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Segment Information | 6 Months Ended
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Jun. 30, 2022
Segment Information [Abstract] |
Segment Information |
10. | Segment Information
The Company reports revenue from nine segments, consisting of its seven geographic Nu Skin segments—Americas, Mainland China, Southeast Asia/Pacific, South Korea, Japan, EMEA, and Hong Kong/Taiwan—and two Rhyz Investments segments—Manufacturing and Rhyz other. The Nu Skin other category includes miscellaneous corporate revenue and related adjustments. The Rhyz other segment includes other investments by our Rhyz strategic investment arm. These segments reflect the way the chief operating decision maker evaluates the Company’s business performance and allocates resources. Reported revenue includes only the revenue generated by sales to external customers. Profitability by segment as determined under US GAAP is driven primarily by the Company’s transfer pricing 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, and marketing and supply chain functions not recorded at the segment level. Prior year segment information has been recast to reflect the move of the Pacific components from the “America/Pacific” operating segment to the “Southeast Asia/Pacific” operating segment to comply with current segment presentation. Prior year segment information has been recast to reflect the fourth quarter 2021 exit of the Grow Tech segment, which has been recast to Corporate and other expenses. Consolidated financial information is not affected. The accounting policies of the segments are the same as those described in Note 2 – Summary of Significant Accounting Policies. 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
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(U.S. dollars in thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Nu Skin |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 124,445 |  |  | $ | 138,512 |  |  | $ | 248,025 |  |  | $ | 272,273 |
Mainland China |  |  | 86,808 |  |  |  | 154,182 |  |  |  | 211,303 |  |  |  | 303,775 |
Southeast Asia/Pacific |  |  | 94,067 |  |  |  | 83,968 |  |  |  | 184,303 |  |  |  | 167,257 |
South Korea |  |  | 69,308 |  |  |  | 88,604 |  |  |  | 141,441 |  |  |  | 169,735 |
Japan |  |  | 55,952 |  |  |  | 68,020 |  |  |  | 117,743 |  |  |  | 137,884 |
EMEA |  |  | 50,871 |  |  |  | 83,115 |  |  |  | 103,839 |  |  |  | 159,295 |
Hong Kong/Taiwan |  |  | 39,327 |  |  |  | 38,529 |  |  |  | 77,821 |  |  |  | 74,874 |
Nu Skin other |  |  | 1,318 |  |  |  | 947 |  |  |  | 1,938 |  |  |  | 1,825 |
Total Nu Skin |  |  | 522,096 |  |  |  | 655,877 |  |  |  | 1,086,413 |  |  |  | 1,286,918 |
Rhyz Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing (1) |  |  | 38,229 |  |  |  | 48,140 |  |  |  | 78,570 |  |  |  | 94,125 |
Rhyz other |  |  | 290 |  |  |  | 38 |  |  |  | 531 |  |  |  | 38 |
Total Rhyz Investments |  |  | 38,519 |  |  |  | 48,178 |  |  |  | 79,101 |  |  |  | 94,163 |
Total |  | $ | 560,615 |  |  | $ | 704,055 |  |  | $ | 1,165,514 |  |  | $ | 1,381,081 |
(1) | The Manufacturing segment had $16.7 million and $23.2 million of intersegment revenue for the three months ended June 30, 2022 and 2021, respectively, and $31.3 million and $40.6 million for the six months ended June 30, 2022 and 2021, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above.
Segment Contribution
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(U.S. dollars in thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Nu Skin |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 30,026 |  |  | $ | 28,998 |  |  | $ | 55,149 |  |  | $ | 57,743 |
Mainland China |  |  | 12,945 |  |  |  | 51,480 |  |  |  | 41,940 |  |  |  | 90,919 |
Southeast Asia/Pacific |  |  | 24,367 |  |  |  | 21,213 |  |  |  | 47,773 |  |  |  | 40,861 |
South Korea |  |  | 20,578 |  |  |  | 28,892 |  |  |  | 43,321 |  |  |  | 55,417 |
Japan |  |  | 13,451 |  |  |  | 16,461 |  |  |  | 28,764 |  |  |  | 34,442 |
EMEA |  |  | 6,162 |  |  |  | 13,681 |  |  |  | 9,998 |  |  |  | 22,577 |
Hong Kong/Taiwan |  |  | 9,161 |  |  |  | 8,560 |  |  |  | 17,851 |  |  |  | 15,908 |
Nu Skin contribution |  |  | 116,690 |  |  |  | 169,285 |  |  |  | 244,796 |  |  |  | 317,867 |
Rhyz Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  | 1,188 |  |  |  | 6,764 |  |  |  | 4,480 |  |  |  | 12,590 |
Rhyz other |  |  | (1,299 | ) |  |  | (519 | ) |  |  | (2,345 | ) |  |  | (519 | )
Rhyz Investments contribution |  |  | (111 | ) |  |  | 6,245 |  |  |  | 2,135 |  |  |  | 12,071 |
Total segment contribution |  |  | 116,579 |  |  |  | 175,530 |  |  |  | 246,931 |  |  |  | 329,938 |
Corporate and other |  |  | (65,052 | ) |  |  | (90,154 | ) |  |  | (143,259 | ) |  |  | (181,649 | )
Operating income |  |  | 51,527 |  |  |  | 85,376 |  |  |  | 103,672 |  |  |  | 148,289 |
Other income (expense) |  |  | (8,640 | ) |  |  | (4,012 | ) |  |  | (10,093 | ) |  |  | (2,430 | )
Income before provision for income taxes |  | $ | 42,887 |  |  | $ | 81,364 |  |  | $ | 93,579 |  |  | $ | 145,859 |
Depreciation and Amortization
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(U.S. dollars in thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Nu Skin |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 192 |  |  | $ | 235 |  |  | $ | 391 |  |  | $ | 466 |
Mainland China |  |  | 2,676 |  |  |  | 3,276 |  |  |  | 5,560 |  |  |  | 6,615 |
Southeast Asia/Pacific |  |  | 381 |  |  |  | 383 |  |  |  | 762 |  |  |  | 737 |
South Korea |  |  | 372 |  |  |  | 973 |  |  |  | 760 |  |  |  | 1,963 |
Japan |  |  | 245 |  |  |  | 226 |  |  |  | 522 |  |  |  | 479 |
EMEA |  |  | 244 |  |  |  | 283 |  |  |  | 474 |  |  |  | 569 |
Hong Kong/Taiwan |  |  | 718 |  |  |  | 905 |  |  |  | 1,409 |  |  |  | 1,790 |
Total Nu Skin |  |  | 4,828 |  |  |  | 6,281 |  |  |  | 9,878 |  |  |  | 12,619 |
Rhyz Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  | 3,282 |  |  |  | 2,887 |  |  |  | 6,612 |  |  |  | 5,575 |
Rhyz other |  |  | 592 |  |  |  | 395 |  |  |  | 1,184 |  |  |  | 395 |
Total Rhyz Investments |  |  | 3,874 |  |  |  | 3,282 |  |  |  | 7,796 |  |  |  | 5,970 |
Corporate and other |  |  | 9,932 |  |  |  | 10,018 |  |  |  | 18,090 |  |  |  | 19,336 |
Total |  | $ | 18,634 |  |  | $ | 19,581 |  |  | $ | 35,764 |  |  | $ | 37,925 |
Capital Expenditures
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(U.S. dollars in thousands) |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Nu Skin |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 87 |  |  | $ | 87 |  |  | $ | 129 |  |  | $ | 199 |
Mainland China |  |  | 2,052 |  |  |  | 3,416 |  |  |  | 6,120 |  |  |  | 11,933 |
Southeast Asia/Pacific |  |  | 56 |  |  |  | 358 |  |  |  | 124 |  |  |  | 923 |
South Korea |  |  | 216 |  |  |  | 18 |  |  |  | 578 |  |  |  | 508 |
Japan |  |  | 184 |  |  |  | — |  |  |  | 184 |  |  |  | 91 |
EMEA |  |  | 385 |  |  |  | 258 |  |  |  | 778 |  |  |  | 430 |
Hong Kong/Taiwan |  |  | 536 |  |  |  | 112 |  |  |  | 799 |  |  |  | 112 |
Total Nu Skin |  |  | 3,516 |  |  |  | 4,249 |  |  |  | 8,712 |  |  |  | 14,196 |
Rhyz Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing |  |  | 1,222 |  |  |  | 5,662 |  |  |  | 2,430 |  |  |  | 9,000 |
Rhyz other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Rhyz Investments |  |  | 1,222 |  |  |  | 5,662 |  |  |  | 2,430 |  |  |  | 9,000 |
Corporate and other |  |  | 4,801 |  |  |  | 7,565 |  |  |  | 8,676 |  |  |  | 13,653 |
Total |  | $ | 9,539 |  |  | $ | 17,476 |  |  | $ | 19,818 |  |  | $ | 36,849 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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