Derivative Financial Instruments

12 Months Ended

Dec. 31, 2015

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

17.Derivative Financial Instruments

As of December 31, 2015, the Company held mark-to-market forward derivative contracts to hedge foreign denominated intercompany positions with notional amounts of 500.0 million Japanese yen ($4.2 million), 9.0 million Canadian dollars ($6.5 million), and 5.8 billion Korean won ($4.9 million), with related gains and losses being recorded as part of Other Income (Expense);  in addition the Company held mark-to-market forward contracts designated as foreign currency cash flow hedges with notional amounts totaling 1.9 billion Japanese yen and 15.0 million euros ($15.8 million and $16.3 million, respectively) as of December 31, 2015 and 2.1 billion Japanese yen and 4.0 million euros ($17.5 million and $4.8 million, respectively) as of December 31, 2014 to hedge forecasted foreign-currency-denominated intercompany transactions. The fair value of these hedges were $1.7 million and $0.5 million as of December 31, 2014 and 2015, respectively.

The contracts held at December 31, 2015 have maturities through March 2017, and accordingly, all unrealized gains and losses on foreign currency cash flow hedges included in accumulated other comprehensive loss will be recognized in current earnings over the next 15 months. The pre-tax net losses/gains on foreign currency cash flow hedges reclassified from accumulated other comprehensive loss to revenue were $5.1 million of pre-tax net gains, $2.7 million of pre-tax net losses and $2.1 million of pre-tax net gains for the years ended December 31, 2013, 2014 and 2015, respectively. The corresponding tax effects of these transactions were recorded in provision for income tax expense. As of December 31, 2014 and 2015, there were $1.1 million and $0.3 million of unrealized gains included in accumulated other comprehensive loss related to foreign currency cash flow hedges. The remaining $52.6 million and $71.6 million as of December 31, 2014 and 2015, respectively, in accumulated other comprehensive income are related to cumulative translation adjustments.

NU SKIN ENTERPRISES, INC.

Notes to Consolidated Financial Statements

18.Supplemental Cash Flow Information