Herbalife Ltd. (NYSE:HLF) CEO and Chairman, Michael Johnson discusses the company’s regulatory compliance, sales, gold standards and Bill Ackman. We picked out some of the relevant segments from the conference call. Also see: Bill Ackman To Release A Documentary On Herbalife Ltd. (HLF) Victims

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Michael Johnson – Herbalife Ltd. – Chairman & CEO

Now, moving on to the regulatory compliance of our model I would like to take a few minutes to provide you with some facts and figures that give us continued and complete confidence. Our products are consumed and the consumption is genuine, backed by real demand.

In the US there were 7.9 million purchasers of Herbalife Ltd. (NYSE:HLF) product in the three month period of which 87% were not members. More than 90% of current purchasers, those purchasing in the past three months, say they intend to purchase products again. Few members that join the business in the US spend substantial time in the Herbalife business.

Of those surveyed, approximately half worked five hours or less in a month and they made an average of $158 in that month. This is consistent with both industry and Herbalife Ltd. (NYSE:HLF) specific surveys that suggest most who intend to work do so part-time to make extra income.

Current members are overwhelmingly satisfied with their experience, 91% say that they will definitely or probably continue. 63% of former distributors would recommend their experience to others and that number increases to 94% for those who operated nutrition clubs.

With regard to the Federal Trade Commission, as we have said publicly, Herbalife welcomes the inquiry. Given the tremendous amount of misinformation in the marketplace and we are cooperating fully.

We are confident that Herbalife Ltd. (NYSE:HLF) is in compliance with all applicable laws and regulations. Across the board, the facts bear on our side.

For example, during the past two years in the US, when we have enhanced our refund and buyback policy and required new members to acknowledge such policies, it is telling that in the face of nearly daily negative headlines by a short seller our product refund and return rate has continued to

decline with 2013 rates being the lowest in history at 0.2%. This trend is in direct contradiction to what one might expect if the short seller’s thesis is even close to accurate.

Herbalife Ltd. (NYSE:HLF) is proud to have the industry’s Gold Standard in consumer protection. The company provides complete 100% money back guarantee including shipping costs for any unsold product purchased within the past 12 months should a member choose to leave the business.

We require all new members to acknowledge that they are aware of our buyback policy. We enclose a brochure in every order in the US that communicates our buyback policy. In fact nearly 1 million brochures were distributed during the past two and a half months alone.

We provide clear, accurate and timely disclosures to prospective members regarding potential income in our statement of average gross compensation. The reality backed by statistics and studies that is the overwhelming majority of members have realistic expectations.

Regarding rumored investigations, let me be clear. Herbalife Ltd. (NYSE:HLF) takes its disclosure obligations seriously. We do not intend to make any additional comments regarding any of these matters unless and until there are material developments.

I also want to discuss the steps the Board has taken to accelerate cash returns to shareholders. It is the belief of Management and the Board that we have the opportunity to create long-term value for shareholders by repurchasing our stock now while the overhang of the short selling campaign has contracted our multiple.

To help maximize this opportunity we are redirecting the cash that would have otherwise been used for dividends over the next two years through a share repurchase to be completed in May and June. This decision demonstrates the Board’s continued confidence in the current strength of our business and our future cash flow generation.

Our strong financial position and current market valuation make this repurchase an attractive use of our capital. We continue to be grateful to our loyal shareholders, our outstanding sales leaders, our passionate members and our dedicated employees.

Des Walsh – Herbalife Ltd. – President

In the US, we have already had over 100,000 new members acknowledge the protections before they even began the member application process. In addition, we have already distributed approximately 1 million pamphlets promoting the Gold Standard in orders shipped to US members in the past 60 days.

If there are any existing members who have been misled by misrepresentations about excessive income or product claims, or wish to leave the business and would like to return excess inventory, we want to know about it. To date, despite these 1 million pamphlets and other member communication regarding Gold Standards, we have seen no increase in our product returns.

In addition to the written acknowledgement of the Gold Standard required of all new members, we will promote the Gold Standard in other new member materials and training materials for all levels of members. We are proud to offer this industry-leading standard in consumer protection and believe that this is another important milestone in our build it better initiative.

In closing, let me thank all our members and sales leaders for another great year. We are inspired by their passion, dedication and entrepreneurial spirit.

Our collaboration improves public health around the world. By providing support, education, and access to affordable, excellent nutrition, our members empower consumers on a daily basis to truly achieve a healthy, active lifestyle.

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Scott Van Winkle – Canaccord Genuity – Analyst

Sticking on the US as a topic, I know you can’t talk anymore about the regulatory comments, beginning of the call, but can you talk about your public relations efforts? It seems like it’s stepped up a little bit and you became more responsive over the last month. Has there been any change in PR and as well as your outreach efforts to distributors?

John DeSimone – Herbalife Ltd. – CFO

Hi, Scott. This is John. I’ll take that. Our efforts are what they are in response to the situation we’re in.

We are in a campaign. That campaign is something that we think is beneficial to the long-term value creation of our stock and for the benefit of our shareholders and we’ll do whatever it is we feel we need to do.

You sense that it’s stepped up. Maybe that’s the case. But at the end of the day, this is a proactive and a reactive piece and I think you’ll sense that both have stepped up and will continue to step up.

Scott Van Winkle – Canaccord Genuity – Analyst

And on the distributor side, is there any change in communication to present your point of view?

Des Walsh – Herbalife Ltd. – President

Yes, Scott, this is Des. No, our communication with distributors has remained consistent throughout and I think you see the impact of that. Obviously tremendous distributor confidence.

You see it reflected in distributor engagement. You see it reflected in those numbers that we shared in terms of meeting attendance, 112% increase compared to same period prior year. You see it reflected in activity rates in terms of average active sales leaders, and you see it also in terms

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