FINANCIAL PERFORMANCE

($ in thousands, except per share amounts)

4th Quarter

Twelve Months Ended
December 31,

2014

2013

Change

2014

2013

Change

Total Revenues

$

799,957

$

584,946

37

%

$

2,877,188

$

2,616,907

10

%

Reported Net Income

$

(53,483)

$

(775,910)

(93)

%

$

(721,319)

$

(685,339)

5

%

Reported Diluted EPS

$

(0.35)

$

(6.74)

(95)

%

$

(4.91)

$

(6.05)

(19)

%

Adjusted Net Income

$

184,884

$

123,697

49

%

$

674,898

$

573,996

18

%

Adjusted Diluted Weighted
Average Shares

159,213

128,644

24

%

156,730

119,829

31

%

Adjusted Diluted EPS

$

1.16

$

0.96

21

%

$

4.31

$

4.79

(10)

%

Supplemental Financial Information

The following tables provide a reconciliation of our reported (GAAP) statements of operations to our adjusted statements of operations (Non-GAAP) for each of the three months ended December 31, 2014 and 2013 (in thousands, except per share data):

Three Months Ended December 31, 2014 (unaudited)

 Actual
Reported
(GAAP)

Adjustments

Non-GAAP
Adjusted

 REVENUES

$

799,957

$

—

$

799,957

 COSTS AND EXPENSES:

Cost of revenues

423,656

(113,988)

(1)

309,668

Selling, general and administrative

192,282

(20,363)

(2)

171,919

Research and development

40,431

(12,402)

(3)

28,029

Litigation-related and other contingencies, net

179,999

(179,999)

(4)

—

Asset impairment charges

22,542

(22,542)

(5)

—

Acquisition-related and integration items

13,715

(13,715)

(6)

—

 OPERATING (LOSS) INCOME

$

(72,668)

$

363,009

$

290,341

 INTEREST EXPENSE, NET

59,587

(885)

(7)

58,702

 LOSS ON EXTINGUISHMENT OF DEBT

105

(105)

(8)

—

 OTHER INCOME, NET

(12,443)

8,613

(9)

(3,830)

 (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE
   INCOME TAX

$

(119,917)

$

355,386

$

235,469

 INCOME TAX

(63,248)

114,035

(10)

50,787

 (LOSS) INCOME FROM CONTINUING OPERATIONS

$

(56,669)

$

241,351

$

184,682

 DISCONTINUED OPERATIONS, NET OF TAX

3,426

(2,742)

(11)

684

 CONSOLIDATED NET (LOSS) INCOME

$

(53,243)

$

238,609

$

185,366

 Less: Net income attributable to noncontrolling interests

240

242

(12)

482

 NET (LOSS) INCOME ATTRIBUTABLE TO ENDO INTERNATIONAL
   PLC

$

(53,483)

$

238,367

$

184,884

 DILUTED EARNINGS PER SHARE DATA ATTRIBUTABLE TO ENDO
   INTERNATIONAL PLC ORDINARY SHAREHOLDERS:

 Continuing operations

$

(0.37)

$

1.16

 Discontinued operations

0.02

—

 DILUTED (LOSS) EARNINGS PER SHARE

$

(0.35)

$

1.16

 DILUTED WEIGHTED AVERAGE SHARES

153,772

159,213

Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:

(1)

To exclude amortization of commercial intangible assets related to developed technology of $83,839, a fair value step-up in inventory of $25,493 and accruals for milestone payments to partners of $4,656.

(2)

To exclude certain separation benefits and other costs incurred in connection with continued efforts to enhance the company's operations of $9,318, amortization of intangible assets of $2,485 and mesh litigation-related defense costs of $8,560.

(3)

To exclude milestone payments to partners of $12,165 and adjustments to accruals for other costs incurred in connection with continued efforts to enhance the company's operations of $237.

(4)

To exclude the impact of net charges primarily for mesh-related and other product liability.

(5)

To exclude asset impairment charges.

(6)

To exclude acquisition and integration costs associated with the Paladin, Boca, Somar, DAVA, Auxilium and other acquisitions.

(7)

To exclude additional non-cash interest expense related to our 1.75% Convertible Senior Subordinated Notes.

(8)

To exclude the net loss on extinguishment of debt in connection with various refinancing and note repurchase activity.

(9)

To exclude adjustments to the gain on sale of certain early-stage drug discovery and development assets of $1,200 and foreign currency impact related to the remeasurement of intercompany debt instruments of $7,413.

(10)

Primarily to reflect the tax savings from acquired tax attributes and the effect of the pre-tax adjustments above at applicable rates.

(11)

Primarily to exclude the after-tax adjustment to the previously recorded gain on sale of the HealthTronics business and certain other sale-related costs.

(12)

To exclude the impact of the portion of certain of the above adjustments attributable to noncontrolling interests.

Three Months Ended December 31, 2013 (unaudited)

 Actual
Reported
(GAAP)

Adjustments

Non-GAAP
Adjusted

 REVENUES

$

584,946

$

—

$

584,946

 COSTS AND EXPENSES:

Cost of revenues

253,886

(51,825)

(1)

202,061

Selling, general and administrative

186,443

(34,705)

(2)

151,738

Research and development

33,623

(7,029)

(3)

26,594

Litigation-related and other contingencies

325,144

(325,144)

(4)

—

Asset impairment charges

514,255

(514,255)

(5)

—

Acquisition-related and integration items

4,076

(4,076)

(6)

—

 OPERATING (LOSS) INCOME

$

(732,481)

$

937,034

$

204,553

 INTEREST EXPENSE, NET

43,910

(5,926)

(7)

37,984

 OTHER INCOME, NET

(1,330)

—

(1,330)

 (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE
   INCOME TAX

$

(775,061)

$

942,960

$

167,899

 INCOME TAX

(106,984)

148,994

(8)

42,010

 (LOSS) INCOME FROM CONTINUING OPERATIONS

$

(668,077)

$

793,966

$

125,889

 DISCONTINUED OPERATIONS, NET OF TAX

(93,666)

105,641

(9)

11,975

 CONSOLIDATED NET (LOSS) INCOME

$

(761,743)

$

899,607

$

137,864

 Less: Net income attributable to noncontrolling interests

14,167

—

14,167

 NET (LOSS) INCOME ATTRIBUTABLE TO ENDO INTERNATIONAL
   PLC

$

(775,910)

$

899,607

$

123,697

 DILUTED EARNINGS PER SHARE DATA ATTRIBUTABLE TO ENDO
   INTERNATIONAL PLC ORDINARY SHAREHOLDERS:

 Continuing operations

$

(5.80)

$

0.98

 Discontinued operations

(0.94)

(0.02)

 DILUTED (LOSS) EARNINGS PER SHARE

$

(6.74)

$

0.96

 DILUTED WEIGHTED AVERAGE SHARES

115,105

128,644

Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:

(1)

To exclude amortization of commercial intangible assets related to marketed products of $39,493 and accruals for milestone payments to partners of $12,332.

(2)

To exclude certain separation benefits and other costs incurred in connection with continued efforts to enhance the company's operations of $13,602, amortization of customer relationships of $2,515 and mesh litigation-related defense costs of $18,588.

(3)

To exclude milestone payments to partners of $6,307 and certain separation benefits and other costs incurred in connection with continued efforts to enhance the company's operations of $722.

(4)

To exclude the impact of charges primarily for mesh-related product liability.

(5)

To exclude asset impairment charges.

(6)

Primarily to exclude integration costs associated with prior acquisitions.

(7)

To exclude additional interest expense as a result of the prior adoption of ASC 470-20.

(8)

Primarily to reflect the tax savings from acquired tax attributes and the effect of the pre-tax adjustments above at applicable rates.

(9)

To exclude certain items related to the HealthTronics business, which is reported as Discontinued operations, net of tax.

The following tables provide a reconciliation of our reported (GAAP) statements of operations to our adjusted statements of operations (Non-GAAP) for each of the twelve months ended December 31, 2014 and 2013 (in thousands, except per share data):

Twelve Months Ended December 31, 2014 (unaudited)

 Actual
Reported
(GAAP)

Adjustments

Non-GAAP
Adjusted

 REVENUES

$

2,877,188

$

—

$

2,877,188

 COSTS AND EXPENSES:

Cost of revenues

1,400,555

(350,053)

(1)

1,050,502

Selling, general and administrative

795,855

(160,275)

(2)

635,580

Research and development

154,203

(37,424)

(3)

116,779

Litigation-related and other contingencies, net

1,315,442

(1,315,442)

(4)

—

Asset impairment charges

22,542

(22,542)

(5)

—

Acquisition-related and integration items

85,534

(85,534)

(6)

—

 OPERATING (LOSS) INCOME

$

(896,943)

$

1,971,270

$

1,074,327

 INTEREST EXPENSE, NET

227,115

(12,192)

(7)

214,923

 LOSS ON EXTINGUISHMENT OF DEBT

31,817

(31,817)

(8)

—

 OTHER INCOME, NET

(30,174)

18,192

(9)

(11,982)

 (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE
   INCOME TAX

$

(1,125,701)

$

1,997,087

$

871,386

 INCOME TAX

(401,840)

597,005

(10)

195,165

 (LOSS) INCOME FROM CONTINUING OPERATIONS

$

(723,861)

$

1,400,082

$

676,221

 DISCONTINUED OPERATIONS, NET OF TAX

5,677

(2,048)

(11)

3,629

 CONSOLIDATED NET (LOSS) INCOME

$

(718,184)

$

1,398,034

$

679,850

 Less: Net income attributable to noncontrolling interests

3,135

1,817

(12)

4,952

 NET (LOSS) INCOME ATTRIBUTABLE TO ENDO INTERNATIONAL
   PLC

$

(721,319)

$

1,396,217

$

674,898

 DILUTED EARNINGS PER SHARE DATA ATTRIBUTABLE TO ENDO
   INTERNATIONAL PLC ORDINARY SHAREHOLDERS:

 Continuing operations

$

(4.92)

$

4.31

 Discontinued operations

0.01

—

 DILUTED (LOSS) EARNINGS PER SHARE

$

(4.91)

$

4.31

 DILUTED WEIGHTED AVERAGE SHARES

146,896

156,730

Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:

(1)

To exclude amortization of commercial intangible assets related to developed technology of $270,566, a fair value step-up in inventory of $65,582 and accruals for milestone payments to partners of $13,905.

(2)

To exclude certain separation benefits and other costs incurred in connection with continued efforts to enhance the company's operations of $29,970, amortization of intangible assets of $10,031, mesh litigation-related defense costs of $53,002, offset by insurance recoveries of $(22,000), a charge for an additional year of the branded prescription drug fee in accordance with IRS regulations issued in the third quarter of 2014 of $24,972, accruals for excise tax payments of $54,300 and a charge of $10,000 related to the non-recoverability of certain non-trade receivables that did not relate to our core operating activities.

(3)

To exclude milestone payments to partners of $37,869 and adjustments to accruals for other costs incurred in connection with continued efforts to enhance the company's operations of $(445).

(4)

To exclude the impact of net charges primarily for mesh-related and other product liability.

(5)

To exclude asset impairment charges.

(6)

To exclude acquisition and integration costs associated with the Paladin, Boca, Somar, DAVA, Auxilium and other acquisitions.

(7)

To exclude additional non-cash interest expense related to our 1.75% Convertible Senior Subordinated Notes.

(8)

To exclude the net loss on extinguishment of debt in connection with various refinancing and note repurchase activity.

(9)

To exclude the net gain on sale of certain early-stage drug discovery and development assets of $(5,200), foreign currency impact related to the remeasurement of intercompany debt instruments of $(13,153) and other miscellaneous expense of $161.

(10)

Primarily to reflect the tax savings from acquired tax attributes and the effect of the pre-tax adjustments above at applicable rates.

(11)

Primarily to exclude the after-tax adjustment to the previously recorded gain on sale of the HealthTronics business and certain other sale-related costs.

(12)

To exclude the impact of the portion of certain of the above adjustments attributable to noncontrolling interests.

Twelve Months Ended December 31, 2013 (unaudited)

 Actual
Reported
(GAAP)

Adjustments

Non-GAAP
Adjusted

 REVENUES

$

2,616,907

$

—

$

2,616,907

 COSTS AND EXPENSES:

Cost of revenues

1,039,516

(194,748)

(1)

844,768

Selling, general and administrative

849,339

(147,785)

(2)

701,554

Research and development

142,472

(26,216)

(3)

116,256

Litigation-related and other contingencies

484,242

(484,242)

(4)

—

Asset impairment charges

519,011

(519,011)

(5)

—

Acquisition-related and integration items

7,952

(7,952)

(6)

—

 OPERATING (LOSS) INCOME

$

(425,625)

$

1,379,954

$

954,329

 INTEREST EXPENSE, NET

173,601

(22,742)

(7)

150,859

 LOSS ON EXTINGUISHMENT OF DEBT

11,312

(11,312)

(8)

—

 OTHER (INCOME) EXPENSE, NET

(50,971)

51,448

(9)

477

 (LOSS) INCOME FROM CONTINUING OPERATIONS BEFORE
   INCOME TAX

$

(559,567)

$

1,362,560

$

802,993

 INCOME TAX

(24,067)

253,130

(10)

229,063

 (LOSS) INCOME FROM CONTINUING OPERATIONS

$

(535,500)

$

1,109,430

$

573,930

DISCONTINUED OPERATIONS, NET OF TAX

(96,914)

149,905

(11)

52,991

 CONSOLIDATED NET (LOSS) INCOME

$

(632,414)

$

1,259,335

$

626,921

 Less: Net income attributable to noncontrolling interests

52,925

—

52,925

 NET (LOSS) INCOME ATTRIBUTABLE TO ENDO INTERNATIONAL
   PLC

$

(685,339)

$

1,259,335

$

573,996

 DILUTED EARNINGS PER SHARE DATA ATTRIBUTABLE TO ENDO
   INTERNATIONAL PLC ORDINARY SHAREHOLDERS:

 Continuing operations

$

(4.73)

$

4.79

 Discontinued operations

(1.32)

—

 DILUTED (LOSS) EARNINGS PER SHARE

$

(6.05)

$

4.79

 DILUTED WEIGHTED AVERAGE SHARES

113,295

119,829

Notes to reconciliation of our GAAP statements of operations to our adjusted statements of operations:

(1)

To exclude amortization of commercial intangible assets related to marketed products of $175,298, certain separation benefits and other costs incurred in connection with continued efforts to enhance the company's operations of $1,118 and accruals for milestone payments to partners of $18,332.

(2)

To exclude certain separation benefits and other costs incurred in connection with continued efforts to enhance the company's operations of $84,290, amortization of customer relationships of $10,036 and mesh litigation-related defense costs of $53,459.

(3)

To exclude milestone payments to partners of $11,371 and certain separation benefits and other costs incurred in connection with continued efforts to enhance the company's operations of $14,845.

(4)

To exclude the impact of charges primarily for mesh-related product liability.

(5)

To exclude asset impairment charges.

(6)

Primarily to exclude integration costs associated with prior acquisitions.

(7)

To exclude additional interest expense as a result of the prior adoption of ASC 470-20.

(8)

To exclude the unamortized debt issuance costs written off and recorded as a loss on extinguishment of debt upon our March 2013 prepayment on our Term Loan indebtedness as well as upon the amendment and restatement of our existing credit facility.

(9)

To exclude $50,400 related to patent litigation settlement income and other income of $1,048.

(10)

Primarily to reflect the tax savings from acquired tax attributes and the effect of the pre-tax adjustments above at applicable rates.

(11)

To exclude certain items related to the HealthTronics business, which is reported as Discontinued operations, net of tax.

Non-GAAP Adjusted net income and its components and Non-GAAP Adjusted diluted EPS are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted EPS. Despite the importance of these measures to management in goal setting and performance measurement, we stress that these are Non-GAAP financial measures that have no standardized meaning prescribed by U.S. GAAP and, therefore, have limits in their usefulness to investors. Because of the non-standardized definitions, Non-GAAP Adjusted net income and its components (unlike U.S. GAAP net income and its components) may not be comparable to the calculation of similar measures of other companies. These Non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses performance. See Endo's Current Report on Form 8-K filed today with the Securities and Exchange Commission for an explanation of Endo's reasons for using non-GAAP measures.

Reconciliation of Projected GAAP Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share Guidance for 2015

Year Ending

December 31, 2015

Projected GAAP diluted income per common share

$

2.73

To

$

2.93

Upfront and milestone-related payments to partners

0.40

0.40

Amortization of commercial intangible assets and fair value inventory step-up

1.02

1.02

Acquisition related, integration and restructuring charges

0.16

0.16

Interest expense adjustment for non-cash interest related to our 1.75% Convertible Senior Subordinated Notes and other treasury related items

0.01

0.01

Tax effect of pre-tax adjustments at the applicable tax rates and certain other expected cash tax savings as a result of acquisitions

0.03

0.03

Diluted adjusted income per common share guidance

$

4.35

To

$

4.55

The company's guidance is being issued based on certain assumptions including:

• Certain of the above amounts are based on estimates and there can be no assurance that Endo will achieve these results.
• Includes all completed business development transactions as of March 2, 2015.

(Tables Attached)

The following tables present Endo's unaudited Net Revenues for the three and twelve months ended December 31, 2014 and 2013:

Endo International plc

Net Revenues (unaudited)

(in thousands)

Three Months Ended December 31,

Percent
Growth

Twelve Months Ended December 31,

Percent Growth

2014

2013

2014

2013

U.S. Branded Pharmaceuticals:

LIDODERM®

$

39,807

$

36,372

9

%

$

157,491

$

602,998

(74)

%

OPANA® ER

46,927

53,664

(13)

%

197,789

227,878

(13)

%

Voltaren® Gel

50,158

46,904

7

%

179,816

170,841

5

%

PERCOCET®

31,123

26,996

15

%

122,355

105,814

16

%

FORTESTA® Gel

5,299

18,704

(72)

%

39,971

65,860

(39)

%

FORTESTA® Gel Authorized Generic

12,642

—

NM

18,690

—

NM

FROVA®

20,648

16,811

23

%

73,065

60,927

20

%

SUPPRELIN® LA

18,142

14,206

28

%

66,710

58,334

14

%

VALSTAR®

6,965

7,330

(5)

%

25,372

23,657

7

%

VANTAS®

1,887

3,228

(42)

%

8,199

13,241

(38)

%

SUMAVEL®

7,855

—

NM

18,521

—

NM

AVEED®

2,587

—

NM

4,199

—

NM

Other Branded Products

1,256

(133)

NM

2,789

1,700

64

%

Royalty and Other Revenue

498

30,561

(98)

%

54,470

62,765

(13)

%

Total U.S. Branded Pharmaceuticals

$

245,794

$

254,643

(3)

%

$

969,437

$

1,394,015

(30)

%

Total U.S. Generic Pharmaceuticals

$

337,354

$

197,944

70

%

$

1,140,821

$

730,666

56

%

Total International Pharmaceuticals

79,729

—

NM

270,425

—

NM

Devices:

Men's Health

74,955

73,158

2

%

273,929

270,343

1

%

Women's Health

27,355

28,628

(4)

%

101,274

109,098

(7)

%

BPH Therapy

34,770

30,573

14

%

121,302

112,785

8

%

Total Devices

137,080

132,359

4

%

496,505

492,226

1

%

Total Revenue

$

799,957

$

584,946

37

%

$

2,877,188

$

2,616,907

10

%

The following table presents unaudited condensed consolidated Balance Sheet data at December 31, 2014 and December 31, 2013:

December 31,
 2014

December 31,
 2013

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

408,753

$

526,597

Restricted cash and cash equivalents

530,930

770,000

Marketable securities

815

—

Accounts receivable

1,234,728

725,827

Inventories, net

472,215

374,439

Assets held for sale

—

160,257

Other assets

660,031

297,387

Total current assets

$

3,307,472

$

2,854,507

TOTAL NON-CURRENT ASSETS

7,602,144

3,717,349

TOTAL ASSETS

$

10,909,616

$

6,571,856

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable and accrued expenses

$

2,943,286

$

1,247,083

Liabilities related to assets held for sale

—

31,571

Other current liabilities

155,959

418,018

Total current liabilities

$

3,099,245

$

1,696,672

LONG-TERM DEBT, LESS CURRENT PORTION, NET

4,202,356

3,323,844

OTHER LIABILITIES

1,199,802

966,124

STOCKHOLDERS' EQUITY:

Total Endo International plc shareholders' equity

$

2,374,757

$

526,018

Noncontrolling interests

33,456

59,198

Total shareholders' equity

$

2,408,213

$

585,216

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

10,909,616

$

6,571,856

The following table presents unaudited condensed consolidated Statement of Cash Flow data for the twelve months ended December 31, 2014 and 2013:

Twelve Months Ended December 31,

2014

2013

OPERATING ACTIVITIES:

Consolidated net loss

$

(718,184)

$

(632,414)

Adjustments to reconcile consolidated Net loss to Net cash provided by operating activities

Depreciation and amortization

331,651

255,663

Share-based compensation

32,671

38,998

Amortization of debt issuance costs and premium / discount

29,086

36,264

Other

(161,171)

539,184

Changes in assets and liabilities which provided cash

823,723

60,822

Net cash provided by operating activities

337,776

298,517

INVESTING ACTIVITIES:

Purchases of property, plant and equipment, net

(80,251)

(94,626)

Acquisitions, net of cash acquired

(1,086,510)

(3,645)

Proceeds from sale of business, net

54,521

8,150

Proceeds from / (payments to) settlement escrow

11,518

(11,518)

Increase in restricted cash and cash equivalents

(633,173)

(770,000)

Decrease in restricted cash and cash equivalents

869,936

—

Other

92,106

(12,000)

Net cash used in investing activities

(771,853)

(883,639)

FINANCING ACTIVITIES:

Cash distributions to noncontrolling interests

(5,291)

(52,711)

Borrowings (payments) on indebtedness, net

321,276

544,521

Exercise of options

41,392

97,129

Other

(54,520)

(9,414)

Net cash provided by (used in) financing activities

302,857

579,525

Effect of foreign exchange rate

(4,037)

1,692

NET DECREASE IN CASH AND CASH EQUIVALENTS

(135,257)

(3,905)

LESS: NET DECREASE IN CASH AND CASH EQUIVALENTS OF DISCONTINUED OPERATIONS

(17,413)

(813)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS OF CONTINUING OPERATIONS

(117,844)

(3,092)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

526,597

529,689

CASH AND CASH EQUIVALENTS, END OF PERIOD

$

408,753

$

526,597

Our Net cash provided by operating activities includes the impact of certain payments for legal settlements, primarily related to mesh and the Department of Justice settlement related to the sale, marketing and promotion of Lidoderm. The following schedule presents the unaudited impact of these payments on our Net cash provided by operating activities for the twelve months ended December 31, 2014 and 2013:

Twelve Months Ended December 31,

2014

2013

Net cash provided by operating activities, as reported

$

337,776

$

298,517

Payments for certain legal settlements

333,763

42,982

Net cash provided by operating activities, excluding the impact of certain legal settlements

671,539

341,499