Good morning, and thank you for joining the third quarter 2011 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 General Counsel. 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 maybe 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 maybe discussed that differ from comparable measures contained in our financial statements prepared in accordance with the 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.

Thanks Brett. Good morning everyone and welcome to our third quarter earnings call. Today we are very pleased with the record results that we reported yesterday, specifically the sixth consecutive quarter of double digit top line growth. We would like to take this moment to congratulate our distributors who are once again leading the way through increased engagements and improved activity and of course our employees who remain keenly focused on the servicing and the needs of our distributors. For the first time in our history the company exceeded 1 billion volume points in a single quarter. We continue to believe that our top line growth is a result of strategically pursuing three large global mega trends, first the global obesity epidemic which shows no sign of letting up. In fact last month the Red Cross reported that more people died in the past year from complications associated with obesity than those that died as a result of being malnourished. Secondly anti-aging. People today are living longer and desire to take more control of their personal health regimens. And lastly earning extra income, whether it is here in the US or developed markets where underemployment is as big an issue as unemployment or in emerging markets where people want to improve their social economic stature, the pursuit for supplemental income, that’s seemingly universal. Herbalife is uniquely positioned to capitalize on these three mega trends through our products and our business opportunity. We believe it’s the confluence of these mega trends along with our products and our distribution and compensation plan that continue to positively differentiate our company. On the product front, we continue to build our leading position in the global weight management category, to provide solutions for healthy weight management. As a result, the company’s global market share in…

Thank you, Michael. The momentum we’re seeing in our business is driven by two key forces; our distributors’ commitment to expanding daily consumption business methods around the world and the continuing commitment of our distributors to Herbalife’s Mission for Nutrition. The third quarter was tremendous. As Michael mentioned, this is the first time that the company has ever exceeded 1 billion volume points in a quarter and frankly, we believe that we are just getting started. It was our founder Mark Hughes’ aspirational goal that Herbalife would one day achieve $5 billion in retail sales and that at the pace we’re going, that milestone may be just around the corner. When we look at the key metrics that we report to investors, such as volume points, local currency net sales, new distributors and average active sales leaders, every region posted increases in every metric. We have often mentioned the transformation that is occurring in our business due to the expansion of daily consumption business methods and this quarter is a stellar example of the positive changes that we are seeing throughout the markets in which we operates. We believe the momentum behind this evolution will continue to accelerate as more distributors in more markets have success acculturating daily consumption business methods to their markets. Daily consumption business methods not only drive increased distributor engagement, they also drive increases in consumer engagement. One key characteristic of daily consumption business methods whether nutrition clubs, weight-loss challenges or distributor led fitness boot camps is that the distributor and their consumers have much more frequent contact then is normal for traditional direct sellers. Based on the consumer research that we have conducted in the U.S., Mexico and Korea, nutrition club customers in each market indicate that approximately 80% of them visited the club more…

Thank you, Des. I’ll first go the third quarter’s results and then I’ll discuss the guidance provided in yesterday’s earnings release and specifically the topical issue of foreign currency and it’s potential impact on our expected performance. Let’s start at the top with volume. As both Michael and Des mentioned, the third quarter was the first in the company’s history in which we achieved in excess of 1 billion volume points in a quarter. This record performance was geographically broad based with all six regions and 80% of our 78 countries, experiencing increases in the quarter. Volume growth in the quarter was also strong in both established and emerging markets, with established growing 19.5% during the quarter and emerging increasing 26.9%. Our overall volume performance in the quarter was also very broad based from a timing standpoint. While we wouldn’t normally comment on monthly results, it is worthy to note that our distributors’ businesses remained strong despite the volatility in the financial markets over the past two months, with September volume points being the largest in the company’s history. Since Des has already provided significant detail on volume points by region, I’ll move to net sales, which grew approximately 30% compared to the third quarter last year. This increase was comprised of 24.1% local currency sales growth plus an approximate 600 basis point benefit from foreign currency exchange rates. Turning to the third quarter margins, gross margin was slightly lower on a year-over-year and sequential basis. The differences are due to changes in country mix, slight increases in our inventory reserves offset by net sourcing savings which includes the benefit from our seed-to-feed strategy. In the third quarter, the H.I.M. manufacturing facility continued to produce approximately 23% of all worldwide inner-nutrition production volume, very similar to last quarter and in…

(Operator Instructions) And your first question comes from Per Ostlund with Jefferies & Company. Per Ostlund - Jefferies & Company: Thanks. Good morning everybody. Congratulations. I want to start, I’ll get your thoughts on the EMEA region. Obviously, you know, there are other region growing faster but I guess, I like to see the acceleration that you’ve got there in EMEA and both the volume points, an average active sales leaders in the quarter. Are you seeing anything yet that, sort of, resemble and inflection point on the daily consumption front, given that sort of the strength in the U.S., India and Brazil among other region that might be expected to kind of have some cultural over lap there?

Hi, Per, this is Des. So the answer is yes and essentially, if you look at EMEA, lets divide it into two areas. First of all, you got what’s happening in Russia where we’ve obviously had already seen that inflection point. We’ve seen this tremendous growth there combined with tremendous levels of activities, distributor engagement and the impact of the 5-K marketing change that we’ve first tested there a couple of years ago, and then in Western Europe as well. We actually now have in emergence, a range of daily consumption activities driven initially by weight-loss challenges, than expanding into lifestyle ventures and now we’re actually seeing a growing number of successful clubs and duplication of clubs. So I would say, absolutely we’re seeing that inflection point still in the early stages, but certainly we’re very excited by the seeds that are begin planted, that are being sold by our distributor leadership there. Per Ostlund - Jefferies & Company: Great. Des, following just on that point you commented in the preamble about it being early days for daily consumption, I think that certainly seems to have been through. You talked in the past about sort of a lifecycle I guess for daily consumption, be it inception that’s expansion enhancement. As you’re kind of looking at your markets now versus may be where you are at the end of the last year when you had your Analyst Day, have any of the markets kind of moved up the maturity curve or is it still really early for frankly the vast majority of the market share?

It’s still early Per, I mean obviously we recognize that it takes about two or three years for the acculturation process and I would say that pretty much happy that its still in the same buckets as they were a year ago are just growing in terms of maturity. The other thing that we’re seeing is that some of the systemized training message that we’re seeing adopted in Mexico now spreading elsewhere we believe are actually going to contribute both to the mature markets in terms of enhancing their growth, but also possibly accelerating the growth of others in the other stages. Per Ostlund - Jefferies & Company: Excellent, I appreciate that color. John, one for you quick here or may be two; not to dwell on the FX thing, given all positives here but, you mentioned the 600 basis point impact on the top-line, is that actually 600 basis points discreet to 2012 or is that a swing factor versus where it would have been in June?

That is a swing factor to what it would have been in June rates; about 400 basis points is the discreet factor. Per Ostlund - Jefferies & Company: Okay. So using the rule of thumb then something on the order of $0.20 in terms of just sort of an adverse currency in the vacuum for 2012 is probably reasonable?

I think $0.20 is may be a little light below. Yeah, I think so it’s 200 basis points on the base of 600 basis points is a third, so if you apply that same ratio to EPS which I think is appropriate, and we’re talking $0.10 to $0.12 a quarter so may be $0.03 to $0.04 a quarter is, even a soothing equation so you are 70% less then you’ve got – probably I would say about $0.25, may be $0.28 somewhere in that range. Per Ostlund - Jefferies & Company: And then so just real quickly, the FX impact to EPS in the quarter was $0.12 was a little bit more than sort of the first couple of quarters of the year; was that basically the lower FX losses in the quarter in the SG&A line jump?

It was lower FX losses, but it was also overall for the Q3 sounds when you say this today, but it was a better FX rate than it was a year ago.

Your next question comes from John San Marco with Janney Capital Markets.

Can you update your estimate of how many nutrition clubs you think you have globally?

Well let me put out the standard qualifier, when we talk about the numbers of nutrition clubs it is an estimate; it’s a statistical estimate, and a survey estimate. In some countries we have actually pretty good data, pretty good registration data and in other countries it’s a little softer number. I am looking at the sheet here we’re probably get around 70,000 clubs around the world. We are going to work on giving the investors a better number; we’re going to kind of break it into home clubs and commercial clubs sometime next year hopefully early next year.

And then Des, I think you said that you have seen some shifts in how daily consumption manifest in Europe; do you have a guess of what the nutrition club count looks like in the EMEA business and may be how that compares versus year ago? And then I guess secondarily if, is it the distributors are shifting from weight loss challenges etcetera to nutrition clubs or has it been largely incremental?

So I guess John what's happening is if you think of the nutrition clubs in Europe lets say began initially with a conflict of lifestyle centers which essentially are branded Herbalife offices. For our distributors, they have meetings, they invite customers there to participate in weight loss challenges and so they are really sort of brand centers rather than traditional nutrition clubs. Now obviously they take part in other activities there, but you won't have customers coming on a daily basis to actually start the day with a healthy shake. So that's the model that we saw initially emerge in Western Europe, primarily as a factor of the local regulation and other factors. So what's happening now is that from that base, we are actually seeing an expansion into more traditional nutrition clubs, but primarily in commercial locations and primarily with the number of distributors operating together, so this is an evolution that we are seeing taking place. The reason that we believe that we may have reached an inflection point is that we’re now seeing distributors move up the marketing plan as a result of duplication of the club, so there has always been several hundred clubs operating in recent years in Western Europe, but we haven't necessarily seen that duplication, that's what we’re now beginning to see. We’re beginning to see the movement of the marketing plan and for us that's really the first indication that you’ve got that duplication that drives further adoption.

Okay. And then on the 8% to 10% volume guidance which is the same guidance you originally gave for 2011, I guess a couple of observations, of course you have a little better year-to-date sales force growth this year than you had a year ago today. And also yet again on below the long-term volume guidance of 11% are there any discreet headwinds reflected in that volume assumption, just any comments you care to make on the 8% to 10% versus recent growth rates?

Well, it’s a coincidence that it was 8% to 10% this year and last year, they are not related to each other but with a little bit – if we’re lucky, we will beat them by the same amount but I wouldn’t make that assumption. The 8% to 10% is based off the best information available; it is based off what our really strong year-over-year, over year comps like we’ve had two incredible growth years that we now have to compound. And 8% to 10% is not materially different than the long-term growth rate of 11%, it’s pretty close to that number. So it’s nothing discreet, it’s just may be a little bit of conservatism given the strong two years that we’ve had.

Got it; same guidance practice as historically. And then my last one, can you quantify, you mentioned iChange and it sounded like you are having some at least the level of success you expected with. Is there anything you can quantify in terms of the performance of distributors who have been using iChange versus control group or anything like that?

Yes, so John this is Des. So yes, we’re very excited about what we’re seeing iChange; still in the early stages, but what we are seeing is the distributors who are using iChange have significantly better performance in terms of customer engagement, customer retention. So we’re working closely with the pilot group of distributors in terms of continuing to modify to add additional functionality and we believe that as part of our sort of social network strategy, this is going to be an important part and exciting tool for our distributors.

Your next question comes from Mike Schwartz with SunTrust.

I guess I was most impressed in the quarter with the established market growth of about 20%. Could you just give us more color on that where you are seeing particular pockets of strength, is that mostly Europe or is that US general or any thoughts on that would be helpful?

So I would say, it’s a number of factors. Obviously the US general market, very excited about this. This is the oldest market in Herbalife, 31 years and what we’re seeing there is obviously a significant adoption of daily consumption, our US leaders have monitored what’s happening in our Latino group of markets for several years. They really have adopted the clubs and to a significant to create they have merged it with weight loss challenges with traditional HOMs, with the traditional Tuesday, Thursday, Saturday business model. And effectively the nutrition clubs in the general market is being used almost like traditional offices where you’ve got a lot of distributor activity taking place, then you merge that with some of these new wonderful ideas like the fitness boot camp that we’re seeing is a tremendous of way of bringing new customers and that’s really what’s driving the growth you know in the US general market. Same thing I would say for Korea. Obviously a number of years ago, our Korean leaders, they went to Mexico, they went to Taiwan. They came back and you know they introduced a systemized training approach that works very well with the Korean culture and so you have this tremendous training and duplication, time that into a HOM model and so on. So really what I would say is that in the established markets, it’s really this daily consumption driving long-term customers which in turn drives distributor retention, distributor sponsorship and so on. So that’s the whole and that’s the circle of success that you’ve heard us talk about at various meetings.

I know you don’t break this out anymore, but is that kind of US general market still running at about at 20% plus growth rate?

The US general was in excess of 20% and the Latinos also had growth in the quarter.

Okay, great and then next question is just on the Spencers’ trial in India, could you give us an update on that, how that’s performing and then are you looking at replicating that in other areas in the country in the next several quarters?

Yes, so it’s still very early days on that Mike, but we believe that it will be positive. The thing to remember about Spencers though is that unlike Waldo’s in Mexico, for Waldo’s had over 300 locations, Spencers is approximately a 100 and they’re predominantly regional. So what we’re actually doing Mike, is that we obviously believe that improved access points is a significant factor for our distributors, particularly those engaged in daily consumption methods. So to supplement what’s happening with Spencers, we’re looking at a number of other possibilities, not just for India, but elsewhere and I think in future calls, you can expect to hear more about that.

Your next question comes from Linda Bolton Weiser with Caris.

Hi. So in terms of, you made some comment about your cash flow and your opportunistic share repurchase in the quarter, I mean your cash flow performance is really, really great and it looks to me like you’re going to be able to generate free cash like $400 million or so next year in which case that way exceeds doing $200 million of share repurchase. So can you give us thoughts on, you know if that all come true like what you would do with the cash.

Well our first priority for cash is always to invest in our core business and for any opportunity we have that can drive an appropriate ROI above our cost to capital or risk-adjusted cost of capital, we would do that first. When you get beyond that there are little tuck-in acquisitions that maybe an opportunity and we look at things like manufacturing or iChange, beyond that, it’s really returning money to shareholders through a dividend and a buyback. This is a routine piece to the buyback which is included in our guidance is buying back $200 million in stock, which does leave excess cash beyond that which may get utilized for an investment opportunity or may get utilized for buy back more stock if the opportunity rises. So again the hierarchy is invested in our core business, find third-party investments that can drive to Herbalife and then just return the money to shareholders.

I found it very interesting, hearing some of the stories that the convention about the Herbalife24 and the boot camp concepts that are cropping up in Los Angeles and how that is seemingly attracting a non-Latino customer, can you comment on just Herbalife24 and idea that may be it’s not going to be as cannibalizing and that it actually may help you expand and reach a different kind of customer and distributor.

So Linda we believe that Herbalife24 contributes a number of things. First of all, it obviously gives us tremendous creditability within a high level sporting community and that really has a halo effect which applies that to all our products. The second thing is that it absolutely enables us to reach out to a new audience and the fitness boot camps that you referenced you know are a great example of that where it just gives us tremendous authenticity within the weekend warrior sporting community. And it’s also helping us to attract a new group of distributors who are focused on the business opportunity based around health and fitness. So I think, you know, Linda, there's tens of thousands of personal trainers in the U.S. and now with Herbalife24, they can see that we've got both, a tremendous business opportunity but also a product line that is directly related to what they do everyday. So I think we are seeing this having an impact in a number of areas for us and that would just be a summary of all of that.

And for your guidance for next year, it seems like embedded in that guidance is a little bit more price mix than maybe what we've seen in 2011, can you give any color on that?

I might give you a little bit of color. Like I said, 200 basis point of the 600 basis point impact from currency was really just using June rates and not average year-to-date rates. These average year-to-date rates, it’s really a 400 basis point impact. There's a couple of components ahead and there is a little bit of timing. There's a little bit of market conversions where we have some third party countries that we sell to a third party, that next year will be taking operation over to where we just really accounting has changes the gross to net. Then there's about little under 200 basis points in mixed price combined.

Your next question comes from Tim Ramey with DA Davidson.

You know that you’ve talked a lot about distributor engagement and the increase in the average active associates that are leaders. Do you have a sense of what's that doing to incomes across the range of your distributors, is part of this -- I assume its kind of obvious, but part of the distributor engagement is people are making a lot more money?

So, Tim, I don’t know that we’ve got an exact number on that, but there certainly is a correlation because obviously what we see when you got an increased number of sales leaders is that translates -- that’s driven by the fact of having a stronger customer base ordering more regularly. And so effectively, you know, it’s an indication that we have got people who’re building a long-term sustainable income, and of course the critical part of that, Tim, is that that resulted in increased movement of the marketing plan. And so I think you’ve got a combination of factors, more activity, more customers, moving up to marketing plan and that combination then converts into higher income.

And does some of these really stratospheric growth rates that we saw in Russia and elsewhere, and which -- that just seem hard to execute, can you talk about, some of, I guess, you mentioned or John did last night, that there were some supply chain inefficiencies that resulted from a strong volume growth. Is some of this volume growth coming at a higher cost to deliver, given that the rates are just so stunning?

This is John, Tim. There is not a fundamental change in the model but the reality is when you are growing at 20-plus percent and even higher in certain markets. Efficiency isn’t the most critical issue. It’s really supplying our distributors with products. So you need to take the order shift, you have the product, shift the product path to our distributors. Those are the three most critical components we have and we will do whatever it takes to support that right because when the distributor is ordering product is because they have a customer in there selling that product and we want to make sure we support it. And in the short-term, when we have high growth rates, mainly our freight product, we may add inventory to our marketplace, but it is not a fundamental shift in the cost structure. It is more of a short-term inefficiencies to support them. They are in, -- growth we’re seeing in certain markets.

Great. And probably, I think it’s worth mentioning. I haven’t had too many 10 wagers in my career but when we get to 65 and not if then when we get to $65, it’s just nice to point out that this is a 10 wager of the March ‘09 number, congratulations on that?

Your next question comes from Scott Van Winkle with Canaccord Adams.

Thanks. Most of my questions had been asked. I have a question about new products in kind of carrying on the conversation about 24 and how it, you know, attracts the new distributor group and a new selling model. Is that important with new products and my question is as nutrition clubs grow as a percentage of your total sales, and the focus is on the core three products. Does new product innovation have any less of an impact in driving in a momentum arc of our sales?

Hi, Scott, It’s Michael. 24, let me start there. 24, we believe, and I am going to repeat basically what Des says, it has a chance to open up some new doors without a doubt. We’re seeing a younger distributor come to this company for many reasons. Obviously, there is an economy opportunity, but it’s the product opportunity that appeals to them all. So they can talk. The people in the younger segment may not always be interested in weight-loss or weight management, you know, they haven’t had that unfortunate moment yet in life where their waist has expanded to the point where they’re just out of control with it. But it offers an opportunity for them to get excited about this company, engage in this company with a product that is very useful for the target market area. So, that’s why you are seeing these boot camps, and these type of business opportunity offerings work so well force. So I don’t -- we’re kind of on the cusp of understanding the cannibalization of Herbalife24, but I am not sure we’re going see it in the way we had kind of early expected it. On the other side as far as expanding the basic three offerings, you’re going to see more and more about Formula 1 as we go down the road. You’re going to see boost restored, you’re going to see opportunities for distributor to sell product inside and have people walk away with products from their clubs and that’s an opportunity for us to build and expand on this bit. Des, you want to add anything on that?

I think absolutely, I mean at the end of the day, new products drive excitement and this is the business that it gives another reason for our distributors thought to be, whether in the clubs, whether outside the clubs. So we’re keeping the products on the cutting edge, our reformulations, so we’re always, always the best signs that always going to be part. And then the last thing I would mention is seasonal flavors Scott, so we’ve had tremendous success with seasonal flavors for those of you who tried the Pumpkin Spice or the Orange Creamsicle, you will know what I am talking about. But you know again a significant factor and excitement and the driving reasons for conversations.

And then quickly on iChange which I think is just an awesome tool. Are there any challenges like testimonials or regulatory or anything like that you have to be careful with setting up a network like that?

So there has always occasional challenges because obviously our customers are leaving comments and obviously our customers get excited about product’s results but obviously it’s something that we closely monitor Scott, and if we see anything that’s inappropriate then we respond very quickly. And then the other thing Scott, as well as of course, we train our distributors so that constantly on this message of no medical claims you know so that they also are acting as observers out there and if they see anything inappropriate many of them will respond to us and let us know.

Your next question comes from Anand Vankawala with Avondale partners.

Just one quick follow-up, as far as share repurchase goes, it’s the $200 million you mentioned built into the fiscal ’12 guidance?

Yeah, it’s built in as an average spread over the year.

Your next question comes from Chris Ferrara with Bank of America

But just in Central and South America right I guess in last five or over the last six quarters your edge have been I guess in the range of 60,000 to 75,000. This quarter it’s like 107,000 and I know you talked about how strong the markets have been, but what drove that immediate that big jump up this quarter was there anything specific to think of?

Yeah so Chris, there are two factors, obviously one is increased distributor engagement and the second factor is that we did begin a test in all countries in South and Central America other than Brazil where we tested a lower cost IBP which is directionally related to income levels in different countries. And so we’re monitoring that closely because for us the issue really isn’t whether we bring in more distributors or we sell more IBP’s because we assume that was a given. So really for us as to monitor what happens with those distributors when they come in to the business and see what the engagement level is. So I think that’s one of the things that drove the new distributors, but again for us its an interesting experiment, we’re certainly with initial results but the real issue is what happens now and over the next six months with those distributors and the systemized training and the impact of that and so on.

And then I guess John real quick, the relationship you gave between I guess 1% FX hit on top-line at $0.05 a share, it sounds like that relationship deviates in the 2012 guidance so I think you were saying may be four points of FX hit, but its more like $0.25 to $0.28 of EPS, is there a particular reason why it would be different in this 2012 guidance or I misunderstand it?

I think it’s a different context. So versus the guidance a 1% change in all of our currencies that are in our basket will drive a $0.05 change to the guidance we provided. What I was trying and I hope I answered to Pierre’s question right when he asked this, the $0.25 impact is the year-over-year impact from currency change and the reason why it’s a lower number is, Q4 this year is also impacted by currency. They don't really have a full year impact next year versus 2011, so it was a slightly different context.

At this time, there are no further questions. Gentlemen, are there any closing remarks?

Just a few real quick, thank you everyone for tuning in this morning. It’s always good to seeing wake up every morning, get online and see what's impacted the world in the last eight hours and this has obviously been a world of great impacts lately. And the way I put it, its quite simply is bad news on the outside of Herbalife and damn good news on the inside in our world. We focus internally on team Herbalife which is employees and distributors dedicated to our mission for nutrition. Tomorrow, most of us and our management team will fly to Singapore for meetings with our global management team to focus on continuing our momentum by transferring best practices market-to-market. After three days with our management teams will welcome our top 50 distributors from around the world for two days of further discussion on how we reach our near-term goals, our five year plan and our 10 year aspirational opportunity. We work closely with our independent Herbalife distributor leadership on almost every aspect of how we go to market, our business is better and our future brighter because of both the global megatrends and our incredible team Herbalife which is once, again repeating myself, our employees and our distributors who work together taking our business to new heights. Thanks again for your support. We look forward to seeing you at the end of next quarter.

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