Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.25.0.1
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Components of Income before Income Taxes

The components of income before income taxes were as follows:

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(in millions)

 

Domestic

 

$

(167.7

)

 

$

(94.1

)

 

$

(72.0

)

Foreign

 

 

337.1

 

 

 

297.1

 

 

 

496.8

 

Total

 

$

169.4

 

 

$

203.0

 

 

$

424.8

 
Components of Income Tax Expense

Income taxes were as follows:

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(in millions)

 

Current:

 

 

 

 

 

 

 

 

 

Foreign

 

$

90.3

 

 

$

80.8

 

 

$

100.1

 

Federal

 

 

49.4

 

 

 

21.3

 

 

 

26.3

 

State

 

 

5.0

 

 

 

(0.2

)

 

 

7.0

 

 

 

 

144.7

 

 

 

101.9

 

 

 

133.4

 

Deferred:

 

 

 

 

 

 

 

 

 

Foreign

 

 

(165.9

)

 

 

(1.7

)

 

 

(2.0

)

Federal

 

 

(57.0

)

 

 

(34.6

)

 

 

(25.1

)

State

 

 

(6.7

)

 

 

(4.8

)

 

 

(2.8

)

 

 

 

(229.6

)

 

 

(41.1

)

 

 

(29.9

)

 

 

$

(84.9

)

 

$

60.8

 

 

$

103.5

 
Reconciliation between Provision for Income Taxes at Statutory Rate and Provision for Income Taxes at Effective Tax Rate

The applicable statutory income tax rate in the Cayman Islands was zero for Herbalife Ltd. for the years being reported. For purposes of the reconciliation between the provision for income taxes at the statutory rate and the provision for income taxes at the effective tax rate, the 21% U.S. tax rate (the tax rate at which the majority of the Company’s operations are taxed) is applied for the years ended December 31, 2024, 2023, and 2022 as follows:

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(in millions)

 

Tax expense at United States statutory rate

 

$

35.6

 

 

$

42.6

 

 

$

89.2

 

Increase (decrease) in tax resulting from:

 

 

 

 

 

 

 

 

 

Differences between U.S. and foreign tax rates on foreign income, including withholding taxes

 

 

30.2

 

 

 

90.3

 

 

 

(21.5

)

U.S. tax expense (benefit) on foreign income, net of foreign tax credits

 

 

(12.0

)

 

 

1.1

 

 

 

(4.7

)

Intra-entity transfers of intellectual property

 

 

(177.6

)

 

 

—

 

 

 

—

 

Deferred tax charge

 

 

18.5

 

 

 

(7.4

)

 

 

—

 

Increase (decrease) in valuation allowances

 

 

28.8

 

 

 

(61.0

)

 

 

24.7

 

State taxes, net of federal benefit

 

 

(2.2

)

 

 

(5.6

)

 

 

3.9

 

Unrecognized tax (benefits) expenses

 

 

(13.8

)

 

 

(6.1

)

 

 

7.5

 

Excess tax expense (benefits) on equity awards

 

 

6.5

 

 

 

5.2

 

 

 

0.6

 

U.S. research and development tax credit

 

 

(4.9

)

 

 

(4.4

)

 

 

(2.4

)

Expenses not deductible for tax

 

 

6.3

 

 

 

3.2

 

 

 

4.0

 

Other

 

 

(0.3

)

 

 

2.9

 

 

 

2.2

 

Total

 

$

(84.9

)

 

$

60.8

 

 

$

103.5

 
Deferred Income Tax Assets and Liabilities

The significant categories of temporary differences that gave rise to deferred income tax assets and liabilities were as follows:

 

 

 

December 31,

 

 

 

2024

 

 

2023

 

 

 

(in millions)

 

Deferred income tax assets:

 

 

 

 

 

 

Accruals not currently deductible

 

$

86.2

 

 

$

77.1

 

Tax loss and credit carryforwards of certain foreign subsidiaries

 

 

225.6

 

 

 

216.7

 

Tax loss and domestic tax credit carryforwards

 

 

161.6

 

 

 

174.3

 

Intellectual property

 

 

177.6

 

 

 

—

 

Deferred compensation plan

 

 

27.8

 

 

 

32.6

 

Deferred interest expense

 

 

77.6

 

 

 

48.9

 

Inventory reserve

 

 

5.9

 

 

 

7.1

 

Operating lease liabilities

 

 

42.2

 

 

 

41.0

 

Depreciation and amortization

 

 

77.0

 

 

 

56.7

 

Other

 

 

24.5

 

 

 

8.9

 

Gross deferred income tax assets

 

 

906.0

 

 

 

663.3

 

Less: valuation allowance

 

 

(404.2

)

 

 

(375.5

)

Total deferred income tax assets

 

$

501.8

 

 

$

287.8

 

Deferred income tax liabilities:

 

 

 

 

 

 

Intangible assets

 

$

71.9

 

 

$

72.7

 

Unremitted foreign earnings

 

 

11.7

 

 

 

18.7

 

Operating lease assets

 

 

37.3

 

 

 

35.8

 

Other

 

 

—

 

 

 

2.4

 

Total deferred income tax liabilities

 

 

120.9

 

 

 

129.6

 

Total net deferred income tax assets

 

$

380.9

 

 

$

158.2

 
Changes Occurred in Amount of Unrecognized Tax Benefits

The following changes occurred in the amount of unrecognized tax benefits during the years ended December 31, 2024, 2023, and 2022:

 

 

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2022

 

 

 

(in millions)

 

Beginning balance of unrecognized tax benefits

 

$

49.1

 

 

$

49.7

 

 

$

54.1

 

Additions for current year tax positions

 

 

6.8

 

 

 

9.7

 

 

 

8.8

 

Additions for prior year tax positions

 

 

4.3

 

 

 

1.0

 

 

 

2.2

 

Reductions for prior year tax positions

 

 

(14.6

)

 

 

(6.6

)

 

 

(3.7

)

Reductions for audit settlements

 

 

(0.3

)

 

 

(0.2

)

 

 

(1.8

)

Reductions for the expiration of statutes of limitations

 

 

(4.1

)

 

 

(4.4

)

 

 

(6.2

)

Changes due to foreign currency translation adjustments

 

 

(1.3

)

 

 

(0.1

)

 

 

(3.7

)

Ending balance of unrecognized tax benefits (excluding interest and penalties)

 

 

39.9

 

 

 

49.1

 

 

 

49.7

 

Interest and penalties associated with unrecognized tax benefits

 

 

11.4

 

 

 

18.3

 

 

 

22.8

 

Ending balance of unrecognized tax benefits (including interest and penalties)

 

$

51.3

 

 

$

67.4

 

 

$

72.5