Pershing Square Capital - Robin Hood In Reverse

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Pershing Square Capital Management, L.P.

Robin Hood in Reverse

November 22, 2013



Disclaimer

Pershing Square Capital Management, L.P. (“Pershing Square”) is an investment adviser to funds that are in the business of bu ying and selling securities and other

financial instruments. Pershing Square currently maintains a substantial short position in the common stock of Herbalife Ltd. (“Herbalife”).

Pershing Square will profit i f the trading price of Herbalife common stock declines and will lose money if the trading price of common stock of Herbalife increases.

Pershing Square may change its views about or its investment positions in Herbalife at any time, for any reason or no reason. Pershing Square may buy, sell, cover or

otherwise change the form or substance of any of its investments related to Herbalife at any time for any reason or no reason. Pershing Square disclaims any

obligation to notify the market or any other party of any such changes.

The information and opinions expressed in this presentation (the “Presentation”) are based on publicly available information about Herbalife and other companies.

Pershing Square recognizes that there may be non-public information in the possession of Herbalife or others that could lead Herbalife or others to disagree with

Pershing Square’s analyses, conclusions and opinions.

The Presentation includes forward-looking statements, estimates, projections and opinions prepared with respect to, among other things, certain legal and regulatoryissues Herbalife faces and the potential impact of those issues on its future business, financial condition and results of op erations, as well as, more generally,

Herbalife’s anticipated operating performance, access to capital markets, market conditions, assets and liabilities. Such statements, estimates, projections and

opinions may prove to be substantially inaccurate and are inherently subject to significant risks and uncertainties beyond Pershing Square’s control.

Although Pershing Square believes the statements it makes in the Presentation are accurate in all material respects and do not omit to state material facts necessary

to make those statements not misleading, Pershing Square makes no representation or warranty, express or implied, as to the accuracy or completeness of those

statements or any other written or oral communication it makes with respect to Herbalife and any other companies mentioned, and Pershing Square expressly

disclaims any liability relating to those statements or such communications (or any inaccuracies or omissions therein). Thus, shareholders and others should

conduct their own independent investigation and analysis of those statements and communications and of Herbalife and other companies to which those statements

or communications may be relevant.

The statements Pershing Square makes in the Presentation are not investment advice or a recommendation or solicitation to buy or sell any securities. Except where

otherwise indicated, the Presentation speaks as of the date hereof, and Pershing Square undertakes no obligation to correct, update or revise those statements or to

otherwise provide any additional materials. Pershing Square also undertakes no commitment to take or refrain from taking any action with respect to Herbalife or any

other company.

As used herein, except to the extent the context, otherwise requires, Pershing Square includes its affiliates and funds it ma nages or advises and their respective

partners, directors, officers and employees.

1



SEC Recent Actions on Pyramid Schemes

In January 2013, the SEC’s enforcement unit opened an

investigation into Herbalife(1)

On October 17, 2013, the SEC announced charges and seized the

assets of a worldwide pyramid scheme operating under businessnames “CKB” and “CKB168”(2)

The SEC has a long history of prosecuting pyramid schemes,including the landmark 1973 action against Koscot , and hasprosecuted two pyramid schemes in the last 18 months(3)

2

(1) Source: Ben Protess & Michael J. De La Merced, S.E.C. Opens Investigation Into Herbalife, NEW YORK TIMES, January 9, 2013 (http://dealbook.nytimes.com/2013/01/09/s-e-c-opens-investigation-into-herbalife/?_r=0)

(2) Source: SEC Press Release (Oct. 17, 2013) (http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539880547(3) SEC v. Koscot Interplanetary , Civ. A. No. 17134 (N.D. Ga. 1973); SEC Press Release (Oct. 2013) (available at https://www.sec.gov/News/PressRelease/Detail/Press

Release/1370539880547); SEC Press Release (Aug. 2012) (available at https://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171483920

https://www.sec.gov/News/PressRelease/Detail/Press%20Release/1370539880547






On October 17th, 2013, the SEC issued an

Investor Alert warning investors to bewareof “pyramid schemes posing as multi-level

marketing programs”

3



The SEC Investor Alert Identified Seven Hallmarks

of a Pyramid Scheme

Source: SEC Press Release and Investor Alert (Oct 17, 2013), available at https://www.sec.gov/investor/alerts/ia_pyramid.htm

Investor Alert: Beware of Pyramid SchemesPosing as Multi-Level Marketing Programs

The SEC's Office of Investor Education and Advocacy is issuing this Investor Alert to warnindividual investors about pyramid schemes, a type of investment scam that fraudsters often pitch

as a legitimate business opportunity in the form of multi-level marketing programs.

4

Have you ever been tempted by an advertisement or offer to make "easy money" or "onlineincome" out of your own home? Multi-level marketing ("MLM") programs are promoted throughInternet advertising, company websites, social media, presentations, group meetings, conferencecalls, and brochures. In an MLM program, you typically get paid for products or services that youand the distributors in your "downline" ( i.e., participants you recruit and their recruits) sell to others.However, some MLM programs are actually pyramid schemes -- a type of fraud in whichparticipants profit almost exclusively through recruiting other people to participate in the program.



Hallmark #1: Emphasis on Recruiting

5

“Emphasis on recrui t ing. If a program primari ly focuses on recrui t ing

oth ers to join the program for a fee, it is l ikely a py ramid scheme. Be

skept ical if you wi l l receive more com pensat ion fo r recrui t ing others

than for prod uct sales .”

- SEC Investo r Alert, Octob er 17, 2013

Source: SEC Press Release and Investor Alert (Oct. 17, 2013) (available at https://www.sec.gov/investor/alerts/ia_pyramid.htm)



It’s All About Recruiting

6

Source: Herbalife’s 2011 Extravaganza, Las Vegas, NY (October 26-29, 2011) (available at http://www.youtube.com/watch?v=cVbd8bw4MlQ)

VIDEO

Susan Peterson – Founder’s Circle Member, Herbalife’s 2011 Extravaganza

http://factsaboutherbalife.com/its-all-about-recruiting/

http://factsaboutherbalife.com/its-all-about-recruiting/



It’s All About Recruiting

7

Source: Herbalife’s 2011 Extravaganza, Las Vegas, NY (October 26-29, 2011) (available at http://www.youtube.com/watch?v=cVbd8bw4MlQ)

“If you want to m ove the check, you need to f ind other

people that want to make money and represent the

Herbal i fe products and Herbal i fe opportunity.”

Susan Peterson – Founder’s Circle Member, Herbalife’s 2011 Extravaganza:



“Promises of hig h returns in a short t ime period. Be leery of pi tches forexponent ia l returns and ‘get r ich quick’ cla ims . High returns and fast

cash in an MLM program may suggest that comm issions are being paid

out o f money from new recrui ts rather than revenue generated b y

product sales .”

- SEC Inv esto r Alert, Oct ob er 17, 2013

Hallmark #2: Promises of High Returns in a Short

Time Period

8




Senior Herbalife Distributors Lead Recruits to Believe They

Can Make Hundreds of Thousands in Short Order

Source: Doran Andry, Financial Success Systems Fi rst Package video

VIDEO

Doran Andry – Chairman’s Club Member

http://factsaboutherbalife.com/senior-herbalife-distributors-lead-recruits-to-believe-they-can-make-hundreds-of-thousands-in-short-order/

http://factsaboutherbalife.com/senior-herbalife-distributors-lead-recruits-to-believe-they-can-make-hundreds-of-thousands-in-short-order/



Current and Former Board Members Tell Recruits That

Herbalife is an Opportunity to Make Money Quickly

10

Source: Promotional video for online recruiting business Success Connection (available at http://www.youtube.com/watch?feature=player_embedded&v=kKq8IhJ_dMI)

VIDEO

Leslie Stanford: Former Herbalife Board Member and Current Founder’s Circle Member

John Tartol: Herbalife Board Member and Chairman’s Club Member

http://factsaboutherbalife.com/current-and-former-board-members-tell-recruits-they-are-making-millions/

http://factsaboutherbalife.com/current-and-former-board-members-tell-recruits-they-are-making-millions/



Hallmark #3: Easy Money or Passive Income

“Easy money or passive incom e. Be wary if you are offered

com pensat ion in exchange for l i t tle wo rk such as making payments,

recrui t ing others, and p lacing advert isements .”

- SEC Invest or A lert, October 17, 2013

11

Source: SEC Press Release and Investor Alert (Oct. 17, 2013) (available at https://www.sec.gov/investor/alerts/ia_pyramid.htm); Financial Success Systems ‘Herbalife Success University’ Presentation(Module 1)

https://www.sec.gov/investor/alerts/ia_pyramid.htm




Senior Herbalife Distributors Tell Recruits They

Can Earn Millions in Passive Income

12

VIDEO

Doran Andry, Again – Chairman’s Club Member

Source: Doran Andry, Financial Success Systems Fi rst Package video

http://factsaboutherbalife.com/senior-herbalife-distributors-tell-recruits-they-can-earn-millions-in-passive-income/

http://factsaboutherbalife.com/senior-herbalife-distributors-tell-recruits-they-can-earn-millions-in-passive-income/



Hallmark #4: Buy-in Required

Herbalife requires a “buy-in” via an Herbalife Member Pack for $57.75 or $89.55 to receivea discount and the option to run the business. To advance quickly and receivecommissions, distributors must also spend ~$3,000 - $4,000 purchasing inventory to qualifyas a Supervisor, in order to be eligible to earn recruiting rewards.

13

“Buy -in required. The goal of an MLM pro gram is to sel l produ cts. Be

careful i f you are requ ired to pay a buy-in to part icip ate in the prog ram,

even if th e buy -in is a nom inal one-t ime or recurrin g fee (e.g., $10 or

$10/month ).”

- SEC Inv esto r Alert, Octob er 17, 2013




Hallmark #5: Complex Commission Structure

“Complex commission structure. Be con cerned unless comm issions are

based on prod ucts o r services that you or you r recrui ts sel l to people

outs ide the program. If you do not un derstand how yo u w i l l be

com pensated, be caut ious .”


126 Pages of Text and Forms

More than 150 Rules

More than 60,000 words 11+ Levels of Distributors

Five Different Forms ofCompensation

14

Minimal Marketing Advice

Largely Unintelligible

Frequently Revised &Supplemented

Herbalife Sales and Marketing Plan

Source: SEC Press Release and Investor Alert (Oct. 17, 2013) (available at https://www.sec.gov/investor/alerts/ia_pyramid.htm); Herbalife Sales & Marketing Plan; see li nk athttp://factsaboutherbalife.com/wp-content/uploads/2012/12/Marketing-Plan-and-Business-Rules-2012.pdf


http://factsaboutherbalife.com/wp-content/uploads/2012/12/Marketing-Plan-and-Business-Rules-2012.pdf

















“No genuine products or service. MLM prog rams invo lve sel l ing agenuine produ ct or service to people wh o are not in th e program.

Exercise caut ion i f there is no u nder ly ing prod uct or s ervice being sold

to o thers, or i f w hat is being sold is speculat ive or appears

inappropr iately pr iced .” (emphasis added)


Hallmark #6: No Genuine Products or Service…Sold to

People Who Are Not in the Program / Inappropriately Priced

In Herbalife’s case:

No empirical evidence of retail sales outside the program

Commodity products with highly inflated suggested retail prices

15

Source: SEC Press Release and Investor Alert (Oct. 17, 2013) (available at https://www.sec.gov/investor/alerts/ia_pyramid.htm); see materials collected and analyzed in Pershing Square Presentation,Who Wants to be a Millionaire? (December 20, 2012)





Hallmark #6 (Cont’d): “Inappropriately Priced” Products

Retail Price Per Multivitamin Tablet (1)

16

$0.06

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.26 = 4x Centrum

(1) HLF Source: Herbalife U.S. Product Price List (11-2013). Centrum source: Walmart.com (11-2013)).



Hallmark #7: No Demonstrated Revenue from Retail

Sales

“No demonstrated revenue from retail sales. Ask to see documents,such as f inancial statements audi ted b y a cert i f ied pub l ic accountant

(CPA), showin g that the MLM company generates revenue from sel l ing

i ts produ cts or s ervices to people outside the program .”


17

Let’s see how Herbalife has answered this question




Retail Sales: The Big Question

“So we don’t have an exact

percentage David, because wedon’t have visibility to that level

of detail. . . . So, well, again,going back to our 70% rule, webelieve that it’s that 70% or

potentially in excess of that.”

-Herbalife President Des Walsh

18

David Einhorn:“What is the percentage that is actually sold to

consumers that are not distributors?”

Source: Herbalife Q1 2012 earnings call

VIDEO

Herbalife Q1 2012 Earnings Conference Call – May 1st, 2012

http://factsaboutherbalife.com/retail-sales-the-big-question

http://factsaboutherbalife.com/retail-sales-the-big-question



The Day After Einhorn Asked His Question, Herbalife

Issued an 8K Changing Walsh’s Answer

19Source: Herbalife Report on Form 8-K, filed May 2, 2012



The Day After Einhorn Asked His Question, Herbalife

Issued an 8K Changing Walsh’s Answer

20Source: Herbalife report on form 8-K, filed May 2, 2012, at 2



0.0

50.0

100.0

150.0

200.0

$40

$45

$50

$55

$60

$65

$70

$75

Apr 30 May 1 May 2 May 3

V o l u m e ( m m S h a r e s )

P r i c e

Volume Price

The Market Did Not Like This Answer

21

$70.32

$46.20

34% decline



The FTC, SEC, the Court s, and even Herbali fe itself have all

recent ly reaff i rmed the cr i t ical role of retai l sales to cus tom ers

outs ide the dist r ibut ion netwo rk in dist inguish ing a legi t imate MLM

from a pyramid scheme

22

Why Did the Market React So Negatively



The FTC Reaffirms the Critical Role of Retail Sales

Multilevel Marketing

“Not all multilevel marketing plans are legitimate. If the money you makeis based on your sales to the public, it may be a legitimate multilevelmarketing plan. If the money you make is based on the number ofpeople you recruit and your sales to them, it’s not. It’s a pyramidscheme. Pyramid schemes are illegal, and the vast majority ofparticipants lose money.”

- FTC Website, Bureau of Consumer Protection – Business Center

23Source: http://www.business.ftc.gov/documents/inv08-bottom-line-about-multi-level-marketing-plans

FTC Facts for Consumers: Bottom Line About Multilevel Marketing Plans

and Pyramid Schemes (November 2012)



Source: Complaint in FTC v. Fortune Hi-Tech Marketing, Inc., No. 13CV578 Dkt #4 (N.D. Ill. January 24, 2013) (emphasis added). 24

Fortune Hi-Tech Marketing Complaint

On January 24, 2013, Fortune Hi-Tech Marketing was shut down by the FTC

and State Attorneys General from Kentucky, Illinois and North Carolina onthe ground that it was a pyramid scheme. In its complaint, the governmentnoted the lack of retail sales outside the distributor network

The FTC Reaffirms the Critical Role of Retail Sales



A Federal Judge Reaffirms the Critical Role of

Retail Sales

Source: Bostick v. Herbalife International of American, No 2:13-cv-02488-BRO-RZ, Dkt #40, at 9 (C.D. California October 11, 2013)

“Although [Herbalife] contend[s] that distributors should be classified asultimate users, Omnitrition points out that “[i]f Koscot is to have any teeth, [asale for a distributor’s personal use] cannot satisfy the requirement that salesbe to ‘ultimate users’ of a product.” Id. at 783. Therefore, downline

distributors are not ultimate users for purposes of the second elementof the Kosco t test.” (bold emphasis added)

25

Order Denying Herbalife’s Motion to Dismiss pg. 9)

In the class-action, Bostic k v. Herbal i fe, Herbalife argued that distributors

should be classified as ultimate users. On October 11, 2013, FederalDistrict Court Judge O’Connell denied Herbalife’s motion to dismiss and

stated that distributors are not ultimate users.



“. . . Regulations applicable to network marketing organizations

generally are directed at preventing fraudulent or deceptive schemes,often referred to as “pyramid” or “chain sales” schemes, by ensuring

that product sales ultimately are made to consumers and thatadvancement within an organization is based on sales of theorganization’s products rather than investments in the organization or

other non-retail sales-related criteria.”

Even Herbalife Admits That Retail Sales Are Crucial

26

Herbalife 2012 10K – Risk Factors

Source: Herbalife 2012 Report on form 10-K, filed February 19, 2013, at 30



27



Herbalife Requires Distributors to Keep Detailed

Retail Sales Records

Source: Herbalife Sales & Marketing Plan at 71

Required Information:- Name- Address- Telephone no.- Products sold- Sales price

28



Herbalife’s Retail Order Form

29Source: Herbalife Sales & Marketing Plan at 42



30

What does management have tosay about this critical issue?



31

CEO Michael Johnson Interview on CNBC – December 19, 2012

Source: http://video.cnbc.com/gallery/?video=3000136542ar

VIDEO

http://factsaboutherbalife.com/ceo-michael-johnson-interview-on-cnbc-december-19-2012/

http://factsaboutherbalife.com/ceo-michael-johnson-interview-on-cnbc-december-19-2012/



CEO Michael Johnson Answers The Same Question…

32

December 19, 2012:

CNBC: “What % of your sales areoutside that distribution network?”

Johnson: “90%”

CNBC: “So the vast majority?”

Johnson: “Absolutely”



33

CEO Michael Johnson Interview on CNBC – January 10, 2013

Source: http://video.cnbc.com/gallery/?video=3000140236

VIDEO

http://factsaboutherbalife.com/ceo-michael-johnson-interview-on-cnbc-january-10-2013/

http://factsaboutherbalife.com/ceo-michael-johnson-interview-on-cnbc-january-10-2013/



…But That Answer Was Actually a “Misstatement”

34

If 90% of distributors are buying for themselves, clearly these are notretail sales to customers outside the program

January 10th, 2013 (22 Days Later), Michael Johnson Says:

“It was a misstatement. 90% of ourdistributors - ok - who are buying ourproduct - let me just try to clarify this - buy

it for one reason, and they buy it for self-consumption, and that was amisstatement on that day, I was kind ofhyped up that day, wasn’t I?”



35

Unwilling to provide actual retail sales

data, Herbalife says that people are

just confused



36

CEO Michael Johnson Interview on CNBC – December 19, 2012

Source: http://video.cnbc.com/gallery/?video-3000136542

VIDEO

http://factsaboutherbalife.com/ceo-michael-johnson-interview-on-cnbc-december-19-2012-2/

http://factsaboutherbalife.com/ceo-michael-johnson-interview-on-cnbc-december-19-2012-2/



“[A] part of the distributors is described ascustomers . . . Obviously, this is not serious.” -Commercial Court in Belgium

Source: Test-AanKoop v. Herbalife International Belgium [Comm. Ct Brussels], November 23, 2011, AR 2004/7787, No. JC-DC / 27 [Jee] (Belg.), sli p op. at 12.

Courts Have Rejected Herbalife’s Claim that its

Distributors are Retail Customers

37

On November 23, 2011, the Belgian Commercial Court found Herbalife to be

a pyramid scheme, rejecting Herbalife’s claim that distributors are simplymisnamed



http://factsaboutherbalife.com/what-do-competitors-say-about-importance-of-retail-sales/



39

What excuses does Herbalife give fornot collecting retail sales data?



In June 2009 Herbalife Said It Doesn’t Collect

Retail Sales Data Because of Price-Fixing Concerns

Collecting proof of actual retail sales is not illegal and does notcreate anti-trust risk

Source: Transcript of hearing on Motions for Summary Judgment in Herbalife v. Ford, No. 07 civ. 2529, Dkt #300 at 13 (C.D. Cal., June 1, 2009) 40

Herbalife’s Attorney in Summary Judgment Argument – June 1, 2009



41

Herbalife Has a New Excuse

Source: http://video.cnbc.com/gallery/?video-3000140234

VIDEO

President Des Walsh interview on CNBC – January 10, 2013

http://factsaboutherbalife.com/fewer-than-four-years-later-herbalife-has-a-new-excuse/

http://factsaboutherbalife.com/fewer-than-four-years-later-herbalife-has-a-new-excuse/



Herbalife Claims Privacy Concerns Prevent

Collecting Retail Sales Data

42

How is Herbalife responding to the SEC October 2013 Investor Alert?


SEC Investor Alert Hallmark:

“ No demon strated revenue from retai l sales. Ask to see documents,

such as f inancial statements audi ted b y a cert i f ied p ubl ic accountant

(CPA), show ing that the MLM company generates revenue from sel l ing

i ts produ cts or s ervices to people outside the program .”

- SEC Invest or A lert, October 17, 2013

Herbalife responds to this simple question with misstatements and

misdirection



To collect two years of Retail Order Forms from all of Herbalife’s

distributors

To hire an independent big four accounting firm to verify and validatethe retail sales data

To submit the results of the data and analysis directly to the various

regulators (which would protect the privacy of Distributors)

Herbalife need only:

(1) Direct Distributors to cooperate and

(2) Inform them that their records will be submitted to the government,which means the records must be authentic and truthful*

Pershing Square Offers to Pay the Cost:

*Source: 18 U.S.C. §1001. Statements or entries generally

(a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and

willfully - (1) falsi fies, conceals, or covers up by any trick, scheme, or device a material fact; (2) makes any materially fals e, fictitious, or fraudulent statement or representation; or (3) makes or uses

any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry; shall be fined under this title, imprisoned not more than 5 years or, if the

offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or

117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.

43

Herbalife Exhibits All Seven SEC Hallmarks of a



Herbalife Exhibits All Seven SEC Hallmarks of a

Pyramid Scheme

44

Emphasis On Recruiting

Promises Of High Returns In A Short Time Period

Easy Money Or Passive Income

Buy-In Required

Complex Commission Structure

No Genuine Product or Service…Sold to People Who

Are Not in the Program / Inappropriately Priced

No Demonstrated Revenue from Retail Sales



Herbalife says nutrition clubs are

proof of retail sales

Let’s take a look at what’s really

going on…

45



The Reality of New York City Nutrition Clubs

46

Source: CNNMoney interview aired on January 11, 2013, available at http://money.cnn.com/2013/01/11/smallbusiness/herbalife-network/

VIDEO

http://money.cnn.com/2013/01/11/smallbusiness/herbalife-network/

http://factsaboutherbalife.com/the-reality-of-new-york-city-nutrition-clubs/

http://factsaboutherbalife.com/the-reality-of-new-york-city-nutrition-clubs/






Nutrition Club Rules Make Retail Sales Not Viable

No external displays of the Herbalife’s name or logo

Must cover windows

No “Open / Closed” sign

No advertising or promotionNot allowed to attract customers or walk-ins

Must serve a shake, aloe water and tea to every “Member”

Only complimentary offerings of products

Can charge membership fees to cover operating costs; product costs may notbe recovered

Customers not allowed to carry out food unless in a small, unmarkedcontainer

47Source: Herbalife Sales & Marketing Plan at 74, 101 - 115

According to Herbalife’s rules, “Nutrition Clubs are social gatherings…not retail

stores or outlets, nor are they restaurants or carry-out establishments”



48

Herbalife Claims its Competition Is Fast Food

Herbalife says its competition is McDonald’s and KFC

“You’re not going to like my answer on competition because

strategically we view the competition as fast food… It is the steal a

meal a day from fast food. It is no t to go after oth er supplement

companies. It’s to go after McDonald’s, to go after KFC.”

-John DeSimone, CFO, September 7th, 2011



A Map of Queens, New York

49



McDonald’s Are Evenly & Rationally Distributed

50

But Why Are Nutrition Clubs Clustered In Two



But Why Are Nutrition Clubs Clustered In Two

Sections of Queens?

51

Interestingly Grameen America’s Two Offices in



Interestingly, Grameen America’s Two Offices in

Queens are in the Heart of the Clusters

52



Who are the victims?

53



54

Herbalife Targets Vulnerable, Low-Income Minorities

“[M]any Latino leaders [are] increasingly concerned with Herbalife's

predatory business practices and how the company targets the Latino

community in a methodical and calculated manner…

“The scale of the scheme is breath-taking. There are 550,000Herbalife distributors in the United States. Somewhere between 60 to 83

percent of them are Latino. 300,000 to 400,000 Latino distributors will quit

this year alone only to be replaced by another 300,000 to 400,000 new Latino

distributors. If left unchecked, Herbalife could recruit, defraud and dispose of

as many as 4 million Latino distributors over the next 10 years.”

Source: http://www.huffingtonpost.com/brent-a-wilkes/herbalife-a-pyramid-scheme_b_4220426.html

Numerous Voices Are Calling for an Investigation of

http://www.huffingtonpost.com/brent-a-wilkes/herbalife-a-pyramid-scheme_b_4220426.html














55

Numerous Voices Are Calling for an Investigation of

Herbalife

Rep. Linda Sanchez (CA-38)Rep. Loretta Sanchez (CA-46)

Rep. Michelle Lujan Grisham (NM-1)

Neil M. O'Leary, Mayor of Waterbury, CT

State Senator Adriano Espaillat, NY SD-31

Ofelia Hernandez, Huntington Park, CA Councilor

Chris Garcia, Cudahy, CA Vice MayorJorge Morales, South Gate, CA Councilor

Aide Castro, Lynwood, CA Councilor

Denise Robles, Commerce City, CA Councilor

Julissa Ferreras, NYC Councilor District 21

Melissa Mark-Viverito, NYC Councilor, District 8

Tito Jackson, Boston City Councilor, District 7 55

Herbalife Asks Distributors to Write to Their Local



56

Herbalife Asks Distributors to Write to Their Local

Member of Congress in Support of Herbalife

“I find the targeting of Distributors by ethnicity offensive on many levels and thesuggestion that Herbalife takes advantageof any Distributor to be simply false. AtHerbalife, we strive to change people’s

lives by providing the best nutritionalproducts and the best business opportunityto ALL”



57

Herbalife Targets Ethnic Affinity Groups

From Herbalife’s 2010 Investor Presentation

Source: Herbalife 2010 investor day presentation



58 ________________________________________________

Source: Herbalife flyer.

Herbalife Targets African Americans



59Source: Herbalife Today (magazine published by Herbalife)

Herbalife Targets Latinos

Based on Herbalife’s Own Reported Data What



60

Based on Herbalife s Own Reported Data, What

are a Distributor’s Chances of Success?

88% of all distributors receive no commissions from Herbalife

Even among “Sales Leaders” (who are pressured to invest~$3,000 - $4,000 purchasing inventory in order to be eligibleto earn recruiting rewards), half received no commissionsand 95% averaged commissions of only $8 per week beforeexpenses

The top 1% of distributors received 87% of all commissions

According to Herbalife’s most recent U.S. Statement of Average

Gross Compensation, the real facts are:

Source: Herbalife Statement of Average Gross Compensation of U.S. Distributors; Pershing Square Presentation, Who Wants to be a Millionaire



61

Ana Maria Archila

Co-Executive Director, Make the

Road New York

Make the Road New York’s mission is to build the power of Latino

and working class communities to achieve dignity and justicethrough organizing, policy innovation, transformative education,and survival services.



Make The Road Video

http://factsaboutherbalife.com/make-the-road-video/

Pershing Square Capital - Robin Hood In Reverse

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