v2.4.0.8

Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Components of Income Before Income Taxes | The components of income before income taxes are as follows (in millions):
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Domestic |  | $ | 172.3 |  |  | $ | 143.9 |  |  | $ | 69.5 |
Foreign |  |  | 478.6 |  |  |  | 415.9 |  |  |  | 310.6 |
Total |  | $ | 650.9 |  |  | $ | 559.8 |  |  | $ | 380.1 |
Components of Income Tax Expense | Income taxes are as follows (in millions):
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  | $ | 104.0 |  |  | $ | 103.3 |  |  | $ | 84.9 |
Federal |  |  | 82.1 |  |  |  | 55.3 |  |  |  | 27.4 |
State |  |  | 8.6 |  |  |  | 7.4 |  |  |  | 8.2 |
|  |  | 194.7 |  |  |  | 166.0 |  |  |  | 120.5 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  |  | (6.3 | ) |  |  | (11.8 | ) |  |  | (3.2 | )
Federal |  |  | (2.7 | ) |  |  | (8.7 | ) |  |  | (29.9 | )
State |  |  | 1.2 |  |  |  | (0.7 | ) |  |  | (0.2 | )
|  |  | (7.8 | ) |  |  | (21.2 | ) |  |  | (33.3 | )
|  | $ | 186.9 |  |  | $ | 144.8 |  |  | $ | 87.2 |
Deferred Tax Assets and Liabilities | The significant categories of temporary differences that gave rise to deferred tax assets and liabilities are as follows (tax effected in millions):
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |
Deferred income tax assets: |  |  |  |  |  |  |  |
Accruals not currently deductible |  | $ | 48.0 |  |  | $ | 46.4 |
Tax loss carry forwards of certain foreign subsidiaries |  |  | 22.0 |  |  |  | 16.9 |
Depreciation/amortization |  |  | 13.5 |  |  |  | 13.9 |
Deferred compensation plan |  |  | 35.6 |  |  |  | 26.2 |
Deferred interest expense |  |  | 186.9 |  |  |  | 151.3 |
Accrued vacation |  |  | 4.6 |  |  |  | 4.0 |
Inventory reserve |  |  | 6.4 |  |  |  | 4.2 |
Hyperinflationary adjustment |  |  | 3.5 |  |  |  | 7.4 |
Other |  |  | 8.6 |  |  |  | 11.3 |
Gross deferred income tax assets |  |  | 329.1 |  |  |  | 281.6 |
Less: valuation allowance |  |  | (209.3 | ) |  |  | (168.1 | )
Total deferred income tax assets |  | $ | 119.8 |  |  | $ | 113.5 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  | $ | 111.7 |  |  | $ | 113.1 |
Unremitted foreign earnings |  |  | 13.9 |  |  |  | 8.7 |
Other |  |  | 4.5 |  |  |  | 4.7 |
Total deferred income tax liabilities |  | $ | 130.1 |  |  | $ | 126.5 |
Total net deferred tax liabilities |  | $ | (10.3 | ) |  | $ | (13.0 | )
Reconciliation Between Provision for Income Taxes at Statutory Rate and Provision for Income Taxes | The applicable statutory income tax rate in the Cayman Islands was zero for Herbalife Ltd. for the years being reported. For purposes of the reconciliation between the provision for income taxes at the statutory rate and the provision for income taxes at the effective tax rate, a notional 35% tax rate is applied as follows (in millions):
|  | Year Ended December 31, |
|  | 2012 |  |  | 2011 |  |  | 2010 |
|  | (In millions) |
Tax expense at United States statutory rate |  | $ | 227.8 |  |  | $ | 195.9 |  |  | $ | 133.0 |
Increase (decrease) in tax resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Differences between U.S. and foreign tax rates on foreign income, including withholding taxes |  |  | (97.9 | ) |  |  | (78.1 | ) |  |  | (71.1 | )
U.S. tax (benefit) on foreign income net of foreign tax credits |  |  | 1.8 |  |  |  | (8.8 | ) |  |  | (19.3 | )
Increase (decrease) in valuation allowances |  |  | 40.2 |  |  |  | 31.8 |  |  |  | 65.4 |
State taxes, net of federal benefit |  |  | 7.3 |  |  |  | 5.2 |  |  |  | 5.9 |
Unrecognized tax benefits |  |  | 6.6 |  |  |  | 1.1 |  |  |  | (10.9 | )
Venezuela DASTM hyperinflationary impact |  |  | — |  |  |  | — |  |  |  | (14.5 | )
Other |  |  | 1.1 |  |  |  | (2.3 | ) |  |  | (1.3 | )
Total |  | $ | 186.9 |  |  | $ | 144.8 |  |  | $ | 87.2 |
Changes Occurred in Amount of Unrecognized Tax Benefits | The following changes occurred in the amount of unrecognized tax benefits during the years ended December 31, 2012, 2011, and 2010 (in millions):
|  | Year Ended December 31, 2012 |  |  | Year Ended December 31, 2011 |  |  | Year Ended December 31, 2010 |
Beginning balance of unrecognized tax benefits |  | $ | 32.4 |  |  | $ | 31.6 |  |  | $ | 39.3 |
Additions for current year tax positions |  |  | 7.8 |  |  |  | 5.5 |  |  |  | 4.3 |
Additions for prior year tax positions |  |  | 4.5 |  |  |  | 2.0 |  |  |  | 1.1 |
Reductions for prior year tax positions |  |  | (0.1 | ) |  |  | (0.9 | ) |  |  | (2.3 | )
Reductions for audit settlements |  |  | (0.3 | ) |  |  | (0.7 | ) |  |  | (8.6 | )
Reductions for the expiration of statutes of limitation |  |  | (4.9 | ) |  |  | (4.5 | ) |  |  | (2.4 | )
Changes due to foreign currency translation adjustments |  |  | 0.3 |  |  |  | (0.6 | ) |  |  | 0.2 |
Ending balance of unrecognized tax benefits (excluding interest and penalties) |  | $ | 39.7 |  |  | $ | 32.4 |  |  | $ | 31.6 |
Interest and penalties associated with unrecognized tax benefits |  |  | 7.4 |  |  |  | 6.6 |  |  |  | 6.9 |
Ending balance of unrecognized tax benefits (including interest and penalties) |  | $ | 47.1 |  |  | $ | 39.0 |  |  | $ | 38.5 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 48 -Paragraph 21 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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