Good afternoon, and thank you for joining the Fourth Quarter and Full-Year 2015 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 Alan Quan, the company's Vice President Investor Relations. I would now like to turn the call over to Alan Quan 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 today's earnings release and our SEC filings for a complete discussion of risks associated with these forward-looking statements in 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 that these non-GAAP financial measures assist management and investors in evaluating and preparing 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 our Chairman and CEO, Michael Johnson.

Thank you, Alan. Good afternoon. We're pleased to report that 2015 finished strongly returning the volume growth and exceeding the financial expectations that we set out at the start of the year. This is a testament to the fact that Herbalife is well positioned in a growing worldwide market for nutrition, health and wellness, and of course to the hard work and dedication of our members and employees. These results confirm our belief that we're on the right path for continued sustainable growth. So let me take a moment and recap some of the highlights for the fourth quarter. Total worldwide volume points grew 5% compared to the fourth quarter of 2014. This significantly exceeds the high-end of our guidance which was 1.5% growth. This result also reflects the first time in five quarters that we reported year-over-year volume point growth. Our net sales in quarter four $1.1 billion, up 9.7% on local currency basis versus the fourth quarter of 2014. In terms of profitability, adjusted EPS for the quarter was $1.19 per diluted share. Again, this significantly exceeded the high-end of our guidance of $0.95 per diluted share. We continued this quarter to demonstrate the sustainability of our business and our members' resolve to succeeding through specific market challenges. For instance, Mexico, it was up 4% in quarter four on a volume point basis compared to the same period last year, and that's despite the impact of the new 16% VAT that was imposed in quarter three. Additionally, full-year reported net sales were $4.5 billion, up 4.7% in local currency, and adjusted EPS was $5 per diluted share. With approximately 80% of our volume generated outside the U.S., currency exchange rates continued to impact our reported results. This is the case for all companies doing business globally. John will…

Thank you, Michael. Today, I will start by reviewing the company's fourth quarter 2015 reported and adjusted results, including key market highlights. I will then discuss full year 2015 results, followed by first quarter and full year 2016 guidance. For the fourth quarter 2015, volume points grew 5% compared to the prior year period, with approximately three quarters of our markets experiencing volume growth during the quarter. The 5% growth in volume was 350 basis points above the high end of our guidance, with approximately 100 basis points to 150 basis points of the growth being a result of Q4 price increases in India and Indonesia, that we believe had the effect of pulling some volume forward from Q1 2016. Worldwide net sales in the fourth quarter were $1.1 billion, down 3.1% on a reported basis, compared to the same period in 2014, primarily due to the continuing, unfavorable impact of foreign currency. On a constant currency basis, worldwide net sales were up 9.7% in total, or 8.5% adjusted for Venezuela. Adjusted EPS of $1.19 per diluted share came above the high-end of our guidance range of $0.85 to $0.95. Reported EPS of $0.98 per diluted share compared to $1.21 per diluted share for the same period last year. Currency movements had an adverse impact of $0.30 on our fourth quarter adjusted EPS compared to last year's fourth quarter. Like many global companies, currency translation continues to have a significant impact on our reported results, the expectations of which are included on our guidance, and that I will address in more depth later in the call. As Michael stated earlier, the key takeaway from our fourth quarter is that we return to volume point growth, meeting the expectations that we had communicated at the start of the year. We saw…

Thanks, John. I also wanted to share today that we filed updated disclosures in our 10-K, and I'd like to read you an important excerpt. The company is currently in discussions with the FTC regarding a potential resolution of these matters. Possible range of outcomes include the filing by the FTC of a contested civil complaint or further discussions leading towards settlement, which could include monetary penalties and other relief, or the closure of these matters without action. For almost two years, the company has been cooperating with the investigation, and at this time, it is difficult to predict the timing and the likely outcome of these matters. Moreover, no assurances can be given that the outcome of these matters will not have a material adverse impact on the company's business operations, its financial condition, or its results of operations. And at the present time, the company is unable to estimate a range of potential loss, if any, relating to these matters. We cannot comment on the scope, duration or the outcome of the investigation at this time. We will provide updates when appropriate to do so. Okay. Let's get on to the Q&A.

Our first question is from the line of Tim Ramey with Pivotal Research.

Hi, Tim.

Congratulations. As I kind of put the numbers on my model, the thing that was sort of screaming up was inflection point, and that's not inconsistent with what you've been telling us all year. I think you told us that the fourth quarter would likely be an inflection point in volumes. And so all that feels really good, however, the 1Q volume guidance doesn't really show a continuation of that. How should we reconcile those two thoughts?

Yeah. I think (27:19) my prepared comments, Tim, so we had two markets in the fourth quarter, it had a price increase, it had the effect of changing the timing of sales from what would have been Q1 of 2016 into Q4 of 2015, and that was India and Indonesia. Somewhere about 15 million to 20 million volume points. So without that impact, Q4 would have been among 3.5% growth, and we would have added in Q1 to our guidance another 150 basis points, so that would have kind of put it on par. So that's primarily a different (27:55) little things. So Venezuela had a really significant price increase last March which pulled a lot of volume into Q1 last year. And so there's a handful of other things, but the core difference is the timing of price increases in Indonesia and India.

But in just sort of referring around terms, do you feel like there has been an inflection point that the changes in the compensation system that you implemented now, sort of worked their way through, and are having positive benefits in the business. I guess, I'd love to hear you reiterate that.

Yeah. Well, so I agree with most of that. I mean, I don't know if I defined it as inflection point, but I think it's on track and maybe slightly better in Q4 than we had expected. I think the real benefit in Q4 excluding the price increases in the two markets (28:51) came in Mexico, which really adapted really well to this 16% VAT, a little better than we had expected. But the core of what you said is accurate, which is most of the markets have cycle through the impact of margin change. We're not completely there, remember, we instituted it in February of last year so March was kind of a first month of all those changes. So we've got a couple of months left in Q1 before we completely cycle through it. But clearly, in our results you can see that most markets have adapted and cycle through it. I won't say all, so we still have a challenging career. But outside of that, I think most markets have adapted

Congrats.

Thank you.

Our next question is from the line of Anna Glaessgen from SunTrust.

Hi. I'm on for Mike. So just looking at your update on volume growth, if you could just clarify and give some more color on what you mean by it's absolutely unchanged, that's like the translation is really the impact there?

Yeah. Sure. So we didn't change the absolute value of the amount of volume once we expected due next year but because we beat Q4, it translates to a slightly lower growth rate.

Right.

And the reason we didn't roll that forward is because some of the beat in Q4 was a result of timing differences that pulled away from Q1.

Okay. Great. And then, just one more, is there anything that surprised you guys, positive or negative, as far as the global rollout of the 12-month qualifying period?

No. I think – there were nuances here and there that may have surprised us, but overall on a broad scale, we were able to predict pretty well the impact. And I think you can tell that by our performance and how it improved from Q2 to Q3, and then further improved from Q3 to Q4. And the thing to note is in Q4 the volume point trends in all six regions were better than they were in Q3. So there were no major surprises.

Okay. Thank you very much.

We do have a question from the line of Meredith Adler with Barclays Capital.

I was wondering if you could talk a little bit about expenses. As you see volume points do better, will you be pulling back on some of the things that you were most conservative about? I think, I heard that you won't be combining extravaganzas in the U.S. this coming year like you did last year. Are there other things you're doing or are you pacing it out as the volume point growth accelerates?

So we've been pretty prudent on the cost side through the marketing plan changes, and we will continue to make sure that volume is there before we add back expenses. But let me correct – I don't think we combine the extravagance in the U.S. as a cost or savings measure. That was more of a business decision that we think is better for our members. But if you look at margins next year, there's really two things impacting margins; one is, there's a mix issue 2016 over 2015 of about 50 basis points; and then it's really currency. So outside of that, we're not getting a lot of leverage because we are expecting to reinvest next year as we see growth. But we want to do it after we see the growth.

Okay. And then if you maybe could talk about Korea, I don't know whether you expected the results you've got or were you disappointed. And what are the plans to fix it, or is it as mature and as it's going to be?

Yeah. Hi Meredith, this is Des. So look, we always knew that Korea was a different (33:05) because obviously in Korea there was the cumulative effect of both the worldwide marketing plan change that we have obviously a lot of experience with another market, and then the fact that the Korea marketing plan is unique to itself, and therefore there was a further modification there. So I think certainly when you have the cumulative effect of that, it had an impact possibly little beyond what we expected, but we are vigorously engaged with our distributor leadership there in terms of the same transition that we successfully accomplished in other markets.

Okay. Great. And then I have another question that I don't know if you're comfortable answering. But this discussion with the FTC, can you just say anything about when it's started?

So you are right. There's nothing else we can say other than what we disclosed in our 10-K.

All right. I had to ask. Thank you.

I don't think we have any more questions queued in, so...

All right. Light on questions today. Listen, we were incredibly pleased with the performance in 2015, especially the ending in the strong fourth quarter that we had. As we look to 2016, we are confident that the positive macro trends coupled with our execution of the growth strategy will continue to position us for success. We've got a lot of really, really good things going in the marketplace. We're pretty excited about it, we're excited about our members. I want to say thank you to them of course for their passion and their hard work, and especially the team (34:37) working with our members to support our customers to change their life, and to build frankly a better distributed health platform than just about anybody out there. So thank you very much. Look forward to seeing you all next quarter. Thank you.