47 NU SKIN ENTERPRISES NU SKIN ENTERPRISES  48 CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED BALANCE SHEETS December 31, December 31, (U.S. dollars in thousands, except share amounts) As of 1999 2000  Assets Current assets Cash and cash equivalents $ 110,162 $ 63,996 Accounts receivable 18,160 18,191 Related parties receivable 16,424 13,176 Inventories, net 85,751 82,015 Prepaid expenses and other 52,388 44,513 282,885 221,891 Property and equipment, net 57,948 60,562 Other assets, net 302,382 308,350 Total assets $ 643,215 $ 590,803 Liabilities and stockholders’ equity Current liabilities Accounts payable $ 22,685 $ 15,837 Accrued expenses 114,691 74,199 Related parties payable 15,059 9,020 Current portion of long-term debt 55,889 — 208,324 99,056 Long-term debt, less current portion 89,419 84,884 Other liabilities 36,093 40,130 Total liabilities 333,836 224,070 Commitments and contingencies (Notes 12 and 20) Stockholders’ equity Class A common stock—500,000,000 shares authorized, $.001 par value, 32,002,158 and 31,338,676 shares issued and outstanding 32 31 Class B common stock—100,000,000 shares authorized, $.001 par value, 54,606,905 and 53,408,951 shares issued and outstanding 55 54 Additional paid-in capital 119,652 106,284 Accumulated other comprehensive income (48,220) (45,347) Retained earnings 244,758 306,458 Deferred compensation (6,898) (747) 309,379 366,733 Total liabilities and stockholders’ equity $ 643,215 $ 590,803 The accompanying notes are an integral part of these consolidated financial statements. December 31, December 31, December 31, (U.S. dollars in thousands, except per share amounts) Year ended 1998 1999  2000 Revenue $ 913,494 $ 894,249 $ 879,758 Cost of sales 188,457 151,681 149,342 Cost of sales—amortization of inventory step-up (Note 3) 21,600 — — Gross profit 703,437 742,568 730,416 Operating expenses: Distributor incentives 331,448 346,951 345,259 Selling, general and administrative 202,150 265,770 294,744 In-process research and development (Note 4) 13,600 — — Total operating expenses 547,198 612,721 640,003 Operating income 156,239 129,847 90,413 Other income (expense), net 13,599 (1,411) 5,993 Income before provision for income taxes and minority interest 169,838 128,436 96,406 Provision for income taxes (Note 15) 62,840 41,742 34,706 Minority interest 3,081 — — Net income $ 103,917 $ 86,694 $ 61,700 Net income per share (Note 2): Basic $ 1.22 $ 1.00 $ 0.72 Diluted 1.19 0.99 0.72 Weighted average common shares outstanding (000s): Basic 84,894 87,081 85,401 Diluted 87,018 87,893 85,642 Unaudited pro forma data (Note 15): Income before pro forma provision for income taxes and minority interest $ 169,838 Pro forma provision for income taxes 65,998 Pro forma minority interest 1,947 Pro forma net income $ 101,893 Pro forma net income per share: Basic $ 1.20 Diluted 1.17 The accompanying notes are an integral part of these consolidated financial statements.