Good morning ladies and gentlemen and welcome to the Fourth Quarter 2008 Earnings Results Conference Call for Herbalife Limited. On the call today are Michael Johnson, the company’s Chairman and CEO; Des Walsh, Executive Vice-President: Richard Goudis, the company’s Chief Financial Officer and Brett Chapman, the company’s General Counsel. I would now like to turn the call over to Brett to read the company’s Safe Harbor language.

Thank you. Before we begin and as a reminder, during this conference call comments may be made that include some forward-looking statements. These statements involve risks 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 that have been prepared in accordance with US 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 fourth quarter press release containing a reconciliation of these measures. I will now turn the conference over to Michael.

Thanks Brett, and good morning and welcome to everyone. You know I just finished my Herbalife shake doing this morning what millions of people around the world do every single day and what millions more will be doing, I’m confident, in the future. Today I want to address three areas with you: Our record financial and distributor performance in 2008; our fourth quarter results; and most importantly what we’re doing in 2009 to improve our business at every single level, including invigorating distributor activity in order to accelerate our growth in our top markets, improving our margins, and maintaining a pristine balance sheet, one of our greatest assets. First let me address our record year. As you know volume points reached $2.8 billion, up 3% over last year. We had net sales of $2.4 billion, which is an increase of 10%. We had an adjusted operating income of $339 million, a 75 increase. Our adjusted net income of $232 million is an increase of 18%. Our EPS of $353 is an increase of 30% and we generated free cash flow of $166 million. Those are pretty good numbers and a lot of company’s would love to have them. This year we invested over $100 million in capital, our largest investment year in our company’s history. We did this to provide expanded support globally to our distributors through the role out of Oracle, new and expanded facilities and enhanced technology tools to improve distributor productivity. Our net debt of $201 million has been used to finance our share repurchase program. Since the inception of this plan we have repurchased $503 million in stock, representing a repurchase of 18% o the shares that were outstanding at the time the plan was announced. Additionally, we have paid $92 million in dividends since the…

I just got back late last night, so hello everyone. Thank you, Michael. Let me also begin by congratulating our distributors and employees on a record setting year in 2008. Now let’s look at key business trends in many markets including the US, Mexico, China, South America, Tawain and Korea and share with you our actions to accelerate growth in these markets. After tremendous growth in the first three quarters of the year, results from the US during the fourth quarter were below expectations as net sales were flat year-over-year. The US remains our largest market and we were negatively impacted by weak economic use, which was prevalent in the media during this period. The results in the USA were primarily driven by a 3% volume decline in the Latino market; however the activity by our distributors within the segment remains strong, as the number of supervisors ordering was up 12% while the average size of the order was down 13%. As Michael highlighted, we believe the weak economic condition kept consumers sitting on their wallets, which led to fewer club visits and less retail product sales; however, fourth quarter volume points for the top 25 metro areas in the US were up 5% year-over-year compared to a 15% decline from the remaining US markets. The top 25 metro areas for the Latino market experienced volume point growth of 6% versus a year ago; while the general markets top 25 metro areas experienced a year-over-year volume point growth of 10%. So, as you can see, we are beginning to see growth in our largest US markets, which is encouraging and we’ll use this success to demonstrate to our distributors that people are having success despite all the negative headlines and poor economy. This data is proof that we can weather…

Thanks Des. Let me briefly walk you through the fourth quarter financial results, our initial 20009 first quarter guidance and our revised guidance of [inaudible] 2009. Then we will open the call to your questions. Net sales of $512.9 million in the fourth quarter were down 11.3% versus the fourth quarter of 2007. FX has an unfavorable 856 basis point impact during the quarter reflecting the fact that 80% of our sales are derived outside the US. Last night we posted historical performance for the new regional structure. We also filed our 10-K which you can read online, and for the past 48 years we have also shown our top ten markets in terms of net sales and volume points, local currencies, etc… All of this information can be found on our website under the Investor Relations tab. On a reported basis gross profit in the fourth quarter was $416.8 million or 81.3% of net sales. This is an increase of 96 basis points compared to the fourth quarter of 2007. The improved margin was primarily the result of foreign currency fluctuations. Royalty expense in the fourth quarter was $168.4 million or 32.8% of sales, reflecting an improvement of 260 basis points compared to last year, primarily due to the country mix as China sales employee expense is recorded in SG&A. On a reported basis fourth quarter SG&A of $187.6 million or 36.6% of sales, excluding restructuring expenses in both quarters, SG&A expense was $182.7 million our 35.6% of sales, an increase of 627 basis points versus a year ago. Then adjusting for the China sales expense of $21.3 million in 2008, compared to the $11.5 million in ’07, SG&A expense was $161 million or 31.4% of sales, an increase of 411 basis points versus last year. After including these…

(Operator Instructions) Your first question comes from Chris Ferrara of Merrill Lynch.

I just wanted to talk about the new supervisor levels. I understand some things, you have some market specific things going on with Venezuela and Mexico, but across the board they’re pretty much down in most regions in Q4 and have decelerated. I understand this isn’t a counter cyclical business, but can you talk a little bit about why you think across the board these levels have fallen so much and what you think the implication might be?

There are a number of things. Obviously any time you’ve got the number of headlines that are out there, it inevitably causes some distraction and our business is based on two things, one is confidence and focus. So whenever you’ve got a situation I think you inevitably have some impact on that, but here’s what we are seeing today. We’ve mentioned the fact that we did this seven-city tour in the US, we’ve just come back from two big extravaganzas in South America. I’ve just come back from Mexico where Rob and I were there with our leaders and what we’re seeing from our leaders through out the world is that now they’ve seen this happen and now they’re actually totally focused on this message that now is the time for Herbalife. We’ve gone out with the video and a variety of a tool which all stress the same message, the Why Herbalife Why Now message and that’s why we believe that this set back was temporary, but now we’re going to see those levels rebound around the world.

I would add a couple other things. When you say we’re down across the board in all the regions, you’ve got to look at a couple of market places, which once again, that have really impacted us. Venezuela, which Des pointed out we have three specific issues, we have the government; we have some issues with our distributors in that marketplace and everybody knows it; and we’re straight up about it with our distributors, and we have ourselves. We had some operational issues down there. So you couple that with Mexico and then you carve those two out, our fourth quarter was down a little over 11%. We’re not proud of that. We’re not happy with that, but we see this shift taking place and again, I definitely believe the economy is causing us problems in Mexico; I think it’s causing us problems in the US. I think we have a big shift taking place in our business from what I would call kind of a recruiting only mentality to a recruiting and retailing mentality and as that shift takes place in this daily consumption the business fundamentals of this company will get stronger. Now that’s will and you guys are always concerned about win, which is fair, and I would be concerned about that too if I were sitting in your position. But, sitting in my position as I look at it, and as Des said, a lot of time in the market in the last five weeks we’ve been in nine different cities in Latin America and in the US. We’ll do four more in Mexico in the next two weeks. We’re going to see all of our top leadership here in the Herbalife Honors and we will be putting up the winners. That’s what we do. Rob…

Can you get a little more specific? I understand Why Herbalife Why Now and it makes sense you’re trying to get more people into the business, I guess. Again, understanding it’s not counter cyclical, because you’ve still got to get people to pay for products, usually in a direct selling model you’ll get a higher level of recruitment and not so much a higher activity level, which is what you’re seeing. So, I guess one, why do you think you’re seeing a higher activity level in the business and two, can you talk about what you saw for new supervisor trends in January? I understand Venezuela and Mexico, forget those. I mean how about the US and EVI. I mean have you seen those trends get better as you move into January?

You’ve asked a lot of questions there, so when you say get specific about it, what specifics are is this business is run by getting people to meetings and introducing the opportunities to them, at the simplest levels; getting them to understand the successful business models that are operating out there. You have levels of entry in this company that are anything from a $2.00 shake to becoming a supervisor instantly for around $2,500 depending on where you are and what the costs are in that marketplace. You can sign up for a $49.00 IBP. So when you say be specific, the specifics are working with our distributors to get more meetings out there. To take nutrition clubs and use them as a multi functional facility, which is everything from serving shakes and bringing people and new members in to a training facility, to a recruiting facility, to making sure that they understand that the activation of this business is a daily function; that the activation of new distributors is absolutely daily. It’s Tuesday, Thursday, Saturday meetings. It’s using the product. It’s wearing the brand. It’s talking to people. It’s the basics of this company. Again, I am a little confused by this specific question, because that’s dragging you through the absolute function of a distributor on a day-to- day basis. I would be happy to do that, better to do it offline. We’ll do that anytime you want, but it’s a long and drawn out conversation. Concerning the trends on a global basis, worldwide in the fourth quarter the number of supervisors ordering was flat. The average order was down 9%. The club model is retail sensitive. We understand that better and better as we go forward. As that model continues to prosper we’re going to have more, what I would call, fronts out there. More places for people to go to join these clubs, to be members. More places for people to activate and become distributors. That’s a key part of this, is not only become member of the clubs they get their own success story in the club and then they themselves become distributors. This is what’s key to us. 40% of the sales in the US are club driven right now. Mexico and the US 40% are club driven, so like everywhere else. Excuse me not 40% in Mexico, but 40% in the US are club driven and so what we’ve got to do is make sure that we are continuing to build this club model.

One thing to add to that as well is, is what we’re hearing is that two things are happening out there in the field and that is that the number of people who are showing up at HOMs has increased dramatically. So, over and over what we’re seeing is that an HOM which might traditionally have attracted 20 or 30 people, they’re now attracting twice that number. The other thing that we’re hearing is that the quality of people who are actually showing up at HOMs has significantly improved. Because essentially what’s happening is that there are many people out there who fall either into one of two categories. They have either lost their jobs or they’re in fear of losing their jobs and what that’s driving them now is to look for opportunity, to actually create an income or to gain a supplemental income. We’re seeing that and that’s what we’re hearing from distributors. Not just in the US, but in all of these markets that we’re traveling to.

I appreciate the color. Michael, what I was asking for specificity on was just numbers. Like in January did you see the new supervisor trend up as opposed to where it was for the fourth quarter?

Let me have Rich jump in on that one.

Hey Chris, I think we went as far as we want to go with giving you a look see into our first quarter performance and I think that you’ll have to draw that conclusion from our comments and our tone as it relates to the improving trend of volume point both in the US and Mexico that we shared with you.

Great, I appreciate it. Thanks guys.

Your next question comes from Tim Ramey of D.A. Davidson & Co.

I’m just trying to connect dots here. I think you said that you expected flat volume for the first quarter and maybe the year-over-year volume trends to go positive again in August, so maybe implying flat or up volume for the fourth quarter. To do the math I guess that says the middle two quarters are going to be down at least 10% if your down 5% volume is correct. Am I doing something wrong there or?

That was just Mexico. We implemented of that in Mexico in August. For the third quarter last year, Mexico was down 8%, you saw it was down 23% in the fourth quarter and we saw the full impact of that. So, given what we’re hearing from, again Des and Michael being in the market in Mexico recently, we’re hearing and we’re seeing very positive trends. Mexico was down just 17%. They met our internal expectations, which, that is very important. January is a key month for re-qualification, as you know. We’re cautious just because we have so much of the year ahead of us, but right now, early on at least, these markets are hitting their internal expectations.

Okay. So, the only real volume guidance you gave is 5% for the full year, but may be flat for the 1Q?

I said, I think for the full year we said that volume is going to be plus or minus 1%, net sales are going to be down 5% to 7% because of FX. I don’t think we gave any market specific full year volume guidance.

Then on the Beckham question, is there any issue to an intangible cost there or if he doesn’t come back to LA what does that mean?

As we discussed last night with several folks, we’re still uncertain about what is going to transpire, so we are in constant contact with AEG, but the net, net is that it’s been a great partnership. We benefited tremendously. We have 800,000 jerseys walking around with Herbalife today and hopefully AEG will make the right decisions for their club and their franchise and we’ll continue to reap the benefit of that.

We have to remember also, we are sponsoring the galaxy. David Beckman is one player. He is a worldwide renowned player, there is no doubt about it. He gets a ton of press. He’s out there almost every week in some magazine or another, he and his wife. That’s good for us. That’s good news. He’s associated with our brand. We’re proud of that. We’re proud of what they do, but lets be also honest about the on field performance of that team is as important as anything that we have and we’d love to see them get to the playoffs, win the championship. We’ll get a lot of notoriety for that and with our without David Beckham, that’s our key cause in that team, is to see them succeed. To see them grow to build their fan base. We’re working with them to become more nutritionally aware in the community of Los Angeles and the community of Soccer, so those are the good things about it. We’re talking to AEG almost every day about this. We hope for the best for everybody.

Your next question comes from Karen Howland of Lehman Brothers.

I was wondering if you could bridge the gap a little bit for me. I know the last time you reported earnings you said you expect volume points for this year, I believe, to be up 4% 5o 5%. I think you reiterated that in December. You said January hit the internal targets in the US and in Mexico, but now you’re expecting volume points to be down 1% and up 1%. That seems like a pretty drastic change in two months.

I think the plus or minus 1% was for the full year.

Right and previously you said up 4%, 5% for the full year.

Right and I think two things. One is we ended softer than we thought, even when we talked to you in New York at the Investor Day, so I think we’re just being cautious for our 2009 outlook. Our year is back end loaded when you look at it and the biggest jump is in the second quarter. Last year in 2008 we had our single biggest month ever when we launched the introduction of our 30th anniversary promotion and we had our single biggest month for the year in company history last April. So we have a big hurdle to get over and until we get through that hurdle I think we’re going to be very cautious. Cautiously look at our volume. Ratchet our costs down so that we’re not spending ahead of the volume and be conservative. And hopefully if we get through the next several months and maybe we can give you some better feedback to better insights whether it’s underlying supervisor growth or volume growth in some of these markets and start to get on the other side of this. But we are out there. It’s like a blitz creek right now and Michael, Des, Rob, they’ve been traveling a significant amount, more than I’ve seen in the last five years that I’ve been here, this early in the year and that’s just the beginning of the year. We have 13 extravaganzas this year versus 80 a year ago. So we’ll spend more than ever before behind distributor activation and activity in the form of events and meetings and also promotions. We think that those investments, historically, have shown us to be the best return on investment.

That is a good follow up to my next question. When you think about the fact that January was more or less in line with your internal expectations, but it sounds like you guys have been running all over the place trying to drum up interest in the business. If that is going to have to continue how does that additional distributor touching SG&A cost offset the cost savings that you guys have in put in place?

It’s actually very interesting that some of the things that we’ve done here early in the year have proven to be well incremental in spending versus our internal numbers, a hell of a return on investment. In fact so much so that we’re looking and saying can we continue to do some of these things through out the course of the year? So, the big is getting off to a quick start. Getting people reengaged, as Michael and Des described earlier.

And as to whether it’s necessary, we are going to do whatever it takes. We’re actually, believe it or not, having a good time at these meetings, because I have to tell you, you go to your hotel room and you turn on CNN and you see depressing news. You go and you sit with these distributors and you leave there with a sense that these guys are going to turn the world on fire. They’re accepting this as a personal challenge. They’re hearing from their leaders, many of whom came into this business, because they had lost their jobs, their businesses collapsed. So, they are hearing stories of inspiration. I have to tell that we went on this tour and in each case we actually had, in addition to a traditional HOM, Michael actually introduced, from the audience, somebody who had been in the business just a few months and we heard the most extraordinary stories. One story in particular, a guy worked for a company. He was a welder and he lost I think it was 50 or 60 pounds on the products. He had not interest in the business. He was earning $17.00 an hour as a welder. He expected a raise in October to $20.00 an hour and instead in October his company laid off 50 people because their order book had just collapsed. He started in the business and literally here he was in December. He had joined the business, became a supervisor and actually literally two months later was earning back about 70% of what he was earning as a welder. We heard these stories over and over again. Frankly, we’re going to do whatever it takes. If it requires us to keep up this same schedule for the rest of the year, we’re going to be out there, because frankly, the key issue for us is distributor engagement and distributor confidence and that’s what we’re out there to help support.

Just to let you know how excited our distributors are, for example in Mexico we announced this tour about maybe three or four weeks ago and in three days there were no tickets available for the tour, 14,000 seats, so they’ve actually asked us to double the amount of activity we’re doing down there, so instead of one meeting a day, we’re going to do two meetings a day and we definitely expect to see more than 20,000 people, 50% of which are new people. So the excitement level is extremely high.

And Karen, you know in this business attendance at these meetings is the first key leading indicator as to change in momentum.

Right, I guess it sounds like there was a lot of momentum in the fourth quarter, but it just didn’t show up in the numbers.

There wasn’t a lot of momentum in the fourth quarter. We’re starting to see the first quarter have momentum.

Okay then the SG&A, the $40 million that I think you highlighted Michael, the cost savings you expect through out the course of this year. Is that at a full run rate or what portion of that was actually visible in the fourth quarter?

None of it was visible in the fourth quarter.

We did all the lay offs in the fourth quarter.

We started the announcements on December 12, so from the standpoint of salaries and wages, we basically had those expenses through out the entire quarter.

Okay so that should all be visible going forward?

You’ll start to see it sequentially going through the first and second quarter and then you’ll start to see the full impact Q3 and beyond.

Your next question comes from Douglas Lane of Jefferies & Company.

Following up on the volume points question, it looks like you’re telling us that you’re already seeing some improving trends with the volumes only expected to be down 5%to 7% in March. Will that be a steady improvement as the year progresses, turning positive in the third quarter? Is that how we should think about it when we’re modeling?

You are exactly reading right on the first quarter guidance. The big question is going to be the second quarter. We have a very large comp, so from a percentage standpoint we have a difficult comp in the second quarter that we kicked off our 30th year anniversary. But, from a standpoint of the key markets that are turning like Mexico, which is 176% of our business, we expect to see that start comping positive after the August vat. We expect Venezuela, after July, should start comping positive. They’ve stabilized their business. They have a good run rate of a little over four to four and a half million volume points a month and then the question is going to be is the US momentum that we’re seeing here early, does it carry on and more importantly does it accelerate through out the year. I think we’ll have a better insight after we get through these first couple of months. We just introduced a 5% price increase in the US business in February so February is a tough month for us to read right now, because it could have been distributors buying ahead of that price increase which occurred last weekend. I think that we’re going to be very quiet as it relates to the outlook on our business, from what we’ve given you here, until we meet again in May or late April.

Okay that makes sense. I know you’re not getting specific in your outlook, but can you give us directionally what you think the impact of foreign currency will be on your gross margins this year?

Why don’t we take that off line. I think we’ve given you and the industry our key assumptions that were in our initial guidance was 1.30 for the euro and 13 I think 25 or so for the peso. Our current guidance reflects; let’s say the FX rates that were available around February 10, before we rolled up our financial package that went to the board.

Okay, but you still source mostly in the US correct?

Yes, that’s correct.

Shifting to China, didn’t we talk about a re-qualification process for the Chinese sales leaders? Has that been undertaken yet?

Yes, we are just completing that right now.

So that was not included in the 40.3% retention rate that you quoted?

No. As you know the China business model is a separate business model and the supervisor re-qualification has never included China. What we’ll do is we’ll differentiate it and report it separately when we do report it. And remember, when we do report it, it’s a cumulative three because we’ve never done a re-qualification. So, it will be lower than the worldwide average just for the sheer fact that we haven’t done one.

So then this time next year in February China will be in the mix with everybody else correct?

No. We’ll never include China with everybody else. It’s a different model and we’ll always, just like we do right now, if you look at new supervisor, everything else is separate and we do the same thing with the re-qualification.

Your next question comes from Scott VanWinkle of Canaccord Adams.

I heard all the commentary about trying to excite distributors and get the energy and the momentum going. I didn’t hear anything about new products or was there a promotion going on starting up here in the first quarter or something of that nature?

We’ve been releasing new products globally. We’ve got two skin activator launches in San Diego and Bogotá, Chile. I mean we can go through it in depth because it’s on 70 market places. You’ve got different products rolling out in different markets on a constant basis. In North America we had the F1 packets, the Formula 1 and we’ve had the H3O launch in Canada. I don’t know if you want me to go through all this, but a digestive health line in the US which we just launched, an herbal aloe powder, mango accent and aloe flavors.

I was just wondering if you had something in the hopper that you though would really change the momentum of the distributor force, brewing up for later this year.

Well we always have on in the hopper and we’re pretty excited about something, but I don’t want to say too much about it yet. We’re doing some clinical testing on a product before we bring it out, which is unusual for us. The test results are very positive so far and we are working with our distributors right now that I would hesitate to call it a game changer, but it certainly is something very strong in the weight loss category.

From a promotional perspective, we are now in the final 12 months of the worldwide promotion for our 30th anniversary vacations, so this is the promotion which Rich mentioned. We launched it in the early part of last year, but now people are in the final 12 months, so if they are going to qualify and get to Atlanta for our 30th anniversary celebration, this is the year they’re going to have to do it. Around the world the catch cry is see you in the pool in Atlanta, because effectively to do that distributors have to really work hard for the balance of this year and a lot of our net promotional messages are geared around that. In addition what we’re doing is that in various key markets we are launching Presidents Team challenges. So one of the things that is being announced at our future Presidents Team retreat in Mexico is the opportunity for our entire presidents team to have a vacation together if they accomplish certain volume point levels. That requires not only the country to achieve those volume points, but each president’s team individually to qualify. We are going to be launching those in other key markets and again, it is part of our message that this is the right time. There has never been a better time to bring people into the business. To get people on these products and we’re working to provide the rewards to incentivize our distributors to accomplish those goals.

It sounds like those promotions are probably more focused on distributors of higher pin levels. Is there anything more in the front end, the rank and file and distributor force to increase recruiting at the lower levels

Yes. We actually have gone back and again, one of the things we have done is we have looked at previous hugely successful promotions, particularly in times like these. We recognize that for many people to make the investment to become a supervisor is significant and so we are re-launching a hugely successful promotion from a number of years ago based around success builder. To become a success builder basically requires a purchase of 1,000 volume points, which in US terms including tax and shipping represents an investment of about $600 odd dollars and the promotion basically revolves around buying that product and then selling it within ten days, because if you sell that product within ten days at full retail you generate a profit of $480.00. So we’re launching the success builder promotion in many key markets and that primarily is focused at our lower lever distributors and encouraging them to bring new people into the business with those success builder orders and most importantly, not only to encourage them to come into the business that way, but then to support them in selling that product within ten days. Because our experience is that if people make that initial investment, make the sale of those products, now they realize they’ve got the confidence to do this business and that becomes an ongoing process and therefore they stay engaged because they have had that early success.

Okay, thanks. See you all at honors.

Well tough fourth quarter, but you want to know something, we are very excited about 2009.We have interests you on this phone and us that are completely aligned. It is interesting, this week we are going to hand out equity to our employees in this company and that equity is a large part of their compensation, driving that stock price, driving shareholder value becomes a key metric in every single employee and frankly many of our distributors are shareholders also. So, they become as driven by this stock price as you do, by analyzing it as we do, by making it move forward. The independent business opportunity in this company as AMERTIX distributors they earn what they’re worth and they never lay themselves off and these are the tremendous attributes of our company, especially during times of sky rocketing unemployment. So trouble is definitely opportunity for Herbalife. It is something we believe in. We know that our lead product, Formula 1, has been proven clinically in studies through out the world. Our distributor testimonies they continue to tell us that this helps people lose weight, we know it and what better product to sell in a world that is experiencing an obesity epidemic. We are truly at the intersection of health and wealth. Activating our distributors, activating our employees, activating every part of our business is the key to growth and that’s what we’re going to do. We started 29 years ago in 1980 when the US prime rate was over 15%, home mortgages were 13% and the unemployment rate hit a high of almost 11% in ’82. Yet through these times our distributors build tremendous businesses. They see these times the same way. We may have slowed down a little bit in the fourth quarter due to some isolated…

Ladies and gentlemen, this does conclude today’s presentation.