SEGMENTS

12 Months Ended

Dec. 31, 2011

SEGMENTS

SEGMENTS

NOTE 16. SEGMENTS

        The Company has three reportable segments, each of which represents an identifiable component of the Company for which separate financial information is available. This information is utilized by management to assess performance and allocate assets accordingly. The Company's management evaluates segment operating results based on several indicators. The primary key performance indicators are sales and operating income or loss for each segment. Operating income or loss, as evaluated by management, excludes certain items that are managed at the consolidated level, such as distribution and warehousing, impairments and other corporate costs. The following table represents key financial information for each of the Company's reportable segments, identifiable by the distinct operations and management of each: Retail, Franchising, and Manufacturing/Wholesale. The Retail reportable segment includes the Company's corporate store operations in the United States, Canada, Puerto Rico and its GNC.com and LuckyVitamin.com businesses. The Franchise reportable segment represents the Company's franchise operations, both domestically and internationally. The Manufacturing/Wholesale reportable segment represents the Company's manufacturing operations in South Carolina and the Wholesale sales business. This segment supplies the Retail and Franchise segments, along with various third parties, with finished products for sale. The Warehousing and Distribution and Corporate costs represent the Company's administrative expenses. The accounting policies of the segments are the same as those described in the "Basis of Presentation and Summary of Significant Accounting Policies."

        The following table represents key financial information of the Company's segments:

	Year ended December 31,
	2011			2010			2009
	(in thousands)
Revenue:
Retail	$	1,518,494		$	1,344,358		$	1,256,314
Franchise		334,792			293,549			264,168
Manufacturing/Wholesale:
Intersegment(1)		224,127			209,465			201,306
Third Party		218,893			184,261			186,525
Sub total Manufacturing/Wholesale		443,020			393,726			387,831
Sub total segment revenues		2,296,306			2,031,633			1,908,313
Intersegment elimination(1)		(224,127	)		(209,465	)		(201,306	)
Total revenue	$	2,072,179		$	1,822,168		$	1,707,007

(1)

Intersegment revenues are eliminated from consolidated revenue.

	Year ended December 31,
	2011			2010			2009
	(in thousands)
Operating income:
Retail	$	243,506		$	181,873		$	153,142
Franchise		111,261			93,821			80,800
Manufacturing/Wholesale		82,185			69,421			73,450
Unallocated corporate and other costs:
Warehousing and distribution costs		(60,539	)		(54,983	)		(53,557	)
Corporate costs		(93,906	)		(77,726	)		(72,809	)
Sub total unallocated corporate and other costs		(154,445	)		(132,709	)		(126,366	)
Total operating income		282,507			212,406			181,026
Interest expense, net		74,903			65,376			69,940
Income before income taxes		207,604			147,030			111,086
Income tax expense		75,271			50,463			41,562
Net income	$	132,333		$	96,567		$	69,524

	December 31,
	2011		2010		2009
	(in thousands)
Depreciation and amortization:
Retail	$	25,982	$	26,241	$	24,164
Franchise		2,873		3,044		4,081
Manufacturing / Wholesale		11,585		11,407		10,926
Corporate / Other		6,350		6,301		7,494
Total depreciation and amortization	$	46,790	$	46,993	$	46,665
Capital expenditures:
Retail	$	29,331	$	23,263	$	20,640
Franchise		684		50		2
Manufacturing / Wholesale		7,534		4,318		4,527
Corporate / Other		6,268		4,891		3,513
Total capital expenditures	$	43,817	$	32,522	$	28,682
Total assets
Retail	$	1,339,325	$	1,272,541	$	1,262,755
Franchise		491,008		477,230		468,949
Manufacturing / Wholesale		410,171		410,832		423,884
Corporate / Other		189,083		264,480		162,506
Total assets	$	2,429,587	$	2,425,083	$	2,318,094
Geographic areas
Total revenues:
United States	$	1,972,121	$	1,727,489	$	1,618,452
Foreign		100,058		94,679		88,555
Total revenues	$	2,072,179	$	1,822,168	$	1,707,007
Long-lived assets:
United States	$	196,176	$	188,988	$	193,762
Foreign		9,251		10,207		10,151
Total long-lived assets		205,427	$	199,195	$	203,913

        The following table represents sales by general product category. The category "Other Wellness Products" includes other wellness products sales from the Company's point of sales system, sales from LuckyVitamin.com of $14.5 million, which is not on the Company's point of sales system, and certain required accounting adjustments of $2.2 million, $6.5 million and $5.7 million for the years ended December 31, 2011, 2010 and 2009, respectively.

	December 31,
	2011		2010		2009
	(in thousands)
U.S. Retail Product Categories:
VMHS	$	542,575	$	496,093	$	496,427
Sports Nutrition Products		621,751		531,269		443,408
Diet Products		139,612		122,259		128,039
Other Wellness Products		116,454		100,058		99,885
Total U.S. Retail revenues		1,420,392		1,249,679		1,167,759
Canada retail revenues(1)		98,102		94,679		88,555
Total Retail Revenue	$	1,518,494	$	1,344,358	$	1,256,314

(1)

Canada sales are presented in total not by category as product sales for Canada are managed in local currency.

        In addition to the Retail product categories discussed above, Franchise revenues are primarily generated from (1) product sales to franchisees, (2) royalties from franchise retail sales and (3) franchise fees, and Manufacturing/Wholesale sales are generated from sales of manufactured products to third parties, primarily in the VMHS product category.