Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 31, 2018 | Jun. 30, 2017 | |
Entity Information [Line Items] | |||
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 | $ 3,270 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Common Class A [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 52,750,931 | ||
Common Class B [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | |
Current assets | |||
Cash and cash equivalents | $ 426,399 | $ 357,246 | |
Current investments | 11,847 | 10,880 | |
Accounts receivable | 33,196 | 31,199 | |
Inventories, net | 253,454 | 249,936 | |
Prepaid expenses and other | 52,893 | 65,076 | |
Total Current Assets | 777,789 | 714,337 | |
Property and equipment, net | 464,587 | 444,732 | |
Goodwill | 114,954 | 114,954 | [1] |
Other intangible assets, net | 67,647 | 63,553 | |
Other assets | 164,895 | 136,469 | |
Total assets | 1,589,872 | 1,474,045 | |
Current liabilities | |||
Accounts payable | 50,341 | 41,261 | |
Accrued expenses | 319,189 | 275,023 | |
Current portion of long-term debt | 77,840 | 82,727 | |
Total Current Liabilities | 447,370 | 399,011 | |
Long-term debt | 310,790 | 334,165 | |
Other liabilities | 127,116 | 76,799 | |
Total liabilities | 885,276 | 809,975 | |
Commitments and contingencies (Notes 11 and 21) | |||
Stockholders' equity | |||
Class A common stock - 500 million shares authorized, $.001 par value, 90.6 million shares issued | 91 | 91 | |
Additional paid-in capital | 466,349 | 439,635 | |
Treasury stock, at cost - 38.0 million and 37.9 million shares | (1,304,694) | (1,250,123) | |
Accumulated other comprehensive loss | (66,318) | (84,122) | |
Retained earnings | 1,609,168 | 1,558,589 | |
Total stockholders' equity | 704,596 | 664,070 | |
Total liabilities and stockholders' equity | $ 1,589,872 | $ 1,474,045 | |
[1] | Goodwill was recast to reflect current period presentation by geographic region at December 31, 2016. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' equity: | ||
Common stock, shares authorized (in shares) | 500 | 500 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares issued (in shares) | 90.6 | 90.6 |
Treasury stock (in shares) | 37.9 | 38 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Income [Abstract] | |||
Revenue | $ 2,279,099 | $ 2,207,797 | $ 2,247,047 |
Cost of sales | 502,078 | 500,457 | 489,510 |
Gross profit | 1,777,021 | 1,707,340 | 1,757,537 |
Operating expenses: | |||
Selling expenses | 938,024 | 922,083 | 951,372 |
General and administrative expenses | 564,514 | 554,153 | 561,463 |
Total operating expenses | 1,502,538 | 1,476,236 | 1,512,835 |
Operating income | 274,483 | 231,104 | 244,702 |
Other income (expense), net (Note 23) | (8,916) | (18,265) | (32,743) |
Income before provision for income taxes | 265,567 | 212,839 | 211,959 |
Provision for income taxes | 136,130 | 69,753 | 78,913 |
Net income | $ 129,437 | $ 143,086 | $ 133,046 |
Net income per share: | |||
Basic (in dollars per share) | $ 2.45 | $ 2.58 | $ 2.29 |
Diluted (in dollars per share) | $ 2.36 | $ 2.55 | $ 2.25 |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 52,806 | 55,412 | 57,997 |
Diluted (in shares) | 54,852 | 56,097 | 59,057 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income [Abstract] | |||
Net income | $ 129,437 | $ 143,086 | $ 133,046 |
Other comprehensive income: | |||
Foreign currency translation adjustment, net of taxes of $114, $2,483 and $(8,056), respectively | 18,264 | (13,127) | (18,967) |
Net unrealized gains/(losses) on foreign currency cash flow hedges, net of taxes of $(325), $784 and $84, respectively | (152) | (1,423) | 590 |
Less: Reclassification adjustment for realized losses/(gains) in current earnings, net of taxes of $756, $(935) and $169, respectively | (308) | 1,697 | (1,371) |
Total other comprehensive income | 17,804 | (12,853) | (19,748) |
Comprehensive income | $ 147,241 | $ 130,233 | $ 113,298 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other comprehensive income: | |||
Foreign currency translation adjustment, tax | $ (8,056) | $ 2,483 | $ 114 |
Net unrealized gains/(losses) on foreign currency cash flow hedges, tax | 84 | 784 | (325) |
Reclassification adjustment for realized losses/(gains) in current earnings, tax | $ 169 | $ (935) | $ 756 |
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 |
Balance at beginning 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 12) | 0 | 0 | (164,094) | 0 | 0 | (164,094) |
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 |
Stockholders' Equity [Roll Forward] | ||||||
Net income | 0 | 0 | 0 | 0 | 143,086 | 143,086 |
Other comprehensive income, net of tax | 0 | 0 | 0 | (12,853) | 0 | (12,853) |
Repurchase of Class A common stock (Note 12) | 0 | 0 | (247,208) | 0 | 0 | (247,208) |
Exercise of employee stock options/vesting of stock awards | 0 | 159 | 14,148 | 0 | 0 | 14,307 |
Excess tax benefit from equity awards | 0 | 3,840 | 0 | 0 | 0 | 3,840 |
Stock-based compensation | 0 | 8,890 | 0 | 0 | 0 | 8,890 |
Equity component of convertible note issuance (net) | 0 | 6,825 | 0 | 0 | 0 | 6,825 |
Cash dividends | 0 | 0 | 0 | 0 | (78,438) | (78,438) |
Balance at end of period at Dec. 31, 2016 | 91 | 439,635 | (1,250,123) | (84,122) | 1,558,589 | 664,070 |
Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect adjustment from adoption of ASU 2016-09 | Accounting Standards Update 2016-09 [Member] | 0 | 2,800 | 0 | 0 | (2,800) | 0 |
Net income | 0 | 0 | 0 | 0 | 129,437 | 129,437 |
Other comprehensive income, net of tax | 0 | 0 | 0 | 17,804 | 0 | 17,804 |
Repurchase of Class A common stock (Note 12) | 0 | 0 | (71,731) | 0 | 0 | (71,731) |
Exercise of employee stock options/vesting of stock awards | 0 | 9,479 | 14,964 | 0 | 0 | 24,443 |
Stock-based compensation | 0 | 19,314 | 0 | 0 | 0 | 19,314 |
Acquisition of noncontrolling interests | 0 | (11,067) | 0 | 0 | 0 | (11,067) |
Acquisition of equity method investment (0.2 million shares) | 0 | 6,188 | 2,196 | 0 | 0 | 8,384 |
Cash dividends | 0 | 0 | 0 | 0 | (76,058) | (76,058) |
Balance at end of period at Dec. 31, 2017 | $ 91 | $ 466,349 | $ (1,304,694) | $ (66,318) | $ 1,609,168 | $ 704,596 |
Consolidated Statements of Sto8
Consolidated Statements of Stockholder's Equity (Parenthetical) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stockholders' Equity [Roll Forward] | |||
Employee stock options (in shares) | 1.2 | 1.1 | 0.7 |
Acquisition of equity method investment with treasury stock (in shares) | 0.2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 129,437 | $ 143,086 | $ 133,046 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 71,564 | 72,397 | 71,365 |
Equity method earnings | (1,048) | 0 | 0 |
Japan customs expense | 0 | 31,355 | 0 |
Foreign currency (gains)/losses | (3,014) | 8,863 | 27,235 |
Stock-based compensation | 19,314 | 8,890 | 7,400 |
Deferred taxes | 39,213 | (17,652) | 17,362 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (103) | 3,357 | (2,246) |
Inventories, net | 7,537 | 9,801 | 59,652 |
Prepaid expenses and other | 14,250 | 37,789 | 13,572 |
Other assets | (11,658) | (3,969) | (15,752) |
Accounts payable | 6,834 | 13,443 | (4,297) |
Accrued expenses | 22,490 | (33,624) | 15,902 |
Other liabilities | 7,739 | 1,527 | (1,130) |
Net cash provided by operating activities | 302,555 | 275,263 | 322,109 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (60,156) | (50,221) | (56,622) |
Proceeds of investment sales | 11,269 | 18,132 | 11,526 |
Purchases of investments | (11,332) | (17,080) | (15,750) |
Acquisitions and investment in equity investee | (31,745) | (8,692) | 0 |
Net cash used in investing activities | (91,964) | (57,861) | (60,846) |
Cash flows from financing activities: | |||
Payment of cash dividends | (76,058) | (78,438) | (81,187) |
Repurchase of shares of common stock | (71,731) | (247,208) | (164,094) |
Exercise of employee stock options and taxes paid related to the net shares settlement of stock awards | 24,443 | 14,307 | 3,315 |
Income tax benefit of equity awards | 0 | 5,651 | 5,337 |
Payments on long-term debt | (103,226) | (56,151) | (35,508) |
Payment of debt issuance costs | 0 | (6,596) | 0 |
Proceeds from long-term debt | 67,000 | 233,721 | 36,217 |
Net cash used in financing activities | (159,572) | (134,714) | (235,920) |
Effect of exchange rate changes on cash | 18,134 | (14,796) | (24,404) |
Net increase in cash and cash equivalents | 69,153 | 67,892 | 939 |
Cash and cash equivalents, beginning of period | 357,246 | 289,354 | 288,415 |
Cash and cash equivalents, end of period | $ 426,399 | $ 357,246 | $ 289,354 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2017 | |
The Company [Abstract] | |
The Company | 1. The Company Nu Skin Enterprises, Inc. (the "Company") is a leading, global direct selling company that develops and distributes premium-quality, innovative personal care products and nutritional supplements that are sold worldwide under the Nu Skin and Pharmanex brands and a small number of other products and services. Over the last several years, the Company has introduced new Pharmanex nutritional supplements and Nu Skin personal care products under its ageLOC anti-aging brand. The Company reports revenue from seven segments: |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
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 net realizable value, using a standard cost method which approximates the first-in, first-out method. The Company had reserves of its inventory carrying value totaling $8.0 million and $8.1 million as of December 31, 2016 and 2017, respectively. Inventories consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Raw materials $ 108,276 $ 87,683 Finished goods 141,660 165,771 $ 249,936 $ 253,454 Reserves of inventories consist of the following (U.S. dollars in thousands): 2015 2016 2017 Beginning balance $ 56,034 $ 20,744 $ 7,995 Additions 38,605 24,906 16,382 Write-offs (73,895 ) (37,655 ) (16,296 ) Ending balance $ 20,744 $ 7,995 $ 8,081 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 No impairment charges were recorded for goodwill or intangibles during the periods presented. Revenue recognition Revenue is recognized when products are shipped, which is when title and risk of loss pass to the purchaser of the products. A reserve for product returns is accrued based on historical experience totaling $6.1 million and $4.5 million as of December 31, 2016 and 2017, respectively. During the years ended December 31, 2015, 2016 and 2017, the Company recorded sales returns of $65.6 million, $61.2 million and $53.8 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, 2015, 2016 and 2017 totaled $11.0 million, $15.9 million and $15.6 million, respectively. Selling expenses Selling expenses are the Company's most significant expense and are classified as operating expenses. Selling expenses include distributor commissions as well as wages, benefits, bonuses and other labor and unemployment expenses the Company pays to its sales force in Mainland China. In each of the Company's markets, except Mainland China, Sales Leaders can earn "multi-level" compensation under the Company's global sales compensation plan, including commissions for product sales to their consumer groups as well as the product sales made through the sales network they have developed and trained. The Company does not pay commissions on sales materials. Outside of Mainland China, the Company's distributors may make profits by purchasing the products from the Company at a discount and selling them to consumers with a mark-up. The Company does not account for nor pay additional commissions on these mark-ups received by distributors. In many markets, the Company also allows individuals who are not members of its sales force, referred to as "preferred customers," to buy products directly from the Company at a discount. The Company pays commissions on preferred customer purchases to the referring member of its sales force. Research and development Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of income and totaled $20.1 million, $24.3 million and $22.0 million in 2015, 2016 and 2017, 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 before 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 2018 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 2011. However, statutes in certain markets 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. In the first quarter of 2018, the Company received a preliminary tax assessment from Indonesia. The Company is currently evaluating the impact of the preliminary findings on its tax rate for the first quarter of 2018. A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands): 2015 2016 2017 Gross balance at January 1 $ 5,987 $ 7,772 $ 5,290 Increases related to prior year tax positions 1,677 185 ─ Decreases related to prior year tax positions ─ ─ (277 ) Increases related to current year tax positions 1,119 918 669 Settlements ─ (3,369 ) (159 ) Decreases due to lapse of statutes of limitations (667 ) (252 ) (187 ) Currency adjustments (344 ) 36 178 Gross balance at December 31 $ 7,772 $ 5,290 $ 5,514 At December 31, 2017, the Company had $5.5 million in unrecognized tax benefits of which $5.2 million, if recognized, would affect the effective tax rate. In comparison, at December 31, 2016, the Company had $5.3 million in unrecognized tax benefits of which $1.0 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 $2.5 to $3.5 million. During the years ended December 31, 2015, 2016 and 2017 the Company recognized $0.4 million, $(0.8) million and $0.7 million, respectively in interest and penalties expenses/(benefits). The Company had $1.7 million, $0.9 million and $1.6 million of accrued interest and penalties related to uncertain tax positions at December 31, 2015, 2016 and 2017, 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 12). 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 (expense) in the consolidated financial statements. Net of tax, the accumulated other comprehensive loss related to the foreign currency translation adjustments are $71.6 million (net of tax of $10.9 million), $84.7 million (net of tax of $13.4 million) and $66.4 million (net of tax of $5.8 million), at December 31, 2015, 2016 and 2017, respectively. Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its Currency Since 2010, Venezuela has been considered a highly inflationary economy. A market 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 the Company's 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. 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 of March 31, 2015. 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. 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. 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, 2017 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, 2016 and 2017, the long-term debt fair value is $497.4 million and $515.2 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 fair value of the Convertible Note is highly dependent upon the Company's stock price at the valuation date. The Company has classified these instruments as Level 2 in the fair value hierarchy. Fair value estimates are made at a specific point in time, based on relevant market information. The FASB Codification defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. On a quarterly basis, the Company measures at fair value certain financial assets, including cash equivalents. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair-value hierarchy: • Level 1 – quoted prices in active markets for identical assets or liabilities; • Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; • Level 3 – unobservable inputs based on the Company's own assumptions. Accounting standards permit companies, at their option, to measure many financial instruments and certain other items at fair value. The Company has elected not to apply the fair value option to existing eligible items. Stock-based compensation All share-based payments, including grants of stock options and restricted stock units, are required to be recognized in the Company's 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 the Company's stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The Company uses 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 the Company's stock options. The fair value of the Company's restricted stock units is based on the closing market price of its stock on the date of grant less the Company's expected dividend yield. The Company The total compensation expense related to equity compensation plans was $7.4 million, $8.9 million and $19.3 million for the years ended December 31, 2015, 2016 and 2017, respectively. In 2015, 2016 and 2017, these amounts reflect the reversal of $7.6 million, $9.6 million and none, respectively, for certain performance-based awards that were no longer expected to vest. For the years ended December 31, 2015, 2016 and 2017, 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. The Company's Subsidiaries enter into significant transactions with each other and third parties that may not be denominated in the respective Subsidiaries' functional currencies. The Company regularly monitors its foreign currency risks and seeks to reduce its exposure to fluctuations in foreign exchange rates using foreign currency exchange contracts and through certain intercompany loans of foreign currency. Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting treatment. Changes in fair value associated with hedge ineffectiveness, if any, are recorded in the results of operations currently. In the event that an anticipated transaction is no longer likely to occur, the Company recognizes the change in fair value of the derivative in its results of operations currently. Changes in the fair value of derivatives are recorded in current earnings or accumulated other comprehensive loss, depending on the intended use of the derivative and its resulting designation. The gains and losses in accumulated other comprehensive loss stemming from these derivatives will be reclassified into earnings in the period during which the hedged forecasted transaction affects earnings. The fair value of the receivable and payable amounts related to these unrealized gains and losses is classified as other current assets and liabilities. The Company does not use such derivative financial instruments for trading or speculative purposes. Gains and losses on certain intercompany loans of foreign currency are recorded as other income (expense) in the consolidated statements of income. Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard will be effective for the Company in the first quarter of 2018. As a result of adopting this new accounting guidance, the Company will change the method of accounting for its loyalty points program from a cost provision method to a deferred revenue method. The Company is continuing to evaluate the impact this ASU, and related amendments and interpretive guidance, will have on its consolidated financial statements. The Company plans to adopt the new standard in the first quarter of 2018 using the modified retrospective transition method. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In February 2016, the FASB issued ASU 2016-02, Leases (Subtopic 842) In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The objective of this update was to simplify several aspects of the accounting for employee share-based payment transactions, including accounting for income taxes related to share-based compensation, the related classification in the statement of cash-flows, and accounting for share award forfeitures. This ASU was effective for the Company beginning on January 1, 2017. Prior to January 1, 2017, excess tax benefits were recognized in equity. As permitted, the Company elected to classify excess tax benefits as an operating activity in the Statement of Cash Flows instead of as a financing activity on a prospective basis and did not retroactively adjust prior periods. As also permitted by the new guidance, beginning January 1, 2017 the Company has elected to account for share award forfeitures as they occur. Previously, share-based compensation expense was recorded net of estimated forfeitures. A cumulative adjustment of $2.8 million was recorded to retained earnings and additional paid-in capital as of January 1, 2017. Prior periods were not retroactively adjusted. In the second half of 2016, the FASB issued ASU Nos. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments Statement of Cash Flows (Topic 230): Restricted Cash. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This guidance simplifies the required test of goodwill for impairment by eliminating Step 2 from the goodwill impairment test. If a company determines in Step 1 of the goodwill impairment test that the carrying value of a reporting unit is less than the fair value, an impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. This ASU is effective for interim and annual impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In December 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities The |
Prepaid Expenses and Other
Prepaid Expenses and Other | 12 Months Ended |
Dec. 31, 2017 | |
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, 2016 2017 Deferred charges $ 9,319 $ 4,256 Prepaid income taxes 6,799 ─ Prepaid inventory and import costs 10,857 9,397 Prepaid rent, insurance and other occupancy costs 13,398 14,558 Prepaid promotion and event cost 4,126 3,581 Prepaid other taxes 4,778 5,559 Forward contracts 1,371 158 Deposits 1,079 1,147 Other 13,349 14,237 $ 65,076 $ 52,893 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment are comprised of the following (U.S. dollars in thousands): December 31, 2016 2017 Land $ 33,158 $ 33,667 Buildings 266,436 274,632 Construction in progress (1) 31,124 53,125 Furniture and fixtures 82,194 95,378 Computers and equipment 143,014 156,994 Leasehold improvements 109,863 123,479 Scanners 10,578 11,212 Vehicles 2,090 2,339 678,457 750,826 Less: accumulated depreciation (233,725 ) (286,239 ) $ 444,732 $ 464,587 (1) Construction in progress includes $25.8 million and $43.4 million as of December 31, 2016 and 2017, respectively, of eligible capitalized internal-use software development costs which will be reclassified to computers and equipment when placed into service. Depreciation of property and equipment totaled $61.6 million, $60.8 million and $58.3 million for the years ended December 31, 2015, 2016 and 2017, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill [Abstract] | |
Goodwill | 5. Goodwill During the first quarter of 2017, the Company realigned its operational segments and reporting structure to reflect how the business will be managed going forward. As part of this realignment, the Company divided its single operating segment into seven geographical reporting segments. The Company's reporting units for goodwill are its operating segments, which are also its reportable segments. As a result of the segment changes, the historical goodwill of $115.0 million was allocated to the seven reportable segments. The following table presents goodwill allocated to the Company's reportable segments for the periods ended December 30, 2017 and December 31, 2016 (U.S. dollars in thousands): December 31, 2016 (1) December 31, 2017 Mainland China $ 32,179 $ 32,179 South Korea 29,261 29,261 Americas 9,449 9,449 South Asia/Pacific 18,537 18,537 Japan 16,019 16,019 Hong Kong/Taiwan 6,634 6,634 EMEA 2,875 2,875 Total $ 114,954 $ 114,954 (1) Goodwill was recast to reflect current period presentation by geographic region at December 31, 2016. Goodwill is not amortized, rather it is subject to annual impairment tests. Annual impairment tests were completed resulting in no impairment charges for any of the periods shown. |
Other Intangible Assets
Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Other Intangible Assets [Abstract] | |
Other Intangible Assets | 6. Other Intangible Assets Other intangible assets consist of the following (U.S. dollars in thousands): Carrying Amount at December 31, Indefinite life intangible assets: 2016 2017 Trademarks and trade names $ 24,599 $ 24,599 Other indefinite lived intangibles 3,763 3,763 $ 28,362 $ 28,362 December 31, 2016 December 31, 2017 Finite life intangible assets: Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Weighted-average Amortization Period Scanner technology $ 46,482 $ 36,624 $ 46,482 $ 39,657 18 years Developed technology 22,500 18,383 22,500 19,207 20 years Distributor network 11,598 11,598 11,598 11,598 15 years Trademarks 2,592 1,011 2,785 1,197 15 years Other 46,219 26,584 57,550 29,971 8 years $ 129,391 $ 94,200 $ 140,915 $ 101,630 15 years Amortization of finite-life intangible assets totaled $8.6 million, $8.4 million and $8.1 million for the years ended December 31, 2015, 2016 and 2017, respectively. In the year ended December 31, 2015, the Company wrote-off approximately $12.0 million of fully amortized intangible assets. The estimated annual amortization expense for each of the five succeeding fiscal years are as follows (U.S. dollars in thousands): Year Ending December 31, 2018 $ 8,978 2019 8,876 2020 4,898 2021 4,148 2022 5,201 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, 2017 | |
Other Assets [Abstract] | |
Other Assets | 7. Other Assets Other assets consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Deferred taxes $ 35,752 $ 33,785 Deposits for noncancelable operating leases 38,858 43,375 Cash surrender value for life insurance policies 32,286 37,737 Other 29,573 49,998 $ 136,469 $ 164,895 |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | 8. Accrued Expenses Accrued expenses consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Accrued sales force commissions and other payments $ 126,153 $ 151,549 Accrued income taxes ─ 13,075 Accrued other taxes 31,748 44,580 Accrued payroll and other employee expenses 25,412 38,167 Accrued payable to vendors 28,456 29,874 Accrued royalties 4,767 2,623 Sales return reserve 6,125 4,523 Deferred revenue 13,494 12,669 Other 38,868 22,129 $ 275,023 $ 319,189 |
Other Liabilities
Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities [Abstract] | |
Other Liabilities | 9. Other Liabilities Other liabilities consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Deferred tax liabilities $ 643 $ 36,718 Reserve for other tax liabilities 6,264 7,163 Liability for deferred compensation plan 36,730 43,248 Pension plan benefits reserve 5,631 6,359 Build to suit – financing obligation 9,543 10,290 Deferred rent and deferred tenant incentives 5,952 6,389 Asset retirement obligation 5,682 6,578 Other 6,354 10,371 $ 76,799 $ 127,116 |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | 10. Long-Term Debt Credit Agreement 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, 2016 and 2017, the Company had an outstanding balance of $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. Convertible Note On June 16, 2016, the Company issued $210.0 million of convertible senior notes (the "Convertible Notes") in a private offering to a Chinese investor (the "Holder"). The Convertible Notes are senior unsecured obligations which will rank equal in right of payment to all senior unsecured indebtedness of the Company, and will rank senior in right of payment to any indebtedness that is contractually subordinated to the Convertible Notes. Interest on the Convertible Notes is payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2016 at a rate of 4.75% per annum. The Convertible Notes mature on June 15, 2020, unless repurchased or converted prior to maturity. Prior to the stated maturity date, the Company may, at its option, redeem all or part of the Convertible Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, provided that its common stock share price is equal to or exceeds 180% of the applicable conversion price for 20 or more trading days (including the final three trading days) in the 30 consecutive trading days prior to the Company's exercise of such redemption right. The Holder of the Convertible Notes may, at its option, cause the Company to repurchase all of such Holder's Convertible Notes or any portion thereof that is equal to $1,000 in principal amount or multiples of $1,000 upon a change in control or a termination of trading of the Company's common stock, as those terms are defined in the indenture governing the Convertible Notes. In addition, each holder of the Convertible Notes shall have the right, at such holder's option, to convert all or any portion thereof that is equal to $1,000 in principal amount or multiples of $1,000 at any time beginning six calendar months following June 16, 2016, at the then-applicable conversion rate. Upon conversion by the Holder, the Convertible Notes will be settled in cash with respect to principal and any accrued and unpaid interest to such date and in the Company's common shares with respect to any additional amounts, based on the applicable conversion rate at such time. The Convertible Notes had an initial conversion rate of 21.5054 common shares per $1,000 principal amount of the Convertible Notes (which is equal to an initial conversion price of approximately $46.50 per common share). Throughout the term of the Convertible Notes, the conversion rate may be adjusted upon the occurrence of certain specified events. Of the $210.0 million in proceeds received from the issuance of the Convertible Notes, $199.1 million was allocated to long-term debt (the "Liability Component") and $10.9 million was allocated to additional paid-in-capital (the "Equity Component") within the Company's consolidated balance sheet. The Liability Component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The amount allocated to the Equity Component, which represents the conversion option, was calculated by deducting the fair value of the Liability Component from the par value of the Convertible Notes. The Company determined that the conversion option does not require separate accounting treatment as a derivative instrument because it is both indexed to the Company's own stock and would be classified in stockholders' equity if freestanding. The Equity Component will not be remeasured as long as it continues to meet the conditions for equity classification. The excess of the principal amount of the Liability Component over its carrying amount (the "Debt Discount") will be amortized to interest expense over the term of the Convertible Notes. As a result, the Liability Component will be accreted up to the Convertible Notes' $210.0 million face value, resulting in additional non-cash interest expense being recognized within the Company's consolidated statement of income. The effective interest rate on the Convertible Notes is approximately 7.1% per annum. The net carrying amount of the Liability Component is as follows (U.S. dollars in thousands): December 31, 2017 Principal $ 210,000 Unamortized debt discount (conversion option) (7,078 ) Total long-term debt, net 202,922 Unamortized debt discount (issuance costs) (4,050 ) Net carrying amount $ 198,872 The net carrying amount of the Liability Component was recorded to long-term debt within the Company's consolidated balance sheet. The Company incurred approximately $6.6 million of issuance costs related to the issuance of the Convertible Notes. Of the $6.6 million in issuance costs incurred, $6.3 million and $0.3 million were recorded to deferred financing cost and additional paid-in capital, respectively, in proportion to the allocation of the proceeds of the Convertible Notes. The $6.3 million recorded to deferred financing cost on the Company's consolidated balance sheet as a reduction of long-term debt is being amortized over the contractual term of the Convertible Notes using the effective interest method. During the year ended December 31, 2017, the Company recognized $14.0 million in interest expense related to the Convertible Notes, which included $10.0 million of contractual interest and $4.0 million in amortization of debt issuance costs and in amortization of the Debt Discount. The following table summarizes the Company's debt facilities as of December 31, 2016 and 2017: Facility or Arrangement Original Principal Amount Balance as of December 31, 2016 Balance as of December 31, 2017 (1)(2) Interest Rate Repayment terms Credit Agreement term loan facility: U.S. dollar denominated: $127.5 million $108.4 million $94.8 million Variable 30 day: 4.319% 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 5.6 billion yen ($47.9 million as of December 31, 2016) 4.9 billion yen ($43.5 million as of December 31, 2017) Variable 30 day: 2.75% 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: $47.5 million $47.5 million Variable 30 day: 4.319% Revolving line of credit expires October 2019. South Korea subsidiary loan: $20.0 million $10.0 million ─ 1.12% Loan was paid off in March 2017. Japan subsidiary loan: 2.0 billion yen 1.3 billion yen ($11.4 million as of December 31, 2016) 0.7 billion yen ($5.9 million as of December 31, 2017) 0.66% Payable in semi-annual installments over three years that began on January 31, 2016. Convertible note $210.0 million $210.0 million $210.0 million 4.75% Principal amount payable on June 15, 2020. (1) As of December 31, 2017, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $16.7 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility, $7.7 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility and $5.9 million of the Japan subsidiary loan. The Company has classified the $47.5 million 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 $9.1 million and debt issuance costs of $4.0 million (consisting of $11.1 million related to the Convertible Note and $2.0 million related to the credit agreement), which is not reflected in this table. Interest expense relating to debt totaled $7.9 million, $15.6 million and $22.2 million for the years ended December 31, 2015, 2016 and 2017, respectively. Maturities of all long-term debt at December 31, 2017, based on the year-end exchange rate, are as follows (U.S. dollars in thousands): Year Ending December 31, 2018 $ 77,840 2019 113,928 2020 210,000 2021 ─ 2022 ─ Thereafter ─ Total (1) $ 401,768 (1) The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $13.1 million, which is not reflected in this table. |
Lease and Financing Obligations
Lease and Financing Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Lease and Financing Obligations [Abstract] | |
Lease and Financing Obligations | 11. 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. 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. As of December 31, 2016, the Company had recognized $18.9 million as the value of the New Building offset by accumulated depreciation of $0.8 million and a financing obligation of $10.0 million, net of a $9.1 million deposit paid directly to the landlord, as part of other liabilities in its consolidated balance sheet. As of December 31, 2017, the Company had recognized $20.8 million as the value of the New Building offset by accumulated depreciation of $1.5 million and a financing obligation of $10.8 million, net of a $10.3 million deposit paid directly to the landlord, as part of other liabilities in its consolidated balance sheet. As of December 31, 2016, the tenant incentive asset and deferred tenant incentive liability associated with the Existing Building totaled $4.9 million and $4.5 million, respectively. As of December 31, 2017, the tenant incentive asset and deferred tenant incentive liability associated with the Existing Building totaled $4.9 million and $4.5 million, respectively. 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, 2017 are as follows (U.S. dollars in thousands): Year Ending December 31, Operating Leases Financing Obligations 2018 $ 41,788 $ 736 2019 27,088 758 2020 14,907 781 2021 10,036 790 2022 7,672 804 Thereafter 13,250 2,027 Total minimum lease payments $ 114,741 $ 5,896 Rent expense for operating leases totaled $52.4 million, $48.2 million and $50.7 million for the years ended December 31, 2015, 2016 and 2017, respectively. Interest expense associated with the financing obligations was $0.1 million, $0.2 million and $0.2 million for the years ended December 31, 2015, 2016 and 2017, respectively |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2017 | |
Capital Stock [Abstract] | |
Capital Stock | 12. 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, 2016 and 2017, there were no preferred or Class B common shares outstanding. Weighted-average common shares outstanding The following is a reconciliation of the weighted-average common shares outstanding for purposes of computing basic and diluted net income per share (in thousands): Year Ended December 31, 2015 2016 2017 Basic weighted-average common shares outstanding 57,997 55,412 52,806 Effect of dilutive securities: Stock awards and options 1,060 683 1,110 Convertible note — 2 936 Diluted weighted-average common shares outstanding 59,057 56,097 54,852 For the years ended December 31, 2015, 2016 and 2017, other stock options totaling 1.8 million, 2.0 million and 0.4 million, respectively, were excluded from the calculation of diluted earnings per share because they were anti-dilutive. The convertible note has a dilutive impact on EPS when the average market price of the Company's common stock for a given period exceeds the initial conversion price. See Note 10 for discussion of initial conversion price and conversion rate. 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 for strategic initiatives and to offset dilution from the Company's equity incentive plans and from conversion of the Convertible Notes. During the years ended December 31, 2015, 2016 and 2017, the Company repurchased 3.8 million, 4.5 million and 1.2 million shares of Class A common stock for an aggregate price of $164.1 million, $247.2 million and $71.7 million, respectively. At December 31, 2017, $128.0 million was available for repurchases under the 2015 stock repurchase plan. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | 13. Stock–Based Compensation At December 31, 2017, 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. On May 24, 2016, the Company's stockholders approved a Second Amended and Restated 2010 Omnibus Incentive Plan, which among other things increased the number of shares available for awards by 3.8 million shares. 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 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 2015 2016 2017 Weighted-average grant date fair value of grants $ 16.26 $ 12.59 $ 18.84 Risk-free interest rate (1) 1.7% 1.4% 2.1% Dividend yield (2) 2.1% 2.3% 2.5% Expected volatility (3) 46.8% 47.9% 48.2% Expected life in months (4) 65 months 68 months 68 months (1) The risk-free interest rate is based upon the rate on a zero-coupon U.S. Treasury bill, for periods within the contractual life of the option, in effect at the time of the grant. (2) The dividend yield is based on the average of historical stock prices and actual dividends paid. (3) Expected volatility is based on the historical volatility of the Company's stock price, over a period similar to the expected life of the option. (4) The expected term of the option is based on the historical employee exercise behavior, the vesting terms of the respective option, and a contractual life of either seven or ten years. Options under the plans as of December 31, 2017 and changes during the year ended December 31, 2017 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, 2016 2,207.0 $ 39.93 Granted ─ ─ Exercised (324.4 ) 34.71 Forfeited/cancelled/expired (489.7 ) 43.85 Outstanding at December 31, 2017 1,392.9 39.76 4.36 $ 41,756 Exercisable at December 31, 2017 725.5 43.14 3.55 20,237 Options activity – performance based Outstanding at December 31, 2016 3,725.9 $ 58.23 Granted 298.0 50.93 Exercised (853.0 ) 30.86 Forfeited/cancelled/expired (869.4 ) 70.17 Outstanding at December 31, 2017 2,301.5 62.89 3.61 $ 26,206 Exercisable at December 31, 2017 294.1 35.58 4.17 9,601 Options activity – all options Outstanding at December 31, 2016 5,932.9 $ 51.42 Granted 298.0 50.93 Exercised (1,177.4 ) 31.92 Forfeited/cancelled/expired (1,359.1 ) 60.69 Outstanding at December 31, 2017 3,694.4 54.17 3.90 $ 67,962 Exercisable at December 31, 2017 1,019.6 40.96 3.73 29,838 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, 2017. This amount varies based on the fair market value of the Company's stock. Cash proceeds, tax benefits and intrinsic value related to total stock options exercised during 2015, 2016 and 2017, were as follows (U.S. dollars in thousands): December 31, 2015 2016 2017 Cash proceeds from stock options exercised $ 13,041 $ 15,707 $ 26,980 Tax benefit realized for stock options exercised 4,451 3,840 6,457 Intrinsic value of stock options exercised 12,085 30,587 42,749 Nonvested restricted stock awards as of December 31, 2017 and changes during the year ended December 31, 2017 were as follows: Number of Shares (in thousands) Weighted-average Grant Date Fair Value Nonvested at December 31, 2016 596.4 $ 53.62 Granted 261.6 50.95 Vested (203.2 ) 53.94 Forfeited (91.9 ) 60.30 Nonvested at December 31, 2017 562.9 51.17 Stock-based compensation expense is recognized 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. The Company recognized $2.6 million, $5.8 million and $4.0 million of expense related to service condition stock options in 2015, 2016 and 2017, respectively; and $10.9 million, $10.5 million and $11.3 million of expense related to service condition restricted stock units in 2015, 2016 and 2017, respectively. For performance stock options and performance stock units, an expense is recorded each period for the estimated expense associated with the projected achievement of the performance-based targets. The Company recognized $6.5 million of income, $7.1 million of income and $3.9 million of expense related to performance stock options in 2015, 2016 and 2017, respectively; and $0.4 million of expense, $0.3 million of income and $0.1 million of expense related to performance stock units in 2015, 2016 and 2017, respectively. The amounts in 2015 and 2016 reflect the reversal of stock compensation for awards no longer expected to vest. As of December 31, 2017, there was $6.4 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 1.9 years. As of December 31, 2017, there was $16.3 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 2.4 years. |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value [Abstract] | |
Fair Value | 14. Fair Value 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, 2017 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. 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 following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (U.S. dollars in thousands): Fair Value at December 31, 2016 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 50,307 $ ─ $ ─ $ 50,307 Other long-term assets 2,782 ─ ─ 2,782 Forward contracts ─ 1,371 ─ 1,371 Life insurance contracts ─ ─ 32,286 32,286 Total $ 53,089 $ 1,371 $ 32,286 $ 86,746 Fair Value at December 31, 2017 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 36,531 $ ─ $ ─ $ 36,531 Other long-term assets 3,726 ─ ─ 3,726 Forward contracts ─ 158 ─ 158 Life insurance contracts ─ ─ 37,737 37,737 Total $ 40,257 $ 158 $ 37,737 $ 78,152 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 2016 2017 Beginning balance at January 1 $ 27,292 $ 32,287 Actual return on plan assets: Relating to assets still held at the reporting date 2,196 4,917 Purchases and issuances 3,051 895 Sales and settlements (252 ) (362 ) Transfers into Level 3 ─ ─ Ending balance at December 31 $ 32,287 $ 37,737 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | 15. Income Taxes On December 22, 2017, tax reform legislation known as the Tax Cuts and Jobs Act (the Tax Reform Act) was enacted in the United States (U.S.). The Tax Reform Act significantly revises the U.S. corporate income tax by, among other things, lowering the corporate income tax rate to 21%, implementing a modified territorial tax system and imposing a one-time repatriation tax on deemed repatriated earnings and profits of U.S.-owned foreign subsidiaries (the Toll Charge). Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (SAB 118), given the amount and complexity of the changes in tax law resulting from the Tax Reform Act, the Company has not finalized the accounting for the income tax effects of the Tax Reform Act. This includes the provisional amounts recorded related to the Toll Charge, the recording of a valuation allowance relating to foreign tax credits, the write-off and remeasurement of deferred tax assets and deferred tax liabilities and the change in the Company's indefinite reinvestment assertion. Further, the Company is in the process of analyzing the effects of new taxes due on certain foreign income, such as GILTI (global intangible low-taxed income), BEAT (base-erosion anti-abuse tax), FDII (foreign-derived intangible income), limitations on the deductibility of executive compensation, limitations on interest expense deductions (if certain conditions apply), and other provisions of the Tax Reform Act that are effective starting in 2018. Because of the complexity of the new GILTI tax rules, we are continuing to evaluate this provision of the Tax Act and the application of ASC 740. Under U.S. GAAP, we are allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the "period cost method") or (2) factoring such amounts into a company's measurement of its deferred taxes (the "deferred method"). Our selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. We are not yet able to reasonably estimate the effect of this provision of the Tax Act. The Company has preliminarily accounted for the effects of the Tax Reform Act, which resulted in a charge of $47.7 million to deferred income tax expense in the fourth quarter 2017, comprised of a $52.0 million charge from recognition of a valuation allowance on foreign tax credit carryforwards, $7.3 million charge related to reversal of indefinite reinvestment, $4.1 million charge related to the reduction in FIN 48 assets, a benefit of $7.7 million due to the write-off of net outside basis deferred tax liabilities, a benefit of $3.1 million related to the tax effect on OCI and a benefit of $4.9 million from the estimated impact of remeasurement of U.S. deferred tax assets and liabilities at a lower enacted corporate income tax rate. The Toll Charge is based on the Company's post-1986 earnings and profits (E&P) of U.S.-owned foreign subsidiaries for which the Company had previously deferred U.S. income taxes. The total estimated Toll Charge of $96 million is estimated to be offset entirely by foreign tax credits. The Company currently estimates that no additional cash taxes will be paid as a result of the Toll Charge. Due to the modified territorial system that has been implemented in the U.S. the company wrote-off the net outside basis deferred tax liabilities balances after analyzing the impacts of the Toll Charge resulting in a tax benefit of $7.7 million. As of December 22, 2017, the company no longer considers undistributed earnings and profits of U.S. owned subsidiaries to be indefinitely reinvested and recorded a tax expense of $7.3 million related to foreign withholding taxes on unremitted foreign earnings that were previously asserted to be indefinitely reinvested in the fourth quarter of 2017. The impact of the Tax Reform Act may differ from this estimate, possibly materially, during the one-year measurement period due to, among other things, further refinement of the Company's calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the Tax Reform Act. Consolidated income before provision for income taxes consists of the following for the years ended December 31, 2015, 2016 and 2017 (U.S. dollars in thousands): 2015 2016 2017 U.S. $ 134,473 $ (19,119 ) $ 1,135 Foreign 77,486 231,958 264,432 Total $ 211,959 $ 212,839 $ 265,567 The provision for current and deferred taxes for the years ended December 31, 2015, 2016 and 2017 consists of the following (U.S. dollars in thousands): 2015 2016 2017 Current Federal $ 6,328 $ ─ $ (14,358 ) State 1,483 (718 ) 1,814 Foreign 50,403 70,652 104,688 58,214 69,934 92,144 Deferred Federal 16,556 (27,171 ) 45,593 State (674 ) 1,104 (2,273 ) Foreign 4,817 25,886 666 20,699 (181 ) 43,986 Provision for income taxes $ 78,913 $ 69,753 $ 136,130 The principal components of deferred taxes are as follows (U.S. dollars in thousands): Year Ended December 31, 2016 2017 Deferred tax assets: Inventory differences $ 2,521 $ 2,861 Foreign tax credit and other foreign benefits 145,169 52,408 Stock-based compensation 11,470 6,327 Accrued expenses not deductible until paid 32,796 39,326 Foreign currency exchange 4,826 2,001 Net operating losses 9,584 5,230 Capitalized research and development 358 197 Other 1,063 211 Gross deferred tax assets 207,787 108,561 Deferred tax liabilities: Foreign currency exchange 105 874 Foreign withholding taxes ─ 29,018 Intangibles step-up 12,107 6,568 Overhead allocation to inventory 4,820 3,977 Amortization of intangibles 19,091 11,475 Foreign outside basis in controlled foreign corporation 106,846 ─ Other 20,572 2,676 Gross deferred tax liabilities 163,541 54,588 Valuation allowance (9,137 ) (56,906 ) Deferred taxes, net $ 35,109 $ (2,933 ) At December 31, 2017, the Company had foreign operating loss carryforwards of $17.1 million for tax purposes, which will be available to offset future taxable income. If not used, $5.7 million of carryforwards will expire between 2018 and 2027, while $11.4 million do not expire. A valuation allowance has been placed on foreign operating loss carryforwards of $15.9 million. In addition, a valuation allowance has been recorded on the foreign tax credit carryforward of $52.0 million which will expire between 2026 and 2027. The Company uses the tax law ordering approach when determining when excess tax benefits have been realized. The valuation allowance for the foreign tax credit carryforwards was recorded as a result of the Tax Reform Act. A valuation allowance has also been recognized for foreign operating loss carryforwards and unrealized foreign exchange losses. The valuation allowances were recognized for assets 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 positive evidence to utilize the foreign tax credits or the net operating losses, the valuation will be released which would reduce the provision for income taxes. The deferred tax asset valuation adjustments for the years ended December 31, 2015, 2016 and 2017 are as follows (U.S. dollars in thousands): Year Ended December 31, 2015 2016 2017 Balance at the beginning of period $ 35,999 $ 49,271 $ 9,137 Additions charged to cost and expenses 12,948 692 53,983 (5) Decreases (2,943 ) (1) (40,442 ) (4) (6,400 ) (6) Adjustments 3,267 (2) (384 ) (2) 186 (2) Balance at the end of the period $ 49,271 (3) $ 9,137 $ 56,906 (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. (4) Decrease in valuation allowance due to lapse in statute of limitation of the net operating losses carryforward and due to the write off of Venezuelan deferred tax assets, which had no impact to the income statement. (5) Increase in valuation is due primarily to the $52.0 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets. (6) The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands): Year Ended December 31, 2016 2017 Net noncurrent deferred tax assets $ 35,752 $ 33,785 Net noncurrent deferred tax liabilities 643 36,718 Deferred taxes, net $ 35,109 $ (2,933 ) 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, 2015, 2016 and 2017 compared to the statutory U.S. Federal tax rate is as follows: Year Ended December 31, 2015 2016 2017 Income taxes at statutory rate 35.00 % 35.00 % 35.00 % Indefinite reinvestment .92 (1.98 ) 2.75 Excess tax benefit from equity award ─ ─ (2.38 ) Non-deductible expenses 0.09 0.11 0.17 Controlled foreign corporation losses 1.09 (2.63 ) (0.13 ) Valuation allowance recognized foreign tax credit ─ ─ 19.59 Write-off outside basis DTL ─ ─ (2.89 ) Revaluation of deferred taxes ─ ─ (1.28 ) Section 987 implementation ─ 2.69 ─ Other 0.13 (0.42 ) 0.43 37.23 % 32.77 % 51.26 % The effective tax rate for 2017 was impacted largely due to the Tax Reform Act. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plan [Abstract] | |
Employee Benefit Plan | 16. 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 2015, 2016, and 2017 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 $2.8 million, $2.8 million and $3.2 million for the years ended December 31, 2015, 2016 and 2017, respectively, related to its contributions to the plan. The Company may make additional discretionary contributions to the plan of up to 10% of employees' base pay. The Company's discretionary contributions vest 20% per year for an employee's first five years of service. For the years ended December 31, 2015, 2016 and 2017 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 $4.8 million, $5.6 million and $6.1 million as of December 31, 2015, 2016 and 2017, 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 $0.7 million, $0.9 million and $0.7 million for the years ended December 31, 2015, 2016 and 2017, respectively. |
Executive Deferred Compensation
Executive Deferred Compensation Plan | 12 Months Ended |
Dec. 31, 2017 | |
Executive Deferred Compensation Plan [Abstract] | |
Executive Deferred Compensation Plan | 17. 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 $2.3 million, $1.5 million and $1.5 million for the years ended December 31, 2015, 2016 and 2017, respectively, related to its contributions to the plan. The total long-term deferred compensation liability under the deferred compensation plan was $36.7 million and $43.2 million for the years ended December 31, 2016 and 2017, 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 $32.3 million and $37.7 million for the years ended December 31, 2016 and 2017, respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | 18. Derivative Financial Instruments The Company enters into non-designated foreign currency derivatives, primarily comprised of foreign currency forward contracts, for which hedge accounting does not apply. The changes in the fair market value of these non-designated derivatives are included in other income/expense in the Company's consolidated statements of income. The Company uses non-designated foreign currency derivatives to hedge foreign-currency-denominated intercompany transactions and to partially mitigate the impact of foreign-currency fluctuations. The fair value of the non-designated foreign currency derivatives is based on third-party quotes that management considered when determining the fair value. As of December 31, 2017, the Company did not hold any non-designated derivative contracts. As of December 31, 2016, the Company held non-designated derivative contracts with notional amounts of 11.5 billion South Korean won ($9.5 million) as of December 31, 2016. The fair values of these non-designated derivative contracts were $0.5 million and zero as of December 31, 2016 and 2017, respectively. The following table summarizes gains (losses) related to derivative instruments not designated as hedging instruments during the years ended December 31, 2015, 2016 and 2017 (U.S. dollars in thousands): Amount of Gain (Loss) Recognized in Income Year Ended December 31, Derivatives not designated as hedging instruments: Location of Gain (Loss) Recognized in Income 2015 2016 2017 Foreign currency contracts Other income (expense) $ 38 $ 39 $ (485 ) The Company designates as cash-flow hedges those foreign currency forward contracts it enters to hedge forecasted intercompany transactions that are subject to foreign currency exposures. Changes in the fair value of these forward contracts designated as cash-flow hedges are recorded as a component of accumulated other comprehensive income (loss) within shareholders' equity (deficit), and are recognized in the consolidated statement of income during the period which approximates the time the hedged transaction is settled. As of December 31, 2017, the Company held forward contracts designated as foreign currency cash flow hedges with notional amounts totaling 600 million Japanese yen ($5.5 million), and 1.4 billion Japanese yen ($12.0 million) as of December 31, 2016 to hedge forecasted foreign-currency-denominated intercompany transactions. The fair value of these hedges were $0.9 million and $0.2 million as of December 31, 2016 and 2017, respectively. The contracts held at December 31, 2017 have maturities through June 2018, 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 6 months. The following table summarizes gains (losses) related to derivative instruments recorded in other comprehensive income (loss) during the years ended December 31, 2015, 2016 and 2017 (U.S. dollars in thousands): Amount of Gain (Loss) Recognized in Other Comprehensive Loss Year Ended December 31, Derivatives designated as hedging instruments: 2015 2016 2017 Foreign currency forward contracts related to intercompany license fee, product sales, and selling expense hedges $ 590 $ (1,423 ) $ (152 ) The following table summarizes gains (losses) relating to derivative instruments reclassified from accumulated other comprehensive loss into income during the years ended December 31, 2015, 2016 and 2017 (U.S. dollars in thousands): Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Year Ended December 31, Derivatives designated as hedging instruments: Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income 2015 2016 2017 Foreign currency forward contracts related to intercompany license fees and product sales hedges Revenue $ 1,731 $ (1,088 ) $ 119 Foreign currency forward contracts related to intercompany selling expense hedges Selling expenses $ 397 $ (1,544 ) $ 358 As of December 31, 2016 and 2017, there were $0.6 million and $0.1 million, respectively, of unrealized gains/(losses) included in accumulated other comprehensive loss related to foreign currency cash flow hedges. The remaining $84.7 million and $66.4 million as of December 31, 2016 and 2017, respectively, in accumulated other comprehensive loss are related to cumulative translation adjustments. The Company assesses hedge effectiveness at least quarterly. During the years ended December 31, 2016 and 2017, all hedges were determined to be effective. The Company reports its derivatives at fair value as either other current assets or accrued expenses within its consolidated balance sheet. See Note 14, "Fair Value". |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Cash Flow Information | 19. Supplemental Cash Flow Information Cash paid for interest totaled $7.0 million, $11.6 million and $18.4 million for the years ended December 31, 2015, 2016 and 2017, respectively. Cash paid for income taxes totaled $49.8 million, $40.9 million and $78.1 million for the years ended December 31, 2015, 2016 and 2017, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information [Abstract] | |
Segment Information | 20. Segment Information As a result of the Company's management changes in the first quarter of 2017, the Company concluded that the Chief Operating Decision Maker, as defined in ASC 280, is now comprised of the CEO, President and CFO. This change required the Company to reevaluate its determination of operating segments. The Company's operating segments are based on geographic regions that generate revenue and hold its long-lived assets. The Company sells and distributes its products through a global network of customers and sales leaders in approximately 50 markets. The Company has divided these markets into seven operating segments, which are the Company's reportable segments: Mainland China, Hong Kong/Taiwan, South Korea, Japan, South Asia/Pacific, Americas and EMEA. The seven reportable segments generate revenue from the sale of personal care products and nutritional supplements under the Nu Skin and Pharmanex brands, have similar business characteristics and align with how the CODM function began assessing performance and allocating resources in the first quarter of 2017. Profitability by segment as reported under US GAAP is driven primarily by the Company's international taxation policies. Segment contribution, which is the Company's segment profitability metric presented in the table below, excludes certain intercompany charges, specifically royalties, license fees, transfer pricing, discrete charges and other miscellaneous items. These charges have been included in Corporate and other expenses. Corporate and other expenses also include costs related to the Company's executive and administrative offices, information technology, research and development, marketing and supply chain functions not recorded at the segment level. The accounting policies of the segments are the same as those described in Note 1 – The Company. The Company evaluates the performance of its segments based on revenue and segment contribution. Each segment records direct expenses related to its employees and its operations. Summarized financial information for the Company's reportable segments is shown in the following tables. Asset information is not reviewed or included with the Company's internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment. Revenue by Segment Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 565,527 $ 610,414 $ 716,991 South Korea 422,341 413,696 361,692 Americas 329,668 276,590 317,380 South Asia/Pacific 321,971 296,758 299,980 Japan 264,214 279,042 256,085 Hong Kong/Taiwan 206,140 183,979 166,696 EMEA 137,186 147,318 160,275 Total $ 2,247,047 $ 2,207,797 $ 2,279,099 Segment Contribution Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 73,422 $ 135,174 $ 211,625 South Korea 130,516 117,142 100,964 Americas 62,937 44,390 47,040 South Asia/Pacific 68,949 71,365 68,141 Japan 51,181 59,175 51,372 Hong Kong/Taiwan 40,718 35,978 27,958 EMEA 11,172 10,386 11,749 Total segment contribution 438,895 473,610 518,849 Corporate and other (194,193 ) (242,506 ) (244,366 ) Operating income 244,702 231,104 274,483 Other income (expense) (32,743 ) (18,265 ) (8,916 ) Income before provision for income taxes $ 211,959 $ 212,839 $ 265,567 Depreciation and Amortization Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 18,503 $ 16,775 $ 15,122 South Korea 5,882 6,787 6,499 Americas 2,545 2,617 1,608 South Asia/Pacific 2,022 2,388 2,372 Japan 3,434 3,782 3,554 Hong Kong/Taiwan 2,132 2,507 1,395 EMEA 1,498 1,387 985 Corporate and other 35,349 36,154 40,029 Total $ 71,365 $ 72,397 $ 71,564 Capital Expenditures Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 21,998 $ 13,656 $ 4,539 South Korea 9,983 556 469 Americas 400 1,095 744 South Asia/Pacific 2,959 2,282 1,809 Japan 1,903 1,288 994 Hong Kong/Taiwan 1,345 634 1,350 EMEA 1,430 1,224 1,168 Corporate and other 16,604 29,486 49,083 Total $ 56,622 $ 50,221 $ 60,156 Revenue by Major Market A major market is defined as one with total revenue greater than 10% of consolidated total revenue. Based on this criteria, the Company has identified three major markets: Mainland China, South Korea and Japan. There are approximately 50 other markets, each of which individually is less than 10%. The table below also includes the Company's country of domicile (the U.S.). No single customer accounted for 10% or more of net sales for the periods presented. Sales are recorded in the jurisdiction in which the transactions occurred: Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 565,527 $ 610,414 $ 716,991 South Korea 422,341 413,696 361,692 Japan 264,214 279,042 256,085 United States 243,748 201,239 218,734 All others 751,217 703,406 725,597 Total $ 2,247,047 $ 2,207,797 $ 2,279,099 Revenue by Product Line Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Nu Skin $ 1,363,539 $ 1,308,135 $ 1,456,386 Pharmanex 877,924 892,738 817,230 Other 5,584 6,924 5,483 Total $ 2,247,047 $ 2,207,797 $ 2,279,099 Long-Lived Assets by Major Market A major market is defined as a market with long-lived assets greater than 10% of consolidated long-lived assets and also includes the Company's country of domicile (the U.S.). Long-lived assets in Mainland China consist primarily of property, plant and equipment related to manufacturing, distribution facilities and the Mainland China headquarters. Long-lived assets in the U.S. consist primarily of property, plant and equipment, including the Company's corporate offices and distribution facilities. Long-lived assets by major market are set forth below for the periods ended December 31, 2016 and 2017: Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 United States $ 271,058 $ 283,868 $ 302,884 Mainland China 110,839 97,867 97,046 South Korea 48,702 41,545 42,211 Japan 13,587 11,517 9,342 All others 10,351 9,935 13,104 Total $ 454,537 $ 444,732 $ 464,587 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 21. 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 market 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, investigations and other proceedings involving various matters. In the opinion of the Company's management, based upon advice of its counsel handling such litigation, investigations and other 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. |
Dividends per Share
Dividends per Share | 12 Months Ended |
Dec. 31, 2017 | |
Dividends per Share [Abstract] | |
Dividends per Share | 22. Dividends per Share Quarterly cash dividends for the years ended December 31, 2016 and 2017 totaled $78.4 million and $76.1 million or $0.355 per share in all quarters of 2016 and $0.36 for all quarters of 2017. The board of directors has declared a quarterly cash dividend of $0.365 per share of Class A common stock to be paid on March 14, 2018 to stockholders of record on February 26, 2018. |
Other Income (Expense), Net
Other Income (Expense), Net | 12 Months Ended |
Dec. 31, 2017 | |
Other Income (Expense), Net [Abstract] | |
Other Income (Expense), Net | 23. Other Income (Expense), Net Other income (expense), net |
Cost of Sales
Cost of Sales | 12 Months Ended |
Dec. 31, 2017 | |
Cost of Sales [Abstract] | |
Cost of Sales | 24. Cost of Sales The Tokyo District Court and, on appeal in 2017, the Tokyo High Court have upheld the Japan customs authorities' customs assessments related to the importation of several of the Company's products into Japan. We have appealed the High Court's decision to the Japan Supreme Court. As previously disclosed, the Company already recorded a charge of $31.4 million to cost of sales in the first quarter of 2016, when the District Court issued its decision. This charge represents the full amount being disputed. It was a non-cash item because the Company was previously required to pay the assessments. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Acquisitions [Abstract] | |
Acquisitions | 25. Acquisitions Vertical Eden, LLC In the first quarter of 2016, the Company purchased 70% of Vertical Eden, LLC, an early-stage company in the warehouse growing market, based in Alpine, Utah, for $3.3 million in cash and contingent consideration valued at $1.5 million which resulted in $2.5 million of goodwill. In the second quarter of 2017, the Company purchased the remaining 30% of Vertical Eden for $12.5 million in cash. The purchase of Vertical Eden includes specialized technology in remote programming and management of the entire crop growing cycle. As a result of this acquisition, the Company recorded approximately $4.4 million of intangible assets which are being amortized over the useful lives of 3 to 7 years. Treviso, LLC On February 28, 2017, the Company purchased a 35% membership interest in Treviso, LLC, which owns a manufacturing company, for a purchase price of $21.0 million and a possible earnout of $1.0 million. The purchase price included $12.6 million in cash and $8.4 million in the Company's stock (169,560 shares based on the closing stock price of $49.54 per share on February 28, 2017). Dr. Dana Beauty, LLC In the third quarter of 2017, the Company acquired certain assets of Dr. Dana Beauty, LLC for $7.0 million in cash. The acquisition, which was accounted for as an asset acquisition, includes contingent consideration of $4.3 million, which is considered a Level 3 liability. The assets acquired include trademarks, product formulas and other intellectual property primarily related to nail treatment. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 26. Subsequent Events On January 22, 2018, the Company acquired the remaining 73% ownership in Innuvate Health Sciences, LLC ("Innuvate"), which owns a 92% interest in a nutritional product manufacturer. Prior to this acquisition, the Company owned 27% of Innuvate and accounted for it using the equity method. The remaining 8% ownership in the manufacturer will continue to be held by an unrelated third party. Under the terms of the agreement, the Company has agreed to pay $23.5 million in cash and shares of the Company in exchange for the 73% ownership in Innuvate, subject to adjustment for certain closing items. On February 12, 2018, the Company acquired the remaining 65% ownership in Treviso, LLC ("Treviso"), making Treviso a wholly owned subsidiary of the Company. Treviso is a personal care product manufacturer. Prior to this acquisition, the Company owned 35% of Treviso and accounted for it using the equity method. Under the terms of the purchase agreement, the Company has agreed to pay $54.9 million in cash and shares of the Company in exchange for the 65% ownership in Treviso, subject to adjustment for certain closing items. On February 12, 2018, the Company acquired 100% ownership in L&W Holdings, Inc. ("L&W") making L&W a wholly owned subsidiary of the Company. L&W is a packaging supplier company. Under the terms of the purchase agreement, the Company has agreed to pay $25.0 million in shares of the Company in exchange for 100% ownership in L&W, subject to adjustment for certain closing items. The Company is currently in the process of valuing the assets acquired and liabilities assumed as part of these transactions. Given the timing of the close of the transactions, the Company is not yet able to provide the amounts to be recognized for the major classes of assets acquired and liabilities assumed, as well as, other related disclosures. The Company will disclose this and other related information in its Form 10-Q for the quarter ended March 31, 2018. |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
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 net realizable value, using a standard cost method which approximates the first-in, first-out method. The Company had reserves of its inventory carrying value totaling $8.0 million and $8.1 million as of December 31, 2016 and 2017, respectively. Inventories consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Raw materials $ 108,276 $ 87,683 Finished goods 141,660 165,771 $ 249,936 $ 253,454 Reserves of inventories consist of the following (U.S. dollars in thousands): 2015 2016 2017 Beginning balance $ 56,034 $ 20,744 $ 7,995 Additions 38,605 24,906 16,382 Write-offs (73,895 ) (37,655 ) (16,296 ) Ending balance $ 20,744 $ 7,995 $ 8,081 |
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 No impairment charges were recorded for goodwill or intangibles during the periods presented. |
Revenue recognition | Revenue recognition Revenue is recognized when products are shipped, which is when title and risk of loss pass to the purchaser of the products. A reserve for product returns is accrued based on historical experience totaling $6.1 million and $4.5 million as of December 31, 2016 and 2017, respectively. During the years ended December 31, 2015, 2016 and 2017, the Company recorded sales returns of $65.6 million, $61.2 million and $53.8 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, 2015, 2016 and 2017 totaled $11.0 million, $15.9 million and $15.6 million, respectively. |
Selling expenses | Selling expenses Selling expenses are the Company's most significant expense and are classified as operating expenses. Selling expenses include distributor commissions as well as wages, benefits, bonuses and other labor and unemployment expenses the Company pays to its sales force in Mainland China. In each of the Company's markets, except Mainland China, Sales Leaders can earn "multi-level" compensation under the Company's global sales compensation plan, including commissions for product sales to their consumer groups as well as the product sales made through the sales network they have developed and trained. The Company does not pay commissions on sales materials. Outside of Mainland China, the Company's distributors may make profits by purchasing the products from the Company at a discount and selling them to consumers with a mark-up. The Company does not account for nor pay additional commissions on these mark-ups received by distributors. In many markets, the Company also allows individuals who are not members of its sales force, referred to as "preferred customers," to buy products directly from the Company at a discount. The Company pays commissions on preferred customer purchases to the referring member of its sales force. |
Research and development | Research and development Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statements of income and totaled $20.1 million, $24.3 million and $22.0 million in 2015, 2016 and 2017, 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 before 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 2018 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 2011. However, statutes in certain markets 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. In the first quarter of 2018, the Company received a preliminary tax assessment from Indonesia. The Company is currently evaluating the impact of the preliminary findings on its tax rate for the first quarter of 2018. A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands): 2015 2016 2017 Gross balance at January 1 $ 5,987 $ 7,772 $ 5,290 Increases related to prior year tax positions 1,677 185 ─ Decreases related to prior year tax positions ─ ─ (277 ) Increases related to current year tax positions 1,119 918 669 Settlements ─ (3,369 ) (159 ) Decreases due to lapse of statutes of limitations (667 ) (252 ) (187 ) Currency adjustments (344 ) 36 178 Gross balance at December 31 $ 7,772 $ 5,290 $ 5,514 At December 31, 2017, the Company had $5.5 million in unrecognized tax benefits of which $5.2 million, if recognized, would affect the effective tax rate. In comparison, at December 31, 2016, the Company had $5.3 million in unrecognized tax benefits of which $1.0 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 $2.5 to $3.5 million. During the years ended December 31, 2015, 2016 and 2017 the Company recognized $0.4 million, $(0.8) million and $0.7 million, respectively in interest and penalties expenses/(benefits). The Company had $1.7 million, $0.9 million and $1.6 million of accrued interest and penalties related to uncertain tax positions at December 31, 2015, 2016 and 2017, 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 12). |
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 (expense) in the consolidated financial statements. Net of tax, the accumulated other comprehensive loss related to the foreign currency translation adjustments are $71.6 million (net of tax of $10.9 million), $84.7 million (net of tax of $13.4 million) and $66.4 million (net of tax of $5.8 million), at December 31, 2015, 2016 and 2017, respectively. |
Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its Currency | Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its Currency Since 2010, Venezuela has been considered a highly inflationary economy. A market 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 the Company's 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. 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 of March 31, 2015. 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. 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. |
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, 2017 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, 2016 and 2017, the long-term debt fair value is $497.4 million and $515.2 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 fair value of the Convertible Note is highly dependent upon the Company's stock price at the valuation date. The Company has classified these instruments as Level 2 in the fair value hierarchy. Fair value estimates are made at a specific point in time, based on relevant market information. The FASB Codification defines fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. On a quarterly basis, the Company measures at fair value certain financial assets, including cash equivalents. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs have created the following fair-value hierarchy: • Level 1 – quoted prices in active markets for identical assets or liabilities; • Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; • Level 3 – unobservable inputs based on the Company's own assumptions. Accounting standards permit companies, at their option, to measure many financial instruments and certain other items at fair value. The Company has elected not to apply the fair value option to existing eligible items. |
Stock-based compensation | Stock-based compensation All share-based payments, including grants of stock options and restricted stock units, are required to be recognized in the Company's 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 the Company's stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The Company uses 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 the Company's stock options. The fair value of the Company's restricted stock units is based on the closing market price of its stock on the date of grant less the Company's expected dividend yield. The Company The total compensation expense related to equity compensation plans was $7.4 million, $8.9 million and $19.3 million for the years ended December 31, 2015, 2016 and 2017, respectively. In 2015, 2016 and 2017, these amounts reflect the reversal of $7.6 million, $9.6 million and none, respectively, for certain performance-based awards that were no longer expected to vest. For the years ended December 31, 2015, 2016 and 2017, 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. The Company's Subsidiaries enter into significant transactions with each other and third parties that may not be denominated in the respective Subsidiaries' functional currencies. The Company regularly monitors its foreign currency risks and seeks to reduce its exposure to fluctuations in foreign exchange rates using foreign currency exchange contracts and through certain intercompany loans of foreign currency. Hedge effectiveness is assessed at inception and throughout the life of the hedge to ensure the hedge qualifies for hedge accounting treatment. Changes in fair value associated with hedge ineffectiveness, if any, are recorded in the results of operations currently. In the event that an anticipated transaction is no longer likely to occur, the Company recognizes the change in fair value of the derivative in its results of operations currently. Changes in the fair value of derivatives are recorded in current earnings or accumulated other comprehensive loss, depending on the intended use of the derivative and its resulting designation. The gains and losses in accumulated other comprehensive loss stemming from these derivatives will be reclassified into earnings in the period during which the hedged forecasted transaction affects earnings. The fair value of the receivable and payable amounts related to these unrealized gains and losses is classified as other current assets and liabilities. The Company does not use such derivative financial instruments for trading or speculative purposes. Gains and losses on certain intercompany loans of foreign currency are recorded as other income (expense) in the consolidated statements of income. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard will be effective for the Company in the first quarter of 2018. As a result of adopting this new accounting guidance, the Company will change the method of accounting for its loyalty points program from a cost provision method to a deferred revenue method. The Company is continuing to evaluate the impact this ASU, and related amendments and interpretive guidance, will have on its consolidated financial statements. The Company plans to adopt the new standard in the first quarter of 2018 using the modified retrospective transition method. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In February 2016, the FASB issued ASU 2016-02, Leases (Subtopic 842) In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The objective of this update was to simplify several aspects of the accounting for employee share-based payment transactions, including accounting for income taxes related to share-based compensation, the related classification in the statement of cash-flows, and accounting for share award forfeitures. This ASU was effective for the Company beginning on January 1, 2017. Prior to January 1, 2017, excess tax benefits were recognized in equity. As permitted, the Company elected to classify excess tax benefits as an operating activity in the Statement of Cash Flows instead of as a financing activity on a prospective basis and did not retroactively adjust prior periods. As also permitted by the new guidance, beginning January 1, 2017 the Company has elected to account for share award forfeitures as they occur. Previously, share-based compensation expense was recorded net of estimated forfeitures. A cumulative adjustment of $2.8 million was recorded to retained earnings and additional paid-in capital as of January 1, 2017. Prior periods were not retroactively adjusted. In the second half of 2016, the FASB issued ASU Nos. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments Statement of Cash Flows (Topic 230): Restricted Cash. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This guidance simplifies the required test of goodwill for impairment by eliminating Step 2 from the goodwill impairment test. If a company determines in Step 1 of the goodwill impairment test that the carrying value of a reporting unit is less than the fair value, an impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. This ASU is effective for interim and annual impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In December 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities The |
Summary of Significant Accoun37
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Inventories | Inventories consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Raw materials $ 108,276 $ 87,683 Finished goods 141,660 165,771 $ 249,936 $ 253,454 |
Inventory Reserves | Reserves of inventories consist of the following (U.S. dollars in thousands): 2015 2016 2017 Beginning balance $ 56,034 $ 20,744 $ 7,995 Additions 38,605 24,906 16,382 Write-offs (73,895 ) (37,655 ) (16,296 ) Ending balance $ 20,744 $ 7,995 $ 8,081 |
Estimated Useful Lives | 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 |
Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits included in other liabilities is as follows (U.S. dollars in thousands): 2015 2016 2017 Gross balance at January 1 $ 5,987 $ 7,772 $ 5,290 Increases related to prior year tax positions 1,677 185 ─ Decreases related to prior year tax positions ─ ─ (277 ) Increases related to current year tax positions 1,119 918 669 Settlements ─ (3,369 ) (159 ) Decreases due to lapse of statutes of limitations (667 ) (252 ) (187 ) Currency adjustments (344 ) 36 178 Gross balance at December 31 $ 7,772 $ 5,290 $ 5,514 |
Prepaid Expenses and Other (Tab
Prepaid Expenses and Other (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expenses and Other [Abstract] | |
Prepaid Expenses and Other | Prepaid expenses and other consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Deferred charges $ 9,319 $ 4,256 Prepaid income taxes 6,799 ─ Prepaid inventory and import costs 10,857 9,397 Prepaid rent, insurance and other occupancy costs 13,398 14,558 Prepaid promotion and event cost 4,126 3,581 Prepaid other taxes 4,778 5,559 Forward contracts 1,371 158 Deposits 1,079 1,147 Other 13,349 14,237 $ 65,076 $ 52,893 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment [Abstract] | |
Property and Equipment | Property and equipment are comprised of the following (U.S. dollars in thousands): December 31, 2016 2017 Land $ 33,158 $ 33,667 Buildings 266,436 274,632 Construction in progress (1) 31,124 53,125 Furniture and fixtures 82,194 95,378 Computers and equipment 143,014 156,994 Leasehold improvements 109,863 123,479 Scanners 10,578 11,212 Vehicles 2,090 2,339 678,457 750,826 Less: accumulated depreciation (233,725 ) (286,239 ) $ 444,732 $ 464,587 (1) Construction in progress includes $25.8 million and $43.4 million as of December 31, 2016 and 2017, respectively, of eligible capitalized internal-use software development costs which will be reclassified to computers and equipment when placed into service. |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill [Abstract] | |
Goodwill | The following table presents goodwill allocated to the Company's reportable segments for the periods ended December 30, 2017 and December 31, 2016 (U.S. dollars in thousands): December 31, 2016 (1) December 31, 2017 Mainland China $ 32,179 $ 32,179 South Korea 29,261 29,261 Americas 9,449 9,449 South Asia/Pacific 18,537 18,537 Japan 16,019 16,019 Hong Kong/Taiwan 6,634 6,634 EMEA 2,875 2,875 Total $ 114,954 $ 114,954 (1) Goodwill was recast to reflect current period presentation by geographic region at December 31, 2016. |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Intangible Assets [Abstract] | |
Indefinite Life Intangible Assets | Other intangible assets consist of the following (U.S. dollars in thousands): Carrying Amount at December 31, Indefinite life intangible assets: 2016 2017 Trademarks and trade names $ 24,599 $ 24,599 Other indefinite lived intangibles 3,763 3,763 $ 28,362 $ 28,362 |
Finite Life Intangible Assets | December 31, 2016 December 31, 2017 Finite life intangible assets: Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Weighted-average Amortization Period Scanner technology $ 46,482 $ 36,624 $ 46,482 $ 39,657 18 years Developed technology 22,500 18,383 22,500 19,207 20 years Distributor network 11,598 11,598 11,598 11,598 15 years Trademarks 2,592 1,011 2,785 1,197 15 years Other 46,219 26,584 57,550 29,971 8 years $ 129,391 $ 94,200 $ 140,915 $ 101,630 15 years |
Future Amortization Expense | The estimated annual amortization expense for each of the five succeeding fiscal years are as follows (U.S. dollars in thousands): Year Ending December 31, 2018 $ 8,978 2019 8,876 2020 4,898 2021 4,148 2022 5,201 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Assets [Abstract] | |
Other Assets | Other assets consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Deferred taxes $ 35,752 $ 33,785 Deposits for noncancelable operating leases 38,858 43,375 Cash surrender value for life insurance policies 32,286 37,737 Other 29,573 49,998 $ 136,469 $ 164,895 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Accrued expenses consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Accrued sales force commissions and other payments $ 126,153 $ 151,549 Accrued income taxes ─ 13,075 Accrued other taxes 31,748 44,580 Accrued payroll and other employee expenses 25,412 38,167 Accrued payable to vendors 28,456 29,874 Accrued royalties 4,767 2,623 Sales return reserve 6,125 4,523 Deferred revenue 13,494 12,669 Other 38,868 22,129 $ 275,023 $ 319,189 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities [Abstract] | |
Other Liabilities | Other liabilities consist of the following (U.S. dollars in thousands): December 31, 2016 2017 Deferred tax liabilities $ 643 $ 36,718 Reserve for other tax liabilities 6,264 7,163 Liability for deferred compensation plan 36,730 43,248 Pension plan benefits reserve 5,631 6,359 Build to suit – financing obligation 9,543 10,290 Deferred rent and deferred tenant incentives 5,952 6,389 Asset retirement obligation 5,682 6,578 Other 6,354 10,371 $ 76,799 $ 127,116 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt [Abstract] | |
Convertible Note | The net carrying amount of the Liability Component is as follows (U.S. dollars in thousands): December 31, 2017 Principal $ 210,000 Unamortized debt discount (conversion option) (7,078 ) Total long-term debt, net 202,922 Unamortized debt discount (issuance costs) (4,050 ) Net carrying amount $ 198,872 |
Debt Facilities | The following table summarizes the Company's debt facilities as of December 31, 2016 and 2017: Facility or Arrangement Original Principal Amount Balance as of December 31, 2016 Balance as of December 31, 2017 (1)(2) Interest Rate Repayment terms Credit Agreement term loan facility: U.S. dollar denominated: $127.5 million $108.4 million $94.8 million Variable 30 day: 4.319% 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 5.6 billion yen ($47.9 million as of December 31, 2016) 4.9 billion yen ($43.5 million as of December 31, 2017) Variable 30 day: 2.75% 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: $47.5 million $47.5 million Variable 30 day: 4.319% Revolving line of credit expires October 2019. South Korea subsidiary loan: $20.0 million $10.0 million ─ 1.12% Loan was paid off in March 2017. Japan subsidiary loan: 2.0 billion yen 1.3 billion yen ($11.4 million as of December 31, 2016) 0.7 billion yen ($5.9 million as of December 31, 2017) 0.66% Payable in semi-annual installments over three years that began on January 31, 2016. Convertible note $210.0 million $210.0 million $210.0 million 4.75% Principal amount payable on June 15, 2020. (1) As of December 31, 2017, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $16.7 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility, $7.7 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility and $5.9 million of the Japan subsidiary loan. The Company has classified the $47.5 million 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 $9.1 million and debt issuance costs of $4.0 million (consisting of $11.1 million related to the Convertible Note and $2.0 million related to the credit agreement), which is not reflected in this table. |
Maturities of Long-Term Debt | Maturities of all long-term debt at December 31, 2017, based on the year-end exchange rate, are as follows (U.S. dollars in thousands): Year Ending December 31, 2018 $ 77,840 2019 113,928 2020 210,000 2021 ─ 2022 ─ Thereafter ─ Total (1) $ 401,768 (1) The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $13.1 million, which is not reflected in this table. |
Lease and Financing Obligatio46
Lease and Financing Obligations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Lease and Financing Obligations [Abstract] | |
Minimum Future Operating Leases and Financing Obligations | Minimum future operating leases and financing obligations at December 31, 2017 are as follows (U.S. dollars in thousands): Year Ending December 31, Operating Leases Financing Obligations 2018 $ 41,788 $ 736 2019 27,088 758 2020 14,907 781 2021 10,036 790 2022 7,672 804 Thereafter 13,250 2,027 Total minimum lease payments $ 114,741 $ 5,896 |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 (in thousands): Year Ended December 31, 2015 2016 2017 Basic weighted-average common shares outstanding 57,997 55,412 52,806 Effect of dilutive securities: Stock awards and options 1,060 683 1,110 Convertible note — 2 936 Diluted weighted-average common shares outstanding 59,057 56,097 54,852 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 2015 2016 2017 Weighted-average grant date fair value of grants $ 16.26 $ 12.59 $ 18.84 Risk-free interest rate (1) 1.7% 1.4% 2.1% Dividend yield (2) 2.1% 2.3% 2.5% Expected volatility (3) 46.8% 47.9% 48.2% Expected life in months (4) 65 months 68 months 68 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 | Options under the plans as of December 31, 2017 and changes during the year ended December 31, 2017 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, 2016 2,207.0 $ 39.93 Granted ─ ─ Exercised (324.4 ) 34.71 Forfeited/cancelled/expired (489.7 ) 43.85 Outstanding at December 31, 2017 1,392.9 39.76 4.36 $ 41,756 Exercisable at December 31, 2017 725.5 43.14 3.55 20,237 Options activity – performance based Outstanding at December 31, 2016 3,725.9 $ 58.23 Granted 298.0 50.93 Exercised (853.0 ) 30.86 Forfeited/cancelled/expired (869.4 ) 70.17 Outstanding at December 31, 2017 2,301.5 62.89 3.61 $ 26,206 Exercisable at December 31, 2017 294.1 35.58 4.17 9,601 Options activity – all options Outstanding at December 31, 2016 5,932.9 $ 51.42 Granted 298.0 50.93 Exercised (1,177.4 ) 31.92 Forfeited/cancelled/expired (1,359.1 ) 60.69 Outstanding at December 31, 2017 3,694.4 54.17 3.90 $ 67,962 Exercisable at December 31, 2017 1,019.6 40.96 3.73 29,838 |
Stock Options Exercised | Cash proceeds, tax benefits and intrinsic value related to total stock options exercised during 2015, 2016 and 2017, were as follows (U.S. dollars in thousands): December 31, 2015 2016 2017 Cash proceeds from stock options exercised $ 13,041 $ 15,707 $ 26,980 Tax benefit realized for stock options exercised 4,451 3,840 6,457 Intrinsic value of stock options exercised 12,085 30,587 42,749 |
Nonvested Restricted Stock Awards | Nonvested restricted stock awards as of December 31, 2017 and changes during the year ended December 31, 2017 were as follows: Number of Shares (in thousands) Weighted-average Grant Date Fair Value Nonvested at December 31, 2016 596.4 $ 53.62 Granted 261.6 50.95 Vested (203.2 ) 53.94 Forfeited (91.9 ) 60.30 Nonvested at December 31, 2017 562.9 51.17 |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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 (U.S. dollars in thousands): Fair Value at December 31, 2016 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 50,307 $ ─ $ ─ $ 50,307 Other long-term assets 2,782 ─ ─ 2,782 Forward contracts ─ 1,371 ─ 1,371 Life insurance contracts ─ ─ 32,286 32,286 Total $ 53,089 $ 1,371 $ 32,286 $ 86,746 Fair Value at December 31, 2017 Level 1 Level 2 Level 3 Total Financial assets (liabilities): Cash equivalents and current investments $ 36,531 $ ─ $ ─ $ 36,531 Other long-term assets 3,726 ─ ─ 3,726 Forward contracts ─ 158 ─ 158 Life insurance contracts ─ ─ 37,737 37,737 Total $ 40,257 $ 158 $ 37,737 $ 78,152 |
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 2016 2017 Beginning balance at January 1 $ 27,292 $ 32,287 Actual return on plan assets: Relating to assets still held at the reporting date 2,196 4,917 Purchases and issuances 3,051 895 Sales and settlements (252 ) (362 ) Transfers into Level 3 ─ ─ Ending balance at December 31 $ 32,287 $ 37,737 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
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, 2015, 2016 and 2017 (U.S. dollars in thousands): 2015 2016 2017 U.S. $ 134,473 $ (19,119 ) $ 1,135 Foreign 77,486 231,958 264,432 Total $ 211,959 $ 212,839 $ 265,567 |
Current and Deferred Taxes | The provision for current and deferred taxes for the years ended December 31, 2015, 2016 and 2017 consists of the following (U.S. dollars in thousands): 2015 2016 2017 Current Federal $ 6,328 $ ─ $ (14,358 ) State 1,483 (718 ) 1,814 Foreign 50,403 70,652 104,688 58,214 69,934 92,144 Deferred Federal 16,556 (27,171 ) 45,593 State (674 ) 1,104 (2,273 ) Foreign 4,817 25,886 666 20,699 (181 ) 43,986 Provision for income taxes $ 78,913 $ 69,753 $ 136,130 |
Deferred Tax Assets and Liabilities | The principal components of deferred taxes are as follows (U.S. dollars in thousands): Year Ended December 31, 2016 2017 Deferred tax assets: Inventory differences $ 2,521 $ 2,861 Foreign tax credit and other foreign benefits 145,169 52,408 Stock-based compensation 11,470 6,327 Accrued expenses not deductible until paid 32,796 39,326 Foreign currency exchange 4,826 2,001 Net operating losses 9,584 5,230 Capitalized research and development 358 197 Other 1,063 211 Gross deferred tax assets 207,787 108,561 Deferred tax liabilities: Foreign currency exchange 105 874 Foreign withholding taxes ─ 29,018 Intangibles step-up 12,107 6,568 Overhead allocation to inventory 4,820 3,977 Amortization of intangibles 19,091 11,475 Foreign outside basis in controlled foreign corporation 106,846 ─ Other 20,572 2,676 Gross deferred tax liabilities 163,541 54,588 Valuation allowance (9,137 ) (56,906 ) Deferred taxes, net $ 35,109 $ (2,933 ) |
Deferred Tax Asset Valuation Adjustments | The deferred tax asset valuation adjustments for the years ended December 31, 2015, 2016 and 2017 are as follows (U.S. dollars in thousands): Year Ended December 31, 2015 2016 2017 Balance at the beginning of period $ 35,999 $ 49,271 $ 9,137 Additions charged to cost and expenses 12,948 692 53,983 (5) Decreases (2,943 ) (1) (40,442 ) (4) (6,400 ) (6) Adjustments 3,267 (2) (384 ) (2) 186 (2) Balance at the end of the period $ 49,271 (3) $ 9,137 $ 56,906 (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. (4) Decrease in valuation allowance due to lapse in statute of limitation of the net operating losses carryforward and due to the write off of Venezuelan deferred tax assets, which had no impact to the income statement. (5) Increase in valuation is due primarily to the $52.0 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets. (6) |
Deferred Taxes, Net on a Jurisdiction Basis | The components of deferred taxes, net on a jurisdiction basis are as follows (U.S. dollars in thousands): Year Ended December 31, 2016 2017 Net noncurrent deferred tax assets $ 35,752 $ 33,785 Net noncurrent deferred tax liabilities 643 36,718 Deferred taxes, net $ 35,109 $ (2,933 ) |
Reconciliation of Statutory to Effective Tax Rate | The actual tax rate for the years ended December 31, 2015, 2016 and 2017 compared to the statutory U.S. Federal tax rate is as follows: Year Ended December 31, 2015 2016 2017 Income taxes at statutory rate 35.00 % 35.00 % 35.00 % Indefinite reinvestment .92 (1.98 ) 2.75 Excess tax benefit from equity award ─ ─ (2.38 ) Non-deductible expenses 0.09 0.11 0.17 Controlled foreign corporation losses 1.09 (2.63 ) (0.13 ) Valuation allowance recognized foreign tax credit ─ ─ 19.59 Write-off outside basis DTL ─ ─ (2.89 ) Revaluation of deferred taxes ─ ─ (1.28 ) Section 987 implementation ─ 2.69 ─ Other 0.13 (0.42 ) 0.43 37.23 % 32.77 % 51.26 % |
Derivative Financial Instrume51
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Financial Instruments [Abstract] | |
Gains (Losses) Related to Derivative Instruments Not Designated as Hedging Instruments | The following table summarizes gains (losses) related to derivative instruments not designated as hedging instruments during the years ended December 31, 2015, 2016 and 2017 (U.S. dollars in thousands): Amount of Gain (Loss) Recognized in Income Year Ended December 31, Derivatives not designated as hedging instruments: Location of Gain (Loss) Recognized in Income 2015 2016 2017 Foreign currency contracts Other income (expense) $ 38 $ 39 $ (485 ) |
Gains (Losses) Related to Derivative Instruments Designated as Cash Flow Hedges | The following table summarizes gains (losses) related to derivative instruments recorded in other comprehensive income (loss) during the years ended December 31, 2015, 2016 and 2017 (U.S. dollars in thousands): Amount of Gain (Loss) Recognized in Other Comprehensive Loss Year Ended December 31, Derivatives designated as hedging instruments: 2015 2016 2017 Foreign currency forward contracts related to intercompany license fee, product sales, and selling expense hedges $ 590 $ (1,423 ) $ (152 ) The following table summarizes gains (losses) relating to derivative instruments reclassified from accumulated other comprehensive loss into income during the years ended December 31, 2015, 2016 and 2017 (U.S. dollars in thousands): Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Year Ended December 31, Derivatives designated as hedging instruments: Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income 2015 2016 2017 Foreign currency forward contracts related to intercompany license fees and product sales hedges Revenue $ 1,731 $ (1,088 ) $ 119 Foreign currency forward contracts related to intercompany selling expense hedges Selling expenses $ 397 $ (1,544 ) $ 358 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Information [Abstract] | |
Revenue by Segment | Revenue by Segment Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 565,527 $ 610,414 $ 716,991 South Korea 422,341 413,696 361,692 Americas 329,668 276,590 317,380 South Asia/Pacific 321,971 296,758 299,980 Japan 264,214 279,042 256,085 Hong Kong/Taiwan 206,140 183,979 166,696 EMEA 137,186 147,318 160,275 Total $ 2,247,047 $ 2,207,797 $ 2,279,099 |
Segment Contribution | Segment Contribution Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 73,422 $ 135,174 $ 211,625 South Korea 130,516 117,142 100,964 Americas 62,937 44,390 47,040 South Asia/Pacific 68,949 71,365 68,141 Japan 51,181 59,175 51,372 Hong Kong/Taiwan 40,718 35,978 27,958 EMEA 11,172 10,386 11,749 Total segment contribution 438,895 473,610 518,849 Corporate and other (194,193 ) (242,506 ) (244,366 ) Operating income 244,702 231,104 274,483 Other income (expense) (32,743 ) (18,265 ) (8,916 ) Income before provision for income taxes $ 211,959 $ 212,839 $ 265,567 |
Depreciation and Amortization and Capital Expenditures | Depreciation and Amortization Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 18,503 $ 16,775 $ 15,122 South Korea 5,882 6,787 6,499 Americas 2,545 2,617 1,608 South Asia/Pacific 2,022 2,388 2,372 Japan 3,434 3,782 3,554 Hong Kong/Taiwan 2,132 2,507 1,395 EMEA 1,498 1,387 985 Corporate and other 35,349 36,154 40,029 Total $ 71,365 $ 72,397 $ 71,564 Capital Expenditures Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 21,998 $ 13,656 $ 4,539 South Korea 9,983 556 469 Americas 400 1,095 744 South Asia/Pacific 2,959 2,282 1,809 Japan 1,903 1,288 994 Hong Kong/Taiwan 1,345 634 1,350 EMEA 1,430 1,224 1,168 Corporate and other 16,604 29,486 49,083 Total $ 56,622 $ 50,221 $ 60,156 |
Revenue by Major Market | Revenue by Major Market A major market is defined as one with total revenue greater than 10% of consolidated total revenue. Based on this criteria, the Company has identified three major markets: Mainland China, South Korea and Japan. There are approximately 50 other markets, each of which individually is less than 10%. The table below also includes the Company's country of domicile (the U.S.). No single customer accounted for 10% or more of net sales for the periods presented. Sales are recorded in the jurisdiction in which the transactions occurred: Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Mainland China $ 565,527 $ 610,414 $ 716,991 South Korea 422,341 413,696 361,692 Japan 264,214 279,042 256,085 United States 243,748 201,239 218,734 All others 751,217 703,406 725,597 Total $ 2,247,047 $ 2,207,797 $ 2,279,099 |
Revenue by Product Line | Revenue by Product Line Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 Nu Skin $ 1,363,539 $ 1,308,135 $ 1,456,386 Pharmanex 877,924 892,738 817,230 Other 5,584 6,924 5,483 Total $ 2,247,047 $ 2,207,797 $ 2,279,099 |
Long-Lived Assets by Major Market | Long-Lived Assets by Major Market A major market is defined as a market with long-lived assets greater than 10% of consolidated long-lived assets and also includes the Company's country of domicile (the U.S.). Long-lived assets in Mainland China consist primarily of property, plant and equipment related to manufacturing, distribution facilities and the Mainland China headquarters. Long-lived assets in the U.S. consist primarily of property, plant and equipment, including the Company's corporate offices and distribution facilities. Long-lived assets by major market are set forth below for the periods ended December 31, 2016 and 2017: Year Ended December 31, (U.S. dollars in thousands) 2015 2016 2017 United States $ 271,058 $ 283,868 $ 302,884 Mainland China 110,839 97,867 97,046 South Korea 48,702 41,545 42,211 Japan 13,587 11,517 9,342 All others 10,351 9,935 13,104 Total $ 454,537 $ 444,732 $ 464,587 |
The Company (Details)
The Company (Details) | 12 Months Ended |
Dec. 31, 2017Segment | |
The Company [Abstract] | |
Number of segments | 7 |
Summary of Significant Accoun54
Summary of Significant Accounting Policies, Inventories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Inventories [Abstract] | |||
Raw materials | $ 87,683 | $ 108,276 | |
Finished goods | 165,771 | 141,660 | |
Inventories | 253,454 | 249,936 | |
Inventory Valuation Reserve [Member] | |||
Valuation Allowance [Roll Forward] | |||
Beginning balance | 7,995 | 20,744 | $ 56,034 |
Additions | 16,382 | 24,906 | 38,605 |
Write-offs | (16,296) | (37,655) | (73,895) |
Ending balance | $ 8,081 | $ 7,995 | $ 20,744 |
Summary of Significant Accoun55
Summary of Significant Accounting Policies, Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2017 | |
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 |
Computers and Equipment [Member] | Minimum [Member] | |
Property and Equipment [Abstract] | |
Useful life | 3 years |
Computers and 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 Accoun56
Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue Recognition [Abstract] | |||
Sales returns | $ 53.8 | $ 61.2 | $ 65.6 |
Allowance for Product Returns [Member] | |||
Revenue Recognition [Abstract] | |||
Accrued reserve | $ 4.5 | $ 6.1 |
Summary of Significant Accoun57
Summary of Significant Accounting Policies, Advertising Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Advertising Expense [Abstract] | |||
Advertising costs incurred | $ 15.6 | $ 15.9 | $ 11 |
Summary of Significant Accoun58
Summary of Significant Accounting Policies, Research and Development (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Research and Development [Abstract] | |||
Research and development expense | $ 22 | $ 24.3 | $ 20.1 |
Summary of Significant Accoun59
Summary of Significant Accounting Policies, Uncertain Tax Positions (Details) - Multiple Foreign and Domestic Authorities [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits [Roll Forward] | |||
Gross balance at beginning of year | $ 5,290 | $ 7,772 | $ 5,987 |
Increases related to prior year tax positions | 0 | 185 | 1,677 |
Decrease related to prior year tax positions | (277) | 0 | 0 |
Increases related to current year tax positions | 669 | 918 | 1,119 |
Settlements | (159) | (3,369) | 0 |
Decreases due to lapse of statutes of limitations | (187) | (252) | (667) |
Currency adjustments | (344) | ||
Currency adjustments | 178 | 36 | |
Gross balance at end of year | 5,514 | 5,290 | 7,772 |
Uncertain Tax Positions [Abstract] | |||
Unrecognized tax benefits that would impact effective tax rate | 5,200 | 1,000 | |
Interest and penalties expenses/(benefits) | 700 | (800) | 400 |
Accrued interest and penalties | 1,600 | $ 900 | $ 1,700 |
Minimum [Member] | |||
Uncertain Tax Positions [Abstract] | |||
Estimated increase in gross unrecognized tax benefits within next 12 months | 2,500 | ||
Maximum [Member] | |||
Uncertain Tax Positions [Abstract] | |||
Estimated increase in gross unrecognized tax benefits within next 12 months | $ 3,500 |
Summary of Significant Accoun60
Summary of Significant Accounting Policies, Foreign Currency Translation (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Foreign Currency Translation [Abstract] | |||
Cumulative translation adjustment related to foreign currency adjustment | $ (66.4) | $ (84.7) | $ (71.6) |
Cumulative translation adjustment related to foreign currency adjustment, tax | $ 5.8 | $ 13.4 | $ 10.9 |
Summary of Significant Accoun61
Summary of Significant Accounting Policies, Classification of Venezuela as a Highly Inflationary Economy and Devaluation of Its Currency (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($) | Mar. 31, 2015VEB / $ | |
Operations in Venezuela [Abstract] | ||
Foreign currency transaction losses on net monetary assets denominated in bolivar | $ 10.2 | |
Other Income (Expense), Net [Member] | ||
Operations in Venezuela [Abstract] | ||
Foreign currency transaction losses on net monetary assets denominated in bolivar | $ 10.2 | |
Venezuela [Member] | ||
Operations in Venezuela [Abstract] | ||
Foreign currency exchange rate for SIMADI | VEB / $ | 193 |
Summary of Significant Accoun62
Summary of Significant Accounting Policies, Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value of Financial Instruments [Abstract] | ||
Long-term debt fair value | $ 515.2 | $ 497.4 |
Summary of Significant Accoun63
Summary of Significant Accounting Policies, Stock-Based Compensation (Details) - General and Administrative Expense [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-Based Compensation [Abstract] | |||
Compensation expense related to equity compensation plans | $ 19.3 | $ 8.9 | $ 7.4 |
Reversal of compensation expense for certain performance based awards no longer expected to vest | $ 0 | $ 9.6 | $ 7.6 |
Summary of Significant Accoun64
Summary of Significant Accounting Policies, Recent Accounting Pronouncements (Details) - Accounting Standards Update 2016-09 [Member] $ in Thousands | Dec. 31, 2016USD ($) |
Accounting Pronouncements [Abstract] | |
Cumulative adjustment | $ 0 |
Retained Earnings [Member] | |
Accounting Pronouncements [Abstract] | |
Cumulative adjustment | (2,800) |
Additional Paid-in Capital [Member] | |
Accounting Pronouncements [Abstract] | |
Cumulative adjustment | $ 2,800 |
Prepaid Expenses and Other (Det
Prepaid Expenses and Other (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expenses and Other [Abstract] | ||
Deferred charges | $ 4,256 | $ 9,319 |
Prepaid income taxes | 0 | 6,799 |
Prepaid inventory and import costs | 9,397 | 10,857 |
Prepaid rent, insurance and other occupancy costs | 14,558 | 13,398 |
Prepaid promotion and event cost | 3,581 | 4,126 |
Prepaid other taxes | 5,559 | 4,778 |
Forward contracts | 158 | 1,371 |
Deposits | 1,147 | 1,079 |
Other | 14,237 | 13,349 |
Total prepaid expenses and other | $ 52,893 | $ 65,076 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Property and Equipment [Abstract] | ||||
Property and equipment | $ 750,826 | $ 678,457 | ||
Less: accumulated depreciation | (286,239) | (233,725) | ||
Property and equipment, net | 464,587 | 444,732 | $ 454,537 | |
Depreciation expense | 58,300 | 60,800 | $ 61,600 | |
Land [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | 33,667 | 33,158 | ||
Buildings [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | 274,632 | 266,436 | ||
Construction in Progress [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | [1] | 53,125 | 31,124 | |
Furniture and Fixtures [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | 95,378 | 82,194 | ||
Computers and Equipment [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | 156,994 | 143,014 | ||
Leasehold Improvements [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | 123,479 | 109,863 | ||
Scanners [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | 11,212 | 10,578 | ||
Vehicles [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | 2,339 | 2,090 | ||
Internal-Use Software Development Costs [Member] | ||||
Property and Equipment [Abstract] | ||||
Property and equipment | $ 43,400 | $ 25,800 | ||
[1] | Construction in progress includes $25.8 million and $[___] million as of December 31, 2016 and 2017, respectively, of eligible capitalized internal-use software development costs which will be reclassified to computers and equipment when placed into service. |
Goodwill (Details)
Goodwill (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | [1] | |
Goodwill [Abstract] | |||
Number of segments | Segment | 7 | ||
Goodwill | $ 114,954 | $ 114,954 | |
Mainland China [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 32,179 | 32,179 | |
South Korea [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 29,261 | 29,261 | |
Americas [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 9,449 | 9,449 | |
South Asia/Pacific [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 18,537 | 18,537 | |
Japan [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 16,019 | 16,019 | |
Hong Kong/Taiwan [Member] | |||
Goodwill [Abstract] | |||
Goodwill | 6,634 | 6,634 | |
EMEA [Member] | |||
Goodwill [Abstract] | |||
Goodwill | $ 2,875 | $ 2,875 | |
[1] | Goodwill was recast to reflect current period presentation by geographic region at December 31, 2016. |
Other Intangible Assets, Indefi
Other Intangible Assets, Indefinite Life Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Indefinite Life Intangible Assets [Abstract] | ||
Indefinite life intangible assets | $ 28,362 | $ 28,362 |
Trademarks and Trade Names [Member] | ||
Indefinite Life Intangible Assets [Abstract] | ||
Indefinite life intangible assets | 24,599 | 24,599 |
Other Indefinite Lived Intangibles [Member] | ||
Indefinite Life Intangible Assets [Abstract] | ||
Indefinite life intangible assets | $ 3,763 | $ 3,763 |
Other Intangible Assets, Finite
Other Intangible Assets, Finite Life Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 140,915 | $ 129,391 | |
Accumulated amortization | $ 101,630 | 94,200 | |
Weighted-average amortization period | 15 years | ||
Amortization expense | $ 8,100 | 8,400 | $ 8,600 |
Write-off of fully amortized intangible assets | 12,000 | ||
Scanner Technology [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | 46,482 | 46,482 | |
Accumulated amortization | $ 39,657 | 36,624 | |
Weighted-average amortization period | 18 years | ||
Developed Technology [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 22,500 | 22,500 | |
Accumulated amortization | $ 19,207 | 18,383 | |
Weighted-average amortization period | 20 years | ||
Distribution Network [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 11,598 | 11,598 | |
Accumulated amortization | $ 11,598 | 11,598 | |
Weighted-average amortization period | 15 years | ||
Trademarks [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 2,785 | 2,592 | |
Accumulated amortization | $ 1,197 | 1,011 | |
Weighted-average amortization period | 15 years | ||
Other [Member] | |||
Finite Life Intangible Assets [Abstract] | |||
Gross carrying amount | $ 57,550 | 46,219 | |
Accumulated amortization | $ 29,971 | $ 26,584 | |
Weighted-average amortization period | 8 years |
Other Intangible Assets, Annual
Other Intangible Assets, Annual Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Annual Estimated Future Amortization Expense [Abstract] | |||
2,018 | $ 8,978 | ||
2,019 | 8,876 | ||
2,020 | 4,898 | ||
2,021 | 4,148 | ||
2,022 | 5,201 | ||
Impairment Charges [Abstract] | |||
Indefinite life intangible assets impairment charge | $ 0 | $ 0 | $ 0 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Assets [Abstract] | ||
Deferred taxes | $ 33,785 | $ 35,752 |
Deposits for noncancelable operating leases | 43,375 | 38,858 |
Cash surrender value for life insurance policies | 37,737 | 32,286 |
Other | 49,998 | 29,573 |
Total other assets | $ 164,895 | $ 136,469 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued Expenses [Abstract] | ||
Accrued sales force commissions and other payments | $ 151,549 | $ 126,153 |
Accrued income taxes | 13,075 | 0 |
Accrued other taxes | 44,580 | 31,748 |
Accrued payroll and other employee expenses | 38,167 | 25,412 |
Accrued payable to vendors | 29,874 | 28,456 |
Accrued royalties | 2,623 | 4,767 |
Sales return reserve | 4,523 | 6,125 |
Deferred revenue | 12,669 | 13,494 |
Other | 22,129 | 38,868 |
Total accrued expenses | $ 319,189 | $ 275,023 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Other Liabilities [Abstract] | ||
Deferred tax liabilities | $ 36,718 | $ 643 |
Reserve for other tax liabilities | 7,163 | 6,264 |
Liability for deferred compensation plan | 43,248 | 36,730 |
Pension plan benefits reserve | 6,359 | 5,631 |
Build to suit - financing obligation | 10,290 | 9,543 |
Deferred rent and deferred tenant incentives | 6,389 | 5,952 |
Asset retirement obligation | 6,578 | 5,682 |
Other | 10,371 | 6,354 |
Total other liabilities | $ 127,116 | $ 76,799 |
Long-Term Debt, Credit Agreemen
Long-Term Debt, Credit Agreement (Details) $ in Thousands, ¥ in Billions | 12 Months Ended | ||||||||
Dec. 31, 2017USD ($) | Dec. 31, 2017JPY (Â¥) | Dec. 31, 2016USD ($) | Dec. 31, 2016JPY (Â¥) | Oct. 09, 2014USD ($) | Oct. 09, 2014JPY (Â¥) | ||||
Long-term Debt [Abstract] | |||||||||
Outstanding balance | [1] | $ 401,768 | |||||||
Credit Agreement [Member] | Maximum [Member] | |||||||||
Long-term Debt [Abstract] | |||||||||
Consolidated leverage ratio | 2.25 | ||||||||
Credit Agreement [Member] | Minimum [Member] | |||||||||
Long-term Debt [Abstract] | |||||||||
Consolidated interest coverage ratio | 3 | ||||||||
Term Loan Facility [Member] | |||||||||
Long-term Debt [Abstract] | |||||||||
Original principal amount | $ 127,500 | $ 127,500 | |||||||
Term of loan | 5 years | ||||||||
Outstanding balance | $ 94,800 | [2],[3] | $ 108,400 | ||||||
Japanese Yen Term Loan Facility [Member] | |||||||||
Long-term Debt [Abstract] | |||||||||
Original principal amount | ¥ | ¥ 6.6 | ¥ 6.6 | |||||||
Term of loan | 5 years | ||||||||
Outstanding balance | $ 43,500 | [2],[3] | ¥ 4.9 | [2],[3] | 47,900 | ¥ 5.6 | |||
Revolving Credit Facility [Member] | |||||||||
Long-term Debt [Abstract] | |||||||||
Borrowing capacity | $ 187,500 | ||||||||
Term of loan | 5 years | ||||||||
Outstanding balance | $ 47,500 | [2],[3] | $ 47,500 | ||||||
[1] | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $13.1 million, which is not reflected in this table. | ||||||||
[2] | As of December 31, 2017, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $16.7 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility, $7.7 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility and $5.9 million of the Japan subsidiary loan. The Company has classified the $47.5 million 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. | ||||||||
[3] | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $9.1 million and debt issuance costs of $4.0 million (consisting of $11.1 million related to the Convertible Note and $2.0 million related to the credit agreement), which is not reflected in this table. |
Long-Term Debt, Convertible Not
Long-Term Debt, Convertible Note (Details) | Jun. 16, 2016USD ($) | Dec. 31, 2017USD ($)d$ / sharesshares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Convertible Debt [Abstract] | |||||
Equity component of convertible notes allocated to additional paid-in capital | $ 6,825,000 | ||||
Net Carrying Amount of Liability Component [Abstract] | |||||
Principal | [1] | $ 401,768,000 | |||
Unamortized debt discount (conversion option) | (9,100,000) | ||||
Unamortized debt discount (issuance costs) | (4,000,000) | ||||
Debt issuance costs | 0 | 6,596,000 | $ 0 | ||
Interest expense | 22,200,000 | 15,600,000 | $ 7,900,000 | ||
Convertible Note [Member] | |||||
Convertible Debt [Abstract] | |||||
Original principal amount | $ 210,000,000 | $ 210,000,000 | |||
Interest rate | 4.75% | ||||
Maturity date | Jun. 15, 2020 | ||||
Redemption price, percentage of principal amount redeemed | 100.00% | ||||
Threshold percentage of stock price trigger | 180.00% | ||||
Threshold trading days | d | 20 | ||||
Threshold final trading days | d | 3 | ||||
Threshold consecutive trading days | d | 30 | ||||
Principal amount increments that can be repurchased upon a change in control or termination of trading of common stock | $ 1,000 | ||||
Principal amount increments that can be converted | $ 1,000 | ||||
Holding period following issue date before notes can be converted | 6 months | ||||
Initial conversion rate (in shares) | shares | 21.5054 | ||||
Initial conversion price (in dollars per share) | $ / shares | $ 46.50 | ||||
Proceeds from issuance of notes | 210,000,000 | ||||
Liability component of convertible notes | 199,100,000 | ||||
Equity component of convertible notes allocated to additional paid-in capital | $ 10,900,000 | ||||
Effective interest rate | 7.10% | ||||
Net Carrying Amount of Liability Component [Abstract] | |||||
Principal | $ 210,000,000 | $ 210,000,000 | |||
Unamortized debt discount (conversion option) | (7,078,000) | ||||
Total long-term debt, net | 202,922,000 | ||||
Unamortized debt discount (issuance costs) | (4,050,000) | ||||
Net carrying amount | 198,872,000 | ||||
Debt issuance costs | 6,596,000 | ||||
Additions to deferred financing cost | 6,300,000 | ||||
Adjustments to additional paid-in capital for debt issuance costs | 300,000 | ||||
Interest expense | 14,000,000 | ||||
Contractual interest | 10,000,000 | ||||
Amortization of debt issuance costs and debt discount | $ 4,000,000 | ||||
[1] | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $13.1 million, which is not reflected in this table. |
Long-Term Debt, Debt Facilities
Long-Term Debt, Debt Facilities (Details) $ in Thousands, ¥ in Billions | 12 Months Ended | ||||||||||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017JPY (Â¥) | Dec. 31, 2016JPY (Â¥) | Jun. 16, 2016USD ($) | Oct. 09, 2014USD ($) | Oct. 09, 2014JPY (Â¥) | ||||
Long-term Debt [Abstract] | |||||||||||
Balance | [1] | $ 401,768 | |||||||||
Current portion of long-term debt | 77,840 | $ 82,727 | |||||||||
Unamortized debt discount | 9,100 | ||||||||||
Unamortized debt issuance costs | 4,000 | ||||||||||
Unamortized debt discount and debt issuance costs | 13,100 | ||||||||||
Interest expense | 22,200 | 15,600 | $ 7,900 | ||||||||
Credit Agreement [Member] | |||||||||||
Long-term Debt [Abstract] | |||||||||||
Unamortized debt discount and debt issuance costs | 2,000 | ||||||||||
Term Loan Facility [Member] | |||||||||||
Long-term Debt [Abstract] | |||||||||||
Original principal amount | 127,500 | $ 127,500 | |||||||||
Balance | $ 94,800 | [2],[3] | 108,400 | ||||||||
Interest rate | Variable 30 day: 4.319% | ||||||||||
Interest rate | 4.319% | 4.319% | |||||||||
Term of variable rate | 30 days | ||||||||||
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. | ||||||||||
Percentage of principal payable in installments | 50.00% | ||||||||||
Frequency of payment | Quarterly | ||||||||||
Term of loan | 5 years | ||||||||||
Current portion of long-term debt | $ 16,700 | ||||||||||
Japanese Yen Term Loan Facility [Member] | |||||||||||
Long-term Debt [Abstract] | |||||||||||
Original principal amount | ¥ | ¥ 6.6 | ¥ 6.6 | |||||||||
Balance | $ 43,500 | [2],[3] | 47,900 | ¥ 4.9 | [2],[3] | ¥ 5.6 | |||||
Interest rate | Variable 30 day: 2.75% | ||||||||||
Interest rate | 2.75% | 2.75% | |||||||||
Term of variable rate | 30 days | ||||||||||
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. | ||||||||||
Percentage of principal payable in installments | 50.00% | ||||||||||
Frequency of payment | Quarterly | ||||||||||
Term of loan | 5 years | ||||||||||
Current portion of long-term debt | $ 7,700 | ||||||||||
Revolving Credit Facility [Member] | |||||||||||
Long-term Debt [Abstract] | |||||||||||
Balance | $ 47,500 | [2],[3] | 47,500 | ||||||||
Interest rate | Variable 30 day: 4.319% | ||||||||||
Interest rate | 4.319% | 4.319% | |||||||||
Term of variable rate | 30 days | ||||||||||
Repayment terms | Revolving line of credit expires October 2019. | ||||||||||
Term of loan | 5 years | ||||||||||
South Korea Subsidiary Loan [Member] | |||||||||||
Long-term Debt [Abstract] | |||||||||||
Original principal amount | $ 20,000 | ||||||||||
Balance | $ 0 | [2],[3] | 10,000 | ||||||||
Interest rate | 1.12% | 1.12% | |||||||||
Repayment terms | Loan was paid off in March 2017. | ||||||||||
Japan Subsidiary Loan [Member] | |||||||||||
Long-term Debt [Abstract] | |||||||||||
Original principal amount | ¥ | ¥ 2 | ||||||||||
Balance | $ 5,900 | [2],[3] | 11,400 | ¥ 0.7 | [2],[3] | ¥ 1.3 | |||||
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 | ||||||||||
Term of loan | 3 years | ||||||||||
Current portion of long-term debt | $ 5,900 | ||||||||||
Convertible Note [Member] | |||||||||||
Long-term Debt [Abstract] | |||||||||||
Original principal amount | 210,000 | $ 210,000 | |||||||||
Balance | $ 210,000 | $ 210,000 | |||||||||
Interest rate | 7.10% | 7.10% | |||||||||
Interest rate | 4.75% | 4.75% | |||||||||
Repayment terms | Principal amount payable on June 15, 2020. | ||||||||||
Unamortized debt discount | $ 7,078 | ||||||||||
Unamortized debt issuance costs | 4,050 | ||||||||||
Unamortized debt discount and debt issuance costs | 11,100 | ||||||||||
Interest expense | $ 14,000 | ||||||||||
[1] | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $13.1 million, which is not reflected in this table. | ||||||||||
[2] | As of December 31, 2017, the current portion of the Company's debt (i.e. becoming due in the next 12 months) included $16.7 million of the balance of its U.S. dollar denominated debt under the Credit Agreement facility, $7.7 million of the balance of its Japanese yen-denominated debt under the Credit Agreement facility and $5.9 million of the Japan subsidiary loan. The Company has classified the $47.5 million 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. | ||||||||||
[3] | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $9.1 million and debt issuance costs of $4.0 million (consisting of $11.1 million related to the Convertible Note and $2.0 million related to the credit agreement), which is not reflected in this table. |
Long-Term Debt, Maturities of L
Long-Term Debt, Maturities of Long-Term Debt (Details) $ in Thousands | Dec. 31, 2017USD ($) | |
Maturities of Long-term Debt [Abstract] | ||
2,018 | $ 77,840 | |
2,019 | 113,928 | |
2,020 | 210,000 | |
2,021 | 0 | |
2,022 | 0 | |
Thereafter | 0 | |
Total | 401,768 | [1] |
Unamortized debt discount and debt issuance costs | $ 13,100 | |
[1] | The carrying value of the debt reflects the amounts stated in the above table less a debt discount of $13.1 million, which is not reflected in this table. |
Lease and Financing Obligatio78
Lease and Financing Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
New Building [Abstract] | |||
Value of New Building | $ 750,826 | $ 678,457 | |
Accumulated depreciation | 286,239 | 233,725 | |
Deposit paid to landlord | 43,375 | 38,858 | |
Operating Leases, Minimum Future Obligations [Abstract] | |||
2,018 | 41,788 | ||
2,019 | 27,088 | ||
2,020 | 14,907 | ||
2,021 | 10,036 | ||
2,022 | 7,672 | ||
Thereafter | 13,250 | ||
Total | 114,741 | ||
Financing Obligations, Minimum Future Obligations [Abstract] | |||
2,018 | 736 | ||
2,019 | 758 | ||
2,020 | 781 | ||
2,021 | 790 | ||
2,022 | 804 | ||
Thereafter | 2,027 | ||
Total minimum lease payments | 5,896 | ||
Rent expense for operating leases | 50,700 | 48,200 | $ 52,400 |
Interest expense associated with financing obligation | $ 200 | 200 | $ 100 |
New Regional Headquarters Building [Member] | |||
New Building [Abstract] | |||
Extension period for lease | 10 years | ||
Initial term of lease | 10 years | ||
Value of New Building | $ 20,800 | 18,900 | |
Accumulated depreciation | 1,500 | 800 | |
Financing obligation | 10,800 | 10,000 | |
Deposit paid to landlord | 10,300 | 9,100 | |
Tenant incentive asset | 4,900 | 4,900 | |
Deferred tenant incentive liability | $ 4,500 | $ 4,500 | |
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, 2017USD ($)Vote$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)shares | Oct. 31, 2015USD ($) | Aug. 31, 2013USD ($) | Dec. 31, 1998USD ($) | |
Capital Stock [Abstract] | ||||||
Preferred stock, authorized (in shares) | 25,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||||
Weighted Average Shares Outstanding [Abstract] | ||||||
Basic weighted-average common shares outstanding (in shares) | 52,806,000 | 55,412,000 | 57,997,000 | |||
Effect of Dilutive Securities [Abstract] | ||||||
Stock awards and options (in shares) | 1,110,000 | 683,000 | 1,060,000 | |||
Convertible note (in shares) | 936,000 | 2,000 | 0 | |||
Diluted weighted-average common shares outstanding (in shares) | 54,852,000 | 56,097,000 | 59,057,000 | |||
Repurchases of Common Stock [Abstract] | ||||||
Repurchase of Class A common stock | $ | $ 71,731 | $ 247,208 | $ 164,094 | |||
Amount available for repurchases | $ | $ 128,000 | |||||
Stock Options [Member] | ||||||
Effect of Dilutive Securities [Abstract] | ||||||
Anti-dilutive shares excluded from calculation of diluted earnings per share (in shares) | 400,000 | 2,000,000 | 1,800,000 | |||
Common Class A [Member] | ||||||
Capital Stock [Abstract] | ||||||
Common stock, shares 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 (in shares) | 1 | |||||
Repurchases of Common Stock [Abstract] | ||||||
Shares repurchased (in shares) | 1,200,000 | 4,500,000 | 3,800,000 | |||
Authorized amount | $ | $ 500,000 | $ 10,000 | ||||
Increase in authorized amount | $ | $ 400,000 | |||||
Common Class B [Member] | ||||||
Capital Stock [Abstract] | ||||||
Common stock, shares authorized (in shares) | 100,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||
Common stock, shares outstanding (in shares) | 0 | 0 | ||||
Number of votes per share | Vote | 10 | |||||
Treasury Stock [Member] | ||||||
Repurchases of Common Stock [Abstract] | ||||||
Repurchase of Class A common stock | $ | $ 71,731 | $ 247,208 | $ 164,094 |
Stock-Based Compensation, Equit
Stock-Based Compensation, Equity Incentive Plans (Details) shares in Millions | May 24, 2016shares | Jun. 03, 2013shares | Dec. 31, 2017InstallmentLevel | Apr. 30, 2010shares |
2010 Omnibus Incentive Plan [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Number of shares authorized for issuance (in shares) | 7 | |||
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 | |||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Number of additional shares authorized for issuance (in shares) | 3.2 | |||
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 [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Vesting percentage | 25.00% | |||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | Second Performance Level [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Vesting percentage | 25.00% | |||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | Third Performance Level [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Vesting percentage | 25.00% | |||
Amended and Restated 2010 Omnibus Incentive Plan [Member] | Performance-Based Options [Member] | Fourth Performance Level [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Vesting percentage | 25.00% | |||
Second Amended and Restated 2010 Omnibus Incentive Plan [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Number of additional shares authorized for issuance (in shares) | 3.8 |
Stock-Based Compensation, Stock
Stock-Based Compensation, Stock Option Valuation Assumptions (Details) - Stock Options [Member] - $ / shares | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Fair Value Assumptions [Abstract] | ||||
Weighted average grant date fair value of grants (in dollars per share) | $ 18.84 | $ 12.59 | $ 16.26 | |
Risk-free interest rate | [1] | 2.10% | 1.40% | 1.70% |
Dividend yield | [2] | 2.50% | 2.30% | 2.10% |
Expected volatility | [3] | 48.20% | 47.90% | 46.80% |
Expected life in months | [4] | 68 months | 68 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-Based Compensation, Sto82
Stock-Based Compensation, Stock Options (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Stock Options [Member] | |
Number of Shares [Roll Forward] | |
Outstanding at beginning of year (in shares) | shares | 5,932,900 |
Granted (in shares) | shares | 298,000 |
Exercised (in shares) | shares | (1,177,400) |
Forfeited/cancelled/expired (in shares) | shares | (1,359,100) |
Outstanding at end of year (in shares) | shares | 3,694,400 |
Exercisable at end of year (in shares) | shares | 1,019,600 |
Weighted-Average Exercise Price [Roll Forward] | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 51.42 |
Granted (in dollars per share) | $ / shares | 50.93 |
Exercised (in dollars per share) | $ / shares | 31.92 |
Forfeited/cancelled/expired (in dollars per share) | $ / shares | 60.69 |
Outstanding at end of year (in dollars per share) | $ / shares | 54.17 |
Exercisable at end of year (in dollars per share) | $ / shares | $ 40.96 |
Remaining Contractual Term and Aggregate Intrinsic Value [Abstract] | |
Outstanding options, weighted-average remaining contractual term | 3 years 10 months 24 days |
Outstanding options, aggregate intrinsic value | $ | $ 67,962 |
Exercisable options, weighted-average remaining contractual term | 3 years 8 months 23 days |
Exercisable options, aggregate intrinsic value | $ | $ 29,838 |
Service-Based Options [Member] | |
Number of Shares [Roll Forward] | |
Outstanding at beginning of year (in shares) | shares | 2,207,000 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (324,400) |
Forfeited/cancelled/expired (in shares) | shares | (489,700) |
Outstanding at end of year (in shares) | shares | 1,392,900 |
Exercisable at end of year (in shares) | shares | 725,500 |
Weighted-Average Exercise Price [Roll Forward] | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 39.93 |
Granted (in dollars per share) | $ / shares | 0 |
Exercised (in dollars per share) | $ / shares | 34.71 |
Forfeited/cancelled/expired (in dollars per share) | $ / shares | 43.85 |
Outstanding at end of year (in dollars per share) | $ / shares | 39.76 |
Exercisable at end of year (in dollars per share) | $ / shares | $ 43.14 |
Remaining Contractual Term and Aggregate Intrinsic Value [Abstract] | |
Outstanding options, weighted-average remaining contractual term | 4 years 4 months 10 days |
Outstanding options, aggregate intrinsic value | $ | $ 41,756 |
Exercisable options, weighted-average remaining contractual term | 3 years 6 months 18 days |
Exercisable options, aggregate intrinsic value | $ | $ 20,237 |
Performance-Based Options [Member] | |
Number of Shares [Roll Forward] | |
Outstanding at beginning of year (in shares) | shares | 3,725,900 |
Granted (in shares) | shares | 298,000 |
Exercised (in shares) | shares | (853,000) |
Forfeited/cancelled/expired (in shares) | shares | (869,400) |
Outstanding at end of year (in shares) | shares | 2,301,500 |
Exercisable at end of year (in shares) | shares | 294,100 |
Weighted-Average Exercise Price [Roll Forward] | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 58.23 |
Granted (in dollars per share) | $ / shares | 50.93 |
Exercised (in dollars per share) | $ / shares | 30.86 |
Forfeited/cancelled/expired (in dollars per share) | $ / shares | 70.17 |
Outstanding at end of year (in dollars per share) | $ / shares | 62.89 |
Exercisable at end of year (in dollars per share) | $ / shares | $ 35.58 |
Remaining Contractual Term and Aggregate Intrinsic Value [Abstract] | |
Outstanding options, weighted-average remaining contractual term | 3 years 7 months 10 days |
Outstanding options, aggregate intrinsic value | $ | $ 26,206 |
Exercisable options, weighted-average remaining contractual term | 4 years 2 months 1 day |
Exercisable options, aggregate intrinsic value | $ | $ 9,601 |
Stock-Based Compensation, Sto83
Stock-Based Compensation, Stock Options Exercised (Details) - Stock Options [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-Based Compensation [Abstract] | |||
Cash proceeds from stock options exercised | $ 26,980 | $ 15,707 | $ 13,041 |
Tax benefit realized for stock options exercised | 6,457 | 3,840 | 4,451 |
Intrinsic value of stock options exercised | $ 42,749 | $ 30,587 | $ 12,085 |
Stock-Based Compensation, Nonve
Stock-Based Compensation, Nonvested Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | $ 19,314 | $ 8,890 | $ 7,400 |
Stock Options [Member] | |||
Weighted-Average Grant Date Fair Value [Abstract] | |||
Granted (in dollars per share) | $ 50.93 | ||
Unrecognized Stock-Based Compensation Expense [Abstract] | |||
Unrecognized stock-based compensation expense | $ 6,400 | ||
Unrecognized stock-based compensation expense, period for recognition | 1 year 10 months 24 days | ||
Restricted Stock Awards [Member] | |||
Number of Shares [Roll Forward] | |||
Nonvested at beginning of year (in shares) | 596,400 | ||
Granted (in shares) | 261,600 | ||
Vested (in shares) | (203,200) | ||
Forfeited (in shares) | (91,900) | ||
Nonvested at end of year (in shares) | 562,900 | 596,400 | |
Weighted-Average Grant Date Fair Value [Abstract] | |||
Nonvested, beginning balance (in dollars per share) | $ 53.62 | ||
Granted (in dollars per share) | 50.95 | ||
Vested (in dollars per share) | 53.94 | ||
Forfeited (in dollars per share) | 60.30 | ||
Nonvested, Ending Balance (in dollars per share) | $ 51.17 | $ 53.62 | |
Unrecognized Stock-Based Compensation Expense [Abstract] | |||
Unrecognized stock-based compensation expense | $ 16,300 | ||
Unrecognized stock-based compensation expense, period for recognition | 2 years 4 months 24 days | ||
Service-Based Options [Member] | |||
Weighted-Average Grant Date Fair Value [Abstract] | |||
Granted (in dollars per share) | $ 0 | ||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | $ 4,000 | $ 5,800 | 2,600 |
Service-Based Restricted Stock Units [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | $ 11,300 | 10,500 | 10,900 |
Performance-Based Options [Member] | |||
Weighted-Average Grant Date Fair Value [Abstract] | |||
Granted (in dollars per share) | $ 50.93 | ||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | $ 3,900 | (7,100) | (6,500) |
Performance Stock Units [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense (income) | $ 100 | $ (300) | $ 400 |
Fair Value (Details)
Fair Value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value on a Recurring Basis [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | $ 36,531 | $ 50,307 |
Other long-term assets | 3,726 | 2,782 |
Forward contracts | 158 | 1,371 |
Life insurance contracts | 37,737 | 32,286 |
Financial assets (liabilities), net | 78,152 | 86,746 |
Restricted current investments | 11,800 | 10,900 |
Fair Value on a Recurring Basis [Member] | Level 1 [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 36,531 | 50,307 |
Other long-term assets | 3,726 | 2,782 |
Forward contracts | 0 | 0 |
Life insurance contracts | 0 | 0 |
Financial assets (liabilities), net | 40,257 | 53,089 |
Fair Value on a Recurring Basis [Member] | Level 2 [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 0 | 0 |
Other long-term assets | 0 | 0 |
Forward contracts | 158 | 1,371 |
Life insurance contracts | 0 | 0 |
Financial assets (liabilities), net | 158 | 1,371 |
Fair Value on a Recurring Basis [Member] | Level 3 [Member] | ||
Financial Assets (Liabilities) [Abstract] | ||
Cash equivalents and current investments | 0 | 0 |
Other long-term assets | 0 | 0 |
Forward contracts | 0 | 0 |
Life insurance contracts | 37,737 | 32,286 |
Financial assets (liabilities), net | 37,737 | 32,286 |
Insurance Company Contracts [Member] | ||
Changes in Fair Value of Level 3 Marketable Securities [Roll Forward] | ||
Beginning balance | 32,287 | 27,292 |
Actual Return on Plan Assets [Abstract] | ||
Relating to assets still held at the reporting date | 4,917 | 2,196 |
Purchases and issuances | 895 | 3,051 |
Sales and settlements | (362) | (252) |
Transfers into Level 3 | 0 | 0 |
Ending balance | $ 37,737 | $ 32,287 |
Income Taxes, Tax Cuts and Jobs
Income Taxes, Tax Cuts and Jobs Act (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tax Cuts and Jobs Act of 2017 [Abstract] | |||||
Corporate income tax rate | 35.00% | 35.00% | 35.00% | ||
Charge to deferred income tax expense for effects of Tax Reform Act | $ 47.7 | ||||
Recognition of valuation allowance on foreign tax credit carryforwards | 52 | ||||
Charge to deferred income tax expense related to reversal of indefinite reinvestment assertion | 7.3 | ||||
Charge to deferred income tax expense related to reduction in FIN 48 assets | 4.1 | ||||
Benefit related to write-off of net outside basis deferred tax liabilities | (7.7) | ||||
Benefit related to tax effect on OCI | (3.1) | ||||
Benefit related to estimated impact of remeasurement of deferred tax assets and liabilities | (4.9) | ||||
Estimated Toll Charge | $ 96 | ||||
Plan [Member] | |||||
Tax Cuts and Jobs Act of 2017 [Abstract] | |||||
Corporate income tax rate | 21.00% |
Income Taxes, Consolidated Inco
Income Taxes, Consolidated Income Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Income Before Provision for Income Taxes [Abstract] | |||
U.S. | $ 1,135 | $ (19,119) | $ 134,473 |
Foreign | 264,432 | 231,958 | 77,486 |
Income before provision for income taxes | $ 265,567 | $ 212,839 | $ 211,959 |
Income Taxes, Current and Defer
Income Taxes, Current and Deferred Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current [Abstract] | |||
Federal | $ (14,358) | $ 0 | $ 6,328 |
State | 1,814 | (718) | 1,483 |
Foreign | 104,688 | 70,652 | 50,403 |
Current income tax expense (benefit) | 92,144 | 69,934 | 58,214 |
Deferred [Abstract] | |||
Federal | 45,593 | (27,171) | 16,556 |
State | (2,273) | 1,104 | (674) |
Foreign | 666 | 25,886 | 4,817 |
Deferred income tax expense (benefit) | 43,986 | (181) | 20,699 |
Provision for income taxes | $ 136,130 | $ 69,753 | $ 78,913 |
Income Taxes, Deferred Tax Asse
Income Taxes, Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred Tax Assets [Abstract] | ||
Inventory differences | $ 2,861 | $ 2,521 |
Foreign tax credit and other foreign benefits | 52,408 | 145,169 |
Stock-based compensation | 6,327 | 11,470 |
Accrued expenses not deductible until paid | 39,326 | 32,796 |
Foreign currency exchange | 2,001 | 4,826 |
Net operating losses | 5,230 | 9,584 |
Capitalized research and development | 197 | 358 |
Other | 211 | 1,063 |
Gross deferred tax assets | 108,561 | 207,787 |
Deferred Tax Liabilities [Abstract] | ||
Foreign currency exchange | 874 | 105 |
Foreign withholding taxes | 29,018 | 0 |
Intangibles step-up | 6,568 | 12,107 |
Overhead allocation to inventory | 3,977 | 4,820 |
Amortization of intangibles | 11,475 | 19,091 |
Foreign outside basis in controlled foreign corporation | 0 | 106,846 |
Other | 2,676 | 20,572 |
Gross deferred tax liabilities | 54,588 | 163,541 |
Valuation allowance | (56,906) | (9,137) |
Deferred taxes, net | $ 35,109 | |
Deferred taxes, net | (2,933) | |
Foreign [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Operating loss carryforwards | 17,100 | |
Operating loss carryforwards scheduled to expire | 5,700 | |
Operating loss carryforwards that will not expire | 11,400 | |
Valuation allowance on operating loss carryforwards | 15,900 | |
Tax Credit Carryforwards [Abstract] | ||
Tax credit carryforward | $ 52,000 | |
Foreign [Member] | Minimum [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2018 | |
Tax Credit Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2026 | |
Foreign [Member] | Maximum [Member] | ||
Operating Loss Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2027 | |
Tax Credit Carryforwards [Abstract] | ||
Expiration date | Dec. 31, 2027 |
Income Taxes, Deferred Tax As90
Income Taxes, Deferred Tax Asset Valuation Adjustments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |||||
Valuation Allowance [Roll Forward] | ||||||||
Recognition of valuation allowance on foreign tax credit carryforwards | $ 52,000 | |||||||
Deferred Tax Asset Valuation Allowance [Member] | ||||||||
Valuation Allowance [Roll Forward] | ||||||||
Beginning balance | $ 9,137 | $ 49,271 | [1] | $ 35,999 | ||||
Additions charged to cost and expenses | 53,983 | [2] | 692 | 12,948 | ||||
Decreases | (6,400) | [3] | (40,442) | [4] | (2,943) | [5] | ||
Adjustments | [6] | 186 | (384) | 3,267 | ||||
Ending balance | $ 56,906 | $ 56,906 | $ 9,137 | $ 49,271 | [1] | |||
[1] | 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. | |||||||
[2] | Increase in valuation is due primarily to the $52.0 million that was recorded on the foreign tax credit carryforward. The additional amount is due to net operating losses in foreign markets. | |||||||
[3] | Decrease is due primarily to the write-off of Brazil deferred tax assets, which had no impact to the income statement, as a valuation allowance had been previously recorded against the asset. | |||||||
[4] | Decrease in valuation allowance due to lapse in statute of limitation of the net operating losses carryforward and due to the write off of Venezuelan deferred tax assets, which had no impact to the income statement. | |||||||
[5] | Decreases in valuation allowance due to lapse in statute of limitation of the net operating losses carryforward which had no impact to the income statement. | |||||||
[6] | Represents the net currency effects of translating valuation allowances at current rates of exchange. |
Income Taxes, Components of Def
Income Taxes, Components of Deferred Taxes, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Taxes [Abstract] | ||
Net noncurrent deferred tax assets | $ 33,785 | $ 35,752 |
Net noncurrent deferred tax liabilities | 36,718 | 643 |
Deferred taxes, net | $ 35,109 | |
Deferred taxes, net | $ (2,933) |
Income Taxes, Reconciliation of
Income Taxes, Reconciliation of Statutory to Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective income tax rate, continuing operations, tax rate reconciliation [Abstract] | |||
Income taxes at statutory rate | 35.00% | 35.00% | 35.00% |
Indefinite reinvestment | 2.75% | (1.98%) | 0.92% |
Excess tax benefit from equity award | (2.38%) | 0.00% | 0.00% |
Non-deductible expenses | 0.17% | 0.11% | 0.09% |
Controlled foreign corporation losses | (0.13%) | (2.63%) | 1.09% |
Valuation allowance recognized foreign tax credit | 19.59% | 0.00% | 0.00% |
Write-off outside basis DTL | (2.89%) | 0.00% | 0.00% |
Revaluation of deferred taxes | (1.28%) | 0.00% | 0.00% |
Section 987 implementation | 0.00% | 2.69% | 0.00% |
Other | 0.43% | (0.42%) | 0.13% |
Effective income tax rate, continuing operations | 51.26% | 32.77% | 37.23% |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | $ 3.2 | $ 2.8 | $ 2.8 |
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 | $ 6.1 | 5.6 | 4.8 |
Pension expense | $ 0.7 | $ 0.9 | $ 0.7 |
Executive Deferred Compensati94
Executive Deferred Compensation Plan (Details) - Executive [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
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 | $ 1.5 | $ 1.5 | $ 2.3 |
Long-term deferred compensation liability | 43.2 | 36.7 | |
Investment in Rabbi Trust | $ 37.7 | $ 32.3 |
Derivative Financial Instrume95
Derivative Financial Instruments (Details) $ in Thousands, ₩ in Millions, ¥ in Billions | 12 Months Ended | ||||||
Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017JPY (Â¥) | Dec. 31, 2017KRW (â‚©) | Dec. 31, 2016JPY (Â¥) | Dec. 31, 2016KRW (â‚©) | |
Foreign Currency Derivatives [Abstract] | |||||||
Unrealized gains/(losses) related to foreign currency cash flow hedges included in accumulated other comprehensive loss | $ 100 | $ 600 | |||||
Cumulative translation adjustments included in accumulated other comprehensive loss | (66,400) | (84,700) | $ (71,600) | ||||
Foreign Currency Forward Contracts [Member] | Not Designated as Hedging Instrument [Member] | Fair Value Hedges [Member] | |||||||
Foreign Currency Derivatives [Abstract] | |||||||
Fair value | 0 | 500 | |||||
Foreign Currency Forward Contracts [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | |||||||
Foreign Currency Derivatives [Abstract] | |||||||
Fair value | $ 200 | 900 | |||||
Term to recognize gains (losses) in current earnings | 6 months | ||||||
Foreign Currency Forward Contracts [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | Japanese Yen [Member] | |||||||
Foreign Currency Derivatives [Abstract] | |||||||
Notional amount | $ 5,500 | 12,000 | ¥ 0.6 | ¥ 1.4 | |||
Foreign Currency Forward Contracts [Member] | Other Comprehensive Loss [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | |||||||
Foreign Currency Derivatives [Abstract] | |||||||
Gain (loss) recognized in other comprehensive income loss | (152) | (1,423) | 590 | ||||
Foreign Currency Forward Contracts [Member] | Other Income (Expense) [Member] | Not Designated as Hedging Instrument [Member] | Korean Won [Member] | |||||||
Foreign Currency Derivatives [Abstract] | |||||||
Notional amount | 0 | 9,500 | â‚© 0 | â‚© 11,500 | |||
Foreign Currency Forward Contracts [Member] | Other Income (Expense) [Member] | Not Designated as Hedging Instrument [Member] | Fair Value Hedges [Member] | |||||||
Foreign Currency Derivatives [Abstract] | |||||||
Gain (loss) recognized in income | (485) | 39 | 38 | ||||
Foreign Currency Forward Contracts [Member] | Revenue [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | |||||||
Foreign Currency Derivatives [Abstract] | |||||||
Gain (loss) reclassified from accumulated other comprehensive loss into income | 119 | (1,088) | 1,731 | ||||
Foreign Currency Forward Contracts [Member] | Selling Expenses [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedges [Member] | |||||||
Foreign Currency Derivatives [Abstract] | |||||||
Gain (loss) reclassified from accumulated other comprehensive loss into income | $ 358 | $ (1,544) | $ 397 |
Supplemental Cash Flow Inform96
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | $ 18.4 | $ 11.6 | $ 7 |
Cash paid for income taxes | $ 78.1 | $ 40.9 | $ 49.8 |
Segment Information, Revenue by
Segment Information, Revenue by Segment (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)SegmentMarket | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Information [Abstract] | |||
Number of markets | Market | 50 | ||
Number of segments | Segment | 7 | ||
Revenue by Segment [Abstract] | |||
Revenue | $ 2,279,099 | $ 2,207,797 | $ 2,247,047 |
Operating Segment [Member] | |||
Revenue by Segment [Abstract] | |||
Revenue | 2,279,099 | 2,207,797 | 2,247,047 |
Operating Segment [Member] | Mainland China [Member] | |||
Revenue by Segment [Abstract] | |||
Revenue | 716,991 | 610,414 | 565,527 |
Operating Segment [Member] | South Korea [Member] | |||
Revenue by Segment [Abstract] | |||
Revenue | 361,692 | 413,696 | 422,341 |
Operating Segment [Member] | Americas [Member] | |||
Revenue by Segment [Abstract] | |||
Revenue | 317,380 | 276,590 | 329,668 |
Operating Segment [Member] | South Asia/Pacific [Member] | |||
Revenue by Segment [Abstract] | |||
Revenue | 299,980 | 296,758 | 321,971 |
Operating Segment [Member] | Japan [Member] | |||
Revenue by Segment [Abstract] | |||
Revenue | 256,085 | 279,042 | 264,214 |
Operating Segment [Member] | Hong Kong/Taiwan [Member] | |||
Revenue by Segment [Abstract] | |||
Revenue | 166,696 | 183,979 | 206,140 |
Operating Segment [Member] | EMEA [Member] | |||
Revenue by Segment [Abstract] | |||
Revenue | $ 160,275 | $ 147,318 | $ 137,186 |
Segment Information, Segment Co
Segment Information, Segment Contribution (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Contribution [Abstract] | |||
Operating income | $ 274,483 | $ 231,104 | $ 244,702 |
Other income (expense) | (8,916) | (18,265) | (32,743) |
Income before provision for income taxes | 265,567 | 212,839 | 211,959 |
Operating Segment [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 518,849 | 473,610 | 438,895 |
Operating Segment [Member] | Mainland China [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 211,625 | 135,174 | 73,422 |
Operating Segment [Member] | South Korea [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 100,964 | 117,142 | 130,516 |
Operating Segment [Member] | Americas [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 47,040 | 44,390 | 62,937 |
Operating Segment [Member] | South Asia/Pacific [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 68,141 | 71,365 | 68,949 |
Operating Segment [Member] | Japan [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 51,372 | 59,175 | 51,181 |
Operating Segment [Member] | Hong Kong/Taiwan [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 27,958 | 35,978 | 40,718 |
Operating Segment [Member] | EMEA [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | 11,749 | 10,386 | 11,172 |
Corporate and Other [Member] | |||
Segment Contribution [Abstract] | |||
Operating income | $ (244,366) | $ (242,506) | $ (194,193) |
Segment Information, Depreciati
Segment Information, Depreciation and Amortization and Capital Expenditures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | $ 71,564 | $ 72,397 | $ 71,365 |
Capital expenditures | 60,156 | 50,221 | 56,622 |
Reportable Geographic Region [Member] | Mainland China [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 15,122 | 16,775 | 18,503 |
Capital expenditures | 4,539 | 13,656 | 21,998 |
Reportable Geographic Region [Member] | South Korea [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 6,499 | 6,787 | 5,882 |
Capital expenditures | 469 | 556 | 9,983 |
Reportable Geographic Region [Member] | Americas [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 1,608 | 2,617 | 2,545 |
Capital expenditures | 744 | 1,095 | 400 |
Reportable Geographic Region [Member] | South Asia/Pacific [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 2,372 | 2,388 | 2,022 |
Capital expenditures | 1,809 | 2,282 | 2,959 |
Reportable Geographic Region [Member] | Japan [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 3,554 | 3,782 | 3,434 |
Capital expenditures | 994 | 1,288 | 1,903 |
Reportable Geographic Region [Member] | Hong Kong/Taiwan [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 1,395 | 2,507 | 2,132 |
Capital expenditures | 1,350 | 634 | 1,345 |
Reportable Geographic Region [Member] | EMEA [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 985 | 1,387 | 1,498 |
Capital expenditures | 1,168 | 1,224 | 1,430 |
Corporate and Other [Member] | |||
Summarized Financial Information [Abstract] | |||
Depreciation and amortization | 40,029 | 36,154 | 35,349 |
Capital expenditures | $ 49,083 | $ 29,486 | $ 16,604 |
Segment Information, Revenue100
Segment Information, Revenue by Major Market (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)Market | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Information [Abstract] | |||
Number of major markets | Market | 3 | ||
Number of markets | Market | 50 | ||
Segment Contribution [Abstract] | |||
Revenue | $ 2,279,099 | $ 2,207,797 | $ 2,247,047 |
United States [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | 218,734 | 201,239 | 243,748 |
All Others [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | 725,597 | 703,406 | 751,217 |
Major Market [Member] | Mainland China [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | 716,991 | 610,414 | 565,527 |
Major Market [Member] | South Korea [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | 361,692 | 413,696 | 422,341 |
Major Market [Member] | Japan [Member] | |||
Segment Contribution [Abstract] | |||
Revenue | $ 256,085 | $ 279,042 | $ 264,214 |
Segment Information, Revenue101
Segment Information, Revenue by Product Line (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue by Product Line [Abstract] | |||
Revenue | $ 2,279,099 | $ 2,207,797 | $ 2,247,047 |
Nu Skin [Member] | |||
Revenue by Product Line [Abstract] | |||
Revenue | 1,456,386 | 1,308,135 | 1,363,539 |
Pharmanex [Member] | |||
Revenue by Product Line [Abstract] | |||
Revenue | 817,230 | 892,738 | 877,924 |
Other [Member] | |||
Revenue by Product Line [Abstract] | |||
Revenue | $ 5,483 | $ 6,924 | $ 5,584 |
Segment Information, Long Lived
Segment Information, Long Lived Assets by Major Market (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | $ 464,587 | $ 444,732 | $ 454,537 |
Major Markets [Member] | United States [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | 302,884 | 283,868 | 271,058 |
Major Markets [Member] | Mainland China [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | 97,046 | 97,867 | 110,839 |
Major Markets [Member] | South Korea [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | 42,211 | 41,545 | 48,702 |
Major Markets [Member] | Japan [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | 9,342 | 11,517 | 13,587 |
Major Markets [Member] | All Others [Member] | |||
Long-Lived Assets by Major Market [Abstract] | |||
Long-lived assets | $ 13,104 | $ 9,935 | $ 10,351 |
Dividends per Share (Details)
Dividends per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Dividends per Share [Abstract] | |||||||||||
Payment of cash dividends | $ 76,058 | $ 78,438 | $ 81,187 | ||||||||
Dividend Declared 2016-Q1 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Cash dividend paid (in dollars per share) | $ 0.355 | ||||||||||
Dividend Declared 2016-Q2 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Cash dividend paid (in dollars per share) | $ 0.355 | ||||||||||
Dividend Declared 2016-Q3 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Cash dividend paid (in dollars per share) | $ 0.355 | ||||||||||
Dividend Declared 2016-Q4 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Cash dividend paid (in dollars per share) | $ 0.355 | ||||||||||
Dividend Declared 2017-Q1 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Cash dividend paid (in dollars per share) | $ 0.36 | ||||||||||
Dividend Declared 2017-Q2 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Cash dividend paid (in dollars per share) | $ 0.36 | ||||||||||
Dividend Declared 2017-Q3 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Cash dividend paid (in dollars per share) | $ 0.36 | ||||||||||
Dividend Declared 2017-Q4 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Cash dividend paid (in dollars per share) | $ 0.36 | ||||||||||
Dividend Declared 2018-Q1 [Member] | |||||||||||
Dividends per Share [Abstract] | |||||||||||
Dividend payable per share (in dollars per share) | $ 0.365 | ||||||||||
Dividend payable, date to be paid | Mar. 14, 2018 | ||||||||||
Dividend payable, date of record | Feb. 26, 2018 |
Other Income (Expense), Net (De
Other Income (Expense), Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Income (Expense), Net [Abstract] | |||
Other income (expense), net | $ (8,916) | $ (18,265) | $ (32,743) |
Foreign currency transaction losses on net monetary assets denominated in bolivar | 10,200 | ||
Foreign currency translation expenses | 17,000 | ||
Interest expense | $ 22,200 | $ 15,600 | $ 7,900 |
Cost of Sales (Details)
Cost of Sales (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cost of Sales [Abstract] | ||||
Customs expense | $ 31,400 | $ 0 | $ 31,355 | $ 0 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Acquisition [Abstract] | ||||||||
Cash paid for acquisition | $ 31,745 | $ 8,692 | $ 0 | |||||
Goodwill | $ 114,954 | $ 114,954 | [1] | |||||
Useful life | 15 years | |||||||
Vertical Eden, LLC [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Percentage of entity acquired | 30.00% | 70.00% | ||||||
Cash paid for acquisition | $ 12,500 | $ 3,300 | ||||||
Contingent consideration | 1,500 | |||||||
Goodwill | $ 2,500 | |||||||
Intangible assets | $ 4,400 | |||||||
Vertical Eden, LLC [Member] | Minimum [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Useful life | 3 years | |||||||
Vertical Eden, LLC [Member] | Maximum [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Useful life | 7 years | |||||||
Treviso, LLC [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Percentage of entity acquired | 35.00% | |||||||
Purchase price | $ 21,000 | |||||||
Possible earnout | 1,000 | |||||||
Investment in equity investee | 12,600 | |||||||
Value of shares issued | $ 8,400 | |||||||
Number of shares issued (in shares) | 169,560 | |||||||
Share price (in dollars per share) | $ 49.54 | |||||||
Dr. Dana Beauty, LLC [Member] | ||||||||
Acquisition [Abstract] | ||||||||
Cash paid for acquisition | $ 7,000 | |||||||
Contingent consideration | $ 4,300 | |||||||
[1] | Goodwill was recast to reflect current period presentation by geographic region at December 31, 2016. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Feb. 12, 2018 | Jan. 22, 2018 | Feb. 28, 2017 | Feb. 11, 2018 | Jan. 21, 2018 |
Treviso, LLC [Member] | |||||
Subsequent Events [Abstract] | |||||
Percentage of entity acquired | 35.00% | ||||
Purchase price | $ 21 | ||||
Subsequent Event [Member] | Innuvate Health Sciences, LLC [Member] | |||||
Subsequent Events [Abstract] | |||||
Percentage of entity acquired | 73.00% | ||||
Purchase price | $ 23.5 | ||||
Subsequent Event [Member] | Nutritional Product Manufacturer [Member] | |||||
Subsequent Events [Abstract] | |||||
Percentage of entity acquired | 92.00% | ||||
Ownership interest in equity method investment | 27.00% | ||||
Percentage of acquired entity held by third party | 8.00% | ||||
Subsequent Event [Member] | Treviso, LLC [Member] | |||||
Subsequent Events [Abstract] | |||||
Percentage of entity acquired | 65.00% | ||||
Ownership interest in equity method investment | 35.00% | ||||
Purchase price | $ 54.9 | ||||
Subsequent Event [Member] | L&W Holdings, Inc. [Member] | |||||
Subsequent Events [Abstract] | |||||
Percentage of entity acquired | 100.00% | ||||
Purchase price | $ 25 |