{
  "docId": "019de06f-5162-774d-b6ad-08aa71fdb0bc",
  "docSlug": "345ff108ad03e42764e2730db1ef15e0",
  "documentTitle": "Pershing Square | Activist Presentation Deck | 63 slides",
  "authorId": "pershing-square",
  "authorName": "Pershing Square Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2014-03-01 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 42,
  "pageCount": 63,
  "prevPage": 41,
  "nextPage": 43,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "balanced",
  "nDataPoints": 36,
  "notes": "The slide uses a table from the 2013 10K to demonstrate that China's contribution margin is artificially inflated compared to other segments.",
  "elementsJson": null,
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019de06f-5162-774d-b6ad-08aa71fdb0bc/42",
  "deckHref": "/decks/019de06f-5162-774d-b6ad-08aa71fdb0bc",
  "deckJsonHref": "/decks/019de06f-5162-774d-b6ad-08aa71fdb0bc.json",
  "deckAnchorHref": "/decks/019de06f-5162-774d-b6ad-08aa71fdb0bc#slide-42",
  "components": [
    {
      "bbox": {
        "h": 0.15,
        "w": 0.92,
        "x": 0.04,
        "y": 0.15
      },
      "kind": "paragraph",
      "text": "Herbalife discloses Contribution Margin (net sales less cost of sales and royalty overrides) in its Segment Information, and it distinguishes China from the other “Primary Reporting Segments.” Unique to China, however, Herbalife does not deduct its “[c]ompensation to China sales employees and service fees to China licensed business providers” to derive China Contribution Margin (and, instead, includes that expense in SG&A).",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3d8d367f-cb94-4356-8b96-bbf3520ccca4",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.1,
        "w": 0.92,
        "x": 0.04,
        "y": 0.88
      },
      "kind": "source-note",
      "text": "(1) Contribution margin consists of net sales less cost of sales and royalty overrides.\n(2) Compensation to China sales employees and service fees to China independent service providers totaling $215.6 million, $123.5 million, and $96.8 million for the years ended December 31, 2013, 2012, and 2011, respectively, are included in selling, general and administrative expenses while Member compensation for all other countries is included in contribution margin.",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e9d6b022-f50d-4851-b2b4-8027b86a71b7",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.45,
        "w": 0.92,
        "x": 0.04,
        "y": 0.38
      },
      "kind": "table",
      "text": "Table showing Net Sales and Contribution Margin by region for 2011-2013",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5d374720-dcf8-491d-8309-0f1ac952c653",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.1,
        "w": 0.8,
        "x": 0.04,
        "y": 0.04
      },
      "kind": "title",
      "text": "What do Herbalife’s SEC filings tell us about its China business model?",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "fce84620-de02-4bd2-9b78-ed9e1ab39327",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "2c1c5620-330c-4384-8cb4-0f3189aa530e",
      "evidence": "The slide explicitly points out an accounting discrepancy used to mask the true cost structure of the China business.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 55,
      "from": 8,
      "beatId": "8f41381c-764a-4bb5-a641-90d1aab210eb",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "Expose Contradiction",
      "beatSlug": null,
      "evidence": "The document presents multiple slides that expose contradictions in Herbalife's business practices in China, highlighting the company's violations of Chinese law.",
      "position": 0,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}