Good morning and thank you for joining the Third Quarter 2013 Earnings Conference Call for Herbalife Ltd. On the call today is Michael Johnson, the company’s Chairman and CEO; the Company’s President, Des Walsh; John DeSimone, the Company’s CFO and Brett Chapman, the Company’s Chief Legal Officer. I would now like to turn the call over to Brett Chapman to read the company’s Safe Harbor language.

Before we begin, as a reminder, during this conference call, comments may be made that include some forward-looking statements. These statements involve risk and uncertainty, and as you know, actual results may differ materially from those discussed or anticipated. We encourage you to refer to yesterday’s earnings release, and our SEC filings for a complete discussion of risks associated with these forward-looking statements and our business. In addition, during this call certain financial performance measures may be discussed that differ from comparable measures contained in our financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles, referred to by the Securities and Exchange Commission as non-GAAP financial measures. We believe these non-GAAP financial measures assist management and investors in evaluating and comparing period-to-period results of operations in a more meaningful and consistent manner. Please refer to the Investor Relations section of our website, herbalife.com to find our press release for this quarter, which contains a reconciliation of these measures. Additionally, when management makes reference to volume during this conference call, they are referring to volume points. I’ll now turn the call over to Michael.

Thank you, Brett. Good morning everyone and welcome to our third quarter 2013 earnings call. The foundation of our business is stronger than it’s ever been and the operating results we announced yesterday are the best in the company’s history. It was another record performance from both a top and bottom line perspective. Third quarter net sales of $1.2 billion were 19% above last year’s third quarter. Our adjusted EPS of a $1.41 is an increase of 44% compared to the prior year period and we generated more than $220 million in cash flow from operations. In addition to our record financial performance for the third quarter we announced an increase in guidance for revenues and profits in 2013 along with our initial guidance for 2014. Our outlook for record financial performance into 2014 reflects our continued confidence. The mega trends influencing our business coupled with our successful execution of core strategies will continue to grow our business. The global obesity epidemic continues to be a catalyst for Herbalife around the world. For more than 33 years Herbalife has been offering a safe, simple and effective weight-loss and weight management product, our Formula 1 shake, as well as the social community and support provided by our distributors, which continues to drive our stores. It seems that every day there is a new article published about the percentages of the world population who are either overweight or obese. The American Heart Associated said in their December 2012 reports that if the current trends in the growth of obesity continues total healthcare costs attributable to obesity could account for 16% to 18% of U.S. healthcare expenditure. Herbalife Nutrition products and our distributors are well positioned to help combat this epidemic. We believe we will beat the epidemic and its corresponding impact on…

Thank you, Michael. As you’ve just heard we’ve continued our strong performance through the third quarter of this year, marking our 16th consecutive quarter of double-digit top line growth. As previously mentioned we’ve begun to implement a nomenclature change where new participants are classified as members in our systems. The new term is currently being programmed in our Oracle system and applied in member applications. Throughout today’s discussion of results you will hear the new terminology. Our business momentum has carried forward after the first strong first half of 2013 with increased sales leader growth and engagement seen throughout our markets. Five of our six regions posted volume point growth and local currency net sales and average active sales leaders with volume points increased in every region. In the first nine-months of this year over 180,000 members and sales leaders attended regional extravaganza summit and honors events with over 53,000 just in the last three months attending the events held in Russia, Germany, Mexico and Turkey. Herbalife’s members around the world continue to witness the effects of obesity, or nutrition and unemployment in their communities and collectively stand now more than ever in the passion to provide a viable and affective solution by offering delicious low calorie and accessible nutrition coupled with the attentive personal service, Herbalife members engage and support their customers with the proper tools to achieve a healthier lifestyle. Their dedication drives consistent execution and business growth, which were embodied in the financial results you will hear about today. Now let me provide some highlights and details on our region. The North American region had another great quarter. It posted 10% net sales growth and 9% growth in volume points each compared to the prior year. Average active sales leaders with volume points increased 9% and new…

Thank you, Des. Before reviewing our third quarter financial performance and the full year 2013 and 2014 guidance provided in yesterday’s announcement, let me provide a brief update on the re-audits, yesterday we filed our third quarter 10-Q in the same method we did last quarter, without the SAS 100 review and therefore without the required SOX 906 certification. The 10-Q is complete in all other respects including SOX 302 CEO and CFO certification, as to the accuracy of the financial information. When the re-audits are completed the 10-Q will be amended with the 906 certifications to reflect that the SAS 100 review has been completed by PwC as part of their re-audits of the prior three years. Management and the audit committee of the Board believe that the financial statements covered in the reference period really present in all material respect the financial conditions, the results of operations of the company as of the end of and for the reference period and may continue to be relied upon and that the company’s internal control over financial reporting was effective during these periods. With respect to the progress of the re-audits the 2010 through 2012 and SAS 100 reviews of each of the first three quarters of 2013 as we stated last quarter we expect these to be completed and up-to-date no later than the end of this calendar year. Moving to a review of our financial results yesterday we reported third quarter net sales of $1.2 billion, representing an increase of 19.3% compared to the third quarter 2012. Local currency net sales for the period increased 20.5% within an favorable FX impact of 1.2% as compared to the same period last year. Des has already provided significant detail around our volume point and net sales results by regions and…

(Operator Instructions). Our first question comes from the line of Meredith Adler with Barclays.

Hi, Meredith. Meredith Adler – Barclays: Sorry, I was on mute. I was wondering if you could talk a little bit about the development of commercial clubs. I am somewhat new to the story but clearly that’s a whole evolution of the nutrition centers. So maybe if you could just talk a little bit about how you see that developing.

Hi, Meredith this is, Des, so happy to take that one. So obviously Meredith we are excited about the evolution of the clubs in various concepts. The commercial clubs give the opportunity for our members to invite a significantly greater number of customers and therefore increase the number of daily consumptions but in addition the commercial clubs provide the opportunity for a range of other support services. So we see weight loss challenges, we see fit camps, that we feel like [opportunity] meetings, it provides great opportunity for distributor training and activity. So what we see in the commercial clubs is simply greater levels of distributor engagement and increased levels of social activity. And I think, as you know Meredith, as you visited the clubs the full elements of success in the clubs are first of all product results but then it’s socializing sense of community recognition and in all those respect the commercial clubs provide a greater opportunity. Meredith Adler – Barclays: And I guess I was also trying to understand how does the market start to move towards commercial clubs and away from the personal clubs? What is it that sparks that?

So as with everything our distributors fuel our success. So basically where you have distributors who have migrated from home clubs to commercial clubs, their business expands for all the reasons I just mentioned, and that spurs other members, other distributors to take the same course. Meredith Adler – Barclays: Okay, and then maybe just I would like to talk a little bit about pricing. I mean you did say that that helped the margin a little bit, maybe just talk a little bit about what you were doing in relation to pricing and is it market specific related to currency or other factors?

It is John here. Pricing is market specific and any impact from price increases is based on the economic conditions in the marketplace. Inflation plays a big role in that and part of our pricing benefit is driven by price increases in Venezuela which is hyper inflationary and they had substantial price increases during the year. Meredith Adler – Barclays: Okay and then I guess I just had one more question about, I know there are issues in both China and India, I believe in how you operate the business. Have there been any challenges in any other markets saying that you can’t use a distributor model, you know or anything like that?

Meredith I am not sure what you are referring because frankly aside from our normal commercial challenges there are no issues in China or India. 0In China as you know we recently received another license and as anytime we get licenses in China part of the process is the central government goes out to all of the existing provinces in which we have licenses and asks for local officials to give us sort of good [health and seal] approval on based on that any further licensees are granted. So China is probably the most regulated market in which we operate. It is a different model there from the rest of the world but obviously we are very comfortable with our business in China, while at the same time remaining cautious simply because it is China. As far as India I think you maybe referencing some of our competitors who faced certain challenges in certain states but from Herbalife’s perspective we have complete confidence in terms of our business there, and the evolution of our business model. Our growth in both, this quarter is reflection of our position and success both in China and in India. Meredith Adler – Barclays: And I will just ask one more question. There is certainly been news about regulators asking regulators to do a review. Have you gotten any kind of indication from any government body wanting to do a review of your business?

Meredith, this is John. We just published our 10-Q. We take our disclosure seriously and any material information relating to regulator activity is included in the Q. Meredith Adler – Barclays: Okay, thank you.

Our next question comes from the line of Tim Ramey with D.A. Davidson. Tim Ramey – D.A. Davidson: Hi, good morning, thanks so much. Yes if we could drill down on China, was just out in select city, with NuSkin’s event last week and one of the things they said which I thought was a complement was on they might try mutate their model to look a little bit like Amway’s and yours. And remember how we see the tremendous traction that you’ve developed there when I spoke to John DeSimone last night he said you would no longer use the word cautious, you just did but relative to company or country specific challenges I guess. But long question but can you expand on kind of where you are at on this relatively hyperbolic growth curve that we see, other companies certainly experiencing, NuSkin being one and what your opportunity looks like ahead?

Sure, so Tim and in relation to China you will always hear us use the word cautious but purely in relation to the fact that it’s China, not in relation to our business. Our business in China is absolutely solid and so when we hear NuSkin or anybody talk in complementary terms about our business in China, what I think they are referencing is the fact that our business in China is solidly based on daily consumption. We have very high activity levels, you’ll see that we report not just significant increase in volume points in China but another significant increase in terms of sales leader activity. And for us that’s the critical metric of the business, because what we see when we have significant levels of sales leader activity that’s what drives retention and that’s a key indicator for us. Also in Chin we see more people qualifying at various levels based on daily consumption, on consistency in their business. And so we are very optimistic about what we see in China but we’ve still always will say it’s China. So hope that helps Tim. Tim Ramey – D.A. Davidson: Sure. Well, I mean it is impressive to see I think what sales leaders are up 25% and volume up 70%, that kind of leverage is unique to that model perhaps. John we need to drill down a little bit on more share repurchase, you are certainly not constrained by resources, at least in the near to medium term and yet your share repurchases has been moderate the last couple of quarters, above your target in the third quarter but certainly moderate relative to your resources you have net cash and so on. Can you talk through your mindset on why you’ve chosen to be conservative?

I am not sure I fully agree with the characterization but I certainly understand why some people might think it was conservative. Tim Ramey – D.A. Davidson: You have a debt free balance sheet, that’s conservative right?

Well, I mean we bought $110 million of stock, but let me answer the question I think as we are in the middle of a re-audit. That re-audit we believe is near completion and that opens up a lot of additional opportunities for us and we will evaluate the best use of share repurchase once the re-audit is complete. Tim Ramey – D.A. Davidson: Okay. Any reason to think that your comments on the first quarter call where you discussed potentially using leverage to step up the share repurchase and any reason you think the company would be thinking differently about that in the eventuality that the audit is completed or so?

Tim as you know we were a big fan of share buyback. We have done $1.8 million over the last five years. We think it’s an effective way to return money to shareholders. We had mentioned that right after the KPMG issue was announced that we were in the middle of looking to do a debt deal. That debt deal was based on economics and any future capital restructuring would be based on economics also. Tim Ramey – D.A. Davidson: Awesome, thanks so much.

Your next question comes from the line of Mike Swartz with SunTrust. Michael Swarts – SunTrust Robinson Humphrey: Hey good morning everyone. John just to clarify did you say that 2014 guidance does not include any share repurchases not even the 50 per quarter?

That’s correct. We will evaluate after we get the re-audits done as to the best use of cash and appropriate capital structure and then we’ll provide guidance at that point. Michael Swarts – SunTrust Robinson Humphrey: Okay and maybe you can provide us with an update on how the new manufacturing facility in North Carolina is progressing and maybe as part of that, I mean, how do you look at I guess cost savings if there are any from that facility? I know you said it was going to be a startup cost were going to be about $0.03 dragged during 2014. But are there any kind of offsetting benefits you are getting?

Let me answer the first part of that question which is the factory is on time, it’s on budget. It’s expected to come up in the middle of 2014 June, July time frame. A lot of that CapEx happens in Q4 and/or Q1, there is a lot of timing right around year end that could fall either way. Once that factory starts up we expect the first three months it will operate at a loss the next there actually it will operate at a profit. The way the accounting works is there is a lag between the operating results and how it flows through the P&L has to mean inventory turn. So certainly you can have us in the first three months of facility operations we will roll out in the fourth quarter and that will be negative and then we expect to benefit in ‘15. And as we get closer to that point in time we’ll communicate what that benefit is from an EPS standpoint. Michael Swarts – SunTrust Robinson Humphrey: Okay, great. Thank you.

(Operator Instructions). Your next question comes from the line of Scott Van Winkle with Canaccord. Scott Van Winkle – Canaccord Genuity: Thanks, a quick question on China, the 25% sales leader growth versus the 71% revenue growth, is that driven or that disparity driven by the daily consumption model or is last year, I think those two numbers were reversed?

Exactly, that sort of represents stock and again another indication of the strength and stability of our business there. Scott Van Winkle – Canaccord Genuity: Okay. And then on the training that you are talking about by the end of next year, how is that, how does that occur, is that an online based thing or are we going to expect to see Herbalife with a field staff?

Scott, this is John. There are two things. One is in the U.S. that training happens this year, will be implemented this year and at various markets it will be implemented throughout the year, next year and complete globally by the end of next year. It will be online and it will be over the phone, there’s different options utilizing the current staff that we have, creating a track able test based training program. Scott Van Winkle – Canaccord Genuity: So that’s interesting, because I would think today new members or distributors come on, they don’t necessarily have a direct connection with Herbalife. In the future they will all have some type of connection to corporate is that correct?

Well in the future they will certainly all have to acknowledge they’ve been made aware of our core protections. Otherwise they will not be order product. The way the training is designed it’s designed to provide different information to different members based on their individual goals and objectives and performance. So when you join initially as a member you have to be aware of the protections. As you become a sales leader and now you are becoming eligible for multi-level compensation there is going to be a required training on the key dos and don’ts of MLM. So it won’t be for everybody, it will for those people that are moving up to the sales leader position. Scott Van Winkle – Canaccord Genuity: Got you, great. And then John on the Venezuela guidance for next year, talking about volume point declines on next year. Is that just purely driven by the fact that you think you are going to accelerate price increases because of the currency situation or there was something broader?

Well it all is in reaction to the economic climate and currency situation in Venezuela. There will be pricing increases per share that will impact volume and there could be some supply issues that could impact volumes. So it’s a little uncertain as exactly what that impact will be. So the assumption at this point in time is going to result in a reduction in volume points by about $100 million, little over 100 million volume points? Scott Van Winkle – Canaccord Genuity: Okay. And then the last question, the last 10 months since you first had the negative publicity, this U.S. market has performed quite well. Has there been anything beyond member communication and training? Have you spent any advertising and marketing dollars, kind of broader against the U.S. market beyond sponsorships and the stuff you’ve always done?

Scott not at all because we haven’t felt that it’s necessary. I mean the reality as you’ve seen that our business in the U.S. has remained strong, volume point growth in the third quarter of 10%, more people consuming shakes every single day, nutrition’s up throughout the country. Our distributors have never been more focused, never been more resilient. We’ve a solid consumption-based business model and so frankly it’s what’s happening on Wall Street is frankly immaterial to the overwhelming majority of our customers, our members and distributors throughout the U.S. Scott Van Winkle – Canaccord Genuity: Great, thank you very much.

Sure.

The next question comes from the line of Sandy Chen with Visteon Asset Management. Sandy Chen – Visteon Asset Management: Hi, I have a couple of questions. I think the first one is your 2014 guidance appears somewhat conservative. Can you just discuss what your guidance would have been if you x out FX and the Venezuela impact?

Yeah I think I gave some of the information in the script let me repeat it. The impact of the volume point reduction in Venezuela was 200 basis points in sales growth, beyond that it was $0.14 headwind from currency outside of Venezuela. Two-thirds of that $0.14 came from two countries, the Brazilian real and the Mexican Peso. There was approximate $0.20 headwind from tax rate we are expecting to increase next year and then a little dilution from HIM and of course no buyback built-in. Sandy Chen – Visteon Asset Management: Right. So it’s about a $0.40 impact to where your guidance is versus this variable, is that about right?

Yeah I think it might have been $0.37 somewhere in that range without the volume point change in Venezuela. Sandy Chen – Visteon Asset Management: Got it. And that tax rate that also seems conservative because as you are growing in China won’t your tax rates come down?

Effective tax rate in China, last year’s rate at 25% is not that materially different from the overall corporate rate. Sandy Chen – Visteon Asset Management: Got it. Okay. And kind of a weird housekeeping question. Your website talks about your shares outstanding at, the float at 70.33 million and that’s sourced from Morningstar. But I look at Bloomberg I see 77 million shares. Morningstar actually say that they don’t pick out yet, you are the fourth largest shareholder, who’s holding about 5 million shares. So I would think the float’s actually 65 million shares outstanding. Is that correct? What number the right number to be thinking about?

I look at share base before the impact of any equity and that’s a little over 100 million. I think you might use a different definition for float but I have no other insight other than what’s out there on various services. Sandy Chen – Visteon Asset Management: Well, kind of your website says 70.33?

It’s just sourced from a service right, there’s no work that we put into it. Sandy Chen – Visteon Asset Management: Right. But and that sourced from Morningstar but that 70 million fewer than Bloomberg and that’s still 5 million higher than what Morningstar says about your fourth shareholder?

So I don’t know the answer to your question specifically, let look at that. We will get back to you Sandy. Sandy Chen – Visteon Asset Management: All right. Okay. And is there any chance that the audit won’t be complete by year end?

Well it’s our expectation that it will be complete by year end but it’s not done till it’s done. Sandy Chen – Visteon Asset Management: So essentially eight weeks hence you expect to have all that information complete and available.

That is our expectation. Correct. Sandy Chen – Visteon Asset Management: And my last question is, is there an amount of recovery amount you can discuss, from I guess settling with KPMG?

We are there yet, right now we are focused on getting the audit done soon and we expect some element of recovery but we have not begun those conversations. Sandy Chen – Visteon Asset Management: So timeline is audit, talk about your share repurchases and then provide information on KPMG?

I think those are not necessarily related but I think, yeah I guess they are all related to getting the audit done so some maybe that’s an unfair comment on my part but yes we’ve got to get the audit done first. Sandy Chen – Visteon Asset Management: Great. Thank you so much.

There are no further questions at this time.

So everybody I just want to say thank you to everybody on the team of Herbalife family, our incredible board, our members and sales leaders. There are millions of customers around the world as you know are using our products daily to improve their nutrition and health and are responsible for this exceptional growth that we continue to report on a global basis, and of course our employees. Despite this public market distraction somebody give me a call this week and said it’s useless to attempt to reason demand out of the thing, it was reasoned into and that seems to sum up this temporary distraction. Our focus remains on supporting our members. We are going to implement the numerous growth and infrastructure strategy that we outlined for you and we believe this is going to help us deliver ongoing strong finance performance, 33 years deep into the future. Thank you guys very much.

This concludes today’s conference. You may now disconnect.