The Big Lie

July 22, 2014

The Big Lie
July 22, 2014

Pershing Square Capital Management, L.P.
Disclaimer
This disclaimer is issued in connection with this document and the oral presentation by Pershing Square Capital Management, L.P. (“Pershing Square”) on Herbalife Nutrition
Clubs (collectively, the “Presentation”). Pershing Square is an investment adviser to funds that are in the business of actively buying and selling securities and other
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Pershing Square currently maintains a substantial short position in the common stock of Herbalife Ltd. (“Herbalife”) and derivatives related to its common stock. Pershing
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The information and opinions contained in the Presentation are based on publicly available information about Herbalife and other companies and persons. Pershing Square
recognizes that there may be non-public information in the possession of Herbalife or others that could lead Herbalife or others to disagree with Pershing Square’s analyses
and conclusions.

The Presentation includes forward-looking statements, estimates, projections and opinions prepared with respect to, among other things, certain legal and regulatory issues
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directors, officers and employees.
3
All Pyramids Eventually Collapse
“ Every pyramid or Ponzi scheme collapses
because it cannot expand beyond the size
of the earth's population. When the
scheme collapses, most investors find
themselves at the bottom, unable to
recoup their losses.”
http://www.ftc.gov/public-
statements/1998/05/pyramid-schemes
“Why Do Pyramid Schemes Always Fail?
“ Since there are only a limited number of people in a given community, all
pyramid schemes will ultimately collapse. The only people who make money
are those few who are on the top of the pyramid.”
http://www.ag.ny.gov/consumer-frauds/pyramid-schemes
From the Securities and
Exchange Commission:
From the New York Attorney General:
From the Federal Trade Commission:
“ The fraudsters behind a
pyramid scheme may go to
great lengths to make the
program look like a legitimate
multi-level marketing program.
. . . But eventually the pyramid
will collapse.”
http://www.sec.gov/answers/
pyramid.htm
4
All Pyramids Eventually Collapse
“ We went into India ten years ago. And we went in and it was a big –
it's called pop and drop. You go in. A lot of distributors come in. They
recruit and you get a lot of volume. Those distributors leave the country
and you get a big drop.”

– John DeSimone, Herbalife CFO, 3/10/10
China is 1.3 billion people, you can recruit for a long time there before we
had what was called the classic ‘pop-and-drop’ in that marketplace.”

– Michael Johnson, Herbalife CEO, 8/6/08
Source: Herbalife Q2’08 earnings call (8-6-08).
In Herbalife’s Own Words – “The Classic Pop-and-Drop”
5
CEO Michael Johnson:
“The Classic Pop-and-Drop”
Japan Israel Spain
France Germany Russia
Herbalife Stopped Disclosing These Figures in 2002
6
$140
$92
$75
$69
$45
$42
$0
$20
$40
$60
$80
$100
$120
$140
$160
1986 1987 1988 1989 1990 1991
(70%)
Herbalife U.S. “Retail Sales” ($mm)
Retail Sales Declined Significantly
After the 1986 Injunction in California
Source: Herbalife public filings.
Herbalife’s U.S. “Retail Sales” declined 70% cumulatively for the five
year period following the 1986 injunction
7
$42
$86
$247
$295
$334
$280
$299
$365
$416
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
1991 1992 1993 1994 1995 1996 1997 1998 1999
Retail Sales Significantly Increased
After 1992 Infinity Bonus
890%
Herbalife U.S. “Retail Sales” ($mm)
Source: Herbalife public filings.
Herbalife’s U.S. “Retail Sales” increased 890% cumulatively for the
seven years following the introduction of the “Production Bonus”
(also known as “infinity bonus”)
8
Retail Sales Grew Rapidly After Michael Johnson
Became CEO
Herbalife Total “Retail Sales” ($bn)
$1.8 $1.8
$1.7
$1.8
$1.9
$2.1
$2.6
$3.1
$3.5
$3.8
$3.7
$4.3
$5.4
$6.4
$7.5
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Mark
Hughes
dies –
5/21/00
Michael
Johnson
becomes
CEO –
4/3/03
Source: Herbalife public filings.
Note: Herbalife total retail sales used because the company no longer disclosed U.S. retail sales after 2000.
Herbalife’s “Retail Sales” decreased after the death of founder Mark
Hughes in 2000, but have grown rapidly since the company hired
Michael Johnson as CEO in 2003
9
Portfolio Manager John Hempton:
Herbalife is the “Stock Market’s Scumbags”
Source: http://video.cnbc.com/gallery/?video=3000139284
11
Hempton’s Firm Bronte Capital is Long HLF & Believes
in Michael Johnson’s Leadership
 Expanded Disney’s business from 34 markets to 80 markets
 Created Disney subsidiaries in Europe, Asia, Africa, Latin America
and the Middle East

Michael Johnson’s Resume Fits
Herbalife’s Strategy
 Univision Network is the most watched broadcast network and
reaches 98% of U.S. Hispanic households
 The Latino community has become Herbalife’s largest affinity group
Source: “Herbalife International Appoints Michael O. Johnson as Chief Executive Officer “, 4/3/03 and “Univision Communications
Appoints Michael O. Johnson to Board of Directors”, 6/5/05
Two years after becoming CEO of Herbalife, Johnson joined the board of
directors of Univision, which provided him deep exposure to the Latino
community
Prior to becoming CEO of Herbalife, Johnson was the President of
Disney International, which provided him with the experience of
expanding into new markets
12
Herbalife’s Answer to “The Classic Pop-and-Drop”

Under CEO Michael Johnson, Herbalife’s strategies to address the
Classic Pop-and-Drop include:

1. Expand globally, including in the world’s poorest countries

2. Exploit the Internet and Lead Generation

3. Target Latinos and low-income populations in the U.S.

4. Propagate Nutrition Clubs

5. Support ‘Training Programs” within Nutrition Clubs

Targeting the “Bottom of the Pyramid” – in Herbalife’s Own Words . . .
13
SHUTDOWN
See “Deceptive Practices Supporting the Herbalife Pyramid Scheme: Lead Generation” (issued 2.4.14) http://www.herbalifepyrami dscheme.com/deceptive-
practices-supporting-herbalife-pyramid-scheme-lead-generation
From an Herbalife Internal Strategy Document
14
From an Herbalife Internal Strategy Document
15
From an Herbalife Internal Strategy Document
16
Herbalife Targets Those in Extreme Poverty

• More than 4 billion people live at the
Bottom of the Pyramid (BOP) on
less than $2 per day

• Poor represents resilient
entrepreneurs and value‐conscious


From Herbalife’s Internal Strategy Document:
Emphasis in original
17
Herbalife Targets Those in Extreme Poverty
How to Target the Poorest
of the Poor
18
Herbalife’s Answer to “The Classic Pop-and-Drop”
1. Expand globally, including into
the world’s poorest countries
19
Number of Countries in which Herbalife Operates
1 1
2
3
4 4 4 4
5
9
1111
15
16
24
32
34
36
42
46
49
52
55
58
59
60
62
65
70
72
74
79
88
91
0
10
20
30
40
50
60
70
80
90
100
1
9
8
0
1
9
8
1
1
9
8
2
1
9
8
3
1
9
8
4
1
9
8
5
1
9
8
6
1
9
8
7
1
9
8
8
1
9
8
9
1
9
9
0
1
9
9
1
1
9
9
2
1
9
9
3
1
9
9
4
1
9
9
5
1
9
9
6
1
9
9
7
1
9
9
8
1
9
9
9
2
0
0
0
2
0
0
1
2
0
0
2
2
0
0
3
2
0
0
4
2
0
0
5
2
0
0
6
2
0
0
7
2
0
0
8
2
0
0
9
2
0
1
0
2
0
1
1
2
0
1
2
2
0
1
3
Michael
Johnson
becomes
CEO – 4/3/03
Herbalife Needs More Countries to Exploit
Source: Herbalife public filings.
Herbalife currently operates in 91 countries, up from 49 countries in
2000, 11 countries in 1990, and only 1 country in 1980
20
Country Year Entered GDP per Capita
Georgia 2011 $3,602
Belarus 2011 $7,575
Lebanon 2011 $9,928
Mongolia 2011 $4,056
Ghana 2011 $1,850
Trinidad & Tobago 2012 $18,373
Uruguay 2012 $16,351
Slovenia 2012 $22,059
Serbia 2012 $5,935
Macedonia 2012 $4,851
Armenia 2012 $3,505
Kazakhstan 2012 $13,172
Bosnia and Herzegovina 2012 $4,656
Moldova 2012 $2,230
Cambodia 2013 $1,008
Kyrgyzstan 2013 $1,263
Azerbaijan 2013 $7,812
Median $4,851
Herbalife Is Expanding into the
Lowest-Income Countries
Herbalife recently registered a domain in Burundi – Myherbalife.bi –
a country with a GDP per capita of $267
Herbalife
does not
discount
products
in new
markets.

$5 for a
shake?
Source: Herbalife public filings and WorldBank.
In the last three years, Herbalife has entered 17 new countries.
The median GDP per capita of these countries is less than $5,000
21
Herbalife Seeks to Exploit the Extremely Poor
in New & Existing Markets
“What we're seeing more and more is that that leadership
group is starting to train more on these new innovative
methods to drive deeper penetration in the markets.”

– Michael O. Johnson, Herbalife CEO, May 5, 2009
CEO Michael Johnson: “Drive Deeper”
Source: HLF Q1-2009 Conference Call
22
Herbalife Seeks to Exploit the Extremely Poor
in New & Existing Markets
“ This is the number one strategy of the company. If you take nothing
else away from this presentation, it's that our growth opportunity is
from going deeper into the marketplace through a new distribution
method that our distributors have employed. They have had success
in one market. They are learning how to replicate that success in
multiple markets, and that's the future.”

– John De Simone, Herbalife CFO, Dec. 9, 2009
CFO John De Simone: “Going Deeper”
Source: Wedbush California Dreamin Conference
23
Herbalife Seeks to Exploit the Extremely Poor
in New & Existing Markets
“ The main driver of Mexico's success has been a highly unified
distributor leadership group and the adoption of the innovative
Nutrition Club DMO, which has enabled our distributors to increase
penetration in the lower social economic segments of the Mexican
market.”
– Greg Probert, Herbalife COO, Feb. 27, 2007
Former Pres. Greg Probert: “Increase Penetration in the
lower social economic segments of the Mexican market”
Source: Q4 2006 Earnings Conference Call
25
Herbalife’s Answer to “The Classic Pop-and-Drop”
See “Deceptive Practices Supporting the Herbalife Pyramid Scheme: Lead Generation” (issued 2.4.14)
http://www.herbalifepyramidscheme.com/deceptive-practices-supporting-herbalife-pyramid-scheme-lead-generation
2. Exploit the Internet
and Lead Generation
26
SHUTDOWN
Herbalife’s Answer to “The Classic Pop-and-Drop”
3. Target Latinos and
Low-income Populations
in the U.S.
30
Herbalife: “Going Deeper”
Pursuing its “Going Deeper” strategy, Herbalife has
targeted Latinos, African-Americans, Korean-Americans,
Generation H and other affinity groups
Today Herbalife denies it targets ethnic, racial and
other affinity groups, but the evidence demonstrates
that Herbalife explicitly targets vulnerable groups
31
“I find the targeting of
Distributors by ethnicity
offensive on many levels…”

– Michael Johnson, CEO
October 2013
In Herbalife’s Own
Words . . .
32
33
From a 2008 Herbalife Internal Strategy Document
Herbalife Exported Nutrition Clubs From Mexico to the U.S.
34
“ When the new management team came in, they asked what's the
phenomenon going on in Mexico? Why is Mexico is very consistently growing
the business? We went down into Mexico and found that these nutrition
clubs were really the vibrant aspect of that business versus the traditional
retailing-oriented component. In early 2004, we validated the nutrition club
concept. And you can see that point of inflection where once that was
validated and we started to communicate that, put that message on stage,
if you will, and create a lot of visibility around the success distributors were
having, it really escalated the Mexican business. Similarly, that concept
started to migrate into the US in late 2004.”

– Rich Goudis, CFO, Dec. 19, 2008
Source: Wedbush Conference
Source: DSA
35
From a 2008 Herbalife Internal Strategy Document
36
From a 2008 Herbalife Internal Strategy Document
37
From a 2008 Herbalife Internal Strategy Document
38
From a 2008 Herbalife Internal Strategy Document
Herbalife Targets the Unbanked Poor
39
40
From a 2008 Herbalife Internal Strategy Document
From a 2008 Herbalife Internal Strategy Document
Projections
for Spanish
& Non-
Spanish
Markets

41
Herbalife Has Targeted Affinity Groups During
Johnson’s Tenure As CEO
Source: Herbalife 2010 Investor Presentation.
42
Herbalife Has Targeted Affinity Groups During
Johnson’s Tenure As CEO
Source: Herbalife Today
43
Herbalife Has Targeted Affinity Groups During
Johnson’s Tenure As CEO
“ I get a call from a distributor, for example, who lives let's say in Southern
California and wants to move to Miami. So we have a program called
Geoscape that we can basically look up not only the -- let's say that they only
interested in working in the Latino market, okay. So it tells us what's the
Latino population, it actually breaks it down by the Cuban, Mexican, Puerto
Rican, and then also layers it by the distributors. So within that zip code
area, how many distributors do we have and what level are they. And this is
how they also have taken on that city-by-city concept, because they don't
want -- only want to just started working in their own backyard, they want to
start working in the different states.”

– Ibi Fleming, Herbalife SVP North America, Apr 24, 2012
Source: Barclays Retail & Restaurants Conference
From John Tartol, Member of the Chairman’s Club
& Herbalife Board of Directors:
“Latino Business” is a Hot Commodity
Source: https://vimeo.com/84320070 password “tartol”
46
Why Herbalife? Why Now? (2008)
Source: https://www.youtube.com/watch?v=qcZQF8sm4nQ
48
Herbalife Targets Affinity Groups &
Low-Income Populations
Ideal Targets for Business Opportunity Schemes:
 People in Need: Low-Income and Financially Insecure
Populations
 Who are Aspirational, Yearning to Build a Better Life
 Who are Hardworking & “Teachable”
(a favorite HLF term)
 From Close-knit communities based on affinity
 People unlikely to complain – culturally or because
of legal risk (e.g., undocumented residents)
49
Research into Nutrition Clubs & Training Programs
The next sections of this presentation are based upon
on-the-ground research over the past two years in:




Including Nutrition Club visits, Interviews,
Audio/Video Taping, Enrolling in Training Programs
and Undercover Investigators
50
 The U.S.
 Puerto Rico
 Canada
 Mexico
 Argentina
 Brazil
 Venezuela
 Colombia
Herbalife’s Answer to “The Classic Pop-and-Drop”
4. Propagating Nutrition Clubs –
one way for Herbalife to reach
Latino and low-income
populations
51
Nutrition Clubs Are Critical to Herbalife’s
Revenue Growth
“ The fundamental change in our business began 10 years ago with
the development of Nutrition Clubs in Mexico. This increased our
addressable audience by making our products more affordable to
more consumers.”

– Michael Johnson, CEO, Oct. 30, 2012
To reach new target populations, Herbalife adopted
Nutrition Clubs and Training Programs

Source: HLF Q3 2012 Earnings Call
52
Nutrition Clubs are Critical to Herbalife’s Revenue Growth
Units in Mexico
37,000
449 397 403
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
1,249
Source: Herbalife Q4 ’13 earnings conference call and public filings for quick service restaurants
Note: For Herbalife, units represents nutrition clubs. For quick service restaurants,
units represents total number of owned and franchised units.
Herbalife currently has 37,000 nutrition clubs in Mexico, which is 30x
the combined total of Burger King, McDonald’s, and Starbucks
restaurant units
53
In 2010, Herbalife stated that Nutrition Clubs accounted for
nearly 70% of its business in Mexico. We believe Nutrition
Clubs are now an even more significant portion of Mexico’s
business
54
Source: Bloomberg
Mexico Derives Substantially all Revenue
from Nutrition Clubs
“ Today, in some markets, in Mexico, for example, which
is the most advanced in terms of nutrition clubs and
where they originated seven or eight years ago, we
estimate that as much as perhaps 70% of our business
is done through the clubs.”

– Des Walsh, President, Q2 ’10 Earnings Call
Shake Herbal Tea Aloe Water Total
Drinks per Day in Nutrition Clubs (1) 700,000 700,000 700,000 2,100,000
Days per Year 365 365 365 365
Drinks per Year in Nutrition Clubs 255,500,000 255,500,000 255,500,000 766,500,000
Estimated Herbalife Net Sales per Drink (2) $0.74 $0.39 $0.49 $0.54
Estimated Herbalife Net Sales in Nutrition Clubs $189,070,000 $99,645,000 $125,195,000 $413,910,000
Reported '13 Net Sales in Mexico $562,400,000
Estimated Nutrition Club Sales as % of Reported '13 Net Sales in Mexico 74%
Estimated Contribution of Nutrition Clubs to Herbalife’s Net Sales in Mexico
Source: Company filings, conference call transcripts and Pershing estimates
(1) Based on Q3 ’13 earnings conference call for 700,000 shakes. Since members are entitled to one shake, one herbal tea, and one aloe water
with their daily membership, we assume members consume one of each drink per day.
(2) Pershing estimate based on Formula 1, aloe water and herbal tea purchased price at a 50% discount to retail price and including 7%
surcharge and 4% shipping. Serving amount per drink based on Herbalife recommended recipes
Herbalife claims to serve 700,000 shakes per day in nutrition clubs in
Mexico. Based on this assertion, we estimate that nutrition clubs may
represent nearly 75% of Herbalife’s reported net sales in Mexico
55
Mexico Derives Substantially all Revenue
from Nutrition Clubs (Cont.)

“ We have always talked about how long it took for the nutrition
clubs to ramp up. It’s exponential. So you’re probably talking
18-24 months out into the future ‘til you see maybe the explicit
exponential growth.”

– Michael Johnson, CEO, May 2, 2007

“ So once they get to the point where, maybe over 1,000 to 2,000
Clubs, you really start to see exponential growth, so I think that’s
one thing really driving the Hispanic side of the business.”

– Greg Probert, then-President and COO, Nov. 7, 2006

Nutrition Clubs Fuel “Exponential Growth”
Michael Johnson: “It’s exponential.”
Source: Herbalife Q1 2007 Earnings Call; Herbalife Q3 2006 Earnings Call
56
Nutrition Clubs: A Tough Sell
But Opening a Nutrition Club
Presents Nearly Impossible
Obstacles to Success for the
Target Recruits
57

“So it depends on the marketplace, but the clubs can vary from
$5,000, $6,000 to open to something greater than that.”

– John DeSimone, Herbalife CFO, Nov. 16, 2011
Nutrition Clubs: A Tough Sell
Nutrition Clubs Require Significant Start-up Capital
Source: Nov. 16, 2011, Morgan Stanley Global Consumer & Retail Conference.
58
Herbalife’s Nutrition Club Rules:
 No displays of Herbalife name or logo or the words “Nutrition Club” or
“shakes” or any implication of being an Herbalife business (Rules 4-F; 5-B;
5-C; 5-E)
 No advertising or promotion (Rule 4-D)
 Must cover windows; no product visible from outside (Rule 3-G, 5-D)
 No “Open / Closed” sign; signage may not imply or suggest that retail
products are for sale (Rule 5-C)
 Not allowed to attract customers or walk-ins (Rules 4-D; 5-C)
 May not post, list or charge individual prices for products (Rule 3-B)
 Customers not allowed to carry out food unless a “registered Club
attendee” and only in an unmarked single-serving container (Rule 3-C)
Nutrition Clubs: Onerous Restrictions
Preclude Retail Sales and Advertising
Source: Herbalife Nutrition Club Rules, Herbalife Sales & Marketing Plan, available at http://factsaboutherbalife.com/wp-
content/uploads/2012/12/Marketing-Plan-and-Business-Rules-2012.pdf. Compare these restrictions on Nutrition Clubs with HLF’s constant
promotion of its name and logo in other contexts.
59
“ So the clubs first and foremost can't be retail establishments.
They can't be Herbalife signed stores. Okay? . . . The consumer
cannot know it is a club until they have come inside.

“ They can't know it has anything to do with Herbalife. So the
windows are blocked . . . you can have no reference where
somebody walking by will know it is Herbalife.”

– John DeSimone, Herbalife CFO, Nov. 16, 2011
Nutrition Clubs: Onerous Restrictions
Preclude Retail Sales and Advertising
At Nutrition Clubs: The public “can’t know it has anything
to do with Herbalife.”
Source: Nov. 16, 2011 Morgan Stanley Global Consumer & Retail Conference, available at http://factsaboutherbalife.com/wp-
content/uploads/2012/06/111116-HLF-Morgan-Stanley-Global-Consumer-Conference.pdf.
60
Nutrition Clubs: Onerous Restrictions
Preclude Retail Sales and Advertising
We want the confidence of our distributors to be the passionate
expression of this product in the marketplace. And the way we do
that confidence and the way we build that confidence is to put our
name on these jerseys to have the world respond to us and see the
Beckhams of the world, and see the Messis of the world with
Herbalife on them and create an opportunity around our 8 Herbalife
24 product line to build off authenticity around those athletes

– Michael Johnson, Herbalife CEO, Mar. 23, 2012
CEO Michael Johnson praises putting Herbalife’s name on
jerseys, but Nutrition Club operators are prohibited from
using the Herbalife brand
Source: Herbalife Analyst Day
61
Nutrition Clubs: Onerous Restrictions
Preclude Retail Sales and Advertising
Herbalife boasts that it sponsors over 45 teams and sporting
groups and 86 individual athletes, but Herbalife forbids
Nutrition Clubs from using its name or logo
Source: http://sports.herbalife.com
62
Nutrition Clubs Lose Money on a Retail Basis
 Daily traffic trends
(based on two days of observation)
 Breakdown of distributor vs.
member traffic
 Approximate rent per sq. ft.
 Approximate size (sq. ft.)
 Days open per week
 Approximate utility costs
 Start-up costs per club
 Inventory costs per serving
Source: Photos Taken by Pershing Square
We studied the economics of 10 Nutrition Clubs in Queens, N.Y.
64
Look
Commun. Arcoiris Good
Juven. Salud Amigos Weight A New Herba- Feel 2135 Health Healthy
Y Vida Es Vida Felices Loss Hope Life Great 2nd Ave It Up Keepers Average
Membership fee $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00
Daily paying members (1) 21 52 27 23 14 14 12 20 6 51 24
Days open per year 344 292 292 292 292 292 292 292 344 292 302
Membership Revenue $36,765 $75,555 $38,873 $33,398 $19,710 $19,710 $18,068 $28,470 $9,675 $74,460 $35,468
Less: Rent (2) (23,142) (15,685) (16,655) (21,428) (19,170) (22,984) (31,668) (36,447) (14,694) (27,464) (22,934)
Less: Utilities (3) (2,100) (1,750) (2,800) (1,983) (2,362) (2,100) (2,450) (2,800) (1,837) (2,644) (2,283)
Less: Insurance (3) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000) (4,000)
Less: Inventory (4) (16,989) (34,913) (17,963) (15,433) (9,108) (9,108) (8,349) (13,156) (4,471) (34,407) (16,389)
Less: Depreciation (5) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000)
Operating Income ($11,466) $17,207 ($4,545) ($11,446) ($16,929) ($20,482) ($30,399) ($29,933) ($17,326) $3,944 ($12,137)
Nutrition Clubs Lose Money
(1) Daily traffic based on average of the two days of traffic observed by Pershing Square. Assumes 75% of daily traffic are paying members.
(2) Based on analysis of recorded rents for comparable local retail properties performed by New York City real estate consultant
(3) New York City real estate consultant and Pershing Square estimates
(4) Based on estimated traffic for total servings and average cost per serving assuming a purchase price at a 50% discount to retail price. Amount per serving
based on Herbalife recommended recipes. Assumes each member consumes one Formula 1 shake, one herbal tea, and one aloe water per visit, as they are
entitled to under their membership fee.
(5) Assumes a three year amortization period for the $6,000 nutrition club start up costs as reported by Herbalife
We estimate that the average Nutrition Club loses more than $12,000
per year before accounting for the additional opportunity cost of the
operator’s time
65
Market Saturation
66
In the Face of These Obstacles to Success,
How Does Herbalife Lure in Recruits?
First, tell them it’s not about selling
shakes, it’s about DUPLICATION
67
“ Where your money’s made is not serving
smoothies. Where your money’s made is
having hundreds, or tens, or thousands
of distributors around the globe who are
working.”

– Doran Andry,
Herbalife Chairman’s Club Member
The Real Purpose of Nutrition
Clubs Is Recruitment
Source: Doran Andry conducting a “Full Wellness Training,” available at https://vimeo.com/88161989 at 3:58 (password: “andry”).
See also: Profile of Andry on www.herbalifepyramidscheme.com.
69
Because when you buy the product once a month and you have to
come out the pocket $30, $40, $50 or $100, it's hard for people to
afford. If you could break it to a daily price point, you could have the
same price per serving, but now you break it to $2, $3, $4 per day, it
becomes very accessible to people. So it's not more affordable, but
it's more accessible.“

– John DeSimone, Herbalife CFO, Sept 6, 2012
The Real Purpose of Nutrition
Clubs Is Recruitment
“So it's not more affordable, but it's more accessible."
Source: Barclays Back-to-School Consumer Conference
70
The Real Purpose of Nutrition
Clubs Is Recruitment
Source: Financial Success System presentation on Nutrition Clubs, available at http://factsaboutherbalife.com/wp-
content/uploads/2012/12/Eng_OperatorsTraining.pdf. See also: Profile of Andry on www.herbalifepyramidscheme.com.
71
The Real Purpose of Nutrition
Clubs Is Recruitment
“Money is made in the
duplication of Distributors
starting their own Clubs.”
Source: Financial Success System presentation on Nutrition Clubs, available at http://factsaboutherbalife.com/wp-
content/uploads/2012/12/Eng_OperatorsTraining.pdf. See also: Profile of Andry on www.herbalifepyramidscheme.com.
72
The Real Purpose of Nutrition
Clubs Is Recruitment
Source: Financial Success System presentation on Nutrition Clubs, available at http://factsaboutherbalife.com/wp-
content/uploads/2012/12/Eng_OperatorsTraining.pdf. See also: Profile of Andry on www.herbalifepyramidscheme.com.
73
How Does Herbalife Explain
Nutrition Clubs to Wall Street?
“It’s All About Consumption”
74
“It Is All Consumption Based”
“ I think it’s important for somebody interested in this model to go
see a club. And you’ll understand that within the clubs, it is all
consumption based.”
– John DeSimone, CFO, Nov. 14, 2012
Source: Herbalife Independent Distributor Presentation Source: Herbalife Investor Day Presentation, March 23, 2012
Source: Nov. 14, 2012 Morgan Stanley Global Consumer & Retail Conference; Independent Distributor Presentation.
75
Herbalife Tells Wall Street
Nutrition Clubs Attract Repeat Customers
“ In response to a survey of U.S. Nutrition Club members,
nearly 60% said they attended a nutrition club everyday,
almost 80% attended more than 3 days a week, and more
than 40% have been attending the club for longer than
one year.”

– CEO Michael Johnson,
2Q 2011 Earnings Conference Call
Herbalife Chief Executive Officer Michael O. Johnson told
investors during an earnings conference call that people
in Nutrition Clubs are loyal:
76
Herbalife’s Answer to “The Classic Pop-and-Drop”
5. Support ‘Training Programs’ in
Nutrition Clubs – an entry point
for low-income recruits who can’t
or won’t invest to open a club
77
Herbalife Promotes ‘Training’
In the face of:
 High start-up and operating costs
 Projected losses from operations
 Saturated markets
 The daunting prospect of trying to “duplicate” a Club

How can Herbalife recruit low-income, inexperienced,
first-time business operators to try the business if they
are unwilling or unable to open a Club?

TRAINING!
78
Recruits Are Told They Cannot Succeed
Without Training
Data
• Of 100 Clubs 64 closed in their first year
• 90% of Clubs that closed had less than 15 complete consumptions
• 9 out of 10 Clubs that were closed were attended by distributors
who are not trained
Translation:
Source: https://www.facebook.com/solrac.c.zenemij/photos.
79
“ …And frankly, this home commercial model, the method of systemized
training that we're now seeing introduced by many distributor leaders in
Mexico supported obviously by the Company with Nutrition Club tours
and so on.”

– Des Walsh, President, Feb. 22, 2012
“ In Mexico, the more structured training methods that many
distributors are integrating into their businesses is driving solid volume
growth, duplication of Clubs . . ..”
– Des Walsh, November 1, 2011
Herbalife’s Elusive “Systems” of Training
Source: Q3 & Q4 2011 HLF Earnings Conference Calls (emphasis added)
Herbalife repeatedly refers to “structured” or “systemized” training
methods, but they don’t explain what they are
80
“ They've come together and gone into light commercial or industrial
space, and they've put five or six distributorships together, and they
have a social environment. They have a nutrition environment.
They have a training environment. They have a recruiting
environment all under one roof.”

– Michael Johnson, CEO, Sept. 3, 2008
Herbalife’s Elusive “Systems” of Training
Source: HLF at Goldman Sachs Global Retailing Conference, Septermber 3, 2008
Herbalife repeatedly refers to “systemized” or “structured”
training methods but doesn’t explain what they are
81
Herbalife has Fostered Many
Training Programs, including
Club 100, Universidad del Exito
(Success University) and other
‘Trainings’ and ‘Certifications,’
including Herbalife’s own Best
of the Best / Lo Mejor de Lo Mejor
82
Club 100: A Pyramid Within a Pyramid
Source: www.slideshare.net/ivanpatricioarias/hom-club-100.
83
Club 100: A Pyramid Within a Pyramid
84
“ All of our Wall Street analysts have been into clubs
throughout the U.S. and in some cases, Mexico, Brazil or even
Russia, and they can attest to the fact that there are more
customers enjoying Herbalife products on a more frequent
basis than ever before.”

– Michael Johnson Herbalife CEO, July 31, 2012
Source: Q2 ‘12 Earnings Call
John Hempton is the most public bull and blogger
for Herbalife
Wall Street Buys that People in Nutrition Clubs
are “Customers”
“ They . . . were clearly customers – they came in – they paid
their money – they drank their shake. They look like
customers because they were customers.”
– John Hempton, Bronte Capital,
after a visiting a Nutrition Club in Queens
to which Herbalife had directed him
See http://nypost.com/2014/04/16/ackman-adversary-john-hempton-falls-off-herba-cliff/
85
• An institutionalized system for recruiting, training,
and motivating Nutrition Club operators that has driven
Herbalife’s growth in many Spanish-speaking markets
and elsewhere
• Originated in Queretaro, Mexico
• Trademarked in Mexico by Jorge Ruiz in 2009
• Has spread across the U.S. and Latin American markets,
and elsewhere
• Has its own rules, rewards, symbols and tools
• Club 100 is intentionally secretive
• Almost no written explanation or rules
• Rules are inconsistently applied between systems
and sponsors
• Completion of steps is at the discretion of the sponsor
The message, however, is very consistent: Club 100 says it
offers a way for distributors to reach the President’s Team
“ ‘Price is little when the promise is clear,’ as my teacher used to say,
right? The promise – what you are promising people – is very
important. You have to sell them the idea that one day they are
going to make President’s Team.”
– Undercover Investigator at a Club 100 Training
What’s Wrong with Club 100:
False Income Claims
Source: www.facebook.com/yimenita.mora/photos.
89
President’s Team Members Across the U.S.
Are Linked to Club 100
Ernesto Zavalza
Portland, OR
Juan Mendoza
Scottsdale, AZ
CHAIRMAN’S CLUB
Monica Del Caprio
Scottsdale, AZ
Maria Elena Caballero
Park City, IL
Luciano Oliveira
Chicago and PR
Milton Camas
Passaic, NJ
Edgar Montalvan
Queens, NY
Santiago Cobos
New York
Nelson Pablo Paucar
Brooklyn, NY
Estuardo Loza
New York, NY
Marcelo Real
Boston, MA
Emily Molina
Waterbury, CT
George Gutierrez
Puerto Rico
Sujaila Toro &
Carlos Franqui
CT / PR
Veronica Zumano
Metro DC / MD
Alvaro Echavarria
Miami, FL
Andres Gutierrez
& Martha Muriel
Miami, FL
Olga Cortes & Pedro Rojas
Atlanta, GA
Maritza Sanabria
Houston, TX
Joe Pastrana
Houston, TX
Erick & Flor Rios
Houston, TX
Dalia & Angel Ibarra
San Antonio, TX
Norma Nava
Oxnard, CA
David Yanez
Anaheim, CA
Elizabeth Yanez
Anaheim, CA
90
Club 100: Getting Certified
Source: Facebook
91
Club 100
Certification
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100
Certification
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Translation: Certification Course
• Distributors work in an upline distributor’s club
• Distributors pursue certification under a Yellow
or Green Card
• Green Card holders go at their own pace
• Yellow Card holders are on the fast track
and are required to work a set schedule
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Translation: Certification Course
“ You’ll learn how to make the shakes,
how to call and invite people to the club,
as well as how to manage the club
finances and rules.”
– Club 100 Recruiter, Bogota, Colombia
The position is like an unpaid internship

Source: http://www.planclub100.com, before the website was taken down in December 2013.
Translation: Certification Course
The trainee said he would prefer to drink his
shake, tea and Aloe Water at the end of his
shift. His upline said, “How can we serve the
tea if we haven't had the tea?”
– Notes from Undercover Investigator
A distributor's first task, however, is to pay for
and consume the products.
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Classes
Translation:
Certification Class
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Classes
• Classes typically are held three times a week
(but sometimes more frequently)

• The content of the classes is highly repetitive
from one session to the next

• Those who arrive even one minute late don’t
receive credit for the class and must attend
another class, but they must still pay
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Classes
Distributors pay a fee to attend classes which often
includes the cost of consuming products during the
classes.
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Classes
A trainee at the club was asked by another trainee how
many more classes she needed to take to complete
her certification. She replied that she didn’t know
because as soon as she completes one series of
trainings she begins a new one.
– Notes from Undercover Investigator
As with many of Club 100’s requirements, class
attendance requirements can be confusing and
inconsistently described.
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Testimonials
Translation:
Product Training
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Week 1
Translation: Tour of Clubs
Consumptions
Club visited
Host Signature
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Week 1*
“ Distributors during the certification
process have to visit your club on the
tour, and they would have to pay for
their consumption for training. That’s
the host’s benefit of teaching you from
their experience.”
– Club 100 Distributor, Colombia
Touring requires paying for Herbalife products
*Each stage can last longer than a week
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Week 1
Rules for the “Certification Tour” posted online
by Club 100 in Venezuela:
• “ During the first week of the certification tour, visit
seven different clubs, staying for a minimum of two
hours at each”
• “ Only visit clubs that have obtained the ‘25 and More’
qualification”
• “ Inform the host when you plan to attend”
• “ Avoid visiting clubs in groups of more than five”
• “ Avoid use of unauthorized cameras”
• “ Avoid talking to the club’s consumers unless
asked by the host”
“Trainees” are encouraged to look like customers
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Week 2
Translation: Shake
Preparation (how many)
Shakes
School Club
Host Signature
Club 100 Certification
Week 2
Making an Herbalife shake is a fairly simple process
– two scoops of Formula One blended with a glass of
water. The training, however, is extensive.
The first thing trainees learn is the importance of
customer service; then they learn how to make
shakes. A trainee was told that she must make at
least 100 shakes.
– Notes from Undercover Investigator
Club 100 Certification
Week 2
Not only must “trainees” make shakes, they must
also find people to pay for and consume them.
“ Of course, you and your relatives have to pay
the host for the meals or shakes that you
guys take in the school club.”
– Club 100 Distributor, Colombia
Club 100 Certification
Week 2
Not only must “trainees” make shakes, they must
also find people to pay for and consume them.
The undercover asked a trainee who had been working
at the club for two years if it takes a long time to learn to
make shakes. She said, “Nah.”
Later, the undercover asked the trainee if she had
completed the certification process, and she said she
still needs to pass some of the tests.
– Notes from Undercover Investigator
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Week 3
Translation:
Give Information
(to how many people)
No. of People
Club School
Host Signature
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Week 4
Translation:
Invite (how many delivered)
Invitations
Club Visited
Host Signature
Club 100 Certification
Week 4
A trainee in the club asked another trainee if she
had completed the tests – the shake making,
the inviting, the giving information requirements.
"Haven't you already done all that?" he asked.
The trainee said she had, but the invitees needed
to consume product for her to pass those tests.
– Notes from Undercover Investigator
Club 100 Certification
Week 4
Example of a flyer
inviting a person to
visit a Nutrition Club

Note that the invitation
is for a “free sample”
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Retained Members
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Retained Members
Interview notes from a Club 100 club in Caracas, Venezuela
A distributor mentioned that during her
certification, she spent almost three months
trying to complete the retention requirement,
which requires a trainee to bring 10 people
from their circle of family and friends to
consume regularly in the club.

Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Retained Members
Distributors are told they should feel grateful when
turning over 10 family members and friends to their
upline's club in order to graduate.
“That club opened the doors for you. Imagine
how great it is! ... So you have to start
working, inviting people to go in, and when
you get 10 people into the club, it means that
you are no longer afraid of anything.”

Club 100 Co-founder Esther Espinosa, at a training event in Mexico
Note: If the Trainee delivers 10 Retained Clients from his or her Circle of Influence to the
sponsor’s Nutrition Club, there’s no one left to patronize the Trainee’s Club, if it ever opens.
He will need to recruit trainers to bring their Circle of Influence.
So Who’s Really Consuming in Herbalife
Nutrition Clubs?
Friends and family of those
working at clubs to be certified
Potential recruits on
the Presentation Tour
Distributors
training in their
sponsors’ clubs
Distributors on
Certification Tours
115
Source: http://www.planclub100.com, before the website was taken down in December 2013.
Club 100 Certification
Graduation
Translation:
Club 100 Graduation Ceremony
Source: www.facebook.com/hiram.j.silva?fref=ts.
Club 100:
“Certified” Worksheet
117
Amount
Trainee consumes in sponsor’s club twice a day for three months 180
Trainee goes on tours and consumes in 8 clubs as part of the tour 8
Trainee consumes at each class/event attended (Assumes 3 weekly events for 16 weeks) 48
Trainee makes 100 shakes for practice, finds relatives to consume them 100
Trainee takes inviting test and gets 1 person to come into the club every half hour for 4 hours 8
Trainee recruits 10 relatives to consume in his upline’s club once a day for a month 300
Estimated Total Shakes Consumed by Trainee or Trainee's Friends & Family 644
Daily Membership Fee for Nutrition Clubs $5.00
Total Estimated Cost of Shakes Consumed by Trainee or Trainee's Friends & Family $3,220
Hidden Costs of Club 100 Certification
Source: Estimates based on Pershing Square undercover investigations
Amount and Cost of Shakes Prepared by Trainee during Club 100 Certification
The total cost to become a certified Club 100 member approximates the $3,000
cost to become a supervisor - excluding the cost of classes
We estimate that a Club 100 trainee and their family and friends incur
more than $3,000 in fees to purchase shakes
118
Club 100: Graduates in Caps and Gowns
119
Source: www.slideshare.net/ivanpatricioarias/hom-club-100.
Club 100: Another Pyramid to Climb
Now, the new Club operator attempts to advance by ordering large
volumes of Herbalife products to grow “consumptions”
120
Source: www.youtube.com/watch?v=D9ve9LZcdpc&feature=youtu.be
Club 100: Another Pyramid to Climb
“ And when you get to a weekly
average of 25, then we begin
talking about other interesting
things. As they said to us during
our tour when we asked several
questions: ‘I’ll tell you when
you get to 25 or more.’ ”
– Edgar Balbas, Chairman’s Club
member since 2013
There are rewards for reaching various targets, but top distributors are
coy about them
121
Source: www.facebook.com/gustavo.anaya.33/photos.
Club 100: Another Pyramid to Climb
Club operators get a certificate for each new level, starting with
25 “consumers”
122
Source: www.facebook.com/alvaro.echavarria.92?fref=ts#!/photo.php?fbid=10150117556852709.
Club 100: Another Pyramid to Climb
Distributors must faithfully record all “consumers” entering their clubs
123
“ And I'm going to clarify again
that these are not consumers, but
how many consumptions your club
had. Because if someone went
and consumed two or even three
times that day in your nutrition
club, that would be registered
here as three consumptions and
his or her name would be written
three times.”
Source: http://www.youtube.com/watch?v=D9ve9LZcdpc&feature=youtu.be.
Club 100: Another Pyramid to Climb
The number of consumers, however, is not as important as the amount
of product they consume
124
Club 100: Another Pyramid to Climb
“ Now, you see, the objective we
want to achieve is that a club
with 25 [daily consumers]
moves, not 1,200 points [the
amount of volume required to
serve 25 people for 30 days],
but 2,500 points. That means
that there are still 1,300 to go.
Those 1,300 points, my friends,
are achieved with products, eh,
by selling closed products for
specific nutrition.”
Finally, Club 100 requires that distributors place set volume point orders
every month to back up that they have the claimed 25, 50, 75 or 100
consumptions going on daily at their club
125
Club 100: Another Pyramid to Climb
“ Once you have reached 25 meals, you can become a daily school
club. Then, others will go to yours, to learn and pay for their
consumption.”
– Interview with a Club 100 operator in Colombia
The benefits of reaching these inventory loading targets are more
“consumers”
126
Club 100: Another Pyramid to Climb
We were told that clubs are permitted to “train” new recruits
only when they reach “50 or More” consumers. We spoke with
a distributor who had recruited a trainee but was unable to have
that trainee work in her club because she not reached “50 and
More.” As a result, the trainee was working in her upline’s club.
– Notes from Undercover Investigator
The rewards continue to build with the status of the club
127
After reaching 100 daily ‘consumos,’ the Club operator then
focuses on getting downline recruits to open new Clubs
Source: www.slideshare.net/ivanpatricioarias/hom-club-100.
Club 100: Yet Another Pyramid to Climb
128
Club 100: Yet Another Pyramid to Climb
Source: http://planclub100.com/portada/wp-content/uploads/2010/06/5-x-5-clubs.pdf.
129
Club 100 uses a record keeping system called the “Engargolado”
or the “Binding,” which tracks all aspects of the distributor’s
business. The Engargolado requires distributors to misrepresent
the profitability of a Nutrition Club
Club 100: Yet Another Pyramid to Climb
“ In all honesty, the first
time I heard that name
[the Binding], I didn’t like it.
And I said, ‘I’m going to call
it controller.’ But then I said,
‘You know what? I’m going
to call it binding.’ ”
130

As part of the Engargolado Club 100 tells Club operators to
separate the cash generated by their businesses into RED and
GREEN envelopes.

Source: Edgar Balbas video, available at http://www.youtube.com/watch?v=D9ve9LZcdpc&feature=youtu.be.
Club 100: Required Increases in Inventory
Club 100: Required Increases in Inventory
“What is the red envelope?
The red envelope, my friend,
cannot be touched because
that is the cost and that
money is not yours. That
money goes to Herbalife, it
belongs to your business
and it has to be used,
obviously, for product
reposition.”
Source: http://www.youtube.com/watch?v=D9ve9LZcdpc&feature=youtu.be.
132
Club 100: Required Increases in Inventory
“ You place that amount in your green envelope, and that is
your salary. You take that 16 dollars just as if you go to work
someplace else. What do you do with the green envelope that is
your salary? You pay for electricity, you start saving to pay for
electricity, you pay for water, your phone, your club, everything.”

– Online Training
The Green Envelope is described as equivalent of a club operator’s
take-home pay, but there’s a catch
133
“ The first of the binding is a clear
plastic sheet and it is super
important that it is like that, clear,
because in the end, eh, here is the
monthly summary of earnings.
The fact that it is see-through
turns it into a very effective
recruiting tool once your club
becomes successful.”
– Edgar Balbas, Herbalife
Chairman’s Club member
Club 100: False Earnings Claims
Source: http://www.youtube.com/watch?v=D9ve9LZcdpc.
That catch doesn’t stop Club 100 from telling distributors to include the
“profits” they earn in their clubs on forms shared with potential recruits
134
Club 100: False Earnings Claims
These earnings statements provide “proof” to potential recruits that
Club 100 operators are steadily advancing toward the promised
President’s Team level. There are frequent opportunities to present this
proof at classes where club operators provide earnings claims as well as
health claims
135
Club 100: The Requalification Treadmill
Qualification is a never-ending process. Distributors must constantly
re-qualify in order to stay in the game. Those who don’t re-qualify have
their clubs taken off the tour list, aren’t permitted to bring potential
recruits to classes and aren’t welcome to bring their potential recruits
on Presentation Tours of qualified clubs. In other words, they lose
access to Club 100’s (deceptive) marketing techniques.
137
Club 100 requires Club operators to take 10% out of the GREEN
envelope every week and place it in the RED envelope to purchase
additional products. Unless the Club operator reports increased
inventory, he will not re-qualify to remain on the tour list.
10%
Source: Edgar Balbas video, available at http://www.youtube.com/watch?v=D9ve9LZcdpc&feature=youtu.be.
Club 100: The Re-Qualification Treadmill
138
Club 100: The Requalification Treadmill
“Specifically here from the green
envelope, from your profit, you are
going to take 10% and you are going
to put it here in 'increase.' What for?
Because what we want to achieve
with this is that your inventory,
independently of what you start
with—if it was 500 or 1,000 points—
with that, my friends, you can get to
what we saw in those nutrition clubs
with weekly inventories of 3, 4, 5
thousand volume points with this,
with this principle of the 10%. ”
Source: http://www.youtube.com/watch?v=D9ve9LZcdpc&feature=youtu.be.
139
Thus, the RED envelope—containing money to buy Herbalife
products—continues to grow even if it means more of the Club
operator’s “salary” in the GREEN envelope continues to shrink –

More money for Herbalife and the sponsor . . . and larger
stockpiles of Herbalife products for the Club operator to give away
as free samples
Club 100: Required Increases in Inventory
140
Club 100: The Requalification Treadmill

Promotions are used to keep the volume moving
through clubs:

• Distributor birthday parties
• Mother’s Day giveaways
• Product raffles
• Free facials
• Other creative promotions, such as…

141
Three hours of free babysitting with purchase
of a shake
142
Recall that distributors cover the cost of promotions and
must assure that the money needed to replace products are
placed in the RED envelope.

As long as distributors keep ordering more product, ignoring
other expenses and funding the RED envelope, distributors
will see their “earnings” continue to grow.
Club 100: Yet Another Pyramid to Climb
143
Club 100: The Requalification Treadmill
Club operators
advertise the status
of their clubs with
elaborate displays of
product containers,
suggesting “success”
is determined not by a
crowded club but by the
volume purchased and
consumed through
that club.
144
Club 100: The Requalification Treadmill
145
More large volume
purchases from Herbalife
UNDERCOVER
147
VIDEO –
UNDERCOVER


http://vimeo.com/101256156 password: And3s
What’s Wrong with Club 100?
• Relies on deceptive income claims
• Deceives ‘trainees’ into believing they are ‘investing’
in an education with a valuable pay-off – at substantial cost in
time and money for the ‘trainee’
• Demands DUPLICATION for success
• Creates fake Club traffic consisting of ‘trainees’
and their family members and friends
• Promotes inventory loading
• Violates Federal labor laws applicable to unpaid employees
148
Source: www.slideshare.net/ivanpatricioarias/hom-club-100; :
www.facebook.com/solrac.c.zenemij/photos.
 Trainees are told they are on the road to the
President’s Team or higher

 Through Club 100’s pentagonal growth, they can
earn $657,000

 With Herbalife, they can pay the rent, buy shoes for
their children, leave money to their grandchildren
But, according to Club 100:

“9 out of 10 Clubs that were closed were attended by
distributors who are not trained”

So recruits need Training.
What’s Wrong with Club 100:
False Income Claims
149
What’s Wrong with Club 100:
False Income Claims
Club 100 duplication system
Club 100 –
Pentagonal
Progress:
5 steps on each
side of the
ladder;
5 x 5 x 5
Diagram of
“Generations”
150
No Disclosure or Warnings regarding training:

 Cost of Training in Time and Money
 Capital Required to Open a Club
 Retail Sales at Clubs
 Net Profits or Losses at Clubs
 Churn Rate of New Recruits
 How many Trainees become Sales Leaders
 Does anyone make money? Does anyone find a career?
What’s Wrong with Club 100:
False Income Claims
151
A Pyramid
Within
A Pyramid –
presented as a
University
Source: Facebook page of Universidad Del Exito Cuenca [‘Success University’]
What’s Wrong with Club 100 and Other Training
Programs: Illegal Use of the Term “University”
152
What’s Wrong with Club 100 and Other Training
Programs: Illegal Use of the Term “University”
Source: Herbalife Success University
From
Financial
Success
System
(Doran
Andry)

Note:
Herbalife
name,
logo,
text font
&
trademark
notice

153
What’s Wrong with Club 100 and Other Training
Programs: Illegal Use of the Term “University”
New York Education Law § 224(1): “No individual, association, partnership or
corporation not holding university, college or other degree conferring powers by special
charter from the legislature of this state or from the regents, shall confer any degree or
use, advertise or transact business under the name university or college . . . unless the
right to do so shall have been granted by the regents in writing under their seal.”

Cal. Educ. Code § 94050(b): “No person shall designate a business, social, political,
religious, or other organization operating in this state, including, but not limited to, any
firm, association, partnership, or corporation, as a ‘college’ or ‘university.’”

Tex. Educ. Code § 61.313(c): “A person may not use the term ‘college,’ [or] ‘university’ .
. . in the official name or title of an educational or training establishment.”

Other laws: licensing of teachers and administrators; school advertising; certification
of agents who solicit or enroll students; student refunds; general prohibition of unfair or
deceptive acts or practices and false advertising, such as FTC Act §5, New York General
Business Law §§ 349- 350, and similar laws in other States.
See State of New York v. The Trump Entrepreneur Initiative LLC f/k/a Trump University LLC, Index No. 451463/2013
(N.Y. Sup. Ct., Aug. 24, 2013).
154
Translation:
The school where
you will learn…
1. Open your own
club.
2. Grow your club
(25, 50, 75, 100,
etc Consumos)
3. DUPLICATE

Source: http://www.slideshare.net/ivanpatricioarias/hom-club-100.
What’s Wrong with Club 100: DUPLICATION
155
Violates Labor Laws
Source: Advisory (July 2013) available to distributors at MyHerbalife.com, paraphrasing U.S. Department of Labor, Wage
and Hour Division, Fact Sheet #71: Internship Programs Under the Fair Labor Standards Act (issued Apr. 2010), available
at www.dol.gov/whd/regs/compliance/whdfs71.htm.
Herbalife Advisory (July 2013):
Herbalife warns Nutrition Clubs that their trainees may be seen as
unpaid workers in violation of Federal labor law
156
Violates Labor Laws - Herbalife Advisory (7/13):
157
Herbalife is Complicit in the
Propagation of Nutrition Clubs
and Training Programs
158
Herbalife Monitors and Propagates New DMOs
“ [N]ew ideas and DMOs [Distributor Methods of Operation] are
being generated in many of our markets and are globalized where
applicable through the combined efforts of Members, country
management or regional and corporate management. . . .
Management’s strategy is to review the applicability of expanding
successful country initiatives throughout a region, and where
appropriate, financially support the globalization of these
initiatives.”

– HLF 10Q for First Quarter 2014
Herbalife’s Standard Language in its 10Ks and 10Qs
about ‘Globalizing’ DMOs, since at least 2008:
159
Herbalife Monitors and Propagates New DMOs
“ Look at what’s working

“ Walsh wanted to get inside the heads of his successful
distributors and figure out what it was they were doing
so well . . .
Source: http://www.blog.thenutritionshop.co.uk/2012/01/how-des-walsh-helped-reinvigorate-sales.html
“. . . If we find out based on that, it is an idea that can spread across cultures and
across markets, we look to do that.”
From an Article about Herbalife Pres. Des Walsh (Jan. 4, 2012):
Training Programs Have Been ‘Globalized’ by
Herbalife and its Senior-most Distributors
161
Herbalife Mandates ‘Formal Training’
“[A]ny participant desiring to use a nutrition club DMO will be
required to complete a formal Company training program.
This is in addition to the already implemented 90 day waiting
period prior to opening a club.”

– CEO Michael Johnson, 3Q13 Conf. Call, 10/29/13

Herbalife Uses its New 90-Day Waiting Period
to Promote ‘Formal Training’
Herbalife’s ‘Formal Training’ Consists of an Online Quiz with low
standards for passing. Others offer their own ‘Training’ programs
162
Herbalife’s “Training”
163
VIDEO –
FORMAL TRAINING
Herbalife’s Support for Club 100
Leonard Aquino: can you
send me that club 100 poster on
the left?
Deborah Sousa: they gave it
at extravaganza… if not they
have the file on myherbalife
Leonardo Aquino: WHERE?
CAN YOU SEND ME THE FILE
PLS?
Source: https://www.facebook.com/debysousa/photos.
Herbalife distributed Club 100 posters at its Extravaganza in 2012 and
made them available on the website MyHerbalife.com
165
Herbalife’s Support for Club 100
Source: Michael A. Swartz, SunTrust Robinson Humphrey Analyst Report, at 1, Sept. 14, 2012
In 2012, an analyst report touted Club Cien (Club 100), a “best practices
program” that could add “a few percentage points to [Herbalife’s] U.S.
growth in the near term”
166
Herbalife Touts the Success of Clubs
Using the Club 100 System
[Play edited version of Herbalife Nutrition Club video highlighting Club 100 logos]
Source: Herbalife Nutrition Club Video

In the January 2013 Investor Day, in response to Pershing Square,
Herbalife broadcast a video of Nutrition Clubs, in which Club 100
appears prominently in Club after Club

168
VIDEO - WELCOME
TO MY CLUB
Herbalife Promotes Club 100
Perpetrators in its Own Defense
“Members like me are under attack by a billionaire hedge fund manager who has
embarked on an unprecedented effort to take down my way of life, and we want him
to know that Herbalife members won’t stand for it”
– Silvia Muir, Palantine, IL, July 18, 2014
Silvia Muir’s ‘way of life’ is pursuing Club 100
Herbalife Promotes Club 100
Perpetrators in its Own Defense
Best of the Best/Club 100:
Silvia Muir
Marty & Gina Montasterski
Erick Sandoval (son of Chairman’s Club Members
Gabriel & Emma Sandoval)
Angel Ibarra

Universidad del Exito:
Olga Vigoya
Veronica & Carlos Rivera
Ximena Bentancourt
Oscar Morales & Aida Sanchez
On July 10, 2014, Herbalife sent distributors to Washington, DC and
presented in a press conference in defense of its business are in
‘training’ programs
170
Beginning in 2013, Herbalife
began to attempt to hide its
relationship with Club 100
Herbalife’s Support for Club 100
Source: Herbalife U.S. Nutrition Club Notification Form, available at http://factsaboutherbalife.com/wp-
content/uploads/2013/02/Nutrition_Club_Notification_Form_2011.pdf.
Herbalife included Club 100 on its Nutrition Club
registration form in 2011 and 2012
172
Herbalife: Hiding its Connection to Club 100
Source: Herbalife U.S. and Puerto Rico Nutrition Club Notification Form, available at https://www.myherbalife.com/Content/en-
US/pdf/toolsAndTraining/business/businessMethods/DMOs/nutritionClub/NutritionClub_RegistrationForm_USEN.pdf.
In 2013, Herbalife removed Club 100 from its U.S. and Puerto Rico
Nutrition Club registration form
173
Herbalife: Hiding its Connection to Club 100
Jorge Ruiz’ Club 100 website disappeared in December 2013
174
Source: https://www.facebook.com/linis.leal/photos#!/linis.leal/photos_albums.
Club 100 Lives On
New trainees in November 2013
175
Source: http://herbalifespectacular.com.my/Edgar%20Speaker%20Flyer_R2.pdf.
Club 100 Lives On
176
HLF’s Own Training Worksheet Tracks Club 100
In 2013, Herbalife created its
own training program – called Best
of the Best / Lo Mejor de Lo Mejor –
which closely tracks Club 100
177
HLF’s Own Training Worksheet Tracks Club 100
Club 100 Lo Mejor de Lo Mejor
178
Herbalife’s Own
Lo Mejor de Lo Mejor
Herbalife’s four “Fases”
(phases) tracks Club 100’s
four-part training:
- Visiting
- Preparing Shakes
- Giving Information
- Inviting Others
Herbalife’s 3-8-1 list
parallels Club 100’s 3-8-1
list. HLF requires:
3 - Product Trainings
8 - Training Clubs
1 - STS
179
Herbalife’s Continued Support for
Club 100 and Other Training Programs

Herbalife touts its new 90-day waiting period,
as if it prevents recruits from committing to the
business opportunity too quickly.

In fact, Herbalife uses the 90-day period to
encourage recruits to become committed to a
training program which promises success in
the business

180
Herbalife Club 100 Worksheet Notice (emphasis added):

The Worksheet for Nutrition Club Training will help to ensure that new Nutrition
Club operators receive adequate training for their own successful Nutrition
Club. Use this worksheet in your system to keep track of your attendance at
each stage of the theoretical and practical training. This training will take 30
days to complete or can progress at a pace that is most comfortable for you.
Before signing a tenancy agreement for the purpose of opening a
nonresidential Nutrition Club you must complete the first 90 days since
Herbalife accepted your Application and Membership Agreement.

Translation of Legend in Spanish at the
bottom of Lo Mejor de Lo Mejor Training Worksheet
Herbalife’s own “Best of the Best” (“Lo Mejor de Lo Mejor”) instructs
new recruits to keep track of their training over 30 days
181
Herbalife’s Continued Support for
Club 100 and Other Training Programs
Club 100, Universidad del Exito
(Success University) and other
‘Training’ and ‘Certification’
programs pervade the uppermost
reaches of the Herbalife network
182
183

“ And one of the reasons we want to get this out of the way our
Chairman's Club who are the real, real go-getters, the real leaders,
the people who take the stage, who lead the parade in this company,
who are the heavily inspiring, motivating people we have highly
aspirational folks. We will be on the phone with them in two hours
to go through this in more depth with more discussions this years as
we have got to do. They will give us a ton of input and say, here is
what you need to do and here is the support we need to integrate
the market. Yeah, and together and this will also be because these
are global leaders.”
– Michael Johnson, Herbalife CEO, Jan 5, 2007

Source: 2007 Guidance Call
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Eduardo Salazar
(deceased)
Herbalife's most celebrated Latino
distributor, Eduardo Salazar was
murdered in Mexico by a double-crossing
hit man whom Salazar had hired to kill a
rival bar owner.
Salazar was an early user of the
"Universidad del Exito" concept, which
is now used across the U.S. and Latin
America, and requires distributors to
undergo "training" in order to participate
in the Herbalife business opportunity.
1
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Eduardo Salazar
(deceased)
Salazar's distributorship is run
through a corporation, Corporativo
S. de r.l. de c.v., and according to
a former employee is still one of the
most profitable distributorships
within Herbalife.
2
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
The University of Success
Universidad del Exito is used to describe
various training programs that promise
"trainees" they can reach the President's
Team by undergoing an educational
program that includes "graduation."
To graduate, distributors frequently are
required to buy set amounts of Herbalife
products, either through Nutrition Clubs
or from Herbalife directly and to recruit
others into the "University."
1
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
The University of Success
The use of the term “University” for an
unlicensed and unchartered business
purporting to provide training services likely
violates a range of state education laws,
as well as consumer protection laws.
For example, California Education Code
§ 94050(b): “No person shall designate
a business, social, political, religious, or other
organization operating in this state, including,
but not limited to, any firm, association,
partnership, or corporation, as a ‘college’
or ‘university.’”
2
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
The University of Success
We found more than 2,500 people
on LinkedIn who listed "Universidad
del Exito" on the education section
of their resumes.
3
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Enrique Varela &
Graciela Mier
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Enrique Varela &
Graciela Mier
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Enrique Varela &
Graciela Mier
The couple is credited with creating
the entire Nutrition Club concept in
Mexico. They are in Eduardo
Salazar's first line and their downline
organizations attend Universidad del
Exito trainings.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Raquel Cortes
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Raquel Cortes
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Raquel Cortes
Raquel Cortes was the No. 1 Herbalife
distributor in the world in 2008, 2010,
2011, 2012 and possibly 2013.

She is also frequently associated
with Universidad del Exito trainings.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Gabriel & Emma Sandoval
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Gabriel & Emma Sandoval
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Gabriel & Emma Sandoval
The Sandovals oversee a large
organization that operates Latin
Nutrition Clubs in the U.S. Downline
members identify themselves with
Universidad del Exito.
See this example from a hopeful
"graduate" who expects to be a
President's Team member in 2015:
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Gabriel & Emma Sandoval
The Sandovals oversee a large
organization that operates Latin
Nutrition Clubs in the U.S. Downline
members identify themselves with
Universidad del Exito.
See this example from a hopeful
"graduate" who expects to be a
President's Team member in 2015:
Translation: “With the
most renowned teachers,
lesson after lesson, you
get outstanding
achievements.”



https://www.facebook.com/ph
oto.php?fbid=1015175600424
4017&set=pb.702124016.-
2207520000.1404941015.&ty
pe=3&theater
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Leon Waisbein
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Leon Waisbein
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Leon Waisbein
Leon Waisbein is a Founder's Circle
member, a group of fewer than 10
members, and the highest designation
in the Herbalife marketing plan. He is
associated with Universidad del Exito
trainings and is a leader in Russia where
new marketing ideas are tested.
Waisbein served on Herbalife Ltd.'s Board
of Directors from 2005 to 2009.
`
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Humberto Jaimes
Humberto Jaimes
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Humberto Jaimes
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Humberto Jaimes
Humberto Jaimes runs Centro Apoyo
Tecamac (CAT) and is referred to by
members of his group as Professor
Jaimes. The group holds formal
ceremonies with "graduates"
receiving their certificates in caps
and gowns. Jaimes reached the
Chairman's Club in 2013.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
OPS, a Latin American
certification program run by four
Venezuelan Chairman's Club
members, stands for Online
President's System. The group's
members attend Universidad del
Exito trainings.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Guillermo Luna
Carola Lichtman Paulina Riveros
2nd ex-wife 1st ex-wife
Two more Chairman’s Club
members’ successes are tied to
training programs. Luna’s two
ex-wives are Chairman's Club
members as well.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Club 100
Club 100 is a certification and
training program widely used
in Nutrition Clubs in the U.S.
Latin America and elsewhere.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinosa and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Esther Espinosa and
Jorge Ruiz
The couple created Club 100,
expanding it from Mexico
to the U.S. and across Latin America.
Jorge Ruiz owns the registered
trademark for Plan Club 100
in Mexico.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Art Wesley and
Lourdes Montero
The couple is credited with
bringing the Nutrition Club
concept from Mexico to the U.S.
where it spread rapidly in
Hispanic communities. Lourdes
has been photographed attending
Club 100 events.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Edgar Balbas
Venezuelan distributor Edgar Balbas
appears in online training videos for
Club 100, explaining and promoting
the system. Balbas became a
Chairman's Club member in 2013.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Juan Miguel Mendoza
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Juan Miguel Mendoza
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Juan Miguel Mendoza
Juan Mendoza is a Venezuelan
Chairman's Club member who uses
Universidad del Exito trainings. He is
the brother-in-law of Chairman’s Club
Member Nani Rancel who also uses
Universidad del Exito.
Mendoza reached the Chairman's
Club in 2013. He relocated to the U.S.
and trains distributors in Arizona using
the system.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Pedro
Cardoso
Pedro
Cardoso
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Pedro
Cardoso
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Pedro
Cardoso
Brazilian Chairman's Club
member Pedro Cardoso oversees
Espaço 100, a spin-off of Club
100. Distributors in Brazil report
that all clubs in the country are
being converted to Espaço 100
clubs. Cardoso currently is a
member of Herbalife's Board
of Directors.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Pedro
Cardoso
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Doran Andry
Andry developed an English language
version of Universidad del Exito called
"Success University." Among the
"graduation" requirements, a distributor
must become a Supervisor, spending
thousands of dollars on inventory.
1
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
Doran Andry
Andry was among a group of
distributors who formed Newest
Way to Wealth, an Herbalife lead
generation business, which was
accused in a class action lawsuit of
committing fraud and securities fraud
by making deceptive earnings claims.
The lawsuit was settled for $6 million
in 2004.
2
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
David Bevan and
Jane Clark
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
David Bevan and
Jane Clark
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
David Bevan and
Jane Clark
Bevan and Clark joined the
Chairman's Club in 2014.
Like Andry, they use an English-
language version of Universidad
del Exito to train their organization.
Meet the Professors of Success University –
The Chairman's Club (and higher)
Eduardo Salazar
(deceased)
Leon
Waisbein
Gabriel & Emma
Sandoval
Raquel
Cortes
Enrique Valero &
Gracielo Mier
Humberto Jaimes
Fernando and
Judith Rancel
Giancarlo
Lanzilli
Guillermo
Luna
Eduardo Cuellar and
Silvia Anzola
Edgar Balbas Art Wesley and
Lourdes Montero
Esther Espinoza and
Jorge Ruiz
Pedro
Cardoso
David Bevan and
Jane Clark
Doran Andry
Carola
Lichtman
Paulina
Riveros
Success
University
Juan Miguel
Mendoza
Created
Spin-Off
Recruited
2nd ex-wife 1st ex-wife
Spin-Off
Same
System
Spin-Off
Spin-Off
Recruited
Uses
Recruited
South Korea
Herbalife President Des Walsh responded
to an analyst's question about Club 100
and training systems by saying that the
company didn't track the retention rate of
trainees but added: "What we do see is
that the systemized training approaches
have a higher level of duplication earlier
and the greatest example of that is Korea.
So when the Koreans recognized the
potential that the nutrition model had
for Korea, they instituted a systemized
training approach rapidly."
Financial Implications
for Herbalife
228
Nutrition Clubs Are a Significant Amount of Herbalife’s Volume
Source: Q4 ’12 conference call transcript
<Q - Scott Van Winkle> (Analyst): Great. And then, J ohn, do
you have an update on an estimate of volume going through
nutrition clubs? Are we still in that 33% to 41% range?

<A - John DeSimone> (CFO): Yeah. I have no further update at
this point.
Herbalife’s Q4 ’12 Earnings Call:
Nutrition Clubs may currently account for significantly more than 40% of total
volume given Herbalife’s rapid growth over the last 18 months, in light of the
decline of lead generation
Herbalife estimated that Nutrition Clubs accounted for
33% to 41% of its total volume at the end of 2012
229
Low High
Herbalife 2013 Net Sales $4,825 $4,825
Nutrition Clubs % of Total Volume (End of '12) (1) 33% 41%
Estimated Net Sales from Nutrition Clubs $1,592 $1,978
Herbalife 2013 Contribution Margin % (2) 45% 45%
Estimated Contribution Margin from Nutrition Clubs $709 $881
Less: Taxes at 25% (3) (177) (219)
Estimated After-Tax Contribution from Nutrition Clubs $533 $662
2013 Diluted Shares 107 107
Estimated After-Tax Contribution per Share from Nutrition Clubs $4.96 $6.16
Herbalife 2013 EPS Excluding Contribution Margin from Nutrition Clubs $0.41 ($0.79)
Nutrition Club Contribution Margin as % of:
Herbalife 2013 Operating Income (4) 90% 112%
Herbalife 2013 EPS (5) 92% 115%
Nutrition Clubs Contribute Enormously to Herbalife’s Earnings
We estimate that the contribution margin to Herbalife from Nutrition
Clubs may be in excess of 90% of Herbalife’s operating income and
earnings per share
230
Source: Public filings and Pershing Square estimates
(1) Based on Q4’12 earnings call. Assumes similar volume and revenue mix
(2) Contribution margin % based on reported 49% contribution margin and adjusted to exclude $216mm of China compensation that is classified as SG&A
(3) Based on Herbalife 2013 adjusted tax rate of 25%
(4) Based on $785mm of Adjusted Operating Income, which excludes $20mm of expenses for reaudit and $29mm of expenses related to criticism of the company’s business model
(5) Based on Adjusted EPS of $5.37
$ in mm, except per share
Low High
Estimated Contribution Margin from Nutrition Clubs $709 $881
Herbalife 2013 EBITDA (1) $870 $870
Estimated Contribution Margin from Nutrition Clubs as % of 2013 EBITDA 82% 101%
Total Debt (2) $1,848 $1,848
Maximum Total Consolidated Leverage Ratio 3.5x 3.5x
Estimated Total Consolidated Leverage Ratio Based on:
Herbalife 2013 EBITDA 2.1x 2.1x
Herbalife 2013 EBITDA Excluding Nutrition Club Contribution Margin 11.5x (161.7)x
Nutrition Clubs Contribution to EBITDA Vital to Debt Covenants
To the extent Herbalife is found to be a pyramid scheme, it would be in breach
of its “Compliance with Laws” covenant
Source: Public filings and Pershing Square estimates
(1) Based on EBITDA adjusted to exclude $20mm of expenses for reaudit and $29mm of expenses related to criticism of the company’s business model
(2) As of Q1 ‘14
We estimate that the contribution margin from Nutrition Clubs
to Herbalife’s EBITDA is more than 80%. Without the significant
contribution from Nutrition Clubs, Herbalife would be in breach of the
3.5x Maximum Consolidated Total Leverage Ratio covenant
in its Credit Agreement
231
Name Position Date Shares Share Price Amount
Ibi Fleming SVP, North America 8/21/13 388 $63.75 $24,735
Bosco Chiu Principal Accounting Officer 12/23/13 1,989 $80.76 $160,626
Colombe Nicholas Director 1/6/14 10,938 $77.34 $845,945
Michael Johnson CEO 5/7/14 250,000 $60.52 $15,128,960
John Tartol Director 5/21/14 50,000 $63.36 $3,168,000
Richard Bermingham Director 6/13/14 16,000 $63.08 $1,009,280
Patricio Cuesta SVP, South America 6/18/14 2,975 $64.69 $192,453
Miguel Fernandez Calero EVP, Americas & Worldwide Ops 7/7/14 15,332 $66.11 $1,013,613
Leroy Barnes Director 7/16/14 29,391 $64.52 $1,896,295
Total 377,013 $62.17 $23,439,906
Insider Selling Has Significantly Increased Recently
Source: Bloomberg
Note: Date of last sale given if multiple sales occurred within three days
Herbalife executives and directors have sold more than $22mm
of stock in the last three months, compared to $1mm in the preceding
15 months since Pershing Square’s initial investment presentation in
December 2012
232
Michael Johnson Continues to Sell Large Amounts of Stock
Michael Johnson didn’t need the $15mm. In our initial presentation on
December 20, 2012, we highlighted that Johnson had sold $140mm of
stock since 2007. His total amount sold now is $155mm
233
Period Amount
12/20/12 - 12/31/12 $0
Q1 '13 162,400,000
Q2 '13 0
Q3 '13 110,000,000
Q4 '13 25,000,000
Q1 '14 685,800,000
Q2 '14E 581,000,000
Total $1,564,200,000
Insiders Are Selling While The Company is Repurchasing Shares
Source: Public filings and Q1 '14 earnings release for Q2 '14E
We note that Herbalife insiders are selling stock while Herbalife has been
repurchasing stock
Since Pershing Square’s initial presentation the company has
repurchased $1.6bn of stock. Recent share repurchases have increased
Herbalife’s leverage levels and reduced its cash. Insiders are selling to
the company
234
How Could Herbalife Have Gotten Away
with Running a Pyramid Scheme for
More than 30 Years?
The Power of the Big Lie
236

With Pershing Square's limited accountability, in
light of the historical regulatory scrutiny placed on
Herbalife, it has made the astonishing claim that it
is a "provable certainty" Herbalife is a massive,
sprawling fraud that had gone undetected for more
than 30 years. Pershing Square is claiming that
decades of Herbalife management, and a material
number of members had all kept this secret.


– Herbalife Press Release, July 17, 2014
Herbalife Is a Publicly Traded Company
237
Herbalife is a New York Stock Exchange
listed company with a total enterprise
value of approximately $6bn and revenues
of approximately $5bn
Herbalife Has Strong Support From Sell-Side Analysts
Of the eight research analysts who covered Herbalife as of the
beginning of 2014, six have a buy rating on the stock. Not a
single analyst has a sell rating
238
Source: Bloomberg, as of 7/18/14
Note: Buy rating used for buy, outperform, and overweight rankings. Tim Ramey no longer works at D.A. Davidson
Firm Analyst Rating Target Price Date
Wedbush Rommel Dionisio Buy $90 7/16/14
Argus John D Staszak Hold NA 6/9/14
SunTrust Michael Swartz Buy 85 6/2/14
EVA Dimensions Craig Sterling Buy NA 5/28/14
Canaccord Scott Van Winkle Buy 73 4/29/14
Barclays Meridith Adler Buy 94 4/29/14
S&P Capial IQ Thomas Graves Hold 65 1/23/14
Tim Ramey D.A. Davidson Buy 115 1/2/14
Firm Analyst Rating Target Price Date
Wedbush Rommel Dionisio Buy $90 7/16/14
Argus John D Staszak Hold NA 6/9/14
SunTrust Michael Swartz Buy 85 6/2/14
EVA Dimensions Craig Sterling Buy NA 5/28/14
Canaccord Scott Van Winkle Buy 73 4/29/14
Barclays Meridith Adler Buy 94 4/29/14
S&P Capial IQ Thomas Graves Hold 65 1/23/14
Tim Ramey D.A. Davidson Buy 115 1/2/14
Firm Analyst Rating Target Price Date
Wedbush Rommel Dionisio Buy $90 7/16/14
Argus John D Staszak Hold NA 6/9/14
SunTrust Michael Swartz Buy 85 6/2/14
EVA Dimensions Craig Sterling Buy NA 5/28/14
Canaccord Scott Van Winkle Buy 73 4/29/14
Barclays Meridith Adler Buy 94 4/29/14
S&P Capial IQ Thomas Graves Hold 65 1/23/14
Tim Ramey D.A. Davidson Buy 115 1/2/14
Herbalife Has Numerous High Profile Paid Endorsers
Former Secretary of State: Madeleine Albright
239
Reportedly, she has been paid tens of millions
of dollars by Herbalife
Herbalife Has Numerous High Profile Paid Endorsers
Former Secretary of State: Madeleine Albright
241
Herbalife Has Numerous High Profile Paid Endorsers (Cont.)
Former Mayor of Los Angeles: Antonio Villaraigosa
242
Herbalife Has Numerous High Profile Paid Endorsers (Cont.)
Former Mayor of Los Angeles: Antonio Villaraigosa
244
VIDEO –
VILLARAIGOSA
Herbalife Has Numerous High Profile Paid Endorsers (Cont.)
Herbalife Board Member: Maria Otero
245
Maria Otero, Board of Directors (appointed
December 7, 2013)
Dr. Richard Carmona, Board of Directors
(appointed October 25, 2013) Former
Surgeon General of the United States
(2002-2006)
Vasilios Frankos, Board of Directors
(former Director at FDA)
Director Biography from Herbalife 2014 Proxy
Herbalife Has Numerous High Profile Paid Endorsers (Cont.)
Herbalife Board Member: Dr. Richard Carmona
246
Director Biography from Herbalife 2014 Proxy
Herbalife Has Numerous High Profile Paid Endorsers (Cont.)
Nobel Laureate: Dr. Louis Ignarro
247
Year Amount
2003 $200,000
2004 $900,000
2005 $1,400,000
2006 $1,000,000
2007 $1,900,000
2008 $2,100,000
2009 $1,900,000
2010 $2,300,000
2011 $2,900,000
2012 $3,200,000
2013 $3,400,000
Total $21,200,000
Herbalife Makes Significant Payments to Dr. Ignarro’s Affiliates
Herbalife has paid more than $21mm to a consulting firm
affiliated with Dr. Ignarro since 2003, when Herbalife introduced
Niteworks
248
Source: Public filings
Payments to Consulting Firm affiliated with Dr. Ignarro ($ in mm)
Herbalife Has Numerous High Profile Paid Endorsers (Cont.)
Former Professional Soccer Player: David Beckham
249
Herbalife Has Numerous High Profile Paid Endorsers (Cont.)
Professional Soccer Player: Lionel Messi
250
A Fraud Perpetrated by Herbalife’s
Senior Management and Members of its
Founder’s Circle, Chairman’s Club and
President’s Team conceived, designed, and
executed to exploit the poor
Herbalife
Fictitious Customers
Fictitious Business Opportunity
Fictitious University Degree

SEC January 9, 2013
FTC March 12, 2014
Dep’t of Justice & FBI April 11, 2014
New York AG April 14, 2014
Illinois AG April 17, 2014

Investigations of Herbalife

86 Letters from Public Officials, Not-For-Profit Civic Groups and
Concerned Citizens, calling for an investigation of Herbalife.

Investigations officially commenced or reported publicly:
Pershing Square Capital Management, L.P.
www.herbalifepyramidscheme.com
Pershing Square Capital Management, L.P.
Q & A
The Big Lie
July 22, 2014

Pershing Square Capital Management, L.P.
The Big Lie
July 22, 2014

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