DISTRIBUTOR INFORMATION The following table provides information concerning the number of active and executive distributors as of the dates indicated.  Active distributors are those distributors and preferred customers who were resident in the countries in which we operated  and purchased products for resale or personal consumption during the three months ended as of the date indicated. An  executive distributor is an active distributor who has achieved required monthly personal and group sales volumes.  The following table sets forth selected unaudited quarterly data for the periods shown: During the first quarter of  2004 , we adopted FASB Interpretation No.  46 R, “Consolidation of Variable Interest Entities,  an Interpretation of ARB No.  51 .” This accounting standard became effective during the first quarter of  2004 . The adoption  of this standard did not have a significant effect on our financial statements. In December  2004 , the FASB issued SFAS No.  123 R, “Share-Based Payment,” which requires the expensing of em- ployee options as of the beginning of the first interim reporting period that begins after June  15 ,  2005 . Consequently, we  will begin expensing employee options during the third quarter of  2005 . Until that time, we will continue to account for  stock-based compensation granted to employees according to the provisions of APB Opinion No.  25 . We are currently  evaluating the effect of this accounting standard on our financial statements.  In November  2004 , the FASB issued SFAS No.  151 , “Inventory Costs” which requires certain inventory related costs  to be expensed as incurred. This accounting standard is effective January  1 ,  2006 . We are currently evaluating the effect  of this accounting standard on our financial statements. A majority of our revenue and many of our expenses are recognized primarily outside of the United States, except for inven- tory purchases which are primarily transacted in U.S. dollars from vendors in the United States. The local currency of each  of our subsidiary’s primary markets is considered the functional currency. All revenue and expenses are translated at  weighted-average exchange rates for the periods reported. Therefore, our reported revenue and earnings will be positively  impacted by a weakening of the U.S. dollar and will be negatively impacted by a strengthening of the U.S. dollar. Media  reports have indicated that the Chinese government may begin to allow the RMB to float more freely against the U.S.  CURRENCY RISK AND EXCHANGE RATE INFORMATION 48 RECENT ACCOUNTING PRONOUNCEMENTS 2003 2004 Quarter  1 Quarter  2 Quarter  3 Quarter  4 Quarter  1 Quarter  2 Quarter  3 Quarter  4 (U.S. dollars in millions, except per share amounts) Revenue $ 219 . 6 $  240 . 7 $  250 . 2 $  275 . 9 $  264 . 0 $  284 . 2 $  283 . 3 $  306 . 4 Gross profi t 178 . 0 195 . 4 206 . 5 230 . 0 220 . 1 236 . 7 235 . 7 254 . 2 Operating income 19 . 7 25 . 7 24 . 5 37 . 4 23 . 8 35 . 0 33 . 6 33 . 4 Net income 12 . 8 16 . 8 15 . 1 23 . 1 14 . 5 20 . 3 20 . 9 22 . 0 Net income per share: Basic 0 . 16 0 . 21 0 . 19 0 . 32 0 . 20 0 . 28 0 . 30 0 . 32 Diluted 0 . 16 0 . 21 0 . 19 0 . 31 0 . 20 0 . 28 0 . 29 0 . 31 As of December  31 ,  2002 As of December  31 ,  2003 As of December  31 ,  2004 Active Executive Active Executive Active Executive North Asia 322 , 000 17 , 668 322 , 000 17 , 013 337 , 000 16 , 637 Greater China  ( 1 ) 73 , 000 3 , 564 187 , 000 5 , 991 229 , 000 8 , 827 North America 73 , 000 2 , 693 113 , 000 2 , 861 134 , 000 3 , 099 South Asia/Pacifi c 66 , 000 2 , 972 69 , 000 2 , 175 74 , 000 2 , 076 Other Markets 32 , 000 1 , 018 34 , 000 1 , 091 46 , 000 1 , 377 Total 566 , 000 27 , 915 725 , 000 29 , 131 820 , 000 32 , 016 ( 1 ) Following the opening of our retail business in China during  2003 , active distributors include  117 , 000  and  147 , 000  preferred customers in  China and executive distributors include  3 , 100  and  5 , 437  employed, full-time sales representatives for the years ended December  31 ,  2003 and  2004 , respectively. QUARTERLY RESULTS