10.	Segment Information

The Company reports revenue from nine segments, consisting of its seven geographic Nu Skin segments—Mainland China, South Korea, Southeast Asia, Americas/Pacific, Japan, Hong Kong/Taiwan, and Europe, Middle East and Africa (“EMEA”)—and its Manufacturing and Grow Tech segments, which the Company has decided to disclose separately beginning in the first quarter of 2019. Previously, these latter two segments were included in the Other category. The Other category includes miscellaneous corporate revenue and related adjustments. These segments reflect the way the chief operating decision maker evaluates the Company’s business performance and allocates resources. Reported revenue includes only the revenue generated by sales to external customers.

Segment information for the three-month period ended March 31, 2018 has been recast to reflect the separate disclosure of the Manufacturing and Grow Tech segments, both of which were previously included in the Other category. Consolidated financial information is not affected.

Profitability by segment as determined under US GAAP is driven primarily by the Company’s transfer pricing policies. Segment contribution, which is the Company’s segment profitability metric presented in the table below, excludes certain intercompany charges, specifically royalties, license fees, transfer pricing, discrete charges and other miscellaneous items. These charges have been included in Corporate and other expenses. Corporate and other expenses also include costs related to the Company’s executive and administrative offices, information technology, research and development, and marketing and supply chain functions not recorded at the segment level.

The accounting policies of the segments are the same as those described in Note 1 – The Company. The Company evaluates the performance of its segments based on revenue and segment contribution. Each segment records direct expenses related to its employees and its operations.

Summarized financial information for the Company’s reportable segments is shown in the following tables. Asset information is not reviewed or included with the Company’s internal management reporting. Therefore, the Company has not disclosed asset information for each reportable segment.

Revenue by Segment

	Three Months Ended March 31,
(U.S. dollars in thousands)	2019			2018

Nu Skin
Mainland China	$	208,488		$	197,531
Americas/Pacific		86,456			92,289
South Korea		83,853			88,930
Southeast Asia		72,495			70,860
Japan		62,109			63,224
Hong Kong/Taiwan		40,558			40,992
EMEA		41,818			44,981
Other		(1,426	)		235
Total Nu Skin		594,351			599,042
Manufacturing ⁽¹⁾		29,272			17,177
Grow Tech		—			—
Total	$	623,623		$	616,219

(1)	The Manufacturing segment had $5.9 million and $3.2 million of intersegment revenue for the three-month period ended March 31, 2019 and 2018, respectively. Intersegment revenue is eliminated in the consolidated financial statements, as well as the reported segment revenue in the table above.

Segment Contribution

	Three Months Ended March 31,
(U.S. dollars in thousands)	2019			2018

Nu Skin
Mainland China	$	59,167		$	44,817
Americas/Pacific		12,019			9,172
South Korea		25,668			26,201
Southeast Asia		17,992			16,402
Japan		14,106			13,238
Hong Kong/Taiwan		7,474			7,846
EMEA		1,351			4,754
Nu Skin contribution		137,777			122,430
Manufacturing		3,646			(354	)
Grow Tech		(3,629	)		(1,260	)
Total segment contribution		137,794			120,816
Corporate and other		(69,141	)		(61,826	)
Operating income		68,653			58,990
Other income (expense)		(2,848	)		1,207
Income before provision for income taxes	$	65,805		$	60,197

Depreciation and Amortization

	Three Months Ended March 31,
(U.S. dollars in thousands)	2019		2018

Nu Skin
Mainland China	$	3,116	$	3,487
Americas/Pacific		214		214
South Korea		1,524		1,667
Southeast Asia		477		559
Japan		1,048		915
Hong Kong/Taiwan		516		323
EMEA		440		176
Total Nu Skin		7,335		7,341
Manufacturing		1,574		2,825
Grow Tech		875		218
Corporate and other		9,823		8,523
Total	$	19,607	$	18,907

Capital Expenditures

	Three Months Ended March 31,
(U.S. dollars in thousands)	2019		2018

Nu Skin
Mainland China	$	1,681	$	1,869
Americas/Pacific		274		189
South Korea		49		—
Southeast Asia		94		51
Japan		172		311
Hong Kong/Taiwan		463		482
EMEA		34		35
Total Nu Skin		2,767		2,937
Manufacturing		1,602		749
Grow Tech		2,985		2,587
Corporate and other		6,411		6,379
Total	$	13,765	$	12,652