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<div align="left" style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; ">   <div align="center" style="font-size: 10pt; margin-top: 0pt"><b></b> </div> <div align="left"> </div> <div align="center" style="font-size: 10pt; margin-top: 0pt"><b> </b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>1. Organization</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Herbalife Ltd., a Cayman Islands exempt limited liability company, or Herbalife, was incorporated on April 4, 2002. Herbalife Ltd. (and together with its subsidiaries, the “Company”) is a leading global network marketing company that sells weight management, nutritional supplements, energy, sports & fitness products and personal care products through a network of approximately 2.3 million independent distributors, except in China, where the Company currently sells its products through retail stores, sales representatives, sales employees and licensed business providers. The Company reports revenue in six geographic regions: North America, which consists of the U.S., Canada and Jamaica; Mexico; South and Central America; EMEA, which consists of Europe, the Middle East and Africa; Asia Pacific (excluding China) which consists of Asia, New Zealand and Australia; and China. </div> </div>

<div align="left" style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>2. Significant Accounting Policies</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Basis of Presentation</i></b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The unaudited interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s, or the SEC, Regulation S-X. Accordingly, it does not include all of the information required by generally accepted accounting principles in the U.S., or U.S. GAAP, for complete financial statements. The condensed consolidated balance sheet at December 31, 2010 was derived from the audited financial statements at that date and does not include all the disclosures required by U.S. GAAP. The Company’s unaudited condensed consolidated financial statements as of March 31, 2011, and for the three months ended March 31, 2011 and 2010, include Herbalife and all of its direct and indirect subsidiaries. In the opinion of management, the accompanying financial information contains all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s unaudited condensed consolidated financial statements as of March 31, 2011, and for the three months ended March 31, 2011 and 2010. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, or the 2010 10-K. Operating results for the three months ended March 31, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Venezuela</i></b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">In February 2011, Herbalife Venezuela purchased U.S. dollar denominated bonds with a face value of $20 million U.S. dollars in a bond offering from Petróleos de Venezuela, S.A., a Venezuelan state-owned petroleum company, for 86 million Bolivars and then immediately sold the bonds for $15 million U.S. dollars, resulting in an average effective conversion rate of 5.7 Bolivars per U.S. dollar. The 86 million Bolivars were previously remeasured at the regulated system rate, or SITME rate, of 5.3 Bolivars per U.S. dollar and recorded as cash and cash equivalents of $16.3 million on the Company’s consolidated balance sheet at December 31, 2010. This Bolivar to U.S. dollar conversion resulted in the Company recording a net pre-tax loss of $1.3 million U.S. dollars in its condensed consolidated statement of income for the three months ended March 31, 2011. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As of March 31, 2011, Herbalife Venezuela’s net monetary Bolivar denominated assets and liabilities was approximately $9.0 million, and included approximately $13.1 million in Bolivar denominated cash and cash equivalents and approximately $4.8 million in U.S. dollar denominated cash. The majority of these Bolivar denominated assets and liabilities were remeasured at the SITME rate. Although Venezuela is an important market in the Company’s South and Central America Region, Herbalife Venezuela’s net sales represented less than 2% of the Company’s consolidated net sales for both the three months ended March 31, 2011 and 2010 and its total assets represented less than 3% of the Company’s consolidated total assets as of both March 31, 2011 and December 31, 2010. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">See the Company’s 2010 10-K for further information on Herbalife Venezuela and Venezuela’s high inflationary economy. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>3. Long-Term Debt</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Long-term debt consists of the following: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="72%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(In millions)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Borrowings under the prior senior secured credit facility </div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">174.9</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Borrowings under the new senior secured revolving credit facility </div></td> <td> </td> <td> </td> <td align="right">180.0</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Capital leases </div></td> <td> </td> <td> </td> <td align="right">2.6</td> <td> </td> <td> </td> <td> </td> <td align="right">2.9</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Other debt </div></td> <td> </td> <td> </td> <td align="right">0.3</td> <td> </td> <td> </td> <td> </td> <td align="right">0.3</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td> </td> <td align="right">182.9</td> <td> </td> <td> </td> <td> </td> <td align="right">178.1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Less: current portion </div></td> <td> </td> <td> </td> <td align="right">1.7</td> <td> </td> <td> </td> <td> </td> <td align="right">3.1</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Long-term portion </div></td> <td> </td> <td align="left">$</td> <td align="right">181.2</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">175.0</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Interest expense was $3.3 million and $2.4 million for the three months ended March 31, 2011 and 2010, respectively. Interest expense for the three months ended March 31, 2011 included a $0.9 million write–off of unamortized deferred financing costs resulting from the extinguishment of the prior senior secured facility as discussed below. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"> On March 9, 2011, the Company entered into a $700.0 million senior secured revolving credit facility, or the New Credit Facility, with a syndicate of financial institutions as lenders and terminated its prior senior secured credit facility, or the Prior Credit Facility, that consisted of a term loan and a revolving credit facility. The New Credit Facility has a five year maturity and expires on March 9, 2016. During March 2011, U.S. dollar borrowings under the New Credit Facility incurred interest at the base rate plus a margin of 0.75% or LIBOR plus a margin of 1.75%. After March 2011, based on the Company’s consolidated leverage ratio, U.S. dollar borrowings under the New Credit Facility will bear interest at either LIBOR plus the applicable margin between 1.50% and 2.50% or the base rate plus the applicable margin between 0.50% and 1.50%. The Company, based on its consolidated leverage ratio, will pay a commitment fee between 0.25% and 0.50% per annum on the unused portion of the New Credit Facility. The New Credit Facility also permits the Company to borrow limited amounts in Mexican Peso and Euro currencies based on variable rates. The base rate under the New Credit Facility represents the highest of the Federal Funds Rate plus 0.50%, one-month LIBOR plus 1.00%, and the prime rate offered by Bank of America. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%"> In March 2011, the Company used $196.0 million in U.S. dollar borrowings under the New Credit Facility to repay all amounts outstanding under the Prior Credit Facility. The Company incurred approximately $5.5 million of debt issuance costs in connection with the New Credit Facility. These debt issuance costs were recorded as deferred financing costs on the Company’s condensed consolidated balance sheet and are being amortized over the term of the New Credit Facility. On March 31, 2011 and December 31, 2010, the weighted average interest rate for borrowings under the New Credit Facility and the Prior Credit Facility was 1.99% and 1.75%, respectively. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The New Credit Facility requires the Company to comply with a leverage ratio and an interest coverage ratio. In addition, the New Credit Facility contains customary covenants, including covenants that limit or restrict the Company’s ability to incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, pay dividends, merge or consolidate and enter into certain transactions with affiliates. As of March 31, 2011, the Company was compliant with its debt covenants. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During the three months ended March 31, 2011, the Company borrowed $235.7 million and $54.0 million under the New Credit Facility and Prior Credit Facility, respectively, and paid a total of $55.7 million and $228.9 million of the New Credit Facility and Prior Credit Facility, respectively. As of March 31, 2011, the U.S. dollar amount outstanding under the New Credit Facility was $180.0 million. As of December 31, 2010, the amounts outstanding under the Prior Credit Facility, consisting of a term loan and revolving facility, were $143.9 million and $31.0 million, respectively. There were no outstanding foreign currency borrowings as of March 31, 2011 under the New Credit Facility. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>4. Contingencies</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company is from time to time engaged in routine litigation. The Company regularly reviews all pending litigation matters in which it is involved and establishes reserves deemed appropriate by management for these litigation matters when a probable loss estimate can be made. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As a marketer of dietary and nutritional supplements and other products that are ingested by consumers or applied to their bodies, the Company has been and is currently subjected to various product liability claims. The effects of these claims to date have not been material to the Company, and the reasonably possible range of exposure on currently existing claims is not material to the Company. The Company believes that it has meritorious defenses to the allegations contained in the lawsuits. The Company currently maintains product liability insurance with an annual deductible of $10 million. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On April 16, 2007, Herbalife International of America, Inc. filed a Complaint in the United States District Court for the Central District of California against certain former Herbalife distributors who had left the Company to join a competitor. The Complaint alleged breach of contract, misappropriation of trade secrets, intentional interference with prospective economic advantage, intentional interference with contract, unfair competition, constructive trust and fraud and seeks monetary damages, attorney’s fees and injunctive relief (<i>Herbalife International of America, Inc. v. Robert E. Ford, et al</i>). The court entered a Preliminary Injunction against the defendants enjoining them from further use and/or misappropriation of the Company’s trade secrets on December 11, 2007. Defendants appealed the court’s entry of the Preliminary Injunction to the U.S. Court of Appeals for the Ninth Circuit. That court affirmed, in relevant part, the Preliminary Injunction. On December 3, 2007, the defendants filed a counterclaim alleging that the Company had engaged in unfair and deceptive business practices, intentional and negligent interference with prospective economic advantage, false advertising and that the Company was an endless chain scheme in violation of California law and seeking restitution, contract rescission and an injunction. Both sides engaged in discovery and filed cross motions for Summary Judgment. On August 25, 2009, the court granted partial summary judgment for Herbalife on all of defendants’ claims except the claim that the Company is an endless chain scheme which under applicable law is a question of fact that can only be determined at trial. The court denied defendants’ motion for Summary Judgment on Herbalife’s claims for misappropriation of trade secrets and breach of contract. On May 5, 2010, the District Court granted summary judgment for Herbalife on defendants’ endless chain-scheme counterclaim. Herbalife voluntarily dismissed its remaining claims, and on May 14, 2010, the District Court issued a final judgment dismissing all of the parties’ claims. On June 10, 2010 the defendants appealed from that judgment and on June 21, 2010, Herbalife cross-appealed. The parties have reached a settlement of the case which they are in the process of documenting. Herbalife will incur no financial liability in this settlement. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Certain of the Company’s subsidiaries have been subject to tax audits by governmental authorities in their respective countries. In certain of these tax audits, governmental authorities are proposing that significant amounts of additional taxes and related interest and penalties are due. The Company and its tax advisors believe that there are substantial defenses to their allegations that additional taxes are owed, and the Company is vigorously contesting the additional proposed taxes and related charges. On May 7, 2010, the Company received an administrative assessment from the Mexican Tax Administration Service in an amount equivalent to approximately $96 million, translated at the period ended spot rate, for various items, the majority of which was Value Added Tax allegedly owed on certain of the Company’s products imported into Mexico during the years 2005 and 2006. This assessment is subject to interest and inflationary adjustments. On July 8, 2010, the Company initiated a formal administrative appeal process. In connection with the appeal of the assessment, the Company may be required to post bonds for some or all of the assessed amount. Therefore, in July 2010, the Company entered into agreements with certain insurance companies to allow for the potential issuance of surety bonds in support of its appeal of the assessment. Such surety bonds, if issued, would not affect the availability of the Company’s New Credit Facility. The Company did not record a provision as the Company, based on analysis and guidance from its advisors, does not believe a loss is probable. Further, the Company is currently unable to reasonably estimate a possible loss or range of loss that could result from an unfavorable outcome in respect to this assessment or any additional assessments that may be issued for these or other periods. The Company believes that it has meritorious defenses and is vigorously pursuing the appeal, but final resolution of this matter could take several years. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">These matters may take several years to resolve. While the Company believes it has meritorious defenses, it cannot be sure of their ultimate resolution. Although the Company has reserved amounts for certain matters that the Company believes represent the most likely outcome of the resolution of these related disputes, if the Company is incorrect in the assessment, the Company may have to record additional expenses, when it becomes probable that an increased potential liability is warranted. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>5. Comprehensive Income</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Total comprehensive income consisted of the following: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="72%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6">(In millions)</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net income </div></td> <td> </td> <td align="left">$</td> <td align="right">87.6</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">51.9</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Unrealized gain on derivative instruments, net of taxes </div></td> <td> </td> <td> </td> <td align="right">0.3</td> <td> </td> <td> </td> <td> </td> <td align="right">2.1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign currency translation adjustment </div></td> <td> </td> <td> </td> <td align="right">14.9</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5.2</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Comprehensive income </div></td> <td> </td> <td align="left">$</td> <td align="right">102.8</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">48.8</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>6. Segment Information</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company is a network marketing company that sells a wide range of weight management products, nutritional supplements and personal care products within one industry segment as defined under the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC Topic 280, <i>Segment Reporting</i>. The Company’s products are manufactured by third party providers and by the Company in its Suzhou, China facility and in its manufacturing facility located in Lake Forest, California, and then are sold to independent distributors who sell Herbalife products to retail consumers or other distributors. Revenues reflect sales of products to distributors based on the distributors’ geographic location. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As of March 31, 2011, the Company sold products in 75 countries throughout the world and is organized and managed by geographic regions. The Company aggregates its operating segments, excluding China, into one reporting segment, or the Primary Reporting Segment, as management believes that the Company’s operating segments have similar operating characteristics and similar long term operating performance. In making this determination, management believes that the operating segments are similar in the nature of the products sold, the product acquisition process, the types of customers to whom products are sold, the methods used to distribute the products, and the nature of the regulatory environment. China has been identified as a separate reporting segment as it does not meet the criteria for aggregation. The operating information for the Primary Reporting Segment and China, and sales by product line are as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="72%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6">(in millions)</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Net Sales:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Primary Reporting Segment </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">United States </div></td> <td> </td> <td align="left">$</td> <td align="right">162.2</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">146.7</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Mexico </div></td> <td> </td> <td> </td> <td align="right">103.9</td> <td> </td> <td> </td> <td> </td> <td align="right">71.8</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Others </div></td> <td> </td> <td> </td> <td align="right">483.3</td> <td> </td> <td> </td> <td> </td> <td align="right">367.7</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total Primary Reporting Segment </div></td> <td> </td> <td> </td> <td align="right">749.4</td> <td> </td> <td> </td> <td> </td> <td align="right">586.2</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">China </div></td> <td> </td> <td> </td> <td align="right">45.7</td> <td> </td> <td> </td> <td> </td> <td align="right">32.4</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total Net Sales </div></td> <td> </td> <td align="left">$</td> <td align="right">795.1</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">618.6</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Operating Margin(1)(2):</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Primary Reporting Segment </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">United States </div></td> <td> </td> <td align="left">$</td> <td align="right">68.4</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">65.1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Mexico </div></td> <td> </td> <td> </td> <td align="right">40.4</td> <td> </td> <td> </td> <td> </td> <td align="right">24.9</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Others </div></td> <td> </td> <td> </td> <td align="right">218.8</td> <td> </td> <td> </td> <td> </td> <td align="right">151.1</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total Primary Reporting Segment </div></td> <td> </td> <td> </td> <td align="right">327.6</td> <td> </td> <td> </td> <td> </td> <td align="right">241.1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">China (3) </div></td> <td> </td> <td> </td> <td align="right">40.3</td> <td> </td> <td> </td> <td> </td> <td align="right">29.7</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total Operating Margin </div></td> <td> </td> <td align="left">$</td> <td align="right">367.9</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">270.8</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Selling, general and administrative expenses </div></td> <td> </td> <td> </td> <td align="right">244.5</td> <td> </td> <td> </td> <td> </td> <td align="right">206.9</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest expense, net </div></td> <td> </td> <td> </td> <td align="right">2.6</td> <td> </td> <td> </td> <td> </td> <td align="right">1.9</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Income before income taxes </div></td> <td> </td> <td> </td> <td align="right">120.8</td> <td> </td> <td> </td> <td> </td> <td align="right">62.0</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Income taxes </div></td> <td> </td> <td> </td> <td align="right">33.2</td> <td> </td> <td> </td> <td> </td> <td align="right">10.1</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Net Income </div></td> <td> </td> <td align="left">$</td> <td align="right">87.6</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">51.9</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="72%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6">(in millions)</td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Net sales by product line:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Weight Management </div></td> <td> </td> <td align="left">$</td> <td align="right">498.6</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">387.2</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Targeted Nutrition </div></td> <td> </td> <td> </td> <td align="right">180.2</td> <td> </td> <td> </td> <td> </td> <td align="right">138.6</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Energy, Sports and Fitness </div></td> <td> </td> <td> </td> <td align="right">35.5</td> <td> </td> <td> </td> <td> </td> <td align="right">25.8</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outer Nutrition </div></td> <td> </td> <td> </td> <td align="right">36.6</td> <td> </td> <td> </td> <td> </td> <td align="right">31.0</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Literature, promotional and other(4) </div></td> <td> </td> <td> </td> <td align="right">44.2</td> <td> </td> <td> </td> <td> </td> <td align="right">36.0</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total Net Sales </div></td> <td> </td> <td align="left">$</td> <td align="right">795.1</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">618.6</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Net sales by geographic region:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">North America(5) </div></td> <td> </td> <td align="left">$</td> <td align="right">167.0</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">151.3</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Mexico </div></td> <td> </td> <td> </td> <td align="right">103.9</td> <td> </td> <td> </td> <td> </td> <td align="right">71.8</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">South and Central America </div></td> <td> </td> <td> </td> <td align="right">125.3</td> <td> </td> <td> </td> <td> </td> <td align="right">91.3</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">EMEA(6) </div></td> <td> </td> <td> </td> <td align="right">153.9</td> <td> </td> <td> </td> <td> </td> <td align="right">130.8</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Asia Pacific(7) </div></td> <td> </td> <td> </td> <td align="right">199.3</td> <td> </td> <td> </td> <td> </td> <td align="right">141.0</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">China </div></td> <td> </td> <td> </td> <td align="right">45.7</td> <td> </td> <td> </td> <td> </td> <td align="right">32.4</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total Net Sales </div></td> <td> </td> <td align="left">$</td> <td align="right">795.1</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">618.6</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="left"> <div style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr style="font-size: 6pt"> <td width="3%"> </td> <td width="1%"> </td> <td width="96%"> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(1)</td> <td> </td> <td> <div style="text-align: justify">Operating margin consists of net sales less cost of sales and royalty overrides. </div></td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(2)</td> <td> </td> <td> <div style="text-align: justify">In the third quarter of 2010, the Company changed its method of allocation for certain costs to its business segments. Historical information presented has been reclassified to conform to the current presentation. This change had no effect on the Company’s consolidated statements of income. </div></td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(3)</td> <td> </td> <td> <div style="text-align: justify">Compensation to China sales employees and service fees to China licensed business providers totaling $21.8 million and $16.2 million for the three months ended March 31, 2011 and 2010, respectively, is included in selling, general and administrative expenses while distributor compensation for all other countries is included in royalty overrides. </div></td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(4)</td> <td> </td> <td> <div style="text-align: justify">Product buybacks and returns in all product categories are included in the literature, promotional and other category. </div></td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(5)</td> <td> </td> <td> <div style="text-align: justify">Consists of the U.S., Canada and Jamaica. </div></td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(6)</td> <td> </td> <td> <div style="text-align: justify">Consists of Europe, Middle East and Africa. </div></td> </tr> <tr style="font-size: 3pt"> <td> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(7)</td> <td> </td> <td> <div style="text-align: justify">Consists of Asia (excluding China), New Zealand and Australia. </div></td> </tr> </table> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As of March 31, 2011 and December 31, 2010, total assets for the Company’s Primary Reporting Segment were $1,287.7 million and $1,162.1 million, respectively. As of March 31, 2011 and December 31, 2010, total assets for the China segment were $70.3 million and $70.1 million, respectively. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>7. Share-Based Compensation</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company has share-based compensation plans, which are more fully described in Note 9,<i> Share-based Compensation</i>, to the Consolidated Financial Statements in the 2010 10-K. During the three months ended March 31, 2011, the Company granted stock awards subject to continued service, consisting of stock units and stock appreciation rights, with vesting terms fully described in the 2010 10-K. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">For the three months ended March 31, 2011 and 2010, share-based compensation expense amounted to $5.6 million and $5.3 million, respectively. As of March 31, 2011, the total unrecognized compensation cost related to all non-vested stock awards was $25.6 million and the related weighted-average period over which it is expected to be recognized is approximately 1.5 years. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following tables summarize the activity under all share-based compensation plans for the three months ended March 31, 2011: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="44%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Remaining</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Aggregate</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Exercise</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Contractual</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Intrinsic</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Stock Options & Stock Appreciation Rights</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Awards</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Price</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Term</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Value</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(In thousands)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(In millions)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at December 31, 2010 </div></td> <td> </td> <td> </td> <td align="right">6,390</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">28.75</td> <td> </td> <td> </td> <td colspan="3" align="center">5.7 years</td> <td> </td> <td align="left">$</td> <td align="right">253.1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">20</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">73.73</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Exercised </div></td> <td> </td> <td> </td> <td align="right">(334</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">26.22</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Forfeited </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(34</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">32.80</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding at March 31, 2011 </div></td> <td> </td> <td> </td> <td align="right">6,042</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">29.02</td> <td> </td> <td> </td> <td colspan="3" align="center">5.5 years</td> <td> </td> <td align="left">$</td> <td align="right">316.2</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Exercisable at March 31, 2011 </div></td> <td> </td> <td> </td> <td align="right">3,416</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">24.34</td> <td> </td> <td> </td> <td colspan="3" align="center">4.2 years</td> <td> </td> <td align="left">$</td> <td align="right">194.8</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="58%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Weighted</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Average</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Grant Date</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Aggregate</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>Incentive Plan and Independent Directors Stock Units</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Shares</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(In thousands)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(In millions)</b></td> <td> </td> </tr>   <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding and nonvested December 31, 2010 </div></td> <td> </td> <td> </td> <td align="right">580.2</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">27.51</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">16.0</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Granted </div></td> <td> </td> <td> </td> <td align="right">6.8</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">74.68</td> <td> </td> <td> </td> <td> </td> <td align="right">0.5</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Vested </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(173.2</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">33.08</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(5.7</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Forfeited </div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(3.0</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">15.10</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(0.1</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Outstanding and nonvested at March 31, 2011 </div></td> <td> </td> <td> </td> <td align="right">410.8</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">26.04</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10.7</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The weighted-average grant date fair value of stock awards granted during the three months ended March 31, 2011 and 2010 was $41.74 and $20.23, respectively. The total intrinsic value of stock awards exercised during the three months ended March 31, 2011 and 2010, was $16.9 million and $1.2 million, respectively. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>8. Income Taxes</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As of March 31, 2011, the total amount of unrecognized tax benefits, related interest and penalties was $31.4 million, $5.5 million and $1.3 million, respectively. During the three months ended March 31, 2011, the Company recorded tax, interest and penalties related to uncertain tax positions of $1.9 million, $0.5 million and $0.1 million respectively. During the three months ended March 31, 2011 the unrecognized tax benefits were reduced by the expiration of the statutes of limitations for tax of $2.1 million, interest of $0.6 million and penalties of $0.1 million which resulted in a year to date net decrease for tax and related interest of $0.2 million and $0.1 million, respectively. The unrecognized tax benefits relate primarily to uncertainties from international transfer pricing issues and the deductibility of certain operating expenses in various jurisdictions. If the total amount of unrecognized tax benefits were recognized, $31.4 million of unrecognized tax benefits, $5.5 million of interest and $1.3 million of penalties, would impact the effective tax rate. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During the three months ended March 31, 2011, the Company benefited from the terms of a tax holiday in the People’s Republic of China. The tax holiday commenced on January 1, 2008 and will conclude on December 31, 2012. Under the terms of the holiday, the Company was subject to a zero tax rate in China during 2008 and 2009, 11% tax rate in 2010, and is subject to a graduated rate of 12% in 2011. The tax rate will gradually increase to a maximum rate of 25% in 2013. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>9. Derivative Instruments and Hedging Activities</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Interest Rate Risk Management</i></b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company engages in an interest rate hedging strategy for which the hedged transactions are forecasted interest payments on the Company’s variable rate credit facility. The hedged risk is the variability of forecasted interest rate cash flows, where the hedging strategy involves the purchase of interest rate swaps. For the outstanding cash flow hedges on interest rate exposures at March 31, 2011, the Company is hedging certain of its monthly interest rate exposures over approximately two years and four months. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">During August 2009, the Company entered into four interest rate swap agreements with an effective date of December 31, 2009. The agreements collectively provide for the Company to pay interest for less than a four-year period at a weighted average fixed rate of 2.78% on notional amounts aggregating to $140.0 million while receiving interest for the same period at the one month LIBOR rate on the same notional amounts. These agreements will expire in July 2013. These swaps at inception were designated as cash flow hedges against the variability in the LIBOR interest rate on the Company’s prior term loan or against the variability in the LIBOR interest rate on the replacement debt. The Company’s prior term loan was terminated in March 2011 and refinanced with the New Credit Facility as discussed further in Note 3, <i>Long-Term Debt</i>. The Company’s swaps remain effective and continue to be designated as cash flow hedges against the variability in certain LIBOR interest rate borrowings under the New Credit Facility at LIBOR plus 1.50% to 2.50%, thereby now fixing the Company’s weighted average effective rate on the notional amounts at 4.28% to 5.28%. There was no hedge ineffectiveness recorded as result of this refinancing event. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company formally assesses both at inception and at least quarterly thereafter, whether derivatives used in hedging transactions are effective in offsetting changes in cash flows of the hedged item. As of March 31, 2011, the hedge relationships continued to qualify as effective hedges under FASB ASC Topic 815, <i>Derivatives and Hedging</i>, or ASC 815. Consequently, all changes in the fair value of the derivatives are deferred and recorded in other comprehensive income (loss) until the related forecasted transactions are recognized in the consolidated statements of income. The fair value of the interest rate swap agreements are based on third-party bank quotes. At March 31, 2011 and December 31, 2010, the Company recorded the interest rate swaps as liabilities at their fair value of $5.7 million and $6.6 million, respectively. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Foreign Currency Instruments</i></b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company also designates certain foreign currency derivatives, such as certain foreign currency forward and option contracts, as freestanding derivatives for which hedge accounting does not apply. The changes in the fair market value of the derivatives are included in selling, general and administrative expenses in the Company’s consolidated statements of income. The Company uses foreign currency forward contracts to hedge foreign-currency-denominated intercompany transactions and to partially mitigate the impact of foreign currency fluctuations. The Company also uses foreign currency option contracts to partially mitigate the impact of foreign currency fluctuations. The fair value of the forward and option contracts are based on third-party bank quotes. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company also purchases foreign currency forward contracts in order to hedge forecasted inventory purchases and intercompany management fees that are designated as cash-flow hedges and are subject to foreign currency exposures. The Company applied the hedge accounting rules as required by ASC 815 for these hedges. These contracts allow the Company to sell Euros in exchange for U.S. dollars at specified contract rates. As of March 31, 2011, and December 31, 2010, the aggregate notional amounts of these contracts outstanding were approximately $21.6 million and $32.1 million, respectively. At March 31, 2011, the outstanding contracts were expected to mature over the next nine months. The Company’s derivative financial instruments are recorded on the consolidated balance sheet at fair value based on third-party bank quotes. Forward contracts are used to hedge forecasted inventory purchases over specific months. Changes in the fair value of these forward contracts, excluding forward points, designated as cash-flow hedges are recorded as a component of accumulated other comprehensive income (loss) within shareholders’ equity, and are recognized in cost of sales in the consolidated statement of income during the period which approximates the time the hedged inventory is sold. The Company also hedges forecasted intercompany management fees over specific months. Changes in the fair value of these forward contracts designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within shareholders’ equity, and are recognized in selling, general and administrative expenses in the consolidated statement of income during the period when the hedged item and underlying transaction affect earnings. As of March 31, 2011, the Company recorded liabilities at fair value of $2.1 million relating to all outstanding foreign currency contracts designated as cash-flow hedges. As of December 31, 2010, the Company recorded assets at fair value of $0.6 million and liabilities at fair value of $0.8 million relating to all outstanding foreign currency contracts designated as cash-flow hedges. The Company assesses hedge effectiveness and measures hedge ineffectiveness at least quarterly. During the three months ended March 31, 2011 and 2010, the ineffective portion relating to these hedges was immaterial and the hedges remained effective as of March 31, 2011. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">As of March 31, 2011, and December 31, 2010, the majority of the Company’s outstanding foreign currency forward contracts had maturity dates of less than nine months with the majority of freestanding derivatives expiring within two months. There were no foreign currency option contracts outstanding as of March 31, 2011, and December 31, 2010. See Part I, Item 3 — <i>Quantitative and Qualitative Disclosures About Market Risk </i>in this Quarterly Report on Form 10-Q for foreign currency instruments outstanding as of March 31, 2011. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Gains and Losses on Derivative Instruments</i></b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table summarizes gains (losses) relating to derivative instruments recorded in other comprehensive income (loss) during the three months ended March 31, 2011 and 2010: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="72%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain (Loss) Recognized</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>in Other Comprehensive Income (Loss)</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>For the Three Months Ended</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2010</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(In millions)</b></td> <td> </td> </tr>   <tr valign="top" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as cash flow hedging instruments:</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign exchange currency contracts relating to inventory and intercompany management fee hedges </div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1.9</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">5.1</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate swaps </div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(2.5</td> <td nowrap="nowrap">)</td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table summarizes gains (losses) relating to derivative instruments recorded to income during the three months ended March 31, 2011 and 2010: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="44%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="23%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain (Loss)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Recognized in Income</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Location of Gain</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>For the Three Months Ended</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>(Loss)</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Recognized in Income</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(In millions)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"> </td> </tr>   <tr valign="top" style="background: #cceeff"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px"><b>Derivatives designated as cash flow hedging instruments:</b> </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td align="left" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:15px; text-indent:-15px">Foreign exchange currency contracts relating to inventory hedges and intercompany management fee hedges (1) </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">0.1</td> <td nowrap="nowrap" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">(0.1</td> <td nowrap="nowrap" valign="bottom">)</td> <td> </td> <td align="left" valign="top">Selling, general and administrative expenses</td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">  </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td align="left" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px"><b>Derivatives not designated as hedging instruments:</b> </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td align="left" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="bottom"> <div style="margin-left:0px; text-indent:-0px">Foreign exchange currency contracts </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">2.9</td> <td nowrap="nowrap" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">(7.5</td> <td nowrap="nowrap" valign="bottom">)</td> <td> </td> <td align="left" valign="top">Selling, general and administrative expenses</td> </tr>  </table> </div> <div align="left"> <div style="font-size: 3pt; margin-top: 10pt; width: 18%; border-top: 1px solid #000000">  </div> </div> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr style="font-size: 6pt"> <td width="3%"> </td> <td width="1%"> </td> <td width="96%"> </td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">(1)</td> <td> </td> <td> <div style="text-align: justify">For foreign exchange contracts designated as hedging instruments, the amounts recognized in income (loss) represent the amounts excluded from the assessment of hedge effectiveness. There were no ineffective amounts recorded for derivatives designated as hedging instruments. </div></td> </tr> </table> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following table summarizes gains (losses) relating to derivative instruments reclassified from accumulated other comprehensive loss into income during the three months ended March 31, 2011 and 2010: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="44%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="23%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Location of Gain</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain (Loss) Reclassified</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>(Loss)</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>from Accumulated</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Reclassified</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Other Comprehensive</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>from Accumulated</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Loss into Income</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Other Comprehensive</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>For the Three Months Ended</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Loss into Income</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2010</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>(Effective Portion)</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(In millions)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"> </td> </tr>   <tr valign="top" style="background: #cceeff"> <td valign="top"> <div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as cash flow hedging instruments:</b> </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td align="left" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:15px; text-indent:-15px">Foreign exchange currency contracts relating to inventory hedges </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">(0.2</td> <td nowrap="nowrap" valign="bottom">)</td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">(0.6</td> <td nowrap="nowrap" valign="bottom">)</td> <td> </td> <td align="left" valign="bottom">Cost of sales</td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">  </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td align="left" valign="top"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:15px; text-indent:-15px">Foreign exchange currency contracts relating to intercompany management fee hedges </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">(0.6</td> <td nowrap="nowrap" valign="bottom">)</td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">1.6</td> <td nowrap="nowrap" valign="bottom"> </td> <td> </td> <td align="left" valign="top">Selling, general and administrative expenses</td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">  </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom"> </td> <td align="right" valign="bottom"> </td> <td valign="bottom"> </td> <td> </td> <td align="left" valign="top"> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:0px; text-indent:-0px">Interest rate contracts </div></td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">(0.9</td> <td nowrap="nowrap" valign="bottom">)</td> <td> </td> <td nowrap="nowrap" align="left" valign="bottom">$</td> <td align="right" valign="bottom">(0.9</td> <td nowrap="nowrap" valign="bottom">)</td> <td> </td> <td align="left" valign="top">Interest expense, net</td> </tr>  </table> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company reports its derivatives at fair value as either assets or liabilities within its condensed consolidated balance sheet. See Note 12, <i>Fair Value Measurements</i>, for information on derivative fair values and their condensed consolidated balance sheet location as of March 31, 2011, and December 31, 2010. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>10. Shareholders’ Equity</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Dividends</i></b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The declaration of future dividends is subject to the discretion of the Company’s board of directors and will depend upon various factors, including its earnings, financial condition, restrictions imposed by its credit agreement, cash requirements, future prospects and other factors deemed relevant by its board of directors. The New Credit Facility entered into on March 9, 2011, permits payments of dividends as long as no default or event of default exists and the consolidated leverage ratio specified in the New Credit Facility is not exceeded. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On February 22, 2011, the Company announced that its board of directors approved a quarterly cash dividend of $0.25 per common share in an aggregate amount of $14.8 million that was paid to shareholders on March 22, 2011. The aggregate amount of dividends declared and paid during the three months ended March 31, 2011 and 2010 were $14.8 million and $12.1 million, respectively. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Share Repurchases</i></b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On April 30, 2009, the Company announced that its board of directors authorized a new program for the Company to repurchase up to $300 million of Herbalife common shares during the next two years, at such times and prices as determined by the Company’s management. On May 3, 2010, the Company’s board of directors approved an increase to the share repurchase authorization from $300 million to $1 billion. In addition, the Company’s board of directors approved the extension of the expiration date of the share repurchase program from April 2011 to December 2014. The Company did not repurchase any common shares in the open market during the three months ended March 31, 2011. As of March 31, 2011, the remaining authorized capacity under the Company’s share repurchase program was approximately $776.7 million. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The aggregate purchase price of any common shares repurchased is reflected as a reduction to shareholders’ equity. The Company allocates the purchase price of the repurchased shares as a reduction to retained earnings, common shares and additional paid-in-capital. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The number of shares issued upon vesting or exercise for certain restricted stock units and stock appreciation rights granted, pursuant to the Company’s share-based compensation plans, is net of the minimum statutory withholding requirements that the Company pays on behalf of its employees. Although shares withheld are not issued, they are treated as common share repurchases in the Company’s condensed consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b><i>Stock Split</i></b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On February 18, 2011, the Company’s board of directors approved a two-for-one split of the Company’s common shares, subject to approval by the Company’s shareholders at the Company’s Annual General Meeting of Shareholders held on April 28, 2011. See Note 14, <i>Subsequent Events</i>, for further information on the stock split being approved by the Company’s shareholders on April 28, 2011. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>11. Earnings Per Share</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Basic earnings per share represents net income for the period common shares were outstanding, divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share represents net income divided by the weighted average number of common shares outstanding, inclusive of the effect of dilutive securities such as outstanding stock options, stock appreciation rights, stock units and warrants. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The following are the common share amounts used to compute the basic and diluted earnings per share for each period on a pre-split basis: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="72%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>For the Three Months</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Ended March 31,</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(in thousands)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average shares used in basic computations </div></td> <td> </td> <td> </td> <td align="right">59,103</td> <td> </td> <td> </td> <td> </td> <td align="right">60,160</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Dilutive effect of exercise of equity grants outstanding </div></td> <td> </td> <td> </td> <td align="right">2,684</td> <td> </td> <td> </td> <td> </td> <td align="right">2,319</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Dilutive effect of warrants </div></td> <td> </td> <td> </td> <td align="right">121</td> <td> </td> <td> </td> <td> </td> <td align="right">193</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Weighted average shares used in diluted computations </div></td> <td> </td> <td> </td> <td align="right">61,908</td> <td> </td> <td> </td> <td> </td> <td align="right">62,672</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">There were an aggregate of 0.1 million and 1.8 million of equity grants that were outstanding during the three months ended March 31, 2011 and 2010, respectively, consisting of stock options, stock appreciation rights, and stock units, but were not included in the computation of diluted earnings per share because their effect would be anti-dilutive. See Note 14, <i>Subsequent Events</i>, for the computation of the Company’s historical net earnings per share on a pro-forma post-split basis. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>12. Fair Value Measurements</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company applies the provisions of FASB ASC Topic 820, <i>Fair Value Measurements and Disclosures</i>, or ASC 820, for its financial and non-financial assets and liabilities. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 4%">Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 4%">Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; margin-left: 4%; text-indent: 4%">Level 3 inputs are unobservable inputs for the asset or liability. </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The Company measures certain assets and liabilities at fair value as discussed throughout the notes to its consolidated financial statements. Foreign exchange currency contracts and interest rate swaps are valued using standard calculations and models. Foreign exchange currency contracts are valued primarily based on inputs such as observable forward rates, spot rates and foreign currency exchange rates at the reporting period ended date. Interest rate swaps are valued primarily based on inputs such as LIBOR and swap yield curves at the reporting period ended date. Assets or liabilities that have recurring measurements and are measured at fair value consisted of only Level 2 derivatives and are shown below at their gross values at March 31, 2011, and December 31, 2010: </div> <div align="center" style="font-size: 10pt; margin-top: 10pt"><b>Fair Value Measurements at Reporting Date Using</b> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="37%"> </td> <td width="2%"> </td> <td width="33%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="1%"> </td> <td width="2%"> </td> <td width="1%"> </td> <td width="10%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Significant</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Significant</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Other</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Other</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Observable</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Inputs</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Inputs</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(Level 2)</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>(Level 2)</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Derivative Balance</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fair Value at</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fair Value at</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Sheet</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>(in millions)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>ASSETS:</b> </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as cash flow hedging instruments:</b> </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:15px; text-indent:-15px">Foreign exchange currency contracts relating to intercompany management fee hedges </div></td> <td> </td> <td align="left" valign="bottom" nowrap="nowrap">Prepaid expenses and other current assets</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.6</td> <td> </td> </tr> <tr valign="bottom"> <td valign="top"> <div style="margin-left:15px; text-indent:-15px"><b>Derivatives not designated as cash flow hedging instruments:</b> </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td valign="top"> <div style="margin-left:15px; text-indent:-15px">Foreign exchange currency contracts </div></td> <td> </td> <td align="left" valign="top">Prepaid expenses and other current assets</td> <td> </td> <td align="left">$</td> <td align="right">4.1</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2.3</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td align="left">$</td> <td align="right">4.1</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">2.9</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>LIABILITIES:</b> </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Derivatives designated as cash flow hedging instruments:</b> </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign exchange currency contracts relating to inventory and intercompany management fee hedges </div></td> <td> </td> <td align="left" valign="bottom">Accrued expenses</td> <td> </td> <td align="left">$</td> <td align="right">2.1</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.8</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest rate swaps </div></td> <td> </td> <td align="left" valign="top">Accrued expenses</td> <td> </td> <td align="left">$</td> <td align="right">5.7</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">6.6</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Derivatives not designated as hedging instruments:</b> </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign exchange currency contracts </div></td> <td> </td> <td align="left" valign="top">Accrued expenses</td> <td> </td> <td align="left">$</td> <td align="right">1.3</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">3.0</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td align="left">$</td> <td align="right">9.1</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">10.4</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>13. Inventories</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Inventories consist primarily of finished goods available for resale and the following are the major classes of inventory (in millions): </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="72%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>December 31,</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Raw materials </div></td> <td> </td> <td align="left">$</td> <td align="right">17.7</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">13.7</td> <td> </td> </tr> <tr valign="bottom" style="padding-top: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">Work in process </div></td> <td> </td> <td> </td> <td align="right">0.8</td> <td> </td> <td> </td> <td> </td> <td align="right">0.6</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff; padding-top: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">Finished goods </div></td> <td> </td> <td> </td> <td align="right">165.8</td> <td> </td> <td> </td> <td> </td> <td align="right">168.2</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td align="left">$</td> <td align="right">184.3</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">182.5</td> <td> </td> </tr> <tr style="font-size: 1px"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> <td> </td> <td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td> <td> </td> </tr>  </table> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">Total inventories are presented net of the reserves for obsolete and slow moving inventory of $10.6 million and $9.4 million at March 31, 2011 and December 31, 2010, respectively. </div> </div>

<div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>14. Subsequent Events</b> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On April 28, 2011, the Company’s shareholders approved a 2-for-1 split of the Company’s common shares. One additional common share will be distributed to the Company’s shareholders on or around May 17, 2011, for each common share held on May 10, 2011. All common shares subject to outstanding equity awards and warrants, as well as the number of common shares reserved for issuance under the Company’s equity compensation plans, will be adjusted proportionately. </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif; margin-left: 0in; "> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">All numbers in the consolidated financial statements are presented on a pre-split basis. The Company’s historical net earnings per share on a pro-forma basis would be as follows: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="72%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="9%"> </td> <td width="1%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three Months Ended</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>March 31,</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2011</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>2010</b></td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>(unaudited)</b></td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Basic net income per share: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">As reported </div></td> <td> </td> <td align="left">$</td> <td align="right">1.48</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.86</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Pro forma </div></td> <td> </td> <td align="left">$</td> <td align="right">0.74</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.43</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Diluted net income per share: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">As reported </div></td> <td> </td> <td align="left">$</td> <td align="right">1.41</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.83</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Pro forma </div></td> <td> </td> <td align="left">$</td> <td align="right">0.71</td> <td> </td> <td> </td> <td align="left">$</td> <td align="right">0.41</td> <td> </td> </tr>  </table> </div> <div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">On May 2, 2011, the Company announced that its board of directors approved a post stock split cash dividend of $0.20 per common share, payable on June 7, 2011 to shareholders of record as of May 24, 2011. </div> </div>

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