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Shareholders' Deficit | 9 Months Ended
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Sep. 30, 2022
Equity [Abstract] |
Shareholders' Deficit | 10. Shareholders’ Deficit Changes in shareholders’ deficit for the three months ended September 30, 2022 and 2021 were as follows:
|  | Three Months Ended September 30, 2022 |
|  | Common Shares |  |  | Treasury Stock |  |  | Paid-in Capital in Excess of Par Value |  |  | Accumulated Other Comprehensive Loss |  |  | Accumulated Deficit |  |  | Total Shareholders’ Deficit |
|  | (in millions) |
Balance as of June 30, 2022 |  | $ | 0.1 |  |  | $ | (328.9 | ) |  | $ | 185.8 |  |  | $ | (243.1 | ) |  | $ | (1,029.3 | ) |  | $ | (1,415.4 | )
Issuance of 0.1 common shares from exercise of SARs, restricted stock units, employee stock purchase plan, and other |  |  | — |  |  |  |  |  |  | 1.2 |  |  |  |  |  |  |  |  |  | 1.2 |
Additional capital from share-based compensation |  |  |  |  |  |  |  |  | 11.4 |  |  |  |  |  |  |  |  |  | 11.4 |
Repurchases of — common shares |  |  | — |  |  |  |  |  |  | (0.1 | ) |  |  |  |  |  | — |  |  |  | (0.1 | )
Retirement of treasury stock |  |  |  |  |  | 328.9 |  |  |  | (17.3 | ) |  |  |  |  |  | (311.6 | ) |  |  | — |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 82.2 |  |  |  | 82.2 |
Foreign currency translation adjustment, net of income taxes of $0.6 |  |  |  |  |  |  |  |  |  |  |  | (39.6 | ) |  |  |  |  |  | (39.6 | )
Unrealized loss on derivatives, net of income taxes of $— |  |  |  |  |  |  |  |  |  |  |  | (1.6 | ) |  |  |  |  |  | (1.6 | )
Balance as of September 30, 2022 |  | $ | 0.1 |  |  | $ | — |  |  | $ | 181.0 |  |  | $ | (284.3 | ) |  | $ | (1,258.7 | ) |  | $ | (1,361.9 | )
|  | Three Months Ended September 30, 2021 |
|  | Common Shares |  |  | Treasury Stock |  |  | Paid-in Capital in Excess of Par Value |  |  | Accumulated Other Comprehensive Loss |  |  | Accumulated Deficit |  |  | Total Shareholders’ Deficit |
|  | (in millions) |
Balance as of June 30, 2021 |  | $ | 0.1 |  |  | $ | (328.9 | ) |  | $ | 306.1 |  |  | $ | (192.3 | ) |  | $ | (1,076.2 | ) |  | $ | (1,291.2 | )
Issuance of 0.1 common shares from exercise of SARs, restricted stock units, employee stock purchase plan, and other |  |  | — |  |  |  |  |  |  | 1.2 |  |  |  |  |  |  |  |  |  | 1.2 |
Additional capital from share-based compensation |  |  |  |  |  |  |  |  | 14.4 |  |  |  |  |  |  |  |  |  | 14.4 |
Repurchases of 3.5 common shares |  |  | — |  |  |  |  |  |  | (9.6 | ) |  |  |  |  |  | (153.1 | ) |  |  | (162.7 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 117.4 |  |  |  | 117.4 |
Foreign currency translation adjustment, net of income taxes of $(0.6) |  |  |  |  |  |  |  |  |  |  |  | (14.5 | ) |  |  |  |  |  | (14.5 | )
Unrealized gain on derivatives, net of income taxes of $— |  |  |  |  |  |  |  |  |  |  |  | 2.0 |  |  |  |  |  |  | 2.0 |
Balance as of September 30, 2021 |  | $ | 0.1 |  |  | $ | (328.9 | ) |  | $ | 312.1 |  |  | $ | (204.8 | ) |  | $ | (1,111.9 | ) |  | $ | (1,333.4 | )
Changes in shareholders’ deficit for the nine months ended September 30, 2022 and 2021 were as follows:
|  | Nine Months Ended September 30, 2022 |
|  | Common Shares |  |  | Treasury Stock |  |  | Paid-in Capital in Excess of Par Value |  |  | Accumulated Other Comprehensive Loss |  |  | Accumulated Deficit |  |  | Total Shareholders’ Deficit |
|  | (in millions) |
Balance as of December 31, 2021 |  | $ | 0.1 |  |  | $ | (328.9 | ) |  | $ | 318.1 |  |  | $ | (211.8 | ) |  | $ | (1,169.0 | ) |  | $ | (1,391.5 | )
Issuance of 1.1 common shares from exercise of SARs, restricted stock units, employee stock purchase plan, and other |  |  | — |  |  |  |  |  |  | 3.4 |  |  |  |  |  |  |  |  |  | 3.4 |
Additional capital from share-based compensation |  |  |  |  |  |  |  |  | 37.5 |  |  |  |  |  |  |  |  |  | 37.5 |
Repurchases of 4.1 common shares |  |  | — |  |  |  |  |  |  | (24.0 | ) |  |  |  |  |  | (122.6 | ) |  |  | (146.6 | )
Retirement of treasury stock |  |  |  |  |  | 328.9 |  |  |  | (17.3 | ) |  |  |  |  |  | (311.6 | ) |  |  | — |
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 266.9 |  |  |  | 266.9 |
Foreign currency translation adjustment, net of income taxes of $0.2 |  |  |  |  |  |  |  |  |  |  |  | (67.1 | ) |  |  |  |  |  | (67.1 | )
Unrealized loss on derivatives, net of income taxes of $— |  |  |  |  |  |  |  |  |  |  |  | (5.4 | ) |  |  |  |  |  | (5.4 | )
Cumulative effect of accounting change relating to adoption of ASU 2020-06 |  |  |  |  |  |  |  |  | (136.7 | ) |  |  |  |  |  | 77.6 |  |  |  | (59.1 | )
Balance as of September 30, 2022 |  | $ | 0.1 |  |  | $ | — |  |  | $ | 181.0 |  |  | $ | (284.3 | ) |  | $ | (1,258.7 | ) |  | $ | (1,361.9 | )
|  | Nine Months Ended September 30, 2021 |
|  | Common Shares |  |  | Treasury Stock |  |  | Paid-in Capital in Excess of Par Value |  |  | Accumulated Other Comprehensive Loss |  |  | Accumulated Deficit |  |  | Total Shareholders’ Deficit |
|  | (in millions) |
Balance as of December 31, 2020 |  | $ | 0.1 |  |  | $ | (328.9 | ) |  | $ | 342.3 |  |  | $ | (182.2 | ) |  | $ | (687.4 | ) |  | $ | (856.1 | )
Issuance of 1.6 common shares from exercise of SARs, restricted stock units, employee stock purchase plan, and other |  |  | — |  |  |  |  |  |  | 3.2 |  |  |  |  |  |  |  |  |  | 3.2 |
Additional capital from share-based compensation |  |  |  |  |  |  |  |  | 42.3 |  |  |  |  |  |  |  |  |  | 42.3 |
Repurchases of 18.8 common shares |  |  | — |  |  |  |  |  |  | (75.7 | ) |  |  |  |  |  | (833.5 | ) |  |  | (909.2 | )
Net income |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 409.0 |  |  |  | 409.0 |
Foreign currency translation adjustment, net of income taxes of $0.9 |  |  |  |  |  |  |  |  |  |  |  | (25.8 | ) |  |  |  |  |  | (25.8 | )
Unrealized gain on derivatives, net of income taxes of $— |  |  |  |  |  |  |  |  |  |  |  | 3.2 |  |  |  |  |  |  | 3.2 |
Balance as of September 30, 2021 |  | $ | 0.1 |  |  | $ | (328.9 | ) |  | $ | 312.1 |  |  | $ | (204.8 | ) |  | $ | (1,111.9 | ) |  | $ | (1,333.4 | )
Dividends The Company has not declared or paid cash dividends since 2014. 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, Herbalife Nutrition Ltd.’s available distributable reserves under Cayman Islands law, restrictions imposed by the 2018 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. Share Repurchases On February 9, 2021, the Company’s board of directors authorized a new three-year $1.5 billion share repurchase program that will expire on February 9, 2024, which replaced the Company’s prior share repurchase authorization that was set to expire on October 30, 2023 and had approximately $7.9 million of remaining authorized capacity when it was replaced. This share repurchase program allows the Company, which includes an indirect wholly-owned subsidiary of Herbalife Nutrition Ltd., to repurchase the Company’s common shares at such times and prices as determined by management, as market conditions warrant, and to the extent Herbalife Nutrition Ltd.’s distributable reserves are available under Cayman Islands law. The 2018 Credit Facility permits the Company to repurchase its common shares as long as no default or event of default exists and other conditions, such as specified consolidated leverage ratios, are met. As of September 30, 2022, the remaining authorized capacity under the Company’s $1.5 billion share repurchase program was approximately $985.5 million. During the nine months ended September 30, 2022, the Company repurchased approximately 3.7 million of its common shares through open-market purchases at an aggregate cost of approximately $131.8 million, or an average cost of $35.73 per share, and subsequently retired these shares. During January 2021, the Company repurchased from Mr. Carl C. Icahn and certain of his affiliates an aggregate of approximately 12.5 million common shares of the Company at an aggregate cost of approximately $600.0 million, or $48.05 per share, and subsequently retired these shares. In addition, during the nine months ended September 30, 2021, the Company repurchased approximately 5.7 million of its common shares through open-market purchases at an aggregate cost of approximately $281.1 million, or an average cost of $49.27 per share, and subsequently retired these shares. In total, during the nine months ended September 30, 2021, the Company repurchased approximately 18.2 million of its common shares at an aggregate cost of approximately $881.1 million, or an average cost of $48.43 per share. As of December 31, 2021, the Company held approximately 10.0 million of treasury shares for U.S. GAAP purposes. These treasury shares increased the Company’s shareholders’ deficit and were reflected at cost within the Company’s accompanying condensed consolidated balance sheet as of December 31, 2021. Although these shares were owned by an indirect wholly-owned subsidiary of the Company and remained legally outstanding, they were reflected as treasury shares under U.S. GAAP and therefore reduced the number of common shares outstanding within the Company’s condensed consolidated financial statements and the weighted-average number of common shares outstanding used in calculating earnings per share. The common shares of Herbalife Nutrition Ltd. held by the indirect wholly-owned subsidiary, however, remained outstanding on the books and records of the Company’s transfer agent and therefore still carried voting and other share rights related to ownership of the Company’s common shares, which could be exercised. So long as it was consistent with applicable laws, such shares were voted by such subsidiary in the same manner, and to the maximum extent possible in the same proportion, as all other votes cast with respect to any matter properly submitted to a vote of Herbalife Nutrition Ltd.’s shareholders. In August 2022, the Company retired these 10.0 million treasury shares and as a result the amount of its treasury shares reflected at cost within the Company's accompanying condensed consolidated balance sheet decreased by $328.9 million as of September 30, 2022, compared to December 31, 2021. The Company also allocated the excess of the original repurchase price of these common shares over the par value of the shares acquired between shareholders deficit and additional paid-in capital. As a result of the retirement of its treasury shares these approximately 10 million shares no longer remained legally outstanding as of September 30, 2022. 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 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 condensed 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. During the three and nine months ended September 30, 2022 and 2021, the Company withheld shares on its vested restricted stock units and exercised SARs relating to its share-based compensation plans. The Company reflects the aggregate purchase price of its common shares repurchased as an increase to shareholders’ deficit. The Company generally allocated the purchase price of the repurchased shares to accumulated deficit, common shares, and additional paid-in capital, with the exception of treasury shares, which are recorded separately on the Company’s condensed consolidated balance sheets. For the nine months ended September 30, 2022 and 2021, the Company’s share repurchases, inclusive of transaction costs, were $131.8 million and $881.1 million, respectively, under the Company’s share repurchase programs, and $14.8 million and $28.1 million, respectively, due to shares withheld for tax purposes related to the Company’s share-based compensation plans. For the nine months ended September 30, 2022 and 2021, the Company’s total share repurchases, including shares withheld for tax purposes, were $146.6 million and $909.2 million, respectively, and have been recorded as an increase to shareholders’ deficit within the Company’s condensed consolidated balance sheets. Accumulated Other Comprehensive Loss The following table summarizes changes in accumulated other comprehensive loss by component during the three months ended September 30, 2022 and 2021:
|  | Changes in Accumulated Other Comprehensive Loss by Component |
|  | Three Months Ended |
|  | September 30, 2022 |  |  | September 30, 2021 |
|  | Foreign Currency Translation Adjustments |  |  | Unrealized Loss on Derivatives |  |  | Total |  |  | Foreign Currency Translation Adjustments |  |  | Unrealized (Loss) Gain on Derivatives |  |  | Total |
|  | (in millions) |
Beginning balance |  | $ | (239.1 | ) |  | $ | (4.0 | ) |  | $ | (243.1 | ) |  | $ | (189.7 | ) |  | $ | (2.6 | ) |  | $ | (192.3 | )
Other comprehensive (loss) income before reclassifications, net of tax |  |  | (39.6 | ) |  |  | (2.6 | ) |  |  | (42.2 | ) |  |  | (14.5 | ) |  |  | 0.9 |  |  |  | (13.6 | )
Amounts reclassified from accumulated other comprehensive loss to income, net of tax(1) |  |  | — |  |  |  | 1.0 |  |  |  | 1.0 |  |  |  | — |  |  |  | 1.1 |  |  |  | 1.1 |
Total other comprehensive (loss) income, net of reclassifications |  |  | (39.6 | ) |  |  | (1.6 | ) |  |  | (41.2 | ) |  |  | (14.5 | ) |  |  | 2.0 |  |  |  | (12.5 | )
Ending balance |  | $ | (278.7 | ) |  | $ | (5.6 | ) |  | $ | (284.3 | ) |  | $ | (204.2 | ) |  | $ | (0.6 | ) |  | $ | (204.8 | )
(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 loss into income during the three months ended September 30, 2022 and 2021. Other comprehensive loss before reclassifications was net of tax expense of $0.6 million for foreign currency translation adjustments for the three months ended September 30, 2022. Other comprehensive loss before reclassifications was net of tax benefit of $0.6 million for foreign currency translation adjustments for the three months ended September 30, 2021. The following table summarizes changes in accumulated other comprehensive loss by component during the nine months ended September 30, 2022 and 2021:
|  | Changes in Accumulated Other Comprehensive Loss by Component |
|  | Nine Months Ended |
|  | September 30, 2022 |  |  | September 30, 2021 |
|  | Foreign Currency Translation Adjustments |  |  | Unrealized Loss on Derivatives |  |  | Total |  |  | Foreign Currency Translation Adjustments |  |  | Unrealized (Loss) Gain on Derivatives |  |  | Total |
|  | (in millions) |
Beginning balance |  | $ | (211.6 | ) |  | $ | (0.2 | ) |  | $ | (211.8 | ) |  | $ | (178.4 | ) |  | $ | (3.8 | ) |  | $ | (182.2 | )
Other comprehensive (loss) income before reclassifications, net of tax |  |  | (67.1 | ) |  |  | (6.5 | ) |  |  | (73.6 | ) |  |  | (25.8 | ) |  |  | 0.7 |  |  |  | (25.1 | )
Amounts reclassified from accumulated other comprehensive loss to income, net of tax(1) |  |  | — |  |  |  | 1.1 |  |  |  | 1.1 |  |  |  | — |  |  |  | 2.5 |  |  |  | 2.5 |
Total other comprehensive (loss) income, net of reclassifications |  |  | (67.1 | ) |  |  | (5.4 | ) |  |  | (72.5 | ) |  |  | (25.8 | ) |  |  | 3.2 |  |  |  | (22.6 | )
Ending balance |  | $ | (278.7 | ) |  | $ | (5.6 | ) |  | $ | (284.3 | ) |  | $ | (204.2 | ) |  | $ | (0.6 | ) |  | $ | (204.8 | )
(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 loss into income during the nine months ended September 30, 2022 and 2021. Other comprehensive loss before reclassifications was net of tax expense of $0.2 million for foreign currency translation adjustments for the nine months ended September 30, 2022. Other comprehensive loss before reclassifications was net of tax expense of $0.9 million for foreign currency translation adjustments for the nine months ended September 30, 2021.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI https://asc.fasb.org/topic&trid=2208762 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI https://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI https://asc.fasb.org/extlink&oid=126973232&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 6 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126731327&loc=SL126733271-114008 + Details
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