Stephanie ruhle, and her extended conversation with the cfo of herbalife. John, thank you for joining us today. I want to start with Hershey Square has been saying for the last year the you have been miss marking your venezuelan exposure, and you made a correction. Why is that . A correction. Ake sachsen circumstances drove the weight we used in venezuela. Every company use the same rate of 6. 1. Venezuela is an unusual market. It introduced alternate Exchange Rates in the first quarter. We moved to seek at one, which is what the median market did. A few more moved to seek at two. 30th . Do it sometime or 30th . Ptember we signed a supply agreement in october with a local manufacturer to produce our second largest product in venezuela. They will start producing next year. Opportunitytes the to get see cad one. If you had done it in june, how much worse would your financials look . Cadf we had gone to see two in the first quarter, we wouldve had an 8 impact. 18 impact. Industry to the chairman of your Credit Committee is resigning . Hes a great board member. He has been a mentor to me since i came on board. He led us through the reorganization process last year. At the 10 year mark, he is retiring from our company. He is doing so with appropriate notice, and staying on board to the filing of the in february. Hes not retiring completely. Theres other endeavors hes involved with. Hes only walking away from herbalife. Why . Audit Committee Takes a lot of time. But audit committees in general take a lot of time. He is moving on to other things after 10 years. Could we see other top executives at herbalife simply get burnt out and walk away, given what you had to go through through the bill ackman attacks to half years ago . You have to assume people in your position might be sick of it, others might want to walk out. Ever. As engaged as im committed to herbalife as much as ive ever been committed. I think you see that across the management team. We have been able to attract a couple of seasoned Senior Executives to join the company and the last behemoth, including a former ftc commissioner. You mentioned the fcc commissioner. Some press reports of said you are close to some sort of settlor with the ftc. Youve said that herbalife will be completely exonerated. Where do you stand . We are confident in our Business Model and our members. Inquiry is confidential. We respect the integrity of the inquiry. We are not going to comment quickly until that inquiry is over. Why salesalk about are down. Specifically in china and south america. Obesity is at an alltime high. You have a Nutrition Supplement company. Why are sales down . Sales are up. The growth rate has declined. But we are still growing. The sales growth in the Third Quarter is a record sales number for thirdquarter sales. Actually 2. 5 , excluding venezuela which is a unique market, we would be up 7 . We are still growing, just at a rate below what we have historically grown. That is temporary. What do you attribute that to, specifically in china . The manage decline . Chinas of 23 in this quarter. Thats less than you thought it would be. Chinas not less than we thought it would be. To year growth rates are online with a were last quarter. If you look at last year, Second Quarter of 2013, china was up 15 . In the Third Quarter, up 17 . Those, chinaine still growing tremendously strong, and right on track with expectations. What i think people are misunderstanding in china is what we did in china with new members new sales reps, we suspended the introduction of new members for one month. That didnt impact the business, sales in china are strong, with a strong consumer base. Why do you think you have seen growth rates low . Slow . Is it because of the new policies . Made a lot of changes, and accelerated changes over the last two years. Wethe last three months, accelerated further, changes that really helped members become sales leaders over greater. Period of time. Weve onemonth pathway, to of pathway, and a 12 month caf au lait. 12 monthin pathway. We are moving toward systemic changes that help members migrate to that longer development. You were having more supervisor turnover than ever. What do you mean more are being retained . Our retention rate will be higher than last year. We are north of 50 . We were 52 in sales retention last year. We will be somewhere north of that by the end of this year. Is that because you have lowered the standards to become a supervisor . Not at all. You have lowered the amount of product those new supervisors have to buy. The first cap was 4000 volume points. Or 5000 over two months, or 5000 over 12 months. Four or five,from to be five plus. It takes the incentive away from people who do a onemonth pathway. For requalification, which is what we havent made any changes. The retention is the same as it has been for the last five years. Do you feel you have lost momentum . And analyst to is covered herbalife who covered herbalife says the constant battle between bill ackman and herbalife may be half hampering your growth. Some of the changes we are making is moderating growth. Its building a Stronger Foundation with which to build from what this pipeline gets run through. Once the salesforce gets assimilated to the changes. Is the new normal. And the new normal is slower than where you once were . I think its a shortterm moderation. Then we go back to what we consider longterm growth rates. Do you feel the bill ackmans attack is affected your growth . I think what weve done is making us a Better Company. I will ask you one more time. Bill ackman. Do you think his attack, his very public short against herbalife, has for your company . Has hurt your company . I think everything going on is helping our customers and company. I think with every thing going on in the changes we have accelerated you are not answering my question. You are describing it to one individual. I would like you to answer that question. Bill ackmans very a public short do you think it has hurt your company . Im saying we are a Stronger Company today than we were a quarter before he came out with that. Our policies are stronger, our migration to this extended new sales leader approach is stronger. Our gold standard, with 100 return policy and 12 month buyback is the strongest in the industry. Those are elements we would have gone to any way. But we have accelerated changes as a result of the environment we live in. We are a Better Company today than we were two years ago. We are coming off halloween, thanks giving is coming. I need to lose 10 pounds, its the right time to get Nutrition Supplements. John, thank you for joining us. I know this battle continues. It is not easy. John is the ceo of herbalife. Thank you. Stephanie, thank you so much. Up next, American Voters head to the polls in todays midterm elections. The roundtable discussion includes reports from kentucky, colorado, and washington, d. C. Bottom line continues in a moment. We turn now to comprehensive coverage of election 2014. Voters head to local polling stations around the United States. Some are casting ballots for republicans in hopes that it will mean more jobs. Others worry that electing more republicans to congress will only add to gridlock in washington. We have a roundtable discussion ready to go in louisville, kentucky. Ande peter cook colorado, and in washington, cory bowles. Gentlemen, thank you. Your group predicted last month it democrats will narrowly maintain control of the senate. Is that still the case on election day . We have not changed our view. Obviously, it is very close out there. There is still a pathway to democrats maintaining the southern majority. There is still a path that democrats could pick up one or two republican held seats currently. I think we will know pretty early on whether or not that is the case. Some of the most competitive seats are among those polls closing first. , one of the most closely watched senate races in kentucky. Senate Minority Leader Mitch Mcconnell is facing democrat allyson m grimes. The vote there really about president obama, who lost the commonwealth by over 20 points . President obama has been a huge issue in this campaign. Mitch mcconnell saying if you vote for rhymes, you will get more of president obamas policies. She has run away from president obama at the same time challenging Mitch Mcconnell, making the case that he is a guardian of gridlock. The republican player on capitol hill who is standing in the way of progress on a whole host of key issues. President obama played a central role here. At the end of the day, there is a lot of personality. Is 35 years old. A lot voters to consider. Is anotherlorado state that could decide the balance of power in the senate. Iner just spoke about age kentucky. Will the age difference between the candidates and colorado be a determining factor . Mark udall is 64 years old. His republican challenger is 40 years old. It may be in the sense that cory gardner is a very young, charismatic, captivating candidate. Age itself hasnt really been an issue. Positivity, his ability to present himself as Something Different than the prickly Washington Republicans that voters seem to be tired of really has been a big leg up. It surprised a lot of democrats, who thought that youd all l might have a better chance at reelection. You just spoke a few minutes ago about what will happen if theres a shift in our in the senate. Most voters will go to bed tonight, will they know who is in control of the senate by midnight . Its highly unlikely that we know who controls the senate next year by midnight tonight. It democrats are able to maintain some of the early closing seats, New Hampshire and North Carolina specifically, there is still a chance that the alaskan polls dont even close until midnight. It seems logical that we wont know till wednesday were thursday given the disparate population in that state. Georgia, two of the other most closely contested races, it is looking likely if not certain in the case of louisiana, that we are headed for runoffs. Those dont occur for one or two months in the future. If republicans gain control of the u. S. Senate, its not just about legislation. All of the Committee Chairmanships would change hands. Would Mitch Mcconnell be a dealmaker as majority leader . That is an open question right now. There are a lot of questions about what Mitch Mcconnell would do if he actually rises to this position that he has coveted for so long. You can make the case that we are looking at gridlock on steroids. But ive spoken with democratic lawmakers here today. Knows mcconnell well. He is convinced the mcconnell would be a dealmaker, reaching across the aisle to solidify his legacy if he rises to majority leader. A whole host of things would change. You were talking about key committees affecting the business community, banking, the environment, major changes there. An entire seachange on capitol hill. You mentioned that if senator mcconnell does decide to be the dealbreaker, will he get out frank outflanked from his right . Dont see Party Members want him to not negotiate with the president on anything . You have highlighted what will play out most likely. They may think Mitch Mcconnell has interest in being a dealmaker, but it will be hard giving conservatives in the house and within his own senate rank very difficult for Mitch Mcconnell to be able to orchestrate those kind of deals when he has ted cruz looking over his shoulder. That will be the balancing act that Mitch Mcconnell will have to walk in. He is being very coy about not spelling out which direction he will head. Josh, lets talk more about what we are seeing with some democrats. They seem to be running away from president obama. Because of his low cruel ratings. They are discussing their independent streaks, and their willingness to disagree with the white house if necessary. Much of you seen that have you seen that . The president is a huge political liability and colorado. There is a poll that has his Approval Rating at about 35 . Remember, this is a state that obama won both times most recently in 2012 by over five points. His popularity has plummeted, and democrats in colorado unpopularitymas to the struggles of their candidate in the house, senate, and the governor running for reelection. It has been a big problem. You see on the Television Ads that are just bombarding voters here that nearly every republican ad seeks to tie the candidate to president obama. That has had an effect. Josh, does that mean that otherr udall, like democrats running for office, are they trying to display their independent streak by talking about more local issues as opposed to National Issues . A little bit. Strategy hasls not been to localize the election but to turn it into one about abortion and birth control. They think that the way to beat the republican cory gardner is to disqualify him as too extreme. Gardner is a member of the house, he is one of the most conservative members of the house. The democratic strategy was to treat him as too extreme for colorado. This is a strategy that worked for democrats in 2010, when Michael Bennett one a narrow reelection in what we all remove or was a tea party year. Colorado gop has had a hard time over the last decade. What is interesting about this election, and the reason why both parties think it will go so late, is that gardner is not successfully branded as extremists. What is Corporate America going to be looking for tonight, regardless of which Party Controls the senate . We think the markets have already priced into a large extent a republican victory. Once it is known with the outcome is, in terms of the Senate Majority next year, if dems do maintain a majority, i wouldnt be surprised if we saw a selloff in financials and Energy Stocks. Perhaps not an enduring one, but a reaction to the surprise result. In terms of next year under republican control, there is next dictation that republicans will pursue tax reform at the corporate level. And also advances in trade. Cory bowles, joining us from washington. Peter cook joining us from louisville, kentucky. And from littleton, colorado, josh green of bloomberg businessweek. Gentlemen, thank you. You can watch this on bloomberg tv for copperheads of election ash comprehensive election results. We have extended coverage of the results starting at 7 00 new york time it. Mightd the election all or through midnight, at least it could go all my long. Bottom line, continues in a moment. Welcome back. Lets get a quick look on the top stories we are on this election day in the United States. Oil tumbled to a threeyear low with saudi arabia applies cuts deepened price cuts deep into selloff. Global demand growth slowed and supplies swelled from producers outside opec, with United States pumping out the fastest pace in more than 30 years. Thats a look at one of the top stories were following on this tuesday. A quiet day on the equity markets on this election day, 2014. Most u. S. Stocks falling, pulling the s p down from a near record. Reachedlumped once oil a threeyear low. Lets take a quick look at the numbers. The s p 500 is down about a third of a percent at 2011. The Dow Jones Industrial average on this tuesday the dow is up fractionally right now. Its at 13,000 379. The nasdaq composite index is down about 4 10 of a percent at 4618. Again, many on the street taking a look at what is going on in the midterms and seeing whether there will be a republican control of the u. S. Senate going into 2015. Wall street eagerly anticipating the results tonight. Bottom line, continues adjust to moment. Welcome back to this second half hour of bottom line. Thank you for staying with us. Continues inerence las vegas. Leaders are discussing the future of money and mobile payments. Joined by tim is baldwin, the founder of the first mobile tipping app. Tim baldwin founded this app to solve a problem we all have. There is a problem where cash is under serving tipping today. People are carrying less cash today. The fact is, tippers, they are fumbling for cash while in the line, they just dont have cash to we dont even have the right to nomination they dont have cash. Or they dont have the right to nomination. We do not want to be a jerk. E want to tip especially in las vegas, they live on tips. What we have on, is we have looked at the tip scenario, and there is a problem with the tipping ross us today. Process today. I have had this problem countless times. I like to walk out of the house with a phone in one pocket and a couple of cards in the other rocket, with my identification. I never carry cash. Mes happens to frequently. So you build an app. Explain how it works, and im going to do it for you. You are going to tip me . I downloaded the app. It should recognize you. I have never heard of this before, and somebody walks up to me and says i would like to tip you with this, i will say fantastic. You take a photo of my face you take a photo of my face. Send, and the need can tip receipt. Two problems. Are you on there . I am registered on there. To servers, and it is matched on the backend. It is automated matching, and then a process that can go back and match faces as well. So for people to get the money i want to give them, be have to sign up . Ultimately. They dont have to sign up during the tip transaction to the out,go on it register their face, and will deposit the money into their account. I feel like there are two kinds of tipping. There i