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, 2024

Reconciliation of Revenue from Segments to Consolidated

Operating information for the two reportable segments is as follows:


	Three Months Ended						Nine Months Ended
	September 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
	(in millions)
Net sales:
Primary Reporting Segment	$	1,165.5		$	1,191.8		$	3,554.0		$	3,602.2
China		74.8			89.5			231.7			245.2
Total net sales	$	1,240.3		$	1,281.3		$	3,785.7		$	3,847.4
Contribution margin(1)(3):
Primary Reporting Segment	$	502.2		$	486.1		$	1,517.1		$	1,476.2
China		25.6			30.3			79.6			82.2
Total contribution margin	$	527.8		$	516.4		$	1,596.7		$	1,558.4
Selling, general, and administrative expenses excluding service fees to China independent service providers(1)(2)(3)		405.7			409.7			1,322.3			1,267.9
Other operating income		(5.0	)		—			(5.0	)		(10.1	)
Interest expense, net		56.5			38.5			152.1			116.3
Other expense (income), net		—			(1.0	)		10.5			(1.0	)
Income before income taxes		70.6			69.2			116.8			185.3
Income taxes		23.2			26.4			40.4			53.3
Net income	$	47.4		$	42.8		$	76.4		$	132.0

(1)

Contribution margin consists of net sales less cost of sales, Royalty overrides, and service fees to our independent service providers in China. For the China segment, contribution margin includes the portion of service fees to China independent service providers that are currently recorded in selling, general, and administrative expenses within the Company's accompanying condensed consolidated statements of income, which totaled $38.3 million and $45.6 million for the three months ended September 30, 2024 and 2023, respectively, and $116.2 million and $123.8 million for the nine months ended September 30, 2024 and 2023, respectively.

(2)

Selling, general, and administrative expenses exclude the portion of service fees to China independent service providers that are included in selling, general, and administrative expenses within the Company's accompanying condensed consolidated statements of income as described in footnote (1) above.

(3)

In the second quarter of 2024, the Company, as part of its restructuring initiatives, which are described further in Note 13, Restructuring Activities, changed its contribution margin presentation for its China segment which now includes expenses related to service fees to the Company's independent service providers in China as described in the footnotes immediately above. Historically, the China contribution margin did not include the portion of service fees that are recognized in selling, general and administrative expenses in the Company’s accompanying condensed consolidated statements of income. Historical information presented in the table above has been reclassified to conform with the current period contribution margin presentation. This change had no impact on the Company's accompanying condensed consolidated statements of income and only impacts this segment note presentation.

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

The following table sets forth net sales by geographic area:


	Three Months Ended				Nine Months Ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(in millions)
Net sales:
United States	$	253.5	$	270.1	$	787.5	$	854.6
India		218.3		215.9		626.4		583.9
Mexico		131.5		137.3		415.1		403.6
China		74.8		89.5		231.7		245.2
Others		562.2		568.5		1,725.0		1,760.1
Total net sales	$	1,240.3	$	1,281.3	$	3,785.7	$	3,847.4