we recognized compensation cost for stock options in accordance with these new rules during  2004 , our general and ad- ministrative expenses would have been approximately $ 10 . 0  million higher that year. Other income (expense), net was $ 3 . 6  million of expense in  2004  compared to $ 0 . 4  million of income in  2003 . This increase  in other income (expense), net of $ 4 . 0  million is primarily related to increased interest expenses due to additional debt we  entered into during  2003 . Provision for income taxes increased to $ 44 . 5  million in  2004  from $ 39 . 9  million in  2003 . This increase was largely due  to the increase in operating income as compared to the prior year. The effective tax rate decreased to  36 . 4 % from  37 . 0 % of  pre-tax income in  2004  and  2003 , respectively. This decrease in the effective tax rate was largely due to our election in  2004  to permanently reinvest some of our earnings related to our foreign operations. We anticipate the remittance of these  earnings to be postponed indefinitely.  As a result of the foregoing factors, net income increased to $ 77 . 7  million in  2004  from $ 67 . 9  million in  2003 .  Revenue in  2003  increased  2 % to $ 986 . 5  million from $ 964 . 1  million in  2002 . Excluding the impact of changes in foreign  currency exchange rates, we experienced a revenue decline of  2 % for  2003  compared to  2002 . This resulted from the sale  of our professional employer organization in the United States in August  2003  and our transition away from certain Big  Planet offerings, both of which were eliminated as part of our continued efforts to eliminate low margin products and  services. Although these actions negatively impacted  2003  to  2002  revenue comparisons by $ 22 . 0  million, we believe that  they positively impacted gross and operating margins in the fourth quarter of  2003 . Revenue in  2003  was positively impacted by significant revenue growth from our expanded operations in China. In ad- dition, growth in our U.S. nutrition business also positively impacted  2003  results. These improvements were largely offset  by declines in local currency revenue in South Korea, Singapore and Malaysia, and in Japan for the year ended December  31 ,  2003 . The negative year-over-year comparisons were related in part to the shift of attention of distributor leaders away from  their home markets during the first quarter of  2003  to focus on China, the positive impact on revenue results in  2002  from  distributor enthusiasm surrounding and incentives related to our planned expansion of operations in China, and geo-political  conflicts and weak economic conditions. After two consecutive quarters of year-over-year declines in Japan, revenue stabilized  in this market during the last half of  2003 .  In late December  2003 , the Company received notification that Japanese and South Korean regulators had suspended  the importation of nutritional supplements in bovine-based capsules, which includes many of our Pharmanex products. A  few weeks later, Japanese regulators also determined they would no longer allow these same products to be sold by nutrition  companies after February  16 ,  2004 . As a result, we transitioned our production to non-bovine capsules and tablets. North Asia.  The following table sets forth revenue for the North Asia region and its principal markets: Excluding the impact of changes in foreign currency exchange rates, revenue in North Asia decreased  3 % in  2003 compared to  2002 . In local currency, revenue in Japan decreased  2 % in  2003  compared to  2002 . Local currency revenue in  Japan during  2003  was negatively impacted by the factors noted in “Overview” above. In local currency, revenue in South  Korea decreased  12 %. The decrease in revenue in South Korea was primarily a result of the factors discussed in “Overview”  42 Revenue 2003  COMPARED TO  2002 Overview Net income Provision for income taxes Other income (expense), net 2002 2003 Change (U.S. dollars in millions) Japan  $  533 . 0 $  553 . 8 4% South Korea  64 . 1 59 . 0 (8%) North Asia total  $  597 . 1 $  612 . 8 3%