Fair Value

12 Months Ended

Dec. 31, 2012

Fair Value [Abstract]

Fair Value

13.Fair Value

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2011 and December 31, 2012 (U.S. dollars in thousands):

	Fair Value at December 31, 2011
	Level 1		Level 2			Level 3		Total
Financial assets (liabilities):
Cash equivalents	$	15,733	$                     ─			$                     ─		$	15,733
Forward contracts	─			(1,580	)	─			(1,580	)
Insurance company contracts	─		─				14,925		14,925
Total	$	15,733	$	(1,580	)	$	14,925	$	29,078

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NU SKIN ENTERPRISES, INC.

Notes to Consolidated Financial Statements

	Fair Value at December 31, 2012
	Level 1		Level 2		Level 3		Total
Financial assets (liabilities):
Cash equivalents	$	76,006	$ ─		$ ─		$	76,006
Forward contracts	─			2,969	─			2,969
Insurance company contracts	─		─			18,605		18,605
Total	$	76,006	$	2,969	$	18,605	$	97,580

The following methods and assumptions were used to determine the fair value of each class of assets and liabilities recorded at fair value in the consolidated balance sheets:

Cash equivalents: Cash equivalents primarily consist of highly rated money market funds with maturities of three months or less, and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, the Company considers all cash equivalents as Level 1.

Forward contracts:  To hedge foreign currency risks, the Company uses foreign currency exchange forward contracts, where possible and practical.  These forward contracts are valued using standard valuation formulas with assumptions about foreign currency exchange rates derived from existing exchange rates.

Insurance Company Contracts: ASC 820 preserves practicability exceptions to fair value measurements provided by other applicable GAAP. The guidance in ASC 715-30-35-60 allows a reporting entity, as a practical expedient, to use cash surrender value or conversion value as an expedient for fair value when it is present. Accordingly, the Company determines the fair value of its insurance company contracts as the cash-surrender value of life insurance policies held in its Rabbi Trust as disclosed in Note 16 "Executive Deferred Compensation Plan".

The following table provides a summary of changes in fair value of the Company's Level 3 marketable securities (U.S. dollars in thousands):

	Insurance Company Contracts
Beginning balance at January 1, 2011	$	12,967
Actual return on plan assets:
Relating to assets still held at the reporting date		(365	)
Purchases and issuances		2,883
Sales and settlements		(560	)
Transfers into Level 3	─
Ending balance at December 31, 2011		14,925
Actual return on plan assets:
Relating to assets still held at the reporting date		1,560
Purchases and issuances		2,970
Sales and settlements		(850	)
Transfers into Level 3	─
Ending balance at December 31, 2012	$	18,605

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NU SKIN ENTERPRISES, INC.

Notes to Consolidated Financial Statements