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

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

Thanks, Brett. Good morning and welcome to our second quarter 2013 earnings call. Let me start by saying that Herbalife’s business is stronger than it’s ever been and the operating results announced yesterday are the best in the company’s history. It was a record performance from both top and bottom line perspectives. Second quarter net sales of 1.2 billion is 18% above last year’s second quarter. Our adjusted EPS of $1.41 increased 29% compared to the prior year period and we generated $183 million in free cash flow. The strong performance in the second quarter was an acceleration over the record results achieved in the first quarter. Volume points grew 14% year over year with growth in each of our six regions. South and Central America grew 33%, Asia Pacific grew 1%, China grew 49%, EMEA grew 16% and Mexico grew 8%. North America’s growth rate was 11% in the quarter compared to 2012. And more importantly its growth rate increased sequentially from the 4% in the first quarter. Sales of our top selling meal replacement product Formula 1 increased 16%, reflecting the ongoing expansion of daily consumption sales methods by our distributors which are making our products more accessible and affordable. Formula 1 and our other nutritional products provide meaningful solutions to millions of consumers who seek to improve their health and to manage their weight. Obesity, while it continues to be a global epidemic that poses serious health concerns, as well as at tremendous financial burden on public health systems around the world. Herbalife today has a mission for nutrition that is based on our belief that our independent sales force is helping mitigate the global obesity epidemic by offering high quality products, personalized coaching, and a social environment that inspires customers to eat better, engage with each…

Thank you, Michael. As you’ve just heard, we had another record quarter, our 15th consecutive quarter of double digital topline growth and our 8th consecutive quarter of more than 1 billion volume points. As Michael mentioned, we will soon begin implementing the nomenclature change, with new participants being termed members as opposed to distributors. So as we go through the discussion of the regional results, we will use the new terminology. June was the strongest volume month ever in Herbalife’s history. Such performance is reflective of our ongoing momentum and the breadth of growth that we see across our markets. Not only did 4 of our 6 regions post strong double-digit volume point growth but every region saw increases in average active sales leaders. Our members and sales leaders around the world actively continue their mission for nutrition, helping to provide great tasting, low calorie nutrition in communities amidst an increasing obesity epidemic. They consistently execute daily consumption methods to build stable, growing businesses. Now let me provide some highlights and data on our regions. The North American region had another record quarter. It posted 10% net sales growth and 11% growth in volume points, each compared to the prior year. Average active sales leaders with volume points increased 10% and new members increased 4% compared to last year’s second quarter results. The per capita volume point penetration for the region in the last 12 months was 3.4. This compares to 7.4 in Mexico and 9.2 in Korea and supports our belief that there is tremendous opportunity for future growth in this our oldest and largest region. Within the North American region, the continued strength of the U.S. market can be seen in a net sales growth of 11% and a volume point growth of 12% each versus the same…

Thank you, Des. As Michael said earlier in the call, we had a great quarter. But before reviewing our second quarter financial performance and the full year guidance provided in yesterday's announcement, let me provide an update on the reaudits. Similar to last quarter, we filed our second quarter 10-Q without the SAS 100 review and therefore without the required SOX-906 certifications. 10-K is complete in all of the respects including 302 CEO, CFO certifications as to the accuracy of financial information. When completed the 10-Q will be amended with the 906 certifications to reflect that it stands 100 review has been completed by PWC as part of the reaudits of the prior three years. The management and the audit committee believes that the financial statements covering the reference periods daily present in all material respects, the financial conditions and results of operations of the company as of the end of and for the reference periods and we continued to be relied upon. And at the company's internal controls over financial reporting or the factor during these periods. With respect to progress of the reaudits of 2010 through 2012 and the SAAS 100 reviews for each of the first two quarters of 2013, we expect to be completed and up to date no later in the end of this calendar year. Let me now review our financial results. Concerning the both to the second quarter of last year and to the guidance for this quarter that was provided to you in April. And then I'll comment on the updated guidance we provided yesterday. With respect to our financial results yesterday, we reported second quarter net sales of $1.2 billion, an increase of 18.2% compared to the second quarter 2012. Local currency net sales for the period increased 17.4% with a…

(Operator Instructions) Your first question comes from the line of Tim Ramey of D.A. Davidson. Tim Ramey – D.A. Davidson: John, I noted the fact that there were fully restated balance sheets for '10, '11 and '12 in the 10-Q filed last night. And it came to the balance sheet without an income statement so you must be pretty close on the re-look at the financials. Why do we think that it is far out at the end of the calendar year?

I think my words, Tim, were no later than the end of the calendar year.

It's going to be when it's going to be and as soon as this is ready we're going to release it. I think the outside timeline at the end of this year it is possible that it's done earlier. But it's a complex, time consuming process and we want to make sure we set expectations that we can achieve. Tim Ramey – D.A. Davidson: Sounds good. And then obviously one of the reasons why you're unable to repurchase stock at lower levels was the KPMG resignation. I know that you certainly have a very good cause of action against KPMG, will you add on both recovery of excess audit fees as well as other damage that may have been caused by their senior audit partners?

Tim, we can't comment on potential proceedings. Sorry.

Your next question comes from the line of John San Marco with Janney Capital Markets. John San Marco – Janney Montgomery Scott: I have a follow-up on your scripted comments John about capital allocation. Has the amount of cash that you need to keep on hand around the business does that change at all form two years ago when you just held about 250 or so?

No, it hasn't changed. I think what we spoke about on the last earnings call was just a need to get the new orders around Board and have some clarity as to what the timeline was. I think we made it clear that prior KPMG's resignation we were looking to enter into the debt deal, that deal fell apart, we now know we are under levered. No commitment on anything specific that we will do. But we will always look to great value for our shareholders and that includes looking at our capital structure. John San Marco – Janney Montgomery Scott: Okay, thanks. On Latin America, I was wondering if you could just sort of bit talk about in bigger picture sense, it was maybe the last segment you had accelerate out of '08 slow down and now it's been -- this is the biggest driver of growth. I guess what do you do there differently today, has it been impactful and what's the opportunity to take that to other regions?

So John this is Des. So, I think a couple of things, so a significant factor in South and Central America is obviously Brazil. A number of years ago, we sat down where there should be the leadership, we really work with them to improve business practices and retention rates and activity rates in Brazil. And since then, we've actually seen significantly stronger performance and consistent performance in Brazil, most recently in second quarter, 30% growth but of course John, it's not just about the growth and volume points because not only do we have 30% of growth in volume points in Brazil, we have a 26% increase in average active sales leaders. So it's about productivity, it's about engagement. In the Spanish speaking market, the Latin America has been obviously again tremendous leadership by our distributors there, but it's been a focus on daily consumption, focused on more and more training, more institutionalized support and frankly better product access throughout the region. So a whole combination of distributor leadership, engaged leadership, the factors and the company’s approach in terms of regionalization city-by-city and essentially the same strategy that has driven our growth in South and Central America is the same thing, that's our strategy around the world. It's daily consumption, systematized training, locations and a city-by-city approach. John San Marco – Janney Montgomery Scott: And then I was wondering if you can address the decline in total number of distributors during the quarter, was that driven or just maybe if you could -- what you can detail on that number?

So our focus today overall, John, is on productivity and engagement and not pure numbers. Obviously we are thrilled to see the significant number of new distributors joining us in United States as I've said in the prepared comments. The number of new distributors, new members in the second quarter, 80,000 new distributors came to us like in the second quarter, a record number. So we're very pleased to see that but overall our focus is on activity and engagement and helping our members -- to sale people.

This is John. Let me add one other thing too that's unique in the quarter. So in the first quarter when our sales leaders were – one, they were not retained, they were demoted to senior consultant for 90 days and actually dropped out of the system in the second quarter. We actually see that movement in this reported period. John San Marco – Janney Montgomery Scott: And do you think that had an incremental impact versus historical 2Qs and was that a bigger number this year?

No, this is part of the campaign, that was something we were testing as part of the business that we didn't do last year.

Your next question comes from the line of Scott Van Winkle with Canaccord Genuity. Scott Van Winkle – Canaccord Genuity: Des, I was wondering if you could talk a little bit more about Asia-Pacific and kind of you know sum-up you talked about markets puts and takes here and there. I am trying to wondering overall you mentioned some good metrics and average active supervisors, what the expectations are on volume and revenue in that region. And then I would love to hear a little more commentary on the disparity between the revenue of this last quarter and the average active if you could.

Yeah. Scott so on age specific really two key massages there. The first obviously in Korea, Korea represents about a third of our total business in the Asia-Pacific region. Korea as you know has achieved this tremendous volume points per capita just over nine significant number. So in Korea, I think we've reached just a natural plateau in the business while our distributors while the company regroups. That's something that traditionally happens in many markets and we believe that there is still growth ahead in Korea. But we're working with our Korean leadership now to focus on retention because retention has been one of our challenges there and so that's really our key focus on training, on retention and then frankly just overall more increased product access more training regarding clubs and so on. In the other markets in Asia Pacific region again a focus on the 5K qualification you know that we've introduced the first order limitation in India. And seeing the combination of 5-K, the first order limitation. Again our focus is on building a stronger foundation for growth ahead. Volume point penetration in the entire Asia-Pacific region is 0.6 and as you compare that to the advance markets like Korea, you will see there is huge opportunity for growth ahead. So, in the third quarter we predict slightly increased growth and then fourth quarter acceleration growth. So, overall we are going to have a growth story in Asia-Pacific. What you are seeing in Asia-Pacific today something that you saw in Brazil few years ago and China more recently where we want the distributor leadership to putting a stronger foundation for future growth. Scott Van Winkle – Canaccord Genuity: I appreciate the commentary on China. Are there any other metrics that I think for three to four years you've ended your China commentary with that cautionary statement at the end. Are there any other metrics we should watch or think of when we look at China kind of taking off this quarter?

So Scott, China -- we'll always be cautious about China because the reality is that we operate there in a market that is obviously subject to change at any time that we know we do, we have a tremendous relationship and we do a lot of focus in terms of government relation government activity. So the government is totally aware that we're a good call for citizen, but at the end of the day it's China. So, we're very pleased with what we see in China we see an accelerating business, we see tremendous strength in our fundamentals that's shown in the numbers in terms of presented active leaders. All the key metrics are very positive in China but frankly whether it's now or one year or five years or 10 years I think you're always going to hear as -- the same conservative team regarding China. Scott Van Winkle – Canaccord Genuity: Is there -- are there any parallels you can make between China and maybe other market more mature market where you saw the pain type of trajectory, is China just a different environment because of the different operating model?

So it's a different environment because of the same operating model, but the some fundamental deploy and that is that our business is focused on daily consumption. It's about people consuming our products every single day and that's the commonality whether it's China or whether it's any other market in the world.

The next question comes from the line of Sandy Chen with Asset Management. Sandy Chen – IT Asset Management: You noted John that you guys are under levered and that seems to be quite understatement. You have about 850 million in cash and 950 million in debt. So you are about 0.1 debt to EBITDA. Can you talk about what you think will be a normal leverage amount, the group average for consumer is about 1.5 times. So, you could take on another 1 billion in debt and that you’re audits on and if you use that for share repurchases or dividends, it could shrink your float by 15%. Is this the right way to think about what you guys have and how you would use your cash? Could you just rank order to cash use and then talk about the -- walk through the mechanics of, are they doing a tender offer as to where did you want 2 billion in the share repurchase program?

Yeah, obviously I can hear all those. First, we have a tremendous history of share repurchase having new purchase of $1.7 billion since 2007. If you know where it stands a bit and you know us well. Regarding appropriate debt levels that is a decision for forward. As you can imagine, I think we have communicated that investment grade debt level is not necessary investment grade debt but types of multiples that you'd see an investment grade company is something we would be comfortable with, that's something that has consistently been communicated. As far as the buyback goes and the execution of the buyback, I think that will be based on circumstances, the time we decide to do buyback. Yes, we’d do a buyback. Sandy Chen – IT Asset Management: And that timing and when your audited financials are complete.

No, I think what I said in my comments is we're back and we expect to be back in the market now that we have PWC on board and that we have visibility to the completion of the re-audits. Sandy Chen – IT Asset Management: Is that just normal open market share repurchase program?

Yeah, that's what's included in our guidance. Sandy Chen – IT Asset Management: And so what do you have left in your share repurchase program 750 million?

Little more -- almost 787. Sandy Chen – IT Asset Management: And could you go back to the board as soon as that would be complete to ask for more if necessary?

Yes, we will deal with that in time, that will be a board discussion. Again we have a strong history, Sandy, I mean you know us very well. We generated a lot of cash, we're not M&A oriented, that cash first and foremost goes into investing in our future, in our growth and then it goes back to our investors and with a heavy overweight so with share repurchase. And that's been a consistent theme for Herbalife now for six years. Sandy Chen – IT Asset Management: Okay. I guess just you have 850 million in cash on hand but in there are repurchase programs 780. So you could fund all of that with what you have currently without having with that market?

Look, we have a lot of cash as I've said in my opening remarks and we are under-levered and we'll do what we think is best for the long-term interest of our shareholders.

Your next question comes from the line of Tim Ramey with D.A. Davidson. Tim Ramey – D.A. Davidson: Yeah. Thanks for the follow-up. Guys maybe you could shed a little bit more light on the new classification which is a great initiative. Are you actively going to renegotiate or retry agreements for the existing distributors, or do you just plan to have this kind of cycle through the normal re-up period? And is there any change to member economics i.e. the cost to become a new member versus the cost to become a distributor previously?

Yeah. So, Tim, no cost, no change, this is literally a normal site to issue to bring that greater clarity when people look at our business models. So, essentially part is about to happen is that we are introducing a new member application and so, effectively, there really is no change, it will cycle through over the period of time. But very shortly, we'll have a new member application in the United States. If somebody coming to us will complete that they will return a member and then when they qualify the sales leader they will become the sales leader. So essentially it's really a sense of substitution of the term distributor for the term member, recognizing that the majority of people who historically completed a distributor application are joining for the purpose of a wholesale discount. They have no intention of doing the business as you know over 70% people did not -- never included anybody over 70% of people based on the consumer research signed up just to become a wholesale member. So, this change is simply reflective of the reality of our business and is intended clarity to an existing situation Tim Ramey – D.A. Davidson: Des, some of your peers have used an auto ship agreement as sort of an inducement to sign-up as to what their nomenclature is preferred member or preferred distributor or preferred customer. Wouldn't that have been an opportunity for you to do sort of something like that?

Tim, we don't favor order ship significantly for this reason. In our business it's all about the personal interactions between a distributor and their customers. And so from that perspective the idea of simply product shipping automatically just doesn't automatically gel with that. We want to encourage regular contact. If you think about it, that's one of the magics of a nutrition club. The fact is we've got regular contact three, four, five times a week between distributor and their customers. So frankly order ship programs for people just receiving products automatically. Certainly if a customer wishes to have something like that, we certainly explore but frankly as a matter of policy, it's not something that we really support and it's one of the points of difference between Herbalife and our competitors.

At this time, there are no further questions. Presenters, do you have any closing remarks?

Well, this is Michael and I just want to thank everybody for their questions and for participating today. We are obviously extremely proud of our distributors, our team members, everybody involved with Herbalife, our vendors all the products excellence is taking place in the company. As we said in today's call, our business has never been stronger and our guidance reflects our confidence that our business will continue to strengthen as we close out 2013. So get here at Herbalife and as we build it better and every day we believe this velocity will continue to make our company extremely valuable to you, our investors. So, we look forward to seeing you all on our -- and being with you all on our call next October or this October. So thank you very much onward and upward.

This concludes today's conference call. You may now disconnect.