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Herbalife Ltd. Announces Record Fourth Quarter 2012 And Record Full Year Results, And Raises 2013 Earnings Guidance

Herbalife Ltd. (NYSE: HLF) today reported fourth quarter net sales of $1.1 billion, reflecting an increase of 20 percent compared to the same time period in 2011 on volume point growth of 18 percent. Net income for the quarter of $117.8 million, or $1.05 per diluted share, compares to 2011 fourth quarter net income of $105.4 million and EPS of $0.86, respectively.

For the twelve months ended December 31, 2012, the company reported record net sales of $4.1 billion, an 18 percent increase on 20 percent growth in volume compared to 2011. For the same period, the company reported net income of $477.2 million, or $4.05 per diluted share, reflecting an increase of 16 percent and 23 percent, respectively, compared to the 2011 results of $412.6 million and $3.30 per diluted share.

“Herbalife continues to deliver record results in sales and profitability as our independent distributors go deeper into existing markets, developing more and more customers using our nutrition products every day,” said Michael O. Johnson, Herbalife’s chairman and CEO. “Obesity and poor nutrition are global public health problems. Our distributors are proud to be part of the solution.”

For the year ended December 31, 2012 the company generated cash flow from operations of $567.8 million, an increase of 11 percent compared to 2011; paid dividends of $135.1 million; invested $122.8 million in capital expenditures; and repurchased $527.8 million in common shares outstanding under our share repurchase program.

Fourth Quarter and Fiscal 2012 Regional Key Metrics 1,2

Regional Volume Point and Average Active Sales Leader Metrics
Volume Points (Mil)   Average Active Sales Leaders
Region 4Q'12   Yr/Yr % Chg   4Q'12   Yr/Yr % Chg
North America 267.0   15% 68,029   14%
Asia Pacific 304.6 18% 69,553 26%
EMEA 156.6 14% 47,226 14%
Mexico 208.9 13% 61,836 19%
South & Central America 222.5 34% 50,874 28%
China 50.5   17%   12,560   25%
Worldwide Total 1,210.1   18%   300,521   20%
Volume Points (Mil)   Average Active Sales Leaders
Region FY'12   Yr/Yr % Chg   FY'12   Yr/Yr % Chg
North America 1,157.8   17% 66,054   16%
Asia Pacific 1,197.8 25% 63,255 31%
EMEA 602.5 11% 44,098 14%
Mexico 815.4 16% 57,651 21%
South & Central America 740.4 30% 44,980 29%
China 206.5   34%   11,683   33%
Worldwide Total 4,720.4   20%   277,803   22%

2012 Annual Sales Leader Requalification

By the end of January of each year, sales leaders are required to re-qualify to retain their sales leader status. A record number of sales leaders were retained in 2012. The overall pool of sales leaders needing to re-qualify increased by approximately 21% compared to the prior year and we retained 20% more of them than in the prior year. While size of the group needing to re-qualify increased for the year, our overall retention rate remained fairly constant at 51.8%.

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