Good morning, and thank you for joining the Fourth Quarter and Full Year 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 and good morning everyone, and welcome to our fourth quarter and full year 2011 earnings call. As you read in our press release yesterday, we’ve just had a very strong fourth quarter and the best year in the company’s history. Fourth quarter sales were up 20% and EPS grew 25%. And for the year, sales grew 26% and EPS increased 37%. We now had seven consecutive quarters of double-digit growth in Volume Points and distributor engagements as well as two consecutive years of record sales leader retention. In 2011, we achieved a mile. So it’s very important to all of us, and team Herbalife. early in Herbalife’s history, Herbalife’s founder, Mark Hughes set an aspirational goal of $5 billion in retail sales and this has been an inspiration and motivation for everyone. In 2011, we’ve reached that goal and we exceeded it. So let me take a moment to congratulate everybody on team Herbalife, our distributors whose tireless efforts and commitment are making it easier than ever for consumers to access Herbalife’s nutrition product. And to our employees who understand the priority of supporting our distributors and building a world-class infrastructure. while you can see the strength of our business in the financials we reported yesterday record sales, volume and cash flow, the underlying fundamentals in our business are equally exciting and support our confidence and our belief in the future. These fundamentals are broad based volume point growth. For the quarter, we saw double-digit growth in all six regions and for the full year, five of our six regions, volume grew in excess of 10%. Our average active sales leaders increased 22% in 2011, an indication of a strong distributor engagement. Record sales leader retention, in 2011 we have retention levels in excess of 50%, the highest…

Thank you Michael. The fourth quarter was our second consecutive quarter of more than $1 billion volume point, a 23% increase over last year’s fourth quarter results and it’s the highest volume quarter in Herbalife’s history. And as Michael said, we are very pleased with the momentum we see in the underlying trends in our business as all six regions finished the quarter with double-digit Volume Point gain. The main driver of our growth continues to be the adoption and the expansion of daily consumption business method. Additionally, this initiative has been augmented with the expanded use of systemized training methods that enhance training for our distributors and sales leaders and our city-by-city approach continues to localize the Herbalife opportunity and distributor support. Daily consumption business methods not only drive increased distributor engagement, they also drive increased consumer engagement. One key characteristic of daily consumption business methods whether nutrition clubs, weight-loss challenges or distributor led fitness boot camp is that the distributor and their consumers have much more frequent contact than it is normal for traditional direct sellers. Throughout 2011, we were very pleased to see that the increased engagement we have been discussing for the past several quarters continue to translate into growth and Volume Point. Now let me provide regional highlights and color on some key regions. The North American region had another strong quarter, posting almost 18% net sales and local currency net sales growth and 16% growth in Volume Points, each compared to the prior year period. the new distributors increased 5% in the quarter and the average active sales leaders one of our key distributor engagement metrics increased 17% in the North American region compared to last year’s third quarter results. For the quarter, U.S. net sales grew 17% and Volume Points increased 16% versus…

Thank you, Des. I’ll first review the company’s fourth quarter results as compared to the year ago quarter, and then compare to guidance we provided in late October, after which I’ll discuss our guidance for Q1 and full year 2012. For the fourth quarter, we reported net sales of $884.6 million, an increase of 20% compared to the fourth quarter of 2010. For the period, foreign currency had a 310 basis point drag on net sales, and local currency net sales increased by 23%. Since Des has already walked through the details of our volume and net sales results by region, I’ll move on to gross margin, which improved by approximately 80 basis points compared to the fourth quarter of last year. There were two items to bring to your attention with respect to gross margin comparisons. First, our seed-to-feed strategy including H.I.M. manufacturing and our strategic softening efforts, benefited gross profit by slightly less than half the total variants. And secondly, foreign currency benefited gross margin compared to the fourth quarter of last year. I’ll go more into how foreign currency can impact our results during Investor Day next month. Let me add one comment now, for country that purchase most of their products in the U.S. such as Mexico as opposed to those purchasing most of their products locally such as Italy. The impact on cost of goods sold that you would expect to see some changes in foreign currency is essentially lagged by approximately one inventory return. Accordingly the impact from the strengthening dollar during the latter part of 2011 is reflected in our Q1 and full year 2012 guidance. Now let me turn to SG&A; SG&A as a percentage of sales was essentially flat for the quarter compared to a year ago. Excluding compensation to China,…

(Operator Instructions) The first question will come from John San Marco with Janney Montgomery. John P. San Marco – Janney Montgomery Scott LLC: Thanks. Good morning, everyone. Congratulations.

Thank you, John. John P. San Marco – Janney Montgomery Scott LLC: Can we talk a little bit more about this phenomenon of commercial club formation that you’re seeing in Mexico, presumably it cannibalizing some of the previously – what were previously home clubs. So, it would be helpful, if you could quantify maybe what percent of Mexican volumes come from daily consumption and how that compares to the prior year? Any other way you have to look at it to sort of confirm that daily consumption still has momentum in Mexico?

Yeah, John. Hi, this is, Des. Let me take that one. So John, we believe that daily consumption business methods continue to contribute approximately 70% of our volume in Mexico. We believe the transition from home clubs to commercial clubs is a very healthy development that it results in greater facility for training new distributors. We have greater visibility to commercial clubs through our field service program. So frankly in every respect we think this is a very positive development and is certainly contributing to the growth we’re seeing in Mexico today. John P. San Marco – Janney Montgomery Scott LLC: Okay. So I guess in your view when two home clubs become one commercial club and in your observation if one plus one equals something greater than two?

Yeah, absolutely, John and we’re seeing this, because obviously one of the things our distributors are really focused on now is the number of consumptions, the focus on creating duplication, a focus on making it easier for customers to transition the distributors, and then open their own clubs and frankly, this home commercial model, the systemized training that we’re now seeing introduced by many distributor leaders in Mexico, support that obviously by the company with nutrition club towards and so on. I think all of this is contributing to a combination, so that you’ve got this, as you say there's incremental effect to out rather in cannibalistic effect. John P. San Marco – Janney Montgomery Scott LLC: Okay. That's certainly showing up in the financial result. so, I guess second question how much – what was the percentage discount on the IBP in that end.

Yeah. This is, John. it was different by market. What we tried to do is develop an equivalent IBP price in each marketplace compared to the U.S. based on GDP for capital of the addressable audience. so it's different marketplace. John P. San Marco – Janney Montgomery Scott LLC: Okay. And do you have an estimate of what effect that had on your sales or on your pricing?

Well, didn't have much on our sales, they don't believe. I think it was a two months – maybe two and a half months test, a little too early to determine how successful it was. I mean, we’re excited about it early. but really, the objective of the test was not just to bring people in, but to bring people in at a high activity rate and we don’t know if that happened yet, that’s something we wanted to wait six months after promotion, look back at their activity levels and see if it was a successful promotion or not. so it's a little too early to tell. John P. San Marco – Janney Montgomery Scott LLC: Okay. And just last question, I was hoping you could talk about Taiwan and when we will anniversary those club closures there and then maybe what your outlook is once we get those anniversaries?

Yeah. So John, we're pretty close to that. but obviously, we think mid-year we're going to see that. but frankly, we should loose sight of the fact, that our business in Taiwan is very strong that we have there one of the highest penetrations of many commercial markets in the world. so obviously, it's down a little from those busy (inaudible) a year or so ago, and as you know, (inaudible) because of the company’s efforts, because I think a number of our clubs there had tended, had there too far into perception that they were becoming retail outlets and as you know, we’re absolutely committed to our direct selling model. and so as you know, we pulled back and closed a significant number of clubs, but the business that’s there is stable and we're very happy with that. John P. San Marco – Janney Montgomery Scott LLC: Okay. Thank you for taking the questions.

Sure, thanks.

Thank you, John.

The next question will come from Tim Ramey with D. A. Davidson. Timothy Ramey – D. A. Davidson & Co.: Good morning, congratulations, we're not worthy still.

Good morning, Tim. Timothy Ramey – D. A. Davidson & Co.: Good morning. I think you highlighted Korea and India as two of the top performers and I continue to be entreated by the performance in India, I wonder if you dive in a little further there in terms of how that markets developing, and what kind of milestones are ahead on that. I think you would indicate it was above to or had dropped into your top 10 markets.

Yeah. So Tim, we're obviously probably pleased to see what’s happening in Korea and in India, obviously two very different markets in terms of their stage, in terms of the acculturation of daily consumption. In India, obviously we’re excited by the growth that we see. at the same time, we’re somewhat cautious, Tim, because what’s very important to us is that our distributors’ ability to train and to mentor the number of new distributors coming into the business is very important. similarly, we are working hard to keep pace from an infrastructure perspective, from a theoretic perspective with that growth, so obviously we’re very happy about what we’re seeing in India, at the same time we got a note of caution there as we ensured that that growth is based on a strong foundation of daily consumption, but India for us is like a cricket match. Right it’s a three day event, it’s not a three hour event and so we’re looking very much a long term situation in Korea, in India rather than short term one. Timothy Ramey – D. A. Davidson & Co.: Right. If I can just follow-up John’s comment yesterday on the CapEx just sort of being tend to sort of 3% of sales, that begins to sound like there is a significant infrastructure build out that it isn’t just one project, it’s less project oriented and more systems oriented. Can you talk a little bit about kind of the uses of CapEx and what’s your thoughts are on kind of just budgeting at 3%?

So we model at 3%, we don’t budget at 3%, we actually have a very detailed CapEx budget, CapEx budget falls into three categories; maintenance portion which is $30 million, $35 million a year. There is a systems strategy that actually is a good portion of our strategic initiative budget within CapEx. And then there was manufacturing, and those are really the three buckets. Most of our IT investments at this point in time is distributor facing, trying to improve the service of our distributors increased access and it’s along those lines, but because it’s really just three buckets, you got the maintenance bucket that doesn’t change much. On the IT side, we’re on one instance of Oracle and everything is just a prerequisite of the next project. It’s limited on what you can invest at any one point in time and that 3% seems to be about all we can execute from more of a human capital and a financial capital standpoint. So I think 3% is more of a fallout, it’s not a starting point. We don’t budget 3% as a high level we actually do it at a detailed level and what we’re finding is 3% is a bottle we can execute. Timothy Ramey – D. A. Davidson & Co.: Perfect, thanks.

The next question will come from Mike Schwartz with SunTrust. Mike Schwartz – SunTrust Robinson Humphrey: Hi, good morning everyone.

Hi, Mike. Mike Schwartz – SunTrust Robinson Humphrey: Hey, just wanted to take a look at China. And I know you’re trying to kind of rain in any kind of positive commentary going on there, and you don’t want really get ahead of yourself, but was there anything you saw going from 3Q to 4Q and that gives you any kind of thoughts of how daily consumption is playing out? Are you seeing clubs start to touch a broader audience or you’re seeing greater productivity, what’s going on there?

So here is seeing, Mike, we’re seeing in China with the clubs is that as always we go through this cultivation process and that process normally takes two to three years. In China, first of all, its taking a bit longer because as you know China is a closed market, so we don’t have the benefit of having our international leaders there. The second thing in terms of the acceleration of growth, I think it’s partially due to the fact that we now see clubs emerging in lower income area as they work to find to create a model, which works better in that environment. And obviously that’s very positive and very healthy because our (inaudible) substantial, a higher income level in China today. The vast percentage of the population is not in that income bracket. And so, our sales leaders there are very correctly seeing how can they adopt the model, so that it can reach to a broader audience. But again Mike, as you highlighted, we remain cautious about China. It’s a very evolving marketplace, very unique market situation and that’s why we just not remain cautious. It’s very early days yet, we remain positive throughout the future, but we don’t want to get too bullish and get ahead of ourselves. Mike Schwartz – SunTrust Robinson Humphrey: Okay, great. Thanks for the color. And then the follow-up question just on the retention rate up to 52% in 2011. I know in some countries and you pointed out, Russia that stands in the 60%, 70% range. Is there any reason to think that the company wide number can’t get to a 60% to 70% number in the future?

We believe that it is possible and we’re working very hard to replicate the conditions that exist in Russia and many others markets where we have in excess of 60%. And essentially that’s why Mike you continue to hear us talk about the three elements that you heard at [Honors] last year. You’ll hear them again at the investor conference; you’ll hear them at the summit this year. We talk about systemized training about locations and about a city-by-city focus, because it’s really that city-by-city focus that is being led by our distributor leaders in Russia and around the world that is really contributing significantly to that. So, again, no reason at all, we believe that retention rates in excess of 60% are achievable and in fact, as part of our Herbalife Decade plan, we would like to see us get to an excess of 70%. Mike Schwartz – SunTrust Robinson Humphrey: Okay, wonderful. Thank you.

The next question will come from Anand Vankawala with Avondale Partners.

Hello, Anand?

He has withdrawn his question. The next question will come from Linda Bolton-Weiser with Caris.

Hi, Linda. Linda Bolton-Weiser – Caris & Company: Hi, in sharing with various distributors and asking things about the Herbalife24 product line, it seems that there is great optimism about the eventual potential of this product line, but that it really requires a slightly different sales method and presently different training for the distributors. Can you give a little more detail on what you’re thinking long-term with regard to how you’re going to better sell that line?

Hi, Linda, it’s, Michael. I think, Des mentioned it pretty well in his comments today that different business methods are going to spring with products like Herbalife24. We’ve got a new methodology starting and it’s usually distributors not the company, who to start this (inaudible) we unleash their entrepreneurial ambitions with a product like this. And then you’ll see things like fit clubs coming forth, you’re going to – as Des mentioned in his notes, we have a group here in West Los Angeles, that’s developed a whole new method of bringing people to the company and they’re bringing them not only the Herbalife24, but to our standard products to serve with that. It really is an eye-opener for us. It was something that we had in mind to list our brand, to list the opportunity to work with our sports teams more closely who response in and around the world, and have new business methods evolve from it. The creation in these business methods frankly has moved a little quicker than we had anticipated. And it’s a fabulous thing to see a younger more fit group coming in, not just concerned with weight loss, but concerned with total nutrition and fitness nutrition. So these will become organic just like so many things have in our company, we will then take it upon ourselves to make sure that these good ideas spreads for globally as quickly as possible. Linda Bolton-Weiser – Caris & Company: Great. And then, can I also ask about just kind of shifting to the balance sheet and cash flow, I mean your performances is great and your dividend increase is certainly impressive. But one can argue your balance sheet is actually under leverage given the consistency of your performance and growth et cetera. Would you consider sort of levering up a little bit more and being more aggressive on some sort of a share repurchase or something along those lines?

Linda, it’s, John, I’ll take this question. So it is an option. We have a credit line that has quite bit of capacity available right now. And so substantially we may consider it at some point in time. It would be used more if it is an overreaction in the stock or something that’s going on in the marketplace that doesn’t really impact Herbalife’s when the stock overreacts. But other than that, we’re going to keep returning our cash flow to invest as to dividend and buyback and if we decide to lever it up, it will be for a special circumstances. Linda Bolton-Weiser – Caris & Company: Great, and can I just make a one more.

Yeah. Linda Bolton-Weiser – Caris & Company: I mean, I guess you’re on inventory was up 36% year-over-year of course, you have really high sales growth, but is the inventory real high because of your infrastructure build or what’s going on there?

There is couple of things. So, first and foremost of course it is to support sales and 70% of the increase in the inventory is just tied to increase in sales. We have a couple of other things going on. One is, we stopped manufacturing that, right. So there are raw materials and [whip] that are now part of our inventory that we’re sitting at a vendor in prior periods, all right. So that’s about $7 million, which is not a big number, but that is a piece of it. And then we have some coursing strategies that as we take in more products into our facilities we are building buffer inventory from the current vendor to soften the transition. Linda Bolton-Weiser – Caris & Company: Great, thank you very much.

(Operator Instructions) And the next question will come from Gary Albanese with Auriga. Gary Albanese – Auriga: Hi, good morning everybody. I was wondering if you could address the boot camps in terms of the scale, how big is that effort right now? Is it regional wise, and then really what are the opportunities that you see in terms of coordinating that with the rest of business with the nutrition clubs and driving sales in the future?

Hi, Gary, this is, Des. So, Gary it’s in its very initial stages. and in fact, really the concept of a fit camp to boot camp is really tied into this whole question of healthy active lifestyle and another way of bringing customers to the company to be associated around that campfire. And – but initially, it’s in its very early stages. so we have a group here that’s created this in Southern California, it has been very successful, we are following as Michael mentioned, in relation to Herbalife24, our standard process where once we see an idea that our distributors have embraced, once we see it spreading across organizations, once we see distributors moving up the marketing plan, then our distributors follow success. and so what we do is that, we simply provide a platform to get that word out. and so again, Gary it's a testament to the power of our distributors, their entrepreneurial spirit, their ability to create and implement great ideas. But this is one in the very early stages, what will happen is that at our coming summit, this concept will be spoken out and then it will be taken around the world by distributors as they see that if something they can incorporate into their business. So, early stage is yes. but again, by the way, what's really interesting to us is that although it’s developed around the concept of fit camps on a beach, what we’re now seeing is some distributors adopt that to their local environment. So they’re having fit camps in parks, we’re going to see fit camps in malls, we’re going to see it a whole variety of different methods of implementing it in whatever local environment exists. So that's one of the exciting things about obviously, all that we’re seeing at Herbalife. Gary Albanese – Auriga: Yeah. I think the whole concept works very well with your model. Changing [stuff] could be the seed-to-feed program, what's the percentage or how do you see that growing into 2012. I mean, is that going to encompass more and more of your production or your inventory or your revenue?

All right, this is, John. our C2B strategy is a multi-year strategy, and it will ramp up in kind of a wavy fashion over the next three or four years, and you'll see some ramp up throughout 2012 where as we move some of our foreign production and see our current H.I.M. facility. We haven't gotten any more detailed in providing some visibility then, than what I’ve just given you right now. Gary Albanese – Auriga: Okay, okay. And just lastly, do you have any estimates for what in terms of percentage of revenue the daily consumption model is right now?

Yes. We've actually dug pretty deep into different types of analyses to come up with a good estimate, and it really ranges depending on how specifically get by market. and so we believe it’s between 34% and 41%. and probably about two thirds of our growth is coming from daily consumption right now. Gary Albanese – Auriga: Okay, great. Thank you very much.

The next question will come from Anand Vankawala with Avondale Partners. Anand Vankawala – Avondale Partners: Hi guys, thanks for taking my question. Most of my questions have been answered and so the only follow-up I have is do you have an estimate of how many daily consumption clubs or nutrition clubs there are right now worldwide?

Yes. So, now we actually have changed our philosophy on this, because initially when it was home clubs, we was really trying to keep a track of this, and then we [stopped] with that when we had been to commercial clubs. What we’re seeing in commercial clubs of course is that, we have many instances, we’ve got groups of distributors working together, and that's why we believe that individual location is no longer the best measurement to see growth in the clubs, because individual clubs can frankly high the true level of activity and engagement around the clubs, and that's why we're transitioning more to say what is this percentage of daily consumption. And obviously, by the way, daily consumption doesn’t just mean clubs; it means any method focused on creating permanent customers and building a business around them with increased access to them and so on. But directionally, that's why you’re going to start see us more reporting this percentage of volume based on daily consumption rather than individual club numbers. Anand Vankawala – Avondale Partners: Okay, great. Thank you. And then I guess just lastly with regard to Herbalife24, any commentary as far as whether you’re targeting specific in regards, I know that you’re saying that with the Generation H, you’re getting more traction with the Herbalife24, but I mean are you basically trying to attract the younger demographic and is that pretty much the focus going forward, or do you think you can get us through the remainder of the distributor base as well?

Well, Herballife24 is for people who have active lifestyles whether they go to a gym, whether they are participating on a team, whatever they’re doing there is an endurance product, or rebuilt products, or restore products in there we are very confident about the science behind these products in the formulation. So we think that the general public has a reception for either one or all of the products that are in line, there is a hydration product that I’m drinking every single day, that everybody is drinking around here. It's a broad range of consumers, it's a broad range of products that are in there. it's definitely for somebody who is interested in having a very healthy supplement in their active lifestyle. So while we’re seeing younger distributors come to it, I think that some of the branding done by it, some of the fund that’s around it, some of the interesting business models that are coming because of it is attracting a younger distributor to us who isn’t necessarily a weight loss distributor, but certainly is going to attract people to their club. Most people go to gyms, go to clubs to workout, because of weight management, that’s their big goal in life. So, it's going to have a intersection between the two, but it definitely has an opportunity to build new distributors for us, younger distributors for us, but it will work across all of our distribution base. Anand Vankawala – Avondale Partners: Okay. Do you have – can you share any metrics as far as what kind of distributor base in areas where Herbalife24 had been available for more than a quarter. What percent have actually ordered 24 product?

This is, John. It's a little too early for us to start giving outstats. I mean, the product really got launched in – the full set of products in late Q3, early Q4 and Europe was on the same timeframe. So it’s probably about six months away before we feel comfortable giving out statistics. Anand Vankawala – Avondale Partners: Okay. Thank you.

At this time, there are no further questions. I would like to turn the conference back over to management for any closing remarks.

I just wanted to thank everybody for being on the call today. I think you’ve heard some themes about sustainability, about just getting started, about strong [starts], strong fundamentals; the confidence that we have in Herbalife today is greater than ever before. We look into the future with a bold promise for our distributors, for our consumers, for our shareholders and (inaudible) system that this company is poised for its greatest time ever. we look forward to sharing more of those, of that information with you, what we're going to do and how we're going to do it out on our Investor Day. So please join us. it’s going to be an exciting time while you're here, and we'll show you the best of Herbalife and the best is yet to come.

Ladies and gentlemen, thank you for participating in today’s conference call. You may now disconnect.