Nu Skin 2010 Annual Report - Direct Selling News

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NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements 8. LONG-TERM DEBT The following tables summarize the Company’s long-term debt arrangements as of December 31, 2010: Facility or Arrangement (1) 2003 $205.0 million multi-currency uncommitted shelf facility: Original Principal Amount Balance as of December 31, Interest 2010 (2) Rate Repayment terms U.S. dollar denominated $40.0 million $34.3 million 6.2% Notes due July 2016, with annual principal payments that began in July 2010. $20.0 million $20.0 million 6.2% Notes due January 2017, with annual principal payments that began in January 2011. Japanese yen denominated 3.1 billion yen 1.8 billion yen ($22.0 million as of December 31, 2010) 2.3 billion yen 2.3 billion yen ($27.9 million as of December 31, 2010) 2.2 billion yen 2.2 billion yen ($26.7 million as of December 31, 2010) 2010 committed loan: U.S. dollar denominated $30.0 million $30.0 million Variable 30 day: 1.26% 2004 $25.0 million revolving credit N/A None N/A facility 2009 $100.0 million uncommitted N/A None N/A multi-currency shelf facility 1.7% Notes due April 2014, with annual principal payments that began in April 2008. 2.6% Notes due September 2017, with annual principal payments beginning September 2011. 3.3% Notes due January 2017, with annual principal payments that began in January 2011. Amortizes $1.5 million per quarter (1) Each of the credit facilities and arrangements listed in the table are secured by guarantees issued by the Company’s domestic subsidiaries and by pledges of 65% of the outstanding stock of its material foreign subsidiaries. The 2010 committed loan is also secured by deeds of trust with respect to the Company’s corporate headquarters and distribution center in Provo, Utah. (2) The current portion of the Company’s long-term debt (i.e. becoming due in the next 12 months) includes $13.3 million of the balance of its Japanese yen-denominated debt under the 2003 multi-currency uncommitted shelf facility, $8.6 million of the balance on its U.S. dollar denominated debt under the 2003 multi-currency uncommitted shelf facility and $6.0 million of its 2010 committed loan. 62
NU SKIN ENTERPRISES, INC. Notes to Consolidated Financial Statements Interest expense relating to debt totaled $7.8 million, $6.9 million and $5.8 million for the years ended December 31, 2008, 2009 and 2010, respectively. The notes and shelf facility contain other terms and conditions and affirmative and negative financial covenants customary for credit facilities of this type, including a requirement to maintain a minimum cash balance of $65.0 million. As of December 31, 2010, the Company is in compliance with all financial covenants under the notes and shelf facility. Maturities of all long-term debt at December 31, 2010, based on the year-end exchange rate, are as follows (U.S. dollars in thousands): Year Ending December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,865 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,865 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,865 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,865 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,377 Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,041 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 160,878 9. LEASE OBLIGATIONS 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 lease obligations at December 31, 2010 are as follows (U.S. dollars in thousands): Year Ending December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,073 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,598 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,471 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,497 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,134 Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 61,931 Rental expense for operating leases totaled $33.5 million, $33.8 million and $28.8 million for the years ended December 31, 2008, 2009 and 2010, respectively. 63
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NU SKIN ANNUAL REPORT 2010 ELEVATE
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35,676 32,939 30,588 30,002 2007 20
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BUILDING FOR THE FUTURE In 2011, we
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$163M AGELOC GALVANIC SPA AND GELS
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8 8
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5 INCREASING OPERATIONAL EFFICIENCI
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* GAAP RECONCILATION TABLE 2007 200
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Can we sustain growth? Yes we can.
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UNITED STATES SECURITIES AND EXCHAN
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TABLE OF CONTENTS PART I 1 ITEM 1 B
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PART I ITEM 1. BUSINESS OVERVIEW We
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The following table summarizes our
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Other. We also offer a limited numb
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introduction of additional ageLOC a
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ness model utilizing sales employee
Page 33 and 34: in a manner to attract the general
Page 35 and 36: take longer than we anticipated. Pl
Page 37 and 38: chases, management services and con
Page 39 and 40: These declines could continue or in
Page 41 and 42: ous markets, including Japan, South
Page 43 and 44: creased scrutiny by the government.
Page 45 and 46: pact the cost associated with manuf
Page 47 and 48: on a sustained basis. Factors that
Page 49 and 50: negotiated contracts with shipping
Page 51 and 52: System failures could harm our busi
Page 53 and 54: consumption taxes based on an audit
Page 55 and 56: STOCK PERFORMANCE GRAPH Set forth b
Page 57 and 58: ITEM 7. MANAGEMENT’S DISCUSSION A
Page 59 and 60: estrictions on the importation of f
Page 61 and 62: RESULTS OF OPERATIONS The following
Page 63 and 64: South Asia/Pacific. The following t
Page 65 and 66: employees in Mainland China who had
Page 67 and 68: We currently have debt pursuant to
Page 69 and 70: the legal form of the transaction.
Page 71 and 72: closures related to vendor’s mult
Page 73 and 74: NU SKIN ENTERPRISES, INC. Consolida
Page 75 and 76: NU SKIN ENTERPRISES, INC. Consolida
Page 77 and 78: NU SKIN ENTERPRISES, INC. Notes to
Page 83: NU SKIN ENTERPRISES, INC. Notes to
Page 99 and 100: Report of Independent Registered Pu
Page 101 and 102: PART III The information required b
Page 103 and 104: corporated by reference to Exhibit
Page 105 and 106: *10.56 Form of 2010 Plan Director S
Page 107 and 108: BOARD OF DIRECTORS Blake M. Roney E
Page 109: 18 NU SKIN ENTERPRISES, INC. 75 WES
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