Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 23, 2013 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Sep-13 | |
Document Fiscal Year Focus | 2013 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | HLF | |
Entity Registrant Name | HERBALIFE LTD. | |
Entity Central Index Key | 1180262 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 101,268,818 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ||
Cash and cash equivalents | $892,548 | $333,534 |
Receivables, net of allowance for doubtful accounts of $1,769 (2013) and $2,273 (2012) | 109,830 | 116,139 |
Inventories | 347,735 | 339,411 |
Prepaid expenses and other current assets | 174,840 | 145,624 |
Deferred income taxes | 53,880 | 49,339 |
Total current assets | 1,578,833 | 984,047 |
Property, at cost, net of accumulated depreciation and amortization of $309,372 (2013) and $255,862 (2012) | 267,850 | 242,886 |
Deferred compensation plan assets | 25,843 | 24,267 |
Deferred financing costs, net | 5,528 | 7,462 |
Other assets | 49,006 | 48,805 |
Marketing related intangibles and other intangible assets, net | 310,897 | 311,186 |
Goodwill | 105,490 | 105,490 |
Total assets | 2,343,447 | 1,724,143 |
CURRENT LIABILITIES: | ||
Accounts payable | 82,989 | 75,209 |
Royalty overrides | 252,677 | 243,351 |
Accrued compensation | 99,765 | 95,220 |
Accrued expenses | 241,359 | 181,523 |
Current portion of long-term debt | 75,061 | 56,302 |
Advance sales deposits | 73,618 | 49,432 |
Income taxes payable | 42,494 | 61,325 |
Total current liabilities | 867,963 | 762,362 |
NON-CURRENT LIABILITIES: | ||
Long-term debt, net of current portion | 875,018 | 431,305 |
Deferred compensation plan liability | 35,049 | 29,454 |
Deferred income taxes | 64,500 | 62,982 |
Other non-current liabilities | 45,326 | 42,557 |
Total liabilities | 1,887,856 | 1,328,660 |
CONTINGENCIES | ||
SHAREHOLDERS' EQUITY: | ||
Common shares, $0.001 par value; 1.0 billion shares authorized; 101.3 million (2013) and 106.9 million (2012) shares outstanding | 101 | 107 |
Paid-in-capital in excess of par value | 304,638 | 303,975 |
Accumulated other comprehensive loss | -27,371 | -31,695 |
Retained earnings | 178,223 | 123,096 |
Total shareholders' equity | 455,591 | 395,483 |
Total liabilities and shareholders' equity | $2,343,447 | $1,724,143 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $1,769 | $2,273 |
Property, accumulated depreciation and amortization | $309,372 | $255,862 |
Common shares, par value | $0.00 | $0.00 |
Common shares, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common shares, shares outstanding | 101,300,000 | 106,900,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Statement [Abstract] | ||||
Product sales | $1,062,962 | $869,542 | $3,069,581 | $2,574,256 |
Shipping & handling revenues | 150,581 | 147,345 | 486,848 | 438,754 |
Net sales | 1,213,543 | 1,016,887 | 3,556,429 | 3,013,010 |
Cost of sales | 238,415 | 201,597 | 711,616 | 601,478 |
Gross profit | 975,128 | 815,290 | 2,844,813 | 2,411,532 |
Royalty overrides | 373,241 | 330,247 | 1,116,821 | 982,975 |
Selling, general & administrative expenses | 409,747 | 324,200 | 1,174,574 | 926,903 |
Operating income | 192,140 | 160,843 | 553,418 | 501,654 |
Interest expense, net | 4,726 | 3,546 | 15,658 | 8,088 |
Income before income taxes | 187,414 | 157,297 | 537,760 | 493,566 |
Income taxes | 45,464 | 45,424 | 133,775 | 141,811 |
NET INCOME | $141,950 | $111,873 | $403,985 | $351,755 |
Earnings per share: | ||||
Basic | $1.39 | $1.03 | $3.92 | $3.09 |
Diluted | $1.32 | $0.98 | $3.75 | $2.95 |
Weighted average shares outstanding: | ||||
Basic | 102,200 | 108,816 | 103,096 | 113,838 |
Diluted | 107,777 | 113,646 | 107,759 | 119,376 |
Dividends declared per share | $0.30 | $0.30 | $0.90 | $0.90 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income | $141,950 | $111,873 | $403,985 | $351,755 |
Other comprehensive income: | ||||
Foreign currency translation adjustment, net of income taxes of $(1,799) and $579 for the three months ended September 30, 2013 and 2012, respectively, and $(3,610) and $(1,493) for the nine months ended September 30, 2013 and 2012, respectively | 15,025 | 9,113 | -2,906 | 5,189 |
Unrealized gain (loss) on derivatives, net of income taxes of $(214) and $(1,038) for the three months ended September 30, 2013 and 2012, respectively, and $1,490 and $(1,377) for the nine months ended September 30, 2013 and 2012, respectively | 1,887 | -2,811 | 7,230 | -4,005 |
Total other comprehensive income (loss) | 16,912 | 6,302 | 4,324 | 1,184 |
Total comprehensive income (loss) | $158,862 | $118,175 | $408,309 | $352,939 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustment, tax | ($1,799) | $579 | ($3,610) | ($1,493) |
Unrealized gain (loss) on derivatives, tax | ($214) | ($1,038) | $1,490 | ($1,377) |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $403,985 | $351,755 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 63,207 | 55,402 |
Deficiency in (Excess) tax benefits from share-based payment arrangements | 2,586 | -28,073 |
Share-based compensation expenses | 21,882 | 20,850 |
Amortization of deferred financing costs | 1,937 | 1,135 |
Deferred income taxes | -7,532 | -8,249 |
Unrealized foreign exchange transaction (gain) loss | 585 | -3,529 |
Foreign exchange loss from Venezuela currency devaluation | 15,116 | |
Other | 1,661 | 172 |
Changes in operating assets and liabilities: | ||
Receivables | 1,624 | -26,444 |
Inventories | -19,775 | -58,705 |
Prepaid expenses and other current assets | -15,330 | -7,977 |
Other assets | -678 | -3,098 |
Accounts payable | 8,569 | 22,674 |
Royalty overrides | 13,959 | 22,432 |
Accrued expenses and accrued compensation | 65,868 | 20,028 |
Advance sales deposits | 27,038 | 7,384 |
Income taxes | -13,313 | 29,118 |
Deferred compensation plan liability | 5,595 | 5,015 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 576,984 | 399,890 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment | -91,782 | -59,229 |
Proceeds from sale of property, plant and equipment | 121 | 243 |
Deferred compensation plan assets | -3,466 | |
NET CASH USED IN INVESTING ACTIVITIES | -91,661 | -62,452 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividends paid | -92,651 | -102,687 |
Borrowings from long-term debt | 763,232 | 1,387,557 |
Principal payments on long-term debt | -300,733 | -1,090,748 |
Deferred financing costs | -4,460 | |
Share repurchases | -275,821 | -506,331 |
(Deficiency in) Excess tax benefits from share-based payment arrangements | -2,586 | 28,073 |
Proceeds from exercise of stock options and sale of stock under employee stock purchase plan | 975 | 10,819 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 92,416 | -277,777 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | -18,725 | 3,286 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 559,014 | 62,947 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 333,534 | 258,775 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 892,548 | 321,722 |
CASH PAID DURING THE PERIOD | ||
Interest paid | 18,005 | 10,263 |
Income taxes paid | $163,843 | $123,063 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | |
Organization | 1. Organization |
Herbalife Ltd., a Cayman Islands exempt limited liability company, or Herbalife, was incorporated on April 4, 2002. Herbalife Ltd. (and together with its subsidiaries, the “Company”) is a leading global nutrition company that sells weight management products, nutritional supplements, energy, sports & fitness products and personal care products utilizing network marketing distribution. As of September 30, 2013, the Company sold its products to and through a network of 3.6 million independent distributors, which included 0.2 million in China. In China, the Company currently sells its products through retail stores, sales representatives, sales officers and independent service providers. The Company reports revenue in six geographic regions: North America; Mexico; South and Central America; EMEA, which consists of Europe, the Middle East and Africa; Asia Pacific (excluding China); and China. |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||
Significant Accounting Policies | 2. Significant Accounting Policies | ||||||||||||||||||||||||
Basis of Presentation | |||||||||||||||||||||||||
The unaudited and unreviewed interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s, or the SEC, Regulation S-X. Accordingly, as permitted by Article 10 of the SEC’s Regulation S-X, it does not include all of the information required by generally accepted accounting principles in the U.S., or U.S. GAAP, for complete financial statements. The condensed consolidated balance sheet at December 31, 2012 was derived from the previously audited financial statements at that date subject to revisions as discussed below, where, as previously disclosed, the Company’s former independent registered public accounting firm’s audit opinions have now been withdrawn, and does not include all the disclosures required by U.S. GAAP, as permitted by Article 10 of the SEC’s Regulation S-X. The Company’s unaudited and unreviewed condensed consolidated financial statements as of September 30, 2013, and for the three and nine months ended September 30, 2013 and 2012, include Herbalife and all of its direct and indirect subsidiaries. In the opinion of management, the accompanying financial information contains all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s unaudited and unreviewed condensed consolidated financial statements as of September 30, 2013, and for the three and nine months ended September 30, 2013 and 2012. These unaudited and unreviewed condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, or the 2012 10-K. Operating results for the three and nine months ended September 30, 2013, are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |||||||||||||||||||||||||
The unaudited interim financial information presented in this Quarterly Report on Form 10-Q has not been reviewed by an independent registered public accounting firm as the Company’s former independent registered public accounting firm resigned on April 8, 2013. See the Explanatory Note to this Quarterly Report on Form 10-Q for a further description. As a result, this Quarterly Report on Form 10-Q is considered deficient and the Company continues not to be timely or current in its filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act. While this filing does not comply with the requirements of Regulation S-X, and should not be interpreted to be a substitute for the review that would normally occur by the Company’s independent registered public accounting firm, the Company’s Audit Committee and management believe that the interim financial information presented herein fairly present, in all material respects, the financial condition and results of operations of the Company as of the end of and for the referenced periods and may be relied upon. Except for the absence of this review of the unaudited interim financial information discussed above and the omission of the SOX 906 certification discussed in greater detail in the Explanatory Note, this Quarterly Report on Form 10-Q fully complies with the requirements of the Exchange Act and the Company believes it is prudent to file this Report with the SEC in spite of the current circumstances to provide the financial and other information set forth herein to its shareholders and other interested parties. Once PwC completes its re-audit of the Company’s financial statements for the fiscal years ended December 31, 2012, 2011 and 2010, and completes its SAS 100 review of this unaudited interim financial information and the unaudited financial information for applicable prior periods, the Company will file an amendment to this Quarterly Report on Form 10-Q as soon as practicable. | |||||||||||||||||||||||||
New Accounting Pronouncements | |||||||||||||||||||||||||
In February 2013, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB Emerging Issues Task Force). This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |||||||||||||||||||||||||
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force). This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |||||||||||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the Emerging Issues Task Force). This ASU addresses when unrecognized tax benefits should be presented as reductions to deferred tax assets for net operating loss carryforwards in the financial statements. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption and retrospective application is permitted. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |||||||||||||||||||||||||
Revision of Prior Period Financial Statements | |||||||||||||||||||||||||
During the quarter ended June 30, 2013, in connection with preparing the unaudited and unreviewed interim financial information presented in the Quarterly Report on Form 10-Q for that period, prior period errors were identified which affected the interim period ended June 30, 2013, and the annual periods ended December 31, 2012, 2011 and 2010, including the applicable interim periods. These income tax errors primarily relate to income tax expenses calculated on intercompany inventory transactions and the Company’s application of ASC 740-10-25-3(e) and ASC 810-10-45-8. As a result of its misapplication of these accounting standards, the Company’s income tax expenses and net income within its consolidated statement of income were misstated. There were also certain amounts within the Company’s other consolidated financial statements that were misstated. The Company has reflected the correction of these identified prior period errors in the periods in which they originated. | |||||||||||||||||||||||||
In evaluating whether the Company’s previously issued consolidated financial statements were materially misstated, the Company considered the guidance in ASC Topic 250, Accounting Changes and Error Corrections, ASC Topic 250-10-S99-1, Assessing Materiality, and ASC Topic 250-10-S99-2, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. The Company concluded that these errors were not material, individually or in the aggregate, to any of the prior reporting periods, and therefore, amendments of previously filed reports were not required. If the entire correction was recorded in the second quarter of 2013, it was expected that the cumulative amount would not be material for the fiscal year ending December 31, 2013. As such, this cumulative amount could have been recorded as an out of period adjustment during the second quarter of 2013. However, because the Company will be amending its Annual Report on Form 10-K for the fiscal year ended December 31, 2012 due to its predecessor auditors withdrawing their opinions, and will be amending its Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2013, June 30, 2013, and September 30, 2013, and any other Quarterly Reports on Form 10-Q that are deficient due to the absence of a SAS 100 review, the Company decided to revise its applicable prior period financial statements so that the financial statements included therein and herein do not include these income tax errors. The Company believes this approach is more beneficial to investors due to the Company’s unusual facts and circumstances surrounding its predecessor auditors resigning and withdrawing their audit opinions and the Company being required to file future amendments to its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q referenced above. As such, the revisions for these corrections are and will be reflected in the financial information of the applicable prior periods and will be reflected in future filings containing such financial information. The Company has also provided, within this Note, the financial statement items that were impacted and included within its prior period consolidated balance sheets and full year prior period consolidated statements of income so this financial information is presented timely to the Company’s shareholders and other interested parties. | |||||||||||||||||||||||||
The effects of these prior period errors in the condensed consolidated financial statements are as follows: | |||||||||||||||||||||||||
Condensed Consolidated Balance Sheets | |||||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||
As Previously | As Adjusted | As Previously | As Adjusted | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
(In thousands, except per share amount) | |||||||||||||||||||||||||
Prepaid expenses and other current assets | $ | 125,425 | $ | 145,624 | $ | 117,073 | $ | 134,605 | |||||||||||||||||
Deferred income taxes | $ | 49,339 | $ | 49,339 | $ | 55,615 | $ | 54,949 | |||||||||||||||||
Total current assets | $ | 963,848 | $ | 984,047 | $ | 768,819 | $ | 785,685 | |||||||||||||||||
Total assets | $ | 1,703,944 | $ | 1,724,143 | $ | 1,446,209 | $ | 1,463,075 | |||||||||||||||||
Income taxes payable | $ | 15,854 | $ | 61,325 | $ | 31,415 | $ | 62,283 | |||||||||||||||||
Total current liabilities | $ | 716,891 | $ | 762,362 | $ | 548,689 | $ | 579,557 | |||||||||||||||||
Deferred income taxes | $ | 62,982 | $ | 62,982 | $ | 72,348 | $ | 70,390 | |||||||||||||||||
Total liabilities | $ | 1,283,189 | $ | 1,328,660 | $ | 886,021 | $ | 914,931 | |||||||||||||||||
Retained earnings | $ | 148,368 | $ | 123,096 | $ | 305,931 | $ | 293,887 | |||||||||||||||||
Total shareholders’ equity | $ | 420,755 | $ | 395,483 | $ | 560,188 | $ | 548,144 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,703,944 | $ | 1,724,143 | $ | 1,446,209 | $ | 1,463,075 | |||||||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, 2012 | September 30, 2012 | ||||||||||||||||||||||||
As Previously | As Adjusted | As Previously | As Adjusted | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
(In thousands, except per share amount) | |||||||||||||||||||||||||
Income taxes | $ | 39,518 | $ | 45,424 | $ | 134,257 | $ | 141,811 | |||||||||||||||||
Net Income | $ | 117,779 | $ | 111,873 | $ | 359,309 | $ | 351,755 | |||||||||||||||||
Basic earnings per share | $ | 1.08 | $ | 1.03 | $ | 3.16 | $ | 3.09 | |||||||||||||||||
Diluted earnings per share | $ | 1.04 | $ | 0.98 | $ | 3.01 | $ | 2.95 | |||||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | December 31, 2010 | |||||||||||||||||||||||
As Previously | As Adjusted | As Previously | As Adjusted | As Previously | As Adjusted | ||||||||||||||||||||
Reported | Reported | Reported | |||||||||||||||||||||||
(In thousands, except per share amount) | |||||||||||||||||||||||||
Income taxes | $ | 173,716 | $ | 186,944 | $ | 147,201 | $ | 144,820 | $ | 80,880 | $ | 87,212 | |||||||||||||
Net Income | $ | 477,190 | $ | 463,962 | $ | 412,578 | $ | 414,959 | $ | 299,215 | $ | 292,883 | |||||||||||||
Basic earnings per share | $ | 4.25 | $ | 4.13 | $ | 3.51 | $ | 3.53 | $ | 2.51 | $ | 2.46 | |||||||||||||
Diluted earnings per share | $ | 4.05 | $ | 3.94 | $ | 3.3 | $ | 3.32 | $ | 2.37 | $ | 2.32 | |||||||||||||
Condensed Consolidated Statements of Comprehensive Income | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, 2012 | September 30, 2012 | ||||||||||||||||||||||||
As Previously | As Adjusted | As Previously | As Adjusted | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Net Income | $ | 117,779 | $ | 111,873 | $ | 359,309 | $ | 351,755 | |||||||||||||||||
Total comprehensive income | $ | 124,081 | $ | 118,175 | $ | 360,493 | $ | 352,939 | |||||||||||||||||
Condensed Consolidated Statement of Cash Flows | |||||||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||
September 30, 2012 | |||||||||||||||||||||||||
As Previously | As Adjusted | ||||||||||||||||||||||||
Reported | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Net Income | $ | 359,309 | $ | 351,755 | |||||||||||||||||||||
Deferred income taxes | $ | (9,246 | ) | $ | (8,249 | ) | |||||||||||||||||||
Income taxes | $ | 22,561 | $ | 29,118 | |||||||||||||||||||||
Venezuela | |||||||||||||||||||||||||
Currency restrictions enacted by the Venezuelan government have become more restrictive and have impacted the ability of the Company’s subsidiary in Venezuela, Herbalife Venezuela, to timely obtain U.S. dollars in exchange for Venezuelan Bolivars, or Bolivars, at the official foreign exchange rate from the Venezuelan government and its foreign exchange commission, CADIVI. The application and approval process continue to be delayed and the Company’s ability to timely obtain U.S. dollars at the official exchange rate remains uncertain. In recent instances, the Company has been unsuccessful in obtaining U.S. dollars at the official rate and it remains uncertain whether the Company’s current pending applications and future anticipated applications will be approved. | |||||||||||||||||||||||||
In February 2013, the Venezuela government announced that it devalued its Bolivar currency and will eliminate the SITME regulated system. The SITME 5.3 Bolivars per U.S. dollar rate was eliminated and the CADIVI rate has been devalued from 4.3 Bolivars to 6.3 Bolivars per U.S. dollar. This new CADIVI rate is approximately 16% less favorable than the previously published 5.3 SITME rate. The Company recognized approximately $15.1 million of net foreign exchange losses within its condensed consolidated statement of income during the first quarter of 2013, as a result of remeasuring the Company’s Bolivar denominated monetary assets and liabilities at this new CADIVI rate of 6.3 Bolivars per U.S. dollar. The majority of these foreign exchange losses related to the approximately $16.9 million devaluation of Herbalife Venezuela’s Bolivar denominated cash and cash equivalents. In March 2013, the Venezuelan government also announced they will introduce an additional complimentary exchange mechanism known as SICAD. It is currently unknown whether Herbalife Venezuela will be able to access this new exchange mechanism and the Company is currently assessing and monitoring the restrictions and exchange rates relating to this alternative mechanism. | |||||||||||||||||||||||||
During the nine months ended September 30, 2013, the Company also recognized $0.7 million of foreign exchange losses as a result of exchanging Bolivars for U.S. dollars using alternative legal exchange mechanisms that were approximately 75% less favorable than the new CADIVI rate. During the nine months ended September 30, 2013, the Company exchanged 5.6 million Bolivars for $0.2 million U.S. dollars using these alternative legal exchange mechanisms. The Company did not exchange Bolivars for U.S. dollars using these alternative legal exchange mechanisms during the three months ended June 30, 2013 or the three months ended September 30, 2013. As of September 30, 2013, Herbalife Venezuela’s net monetary assets and liabilities denominated in Bolivars were approximately $146.7 million, and included approximately $150.1 million in Bolivar denominated cash and cash equivalents. These Bolivar denominated assets and liabilities were remeasured at the CADIVI rate. The Company remeasures its Bolivars at the official published CADIVI rate given the limited availability of alternative exchange mechanisms and the uncertainty in the effective exchange rate for alternative exchange mechanisms. These remeasured amounts, including cash and cash equivalents, being reported on the Company’s condensed consolidated balance sheet using the published CADIVI rate may not accurately represent the amount of U.S. dollars that the Company could ultimately realize. While the Company continues to monitor the exchange mechanisms and restrictions under CADIVI, and assess and monitor the current economic and political environment in Venezuela, there is no assurance that the Company will be able to exchange Bolivars into U.S. dollars on a timely basis. Herbalife Venezuela’s net sales represented approximately 5% and 3% of the Company’s consolidated net sales for the nine months ended September 30, 2013 and 2012, respectively, and its total assets represented approximately 9% and 7% of the Company’s consolidated total assets as of September 30, 2013 and December 31, 2012, respectively. As of September 30, 2013 and December 31, 2012, the majority of its total assets consisted of Bolivar denominated cash and cash equivalents. | |||||||||||||||||||||||||
See the Company’s 2012 10-K for further information on Herbalife Venezuela and Venezuela’s highly inflationary economy. |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | 3. Inventories | ||||||||
Inventories consist primarily of finished goods available for resale. Inventories are stated at lower of cost (primarily on the first-in, first-out basis) or market. The following are the major classes of inventory: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Raw materials | $ | 24.3 | $ | 19.6 | |||||
Work in process | 1.8 | 1.9 | |||||||
Finished goods | 321.6 | 317.9 | |||||||
Total | $ | 347.7 | $ | 339.4 | |||||
LongTerm_Debt
Long-Term Debt | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-Term Debt | 4. Long-Term Debt | ||||||||
Long-term debt consists of the following: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Borrowings under the senior secured credit facility | $ | 950 | $ | 487.5 | |||||
Capital leases | 0.1 | 0.1 | |||||||
Total | 950.1 | 487.6 | |||||||
Less: current portion | 75.1 | 56.3 | |||||||
Long-term portion | $ | 875 | $ | 431.3 | |||||
On March 9, 2011, the Company entered into a $700.0 million senior secured revolving credit facility, or the Credit Facility, with a syndicate of financial institutions as lenders and terminated its prior senior secured credit facility, or the Prior Credit Facility. The Credit Facility has a five year maturity and expires on March 9, 2016. Based on the Company’s consolidated leverage ratio, U.S. dollar borrowings under the Credit Facility bear interest at either LIBOR plus the applicable margin between 1.50% and 2.50% or the base rate plus the applicable margin between 0.50% and 1.50%. The base rate under the Credit Facility represents the highest of the Federal Funds Rate plus 0.50%, one-month LIBOR plus 1.00%, and the prime rate offered by Bank of America. The Company, based on its consolidated leverage ratio, pays a commitment fee between 0.25% and 0.50% per annum on the unused portion of the Credit Facility. The Credit Facility also permits the Company to borrow limited amounts in Mexican Peso and Euro currencies based on variable rates. | |||||||||
In March 2011, the Company used $196.0 million in U.S. dollar borrowings under the Credit Facility to repay all amounts outstanding under the Prior Credit Facility. The Company incurred approximately $5.7 million of debt issuance costs in connection with the Credit Facility. These debt issuance costs were recorded as deferred financing costs on the Company’s consolidated balance sheet and are being amortized over the term of the Credit Facility. | |||||||||
On July 26, 2012, the Company amended the Credit Facility to include a $500.0 million term loan with a syndicate of financial institutions as lenders, or the Term Loan. The Term Loan is a part of the Credit Facility and is in addition to the Company’s current revolving credit facility. The Term Loan matures on March 9, 2016. The Company will make regular scheduled payments for the Term Loan consisting of both principal and interest components. Based on the Company’s consolidated leverage ratio, the Term Loan bears interest at either LIBOR plus the applicable margin between 1.50% and 2.50% or the base rate plus the applicable margin between 0.50% and 1.50% which are the same terms as the Company’s revolving credit facility. | |||||||||
In July 2012, the Company used all $500.0 million of the borrowings under the Term Loan to pay down amounts outstanding under the Company’s revolving credit facility. The Company incurred approximately $4.5 million of debt issuance costs in connection with the Term Loan. The debt issuance costs are recorded as deferred financing costs on the Company’s consolidated balance sheet and will be amortized over the life of the Term Loan. On September 30, 2013 and December 31, 2012, the weighted average interest rate for borrowings under the Credit Facility, including borrowings under the Term Loan, was 2.18% and 1.96%, respectively. | |||||||||
The Credit Facility requires the Company to comply with a leverage ratio and a coverage ratio. In addition, the Credit Facility contains customary covenants, including covenants that limit or restrict the Company’s ability to incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, pay dividends, repurchase its common shares, merge or consolidate and enter into certain transactions with affiliates. As of September 30, 2013 and December 31, 2012, the Company was compliant with its debt covenants under the Credit Facility. The fair value of the outstanding borrowings on the Company’s revolving credit facility and Term Loan approximated their carrying values as of September 30, 2013, due to their variable interest rates which reprice frequently and represent floating market rates. The fair value of the outstanding borrowings on the Company’s revolving credit facility and Term Loan are determined by utilizing Level 2 inputs as defined in Note 12, Fair Value Measurements, such as observable market interest rates and yield curves. | |||||||||
During the three months ended March 31, 2013, the Company borrowed an aggregate amount of $513.0 million and paid a total amount of $25.5 million under the Credit Facility. During the three months ended June 30, 2013, the Company paid a total amount of $12.5 million and did not make any borrowings under the Credit Facility. During the three months ended September 30, 2013, the Company borrowed an aggregate amount of $250.0 million and paid a total amount of $262.5 million under the Credit Facility. As of September 30, 2013 and December 31, 2012, the U.S. dollar amount outstanding under the Credit Facility was $950.0 million and $487.5 million, respectively. Of the $950.0 million U.S. dollar amount outstanding under the Credit Facility as of September 30, 2013, $450.0 million was outstanding on the Term Loan and $500.0 million was outstanding on the revolving credit facility. Of the $487.5 million U.S. dollar amount outstanding under the Credit Facility as of December 31, 2012, $487.5 million was outstanding on the Term Loan and no amounts were outstanding on the revolving credit facility. There were no outstanding foreign currency borrowings as of September 30, 2013 and December 31, 2012 under the Credit Facility. | |||||||||
As of September 30, 2013, the aggregate annual maturities of the Credit Facility were expected to be $18.8 million for remainder of 2013, $81.2 million for 2014, $100.0 million for 2015, and $750.0 million for 2016. | |||||||||
Interest expense was $6.7 million and $5.0 million for the three months ended September 30, 2013 and 2012, respectively, and $21.1 million and $12.4 million for the nine months ended September 30, 2013 and 2012, respectively. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 5. Contingencies |
The Company is from time to time engaged in routine litigation. The Company regularly reviews all pending litigation matters in which it is involved and establishes reserves deemed appropriate by management for these litigation matters when a probable loss estimate can be made. | |
As a marketer of dietary and nutritional supplements, and other products that are ingested by consumers or applied to their bodies, the Company has been and is currently subjected to various product liability claims. The effects of these claims to date have not been material to the Company, and the reasonably possible range of exposure on currently existing claims is not material to the Company. The Company believes that it has meritorious defenses to the allegations contained in the lawsuits. The Company currently maintains product liability insurance with an annual deductible of $10 million. | |
Certain of the Company’s subsidiaries have been subject to tax audits by governmental authorities in their respective countries. In certain of these tax audits, governmental authorities are proposing that significant amounts of additional taxes and related interest and penalties are due. The Company and its tax advisors believe that there are substantial defenses to governmental allegations that additional taxes are owed, and the Company is vigorously contesting the additional proposed taxes and related charges. On May 7, 2010, the Company received an assessment from the Mexican Tax Administration Service in an amount equivalent to approximately $87 million, translated at the period ended spot rate, for various items, the majority of which was Value Added Tax, or VAT, allegedly owed on certain of the Company’s products imported into Mexico during the years 2005 and 2006. This assessment is subject to interest and inflationary adjustments. On July 8, 2010, the Company initiated a formal administrative appeal process. On May 13, 2011, the Mexican Tax Administration Service issued a resolution on the Company’s administrative appeal. The resolution nullified the assessment. Since the Mexican Tax Administration Service can further review the tax audit findings and re-issue some or all of the original assessment, the Company commenced litigation in the Tax Court of Mexico in August 2011 to dispute the assertions made by the Mexican Tax Administration Service in the case. The Mexican Tax Administration Service filed a response which was received by the Company in April 2012. The response challenged the assertions that the Company made in its August 2011 filing. Litigation in this case is currently ongoing. | |
Prior to the nullification of the Mexican Tax Administration Service assessment relating to the 2005 and 2006 years the Company entered into agreements with certain insurance companies to allow for the potential issuance of surety bonds in support of its appeal of the assessment. Such surety bonds, if issued, would not affect the availability of the Company’s Credit Facility. These arrangements with the insurance companies remain in place in the event that the assessment is re-issued. | |
The Mexican Tax Administration Service commenced audits of the Company’s Mexican subsidiaries for the period from January to September 2007 and on May 10, 2013, the Company received an assessment of approximately $22 million, translated at the period ended spot rate, related to that period. On July 11, 2013, the Company filed an administrative appeal disputing the assessment. The Company has not recognized a loss as the Company does not believe a loss is probable. | |
The Mexican Tax Administration Service audited the Company’s Mexican subsidiaries for the 2011 year. The audit focused on importation and VAT issues. On June 25, 2013, the Mexican Tax Administration Service closed the audit of the 2011 year without any assessment. | |
The Company has not recognized a loss with respect to any of these Mexican matters as the Company, based on its analysis and guidance from its advisors, does not believe a loss is probable. Further, the Company is currently unable to reasonably estimate a possible loss or range of loss that could result from an unfavorable outcome if the assessment was re-issued or any additional assessments were to be issued for these or other periods. The Company believes that it has meritorious defenses if the assessment is re-issued or would have meritorious defenses if any additional assessment is issued. | |
The Company received an assessment from the Spanish Tax Authority in an amount equivalent to approximately $4.3 million translated at the period ended spot rate, for withholding taxes, interest and penalties related to payments to Spanish distributors for the 2003-2004 periods. The Company appealed the assessment to the National Appellate Court (Audiencia Nacional). Based on the ruling of the National Appellate Court, substantially all of the assessment was nullified. The Company began withholding taxes on payments to Spanish distributors for the 2012 year. If the Spanish Tax Authority raises the same issue in later years, the Company believes that it has meritorious defenses. The Company has not recognized a loss as the Company does not believe a loss is probable. The Company is currently unable to reasonably estimate a possible loss or range of loss that could result from an unfavorable outcome if additional assessments for other periods were to be issued. | |
The Company received a tax assessment in September 2009, from the Federal Revenue Office of Brazil in an amount equivalent to approximately $3.8 million U.S. dollars, translated at the period ended spot rate, related to withholding/contributions based on payments to the Company’s distributors during 2004. The Company has appealed this tax assessment to the Administrative Council of Tax Appeals (2nd level administrative appeal) as it believes it has meritorious defenses and it has not recognized a loss as the Company does not believe a loss is probable. The Company is currently unable to reasonably estimate the amount of the loss that may result from an unfavorable outcome if additional assessments for other periods were to be issued. | |
The Company received an order from a Rome Labor Court on behalf of the Social Security Authority on March 1, 2012, to pay an amount equivalent to approximately $7.2 million U.S. dollars, translated at the period ended spot rate, for social contributions, interest and penalties related to payments to Italian distributors from 2002 through 2005. The Company has filed a writ with the Rome Labor Court appealing the order and the Social Security Authority filed a response brief. At a hearing on July 12, 2012, the Social Security Authority announced its intention to withdraw their claim as well as the order to pay the assessment. A hearing on this matter was originally scheduled for October 23, 2012 but it has been postponed and is rescheduled for June 26, 2014. The Company has not recognized a loss as the Company does not believe a loss is probable. | |
These matters may take several years to resolve. While the Company believes it has meritorious defenses, it cannot be sure of their ultimate resolution. Although the Company may reserve amounts for certain matters that the Company believes represent the most likely outcome of the resolution of these related disputes, if the Company is incorrect in its assessment, the Company may have to record additional expenses, when it becomes probable that an increased potential liability is warranted. |
Segment_Information
Segment Information | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Segment Information | 6. Segment Information | ||||||||||||||||
The Company is a nutrition company that sells a wide range of weight management products, nutritional supplements and personal care products. The Company’s products are manufactured by third party providers and by the Company in its Changsha, Hunan, China extraction facility, Suzhou, China facility and in its Lake Forest, California facility, and then are sold to independent distributors who consume and sell Herbalife products to retail consumers or other distributors. Revenues reflect sales of products by the Company to its distributors and are categorized based on geographic location. | |||||||||||||||||
As of September 30, 2013, the Company sold products in 88 countries throughout the world and was organized and managed by geographic regions. The Company aggregates its operating segments, excluding China, into one reporting segment, or the Primary Reporting Segment, as management believes that the Company’s operating segments have similar operating characteristics and similar long term operating performance. In making this determination, management believes that the operating segments are similar in the nature of the products sold, the product acquisition process, the types of customers to whom products are sold, the methods used to distribute the products, and the nature of the regulatory environment. China has been identified as a separate reporting segment as it does not meet the criteria for aggregation. The operating information for the Primary Reporting Segment and China, and sales by product line are as follows: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In millions) | |||||||||||||||||
Net Sales: | |||||||||||||||||
Primary Reporting Segment | |||||||||||||||||
United States | $ | 223.6 | $ | 202.9 | $ | 681.5 | $ | 625.5 | |||||||||
Mexico | 141.2 | 127.5 | 419.8 | 364 | |||||||||||||
South Korea | 111.5 | 109.3 | 333.5 | 314.9 | |||||||||||||
Others | 600.5 | 499.8 | 1,798.30 | 1,497.20 | |||||||||||||
Total Primary Reporting Segment | 1,076.80 | 939.5 | 3,233.10 | 2,801.60 | |||||||||||||
China | 136.7 | 77.4 | 323.3 | 211.4 | |||||||||||||
Total Net Sales | $ | 1,213.50 | $ | 1,016.90 | $ | 3,556.40 | $ | 3,013.00 | |||||||||
Contribution Margin(1)(2): | |||||||||||||||||
Primary Reporting Segment | |||||||||||||||||
United States | $ | 90.7 | $ | 91 | $ | 284.9 | $ | 280 | |||||||||
Mexico | 65.1 | 54.9 | 187.7 | 147.8 | |||||||||||||
South Korea | 57.8 | 53.9 | 169.4 | 150.9 | |||||||||||||
Others | 265.7 | 215.5 | 797.2 | 659.6 | |||||||||||||
Total Primary Reporting Segment | 479.3 | 415.3 | 1,439.20 | 1,238.30 | |||||||||||||
China | 122.6 | 69.7 | 288.9 | 190.3 | |||||||||||||
Total Contribution Margin | $ | 601.9 | $ | 485 | $ | 1,728.10 | $ | 1,428.60 | |||||||||
Selling, general and administrative expenses(2) | 409.7 | 324.2 | 1,174.60 | 926.9 | |||||||||||||
Interest expense, net | 4.7 | 3.5 | 15.7 | 8.1 | |||||||||||||
Income before income taxes | 187.5 | 157.3 | 537.8 | 493.6 | |||||||||||||
Income taxes | 45.5 | 45.4 | 133.8 | 141.8 | |||||||||||||
Net Income | $ | 142 | $ | 111.9 | $ | 404 | $ | 351.8 | |||||||||
Net sales by product line: | |||||||||||||||||
Weight Management | $ | 772.9 | $ | 635.9 | $ | 2,262.70 | $ | 1,884.50 | |||||||||
Targeted Nutrition | 280.7 | 237.4 | 815.1 | 703.3 | |||||||||||||
Energy, Sports and Fitness | 65.5 | 54.8 | 188.9 | 155.4 | |||||||||||||
Outer Nutrition | 36.4 | 34.2 | 112.4 | 108.6 | |||||||||||||
Literature, promotional and other(3) | 58 | 54.6 | 177.3 | 161.2 | |||||||||||||
Total Net Sales | $ | 1,213.50 | $ | 1,016.90 | $ | 3,556.40 | $ | 3,013.00 | |||||||||
Net sales by geographic region: | |||||||||||||||||
North America | $ | 228.7 | $ | 208.8 | $ | 697.6 | $ | 644.2 | |||||||||
Mexico | 141.2 | 127.5 | 419.8 | 364 | |||||||||||||
South and Central America | 241.2 | 167.5 | 683.1 | 485.6 | |||||||||||||
EMEA | 181.7 | 147.5 | 537.6 | 463.1 | |||||||||||||
Asia Pacific | 284 | 288.2 | 895 | 844.7 | |||||||||||||
China | 136.7 | 77.4 | 323.3 | 211.4 | |||||||||||||
Total Net Sales | $ | 1,213.50 | $ | 1,016.90 | $ | 3,556.40 | $ | 3,013.00 | |||||||||
-1 | Contribution margin consists of net sales less cost of sales and royalty overrides. | ||||||||||||||||
-2 | Service fees to China independent service providers totaling $61.0 million and $34.4 million for the three months ended September 30, 2013 and 2012, respectively, and totaling $145.7 million and $93.7 million for the nine months ended September 30, 2013 and 2012, respectively, are included in selling, general and administrative expenses while distributor compensation for all other countries is included in contribution margin. | ||||||||||||||||
-3 | Product buybacks and returns in all product categories are included in the literature, promotional and other category. | ||||||||||||||||
As of September 30, 2013 and December 31, 2012, total assets for the Company’s Primary Reporting Segment were $2,145.6 million and $1,607.2 million, respectively. Total assets for the China segment were $197.8 million and $116.9 million as of September 30, 2013 and December 31, 2012, respectively. As of September 30, 2013 and December 31, 2012, goodwill allocated to the Company’s reporting units included in the Company’s Primary Reporting Segment was $102.4 million for both periods. Goodwill allocated to the China segment was $3.1 million as of September 30, 2013 and December 31, 2012. |
ShareBased_Compensation
Share-Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||
Share-Based Compensation | 7. Share-Based Compensation | ||||||||||||||||
The Company has share-based compensation plans, which are more fully described in Note 9, Share-Based Compensation, to the Consolidated Financial Statements in the 2012 10-K. During the nine months ended September 30, 2013, the Company granted stock awards subject to continued service, consisting of stock appreciation rights, or SARs, and stock units with vesting terms fully described in the 2012 10-K. There were no stock options granted during the nine months ended September 30, 2013. | |||||||||||||||||
For the three months ended September 30, 2013 and 2012, share-based compensation expense amounted to $6.6 million and $8.4 million, respectively. For the nine months ended September 30, 2013 and 2012, share-based compensation expense amounted to $21.9 million and $20.8 million, respectively. As of September 30, 2013, the total unrecognized compensation cost related to all non-vested stock awards was $30.3 million and the related weighted-average period over which it is expected to be recognized is approximately 1.1 years. | |||||||||||||||||
The following tables summarize the activity under all share-based compensation plans for the nine months ended September 30, 2013: | |||||||||||||||||
Stock Options & SARs | Awards | Weighted | Weighted | Aggregate | |||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Remaining | Value(1) | |||||||||||||||
Price | Contractual | ||||||||||||||||
Term | |||||||||||||||||
(In thousands) | (In millions) | ||||||||||||||||
Outstanding at December 31, 2012(2)(3) | 11,333 | $ | 28.62 | 5.9 years | $ | 119.1 | |||||||||||
Granted | 85 | $ | 35.46 | ||||||||||||||
Exercised | (10 | ) | $ | 9.07 | |||||||||||||
Forfeited | (28 | ) | $ | 44.23 | |||||||||||||
Outstanding at September 30, 2013(2)(3) | 11,380 | $ | 28.65 | 5.1 years | $ | 467.9 | |||||||||||
Exercisable at September 30, 2013(2) | 7,590 | $ | 20.82 | 4.1 years | $ | 371.5 | |||||||||||
-1 | The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock awards. | ||||||||||||||||
-2 | Includes 1.5 million market condition SARs. | ||||||||||||||||
-3 | Includes 0.9 million market and performance condition SARs. | ||||||||||||||||
The weighted-average grant date fair value of SARs granted during the three months ended September 30, 2013 and 2012 was $0 and $16.54, respectively. The weighted-average grant date fair value of SARs granted during the nine months ended September 30, 2013 and 2012 was $11.85 and $15.35, respectively. The total intrinsic value of stock options and SARs exercised during the three months ended September 30, 2013 and 2012 was $0.1 million and $2.3 million, respectively. The total intrinsic value of stock options and SARs exercised during the nine months ended September 30, 2013 and 2012 was $0.3 million and $96.6 million, respectively. | |||||||||||||||||
Incentive Plan and Independent Directors Stock Units | Shares | Weighted | |||||||||||||||
Average | |||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
(In thousands) | |||||||||||||||||
Outstanding and non-vested December 31, 2012 | 321.6 | $ | 11.7 | ||||||||||||||
Granted | 7.6 | $ | 35.63 | ||||||||||||||
Vested | (193.5 | ) | $ | 13.84 | |||||||||||||
Forfeited | (0.2 | ) | $ | 53.6 | |||||||||||||
Outstanding and non-vested at September 30, 2013 | 135.5 | $ | 9.91 | ||||||||||||||
The total vesting date fair value of stock units which vested during the three months ended September 30, 2013 and 2012, was $0.4 million and $1.1 million, respectively. The total vesting date fair value of stock units which vested during the nine months ended September 30, 2013 and 2012, was $7.2 million and $24.1 million, respectively. | |||||||||||||||||
The Company recognizes excess tax benefits associated with share-based compensation to shareholders’ equity only when realized. When assessing whether excess tax benefits relating to share-based compensation have been realized, the Company follows the with-and-without approach. Under this approach, excess tax benefits related to share-based compensation are not deemed to be realized until after the utilization of all other tax benefits available to the Company, which are also subject to applicable limitations. As of September 30, 2013 and December 31, 2012, the Company had $29.1 million and $25.9 million, respectively, of unrealized excess tax benefits. |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes |
Income taxes were $45.5 million and $133.8 million for the three and nine months ended September 30, 2013, as compared to $45.4 million and $141.8 million for the same periods in 2012. The effective income tax rate was 24.3% and 24.9% for the three and nine months ended September 30, 2013, as compared to 28.9% and 28.7% for the same periods in 2012. The decrease in the effective tax rate for the three and nine months ended September 30, 2013, as compared to the same periods in 2012, was primarily due to an increase of net benefits from discrete events, principally related to the expiration of statute of limitations related to certain tax contingencies and tax planning items related to certain income tax return filings, partially offset by the impact of changes in the geographic mix of the Company’s income. | |
As of September 30, 2013, the total amount of unrecognized tax benefits, including related interest and penalties was $33.1 million. If the total amount of unrecognized tax benefits was recognized, $26.3 million of unrecognized tax benefits, $3.4 million of interest and $0.8 million of penalties would impact the effective tax rate. | |
The Company believes that it is reasonably possible that the amount of unrecognized tax benefits could decrease by up to approximately $9.8 million within the next twelve months. Of this possible decrease, $6.8 million would be due to the settlement of audits or resolution of administrative or judicial proceedings. The remaining possible decrease of $3.0 million would be due to the expiration of statute of limitations in various jurisdictions. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||||||||
Derivative Instruments and Hedging Activities | 9. Derivative Instruments and Hedging Activities | ||||||||||||||||||
Interest Rate Risk Management | |||||||||||||||||||
The Company previously engaged in an interest rate hedging strategy for which the hedged transactions were the forecasted interest payments on the Credit Facility. The hedged risk was the variability of forecasted interest rate cash flows, where the hedging strategy involved the purchase of interest rate swaps. These interest rate swaps expired in July 2013 and the Company has not entered into new interest swap arrangements as of September 30, 2013. | |||||||||||||||||||
During August 2009, the Company entered into four interest rate swap agreements with an effective date of December 31, 2009. The agreements collectively provided for the Company to pay interest for less than a four-year period at a weighted average fixed rate of 2.78% on notional amounts aggregating to $140.0 million while receiving interest for the same period at the one month LIBOR rate on the same notional amounts. As discussed above, these agreements expired in July 2013. These swaps at inception were designated as cash flow hedges against the variability in the LIBOR interest rate on the Company’s term loan under the Prior Credit Facility or against the variability in the LIBOR interest rate on the replacement debt. The Company’s term loan under the Prior Credit Facility was terminated in March 2011 and refinanced with the Credit Facility as discussed further in Note 4, Long-Term Debt. Until their expiration in July 2013, the Company’s swaps were effective and were designated as cash flow hedges against the variability in certain LIBOR interest rate borrowings under the Credit Facility at LIBOR plus 1.50% to 2.50%, fixing the Company’s weighted average effective rate on the notional amounts at 4.28% to 5.28%. There was no hedge ineffectiveness recorded as result of this refinancing event. | |||||||||||||||||||
The Company assesses hedge effectiveness and measures hedge ineffectiveness at least quarterly. During the three and nine months ended September 30, 2013 and 2012, the ineffective portion relating to these hedges was immaterial and the hedges remained effective until their expiration in July 2013 and as of December 31, 2012. Consequently, all changes in the fair value of the derivatives were deferred and recorded in other comprehensive income (loss) until the related forecasted transactions were recognized in the condensed consolidated statements of income. The fair value of the interest rate swap agreements were based on third-party quotes. At December 31, 2012, the Company recorded the interest rate swaps as liabilities at their fair value of $2.0 million. No amount was recorded as of September 30, 2013 because the interest rate swaps had expired. | |||||||||||||||||||
Foreign Currency Instruments | |||||||||||||||||||
The Company also designates certain foreign currency derivatives, such as certain foreign currency forward and option contracts, as freestanding derivatives for which hedge accounting does not apply. The changes in the fair market value of these freestanding derivatives are included in selling, general and administrative expenses in the Company’s condensed consolidated statements of income. The Company uses foreign currency forward contracts to hedge foreign-currency-denominated intercompany transactions and to partially mitigate the impact of foreign currency fluctuations. The Company also uses foreign currency option contracts to partially mitigate the impact of foreign currency fluctuations. The fair value of the forward and option contracts are based on third-party quotes. The Company’s foreign currency derivative contracts are generally executed on a monthly basis. | |||||||||||||||||||
The Company designates as cash-flow hedges those foreign currency forward contracts it enters into to hedge forecasted inventory purchases and intercompany management fees that are subject to foreign currency exposures. Forward contracts are used to hedge forecasted inventory purchases over specific months. Changes in the fair value of these forward contracts, excluding forward points, designated as cash-flow hedges are recorded as a component of accumulated other comprehensive income (loss) within shareholders’ equity, and are recognized in cost of sales in the condensed consolidated statement of income during the period which approximates the time the hedged inventory is sold. The Company also hedges forecasted intercompany management fees over specific months. These contracts allow the Company to sell Euros in exchange for U.S. dollars at specified contract rates. Changes in the fair value of these forward contracts designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within shareholders’ equity, and are recognized in selling, general and administrative expenses in the condensed consolidated statement of income during the period when the hedged item and underlying transaction affect earnings. | |||||||||||||||||||
As of September 30, 2013 and December 31, 2012, the aggregate notional amounts of all foreign currency contracts outstanding designated as cash flow hedges were approximately $243.2 million and $256.9 million, respectively. At September 30, 2013, these outstanding contracts were expected to mature over the next twelve months. The Company’s derivative financial instruments are recorded on the condensed consolidated balance sheet at fair value based on third-party quotes. As of September 30, 2013, the Company recorded assets at fair value of $5.6 million and liabilities at fair value of $4.2 million relating to all outstanding foreign currency contracts designated as cash-flow hedges. As of December 31, 2012, the Company recorded assets at fair value of $0.5 million and liabilities at fair value of $3.3 million relating to all outstanding foreign currency contracts designated as cash-flow hedges. The Company assesses hedge effectiveness and measures hedge ineffectiveness at least quarterly. During the three and nine months ended September 30, 2013 and 2012, the ineffective portion relating to these hedges was immaterial and the hedges remained effective as of September 30, 2013 and December 31, 2012. | |||||||||||||||||||
As of both September 30, 2013 and December 31, 2012, the majority of the Company’s outstanding foreign currency forward contracts had maturity dates of less than twelve months, with the majority of freestanding derivatives expiring within one month. There were no foreign currency option contracts outstanding as of September 30, 2013 and December 31, 2012. See Part I, Item 3 — Quantitative and Qualitative Disclosures About Market Risk in this Quarterly Report on Form 10-Q for foreign currency instruments outstanding as of September 30, 2013, where the Company had aggregate notional amounts of approximately $630.6 million of foreign currency contracts, inclusive of freestanding contracts and contracts designated as cash flow hedges. | |||||||||||||||||||
Gains and Losses on Derivative Instruments | |||||||||||||||||||
The following table summarizes gains (losses) relating to derivative instruments recorded in other comprehensive income (loss) during the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||||
Amount of Gain (Loss) Recognized | |||||||||||||||||||
in Other Comprehensive Income (Loss) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In millions) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges | $ | 0.2 | $ | (2.8 | ) | $ | 3.2 | $ | (3.0 | ) | |||||||||
Interest rate swaps | — | $ | (0.2 | ) | — | $ | (0.6 | ) | |||||||||||
The following table summarizes gains (losses) relating to derivative instruments recorded to income during the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||||
Location of Gain | Amount of Gain (Loss) | ||||||||||||||||||
(Loss) | Recognized in Income | ||||||||||||||||||
Recognized in Income | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In millions) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign exchange currency contracts relating to inventory hedges and intercompany management fee | Selling, general and | $ | (1.4 | ) | $ | (0.7 | ) | $ | (4.0 | ) | $ | (0.6 | ) | ||||||
hedges(1) | administrative expenses | ||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign exchange currency contracts | Selling, general and | $ | 8.8 | $ | (0.8 | ) | $ | 3.6 | $ | (11.6 | ) | ||||||||
administrative expenses | |||||||||||||||||||
-1 | For foreign exchange contracts designated as hedging instruments, the amounts recognized in income (loss) represent the amounts excluded from the assessment of hedge effectiveness. There were no ineffective amounts recorded for derivatives designated as hedging instruments. | ||||||||||||||||||
The following table summarizes gains (losses) relating to derivative instruments reclassified from accumulated other comprehensive loss into income during the three and nine months ended September 30, 2013 and 2012: | |||||||||||||||||||
Location of Gain | Amount of Gain (Loss) Reclassified | ||||||||||||||||||
(Loss) | from Accumulated | ||||||||||||||||||
Reclassified | Other Comprehensive | ||||||||||||||||||
from Accumulated | Loss into Income | ||||||||||||||||||
Other Comprehensive | |||||||||||||||||||
Loss into Income | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
(Effective Portion) | September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
(In millions) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign exchange currency contracts relating to inventory hedges | Cost of sales | $ | (1.1 | ) | $ | 0.2 | $ | (3.2 | ) | $ | 0.4 | ||||||||
Foreign exchange currency contracts relating to intercompany management fee hedges | Selling, general and | $ | (0.2 | ) | $ | 1.5 | $ | (0.3 | ) | $ | 4 | ||||||||
administrative expenses | |||||||||||||||||||
Interest rate swaps | Interest expense, net | $ | (0.2 | ) | $ | (0.9 | ) | $ | (2.0 | ) | $ | (2.7 | ) | ||||||
The Company reports its derivatives at fair value as either assets or liabilities within its condensed consolidated balance sheet. See Note 12, Fair Value Measurements, for information on derivative fair values and their condensed consolidated balance sheet location as of September 30, 2013 and December 31, 2012. |
Shareholders_Equity
Shareholders' Equity | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Equity [Abstract] | |||||||||||||
Shareholders' Equity | 10. Shareholders’ Equity | ||||||||||||
Dividends | |||||||||||||
The declaration of future dividends is subject to the discretion of the Company’s board of directors and will depend upon various factors, including its earnings, financial condition, restrictions imposed by the Credit Facility and the terms of any other indebtedness that may be outstanding, cash requirements, future prospects and other factors deemed relevant by its board of directors. The Credit Facility permits payments of dividends as long as no default or event of default exists and the consolidated leverage ratio specified in the Credit Facility is not exceeded. | |||||||||||||
On February 19, 2013, the Company announced that its board of directors approved a cash dividend of $0.30 per common share in an aggregate amount of $30.9 million that was paid to shareholders on March 19, 2013. On April 29, 2013, the Company announced that its board of directors approved a cash dividend of $0.30 per common share in an aggregate amount of $30.9 million that was paid to shareholders on May 28, 2013. On July 29, 2013, the Company announced that its board of directors approved a cash dividend of $0.30 per common share in an aggregate amount of $30.8 million that was paid to shareholders on August 27, 2013. | |||||||||||||
The aggregate amounts of dividends declared and paid during the three months ended September 30, 2013 and 2012 were $30.8 million and $32.4 million, respectively. The aggregate amount of dividends declared and paid during the nine months ended September 30, 2013 and 2012 were $92.6 million and $102.7 million, respectively. | |||||||||||||
Share Repurchases | |||||||||||||
On July 30, 2012, the Company announced that its board of directors authorized a new $1 billion share repurchase program that will expire on June 30, 2017. This share repurchase program allows the Company to repurchase its common shares, at such times and prices as determined by the Company’s management as market conditions warrant, and to the extent Herbalife Ltd.’s distributable reserves are available under Cayman Islands law. The Credit Facility permits the Company to repurchase its common shares as long as no default or event of default exists and the consolidated leverage ratio specified in the Credit Facility is not exceeded. | |||||||||||||
During the three months ended March 31, 2013, the Company repurchased approximately 4.0 million of its common shares through open market purchases at an aggregate cost of approximately $162.4 million or an average cost of $40.61 per share. The Company did not repurchase any common shares in the open market during the three months ended June 30, 2013. During the three months ended September 30, 2013, the Company repurchased approximately 1.7 million of its common shares through open market purchases at an aggregate cost of approximately $110.0 million or an average cost of $63.85 per share. As of September 30, 2013, the remaining authorized capacity under the Company’s share repurchase program was $677.6 million. | |||||||||||||
The Company reflects the aggregate purchase price of its common shares repurchased as a reduction to shareholders’ equity. The Company allocated the purchase price of the repurchased shares as a reduction to retained earnings, common shares and additional paid-in-capital. | |||||||||||||
The number of shares issued upon vesting or exercise for certain restricted stock units and SARs granted pursuant to the Company’s share-based compensation plans is net of the minimum statutory withholding requirements that the Company pays on behalf of its employees. Although shares withheld are not issued, they are treated as common share repurchases in the Company’s consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting. These shares do not count against the authorized capacity under the Company’s share repurchase program described above. | |||||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||
The following table summarizes changes in accumulated other comprehensive income (loss) during the nine months ended September 30, 2013: | |||||||||||||
Changes in Accumulated Other Comprehensive | |||||||||||||
Income (Loss) by Component | |||||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||
Foreign | Unrealized | Total | |||||||||||
Currency | Gain (Loss) on | ||||||||||||
Translation | Derivatives | ||||||||||||
Adjustments | |||||||||||||
(In millions) | |||||||||||||
Beginning Balance | $ | (28.8 | ) | $ | (2.9 | ) | $ | (31.7 | ) | ||||
Other comprehensive income (loss) before reclassifications, net of tax | (2.9 | ) | 2.5 | (0.4 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) to income, net of tax(1) | — | 4.7 | 4.7 | ||||||||||
Total other comprehensive income (loss), net of reclassifications | (2.9 | ) | 7.2 | 4.3 | |||||||||
Ending balance | $ | (31.7 | ) | $ | 4.3 | $ | (27.4 | ) | |||||
-1 | See Note 9, Derivative Instruments and Hedging Activities, for information regarding the location in the condensed consolidated statements of income of gains (losses) reclassified from accumulated other comprehensive income (loss) into income during the three and nine months ended September 30, 2013. | ||||||||||||
Other comprehensive income (loss) before reclassifications was net of tax benefits of $3.6 million and tax expense of $0.7 million for foreign currency translation adjustments and unrealized gain (loss) on derivatives, respectively, for the nine months ended September 30, 2013. Amounts reclassified from accumulated other comprehensive income (loss) to income was net of tax expense of $0.8 million for unrealized gain (loss) on derivatives for the nine months ended September 30, 2013. |
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Earnings Per Share | 11. Earnings Per Share | ||||||||||||||||
Basic earnings per share represents net income for the period common shares were outstanding, divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share represents net income divided by the weighted average number of common shares outstanding, inclusive of the effect of dilutive securities such as outstanding stock options, SARs, stock units and warrants. | |||||||||||||||||
The following are the common share amounts used to compute the basic and diluted earnings per share for each period: | |||||||||||||||||
For the Three Months | For the Nine Months | ||||||||||||||||
Ended September 30, | Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(in thousands) | |||||||||||||||||
Weighted average shares used in basic computations | 102,200 | 108,816 | 103,096 | 113,838 | |||||||||||||
Dilutive effect of exercise of equity grants outstanding | 5,577 | 4,830 | 4,663 | 5,485 | |||||||||||||
Dilutive effect of warrants | — | — | — | 53 | |||||||||||||
Weighted average shares used in diluted computations | 107,777 | 113,646 | 107,759 | 119,376 | |||||||||||||
There were an aggregate of 0.9 million and 3.6 million of equity grants that were outstanding during the three and nine months ended September 30, 2013, respectively, and an aggregate of 4.0 million and 2.6 million of equity grants that were outstanding during the three and nine months ended September 30, 2012, respectively, consisting of stock options, SARs, and stock units, but were not included in the computation of diluted earnings per share because their effect would be anti-dilutive or the market condition for the award has not been satisfied. |
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Fair Value Measurements | 12. Fair Value Measurements | ||||||||||||
The Company applies the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, for its financial and non-financial assets and liabilities. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: | |||||||||||||
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. | |||||||||||||
Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |||||||||||||
Level 3 inputs are unobservable inputs for the asset or liability. | |||||||||||||
The Company measures certain assets and liabilities at fair value as discussed throughout the notes to its consolidated financial statements. Foreign exchange currency contracts and interest rate swaps are valued using standard calculations and models. Foreign exchange currency contracts are valued primarily based on inputs such as observable forward rates, spot rates and foreign currency exchange rates at the reporting period ended date. Interest rate swaps are valued primarily based on inputs such as LIBOR and swap yield curves at the reporting period ended date. Assets or liabilities that have recurring measurements and are measured at fair value consisted of Level 2 derivatives and are shown below at their gross values at September 30, 2013, and December 31, 2012: | |||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||
Derivative Balance | Significant | Significant | |||||||||||
Sheet | Other | Other | |||||||||||
Location | Observable | Observable | |||||||||||
Inputs | Inputs | ||||||||||||
(Level 2) | (Level 2) | ||||||||||||
Fair Value at | Fair Value at | ||||||||||||
September 30, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
(in millions) | |||||||||||||
ASSETS: | |||||||||||||
Derivatives designated as cash flow hedging instruments: | |||||||||||||
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges | Prepaid expenses and other | $ | 5.6 | $ | 0.5 | ||||||||
current assets | |||||||||||||
Derivatives not designated as cash flow hedging instruments: | |||||||||||||
Foreign exchange currency contracts | Prepaid expenses and other | $ | 4.9 | $ | 0.7 | ||||||||
current assets | |||||||||||||
$ | 10.5 | $ | 1.2 | ||||||||||
LIABILITIES: | |||||||||||||
Derivatives designated as cash flow hedging instruments: | |||||||||||||
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges | Accrued expenses | $ | 4.2 | $ | 3.3 | ||||||||
Interest rate swaps | Accrued expenses | — | $ | 2 | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||
Foreign exchange currency contracts | Accrued expenses | $ | 0.5 | $ | 1.3 | ||||||||
$ | 4.7 | $ | 6.6 | ||||||||||
The Company’s deferred compensation plan assets consist of Company owned life insurance policies. As these policies are recorded at their cash surrender value, they are not required to be included in the fair value table above. See Note 6, Employee Compensation Plans, to the Company’s 2012 10-K for a further description of its deferred compensation plan assets. | |||||||||||||
The following tables summarize the offsetting of the fair values of the Company’s derivative assets and derivative liabilities for presentation in the Company’s condensed consolidated balance sheet at September 30, 2013 and December 31, 2012: | |||||||||||||
Offsetting of Derivative Assets | |||||||||||||
Gross | Gross | Net Amounts | |||||||||||
Amounts of | Amounts | of Assets | |||||||||||
Recognized | Offset in the | Presented in | |||||||||||
Assets | Balance Sheet | the Balance | |||||||||||
Sheet | |||||||||||||
(In millions) | |||||||||||||
September 30, 2013 | |||||||||||||
Foreign exchange currency contracts | $ | 10.5 | $ | (4.2 | ) | $ | 6.3 | ||||||
Total | $ | 10.5 | $ | (4.2 | ) | $ | 6.3 | ||||||
December 31, 2012 | |||||||||||||
Foreign exchange currency contracts | $ | 1.2 | $ | (1.2 | ) | — | |||||||
Total | $ | 1.2 | $ | (1.2 | ) | — | |||||||
Offsetting of Derivative Liabilities | |||||||||||||
Gross | Gross | Net Amounts | |||||||||||
Amounts of | Amounts | of Liabilities | |||||||||||
Recognized | Offset in the | Presented in | |||||||||||
Liabilities | Balance Sheet | the Balance | |||||||||||
Sheet | |||||||||||||
(In millions) | |||||||||||||
September 30, 2013 | |||||||||||||
Foreign exchange currency contracts | $ | 4.7 | $ | (4.2 | ) | $ | 0.5 | ||||||
Total | $ | 4.7 | $ | (4.2 | ) | $ | 0.5 | ||||||
December 31, 2012 | |||||||||||||
Foreign exchange currency contracts | $ | 4.6 | $ | (1.2 | ) | $ | 3.4 | ||||||
Interest rate swaps | 2 | — | 2 | ||||||||||
Total | $ | 6.6 | $ | (1.2 | ) | $ | 5.4 | ||||||
The Company offsets all of its derivative assets and derivative liabilities in its condensed consolidated balance sheet to the extent it maintains master netting arrangements with related financial institutions. As of September 30, 2013 and December 31, 2012, all of the Company’s derivatives were subject to master netting arrangements and no collateralization was required for the Company’s derivative assets and derivative liabilities. | |||||||||||||
Professional_Fees_and_Other_Ex
Professional Fees and Other Expenses | 9 Months Ended |
Sep. 30, 2013 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Professional Fees and Other Expenses | 13. Professional Fees and Other Expenses |
In late 2012, a hedge fund manager publicly raised allegations regarding the legality of the Company’s network marketing program and announced that the hedge fund manager had taken a significant short position regarding the Company’s common shares, leading to intense public scrutiny and significant stock price volatility. The Company believes that the hedge fund manager’s allegations are inaccurate and misleading. The Company has engaged legal and advisory firms to assist with responding to the allegations and to perform other related services in connection to these recent events. The Company recognizes the related expenses as a part of selling, general & administrative expenses within its consolidated statement of income. For the three and nine months ended September 30, 2013, the Company recorded approximately $6.3 million and $23.8 million, respectively, of professional fees and other expenses related to this matter. | |
Of the approximately $6.3 million and $23.8 million in expenses incurred during the three and nine months ended September 30, 2013, respectively, discussed above, approximately $1.5 million and $4.5 million, respectively, were recognized for advisory retainer fees. The minimum guaranteed retainer fees were approximately $5.5 million as of September 30, 2013 and the expense recognition of these fees could accelerate based on certain conditions. | |
The Company also had a cash settlement liability award, or the Liability Award, outstanding as of September 30, 2013, which is tied to the Company’s stock price and which only vests if certain conditions are met relating to the above matter. The fair value of the Liability Award will be revalued each quarter until settlement and the Company will recognize and adjust the expense over the expected requisite service period. The expense recognized during the three and nine months ended September 30, 2013, relating to the Liability Award was approximately $1.0 million and $2.3 million, respectively, and are included in the approximately $6.3 million and $23.8 million expense described above. The remaining unrecognized expense relating to the Liability Award was approximately $3.6 million as of September 30, 2013, based on the fair value of the Liability Award as of that date. The recognition of the unrecognized expense relating to the Liability Award could accelerate and change based on certain conditions. |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. Subsequent Events |
On October 28, 2013, the Company announced that its board of directors approved a cash dividend of $0.30 per common share, payable on November 26, 2013 to shareholders of record as of November 12, 2013. |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Basis of Presentation | Basis of Presentation |
The unaudited and unreviewed interim financial information of the Company has been prepared in accordance with Article 10 of the Securities and Exchange Commission’s, or the SEC, Regulation S-X. Accordingly, as permitted by Article 10 of the SEC’s Regulation S-X, it does not include all of the information required by generally accepted accounting principles in the U.S., or U.S. GAAP, for complete financial statements. The condensed consolidated balance sheet at December 31, 2012 was derived from the previously audited financial statements at that date subject to revisions as discussed below, where, as previously disclosed, the Company’s former independent registered public accounting firm’s audit opinions have now been withdrawn, and does not include all the disclosures required by U.S. GAAP, as permitted by Article 10 of the SEC’s Regulation S-X. The Company’s unaudited and unreviewed condensed consolidated financial statements as of September 30, 2013, and for the three and nine months ended September 30, 2013 and 2012, include Herbalife and all of its direct and indirect subsidiaries. In the opinion of management, the accompanying financial information contains all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s unaudited and unreviewed condensed consolidated financial statements as of September 30, 2013, and for the three and nine months ended September 30, 2013 and 2012. These unaudited and unreviewed condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, or the 2012 10-K. Operating results for the three and nine months ended September 30, 2013, are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. | |
The unaudited interim financial information presented in this Quarterly Report on Form 10-Q has not been reviewed by an independent registered public accounting firm as the Company’s former independent registered public accounting firm resigned on April 8, 2013. See the Explanatory Note to this Quarterly Report on Form 10-Q for a further description. As a result, this Quarterly Report on Form 10-Q is considered deficient and the Company continues not to be timely or current in its filings under the Securities Exchange Act of 1934, as amended, or the Exchange Act. While this filing does not comply with the requirements of Regulation S-X, and should not be interpreted to be a substitute for the review that would normally occur by the Company’s independent registered public accounting firm, the Company’s Audit Committee and management believe that the interim financial information presented herein fairly present, in all material respects, the financial condition and results of operations of the Company as of the end of and for the referenced periods and may be relied upon. Except for the absence of this review of the unaudited interim financial information discussed above and the omission of the SOX 906 certification discussed in greater detail in the Explanatory Note, this Quarterly Report on Form 10-Q fully complies with the requirements of the Exchange Act and the Company believes it is prudent to file this Report with the SEC in spite of the current circumstances to provide the financial and other information set forth herein to its shareholders and other interested parties. Once PwC completes its re-audit of the Company’s financial statements for the fiscal years ended December 31, 2012, 2011 and 2010, and completes its SAS 100 review of this unaudited interim financial information and the unaudited financial information for applicable prior periods, the Company will file an amendment to this Quarterly Report on Form 10-Q as soon as practicable. | |
New Accounting Pronouncements | New Accounting Pronouncements |
In February 2013, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date (a consensus of the FASB Emerging Issues Task Force). This ASU addresses the recognition, measurement, and disclosure of certain obligations resulting from joint and several arrangements including debt arrangements, other contractual obligations, and settled litigation and judicial rulings. The ASU is effective for public entities for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force). This ASU addresses the accounting for the cumulative translation adjustment when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the Emerging Issues Task Force). This ASU addresses when unrecognized tax benefits should be presented as reductions to deferred tax assets for net operating loss carryforwards in the financial statements. This ASU is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. Early adoption and retrospective application is permitted. The Company is evaluating the potential impact of this adoption on its consolidated financial statements. | |
Revision of Prior Period Financial Statements | Revision of Prior Period Financial Statements |
During the quarter ended June 30, 2013, in connection with preparing the unaudited and unreviewed interim financial information presented in the Quarterly Report on Form 10-Q for that period, prior period errors were identified which affected the interim period ended June 30, 2013, and the annual periods ended December 31, 2012, 2011 and 2010, including the applicable interim periods. These income tax errors primarily relate to income tax expenses calculated on intercompany inventory transactions and the Company’s application of ASC 740-10-25-3(e) and ASC 810-10-45-8. As a result of its misapplication of these accounting standards, the Company’s income tax expenses and net income within its consolidated statement of income were misstated. There were also certain amounts within the Company’s other consolidated financial statements that were misstated. The Company has reflected the correction of these identified prior period errors in the periods in which they originated. | |
In evaluating whether the Company’s previously issued consolidated financial statements were materially misstated, the Company considered the guidance in ASC Topic 250, Accounting Changes and Error Corrections, ASC Topic 250-10-S99-1, Assessing Materiality, and ASC Topic 250-10-S99-2, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. The Company concluded that these errors were not material, individually or in the aggregate, to any of the prior reporting periods, and therefore, amendments of previously filed reports were not required. If the entire correction was recorded in the second quarter of 2013, it was expected that the cumulative amount would not be material for the fiscal year ending December 31, 2013. As such, this cumulative amount could have been recorded as an out of period adjustment during the second quarter of 2013. However, because the Company will be amending its Annual Report on Form 10-K for the fiscal year ended December 31, 2012 due to its predecessor auditors withdrawing their opinions, and will be amending its Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2013, June 30, 2013, and September 30, 2013, and any other Quarterly Reports on Form 10-Q that are deficient due to the absence of a SAS 100 review, the Company decided to revise its applicable prior period financial statements so that the financial statements included therein and herein do not include these income tax errors. The Company believes this approach is more beneficial to investors due to the Company’s unusual facts and circumstances surrounding its predecessor auditors resigning and withdrawing their audit opinions and the Company being required to file future amendments to its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q referenced above. As such, the revisions for these corrections are and will be reflected in the financial information of the applicable prior periods and will be reflected in future filings containing such financial information. The Company has also provided, within this Note, the financial statement items that were impacted and included within its prior period consolidated balance sheets and full year prior period consolidated statements of income so this financial information is presented timely to the Company’s shareholders and other interested parties. | |
Venezuela | Venezuela |
Currency restrictions enacted by the Venezuelan government have become more restrictive and have impacted the ability of the Company’s subsidiary in Venezuela, Herbalife Venezuela, to timely obtain U.S. dollars in exchange for Venezuelan Bolivars, or Bolivars, at the official foreign exchange rate from the Venezuelan government and its foreign exchange commission, CADIVI. The application and approval process continue to be delayed and the Company’s ability to timely obtain U.S. dollars at the official exchange rate remains uncertain. In recent instances, the Company has been unsuccessful in obtaining U.S. dollars at the official rate and it remains uncertain whether the Company’s current pending applications and future anticipated applications will be approved. | |
In February 2013, the Venezuela government announced that it devalued its Bolivar currency and will eliminate the SITME regulated system. The SITME 5.3 Bolivars per U.S. dollar rate was eliminated and the CADIVI rate has been devalued from 4.3 Bolivars to 6.3 Bolivars per U.S. dollar. This new CADIVI rate is approximately 16% less favorable than the previously published 5.3 SITME rate. The Company recognized approximately $15.1 million of net foreign exchange losses within its condensed consolidated statement of income during the first quarter of 2013, as a result of remeasuring the Company’s Bolivar denominated monetary assets and liabilities at this new CADIVI rate of 6.3 Bolivars per U.S. dollar. The majority of these foreign exchange losses related to the approximately $16.9 million devaluation of Herbalife Venezuela’s Bolivar denominated cash and cash equivalents. In March 2013, the Venezuelan government also announced they will introduce an additional complimentary exchange mechanism known as SICAD. It is currently unknown whether Herbalife Venezuela will be able to access this new exchange mechanism and the Company is currently assessing and monitoring the restrictions and exchange rates relating to this alternative mechanism. | |
During the nine months ended September 30, 2013, the Company also recognized $0.7 million of foreign exchange losses as a result of exchanging Bolivars for U.S. dollars using alternative legal exchange mechanisms that were approximately 75% less favorable than the new CADIVI rate. During the nine months ended September 30, 2013, the Company exchanged 5.6 million Bolivars for $0.2 million U.S. dollars using these alternative legal exchange mechanisms. The Company did not exchange Bolivars for U.S. dollars using these alternative legal exchange mechanisms during the three months ended June 30, 2013 or the three months ended September 30, 2013. As of September 30, 2013, Herbalife Venezuela’s net monetary assets and liabilities denominated in Bolivars were approximately $146.7 million, and included approximately $150.1 million in Bolivar denominated cash and cash equivalents. These Bolivar denominated assets and liabilities were remeasured at the CADIVI rate. The Company remeasures its Bolivars at the official published CADIVI rate given the limited availability of alternative exchange mechanisms and the uncertainty in the effective exchange rate for alternative exchange mechanisms. These remeasured amounts, including cash and cash equivalents, being reported on the Company’s condensed consolidated balance sheet using the published CADIVI rate may not accurately represent the amount of U.S. dollars that the Company could ultimately realize. While the Company continues to monitor the exchange mechanisms and restrictions under CADIVI, and assess and monitor the current economic and political environment in Venezuela, there is no assurance that the Company will be able to exchange Bolivars into U.S. dollars on a timely basis. Herbalife Venezuela’s net sales represented approximately 5% and 3% of the Company’s consolidated net sales for the nine months ended September 30, 2013 and 2012, respectively, and its total assets represented approximately 9% and 7% of the Company’s consolidated total assets as of September 30, 2013 and December 31, 2012, respectively. As of September 30, 2013 and December 31, 2012, the majority of its total assets consisted of Bolivar denominated cash and cash equivalents. | |
See the Company’s 2012 10-K for further information on Herbalife Venezuela and Venezuela’s highly inflationary economy. | |
Segment Reporting | The Company is a nutrition company that sells a wide range of weight management products, nutritional supplements and personal care products. The Company’s products are manufactured by third party providers and by the Company in its Changsha, Hunan, China extraction facility, Suzhou, China facility and in its Lake Forest, California facility, and then are sold to independent distributors who consume and sell Herbalife products to retail consumers or other distributors. Revenues reflect sales of products by the Company to its distributors and are categorized based on geographic location. |
As of September 30, 2013, the Company sold products in 88 countries throughout the world and was organized and managed by geographic regions. The Company aggregates its operating segments, excluding China, into one reporting segment, or the Primary Reporting Segment, as management believes that the Company’s operating segments have similar operating characteristics and similar long term operating performance. In making this determination, management believes that the operating segments are similar in the nature of the products sold, the product acquisition process, the types of customers to whom products are sold, the methods used to distribute the products, and the nature of the regulatory environment. China has been identified as a separate reporting segment as it does not meet the criteria for aggregation. | |
Derivatives and Hedging Policies | Interest Rate Risk Management |
The Company previously engaged in an interest rate hedging strategy for which the hedged transactions were the forecasted interest payments on the Credit Facility. The hedged risk was the variability of forecasted interest rate cash flows, where the hedging strategy involved the purchase of interest rate swaps. These interest rate swaps expired in July 2013 and the Company has not entered into new interest swap arrangements as of September 30, 2013. | |
During August 2009, the Company entered into four interest rate swap agreements with an effective date of December 31, 2009. The agreements collectively provided for the Company to pay interest for less than a four-year period at a weighted average fixed rate of 2.78% on notional amounts aggregating to $140.0 million while receiving interest for the same period at the one month LIBOR rate on the same notional amounts. As discussed above, these agreements expired in July 2013. These swaps at inception were designated as cash flow hedges against the variability in the LIBOR interest rate on the Company’s term loan under the Prior Credit Facility or against the variability in the LIBOR interest rate on the replacement debt. The Company’s term loan under the Prior Credit Facility was terminated in March 2011 and refinanced with the Credit Facility as discussed further in Note 4, Long-Term Debt. Until their expiration in July 2013, the Company’s swaps were effective and were designated as cash flow hedges against the variability in certain LIBOR interest rate borrowings under the Credit Facility at LIBOR plus 1.50% to 2.50%, fixing the Company’s weighted average effective rate on the notional amounts at 4.28% to 5.28%. There was no hedge ineffectiveness recorded as result of this refinancing event. | |
The Company assesses hedge effectiveness and measures hedge ineffectiveness at least quarterly. During the three and nine months ended September 30, 2013 and 2012, the ineffective portion relating to these hedges was immaterial and the hedges remained effective until their expiration in July 2013 and as of December 31, 2012. Consequently, all changes in the fair value of the derivatives were deferred and recorded in other comprehensive income (loss) until the related forecasted transactions were recognized in the condensed consolidated statements of income. The fair value of the interest rate swap agreements were based on third-party quotes. At December 31, 2012, the Company recorded the interest rate swaps as liabilities at their fair value of $2.0 million. No amount was recorded as of September 30, 2013 because the interest rate swaps had expired. | |
Foreign Currency Instruments | |
The Company also designates certain foreign currency derivatives, such as certain foreign currency forward and option contracts, as freestanding derivatives for which hedge accounting does not apply. The changes in the fair market value of these freestanding derivatives are included in selling, general and administrative expenses in the Company’s condensed consolidated statements of income. The Company uses foreign currency forward contracts to hedge foreign-currency-denominated intercompany transactions and to partially mitigate the impact of foreign currency fluctuations. The Company also uses foreign currency option contracts to partially mitigate the impact of foreign currency fluctuations. The fair value of the forward and option contracts are based on third-party quotes. The Company’s foreign currency derivative contracts are generally executed on a monthly basis. | |
The Company designates as cash-flow hedges those foreign currency forward contracts it enters into to hedge forecasted inventory purchases and intercompany management fees that are subject to foreign currency exposures. Forward contracts are used to hedge forecasted inventory purchases over specific months. Changes in the fair value of these forward contracts, excluding forward points, designated as cash-flow hedges are recorded as a component of accumulated other comprehensive income (loss) within shareholders’ equity, and are recognized in cost of sales in the condensed consolidated statement of income during the period which approximates the time the hedged inventory is sold. The Company also hedges forecasted intercompany management fees over specific months. These contracts allow the Company to sell Euros in exchange for U.S. dollars at specified contract rates. Changes in the fair value of these forward contracts designated as cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) within shareholders’ equity, and are recognized in selling, general and administrative expenses in the condensed consolidated statement of income during the period when the hedged item and underlying transaction affect earnings. | |
Fair Value Measurement | The Company applies the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, for its financial and non-financial assets and liabilities. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: |
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. | |
Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |
Level 3 inputs are unobservable inputs for the asset or liability. | |
The Company measures certain assets and liabilities at fair value as discussed throughout the notes to its consolidated financial statements. Foreign exchange currency contracts and interest rate swaps are valued using standard calculations and models. Foreign exchange currency contracts are valued primarily based on inputs such as observable forward rates, spot rates and foreign currency exchange rates at the reporting period ended date. Interest rate swaps are valued primarily based on inputs such as LIBOR and swap yield curves at the reporting period ended date. |
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||
Effects of Prior Period Errors in Consolidated Financial Statements | The effects of these prior period errors in the condensed consolidated financial statements are as follows: | ||||||||||||||||||||||||
Condensed Consolidated Balance Sheets | |||||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||
As Previously | As Adjusted | As Previously | As Adjusted | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
(In thousands, except per share amount) | |||||||||||||||||||||||||
Prepaid expenses and other current assets | $ | 125,425 | $ | 145,624 | $ | 117,073 | $ | 134,605 | |||||||||||||||||
Deferred income taxes | $ | 49,339 | $ | 49,339 | $ | 55,615 | $ | 54,949 | |||||||||||||||||
Total current assets | $ | 963,848 | $ | 984,047 | $ | 768,819 | $ | 785,685 | |||||||||||||||||
Total assets | $ | 1,703,944 | $ | 1,724,143 | $ | 1,446,209 | $ | 1,463,075 | |||||||||||||||||
Income taxes payable | $ | 15,854 | $ | 61,325 | $ | 31,415 | $ | 62,283 | |||||||||||||||||
Total current liabilities | $ | 716,891 | $ | 762,362 | $ | 548,689 | $ | 579,557 | |||||||||||||||||
Deferred income taxes | $ | 62,982 | $ | 62,982 | $ | 72,348 | $ | 70,390 | |||||||||||||||||
Total liabilities | $ | 1,283,189 | $ | 1,328,660 | $ | 886,021 | $ | 914,931 | |||||||||||||||||
Retained earnings | $ | 148,368 | $ | 123,096 | $ | 305,931 | $ | 293,887 | |||||||||||||||||
Total shareholders’ equity | $ | 420,755 | $ | 395,483 | $ | 560,188 | $ | 548,144 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 1,703,944 | $ | 1,724,143 | $ | 1,446,209 | $ | 1,463,075 | |||||||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, 2012 | September 30, 2012 | ||||||||||||||||||||||||
As Previously | As Adjusted | As Previously | As Adjusted | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
(In thousands, except per share amount) | |||||||||||||||||||||||||
Income taxes | $ | 39,518 | $ | 45,424 | $ | 134,257 | $ | 141,811 | |||||||||||||||||
Net Income | $ | 117,779 | $ | 111,873 | $ | 359,309 | $ | 351,755 | |||||||||||||||||
Basic earnings per share | $ | 1.08 | $ | 1.03 | $ | 3.16 | $ | 3.09 | |||||||||||||||||
Diluted earnings per share | $ | 1.04 | $ | 0.98 | $ | 3.01 | $ | 2.95 | |||||||||||||||||
Year Ended | Year Ended | Year Ended | |||||||||||||||||||||||
December 31, 2012 | December 31, 2011 | December 31, 2010 | |||||||||||||||||||||||
As Previously | As Adjusted | As Previously | As Adjusted | As Previously | As Adjusted | ||||||||||||||||||||
Reported | Reported | Reported | |||||||||||||||||||||||
(In thousands, except per share amount) | |||||||||||||||||||||||||
Income taxes | $ | 173,716 | $ | 186,944 | $ | 147,201 | $ | 144,820 | $ | 80,880 | $ | 87,212 | |||||||||||||
Net Income | $ | 477,190 | $ | 463,962 | $ | 412,578 | $ | 414,959 | $ | 299,215 | $ | 292,883 | |||||||||||||
Basic earnings per share | $ | 4.25 | $ | 4.13 | $ | 3.51 | $ | 3.53 | $ | 2.51 | $ | 2.46 | |||||||||||||
Diluted earnings per share | $ | 4.05 | $ | 3.94 | $ | 3.3 | $ | 3.32 | $ | 2.37 | $ | 2.32 | |||||||||||||
Condensed Consolidated Statements of Comprehensive Income | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, 2012 | September 30, 2012 | ||||||||||||||||||||||||
As Previously | As Adjusted | As Previously | As Adjusted | ||||||||||||||||||||||
Reported | Reported | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Net Income | $ | 117,779 | $ | 111,873 | $ | 359,309 | $ | 351,755 | |||||||||||||||||
Total comprehensive income | $ | 124,081 | $ | 118,175 | $ | 360,493 | $ | 352,939 | |||||||||||||||||
Condensed Consolidated Statement of Cash Flows | |||||||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||
September 30, 2012 | |||||||||||||||||||||||||
As Previously | As Adjusted | ||||||||||||||||||||||||
Reported | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
Net Income | $ | 359,309 | $ | 351,755 | |||||||||||||||||||||
Deferred income taxes | $ | (9,246 | ) | $ | (8,249 | ) | |||||||||||||||||||
Income taxes | $ | 22,561 | $ | 29,118 |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Classes of Inventory | Inventories consist primarily of finished goods available for resale. Inventories are stated at lower of cost (primarily on the first-in, first-out basis) or market. The following are the major classes of inventory: | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Raw materials | $ | 24.3 | $ | 19.6 | |||||
Work in process | 1.8 | 1.9 | |||||||
Finished goods | 321.6 | 317.9 | |||||||
Total | $ | 347.7 | $ | 339.4 | |||||
LongTerm_Debt_Tables
Long-Term Debt (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Long-Term Debt | Long-term debt consists of the following: | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
(In millions) | |||||||||
Borrowings under the senior secured credit facility | $ | 950 | $ | 487.5 | |||||
Capital leases | 0.1 | 0.1 | |||||||
Total | 950.1 | 487.6 | |||||||
Less: current portion | 75.1 | 56.3 | |||||||
Long-term portion | $ | 875 | $ | 431.3 | |||||
Segment_Information_Tables
Segment Information (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Reconciliation of Revenue from Segments to Consolidated | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | September 30, | September 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(In millions) | |||||||||||||||||
Net Sales: | |||||||||||||||||
Primary Reporting Segment | |||||||||||||||||
United States | $ | 223.6 | $ | 202.9 | $ | 681.5 | $ | 625.5 | |||||||||
Mexico | 141.2 | 127.5 | 419.8 | 364 | |||||||||||||
South Korea | 111.5 | 109.3 | 333.5 | 314.9 | |||||||||||||
Others | 600.5 | 499.8 | 1,798.30 | 1,497.20 | |||||||||||||
Total Primary Reporting Segment | 1,076.80 | 939.5 | 3,233.10 | 2,801.60 | |||||||||||||
China | 136.7 | 77.4 | 323.3 | 211.4 | |||||||||||||
Total Net Sales | $ | 1,213.50 | $ | 1,016.90 | $ | 3,556.40 | $ | 3,013.00 | |||||||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Contribution Margin(1)(2): | ||||||||||||||||
Primary Reporting Segment | |||||||||||||||||
United States | $ | 90.7 | $ | 91 | $ | 284.9 | $ | 280 | |||||||||
Mexico | 65.1 | 54.9 | 187.7 | 147.8 | |||||||||||||
South Korea | 57.8 | 53.9 | 169.4 | 150.9 | |||||||||||||
Others | 265.7 | 215.5 | 797.2 | 659.6 | |||||||||||||
Total Primary Reporting Segment | 479.3 | 415.3 | 1,439.20 | 1,238.30 | |||||||||||||
China | 122.6 | 69.7 | 288.9 | 190.3 | |||||||||||||
Total Contribution Margin | $ | 601.9 | $ | 485 | $ | 1,728.10 | $ | 1,428.60 | |||||||||
Selling, general and administrative expenses(2) | 409.7 | 324.2 | 1,174.60 | 926.9 | |||||||||||||
Interest expense, net | 4.7 | 3.5 | 15.7 | 8.1 | |||||||||||||
Income before income taxes | 187.5 | 157.3 | 537.8 | 493.6 | |||||||||||||
Income taxes | 45.5 | 45.4 | 133.8 | 141.8 | |||||||||||||
Net Income | $ | 142 | $ | 111.9 | $ | 404 | $ | 351.8 | |||||||||
-1 | Contribution margin consists of net sales less cost of sales and royalty overrides. | ||||||||||||||||
-2 | Service fees to China independent service providers totaling $61.0 million and $34.4 million for the three months ended September 30, 2013 and 2012, respectively, and totaling $145.7 million and $93.7 million for the nine months ended September 30, 2013 and 2012, respectively, are included in selling, general and administrative expenses while distributor compensation for all other countries is included in contribution margin. | ||||||||||||||||
Schedule of Entity-Wide Information, Revenue from External Customers by Products and Services | Net sales by product line: | ||||||||||||||||
Weight Management | $ | 772.9 | $ | 635.9 | $ | 2,262.70 | $ | 1,884.50 | |||||||||
Targeted Nutrition | 280.7 | 237.4 | 815.1 | 703.3 | |||||||||||||
Energy, Sports and Fitness | 65.5 | 54.8 | 188.9 | 155.4 | |||||||||||||
Outer Nutrition | 36.4 | 34.2 | 112.4 | 108.6 | |||||||||||||
Literature, promotional and other(3) | 58 | 54.6 | 177.3 | 161.2 | |||||||||||||
Total Net Sales | $ | 1,213.50 | $ | 1,016.90 | $ | 3,556.40 | $ | 3,013.00 | |||||||||
-3 | Product buybacks and returns in all product categories are included in the literature, promotional and other category. | ||||||||||||||||
Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area | Net sales by geographic region: | ||||||||||||||||
North America | $ | 228.7 | $ | 208.8 | $ | 697.6 | $ | 644.2 | |||||||||
Mexico | 141.2 | 127.5 | 419.8 | 364 | |||||||||||||
South and Central America | 241.2 | 167.5 | 683.1 | 485.6 | |||||||||||||
EMEA | 181.7 | 147.5 | 537.6 | 463.1 | |||||||||||||
Asia Pacific | 284 | 288.2 | 895 | 844.7 | |||||||||||||
China | 136.7 | 77.4 | 323.3 | 211.4 | |||||||||||||
Total Net Sales | $ | 1,213.50 | $ | 1,016.90 | $ | 3,556.40 | $ | 3,013.00 | |||||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |||||||||||||||||
Summary of Activity Under Share-Based Compensation Plans | The following tables summarize the activity under all share-based compensation plans for the nine months ended September 30, 2013: | ||||||||||||||||
Stock Options & SARs | Awards | Weighted | Weighted | Aggregate | |||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Remaining | Value(1) | |||||||||||||||
Price | Contractual | ||||||||||||||||
Term | |||||||||||||||||
(In thousands) | (In millions) | ||||||||||||||||
Outstanding at December 31, 2012(2)(3) | 11,333 | $ | 28.62 | 5.9 years | $ | 119.1 | |||||||||||
Granted | 85 | $ | 35.46 | ||||||||||||||
Exercised | (10 | ) | $ | 9.07 | |||||||||||||
Forfeited | (28 | ) | $ | 44.23 | |||||||||||||
Outstanding at September 30, 2013(2)(3) | 11,380 | $ | 28.65 | 5.1 years | $ | 467.9 | |||||||||||
Exercisable at September 30, 2013(2) | 7,590 | $ | 20.82 | 4.1 years | $ | 371.5 | |||||||||||
-1 | The intrinsic value is the amount by which the current market value of the underlying stock exceeds the exercise price of the stock awards. | ||||||||||||||||
-2 | Includes 1.5 million market condition SARs. | ||||||||||||||||
-3 | Includes 0.9 million market and performance condition SARs. | ||||||||||||||||
Incentive Plan and Independent Directors Stock Units | Shares | Weighted | |||||||||||||||
Average | |||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
(In thousands) | |||||||||||||||||
Outstanding and non-vested December 31, 2012 | 321.6 | $ | 11.7 | ||||||||||||||
Granted | 7.6 | $ | 35.63 | ||||||||||||||
Vested | (193.5 | ) | $ | 13.84 | |||||||||||||
Forfeited | (0.2 | ) | $ | 53.6 | |||||||||||||
Outstanding and non-vested at September 30, 2013 | 135.5 | $ | 9.91 | ||||||||||||||
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |||||||||||||||||||
Gains (Losses) Relating to Derivative Instruments Recorded in Other Comprehensive Income (Loss) | The following table summarizes gains (losses) relating to derivative instruments recorded in other comprehensive income (loss) during the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||||
Amount of Gain (Loss) Recognized | |||||||||||||||||||
in Other Comprehensive Income (Loss) | |||||||||||||||||||
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In millions) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges | $ | 0.2 | $ | (2.8 | ) | $ | 3.2 | $ | (3.0 | ) | |||||||||
Interest rate swaps | — | $ | (0.2 | ) | — | $ | (0.6 | ) | |||||||||||
Gains (Losses) Relating to Derivative Instruments Recorded to Income | The following table summarizes gains (losses) relating to derivative instruments recorded to income during the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||||
Location of Gain | Amount of Gain (Loss) | ||||||||||||||||||
(Loss) | Recognized in Income | ||||||||||||||||||
Recognized in Income | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | ||||||||||||||||
(In millions) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign exchange currency contracts relating to inventory hedges and intercompany management fee | Selling, general and | $ | (1.4 | ) | $ | (0.7 | ) | $ | (4.0 | ) | $ | (0.6 | ) | ||||||
hedges(1) | administrative expenses | ||||||||||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||||
Foreign exchange currency contracts | Selling, general and | $ | 8.8 | $ | (0.8 | ) | $ | 3.6 | $ | (11.6 | ) | ||||||||
administrative expenses | |||||||||||||||||||
-1 | For foreign exchange contracts designated as hedging instruments, the amounts recognized in income (loss) represent the amounts excluded from the assessment of hedge effectiveness. There were no ineffective amounts recorded for derivatives designated as hedging instruments. | ||||||||||||||||||
Gains (Losses) Relating to Derivative Instruments Reclassified from Accumulated Other Comprehensive Loss into Income Effective Portion | The following table summarizes gains (losses) relating to derivative instruments reclassified from accumulated other comprehensive loss into income during the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||||
Location of Gain | Amount of Gain (Loss) Reclassified | ||||||||||||||||||
(Loss) | from Accumulated | ||||||||||||||||||
Reclassified | Other Comprehensive | ||||||||||||||||||
from Accumulated | Loss into Income | ||||||||||||||||||
Other Comprehensive | |||||||||||||||||||
Loss into Income | For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||
(Effective Portion) | September 30, 2013 | September 30, 2012 | September 30, 2013 | September 30, 2012 | |||||||||||||||
(In millions) | |||||||||||||||||||
Derivatives designated as hedging instruments: | |||||||||||||||||||
Foreign exchange currency contracts relating to inventory hedges | Cost of sales | $ | (1.1 | ) | $ | 0.2 | $ | (3.2 | ) | $ | 0.4 | ||||||||
Foreign exchange currency contracts relating to intercompany management fee hedges | Selling, general and | $ | (0.2 | ) | $ | 1.5 | $ | (0.3 | ) | $ | 4 | ||||||||
administrative expenses | |||||||||||||||||||
Interest rate swaps | Interest expense, net | $ | (0.2 | ) | $ | (0.9 | ) | $ | (2.0 | ) | $ | (2.7 | ) |
Shareholders_Equity_Tables
Shareholders' Equity (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Equity [Abstract] | |||||||||||||
Summary of Changes in Accumulated Other Comprehensive Income (Loss) | The following table summarizes changes in accumulated other comprehensive income (loss) during the nine months ended September 30, 2013: | ||||||||||||
Changes in Accumulated Other Comprehensive | |||||||||||||
Income (Loss) by Component | |||||||||||||
Nine Months Ended September 30, 2013 | |||||||||||||
Foreign | Unrealized | Total | |||||||||||
Currency | Gain (Loss) on | ||||||||||||
Translation | Derivatives | ||||||||||||
Adjustments | |||||||||||||
(In millions) | |||||||||||||
Beginning Balance | $ | (28.8 | ) | $ | (2.9 | ) | $ | (31.7 | ) | ||||
Other comprehensive income (loss) before reclassifications, net of tax | (2.9 | ) | 2.5 | (0.4 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive income (loss) to income, net of tax(1) | — | 4.7 | 4.7 | ||||||||||
Total other comprehensive income (loss), net of reclassifications | (2.9 | ) | 7.2 | 4.3 | |||||||||
Ending balance | $ | (31.7 | ) | $ | 4.3 | $ | (27.4 | ) | |||||
-1 | See Note 9, Derivative Instruments and Hedging Activities, for information regarding the location in the condensed consolidated statements of income of gains (losses) reclassified from accumulated other comprehensive income (loss) into income during the three and nine months ended September 30, 2013. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following are the common share amounts used to compute the basic and diluted earnings per share for each period: | ||||||||||||||||
For the Three Months | For the Nine Months | ||||||||||||||||
Ended September 30, | Ended September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
(in thousands) | |||||||||||||||||
Weighted average shares used in basic computations | 102,200 | 108,816 | 103,096 | 113,838 | |||||||||||||
Dilutive effect of exercise of equity grants outstanding | 5,577 | 4,830 | 4,663 | 5,485 | |||||||||||||
Dilutive effect of warrants | — | — | — | 53 | |||||||||||||
Weighted average shares used in diluted computations | 107,777 | 113,646 | 107,759 | 119,376 | |||||||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2013 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring Basis | Assets or liabilities that have recurring measurements and are measured at fair value consisted of Level 2 derivatives and are shown below at their gross values at September 30, 2013, and December 31, 2012: | ||||||||||||
Fair Value Measurements at Reporting Date | |||||||||||||
Derivative Balance | Significant | Significant | |||||||||||
Sheet | Other | Other | |||||||||||
Location | Observable | Observable | |||||||||||
Inputs | Inputs | ||||||||||||
(Level 2) | (Level 2) | ||||||||||||
Fair Value at | Fair Value at | ||||||||||||
September 30, | December 31, | ||||||||||||
2013 | 2012 | ||||||||||||
(in millions) | |||||||||||||
ASSETS: | |||||||||||||
Derivatives designated as cash flow hedging instruments: | |||||||||||||
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges | Prepaid expenses and other | $ | 5.6 | $ | 0.5 | ||||||||
current assets | |||||||||||||
Derivatives not designated as cash flow hedging instruments: | |||||||||||||
Foreign exchange currency contracts | Prepaid expenses and other | $ | 4.9 | $ | 0.7 | ||||||||
current assets | |||||||||||||
$ | 10.5 | $ | 1.2 | ||||||||||
LIABILITIES: | |||||||||||||
Derivatives designated as cash flow hedging instruments: | |||||||||||||
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges | Accrued expenses | $ | 4.2 | $ | 3.3 | ||||||||
Interest rate swaps | Accrued expenses | — | $ | 2 | |||||||||
Derivatives not designated as hedging instruments: | |||||||||||||
Foreign exchange currency contracts | Accrued expenses | $ | 0.5 | $ | 1.3 | ||||||||
$ | 4.7 | $ | 6.6 | ||||||||||
Offsetting of Derivative Assets | The following tables summarize the offsetting of the fair values of the Company’s derivative assets and derivative liabilities for presentation in the Company’s condensed consolidated balance sheet at September 30, 2013 and December 31, 2012: | ||||||||||||
Offsetting of Derivative Assets | |||||||||||||
Gross | Gross | Net Amounts | |||||||||||
Amounts of | Amounts | of Assets | |||||||||||
Recognized | Offset in the | Presented in | |||||||||||
Assets | Balance Sheet | the Balance | |||||||||||
Sheet | |||||||||||||
(In millions) | |||||||||||||
September 30, 2013 | |||||||||||||
Foreign exchange currency contracts | $ | 10.5 | $ | (4.2 | ) | $ | 6.3 | ||||||
Total | $ | 10.5 | $ | (4.2 | ) | $ | 6.3 | ||||||
December 31, 2012 | |||||||||||||
Foreign exchange currency contracts | $ | 1.2 | $ | (1.2 | ) | — | |||||||
Total | $ | 1.2 | $ | (1.2 | ) | — | |||||||
Offsetting of Derivative Liabilities | |||||||||||||
Offsetting of Derivative Liabilities | |||||||||||||
Gross | Gross | Net Amounts | |||||||||||
Amounts of | Amounts | of Liabilities | |||||||||||
Recognized | Offset in the | Presented in | |||||||||||
Liabilities | Balance Sheet | the Balance | |||||||||||
Sheet | |||||||||||||
(In millions) | |||||||||||||
September 30, 2013 | |||||||||||||
Foreign exchange currency contracts | $ | 4.7 | $ | (4.2 | ) | $ | 0.5 | ||||||
Total | $ | 4.7 | $ | (4.2 | ) | $ | 0.5 | ||||||
December 31, 2012 | |||||||||||||
Foreign exchange currency contracts | $ | 4.6 | $ | (1.2 | ) | $ | 3.4 | ||||||
Interest rate swaps | 2 | — | 2 | ||||||||||
Total | $ | 6.6 | $ | (1.2 | ) | $ | 5.4 | ||||||
Organization_Additional_Inform
Organization - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2013 | |
Segment | |
Distributor | |
Organization And Description Of Business [Line Items] | |
Number of geographic regions | 6 |
Number of independent distributors | 3,600,000 |
China [Member] | |
Organization And Description Of Business [Line Items] | |
Number of independent distributors | 200,000 |
Significant_Accounting_Policie3
Significant Accounting Policies - Effects of Prior Period Errors in Condensed Consolidated Balance Sheets (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Prepaid expenses and other current assets | $174,840 | $145,624 | $134,605 |
Deferred income taxes | 53,880 | 49,339 | 54,949 |
Total current assets | 1,578,833 | 984,047 | 785,685 |
Total assets | 2,343,447 | 1,724,143 | 1,463,075 |
Income taxes payable | 42,494 | 61,325 | 62,283 |
Total current liabilities | 867,963 | 762,362 | 579,557 |
Deferred income taxes | 64,500 | 62,982 | 70,390 |
Total liabilities | 1,887,856 | 1,328,660 | 914,931 |
Retained earnings | 178,223 | 123,096 | 293,887 |
Total shareholders' equity | 455,591 | 395,483 | 548,144 |
Total liabilities and shareholders' equity | 2,343,447 | 1,724,143 | 1,463,075 |
As Previously Reported [Member] | |||
Prepaid expenses and other current assets | 125,425 | 117,073 | |
Deferred income taxes | 49,339 | 55,615 | |
Total current assets | 963,848 | 768,819 | |
Total assets | 1,703,944 | 1,446,209 | |
Income taxes payable | 15,854 | 31,415 | |
Total current liabilities | 716,891 | 548,689 | |
Deferred income taxes | 62,982 | 72,348 | |
Total liabilities | 1,283,189 | 886,021 | |
Retained earnings | 148,368 | 305,931 | |
Total shareholders' equity | 420,755 | 560,188 | |
Total liabilities and shareholders' equity | $1,703,944 | $1,446,209 |
Significant_Accounting_Policie4
Significant Accounting Policies - Effects of Prior Period Errors in Condensed Consolidated Statements of Income (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Income taxes | $45,464 | $45,424 | $133,775 | $141,811 | $186,944 | $144,820 | $87,212 |
Net income | 141,950 | 111,873 | 403,985 | 351,755 | 463,962 | 414,959 | 292,883 |
Basic earnings per share | $1.39 | $1.03 | $3.92 | $3.09 | $4.13 | $3.53 | $2.46 |
Diluted earnings per share | $1.32 | $0.98 | $3.75 | $2.95 | $3.94 | $3.32 | $2.32 |
As Previously Reported [Member] | |||||||
Income taxes | 39,518 | 134,257 | 173,716 | 147,201 | 80,880 | ||
Net income | $117,779 | $359,309 | $477,190 | $412,578 | $299,215 | ||
Basic earnings per share | $1.08 | $3.16 | $4.25 | $3.51 | $2.51 | ||
Diluted earnings per share | $1.04 | $3.01 | $4.05 | $3.30 | $2.37 |
Significant_Accounting_Policie5
Significant Accounting Policies - Effects of Prior Period Errors in Condensed Consolidated Statements of Comprehensive Income (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Net income | $141,950 | $111,873 | $403,985 | $351,755 | $463,962 | $414,959 | $292,883 |
Total comprehensive income | 158,862 | 118,175 | 408,309 | 352,939 | |||
As Previously Reported [Member] | |||||||
Net income | 117,779 | 359,309 | 477,190 | 412,578 | 299,215 | ||
Total comprehensive income | $124,081 | $360,493 |
Significant_Accounting_Policie6
Significant Accounting Policies - Effects of Prior Period Errors in Condensed Consolidated Statement of Cash Flows (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Net income | $141,950 | $111,873 | $403,985 | $351,755 | $463,962 | $414,959 | $292,883 |
Deferred income taxes | -7,532 | -8,249 | |||||
Income taxes | -13,313 | 29,118 | |||||
As Previously Reported [Member] | |||||||
Net income | 117,779 | 359,309 | 477,190 | 412,578 | 299,215 | ||
Deferred income taxes | -9,246 | ||||||
Income taxes | $22,561 |
Significant_Accounting_Policie7
Significant Accounting Policies - Additional Information (Detail) | 9 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Feb. 28, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Feb. 28, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | |
USD ($) | VEF | USD ($) | USD ($) | USD ($) | Herbalife Venezuela [Member] | Herbalife Venezuela [Member] | Herbalife Venezuela [Member] | SITME Rate [Member] | New CADIVI Rate [Member] | Previous CADIVI Rate [Member] | CADIVI Rate [Member] | Remeasurement of Assets and Liabilities Using New CADIVI Rate [Member] | Devaluation of Bolivar Denominated Cash [Member] | Alternative Bolivar Exchange Mechanisms [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||||||||||
Foreign currency exchange rate, Bolivars per USD | 5.3 | 6.3 | 4.3 | ||||||||||||
Percent by which currency exchange rate was less favorable than SITME | 16.00% | ||||||||||||||
Foreign currency transaction losses | ($15,100,000) | ($16,900,000) | ($700,000) | ||||||||||||
CADIVI rate for remeasurement | 6.3 | 6.3 | |||||||||||||
Percent by which alternative legal exchange mechanism was less favorable than new Cadivi | 75.00% | ||||||||||||||
Currency exchanged through alternative legal exchange mechanisms | 200,000 | 5,600,000 | |||||||||||||
Net monetary Bolivar denominated assets and liabilities | 146,700,000 | ||||||||||||||
Cash and cash equivalents | $892,548,000 | $333,534,000 | $321,722,000 | $258,775,000 | $150,100,000 | ||||||||||
Subsidiary net sales as percentage of consolidated sales | 5.00% | 3.00% | |||||||||||||
Subsidiary assets as percentage of consolidated assets | 9.00% | 7.00% |
Inventories_Classes_of_Invento
Inventories - Classes of Inventory (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Inventory Disclosure [Abstract] | ||
Raw materials | $24,300,000 | $19,600,000 |
Work in process | 1,800,000 | 1,900,000 |
Finished goods | 321,600,000 | 317,900,000 |
Total | $347,735,000 | $339,411,000 |
LongTerm_Debt_Schedule_of_Long
Long-Term Debt - Schedule of Long-Term Debt (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Debt Disclosure [Abstract] | ||
Borrowings under the senior secured credit facility | $950,000,000 | $487,500,000 |
Capital leases | 100,000 | 100,000 |
Total | 950,100,000 | 487,600,000 |
Less: current portion | 75,061,000 | 56,302,000 |
Long-term portion | $875,018,000 | $431,305,000 |
LongTerm_Debt_Additional_Infor
Long-Term Debt - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | |||||||||||||||||||||||||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Mar. 31, 2011 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 09, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Jul. 26, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | Credit Facility [Member] | ||||||
Maximum [Member] | Minimum [Member] | Senior secured revolving credit facility [Member] | Senior secured revolving credit facility [Member] | Senior secured revolving credit facility [Member] | Senior secured revolving credit facility [Member] | Senior secured revolving credit facility [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Interest Rate Option One [Member] | Interest Rate Option One [Member] | Interest Rate Option One [Member] | Interest Rate Option One [Member] | Interest Rate Option One [Member] | Interest Rate Option One [Member] | Interest Rate Option Two [Member] | Interest Rate Option Two [Member] | Interest Rate Option Two [Member] | Interest Rate Option Two [Member] | Interest Rate Option Two [Member] | Interest Rate Option Two [Member] | ||||||||||||
Maximum [Member] | Minimum [Member] | Senior secured revolving credit facility [Member] | Senior secured revolving credit facility [Member] | Senior secured revolving credit facility [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | Senior secured revolving credit facility [Member] | Senior secured revolving credit facility [Member] | Senior secured revolving credit facility [Member] | Term Loan [Member] | Term Loan [Member] | Term Loan [Member] | |||||||||||||||||||||
Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | |||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||
Credit facility, maximum amount | $700 | $500 | ||||||||||||||||||||||||||||||||
Credit facility, maturity period | 5 years | |||||||||||||||||||||||||||||||||
Credit facility, expiration date | 9-Mar-16 | |||||||||||||||||||||||||||||||||
Interest rate spread on variable rate | 2.50% | 1.50% | 2.50% | 1.50% | 2.50% | 1.50% | 1.50% | 0.50% | 1.50% | 0.50% | ||||||||||||||||||||||||
Variable rate basis | LIBOR | LIBOR | LIBOR | The base rate under the Credit Facility represents the highest of the Federal Funds Rate plus 0.50%, one-month LIBOR plus 1.00%, and the prime rate offered by Bank of America. | Base rate | |||||||||||||||||||||||||||||
Base rate in excess of Federal Funds Rate | 0.50% | |||||||||||||||||||||||||||||||||
Base rate in excess of one-month LIBOR | 1.00% | |||||||||||||||||||||||||||||||||
Credit facility, unused capacity, commitment fee percentage | 0.50% | 0.25% | ||||||||||||||||||||||||||||||||
Repayment of all amounts outstanding under the Prior Credit Facility by using borrowings under the new Credit Facility | 196 | 500 | ||||||||||||||||||||||||||||||||
Deferred financing costs | 5.7 | 4.5 | ||||||||||||||||||||||||||||||||
Long-term debt, weighted average interest rate | 2.18% | 2.18% | 1.96% | |||||||||||||||||||||||||||||||
Credit facility, amount borrowed | 250 | 513 | ||||||||||||||||||||||||||||||||
Credit facility, amount repaid | 262.5 | 12.5 | 25.5 | |||||||||||||||||||||||||||||||
Credit facility, amount outstanding | 950 | 950 | 487.5 | 950 | 950 | 487.5 | 500 | 0 | 450 | 487.5 | ||||||||||||||||||||||||
Foreign currency borrowings outstanding | 0 | 0 | 0 | |||||||||||||||||||||||||||||||
Aggregate annual maturities, 2013 | 18.8 | 18.8 | ||||||||||||||||||||||||||||||||
Aggregate annual maturities, 2014 | 81.2 | 81.2 | ||||||||||||||||||||||||||||||||
Aggregate annual maturities, 2015 | 100 | 100 | ||||||||||||||||||||||||||||||||
Aggregate annual maturities, 2016 | 750 | 750 | ||||||||||||||||||||||||||||||||
Interest expense | $6.70 | $5 | $21.10 | $12.40 |
Contingencies_Additional_Infor
Contingencies - Additional Information (Detail) (USD $) | 9 Months Ended | |||||
In Millions, unless otherwise specified | Sep. 30, 2013 | 10-May-13 | 7-May-10 | Sep. 30, 2013 | Sep. 30, 2009 | Mar. 01, 2012 |
Mexican Tax Administration Service [Member] | Mexican Tax Administration Service [Member] | Spanish Tax Authority [Member] | Federal Revenue Office of Brazil [Member] | Rome Labor Court on behalf of Social Security Authority [Member] | ||
Loss Contingencies [Line Items] | ||||||
Deductible for product liability insurance | $10 | |||||
Administrative assessment amount from Mexican Tax Administration Service | 22 | 87 | ||||
Tax assessment for withholding taxes, interest and penalties related to payments to Spanish distributors during 2003-2004 period | 4.3 | |||||
Tax assessment received relating to withholding/contributions to Company's distributors during 2004 | 3.8 | |||||
Equivalent amount under order for social contributions, interest and penalties related to payments to Italian distributors from 2002 through 2005 | $7.20 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | Country | ||
Segment Reporting Information [Line Items] | |||
Number of countries in which the Company sells products | 88 | ||
Total assets | $2,343,447 | $1,724,143 | $1,463,075 |
Goodwill allocated to the Company's Segment | 105,490 | 105,490 | |
Primary Reporting Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,145,600 | 1,607,200 | |
Goodwill allocated to the Company's Segment | 102,400 | 102,400 | |
China [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | 197,800 | 116,900 | |
Goodwill allocated to the Company's Segment | $3,100 | $3,100 |
Segment_Information_Reconcilia
Segment Information - Reconciliation of Revenue from Segments to Consolidated (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Net Sales | $1,213,543 | $1,016,887 | $3,556,429 | $3,013,010 |
Reportable Geographical Components [Member] | United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Net Sales | 223,600 | 202,900 | 681,500 | 625,500 |
Reportable Geographical Components [Member] | Mexico [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Net Sales | 141,200 | 127,500 | 419,800 | 364,000 |
Reportable Geographical Components [Member] | South Korea [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Net Sales | 111,500 | 109,300 | 333,500 | 314,900 |
Reportable Geographical Components [Member] | Others [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Net Sales | 600,500 | 499,800 | 1,798,300 | 1,497,200 |
Reportable Geographical Components [Member] | Primary Reporting Segment [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Net Sales | 1,076,800 | 939,500 | 3,233,100 | 2,801,600 |
Reportable Geographical Components [Member] | China [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Net Sales | $136,700 | $77,400 | $323,300 | $211,400 |
Segment_Information_Reconcilia1
Segment Information - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Operating Margin | |||||||
Total Contribution Margin | $601,900 | $485,000 | $1,728,100 | $1,428,600 | |||
Selling, general and administrative expenses | 409,747 | 324,200 | 1,174,574 | 926,903 | |||
Interest expense, net | 4,726 | 3,546 | 15,658 | 8,088 | |||
Income before income taxes | 187,414 | 157,297 | 537,760 | 493,566 | |||
Income taxes | 45,464 | 45,424 | 133,775 | 141,811 | 186,944 | 144,820 | 87,212 |
Net income | 141,950 | 111,873 | 403,985 | 351,755 | 463,962 | 414,959 | 292,883 |
Reportable Geographical Components [Member] | United States [Member] | |||||||
Operating Margin | |||||||
Total Contribution Margin | 90,700 | 91,000 | 284,900 | 280,000 | |||
Reportable Geographical Components [Member] | Mexico [Member] | |||||||
Operating Margin | |||||||
Total Contribution Margin | 65,100 | 54,900 | 187,700 | 147,800 | |||
Reportable Geographical Components [Member] | South Korea [Member] | |||||||
Operating Margin | |||||||
Total Contribution Margin | 57,800 | 53,900 | 169,400 | 150,900 | |||
Reportable Geographical Components [Member] | Others [Member] | |||||||
Operating Margin | |||||||
Total Contribution Margin | 265,700 | 215,500 | 797,200 | 659,600 | |||
Reportable Geographical Components [Member] | Primary Reporting Segment [Member] | |||||||
Operating Margin | |||||||
Total Contribution Margin | 479,300 | 415,300 | 1,439,200 | 1,238,300 | |||
Reportable Geographical Components [Member] | China [Member] | |||||||
Operating Margin | |||||||
Total Contribution Margin | $122,600 | $69,700 | $288,900 | $190,300 |
Segment_Information_Schedule_o
Segment Information - Schedule of Entity-Wide Information, Revenue from External Customers by Products and Services (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue from External Customer [Line Items] | ||||
Net Sales | $1,213,543 | $1,016,887 | $3,556,429 | $3,013,010 |
Operating Segments [Member] | Weight Management [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Sales | 772,900 | 635,900 | 2,262,700 | 1,884,500 |
Operating Segments [Member] | Targeted Nutrition [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Sales | 280,700 | 237,400 | 815,100 | 703,300 |
Operating Segments [Member] | Energy, Sports and Fitness [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Sales | 65,500 | 54,800 | 188,900 | 155,400 |
Operating Segments [Member] | Outer Nutrition [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Sales | 36,400 | 34,200 | 112,400 | 108,600 |
Operating Segments [Member] | Literature, promotional and other [Member] | ||||
Revenue from External Customer [Line Items] | ||||
Net Sales | $58,000 | $54,600 | $177,300 | $161,200 |
Segment_Information_Schedule_o1
Segment Information - Schedule of Revenue from External Customers Attributed to Foreign Countries by Geographic Area (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net Sales | $1,213,543 | $1,016,887 | $3,556,429 | $3,013,010 |
Reportable Geographical Components [Member] | North America [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net Sales | 228,700 | 208,800 | 697,600 | 644,200 |
Reportable Geographical Components [Member] | Mexico [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net Sales | 141,200 | 127,500 | 419,800 | 364,000 |
Reportable Geographical Components [Member] | South and Central America [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net Sales | 241,200 | 167,500 | 683,100 | 485,600 |
Reportable Geographical Components [Member] | EMEA [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net Sales | 181,700 | 147,500 | 537,600 | 463,100 |
Reportable Geographical Components [Member] | Asia Pacific [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net Sales | 284,000 | 288,200 | 895,000 | 844,700 |
Reportable Geographical Components [Member] | China [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net Sales | $136,700 | $77,400 | $323,300 | $211,400 |
Segment_Information_Reconcilia2
Segment Information - Reconciliation of Operating Profit (Loss) from Segments to Consolidated (Parenthetical) (Detail) (China [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
China [Member] | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Independent service providers service fee costs | $61 | $34.40 | $145.70 | $93.70 |
ShareBased_Compensation_Additi
Share-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $6.60 | $8.40 | $21.90 | $20.80 | |
Unrecognized compensation cost on non-vested stock awards | 30.3 | 30.3 | |||
Unrecognized compensation cost on non-vested stock awards, weighted-average period of recognition | 1 year 1 month 6 days | ||||
Total intrinsic value of awards exercised for options and SARs | 0.1 | 2.3 | 0.3 | 96.6 | |
Total vesting date fair value of stock units | 0.4 | 1.1 | 7.2 | 24.1 | |
Unrealized excess tax benefits | $29.10 | $29.10 | $25.90 | ||
SARs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average grant date fair value of SARs granted | $0 | $16.54 | $11.85 | $15.35 |
ShareBased_Compensation_Summar
Share-Based Compensation - Summary of Activity Under Share-Based Compensation Plans (Detail) (USD $) | 9 Months Ended |
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Awards Outstanding, Beginning Balance | 11,333,000 |
Granted, Awards | 85,000 |
Exercised, Awards | -10,000 |
Forfeited, Awards | -28,000 |
Awards Outstanding, Ending Balance | 11,380,000 |
Awards Exercisable, Ending Balance | 7,590,000 |
Weighted Average Exercise Price Outstanding, Beginning Balance | $28.62 |
Granted, Weighted Average Exercise Price | $35.46 |
Exercised, Weighted Average Exercise Price | $9.07 |
Forfeited, Weighted Average Exercise Price | $44.23 |
Weighted Average Exercise Price Outstanding, Ending Balance | $28.65 |
Exercisable, Weighted Average Exercise Price, Ending Balance | $20.82 |
Weighted Average Remaining Contractual Term Outstanding, Beginning Balance | 5 years 10 months 24 days |
Weighted Average Remaining Contractual Term Outstanding, Ending Balance | 5 years 1 month 6 days |
Exercisable, Weighted Average Remaining Contractual Term, Ending Balance | 4 years 1 month 6 days |
Aggregate Intrinsic Value Outstanding, Beginning balance | $119.10 |
Aggregate Intrinsic Value Outstanding, Ending balance | 467.9 |
Exercisable, Aggregate Intrinsic Value, Ending Balance | $371.50 |
Incentive Plan and Independent Directors Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding and non-vested at December 31, 2012, Shares | 321,600 |
Granted, Shares | 7,600 |
Vested, Shares | -193,500 |
Forfeited, Shares | -200 |
Outstanding and non-vested at September 30, 2013, Shares | 135,500 |
Outstanding and non-vested at December 31, 2012, Weighted Average Grant Date Fair Value | $11.70 |
Granted, Weighted Average Grant Date Fair Value | $35.63 |
Vested, Weighted Average Grant Date Fair Value | $13.84 |
Forfeited, Weighted Average Grant Date Fair Value | $53.60 |
Outstanding and non-vested at September 30, 2013, Weighted Average Grant Date Fair Value | $9.91 |
ShareBased_Compensation_Summar1
Share-Based Compensation - Summary of Activity Under Share-Based Compensation Plans (Parenthetical) (Detail) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Market condition awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding SARs | 1.5 | 1.5 |
Exercisable SARs | 1.5 | |
Market and performance condition awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding SARs | 0.9 | 0.9 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
Income Tax Disclosure [Abstract] | |||||||
Income taxes | $45,464,000 | $45,424,000 | $133,775,000 | $141,811,000 | $186,944,000 | $144,820,000 | $87,212,000 |
Effective income tax rate | 24.30% | 28.90% | 24.90% | 28.70% | |||
Total amount of unrecognized tax benefits, including related interest and penalties | 33,100,000 | 33,100,000 | |||||
Unrecognized tax benefits excluding interest and penalties that if recognized would affect the effective tax rate | 26,300,000 | 26,300,000 | |||||
Total accrued interest for tax contingencies | 3,400,000 | 3,400,000 | |||||
Total accrued penalties for tax contingencies | 800,000 | 800,000 | |||||
Amount of unrecognized tax benefits that could decrease within the next 12 months | 9,800,000 | 9,800,000 | |||||
Decrease in unrecognized tax benefits due to the settlement of audits or resolution of administrative or judicial proceedings | 6,800,000 | 6,800,000 | |||||
Decrease in unrecognized tax benefits expiration of statute of limitations | $3,000,000 | $3,000,000 |
Derivative_Instruments_and_Hed2
Derivative Instruments and Hedging Activities - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Dec. 31, 2012 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative liability fair value | 4.7 | 6.6 |
Derivative asset fair value | 10.5 | 1.2 |
Credit Facility [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Variable rate basis | LIBOR | |
Average effective fixed rate on notional balances, minimum | 4.28% | |
Average effective fixed rate on notional balances, maximum | 5.28% | |
Credit Facility [Member] | Minimum [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest rate spread on variable rate | 1.50% | |
Credit Facility [Member] | Maximum [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest rate spread on variable rate | 2.50% | |
Prior Credit Facility [Member] | Term Loan [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Termination date | Mar-11 | |
Interest rate swaps [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Number of derivative instruments held | 4 | |
Derivative aggregate notional amounts | 140 | |
Weighted average fixed interest rate on notional amounts | 2.78% | |
Interest rate applicable on interest rate swap agreements for stipulated period | One month LIBOR rate | |
Inception date of interest rate swap agreements | 31-Aug-09 | |
Effective date of interest rate swap agreements | 31-Dec-09 | |
Expiration date of interest rate swap agreements | 31-Jul-13 | |
Payment of interest period | Less than a four-year period | |
Derivative liability fair value | 0 | 2 |
Foreign exchange currency contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative aggregate notional amounts | 630.6 | |
Derivative liability fair value | 4.7 | 4.6 |
Derivative asset fair value | 10.5 | 1.2 |
Foreign exchange currency contracts [Member] | Derivatives designated as cash flow hedging instruments [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative aggregate notional amounts | 243.2 | 256.9 |
Derivative liability fair value | 4.2 | 3.3 |
Derivative remaining maturity period | 12 months | |
Derivative asset fair value | 5.6 | 0.5 |
Foreign exchange forward contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative maximum remaining maturity period | 12 months | 12 months |
Freestanding derivatives [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative average remaining maturity period | 1 month | 1 month |
Foreign currency option contracts [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Number of derivative instruments held | 0 | 0 |
Derivative_Instruments_and_Hed3
Derivative Instruments and Hedging Activities - Gains (Losses) Relating to Derivative Instruments Recorded in Other Comprehensive Income (Loss) (Detail) (Derivatives designated as hedging instruments [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Foreign exchange currency contracts relating to inventory hedges and intercompany management fee hedges [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $0.20 | ($2.80) | $3.20 | ($3) |
Interest rate swaps [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | ($0.20) | ($0.60) |
Derivative_Instruments_and_Hed4
Derivative Instruments and Hedging Activities - Gains (Losses) Relating to Derivative Instruments Recorded to Income (Detail) (Selling, general and administrative expenses [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Foreign exchange currency contracts relating to inventory hedges and intercompany management fee hedges [Member] | Derivatives designated as hedging instruments [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | ($1.40) | ($0.70) | ($4) | ($0.60) |
Foreign exchange currency contracts [Member] | Derivatives not designated as hedging instruments [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $8.80 | ($0.80) | $3.60 | ($11.60) |
Derivative_Instruments_and_Hed5
Derivative Instruments and Hedging Activities - Gains (Losses) Relating to Derivative Instruments Reclassified from Accumulated Other Comprehensive Loss into Income Effective Portion (Detail) (Derivatives designated as hedging instruments [Member], USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Foreign exchange currency contracts relating to inventory hedges [Member] | Cost of sales [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ($1.10) | $0.20 | ($3.20) | $0.40 |
Foreign exchange currency contracts relating to intercompany management fee hedges [Member] | Selling, general and administrative expenses [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | -0.2 | 1.5 | -0.3 | 4 |
Interest rate swaps [Member] | Interest expense, net [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | ($0.20) | ($0.90) | ($2) | ($2.70) |
Shareholders_Equity_Additional
Shareholders' Equity - Additional Information (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Share data in Millions, except Per Share data, unless otherwise specified | Jul. 30, 2012 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Stockholders Equity [Line Items] | |||||||
Dividend declared per common share | $0.30 | $0.30 | $0.30 | $0.30 | $0.90 | $0.90 | |
Dividend declaration date | 29-Jul-13 | 29-Apr-13 | 19-Feb-13 | ||||
Dividend payment date | 27-Aug-13 | 28-May-13 | 19-Mar-13 | ||||
Dividends paid | $30,800,000 | $30,900,000 | $30,900,000 | $32,400,000 | $92,651,000 | $102,687,000 | |
Share repurchase program authorized amount | 1,000,000,000 | ||||||
Share repurchase program expiration date | 30-Jun-17 | ||||||
Repurchase of common shares | 1.7 | 4 | |||||
Shares repurchased through open market purchases, aggregate cost | 110,000,000 | 162,400,000 | |||||
Average cost per share of shares repurchased | $63.85 | $40.61 | |||||
Share repurchase program, remaining authorized capacity | 677,600,000 | ||||||
Amounts reclassified from accumulated other comprehensive income (loss) to income, net of tax expense | 800,000 | ||||||
Foreign Currency Translation Adjustment [Member] | |||||||
Stockholders Equity [Line Items] | |||||||
Other comprehensive income (loss) before reclassifications, Tax benefits | -3,600,000 | ||||||
Unrealized Gain (Loss) on Derivatives [Member] | |||||||
Stockholders Equity [Line Items] | |||||||
Other comprehensive income (loss) before reclassifications, Tax benefits | $700,000 |
Shareholders_Equity_Summary_of
Shareholders' Equity - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | ($31,695,000) | |||
Other comprehensive income (loss) before reclassifications, net of tax | -400,000 | |||
Amounts reclassified from accumulated other comprehensive income (loss) to income, net of tax | 4,700,000 | |||
Total other comprehensive income (loss) | 16,912,000 | 6,302,000 | 4,324,000 | 1,184,000 |
Ending balance | -27,371,000 | -27,371,000 | ||
Foreign Currency Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | -28,800,000 | |||
Other comprehensive income (loss) before reclassifications, net of tax | -2,900,000 | |||
Amounts reclassified from accumulated other comprehensive income (loss) to income, net of tax | ||||
Total other comprehensive income (loss) | -2,900,000 | |||
Ending balance | -31,700,000 | -31,700,000 | ||
Unrealized Gain (Loss) on Derivatives [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning Balance | -2,900,000 | |||
Other comprehensive income (loss) before reclassifications, net of tax | 2,500,000 | |||
Amounts reclassified from accumulated other comprehensive income (loss) to income, net of tax | 4,700,000 | |||
Total other comprehensive income (loss) | 7,200,000 | |||
Ending balance | $4,300,000 | $4,300,000 |
Earnings_Per_Share_Computation
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share [Abstract] | ||||
Weighted average shares used in basic computations | 102,200 | 108,816 | 103,096 | 113,838 |
Dilutive effect of exercise of equity grants outstanding | 5,577 | 4,830 | 4,663 | 5,485 |
Dilutive effect of warrants | 53 | |||
Weighted average shares used in diluted computations | 107,777 | 113,646 | 107,759 | 119,376 |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Earnings Per Share [Abstract] | ||||
Equity grants with anti-dilutive effect | 0.9 | 4 | 3.6 | 2.6 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value, Assets and Liabilities Measured on Recurring Basis (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value derivatives asset | $10.50 | $1.20 |
Fair value derivatives liabilities | 4.7 | 6.6 |
Foreign exchange currency contracts [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value derivatives asset | 10.5 | 1.2 |
Fair value derivatives liabilities | 4.7 | 4.6 |
Interest rate swaps [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value derivatives liabilities | 0 | 2 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value measurements, assets total | 10.5 | 1.2 |
Fair value measurements, liabilities total | 4.7 | 6.6 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Derivatives designated as cash flow hedging instruments [Member] | Foreign exchange currency contracts relating to inventory hedges and intercompany management fee hedges [Member] | Prepaid expenses and other current assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value derivatives asset | 5.6 | 0.5 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Derivatives designated as cash flow hedging instruments [Member] | Foreign exchange currency contracts relating to inventory hedges and intercompany management fee hedges [Member] | Accrued expenses [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value derivatives liabilities | 4.2 | 3.3 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Derivatives designated as cash flow hedging instruments [Member] | Interest rate swaps [Member] | Accrued expenses [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value derivatives liabilities | 2 | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Derivatives not designated as hedging instruments [Member] | Foreign exchange currency contracts [Member] | Prepaid expenses and other current assets [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value derivatives asset | 4.9 | 0.7 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Derivatives not designated as hedging instruments [Member] | Foreign exchange currency contracts [Member] | Accrued expenses [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value derivatives liabilities | $0.50 | $1.30 |
Fair_Value_Measurements_Offset
Fair Value Measurements - Offsetting of Derivative Assets (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | $10.50 | $1.20 |
Gross Amounts Offset in the Balance Sheet, Derivative Assets | -4.2 | -1.2 |
Net Amounts of Assets Presented in the Balance Sheet | 6.3 | |
Foreign exchange currency contracts [Member] | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Assets | 10.5 | 1.2 |
Gross Amounts Offset in the Balance Sheet, Derivative Assets | -4.2 | -1.2 |
Net Amounts of Assets Presented in the Balance Sheet | $6.30 |
Fair_Value_Measurements_Offset1
Fair Value Measurements - Offsetting of Derivative Liabilities (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Liabilities | $4.70 | $6.60 |
Gross Amounts Offset in the Balance Sheet, Derivative Liabilities | -4.2 | -1.2 |
Net Amounts of Liabilities Presented in the Balance Sheet | 0.5 | 5.4 |
Foreign exchange currency contracts [Member] | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Liabilities | 4.7 | 4.6 |
Gross Amounts Offset in the Balance Sheet, Derivative Liabilities | -4.2 | -1.2 |
Net Amounts of Liabilities Presented in the Balance Sheet | 0.5 | 3.4 |
Interest rate swaps [Member] | ||
Derivative [Line Items] | ||
Gross Amounts of Recognized Liabilities | 0 | 2 |
Gross Amounts Offset in the Balance Sheet, Derivative Liabilities | ||
Net Amounts of Liabilities Presented in the Balance Sheet | $2 |
Professional_Fees_and_Other_Ex1
Professional Fees and Other Expenses - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2013 |
Other Income And Expenses [Abstract] | ||
Professional fees and other expenses | $6.30 | $23.80 |
Advisory retainer fees | 1.5 | 4.5 |
Minimum guaranteed retainer fees | 5.5 | |
Liability Award expense recognized | 1 | 2.3 |
Liability Award expense unrecognized | $3.60 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | ||||
Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Oct. 28, 2013 | |
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Dividend declared per common share | $0.30 | $0.30 | $0.30 | $0.30 | $0.90 | $0.90 | $0.30 |
Dividend declaration date | 29-Jul-13 | 29-Apr-13 | 19-Feb-13 | 28-Oct-13 | |||
Dividend payment date | 27-Aug-13 | 28-May-13 | 19-Mar-13 | 26-Nov-13 | |||
Dividend date of record | 12-Nov-13 |