Herbalife Ltd. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information (Tables)

Segment Information (Tables)

9 Months Ended

Sep. 30, 2014

Reconciliation of Revenue from Segments to Consolidated


	Three Months Ended				Nine Months Ended
	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
	(In millions)
Net Sales:
Primary Reporting Segment
United States	$	218.4	$	223.6	$	705.7	$	681.5
Mexico		143.9		141.2		435.2		419.8
South Korea		121.3		111.5		338.2		333.5
Others		591.3		600.5		1,858.7		1,798.3

Total Primary Reporting Segment		1,074.9		1,076.8		3,337.8		3,233.1
China		181.3		136.7		487.2		323.3

Total Net Sales	$	1,256.2	$	1,213.5	$	3,825.0	$	3,556.4

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

Contribution Margin(1)(2):
Primary Reporting Segment
United States	$	90.3		$	90.7	$	296.1	$	284.9
Mexico		64.3			65.1		189.8		187.7
South Korea		65.3			57.8		183.6		169.4
Others		256.1			265.7		817.7		797.2

Total Primary Reporting Segment		476.0			479.3		1,487.2		1,439.2
China		161.3			122.6		438.0		288.9

Total Contribution Margin	$	637.3		$	601.9	$	1,925.2	$	1,728.1

Selling, general and administrative expenses(2)		609.7			409.7		1,573.7		1,174.6
Interest expense, net		19.9			4.7		56.2		15.7
Other expense, net		9.8			—		13.0		—

(Loss) income before income taxes		(2.1	)		187.5		282.3		537.8
Income taxes		(13.3	)		45.5		76.9		133.8

Net Income	$	11.2		$	142.0	$	205.4	$	404.0

(1)	Contribution margin consists of net sales less cost of sales and royalty overrides.

(2)

Service fees to China independent service providers totaling $86.6 million and $61.0 million for the three months ended September 30, 2014 and 2013, respectively, and totaling $229.1 million and $145.7 million for the nine months ended September 30, 2014 and 2013, respectively, are included in selling, general and administrative expenses while Member compensation for all other countries is included in contribution margin.

Schedule of Entity-Wide Information, Revenue from External Customers by Products and Services

Net sales by product line:
Weight Management		805.1	$	772.9	$	2,456.2	$	2,262.7
Targeted Nutrition		281.8		280.7		851.9		815.1
Energy, Sports and Fitness		67.1		65.5		202.7		188.9
Outer Nutrition		43.3		36.4		130.0		112.4
Literature, promotional and other(3)		58.9		58.0		184.2		177.3

Total Net Sales	$	1,256.2	$	1,213.5	$	3,825.0	$	3,556.4

(3)	Product buybacks and returns in all product categories are included in the literature, promotional and other category.

Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area

Net sales by geographic region:
North America		223.6	$	228.7	$	722.0	$	697.6
Mexico		143.9		141.2		435.2		419.8
South and Central America		205.2		241.2		653.2		683.1
EMEA		204.4		181.7		642.9		537.6
Asia Pacific		297.8		284.0		884.5		895.0
China		181.3		136.7		487.2		323.3

Total Net Sales	$	1,256.2	$	1,213.5	$	3,825.0	$	3,556.4