk-free interest rate | [1] | 1.70% | 1.70% | 1.40% | ||
Dividend yield | [2] | 2.10% | 1.90% | 3.10% | ||
Expected volatility | [3] | 46.80% | 45.40% | 41.70% | ||
Expected life in months | [4] | 65 months | 62 months | 62 months | ||
Options [Roll Forward] | ||||||
Outstanding at beginning of year (in shares) | shares | 5,962,500 | |||||
Granted (in shares) | shares | 218,500 | |||||
Exercised (in shares) | shares | (720,400) | |||||
Forfeited/cancelled/expired (in shares) | shares | (392,200) | |||||
Outstanding at end of year (in shares) | shares | 5,068,400 | 5,962,500 | ||||
Exercisable at end of year (in shares) | shares | 2,461,600 | |||||
Options, Weighted-Average Exercise Price [Roll Forward] | ||||||
Outstanding at beginning of year (in dollars per share) | $ 50.43 | |||||
Granted (in dollars per share) | 44.72 | |||||
Exercised (in dollars per share) | 21.11 | |||||
Forfeited/cancelled/expired (in dollars per share) | 69.17 | |||||
Outstanding at end of year (in dollars per share) | 52.91 | $ 50.43 | ||||
Exercisable at end of year (in dollars per share) | $ 29.10 | |||||
Outstanding options, weighted-average remaining contractual term | 3 years 3 months 4 days | |||||
Exercisable options, weighted-average remaining contractual term | 1 year 8 months 12 days | |||||
Options, Additional Information [Abstract] | ||||||
Aggregate intrinsic value | $ | $ 29,406 | |||||
Aggregate intrinsic value, exercisable | $ | 29,369 | |||||
Fair value of options vested and expensed, net of tax | $ | 2,800 | $ 4,200 | $ 13,200 | |||
Cash proceeds from stock options exercised | $ | 13,041 | 11,042 | 37,869 | |||
Tax benefit realized for stock options exercised | $ | 4,451 | 11,947 | 41,914 | |||
Intrinsic value of stock options exercised | $ | $ 12,085 | $ 17,159 | $ 241,700 | |||
Nonvested Restricted Stock Awards, Weighted-Average Grant Date Fair Value [Abstract] | ||||||
Granted (in dollars per share) | $ 44.72 | |||||
Unrecognized Stock-Based Compensation Expense [Abstract] | ||||||
Unrecognized stock-based compensation expense | $ | $ 4,400 | |||||
Unrecognized stock-based compensation expense, period for recognition | 2 years 7 months 6 days | |||||
2010 Omnibus Incentive Plan [Member] | Stock Options [Member] | Minimum [Member] | ||||||
Stock-Based Compensation [Abstract] | ||||||
Contractual term of stock options granted | 7 years | |||||
2010 Omnibus Incentive Plan [Member] | Stock Options [Member] | Maximum [Member] | ||||||
Stock-Based Compensation [Abstract] | ||||||
Contractual term of stock options granted | 10 years | |||||
2010 Omnibus Incentive Plan [Member] | Service-Based Options [Member] | ||||||
Options [Roll Forward] | ||||||
Outstanding at beginning of year (in shares) | shares | 1,924,200 | |||||
Granted (in shares) | shares | 179,700 | |||||
Exercised (in shares) | shares | (545,000) | |||||
Forfeited/cancelled/expired (in shares) | shares | (89,200) | |||||
Outstanding at end of year (in shares) | shares | 1,469,700 | 1,924,200 | ||||
Exercisable at end of year (in shares) | shares | 1,175,300 | |||||
Options, Weighted-Average Exercise Price [Roll Forward] | ||||||
Outstanding at beginning of year (in dollars per share) | $ 29.08 | |||||
Granted (in dollars per share) | 42.51 | |||||
Exercised (in dollars per share) | 18.14 | |||||
Forfeited/cancelled/expired (in dollars per share) | 60.99 | |||||
Outstanding at end of year (in dollars per share) | 32.85 | $ 29.08 | ||||
Exercisable at end of year (in dollars per share) | $ 26.68 | |||||
Outstanding options, weighted-average remaining contractual term | 2 years 3 months 29 days | |||||
Exercisable options, weighted-average remaining contractual term | 1 year 5 months 5 days | |||||
Options, Additional Information [Abstract] | ||||||
Aggregate intrinsic value | $ | $ 20,228 | |||||
Aggregate intrinsic value, exercisable | $ | $ 20,191 | |||||
Nonvested Restricted Stock Awards, Weighted-Average Grant Date Fair Value [Abstract] | ||||||
Granted (in dollars per share) | $ 42.51 | |||||
2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | ||||||
Stock-Based Compensation [Abstract] | ||||||
Number of installments for vesting | Installment | 3 | |||||
Number of established performance levels for vesting | Level | 3 | |||||
Options [Roll Forward] | ||||||
Outstanding at beginning of year (in shares) | shares | 4,038,300 | |||||
Granted (in shares) | shares | 38,800 | |||||
Exercised (in shares) | shares | (175,400) | |||||
Forfeited/cancelled/expired (in shares) | shares | (303,000) | |||||
Outstanding at end of year (in shares) | shares | 3,598,700 | 4,038,300 | ||||
Exercisable at end of year (in shares) | shares | 1,286,300 | |||||
Options, Weighted-Average Exercise Price [Roll Forward] | ||||||
Outstanding at beginning of year (in dollars per share) | $ 60.61 | |||||
Granted (in dollars per share) | 54.97 | |||||
Exercised (in dollars per share) | 30.35 | |||||
Forfeited/cancelled/expired (in dollars per share) | 71.58 | |||||
Outstanding at end of year (in dollars per share) | 61.10 | $ 60.61 | ||||
Exercisable at end of year (in dollars per share) | $ 31.31 | |||||
Outstanding options, weighted-average remaining contractual term | 3 years 7 months 20 days | |||||
Exercisable options, weighted-average remaining contractual term | 1 year 11 months 5 days | |||||
Options, Additional Information [Abstract] | ||||||
Aggregate intrinsic value | $ | $ 9,177 | |||||
Aggregate intrinsic value, exercisable | $ | $ 9,177 | |||||
Nonvested Restricted Stock Awards, Weighted-Average Grant Date Fair Value [Abstract] | ||||||
Granted (in dollars per share) | $ 54.97 | |||||
2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | First Performance Level | ||||||
Stock-Based Compensation [Abstract] | ||||||
Vesting percentage | 33.00% | |||||
2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | Second Performance Level | ||||||
Stock-Based Compensation [Abstract] | ||||||
Vesting percentage | 33.00% | |||||
2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | Third Performance Level | ||||||
Stock-Based Compensation [Abstract] | ||||||
Vesting percentage | 33.00% | |||||
2010 Omnibus Incentive Plan [Member] | Non-Vested Restricted Stock [Member] | ||||||
Options, Weighted-Average Exercise Price [Roll Forward] | ||||||
Granted (in dollars per share) | $ 54.80 | |||||
Nonvested Restricted Stock Awards, Number of Shares [Roll Forward] | ||||||
Nonvested at beginning of year (in shares) | shares | 673,800 | |||||
Granted (in shares) | shares | 358,100 | |||||
Vested (in shares) | shares | (249,100) | |||||
Forfeited (in shares) | shares | (120,600) | |||||
Nonvested at end of year (in shares) | shares | 662,200 | 673,800 | ||||
Nonvested Restricted Stock Awards, Weighted-Average Grant Date Fair Value [Abstract] | ||||||
Nonvested, beginning balance (in dollars per share) | $ 60.14 | |||||
Granted (in dollars per share) | 54.80 | |||||
Vested (in dollars per share) | 52.52 | |||||
Forfeited (in dollars per share) | 56.03 | |||||
Nonvested, Ending Balance (in dollars per share) | $ 60.87 | $ 60.14 | ||||
Unrecognized Stock-Based Compensation Expense [Abstract] | ||||||
Unrecognized stock-based compensation expense | $ | $ 22,200 | |||||
Unrecognized stock-based compensation expense, period for recognition | 2 years 6 months | |||||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | ||||||
Stock-Based Compensation [Abstract] | ||||||
Number of installments for vesting | Installment | 4 | |||||
Number of established performance levels for vesting | Level | 4 | |||||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | First Performance Level | ||||||
Stock-Based Compensation [Abstract] | ||||||
Vesting percentage | 25.00% | |||||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | Second Performance Level | ||||||
Stock-Based Compensation [Abstract] | ||||||
Vesting percentage | 25.00% | |||||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | Third Performance Level | ||||||
Stock-Based Compensation [Abstract] | ||||||
Vesting percentage | 25.00% | |||||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | Fourth Performance Level | ||||||
Stock-Based Compensation [Abstract] | ||||||
Vesting percentage | 25.00% | |||||
[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, 2015 | Dec. 31, 2014 | |
Summary of changes in fair value of marketable securities [Roll Forward] | ||
Balance, beginning of period | $ 26,280,000 | $ 23,172,000 |
Actual return on plan assets: [Abstract] | ||
Relating to assets still held at the reporting date | (1,597,000) | 1,249,000 |
Purchases and issuances | 3,025,000 | 2,798,000 |
Sales and settlements | (416,000) | (939,000) |
Transfers into Level 3 | 0 | 0 |
Balance, End of period | 27,292,000 | 26,280,000 |
Fair Value on a Recurring Basis [Member] | ||
Financial assets (liabilities) [Abstract] | ||
Cash equivalents and current investments | 47,121,000 | 86,574,000 |
Forward contracts | 485,000 | 1,661,000 |
Insurance company contracts | 27,292,000 | 26,280,000 |
Total | 74,898,000 | 114,515,000 |
Restricted current investments | 14,400 | 11,800 |
Fair Value on a Recurring Basis [Member] | Level 1 [Member] | ||
Financial assets (liabilities) [Abstract] | ||
Cash equivalents and current investments | 47,121,000 | 86,574,000 |
Forward contracts | 0 | 0 |
Insurance company contracts | 0 | 0 |
Total | 47,121,000 | 86,574,000 |
Fair Value on a Recurring Basis [Member] | Level 2 [Member] | ||
Financial assets (liabilities) [Abstract] | ||
Cash equivalents and current investments | 0 | 0 |
Forward contracts | 485,000 | 1,661,000 |
Insurance company contracts | 0 | 0 |
Total | 485,000 | 1,661,000 |
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 | 27,292,000 | 26,280,000 |
Total | $ 27,292,000 | $ 26,280,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Consolidated income before provision for income taxes [Abstract] | ||||
U.S. | $ 134,473 | $ 184,476 | $ 307,994 | |
Foreign | 77,486 | 114,031 | 248,946 | |
Income before provision for income taxes | 211,959 | 298,507 | 556,940 | |
Current [Abstract] | ||||
Federal | 6,328 | 37,402 | 81,871 | |
State | 1,483 | 2,095 | 361 | |
Foreign | 50,403 | 48,904 | 148,310 | |
Current income tax expense (benefit) | 58,214 | 88,401 | 230,542 | |
Deferred [Abstract] | ||||
Federal | 16,556 | (380) | (2,831) | |
State | (674) | 444 | 551 | |
Foreign | 4,817 | 20,866 | (36,210) | |
Deferred income tax expense (benefit) | 20,699 | 20,930 | (38,490) | |
Provision for income taxes | 78,913 | 109,331 | $ 192,052 | |
Deferred tax assets [Abstract] | ||||
Inventory differences | 5,222 | 12,362 | ||
Foreign tax credit and other foreign benefits | 86,729 | 116,603 | ||
Stock-based compensation | 13,842 | 17,211 | ||
Accrued expenses not deductible until paid | 46,597 | 48,189 | ||
Foreign currency exchange | 8,976 | 10,774 | ||
Net operating losses | 10,994 | 17,530 | ||
Capitalized research and development | 1,632 | 3,362 | ||
Exchange gains and losses | 55,643 | 41,542 | ||
Other | 964 | 841 | ||
Gross deferred tax assets | 230,599 | 268,414 | ||
Deferred tax liabilities [Abstract] | ||||
Intangibles step-up | 13,607 | 15,106 | ||
Overhead allocation to inventory | 5,101 | 10,781 | ||
Amortization of intangibles | 18,733 | 18,374 | ||
Foreign outside basis in controlled foreign corporation | 84,434 | 100,016 | ||
Other | 35,257 | 48,187 | ||
Gross deferred tax liabilities | 157,132 | 192,464 | ||
Valuation allowance | (49,271) | (35,999) | ||
Deferred taxes, net | 24,196 | 39,951 | ||
Deferred tax assets, net, classification [Abstract] | ||||
Net current deferred tax assets | 0 | 40,840 | ||
Net noncurrent deferred tax assets | 40,373 | 15,128 | ||
Total net deferred tax assets | 40,373 | 55,968 | ||
Deferred tax liabilities, classification [Abstract] | ||||
Net current deferred tax liabilities | 0 | 0 | ||
Net noncurrent deferred tax liabilities | 16,177 | 16,017 | ||
Total net deferred tax liabilities | $ 16,177 | $ 16,017 | ||
Effective income tax rate, continuing operations, tax rate reconciliation [Abstract] | ||||
Income taxes at statutory rate | 35.00% | 35.00% | 35.00% | |
Foreign tax rate differential | 0.92% | 0.00% | (0.76%) | |
Non-deductible expenses | 0.09% | 0.12% | 0.12% | |
Controlled foreign corporation losses | 1.09% | 1.48% | 0.00% | |
Other | 0.13% | 0.03% | 0.12% | |
Effective income tax rate, continuing operations | 37.23% | 36.63% | 34.48% | |
Undistributed earnings of foreign subsidiaries | $ 70,000 | $ 50,000 | $ 50,000 | |
Deferred tax liabilities undistributed foreign earnings | $ 3,400 | |||
Minimum [Member] | ||||
Operating loss carryforwards [Abstract] | ||||
Expiration date | Dec. 31, 2016 | |||
Maximum [Member] | ||||
Operating loss carryforwards [Abstract] | ||||
Expiration date | Dec. 31, 2025 | |||
Deferred Tax Asset Valuation Allowance [Member] | ||||
Valuation Allowance [Roll Forward] | ||||
Beginning balance, adjustments to inventory carrying value | $ 35,999 | 10,803 | 10,522 | |
Additions charged to cost and expenses | 12,948 | 28,687 | 278 | |
Decreases | [1] | (2,943) | (3,546) | (165) |
Adjustments | [2] | 3,267 | 55 | 168 |
Ending balance, adjustments to inventory carrying value | 49,271 | $ 35,999 | $ 10,803 | |
Foreign Country [Member] | ||||
Operating loss carryforwards [Abstract] | ||||
Operating loss carryforwards | 34,700 | |||
Operating loss carryforwards scheduled to expire | 15,000 | |||
Operating loss carrying that will not expire | 19,700 | |||
Operating loss carryforwards, valuation allowance | $ 28,400 | |||
[1] | Decreases in valuation allowance due to lapse in statute of limitation of the net operating losses carryforward which had no impact to the income statement. | |||
[2] | Represents the net currency effects of translating valuation allowances at current rates of exchange. |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
401(k) Defined Contribution Plan [Abstract] | |||
Additional discretionary contributions | $ 0 | $ 0 | $ 6.2 |
401(k) Defined Contribution Plan [Member] | |||
401(k) Defined Contribution Plan [Abstract] | |||
Maximum percentage of compensation that can be deferred | 100.00% | ||
Minimum age to make contributions | 18 years | ||
Requisite service period | 1 day | ||
Percent of employees' base pay matched by employer | 4.00% | 4.00% | 4.00% |
Vesting period for Company's matching contributions | 2 years | ||
Compensation expense | $ 2.8 | $ 2.7 | $ 2.7 |
Additional discretionary contribution by employer, maximum percentage of employees' base pay | 10.00% | ||
Additional discretionary contribution by employer, annual vesting percentage | 20.00% | ||
Vesting period for Company's additional discretionary contributions | 5 years | ||
Defined Benefit Pension Plan [Member] | Japan [Member] | |||
Defined Benefit Pension Plan [Abstract] | |||
Accrued pension liability | $ 4.8 | 5.8 | 6.2 |
Pension expense | $ 0.7 | $ 0.9 | $ 0.8 |
Executive Deferred Compensati74
Executive Deferred Compensation Plan (Details) - Executive [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Executive Deferred Compensation Plan [Abstract] | |||
Percentage of matching contribution maximum | 10.00% | ||
Percentage of compensation deferred, maximum | 80.00% | ||
Percentage of bonus deferred, maximum | 100.00% | ||
Percentage vested after ten years of service | 50.00% | ||
Number of years of service to attain fifty percent vesting | 10 years | ||
Percentage vested per year after ten years of service | 5.00% | ||
Minimum age for unvested company contributions to fully vest | 60 years | ||
Compensation expense | $ 2.3 | $ 0.3 | $ 3.1 |
Long-term deferred compensation liability | 33.5 | 32.4 | |
Investment in Rabbi Trust | $ 27.3 | $ 26.3 |
Derivative Financial Instrume75
Derivative Financial Instruments (Details) $ in Thousands, € in Millions, ¥ in Millions, CAD in Millions, ₩ in Billions | 3 Months Ended | 12 Months Ended | |||||||||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015JPY (¥) | Dec. 31, 2015KRW (₩) | Dec. 31, 2015EUR (€) | Dec. 31, 2015CAD | Dec. 31, 2014JPY (¥) | Dec. 31, 2014EUR (€) | |
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Revenue | $ 572,200 | $ 571,300 | $ 560,200 | $ 543,300 | $ 609,600 | $ 638,800 | $ 650,000 | $ 671,100 | $ 2,247,047 | $ 2,569,495 | $ 3,176,718 | ||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Accumulated other comprehensive income (loss) | (71,269) | (51,521) | (71,269) | (51,521) | |||||||||||||
Accumulated Unrealized Gains (Losses) on Foreign Currency Cash Flow Hedges [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Accumulated other comprehensive income (loss) | 300 | 1,100 | 300 | 1,100 | |||||||||||||
Accumulated Unrealized Gains (Losses) on Foreign Currency Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Revenue | 2,100 | (2,700) | $ 5,100 | ||||||||||||||
Accumulated Translation Adjustment [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Accumulated other comprehensive income (loss) | 71,600 | 52,600 | 71,600 | 52,600 | |||||||||||||
Forward Contracts [Member] | Fair Value Hedges [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Fair value | 500 | 1,700 | 500 | 1,700 | |||||||||||||
Forward Contracts [Member] | Fair Value Hedges [Member] | Japanese Yen [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Notional amount | 4,200 | 4,200 | ¥ 500 | ||||||||||||||
Forward Contracts [Member] | Fair Value Hedges [Member] | Canadian Dollars [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Notional amount | 6,500 | 6,500 | CAD 9 | ||||||||||||||
Forward Contracts [Member] | Fair Value Hedges [Member] | Korean Won [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Notional amount | 4,900 | 4,900 | ₩ 5.8 | ||||||||||||||
Forward Contracts [Member] | Cash Flow Hedges [Member] | Japanese Yen [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Notional amount | 15,800 | 17,500 | 15,800 | 17,500 | ¥ 1,900 | ¥ 2,100 | |||||||||||
Forward Contracts [Member] | Cash Flow Hedges [Member] | Euros [Member] | |||||||||||||||||
Derivative Financial Instruments [Abstract] | |||||||||||||||||
Notional amount | $ 16,300 | $ 4,800 | $ 16,300 | $ 4,800 | € 15 | € 4 |
Supplemental Cash Flow Inform76
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | $ 7 | $ 5.3 | $ 4.8 |
Cash paid for income taxes | $ 49.8 | 171.4 | 130.1 |
Non-cash addition of fixed assets | $ 9.2 | ||
Non-cash charges to fixed assets associated with Korea building lease | 19.4 | ||
Non-cash increase in long-term liabilities | 16.7 | ||
Non-cash decrease in long-term assets | $ (2.7) |
Segment Information, Revenue by
Segment Information, Revenue by Region (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)Region | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Information [Abstract] | |||||||||||
Number of geographic regions | Region | 5 | ||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | $ 572,200 | $ 571,300 | $ 560,200 | $ 543,300 | $ 609,600 | $ 638,800 | $ 650,000 | $ 671,100 | $ 2,247,047 | $ 2,569,495 | $ 3,176,718 |
Greater China [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | 771,667 | 948,523 | 1,363,182 | ||||||||
North Asia [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | 686,555 | 782,985 | 869,400 | ||||||||
Americas [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | 329,668 | 329,027 | 370,087 | ||||||||
South Asia/Pacific [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | 321,971 | 328,388 | 378,988 | ||||||||
EMEA [Member] | |||||||||||
Revenue by region [Abstract] | |||||||||||
Revenue | $ 137,186 | $ 180,572 | $ 195,061 |
Segment Information, Revenue 78
Segment Information, Revenue by Product Lines (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue by product line [Abstract] | |||||||||||
Revenue | $ 572,200 | $ 571,300 | $ 560,200 | $ 543,300 | $ 609,600 | $ 638,800 | $ 650,000 | $ 671,100 | $ 2,247,047 | $ 2,569,495 | $ 3,176,718 |
Nu Skin [Member] | |||||||||||
Revenue by product line [Abstract] | |||||||||||
Revenue | 1,363,539 | 1,562,595 | 1,641,618 | ||||||||
Pharmanex [Member] | |||||||||||
Revenue by product line [Abstract] | |||||||||||
Revenue | 877,924 | 1,000,279 | 1,529,211 | ||||||||
Other [Member] | |||||||||||
Revenue by product line [Abstract] | |||||||||||
Revenue | $ 5,584 | $ 6,621 | $ 5,889 |
Segment Information, Significan
Segment Information, Significant Geographical Areas and Long Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Revenue by geographical area and long-lived assets [Abstract] | |||||||||||
Revenue | $ 572,200 | $ 571,300 | $ 560,200 | $ 543,300 | $ 609,600 | $ 638,800 | $ 650,000 | $ 671,100 | $ 2,247,047 | $ 2,569,495 | $ 3,176,718 |
Japan [Member] | |||||||||||
Revenue by geographical area and long-lived assets [Abstract] | |||||||||||
Revenue | 264,214 | 315,265 | 402,580 | ||||||||
Long-lived assets | 13,587 | 13,768 | 13,587 | 13,768 | |||||||
Mainland China [Member] | |||||||||||
Revenue by geographical area and long-lived assets [Abstract] | |||||||||||
Revenue | 565,527 | 675,082 | 1,005,395 | ||||||||
Long-lived assets | 110,839 | 103,445 | 110,839 | 103,445 | |||||||
South Korea [Member] | |||||||||||
Revenue by geographical area and long-lived assets [Abstract] | |||||||||||
Revenue | 422,341 | 467,720 | 466,820 | ||||||||
Long-lived assets | 48,702 | 46,626 | 48,702 | 46,626 | |||||||
United States [Member] | |||||||||||
Revenue by geographical area and long-lived assets [Abstract] | |||||||||||
Revenue | 243,748 | 230,767 | 268,232 | ||||||||
Long-lived assets | $ 271,057 | $ 287,103 | 271,057 | 287,103 | |||||||
Europe [Member] | |||||||||||
Revenue by geographical area and long-lived assets [Abstract] | |||||||||||
Revenue | $ 137,186 | $ 180,572 | $ 195,061 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Dec. 31, 2015 $ in Millions, ¥ in Billions | USD ($) | JPY (¥) |
Dispute Related to Customs Assessments by Yokohama Customs [Member] | ||
Commitments and Contingencies [Abstract] | ||
Estimated assessments and disputed duties | $ 35.4 | ¥ 4.3 |
Dividends Per Share (Details)
Dividends Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Dividends per Share [Abstract] | |||||||||
Payment of cash dividends | $ 81,187 | $ 81,371 | $ 70,514 | ||||||
Cash dividend paid (in dollars per share) | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.345 | $ 0.345 | $ 0.345 | $ 0.35 | $ 0.345 | |
Dividend Declared [Member] | |||||||||
Dividends per Share [Abstract] | |||||||||
Dividend payable per share (in dollars per share) | $ 0.355 | ||||||||
Dividend payable, date to be paid | Mar. 16, 2016 | ||||||||
Dividend payable, date of record | Feb. 26, 2016 |
Quarterly Results (Details)
Quarterly Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Results [Abstract] | |||||||||||
Revenue | $ 572,200 | $ 571,300 | $ 560,200 | $ 543,300 | $ 609,600 | $ 638,800 | $ 650,000 | $ 671,100 | $ 2,247,047 | $ 2,569,495 | $ 3,176,718 |
Gross profit | 450,800 | 418,600 | 449,900 | 438,300 | 503,100 | 529,500 | 494,000 | 564,400 | 1,757,537 | 2,091,061 | 2,670,912 |
Operating income | 61,700 | 42,500 | 71,800 | 68,600 | 91,300 | 105,000 | 54,700 | 101,200 | 244,702 | 352,188 | 554,112 |
Net income | $ 35,800 | $ 16,300 | $ 44,700 | $ 36,300 | $ 46,500 | $ 68,300 | $ 19,500 | $ 54,900 | $ 133,046 | $ 189,176 | $ 364,888 |
Net income per share [Abstract] | |||||||||||
Basic (in dollars per share) | $ 0.63 | $ 0.28 | $ 0.76 | $ 0.62 | $ 0.79 | $ 1.15 | $ 0.33 | $ 0.93 | $ 2.29 | $ 3.20 | $ 6.23 |
Diluted (in dollars per share) | $ 0.62 | $ 0.28 | $ 0.75 | $ 0.60 | $ 0.77 | $ 1.12 | $ 0.32 | $ 0.90 | $ 2.25 | $ 3.11 | $ 5.94 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Other Income (Expense), Net [Abstract] | ||||
Other income (expense), net | $ (32,743) | $ (53,681) | $ 2,828 | |
Foreign currency transaction losses on net monetary assets denominated in bolivar | 10,200 | 46,300 | ||
Expense related to prepayment of debt | $ 7,400 | |||
Foreign currency translation expenses | 17,000 | |||
Interest expense | $ 7,900 | $ 5,700 | $ 3,000 |