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Herbalife Nutrition Ltd.$54.76($.35)(.64%)

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 Herbalife Ltd. Announces Fourth Quarter and Full Year 2015 Results
   Thursday, February 25, 2016 4:15:03 PM ET

--Fourth quarter volume points grew 5% compared to prior year

--Fourth quarter reported net sales of $1.1 billion, increased 9.7% in local currency and declined 3.1% on a reported basis compared to the prior year period due to the unfavorable impact of currency exchange rates

--Cash flow from operations during the quarter was $135.5 million and for the full year was $628.7 million

--Annual sales leader retention of approximately 54.2% percent

--Due to the continued adverse impact from currency exchange rates, full year 2016 adjusted diluted EPS guidance is now expected to be in a range of $4.05 to $4.50, which reflects an $0.80 currency headwind compared to the prior year

Herbalife Ltd. (HLF ) reported fourth quarter net sales of $1.1 billion. Net sales, excluding currency impact, grew by 9.7%, while reported net sales declined 3.1% primarily due to the continuing unfavorable impact of currency exchange rates. Adjusted(1)earnings for the quarter were $1.19 per diluted share compared to $1.41 per diluted share for the same period in 2014. On a reported basis, fourth quarter net income was $84.5 million, or $0.98 per diluted share, compared to $103.3 million, or $1.21 per diluted share for the same period in 2014. Fourth quarter 2015 net income and diluted EPS were negatively impacted by $26.0 million(2) and $0.30(2) per diluted share respectively, due to currency fluctuations.

For the quarter ended December 31, 2015, the company generated $135.5 million in net operating cash flow, and invested $30.4 million in capital expenditures.

For the year ended December 31, 2015, the company reported net sales of $4.5 billion, a 9.9% decrease compared to 2014, primarily due to the continuing unfavorable impact of currency exchange rates. Local currency net sales increased 4.7%, compared to 2014. Adjusted(1)earnings for the year were $5.00 per diluted share compared to $5.93 per diluted share for the full year 2014. On a reported basis, full year net income grew 9.8% to $339 million, or $3.97 per diluted share, compared to $309 million, or $3.40 per diluted share for full year 2014. Full year 2015 net income and diluted EPS were negatively impacted $137.8 million(3) or $1.57(3) per diluted share respectively, due to currency fluctuations.

For the year ended December 31, 2015, the company generated cash flow from operations of $628.7 million and invested $79.1 million in capital expenditures.

For the full year 2016, the company is updating its adjusted EPS guidance, solely to reflect current FX rates, to a range of $4.05 to $4.50 per diluted share, from the previous range of $4.35 to $4.75 per diluted share. Guidance includes a currency headwind of approximately $0.80 per diluted share, compared to 2015, which includes an additional $0.30 negative impact from currency compared to initial guidance provided a quarter ago. Full year 2016 currency adjusted EPS guidance is in a range of $4.85 to $5.30.

Michael O. Johnson, chairman and CEO, Herbalife, stated, "2015 was a significant year for Herbalife, as we completed the rollout of bold and important changes to the marketing plan that will enhance the long-term and sustainable growth of our business. We successfully navigated the associated short-term challenges, believing that we were making the right changes at the right time, and despite ongoing currency and macroeconomic challenges, we finished the year returning to growth."

Johnson continued, "Across the globe, we see more and more health-conscious consumers looking to take their nutrition and health more seriously. We believe Herbalife is well positioned to meet these consumers’ needs through our extensive product range and the personalized approach of our members."

Fourth Quarter and Fiscal 2015 Key Metrics(4,5)

Regional Volume Point and Average Active Sales Leader Metrics

                                     Volume Points (Mil)                   Average Active Sales Leaders
Region                      4Q’15    Yr/Yr % Chg    4Q’15    Yr/Yr % Chg
----------------------- -------------------- ------- -------------------- -------------------------------- ------- -------------------- ------------
North America                                  267.6       0 %                           76,408        -1 %
Asia Pacific                                   269.4                          2 %                           78,078                            0 %
EMEA                                           246.6                         15 %                           79,594                           20 %
Mexico                                         212.4                          4 %                           66,086                           -3 %
South & Central America                        196.1                         -7 %                           61,746                           -7 %
China                       154.2      30 %        27,275        33 %
----------------------- -------------------- ------- -------------------- ----- ----- -------------------- ------- -------------------- ------- ---
Worldwide Total           1,346.3       5 %       377,219         3 %
----------------------- -------------------- ------- -------------------- ----- ----- -------------------- ------- -------------------- ------- ---
                                     Volume Points (Mil)                   Average Active Sales Leaders
Region                     FY 2015   Yr/Yr % Chg   FY 2015   Yr/Yr % Chg
----------------------- -------------------- ------- -------------------- -------------------------------- ------- -------------------- ------------
North America                                1,156.0      -7 %                           76,702         1 %
Asia Pacific                                 1,064.5                        -11 %                           76,256                            1 %
EMEA                                           922.3                         10 %                           73,703                           24 %
Mexico                                         842.9                         -4 %                           65,167                           -1 %
South & Central America                        768.4                        -10 %                           60,828                           -5 %
China                       581.6      30 %        24,289        29 %
----------------------- -------------------- ------- -------------------- ----- ----- -------------------- ------- -------------------- ------- ---
Worldwide Total           5,335.7      -2 %       364,649         5 %
----------------------- -------------------- ------- -------------------- ----- ----- -------------------- ------- -------------------- ------- ---

Regional Net Sales and Foreign Exchange ("FX") Impact

Region                      Reported Net Sales   Growth/Decline   Growth/Decline
                                                  4Q ’15 (mil)                          including FX                        excluding FX
------------------------ -------------------- ------------------  -------------------- -------------  -------------------- -------------
North America                      $     203.4        -1 %              0 %
Asia Pacific (ex. China)                              $     232.1                           -6 %                                 2 %
EMEA                                                  $     192.4                           -4 %                                16 %
Mexico                                                $     113.7                          -14 %                                 4 %
South & Central America                               $     136.4                          -21 %                                10 %
China                              $     220.4        24 %             29 %
------------------------ -------------------- --------- --------- -------------------- ------- ------ -------------------- ------- ------
Worldwide Total                    $   1,098.4        -3 %             10 %
------------------------ -------------------- --------- --------- -------------------- ------- ------ -------------------- ------- ------
Region                      Reported Net Sales   Growth/Decline   Growth/Decline
                                                  FY 2015 (mil)                         including FX                        excluding FX
------------------------ -------------------- ------------------  -------------------- -------------  -------------------- -------------
North America                      $     879.5        -5 %             -5 %
Asia Pacific (ex. China)                              $     938.6                          -17 %                               -11 %
EMEA                                                  $     755.1                          -11 %                                12 %
Mexico                                                $     479.9                          -16 %                                 1 %
South & Central America                               $     569.7                          -31 %                                11 %
China                              $     846.2        27 %             30 %
------------------------ -------------------- --------- --------- -------------------- ------- ------ -------------------- ------- ------
Worldwide Total                    $   4,469.0       -10 %              5 %
------------------------ -------------------- --------- --------- -------------------- ------- ------ -------------------- ------- ------

Outlook

Guidance for the first quarter 2016 includes an unfavorable impact from currency exchange rates of approximately $0.27 per diluted share versus the first quarter of 2015.

Full year 2016 guidance includes a currency headwind of approximately $0.80 per diluted share, compared to 2015, which includes an additional $0.30 negative impact from currency compared to initial guidance provided a quarter ago.

Full year 2016 volume point guidance remains unchanged from previous guidance on an absolute value basis, which translates to a growth rate in the expected range 1.5% to 4.5% compared to 2015.

Based on current business trends the company’s first quarter 2016 and full year 2016 guidance is as follows:

                                                              Three Months Ending                                     Twelve Months Ending
                                                                March 31, 2016                                                             December 31, 2016
                                              ---------------------------------------------------                     ----------------------------------------------------------
                                                    Low             High                                  Low                High
                                              ------------                        ------------                        -------------                        ------------------
Volume Point Growth vs 2015                        (1.5 %)                              1.5 %                                1.5 %                                   4.5 %
Net Sales Growth vs 2015                           (6.0 %)                             (3.0 %)                              (0.5 %)                                  2.5 %
Adjusted Diluted EPS                             $ 0.97                              $ 1.07                              $  4.05                                $   4.50
Cap Ex ($ millions)                              $ 25.0                              $ 35.0                              $ 105.0                                $  135.0
Effective Tax Rate                                 28.0 %                              30.0 %                               28.0 %                                  30.0 %
Currency Adjusted(a) Net Sales Growth vs 2015       2.5 %                               5.5 %                                5.5 %                                   8.5 %
Currency Adjusted EPS (a)                        $ 1.24                              $ 1.34                              $  4.85                                $   5.30
                                                                                                                                                            
(a) Excludes the impact of Venezuela price increases tied
to FX rate movements.

Guidance excludes the impact of legal and advisory services and expenses relating to challenges to the company’s business model, including expenses related to regulatory inquiries, the impact of non-cash interest costs associated with the company’s convertible notes and the expenses incurred related to the effort to recover costs related to the re-audits that occurred in 2013. Forward guidance is based on the average daily exchange rates of the first three weeks of January. With respect to Venezuela, the guidance assumes a SIMADI rate of 198 to 1 for full-year 2016 and excludes the potential impact of the recent and any future devaluation of the Venezuelan Bolivar and future repatriation, if any, of existing cash balances in Venezuela.

Fourth Quarter 2015 Earnings Conference Call

Herbalife senior management will host an investor conference call to discuss its recent financial results and provide an update on current business trends on Thursday, February 25, 2016 at 2:30 p.m. PT (5:30 p.m. ET).

The dial-in number for this conference call for domestic callers is (877) 317-1296, and (706) 634-5671 for international callers (conference ID 24808282). Live audio of the conference call will be simultaneously webcast in the investor relations section of the company’s website at http://ir.herbalife.com .

An audio replay will be available following the completion of the conference call in MP3 format or by dialing (855) 859-2056 for domestic callers or (404) 537-3406 for international callers (conference ID 24808282). The webcast of the teleconference will be archived and available on Herbalife’s website.

About Herbalife Ltd.

Herbalife is a global nutrition company that has been changing people’s lives with great products since 1980. Our nutrition, weight-management, energy and fitness and personal care products are available exclusively to and through dedicated Independent Herbalife Members in more than 90 countries. We are committed to fighting the worldwide problems of poor nutrition and obesity by offering high-quality products, one-on-one coaching with an Herbalife member and a community that inspires customers to live a healthy, active life.

We support the Herbalife Family Foundation (HFF) and its Casa Herbalife programs to help bring good nutrition to children in need.

Herbalife’s website contains a significant amount of financial and other information about the company at http://ir.herbalife.com . The company encourages investors to visit its website from time to time, as information is updated and new information is posted. To learn more visit Herbalife.com or IAmHerbalife.com.

FORWARD-LOOKING STATEMENTS

This earnings release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission. Important factors that could cause our actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in our forward-looking statements include, among others, the following:

-- our relationship with, and our ability to influence the actions of, our Members;

-- improper action by our employees or Members in violation of applicable law;

-- adverse publicity associated with our products or network marketing organization, including our ability to comfort the marketplace and regulators regarding our compliance with applicable laws;

-- changing consumer preferences and demands;

-- the competitive nature of our business;

-- regulatory matters governing our products, including potential governmental or regulatory actions concerning the safety or efficacy of our products and network marketing program, including the direct selling market in which we operate;

-- legal challenges to our network marketing program;

-- risks associated with operating internationally and the effect of economic factors, including foreign exchange, inflation, disruptions or conflicts with our third party importers, pricing and currency devaluation risks, especially in countries such as Venezuela;

-- uncertainties relating to interpretation and enforcement of legislation in China governing direct selling;

-- our inability to obtain the necessary licenses to expand our direct selling business in China;

-- adverse changes in the Chinese economy;

-- our dependence on increased penetration of existing markets;

-- contractual limitations on our ability to expand our business;

-- our reliance on our information technology infrastructure and outside manufacturers;

-- the sufficiency of trademarks and other intellectual property rights;

-- product concentration;

-- our reliance upon, or the loss or departure of any member of, our senior management team which could negatively impact our Member relations and operating results;

-- U.S. and foreign laws and regulations applicable to our international operations

-- restrictions imposed by covenants in our credit facility;

-- uncertainties relating to the application of transfer pricing, duties, value added taxes, and other tax regulations, and changes thereto;

-- changes in tax laws, treaties or regulations, or their interpretation;

-- taxation relating to our Members;

-- product liability claims;

-- our incorporation under the laws of the Cayman Islands;

-- whether we will purchase any of our shares in the open markets or otherwise; and

-- share price volatility related to, among other things, speculative trading and certain traders shorting our common shares.

We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.

(1) See Schedule A - "Reconciliation of Non-GAAP Financial Measures" for more detail. (2) Excludes the impact of Venezuela price increases tied to foreign exchange rate movements. (3) Excludes the impact of Venezuela price increases tied to foreign exchange rate movements. (4) Supplemental tables that include additional business metrics can be found at http://www.ir.herbalife.com . (5) Worldwide Average Active Sales Leaders may not equal the sum of the Average Active Sales Leaders in each region due to the calculation being an average of Sales Leaders active in a period, not a summation, and the fact that some are active in more than one region but are counted only once in the worldwide amount.

RESULTS OF OPERATIONS:

                                                                                                         Herbalife Ltd. and Subsidiaries
                                                                                                   Condensed Consolidated Statements of Income
                                                                                                     (In millions, except per share amounts)
                                                                                                                   (Unaudited)
                                                                                               
                                                 ---------------------------------------------------- --------------------------------                     ---------------------------------------------------- --------------------------------
                                                                                  Three Months Ended                                                                                        Twelve Months Ended
                                                 -------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------
                                                            12/31/2015                        12/31/2014                                                     12/31/2015                                           12/31/2014
                                                 ------------------------------                       ------------------------------                       --------------------------------------------------                        ----------
                                                                                                                                                                                                                 
North America                                                       $      203.4                                         $      204.8                                         $      879.5                                         $      926.8
Mexico                                                                     113.7                                                132.7                                                479.9                                                567.9
South and Central America                                                  136.4                                                173.2                                                569.7                                                826.4
EMEA                                                                       192.4                                                200.2                                                755.1                                                843.1
Asia Pacific                                                               232.1                                                245.6                                                938.6                                              1,130.1
China                                                   220.4                             177.1                             846.2                             664.3
                                                 -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- ----------
   Worldwide net sales                                                   1,098.4                                              1,133.6                                              4,469.0                                              4,958.6
Cost of Sales (5)                                       204.4                             219.6                             856.0                             982.9
                                                 -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- ----------
     Gross Profit                                                          894.0                                                914.0                                              3,613.0                                              3,975.7
Royalty Overrides                                                          305.0                                                334.6                                              1,251.4                                              1,471.1
Selling, General and Administrative Expenses (6)        446.4                             417.4                           1,778.0                           1,991.1
                                                 -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- ----------
     Operating Income                                                      142.6                                                162.0                                                583.6                                                513.5
Interest Expense, net                                                       25.6                                                 23.0                                                 94.9                                                 79.2
Other Expense, net (7)                                      -                                 -                               2.3                              13.0
                                                 -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- ----------
Income before income taxes                                                 117.0                                                139.0                                                486.4                                                421.3
Income Taxes                                             32.5                              35.7                             147.3                             112.6
                                                 -------------------- ----------                      -------------------- ----------                      -------------------- ----------                      -------------------- ----------
Net Income                                                          $       84.5                                         $      103.3                                         $      339.1                                         $      308.7
                                                 ==================== ==========                      ==================== ==========                      ==================== ==========                      ==================== ==========
                                                                                                                                                                                                                 
Basic Shares                                                                82.7                                                 82.1                                                 82.6                                                 86.3
Diluted Shares                                                              85.8                                                 85.5                                                 85.3                                                 90.8
                                                                                                                                                                                                                 
Basic EPS                                                           $       1.02                                         $       1.26                                         $       4.11                                         $       3.58
                                                 ==================== ==========                      ==================== ==========                      ==================== ==========                      ==================== ==========
Diluted EPS                                                         $       0.98                                         $       1.21                                         $       3.97                                         $       3.40
                                                 ==================== ==========                      ==================== ==========                      ==================== ==========                      ==================== ==========
                                                                                                                                                                                                                 
Dividends declared per share                                        $          -                                         $          -                                         $          -                                         $       0.30
                                                 ==================== ==========                      ==================== ==========                      ==================== ==========                      ==================== ==========
                                                                            
------------------------------------------------ ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- --------------------------------
                                                                                                                                                                                                                 
(5) As discussed in Note 2, Basis of Presentation,
to the Consolidated Financial Statements included in Item 15 of the
annual report on form 10-K for the year ended Dec. 31, 2015, Cost of
Sales includes $2.0 million and $7.6 million of inventory write
downs related to Venezuela for the twelve months ended Dec. 31, 2015
and 2014, respectively.
(6) As discussed in Note 2, Basis of Presentation,
to the Consolidated Financial Statements included in Item 15 of the
annual report on form 10-K for the year ended Dec. 31, 2015,
Selling, General and Administrative includes $32.9 million pre-tax
unfavorable impact related to the remeasurement of Venezuela
Bolivar-denominated assets and liabilities at the SIMADI rate for
the twelve months ended Dec. 31, 2015; and $201.4 million pre-tax
unfavorable impact related to the remeasurement of Venezuela
Bolivar-denominated assets and liabilities at the SICAD I and SICAD
II rate for the twelve months ended Dec. 31, 2014; and $7.0 million
loss on Venezuela asset impairment for the twelve months ended Dec.
31, 2014.
(7) As discussed in Note 2, Basis of Presentation,
to the Consolidated Financial Statements included in Item 15 of the
annual report on form 10-K for the year ended Dec. 31, 2015, Other
Expense, net relates to the impairment of investments in
Bolivar-denominated bonds.
 
 
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Herbalife Ltd. and Subsidiaries
                                                                          Condensed Consolidated Balance Sheets
                                                                                      (In millions)
                                                                                       (Unaudited)
 
                                                                                     Dec 31,                                             Dec 31,
                                                                                      2015                                                                   2014
                                                               -----------------------------------------------                        -----------------------------------------------
                                                                                                                                       
ASSETS
Current Assets:
   Cash & cash equivalents                                                        $   889.8                                                              $   645.4
   Receivables, net                                                                    69.9                                                                   83.6
   Inventories                                                                        332.0                                                                  377.7
   Prepaid expenses and other current assets                                          161.1                                                                  186.1
   Deferred income tax assets                                      113.5                            100.6  
                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total Current Assets                                                          1,566.3                                                                1,393.4
                                                                                                                                       
Property, net                                                                         339.2                                                                  366.7
Deferred compensation plan assets                                                      29.3                                                                   27.4
Other assets                                                                          141.1                                                                  154.9
Marketing related intangibles and other intangible assets, net                        310.2                                                                  310.4
Goodwill                                                            91.8                            102.2  
                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total Assets                                                                $ 2,477.9                                           $ 2,355.0  
                                                               ==================== ======= ====================                      ==================== ======= ====================
                                                                                                                                       
                                                                                                                                       
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities:
   Accounts payable                                                               $    71.1                                                              $    72.4
   Royalty overrides                                                                  249.9                                                                  251.0
   Accrued compensation                                                               128.8                                                                   69.6
   Accrued expenses                                                                   228.7                                                                  252.1
   Current portion of long-term debt                                                  229.5                                                                  100.0
   Advance sales deposits                                                              63.8                                                                   70.0
   Income taxes payable                                             52.6                             59.7  
                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total Current Liabilities                                                     1,024.4                                                                  874.8
                                                                                                                                       
Non-current liabilities
   Long-term debt, net of current portion                                           1,392.5                                                                1,691.8
   Deferred compensation plan liability                                                43.6                                                                   42.9
   Deferred income tax liabilities                                                      0.4                                                                   15.3
   Other non-current liabilities                                    70.5                             64.6  
                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total Liabilities                                                             2,531.4                                                                2,689.4
                                                                                                                                       
Commitment and Contingencies
                                                                                                                                       
Shareholders’ deficit:
   Common shares                                                                        0.1                                                                    0.1
   Paid-in capital in excess of par value                                             438.2                                                                  409.1
   Accumulated other comprehensive loss                                              (165.5 )                                                                (78.2 )
   Accumulated deficit                                            (326.3 )                                            (665.4 )
                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
      Total Shareholders’ Deficit                                  (53.5 )                                            (334.4 )
                                                               -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                    
                                                               --------------------------------------------------                     --------------------------------------------------
      Total Liabilities and Shareholders’ Deficit                                 $ 2,477.9                                           $ 2,355.0  
                                                               ==================== ======= ====================                      ==================== ======= ====================
 
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Herbalife Ltd. and Subsidiaries
                                                                          Condensed Consolidated Statements of Cash Flows
                                                                                           (In millions)
                                                                                            (Unaudited)
                                                                                                                          
                                                                                                                          Twelve Months Ended
                                                                    -------------------------------------------------------------------------------------------------------------------------------
                                                                                         12/31/2015                                                                12/31/2014
                                                                                         ----------                                                                ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                                             $      339.1                                                              $      308.7
Adjustments to reconcile net income to net cash provided by
operating activities:
   Depreciation and amortization                                                               98.0                                                                      93.2
   Excess tax benefits from share-based payment arrangements                                   (4.1 )                                                                   (10.4 )
   Share-based compensation expenses                                                           44.9                                                                      45.7
   Non-cash interest expense                                                                   56.2                                                                      43.5
   Deferred income taxes                                                                      (38.2 )                                                                   (84.8 )
   Inventory write-downs                                                                       25.3                                                                      24.5
   Foreign exchange transaction (gain) loss                                                    (6.3 )                                                                    (6.2 )
   Foreign exchange loss from Venezuela currency devaluation                                   32.9                                                                     200.3
   Impairments and write-downs relating to Venezuela currency                                   4.3                                                                      27.5
   devaluation
   Other                                                                                        6.5                                                                       6.1
Changes in operating assets and liabilities:
   Receivables                                                                                 (6.2 )                                                                     6.0
   Inventories                                                                                (30.5 )                                                                   (99.4 )
   Prepaid expenses and other current assets                                                    4.4                                                                     (34.9 )
   Other assets                                                                               (21.3 )                                                                   (36.7 )
   Accounts payable                                                                             6.0                                                                      (5.2 )
   Royalty overrides                                                                           21.6                                                                       6.7
   Accrued expenses and accrued compensation                                                   71.1                                                                     (11.5 )
   Advance sales deposits                                                                       2.3                                                                      10.4
   Income taxes                                                                                21.8                                                                      22.2
   Deferred compensation plan liability                                      0.9                                 5.7  
                                                                    -------------------- ---------- --------------------                      -------------------- ---------- --------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES                                  628.7                               511.4  
                                                                    -------------------- ---------- --------------------                      -------------------- ---------- --------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment                                                    (79.0 )                                                                  (173.7 )
Proceeds from sale of property, plant and equipment                                             0.4                                                                         -
Investments in Venezuelan bonds                                                                (0.1 )                                                                   (12.6 )
Deposit in escrow                                                                                 -                                                                     (15.0 )
Other                                                                        5.3                                   -  
                                                                    -------------------- ---------- --------------------                      -------------------- ---------- --------------------
NET CASH USED IN INVESTING ACTIVITIES                                      (73.4 )                                               (201.3 )
                                                                    -------------------- ---------- --------------------                      -------------------- ---------- --------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid                                                                                    -                                                                     (30.4 )
Dividends received                                                                                -                                                                       3.4
Payments for Capped Call Transactions                                                             -                                                                    (123.8 )
Borrowings from senior secured credit facility and other debt                                     -                                                                      50.0
Proceeds from senior convertible notes                                                            -                                                                   1,150.0
Principal payments on senior secured credit facility and other debt                          (227.6 )                                                                  (131.3 )
Issuance costs relating to long-term debt and senior convertible                               (6.2 )                                                                   (28.9 )
notes
Share repurchases                                                                             (16.6 )                                                                (1,291.9 )
Excess tax benefits from share-based payment arrangements                                       4.1                                                                      10.4
Proceeds from exercise of stock options and sale of stock under                                 1.9                                                                       3.0
employee stock purchase plan
Other                                                                       (5.6 )                                                    -  
                                                                    -------------------- ---------- --------------------                      -------------------- ---------- --------------------
NET CASH USED IN FINANCING ACTIVITIES                                     (250.0 )                                               (389.5 )
                                                                    -------------------- ---------- --------------------                      -------------------- ---------- --------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                    (60.9 )                                               (248.2 )
                                                                    -------------------- ---------- --------------------                      -------------------- ---------- --------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS                                                       244.4                                                                    (327.6 )
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                               645.4                               973.0  
                                                                    -------------------- ---------- --------------------                      -------------------- ---------- --------------------
CASH AND CASH EQUIVALENTS, END OF YEAR                                                 $      889.8                                           $      645.4  
                                                                    ==================== ========== ====================                      ==================== ========== ====================
CASH PAID DURING THE YEAR
Interest paid                                                                          $       50.5                                           $       39.2  
                                                                    ==================== ========== ====================                      ==================== ========== ====================
Income taxes paid                                                                      $      168.4                                           $      180.8  
                                                                    ==================== ========== ====================                      ==================== ========== ====================

SUPPLEMENTAL INFORMATION

SCHEDULE A: RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Unaudited and unreviewed), (All tables provide Dollars in millions, Except per Share Data)

In addition to its reported results, the company has included in the tables below adjusted results that the Securities and Exchange Commission defines as "non-GAAP financial measures." Management believes that such non-GAAP financial measures, when read in conjunction with the company’s reported results, can provide useful supplemental information for investors in analyzing period to period comparisons of the company’s results.

The following is a reconciliation of net income, presented and
reported in accordance with U.S. generally accepted accounting
principles, to net income adjusted for certain items:
                                                                                                                                                                 
---------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- --------------------------------
                                                                                                                                                                                                                                           
                                                                                                                             Three Months Ended                                                                                                                        Twelve Months Ended
                                                                       -------------------------------------------------------------------------------------------------------------------------------                     ----------------------------------------------------------------------------------------------------------
                                                                                            12/31/2015                                                                12/31/2014                                                                12/31/2015                                                                12/31/2014
                                                                                            ----------                                                                ----------                                                                ----------                                                                ----------
                                                                                                                                                                                                (in millions)
                                                                                                                                                                                                                                                                                                      
Net income, as reported                                                                   $       84.5                                                              $      103.3                                                              $      339.1                                                              $      308.7
Remeasurement, impairment losses and other charges relating to                                     2.5                                                                       1.4                                                                      27.7                                                                     154.2
Venezuela (8) (9)
Expenses incurred responding to attacks on the company’s business                                  3.3                                                                       3.1                                                                      13.8                                                                      16.6
model (8) (10)
Expenses related to Regulatory inquiries (8) (11)                                                  3.7                                                                       2.8                                                                      14.2                                                                       9.4
Expenses incurred for the recovery of re-audit fees (8) (12)                                       0.6                                                                       0.1                                                                       1.3                                                                       0.4
Foreign exchange gain from Euro/USD exposure on intercompany                                      (0.5 )                                                                       -                                                                      (8.3 )                                                                       -
balances (8) (13)
Non-cash interest expense and amortization of non-cash issuance costs                              9.4                                                                      10.8                                                                      42.2                                                                      36.7
(8) (14)
Legal reserve for the Bostick case (15)                                                           (1.2 )                                                                    (0.4 )                                                                    (1.2 )                                                                    10.9
Impairment of newly acquired defective manufacturing equipment                                       -                                                                      (0.1 )                                                                       -                                                                       1.6
(16)
Recovery of defective manufacturing equipment previously impaired (17)            -                                   -                                (2.0 )                                                    -
                                                                       -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ----------
Net income, as adjusted (18)                                                              $      102.4                                           $      121.0                                           $      426.9                                           $      538.5
                                                                       ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                      ==================== ==========
                                                                                                                                                                 
---------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- --------------------------------
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
The following is a reconciliation of diluted earnings per share,
presented and reported in accordance with U.S. generally accepted
accounting principles, to diluted earnings per share adjusted for
certain items:
                                                                                                                                                                 
---------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- --------------------------------
                                                                                                                                                                                                                                                                                                      
                                                                                                                             Three Months Ended                                                                                                                        Twelve Months Ended
                                                                       -------------------------------------------------------------------------------------------------------------------------------                     ----------------------------------------------------------------------------------------------------------
                                                                                            12/31/2015                                                                12/31/2014                                                                12/31/2015                                                                12/31/2014
                                                                                            ----------                                                                ----------                                                                ----------                                                                ----------
                                                                                                                                                                                                                                                                                                      
Diluted earnings per share, as reported                                                   $       0.98                                                              $       1.21                                                              $       3.97                                                              $       3.40
Remeasurement, impairment losses and other charges relating to                                    0.03                                                                      0.01                                                                      0.32                                                                      1.70
Venezuela (8) (9)
Expenses incurred responding to attacks on the company’s business                                 0.04                                                                      0.04                                                                      0.16                                                                      0.18
model (8) (10)
Expenses related to Regulatory inquiries (8) (11)                                                 0.04                                                                      0.03                                                                      0.17                                                                      0.10
Expenses incurred for the recovery of re-audit fees (8) (12)                                      0.01                                                                         -                                                                      0.02                                                                         -
Foreign exchange gain from Euro/USD exposure on intercompany                                     (0.01 )                                                                       -                                                                     (0.10 )                                                                       -
balances (8) (13)
Non-cash interest expense and amortization of non-cash issuance costs                             0.11                                                                      0.13                                                                      0.49                                                                      0.40
(8) (14)
Legal reserve for the Bostick case (15)                                                          (0.01 )                                                                       -                                                                     (0.01 )                                                                    0.12
Impairment of newly acquired defective manufacturing equipment                                       -                                                                         -                                                                         -                                                                      0.02
(16)
Recovery of defective manufacturing equipment previously impaired (17)            -                                   -                               (0.02 )                                                    -
                                                                       -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ---------- --------------------                      -------------------- ----------
Diluted earnings per share, as adjusted (18)                                              $       1.19                                           $       1.41                                           $       5.00                                           $       5.93
                                                                       ==================== ========== ====================                      ==================== ========== ====================                      ==================== ========== ====================                      ==================== ==========
                                                                                                                                                                 
---------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- ------------------------------------------------------------------------- --------------------------------
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
(8) Based on interim income tax reporting rules, these
expenses are not considered discrete items. As a result, the
company’s full year effective tax rate is impacted by these items.
When applying the full year effective tax rate to year-to-date
income, the company’s year-to-date tax provision recorded with
respect to these non-GAAP adjustments is different from the
forecasted full-year tax provision impact of these items. As a
consequence, adjustments to the year-to-date and quarterly tax
impacts will be recorded as the adjusted full year effective tax
rate is applied to income in subsequent periods. Additionally,
adjustments to items unrelated to these non-GAAP adjustments may
have an effect on the income tax impact of these non-GAAP
adjustments in subsequent periods. The company plans to update the
income tax impact of these items in subsequent interim reporting
periods.
(9) Net of $1.8 million and $0.4 million tax benefit for
the three months ended Dec. 31, 2015 and 2014, respectively; and net
of $14.9 million and and $76.6 million tax benefit for the twelve
months ended Dec. 31, 2015 and 2014, respectively.
(10) Net of $0.4 million and $3.7 million tax benefit for
the three months ended Dec. 31, 2015 and 2014, respectively; and net
of $4.9 million and $8.5 million tax benefit for the twelve months
ended Dec. 31, 2015 and 2014, respectively.
(11) Net of $0.8 million and $1.6 million tax benefit for
the three months ended Dec. 31, 2015 and 2014, respectively; and net
of $7.3 million and $5.7 million tax benefit for the twelve months
ended Dec. 31, 2015 and 2014, respectively.
(12) Net of $0.2 million and $0.1 million tax benefit for
the three months ended Dec. 31, 2015 and 2014, respectively; and net
of $0.7 million and $0.2 million tax benefit for the twelve months
ended Dec. 31, 2015 and 2014, respectively.
(13) Net of $0.5 million and $0.8 million tax benefit for
the three and twelve months ended Dec. 31, 2015, respectively.
(14) Relates to non-cash expense on our convertible notes
and prepaid forward share repurchase contract.
(15) Net of $0.7 million tax expense and $0.4 million tax
benefit for the three months ended Dec. 31, 2015 and 2014,
respectively; and $0.7 million tax expense
and $6.6 million tax benefit for the twelve months ended Dec. 31,
2015 and 2014, respectively.
(16) Net of $0.1 million and $1.0 million tax benefit for
the three and twelve months ended Dec. 31, 2014, respectively.
(17) Net of $1.1 million tax expense for the twelve
months ended Dec. 31, 2015.
(18) Amounts may not total due to rounding.

The following is a reconciliation of total long-term debt to net debt:

                                                                            12/31/2015                        12/31/2014
                                                                            ----------                                           ----------
                                                                                           (in millions)
                                                                                                             
  Total long-term debt (current and long-term portion)                    $    1,622.0                                         $    1,791.8
  Less: Cash and cash equivalents                             889.8                             645.4
                                                       -------------------- ----------                      -------------------- ----------
  Net debt                                                                $      732.2                      $    1,146.4
------------------------------------------------------ -------------------- ---------- -------------------- -------------------- ----------

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20160225006604r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20160225006604/en/

SOURCE: Herbalife Ltd.

Herbalife Ltd. 
Media Contact: 
Jennifer Butler 
VP, Media Relations 
213.745.0420 
or 
Investor Contact: 
Alan Quan 
VP, Investor Relations 
213.745.0541


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