NU SKIN ENTERPRISES, INC. Consolidated Statements of Income (U.S. dollars in thousands, except per share amounts) Year Ended December  31 , 2002 2003 2004 Revenue $  964 , 067 $  986 , 457 $  1 , 137 , 864 Cost of sales 190 , 868 176 , 545 191 , 211 Gross profi t 773 , 199 809 , 912 946 , 653 Operating expenses: Selling expenses 382 , 159 407 , 088 487 , 631 General and administrative expenses 285 , 229 289 , 925 333 , 263 Restructuring and other charges — 5 , 592 — Total operating expenses 667 , 388 702 , 605 820 , 894 Operating income 105 , 811 107 , 307 125 , 759 Other income (expense), net ( 2 , 886 ) 432 ( 3 , 618 ) Income before provision for income taxes  102 , 925 107 , 739 122 , 141 Provision for income taxes  38 , 082 39 , 863 44 , 467 Net income $  64 , 843 $  67 , 876 $  77 , 674 Net income per share: Basic $  0 . 79 $  0 . 86 $  1 . 10 Diluted $  0 . 78 $  0 . 85 $  1 . 07 Weighted-average common shares outstanding ( 000 s): Basic 81 , 731 78 , 637 70 , 734 Diluted 83 , 128 79 , 541 72 , 627 The accompanying notes are an integral part of these consolidated financial statements. 53