Good morning and thank you for joining the Second Quarter 2012 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 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, prepared in accordance with U.S. generally accepted accounting principles, referred to by the Securities and Exchange Commission as non-GAAP financial measures. We believe these non-GAAP financial measures assist management and investors in evaluating and comparing period-to-period results of operations in a more meaningful and consistent manner. Please refer to the Investor Relations section of our website, herbalife.com, to find our press release for this quarter, which contains a reconciliation of these measures. Additionally, when management makes reference to volume during this conference call, they are referring to volume points. I’ll now turn the call over to Michael.

Thanks, Brett. Good morning everyone, and welcome to our second quarter 2012 earnings conference call. As you know, it’s been a unique quarter, but the results that we are going to discuss today demonstrate that the noise of the past few months has been outside, not inside Herbalife. As a testament to the strength of our distributors and our business, we are happy to report another record quarter. We continued to demonstrate financial performance with another record quarter and for the first time in our 32-year history our net sales topped $1 billion in a quarter; that’s up 17%. Volume points of 1.2 billion increased by 23% over the prior year second quarter, and EPS is $1.10, a 25% increase. Our growth continues to be very broad-based. Each of our six regions experienced strong double-digit volume point growth in the quarter. Five of our regions – Asia, North America, Mexico, China, South and Central America – exceeded 15% volume growth. EMEA had a 13% increase in volume point. Average active sales leaders increased 24% in the quarter and Des will provide more color around these regional results in just a minute. Our financial performance has never been stronger. The consistency of our growth in financial results is due to the dedication and hard work of everyone at team Herbalife. So I want to say thank you to our independent distributors and to our employees around the world for another record performance. For more than 32 years, Herbalife independent distributors and employees have been helping millions of people achieve their weight management and nutrition goals. This has always been the culture at Herbalife and good nutrition has never been more relevant or important than now. Obesity continues to be a major health issue around the world, and 64% of our sales…

Thank you, Michael. The second quarter is our fourth consecutive quarter of more than 1 billion volume points and was 23% higher than last year’s second quarter results and is now the highest volume quarter in Herbalife’s history. As Michael mentioned, we continue to be very pleased with the momentum we see in the underlying trends in our business, as all six regions posted strong double-digit volume point growth. The main driver of our growth continues to be the consistent execution of the business methods that we have been discussing with you all for the past several years. The adoption and expansion of daily consumption business methods augmented with the expanded use of systemized training methods 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 camps, is that the distributor and their consumer have much more frequent contact than is normal for traditional direct sellers. For those on this call that have visited nutrition clubs or participated in a fit camp or a 12-week weight loss challenge, you have seen that while the product and product results are the main drivers, the social elements of the clubs, the fit camps and weight loss challenges, is also very important. Whether it is the Gen H crowd at the fit camp, a group of mothers meeting up with their health coach in a nutrition club after dropping children off at preschool, or the regulars at a weight loss challenge, it is the stickiness of the daily consumption models that is increasing distributor productivity and helping to drive growth. We estimate that in the second quarter…

Thank you. I’ll start my prepared comments with a review of the second quarter results followed by commentary regarding our guidance and then I’ll end with some remarks on our new share repurchase authorization and extended credit facility. For the second quarter, we reported net sales of $1 billion, an increase to 17.3% compared to the second quarter of 2011. As you all know, we faced a big currency headwind in the quarter as foreign exchange rates had an approximate 810 basis point drag on net sales. Gross profit margins in the quarter were slightly below last year’s, but slightly up sequentially. There is nothing material to note during the quarter with respect to cost of sales. However, on a year-over-year basis, there was a small increase in inventory reserves that was partially offset by an incremental benefit from our Seed-to-Feed strategy. Turning to operating margin: operating margins at 18.1% represents approximately 70 basis point improvement compared to the prior year. The improvement is mainly driven by the short-term leverage from higher sales. Looking forward, operating margins will likely decline sequentially as we invest behind the growth and recognize the impact of the strengthening dollar. A couple of noteworthy items in SG&A, similar to the first quarter of this year, we recognized a $2 million loss on the repatriation of some funds from Venezuela. The effective exchange rate of the transactions in the quarter was approximately 9 bolivars to $1, or about 40% lower than the SITME rate of 5.3 that current accounting guidance require we use to re-measure our results in Venezuela. Additionally, excluding Venezuela, SG&A during the quarter this year includes approximately $1.2 million in foreign currency hedging and transaction gains compared to approximately $5.5 million in losses recognized from these same items during the second quarter of…

(Operator Instructions). You have a question from Tim Ramey with DA Davidson. Tim Ramey – DA Davidson: Good morning and congratulations on a great quarter. I guess, does the piece that I think I’m impressed with and would love to hear you talk a little bit more about is kind of the increased level of productivity of distributors through the distributor engagement. I mean, I think – if I’m getting the number right, I think it was North America you had only 7% new distributors, but you had 18% increase in average actives. And to me, that variance is telling me greater distributor engagement. Can you talk a little bit more about that?

Sure. Sure, Tim, happy to do so. So I think this is a combination of three different strategies all coming together effectively in the perfect storm. First is you’ve got daily consumption, Tim, which, as you know, has continued to drive our business now for many years, this focus on creating long-term customers. That is supplemented then by a systemized training approach where new distributors coming into the business are basically slotted into training programs that really helps not just to educate them about the business, but helps support them, particularly during that first critical 90, 120 days in the business. And, then lastly, you’ve got a city-by-city approach, where you’ve got distributor leaders taking responsibility for their city, working together to create a systemized training in that city and also working together to enhance the brand and image of Herbalife in that city. So I think it’s a combination of all of those factors that together is driving that distributor engagement and performance. Tim Ramey – DA Davidson: Yeah. I think of city to city, sort of, on your Russia model or some markets were perhaps they’re less developed, but it sounds like there’s a lot of efficacy in the – in North America and in Europe – or I mean in the U.S. as well?

Absolutely. We see this, Tim, as being a hugely important initiative for growing deeper in our communities. So, as you know, as part of our Herbalife decade plan, our goal is to triple in volume over that 10-year period and essentially our penetration is a critical part of that. And what we’re seeing is that because of the city-by-city approach, whether it’s in emerging markets or established markets like the U.S., it is equally valid and helping us accomplish all our objectives of increasing distributor engagement, increasing brand awareness and creating more long-term customers, which is what we’re all about these days. Tim Ramey – DA Davidson: Great. Just a quick one for John, I mean, great sometimes – rainbow that you don’t expect – the opportunity to buy back all this stock at $46 has to be thought of as a good thing given the last 30 days was not so fun – or 90 days, I should say. How aggressive do you expect to be with the next share repurchase? I thought it was interesting that you – that you took out the financing that would make it sound like you were going to continue to be aggressive?

Yeah. I don’t want to give you the wrong impression, our intention is to execute the buyback that was authorized over time, utilizing our future earnings and not to accelerate. Having said that, we certainly want to have the ability to accelerate if we deem – deem it appropriate. So at this point in time, we have not included any buyback, any future buyback in our guidance, and I think it’s safe to say at this point, we’ll just keep it as dry powder for a little while. Tim Ramey – DA Davidson: Thanks a lot, John.

Your next question comes from John San Marco with Janney. John San Marco – Janney: Thanks. Good morning and congratulations. John, I’m just – just a quick clarification on your last comment, you said guidance reflects no share repurchasing as in none at all or is it nothing in addition to the regular $50 million a quarter piece?

Nothing in addition to what was executed as part of the share repurchase agreement we announced in May – John San Marco – Janney: Okay.

– so not $50 million a quarter – not. John San Marco – Janney: Okay. And moving on to another housekeeping item, what’s different about Brazil that you’re not trialing the IBP promotion there?

It’s simply a matter of language, John. So the reason we adopted in all of the markets in South and Central America is because they’re all Spanish speaking, and so we wanted to confine the test to an area that was geographically simple for us and that’s the sole reason. John San Marco – Janney: Okay. That’s helpful. And then in terms of the U.S., what – I want to make sure I got my numbers right. I think Michael said that 30% to 35% of volume in the U.S. is daily consumption and then I think you stuck to the number that was about 40% of global volume is from daily consumption. Why do you think it is that the U.S. under-indexes? Because if I remember correctly, it was the second market where daily consumption sort of became a phenomenon. So why do you think it under-indexes, and do you think it has the same long-term potential in terms of shifting mix towards daily consumption?

Yeah. So the answer is, John, because the clubs initially were adopted by our Latino group in the United States, and it was based on the success of the Latino group that then they were adopted within the general market. But that was probably about two years later, and that’s why you’re seeing that, by comparison, the percentage involved is lower today, but as far as future potential, we’re very bullish upon the growth now that’s happening in the general market. And frankly, that growth in the general market is spurring increased growth in the Latino markets. And although, we don’t bifurcate the two anymore, as you know, the reality is that the future is very bright for the adoption and continued expansion of clubs and daily consumption in the U.S. John San Marco – Janney: I’m sorry. When did you characterize that the daily consumption got started in the general market? Just I missed that part.

So it was about 2010, about two years after – after the adoption in the Latino market. John San Marco – Janney: Okay. My fault. And then, lastly, in the past, you had spoken some about strategizing your product development around the nutrition club footprint you now have. Where does that stand? Because it still looks to me like substantially all of the nutrition club sales are the three main products. I know you mentioned the skincare item in Mexico. I’m just wondering if there’s any, sort of, bigger picture updates on where you stand getting new products through your club footprint?

Yeah. So – so, John, as you know, Mexico is where the clubs began. That’s where we have this tremendous penetration (inaudible) and tremendous adoption there. So, one – two things I would mention. First of all, in Mexico, as we mentioned, we’ve introduced two products – one a shake additive which actually helps greater consistency, greater taste for the shake in Mexico. The second is the skincare products which effectively enable us to have a very low cost, daily consumption skincare product. So that’s focused on Mexico. As far as other markets, the adoption of the Herbalife 24 line has been hugely impactful in a club context because, as you know, we have many distributors around the world now creating fitness clubs, which are very much focused on the Generation H group, a young, active, healthy lifestyle and the Herbalife 24 product line, although not developed specifically for the clubs, has actually very much contributed to that – to their growth and success. John San Marco – Janney: Okay. Thanks for the color and thanks for taking the questions.

Sure. Thank you, John.

Your next question comes from Linda Bolton Weiser with Caris & Company. Linda Weiser – Caris & Company: Hi. I was wondering if you could give us an update if there’s any – been any additional activity developing the Angelina machines. I know you had talked about testing them in some markets. Any information you could give on that would helpful.

Yeah. Linda Weiser – Caris & Company: And then also if you could update us on your facility progression in terms of the China plant and also the facility in California and how much further that has ramped up? Thanks a lot.

Sure, Linda. So – so for those of you on the call who may not be familiar, Angelina is the internal code name that we’ve actually given to a project of an automated sales center. It gives us the ability to provide our distributors with 24/7 access to product, and we believe this is going to be an integral part of our city-by-city approach in making it easier for our products – for our distributors to get access to our products 24/7. The initial test units of this automated sales center have actually just been rolled out; one in Holland, one in Russia. And then through the remainder of the year, we’re going to see further test units rolled out elsewhere. So it’s too early to tell, Linda, what the impact of those would be, but obviously we believe it’s going to be very significant. In relation to other questions, let me pass over to John.

Yeah. I’ll give you a quick update on manufacturing. I’ll break it into a couple of pieces. The facility in California produced a little under 29% of our inner nutrition production needs in the second quarter. And then our production facility in China produced around 5%, so we’re up a little over a third of our inner nutrition production was self-manufactured. We are in the process of actually looking for a additional facility on the East Coast of the United States for business continuity reasons and for support of the tremendous growth we have. We’ll certainly bring more information forward as we finalize those plans in the next couple of months. And as it relates to our extraction facility in China, we’re pleased to announce that we had our first production run in June of corn soup. It’s still early; the facility is ramping up. It will continue to ramp up throughout the rest of this year, and I think we should have a good update for you maybe next quarter. Or if not next quarter, certainly the quarter after as to how that ramp up is going. Linda Weiser – Caris & Company: Thanks. That’s all I had.

Thank you, Linda.

Your next question comes from Scott Van Winkle with Canaccord.

Hey, Scott. Scott Van Winkle – Canaccord: Hey, thanks – so just following up on the extraction facility in China, when that thing’s up and running a year or two from now, what percentage of your products will be using ingredients from that facility?

The way we defined it, is that 100% of our botanical extraction ingredients will come from that facility. So that’s – and that is specific for botanical extraction. So it doesn’t includes soy. Soy will come from our soy vendors. And our vitamins will come from DSM on – our vendor with respect to those, the materials – excuse me, the minerals and vitamins. But all botanicals, 100% of our products will – 100% of our ingredient need will come from that facility. I kind of stumbled on that, but... Scott Van Winkle – Canaccord: Okay. Thanks. And then you mentioned soy, you know, kind of timely with the drought out there. What’s your position on soy and is there any possibility of taking pricing if you see some rising ingredient costs next year?

So we’re certainly at this point expecting some ingredient costs next year and we are working to cover those costs through whatever it is we have to do from a manufacturing standpoint to offset it from an efficiency standpoint or from a price increase. So I think we can at least cover the cost of any potential increase. Scott Van Winkle – Canaccord: And sticking with pricing, so in many of your markets, local currency growth grew at a modestly faster rate than volume point growth. Is that pricing or mix, or both?

It could be pricing or it could be timing of shipments. The volume point month is slightly different than the financial month. So in some cases, it’s timing; in some cases, it’s price. Scott Van Winkle – Canaccord: Okay. Like if you back into your Q4 guidance it looks like there’s not as much currency impact in the Q4 that – as we’re likely to see in the Q3. Is – is –

(Inaudible). Scott Van Winkle – Canaccord: (Inaudible) or what’s the driver?

Because the dollar strengthened a lot during the late third quarter, early fourth quarter of last year, so the comparison isn’t as negative as the third quarter. Scott Van Winkle – Canaccord: Perfect. And then on this Lieberman study, two questions; one, aren’t you amazed that we have 5%, almost 5% household penetration; and then, two, is there anything else you’re trying to get from this study, any other insights you can glean?

Well, I think – hi, Scott. It’s Michael. I think we’ll continue to glean more information. This is our first quarter with them. And – so as the research builds, we’ll be adding more questions, we’ll be working with them to understand our consumers a lot better. And I don’t think we’re amazed at 5 point – at that number, the 5 million households. I think that we knew there’s a strong consumer – a part of our business because the order patterns that we see, the repurchasing that’s taking place through the month. We knew that the patterns are very, very strong and some of the skepticism that’s out there about our consumer uptake is something we had to – we had to put to bed. Scott Van Winkle – Canaccord: Great, thanks. And then, John, one last question. Thanks for the information on the share repurchase and the timing of the shares being delivered. Can you just make it a little simple for us, what are you expecting for maybe a range of diluted share count in this third quarter?

That repurchase agreement should lower our share count by around 7.5 million shares in Q3 and the full 9.2 million shares in Q4. Scott Van Winkle – Canaccord: Thank you very much.

As there are no further questions in the queue, I will turn the call back over to Michael Johnson.

Well, thank you, everybody. We had a great quarter. And as Des mentioned in his – we were kidding him about it as he mentioned in his opening comments – he mentioned daily consumption 21 times, and that’s probably not enough. We have a tremendous business model built by very apt distributors and a wonderful team of employees. Our Team Herbalife is focused on great product, productive distributors and servicing customers. While our growth continues, we believe that the best, frankly, is ahead of us and we’re just getting started. You’ve heard that before from me and you’ll hear it again. So, we want to say thank you for your support. And for those of who are joining us for the Herbalife Triathlon, Los Angeles, good luck with your training, and we’ll see you soon. Thanks for being with us today. We appreciate it.

That concludes today’s conference call. You may now disconnect.