Herbalife Ltd. Annual report pursuant to Section 13 and 15(d)

Segment Information (Tables)

12 Months Ended

Dec. 31, 2020

Operating information for the two reportable segments, sales by product line, and sales by geographic area are as follows:


	Year Ended December 31,
	2020			2019			2018
	(in millions)
Net sales:
Primary Reporting Segment	$	4,732.2		$	4,125.1		$	3,884.2
China		809.6			752.0			1,007.6

Total net sales	$	5,541.8		$	4,877.1		$	4,891.8

Contribution margin(1):
Primary Reporting Segment	$	1,983.6		$	1,793.6		$	1,693.5
China(2)		717.5			677.3			915.0

Total contribution margin	$	2,701.1		$	2,470.9		$	2,608.5

Selling, general, and administrative expenses(2)		2,075.0			1,940.3			1,955.2
Other operating income		(14.5	)		(37.5	)		(29.8	)
Interest expense		133.0			153.0			181.0
Interest income		8.8			20.6			19.4
Other expense (income), net		—			(15.7	)		57.3

Income before income taxes		516.4			451.4			464.2
Income taxes		143.8			140.4			167.6

Net income	$	372.6		$	311.0		$	296.6

Net sales by product line:
Weight Management	$	3,312.8		$	3,012.5		$	3,105.8
Targeted Nutrition		1,527.4			1,278.5			1,243.5
Energy, Sports, and Fitness		437.4			352.0			308.4
Outer Nutrition		111.3			97.3			91.9
Literature, Promotional, and Other(3)		152.9			136.8			142.2

Total net sales	$	5,541.8		$	4,877.1		$	4,891.8

Net sales by geographic area:
United States	$	1,334.5		$	1,002.6		$	925.9
China		809.6			752.0			1,007.6
Mexico		436.9			473.6			467.9
Others		2,960.8			2,648.9			2,490.4

Total net sales	$	5,541.8		$	4,877.1		$	4,891.8

(1)	Contribution margin consists of net sales less cost of sales and Royalty overrides. For the China segment, contribution margin does not include service fees to China independent service providers.

(2)	Service fees to China independent service providers totaling $454.0 million, $418.9 million, and $523.2 million for the years ended December 31, 2020, 2019, and 2018, respectively, are included in selling, general, and administrative expenses.

(3)	Product buybacks and returns in all product categories are included in the Literature, Promotional, and Other category.

The following table sets forth property, plant, and equipment and deferred tax assets by geographic area:


	December 31,
	2020		2019		2018
	(in millions)
Property, plant, and equipment, net:
United States	$	303.2	$	292.4	$	285.2
Foreign		87.0		79.1		74.8

Total property, plant, and equipment, net	$	390.2	$	371.5	$	360.0

Deferred tax assets:
United States	$	123.8	$	114.5	$	90.7
Foreign		76.6		68.3		74.9

Total deferred tax assets	$	200.4	$	182.8	$	165.6