35 NU SKIN ENTERPRISES SELECTED CONSOLIDATED FINANCIAL DATA (CONTINUED) NU SKIN ENTERPRISES  36 MANAGEMENT’S DISCUSSION AND ANALYSIS OF  FINANCIAL CONDITION AND RESULTS OF OPERATIONS (1) 1999 results include transactions during the year which are discussed in detail in Management’s Discussion and Analysis of Financial Condition and Results of Operations. (2) Active distributors are those distributors who were resident in the countries in which the Company operated and purchased products during the three months ended as of the date indicated. An executive distributor is an active distributor who has achieved required personal and group sales volumes. The increase in the number of active distributors in 1999 is primarily due to the inclusion of distributors formerly licensed to the Company’s affiliate Nu Skin USA, Inc.  (3) The Big Planet representatives do not necessarily place product orders with the Company for resale to retail customers. Big Planet representatives sign up retail customers for Internet, telecommunications and other services with the Company or its service providers for all products. Therefore, the active distributors for 1999 and 2000 do not include approximately 29,000 and 40,000 Big Planet representatives who have residual sales volume on a three month rolling basis, respectively, for service provided by the Company or its service providers. GENERAL The following discussion of the Company’s financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes thereto, which are included in this Annual Report to Stockholders. Nu Skin Enterprises, Inc. (the “Company”) is a leading, global direct selling  company that develops and distributes premium-quality, innovative personal care products and nutritional supplements and technology and telecommunications prod- ucts and services. The Company’s revenue depends upon the number and productivity of independ- ent distributors who purchase products and sales materials from the Company in their local currency for resale to their customers or for personal use. The Company recog- nizes revenue when products are shipped and title passes to these independent distrib- utors. Revenue is net of returns, which have historically been less than 5.0% of gross sales. Distributor incentives are paid to several levels of distributors on each product sale. The amount of the incentive varies depending on the purchaser’s position within the Company’s Global Distributor Compensation Plan. These incentives are classified as operating expenses. The following table sets forth revenue information by region for the time periods indicated. This table should be reviewed in connection with the tables presented under “Results of Operations,” which disclose distributor incentives and other costs associated with generating the aggregate revenue presented. Revenue generated in North Asia represented 67% of total revenue generated during the year ended December 31, 2000. The Company’s operations in Japan gener- ated 95% of the North Asia revenue during the same period. Revenue generated in North America represented 18% of total revenue generated during the year ended December 31, 2000. The Company’s operations in the United States generated 95% of the North America revenue during that period. Revenue from Southeast Asia opera- tions represented 14% of total revenue generated during the year ended December 31, 2000. The Company’s operations in Taiwan generated 70% of the Southeast Asia rev- enue during that period.  Cost of sales primarily consists of the cost of products purchased from third-party vendors (generally in U.S. dollars), the freight cost of shipping these products to dis- tributors as well as import duties for such products. Additionally, cost of sales includes the cost of sales materials sold to distributors at or near cost. Sales materials are generally purchased in local currencies. As the sales mix changes between product categories and sales materials, cost of sales and gross profit may fluctuate to some degree due primarily to the margin on each product line as well as varying import duty rates levied on imported product lines. In each of the Company’s current markets, duties are generally higher on nutritional supplements than on personal care products. Also, as currency exchange rates fluctuate, the Company’s gross margin will fluctuate. Distributor incentives are the Company’s most significant expense. Distributor incentives are paid to distributors on a monthly basis based upon their personal and group sales volumes as well as the group sales volumes of up to six levels of executive distributors in their downline sales organizations. These incentives are computed each month based on the sales volume and network of the Company’s global distributor force. Small fluctuations occur in the amount of incentives paid as the network of dis- tributors actively purchasing products changes from month to month. However, due to the size of the Company’s distributor force of approximately 475,000 active distributors, (U.S. dollars in millions) December 31, December 31,  December 31, Region Year ended 1998 1999 2000 North Asia $ 665.5 $ 619.3 $ 585.4 North America 72.7 117.9 155.8 Southeast Asia 159.7 140.1 119.5 Other Markets 15.6 17.0 19.1 Totals $ 913.5 $ 894.3 $ 879.8 BALANCE SHEET DATA December 31, December 31,  December 31, December 31, December 31, (U.S. dollars in thousands) As of 1996 1997 1998 1999 (1) 2000 Cash and cash equivalents $ 214,823 $ 174,300 $ 188,827 $ 110,162 $ 63,996 Working capital 143,308 123,220 164,597 74,561 122,835 Total assets 380,482 405,004 606,433 643,215 590,803 Short-term notes payable to stockholders 71,487 19,457 — — — Long-term notes payable to stockholders — 116,743 — — — Short-term debt — — 14,545 55,889 — Long-term debt — — 138,734 89,419 84,884 Stockholders’ equity 113,495 94,892 254,642 309,379 366,733 December 31, December 31,  December 31, December 31, December 31, OTHER OPERATING DATA As of 1996 1997 1998 1999  2000 Number of active distributors (2) (3) 397,000 448,000 470,000 494,000 475,000 Number of executive distributors 21,479 22,689 22,781 21,005 21,381