2004  COMPARED TO  2003 Overview Revenue 38 In South Korea, our local currency revenue grew  7 % in  2004  compared to  2003  primarily as a result of continued  growth in our active distributors. We believe that strong initiatives and distributor support contributed to the growth in  this market despite the difficult regulatory and economic conditions in South Korea that we expect will continue to nega- tively impact this market in  2005 .  We began leasing BioPhotonic Scanners to our distributor leaders in Japan in November  2004 , and we plan to increase  the number of BioPhotonic Scanners available for lease in this market throughout the upcoming year. We have also made  recent changes to our distributor incentives which are designed to help promote growth in the number of executive dis- tributors. These initiatives helped us post improved results in the fourth quarter, with local currency revenue down only  2 % on a year-over-year basis compared to an  8 % decline in the third quarter, and solid sequential growth of  7 % in execu- tive distributors. Excluding the impact of changes in foreign currency exchange rates, revenue in North Asia decreased  1 % in  2004 compared to  2003 . In local currency, revenue in Japan decreased  3 %. Revenue in Japan during  2004  was negatively im- pacted by the absence of a compelling growth driver for our distributors during most of the year as a result of regulatory  uncertainty associated with the BioPhotonic Scanner that prevented us from introducing it until November  2004 . Revenue  was also negatively impacted by: North Asia.  The following table sets forth revenue for the North Asia region and its principal markets: • key distributor leaders spending time in other markets pending the launch of the BioPhotonic Scanner;  • competitive pressures. • stock outages resulting from product quality and regulatory challenges we faced during  2004 , including BSE (or  mad cow disease) issues in the first quarter, which required us to convert many of our dietary supplements for sale  in Japan from bovine-based capsules to tablets and non-bovine based capsules; and Revenue in  2004  increased  15 % to $ 1 , 137 . 9  million from $ 986 . 5  million in  2003 . Excluding the impact of changes in  foreign currency exchange rates, we would have experienced a revenue increase of  11 % for  2004  compared to  2003 . The  revenue increase in  2004  was a result of significant revenue growth in China, as well as solid revenue growth in the  United States, Taiwan and Hong Kong. During  2004  we continued to see the positive impact of our BioPhotonic Scanner  and monthly product subscription programs. We continued to expand our use of the BioPhotonic Scanner in the United  States and initiated lease programs in other key markets including Japan in November  2004 . Subscription orders repre- sented  29 % of our revenue in  2004  compared to  24 % in the prior year. We believe that these programs are strengthening  our recurring revenue base and are improving customer retention rates, as well as helping our distributor leaders build their  sales organizations. Revenue growth in  2004  was negatively impacted by a decline in local currency revenue in Japan.  These factors also contributed to a $ 0 . 22  increase in earnings per share in  2004  compared to  2003 . Earnings per share  for  2003  included the impact of a $ 0 . 04  per share, one-time restructuring charge. The growth in earnings per share was  also positively impacted by the repurchase of  10 . 8  million and  3 . 1  million shares of our Class A common stock in October  2003  and July  2004 , respectively. 2003 2004 Change (U.S. dollars in millions) Japan $ 553 . 8 $  574 . 4  4% South Korea  59 . 0 65 . 7  11% North Asia total  $  612 . 8 $  640 . 1  4%