Press Release: Endo Reports Second Quarter 2016 Financial Results

Press Release: Endo Reports Second Quarter 2016 Financial Results

Endo Reports Second Quarter 2016 Financial Results

Canada NewsWire

DUBLIN, Aug. 8, 2016

DUBLIN, Aug. 8, 2016 /CNW/ —

   -- Second quarter 2016 reported revenues of $921 million and diluted GAAP 
      earnings per share (EPS) from continuing operations of $1.75 
 
   -- Second quarter 2016 adjusted diluted EPS of $0.86 
 
   -- Company affirms full year 2016 revenue and adjusted diluted EPS financial 
      guidance 
 
   -- Company expands management capabilities, appointing Joseph J. Ciaffoni to 
      President, U.S. Branded Pharmaceuticals 
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Endo International plc (NASDAQ: ENDP) (TSX: ENL) today reported second quarter 2016 financial results, including:

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

“During the second quarter 2016, Endo remained focused on operational execution. We have delivered results across all of our businesses that are on-track or ahead of Company expectations for the quarter and today we are affirming our full year 2016 revenue and adjusted diluted EPS financial guidance while increasing investment in Branded and Generics R&D as well as BELBUCA(TM) and XIAFLEX(R) promotion,” said Rajiv De Silva, President and CEO of Endo. “We also continue to build our internal team and are pleased to announce the appointment of Joseph J. Ciaffoni to President, U.S. Branded Pharmaceuticals. We look forward to continuing to execute on our corporate objectives and delivering products that improve patients’ lives while creating value for our shareholders.”

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

(1) Refer to footnote 12 and 14 in the Reconciliation of GAAP and Non-GAAP Financial Measures tables for three and six months ended June 30, 2015, respectively, for further discussion.

CONSOLIDATED RESULTS

Total revenues increased by 25 percent to $921 million in second quarter 2016 compared to the same period in 2015, primarily attributable to revenues related to the September 2015 Par acquisition. GAAP net income from continuing operations in second quarter 2016 increased to $390 million compared to a GAAP net loss from continuing operations of $(91) million during the same period in 2015, primarily attributable to a legal entity reorganization that resulted in the recognition of discrete net tax benefits of $448 million during the second quarter 2016. GAAP net income per share from continuing operations for the three months ended June 30, 2016 was $1.75, compared to a GAAP net loss from continuing operations of $(0.49) in second quarter 2015.

Adjusted net income from continuing operations for second quarter 2016 decreased by 6 percent to $192 million compared second quarter 2015, driven primarily by an increase in interest expense, partially offset by higher operating margin. Adjusted net income per share from continuing operations for the three months ended June 30, 2016 decreased 20 percent to $0.86 compared to second quarter 2015. This decrease was mainly due to a decrease in adjusted net income from continuing operations resulting from the items listed above in this paragraph and an increase in the number of diluted weighted average shares outstanding.

U.S. BRANDED PHARMACEUTICALS

During second quarter 2016, the U.S. Branded Pharmaceuticals business unit continued to focus on the launch of the first and only buprenorphine buccal film approved by the U.S. Food and Drug Administration (FDA), BELBUCA(TM), while also supporting demand growth for XIAFLEX(R) in both the Dupuytren’s contracture and Peyronie’s disease indications.

Second quarter 2016 U.S. Branded Pharmaceuticals results include:

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

U.S. GENERIC PHARMACEUTICALS

During second quarter 2016, the U.S. Generic Pharmaceuticals business unit substantially completed the Par integration, implemented the initial phase of the supply chain restructuring and product rationalization activities announced in May 2016, and continued to execute on its sales and marketing, research and development (R&D), and manufacturing plans for the year.

Second quarter 2016 U.S. Generic Pharmaceuticals results include:

   -- Revenues of $565 million, a 67 percent increase compared to second 
      quarter 2015; this increase was primarily attributable to growth from the 
      addition of sales by Par. 
 
   -- Secured a patent (expiration January 2035) for Vasostrict(R), the only 
      vasopressin injection currently approved by the FDA. 
 
   -- As expected and previously communicated by the Company, the Generics Base 
      business revenues declined approximately 5 percent sequentially compared 
      to the first quarter 2016, due to consortium pricing pressures and 
      additional competitive entrants. 
 

INTERNATIONAL PHARMACEUTICALS

During second quarter 2016, the International Pharmaceuticals business unit focused on expanding margins for its emerging markets businesses, while in-licensing new products and managing the expected loss of exclusivity for certain products at Paladin.

Second quarter 2016 International Pharmaceuticals results include:

   -- Revenues of $67 million, a 17 percent decrease compared to second quarter 
      2015. 
 
   -- Paladin revenues of $26 million, a 14 percent decrease compared to second 
      quarter 2015, due primarily to the previously expected loss of 
      exclusivity for two products. During second quarter 2016, Paladin filed a 
      submission for BELBUCA(TM) with Health Canada, acquired the Canadian 
      rights to XIAFLEX(R) and launched Metadol D 1L. 
 
   -- Emerging market revenues from Litha and Somar of $37 million, a 23 
      percent decrease compared to second quarter 2015, driven primarily by a 
      decrease in Litha revenues as it manages its recent divestiture of 
      non-core assets and integrates its new portfolio of products and pipeline 
      programs acquired from Aspen. 
 

2016 Financial Guidance

For the full twelve months ended December 31, 2016, at current exchange rates, Endo is affirming its full year revenue and adjusted diluted EPS financial guidance issued in May 2016. The Company estimates:

   -- Total revenues to be between $3.87 billion and $4.03 billion; 
 
   -- Diluted GAAP EPS from continuing operations is now expected to be between 
      $1.86 and $2.16; and 
 
   -- Adjusted diluted EPS from continuing operations to be between $4.50 and 
      $4.80. 
 

The Company’s 2016 financial guidance is based on the following assumptions:

   -- Adjusted gross margin of approximately 59 percent to 60 percent; 
 
   -- Adjusted operating expenses as a percentage of revenues to be 
      approximately 21.5 percent to 22 percent; 
 
   -- Adjusted interest expense of approximately $455 million; 
 
   -- Adjusted effective tax rate of approximately zero to 2 percent; and 
 
   -- Adjusted diluted EPS from continuing operations assumes full year 
      adjusted diluted shares outstanding of approximately 223 million shares. 
 

Balance Sheet, Liquidity and Other Updates

As of June 30, 2016, the Company had $667.8 million in unrestricted cash; net debt of approximately $7.6 billion and a net debt to pro forma adjusted EBITDA ratio of 4.6.

Second quarter 2016 reported cash provided by operating activities was $604.5 million, primarily attributable to the Company’s receipt of a $707 million federal income tax refund during the quarter, partially offset by the timing of mesh-related payments, payments related to restructuring and other working capital increases.

Press Release: Endo Reports Second Quarter 2016 -2-

During second quarter 2016, the Company recorded pre-tax, non-cash impairment charges of $40.0 million related to certain market and regulatory conditions impacting the commercial potential of certain definite-lived intangible assets in the Company’s U.S. Generic Pharmaceuticals segment.

As part of the continued integration of the legacy Qualitest and Par businesses, Endo initiated a legal entity reorganization that moved the Generics business to a new U.S. holding company structure that is separate from the legacy Branded business structure. The reorganization provides operating flexibility and benefits and reduces the potential impact related to any future limits that could apply to the use of tax attributes by utilizing most of the Company’s attributes to offset the gain that was created in the intercompany sale. This reorganization resulted in stepped-up tax basis of the U.S. Generics business assets to their fair value.

The reorganization also gave rise to a discrete net GAAP tax benefit of $448 million in the second quarter 2016 arising from outside basis differences. This benefit has been excluded from our adjusted effective tax rate, in accordance with our policy.

On an adjusted basis, the elimination of tax benefits from acquired attributes is offset by an improved mix of jurisdictional adjusted pre-tax income resulting primarily from the reorganization.

As a result of the SEC’s recently issued Compliance and Disclosure Interpretations on Non-GAAP measures issued in May 2016, Endo is no longer excluding the non-cash deferred tax expense associated with acquired attributes in our adjusted effective tax rate. This change has no impact on Endo’s historic or forward looking GAAP tax or cash tax profile. Additionally, as Endo has utilized almost all of its acquired attributes through the legal entity reorganization, Endo’s change in policy is also not expected to have a material impact on our 2016 and forward looking adjusted tax rate.

Management Team Updates

In a separate press release issued today, Endo announced the appointment of Joseph J. Ciaffoni to the position of President, U.S. Branded Pharmaceuticals, effective August 15, 2016. Mr. Ciaffoni most recently served as Senior Vice President, Global Specialty Medicines at Biogen and brings to Endo extensive experience building commercial businesses, leading multi-function organizations and achieving successful results across the primary care, specialty and rare disease markets.

Conference Call Information

Endo will conduct a conference call with financial analysts to discuss this press release today at 4:30 p.m. ET. The dial-in number to access the call is U.S./Canada (866) 497-0462, International (678) 509-7598, and the passcode is 45050862. Please dial in 10 minutes prior to the scheduled start time.

A replay of the call will be available from August 8, 2016 at 7:30 p.m. ET until 7:30 p.m. ET on August 22, 2016 by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International) and entering the passcode 45050862.

A simultaneous webcast of the call can be accessed by visiting www.endo.com. In addition, a replay of the webcast will be available until 7:30 p.m. ET on August 22, 2016. The replay can be accessed by clicking on “Upcoming Events” in the Investor Relations section of the Endo website.

The following table presents Endo’s unaudited Net Revenues for the three and six months ended June 30, 2016 and 2015:

 
Endo International plcNet Revenues (unaudited)(in thousands) 
 
                   Three Months Ended  Percent    Six Months Ended June   Percent 
                   June 30,             Growth    30,                      Growth 
                   2016      2015                 2016        2015 
U.S. Branded 
Pharmaceuticals: 
Pain Management: 
LIDODERM(R)        $ 27,039  $ 30,186  (10)%      $   46,751  $   55,346  (16)% 
OPANA(R) ER          38,554    43,097  (11)%          83,224      89,956   (7)% 
PERCOCET(R)          35,708    32,444     10%         69,301      68,743      1% 
Voltaren(R) Gel      27,290    51,006  (46)%          63,037      96,477  (35)% 
                   $128,591  $156,733  (18)%      $  262,313  $  310,522  (16)% 
Specialty 
Pharmaceuticals: 
SUPPRELIN(R) LA    $ 21,211  $ 17,796     19%     $   38,463  $   34,078     13% 
XIAFLEX(R)           42,419    39,952      6%         86,464      67,918     27% 
                   $ 63,630  $ 57,748     10%     $  124,927  $  101,996     22% 
Branded Other 
 Revenues (1)        96,121   101,432   (5)%         209,915     187,902     12% 
Total U.S. 
 Branded 
 Pharmaceuticals 
 (2)               $288,342  $315,913   (9)%      $  597,155  $  600,420   (1)% 
U.S. Generic 
Pharmaceuticals: 
U.S. Generics 
 Base              $331,095  $214,241     55%     $  678,524  $  458,511     48% 
Sterile 
 Injectables        126,245        --         NM     249,934          --         NM 
New Launches and 
 Alternative 
 Dosages            108,018   124,085  (13)%         220,290     236,777   (7)% 
Total U.S. 
 Generic 
 Pharmaceuticals   $565,358  $338,326     67%     $1,148,748  $  695,288     65% 
Total 
 International 
 Pharmaceuticals   $ 67,187  $ 80,927  (17)%      $  138,523  $  153,586  (10)% 
Total Revenues     $920,887  $735,166     25%     $1,884,426  $1,449,294     30% 
 
 
 
 
(1)  Products included within Branded Other Revenues in 
     the table above include, but are not limited to, TESTOPEL(R) 
     , Testim(R) , Fortesta(R) Gel, including authorized 
     generic, BELBUCA(TM) , Sumavel(R) DosePro(R) and Nascobal(R) 
     Nasal Spray. 
(2)  Individual products presented above represent the 
      top two performing products in each segment plus any 
      product having revenues in excess of $25.0 million 
      during the three months ended June 30, 2016. 
 
 

The following table presents unaudited consolidated Statement of Operations data for the three and six months ended June 30, 2016 and 2015 (in thousands, except per share data):

 
                          Three Months Ended      Six Months Ended June 
                          June 30,                30, 
                          2016        2015        2016        2015 
 TOTAL REVENUES           $  920,887  $  735,166  $1,884,426  $1,449,294 
 COSTS AND EXPENSES: 
Cost of revenues             632,218     438,858   1,320,923     823,124 
Selling, general and 
 administrative              193,070     154,491     371,425     366,069 
Research and development      50,589      18,984      92,281      36,881 
Litigation-related and 
 other contingencies, 
 net                           5,259       6,875      10,459      19,875 
Asset impairment charges      39,951      70,243     169,576      77,243 
Acquisition-related and 
 integration items            48,171      44,225      60,725      78,865 
 OPERATING (LOSS) INCOME 
  FROM CONTINUING 
  OPERATIONS              $ (48,371)  $    1,490  $(140,963)  $   47,237 
 INTEREST EXPENSE, NET       111,919      80,611     228,712     153,750 
 LOSS ON EXTINGUISHMENT 
  OF DEBT                         --          --          --         980 
 OTHER EXPENSE, NET            5,175      24,493       3,268      12,498 
 LOSS FROM CONTINUING 
  OPERATIONS BEFORE 
  INCOME TAX              $(165,465)  $(103,614)  $(372,943)  $(119,991) 
 INCOME TAX BENEFIT        (555,277)    (12,720)   (673,992)   (179,589) 
 INCOME (LOSS) FROM 
  CONTINUING OPERATIONS   $  389,812  $ (90,894)  $  301,049  $   59,598 
 DISCONTINUED 
  OPERATIONS, NET OF TAX    (46,216)   (159,632)    (91,324)   (385,842) 
 CONSOLIDATED NET INCOME 
  (LOSS)                  $  343,596  $(250,526)  $  209,725  $(326,244) 
 Less: Net income (loss) 
  attributable to 
  noncontrolling 
  interests                       18       (107)          16       (107) 
 NET INCOME (LOSS) 
  ATTRIBUTABLE TO ENDO 
  INTERNATIONAL 
  PLC                     $  343,578  $(250,419)  $  209,709  $(326,137) 
 NET INCOME (LOSS) PER 
 SHARE ATTRIBUTABLE TO 
 ENDO INTERNATIONAL 
 PLC ORDINARY 
 SHAREHOLDERS--BASIC: 
Continuing operations     $     1.75  $   (0.49)  $     1.35  $     0.34 
Discontinued operations       (0.21)      (0.86)      (0.41)      (2.18) 
Basic                     $     1.54  $   (1.35)  $     0.94  $   (1.84) 
 NET INCOME (LOSS) PER 
 SHARE ATTRIBUTABLE TO 
 ENDO INTERNATIONAL 
 PLC ORDINARY 
 SHAREHOLDERS--DILUTED: 
Continuing operations     $     1.75  $   (0.49)  $     1.35  $     0.33 
Discontinued operations       (0.21)      (0.86)      (0.41)      (2.11) 
Diluted                   $     1.54  $   (1.35)  $     0.94  $   (1.78) 
 WEIGHTED AVERAGE 
 SHARES: 
Basic                        222,667     185,328     222,485     177,490 
Diluted                      222,863     185,328     223,021     182,822 
 
 

The following table presents unaudited condensed consolidated Balance Sheet data at June 30, 2016 and December 31, 2015 (in thousands):

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

0

0

Press Release: Endo Reports Second Quarter 2016 -3-

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

1

1

The following table presents unaudited condensed consolidated Statement of Cash Flow data for the six months ended June 30, 2016 and 2015 (in thousands):

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

2

2

The following schedule presents the significant pre-tax cash outlays and cash receipts impacting our Net cash provided by (used in) operating activities for the six months ended June 30, 2016 and 2015 (in thousands):

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

3

3

(1) Cash payments into QSFs result in a cash outflow for investing activities (CFI). Cash releases from QSFs result in a cash inflow for investing activities and a corresponding outflow for cash provided by (used in) operating activities (CFO). The following table reflects the mesh-related payment activities for the six months ended June 30, 2016 and 2015 by cash flow component:

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

4

4

(1) These amounts are included in Changes in assets and liabilities which provided (used) cash in the table above.

Supplemental Financial Information

To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures. For additional information on the Company’s use of such non-GAAP financial measures, refer to Endo’s Current Report on Form 8-K furnished today to the Securities and Exchange Commission, which includes an explanation of the Company’s reasons for using non-GAAP measures.

The table below provides reconciliations of our consolidated income (loss) from continuing operations (GAAP) to our adjusted income from continuing operations (non-GAAP) for the three and six months ended June 30, 2016 and 2015:

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

5

5

Press Release: Endo Reports Second Quarter 2016 -4-

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

6

6

Notes to the reconciliation of certain line items included in the GAAP Statements of Operations to the Non-GAAP line items are as follows:

(1) Adjustments for amortization of commercial intangible assets included the following:

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

7

7

Press Release: Endo Reports Second Quarter 2016 -5-

(2) Adjustments for inventory step-up and other cost savings included the following:

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

8

8

(3) Adjustments for upfront and milestone-related payments to partners included the following:

   -- Revenues of $921 million including the addition of sales from its 2015 
      acquisition of Par Pharmaceutical, a 25 percent increase compared to 
      second quarter 2015 revenues of $735 million. 
 
   -- Reported net income from continuing operations of $390 million compared 
      to second quarter 2015 reported net loss from continuing operations of 
      $(91) million. 
 
   -- Reported diluted EPS from continuing operations of $1.75 compared to 
      second quarter 2015 reported diluted loss per share from continuing 
      operations of $(0.49). 
 
   -- Adjusted net income from continuing operations of $192 million, a 6 
      percent decrease compared to second quarter 2015 adjusted net income from 
      continuing operations of $204 million.1 
 
   -- Adjusted diluted EPS from continuing operations of $0.86 compared to 
      second quarter 2015 adjusted diluted EPS from continuing operations of 
      $1.08.1 
 

9

9

(4) To exclude charges due to increased inventory reserves related to the 2016 U.S. Generic Pharmaceuticals restructuring initiative.

(5) Adjustments for separation benefits and other restructuring included the following:

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

0

0

(6) To exclude litigation settlement charges.

(7) To exclude asset impairment charges. During the three months ended June 30, 2016 and 2015, we recorded pre-tax, non-cash impairment charges of $40.0 million and $70.2 million, respectively, resulting from certain market conditions impacting the commercial potential of certain intangible assets in our U.S. Generic Pharmaceuticals segment.

(8) Adjustments for acquisition and integration items primarily relate to various acquisitions, including Par Pharmaceuticals and Auxilium Pharmaceuticals, and included the following:

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

1

1

(9) To exclude the impact of the change in fair value of contingent consideration resulting from certain market conditions impacting the commercial potential of the underlying products.

(10) To exclude penalty interest charges of $2,746 and additional non-cash interest expense related to our 1.75% Convertible Senior Subordinated Notes of $253 for the three months ended June 30, 2015.

(11) Adjustments to other included the following:

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

2

2

(12) Adjusted income taxes are calculated by tax effecting adjusted pre-tax income at the applicable effective tax rate that will be determined by reference to statutory tax rates in the relevant jurisdiction in which the Company operates and includes current and deferred income tax expense commensurate with the non-GAAP measure of profitability.

As part of the continued integration of our Qualitest and Par businesses, Endo initiated a legal entity reorganization that moved the Generics business to a new U.S. holding company structure that is separate from the legacy Branded business structure. The reorganization also provides operating flexibility and benefits and reduces the potential impact related to any future limits that could apply to the use of tax attributes by utilizing most of the Company’s attributes to offset the gain in the intercompany sale that stepped-up the tax basis of the U.S. Generics business assets. The utilization of acquired attributes in the reorganization would have had an unfavorable impact of $157 million on our full-year 2016 adjusted tax expense under Endo’s non-GAAP policy prior to the adoption of the SEC’s updated guidance on Non-GAAP measures (see below). The elimination of this acquired attribute benefit was largely offset by an improved mix of jurisdictional adjusted pre-tax income resulting primarily from the reorganization. The reorganization also gave rise to a discrete GAAP tax benefit of $448 million, net of a valuation allowance, in the second quarter 2016 arising from outside basis differences. This benefit has been excluded from our adjusted effective tax rate in accordance with our policy.

Separately, as a result of the SEC’s recently updated guidance on Non-GAAP measures issued in May 2016, Endo is no longer excluding the non-cash deferred tax expense associated with acquired attributes in our adjusted income tax expense. This change has no impact on Endo’s historic or forward looking GAAP tax or cash tax profile. Additionally, as we have utilized almost all of our acquired attributes through the recent legal entity reorganization, our change in policy is not expected to have a material impact on our 2016 and forward looking adjusted tax rate. The following table presents the impact of our change in policy on Adjusted Diluted EPS from Continuing Operations for each relevant period of 2015 and 2016:

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

3

3

(13) To exclude the results of the Astora business reported as discontinued operations, net of tax.

(14) This amount includes non-controlling interest of $18 and $(107) for the three months ended June 30, 2016 and 2015, respectively.

(15) Calculated as income (loss) from continuing operations divided by the applicable weighted average share number. The applicable weighted average share number for the three months ended June 30, 2016 is 222,863 for both the GAAP and non-GAAP EPS calculations. The applicable weighted average share number for the three months ended June 30, 2015 is 185,328 for the GAAP EPS calculation and 188,819 for the non-GAAP EPS calculations.

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

4

4

Press Release: Endo Reports Second Quarter 2016 -6-

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

5

5

Press Release: Endo Reports Second Quarter 2016 -7-

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

6

6

Notes to the reconciliation of certain line items included in the GAAP Statements of Operations to the Non-GAAP line items are as follows:

(1) Adjustments for amortization of commercial intangible assets included the following:

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

7

7

(2) Adjustments for inventory step-up and other cost savings included the following:

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

8

8

(3) Adjustments for upfront and milestone-related payments to partners included the following:

 
FINANCIAL PERFORMANCE 
 
(in thousands, except per share amounts) 
 
             Three Months Ended                  Six Months Ended June 30, 
             June 30, 
             2016      2015            Change    2016        2015             Change 
Total 
 Revenues    $920,887  $ 735,166         25%     $1,884,426  $1,449,294         30% 
Reported 
 Income 
 (Loss) 
 from 
 Continuing 
 Operations  $389,812  $(90,894)         NM      $  301,049  $   59,598        405% 
Reported 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    185,328         20%        223,021     182,822         22% 
Reported 
 Diluted 
 Income 
 (Loss) per 
 Share from 
 Continuing 
 Operations  $   1.75  $  (0.49)         NM      $     1.35  $     0.33        309% 
Adjusted 
 Income 
 from 
 Continuing 
 Operations  $192,341  $ 204,335  (1)   (6)%     $  433,072  $  411,695  (1)     5% 
Adjusted 
 Diluted 
 Weighted 
 Average 
 Shares       222,863    188,819         18%        223,021     182,822         22% 
Adjusted 
 Diluted 
 EPS from 
 Continuing 
 Operations  $   0.86  $    1.08  (1)  (20)%     $     1.94  $     2.25  (1)  (14)% 
 
 

9

9

(4) To exclude charges due to increased inventory reserves related to the 2016 U.S. Generic Pharmaceuticals restructuring initiative.

(5) To adjust for the reversal of the remaining Voltaren(R) Gel minimum royalty obligations as a result of a generic entrant.

(6) Adjustments for separation benefits and other restructuring included the following:

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

0

0

(7) To exclude the acceleration of Auxilium employee equity awards at closing of acquisition.

(8) To exclude litigation settlement charges.

(9) To exclude asset impairment charges. During the six months ended June 30, 2016 and 2015, we recorded pre-tax, non-cash impairment charges of $169.6 million and $77.2 million, respectively. The charges for the six months ended June 30, 2016, were primarily driven by our 2016 U.S. Generic Pharmaceuticals restructuring initiative, which resulted in the discontinuation of certain commercial products and the abandonment of certain IPR&D projects. The charges for the six months ended June 30, 2015 resulted from certain market conditions impacting the commercial potential of certain intangible assets in our U.S. Generic Pharmaceuticals segment.

(10) Adjustments for acquisition and integration items primarily relate to various acquisitions, including Par Pharmaceuticals and Auxilium Pharmaceuticals, and included the following:

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

1

1

(11) To exclude the impact of the change in fair value of contingent consideration resulting from certain market conditions impacting the commercial potential of the underlying products.

(12) Adjustments to interest charges included the following:

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

2

2

(13) Adjustments to other included the following:

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

3

3

(14) Refer to Footnote 12 included within the tables for the three months ended June 30, 2016 and 2015 for a discussion of our Non-GAAP tax adjustments and changes to our policy for calculating adjusted income taxes. The following table presents the impact of this change on Adjusted Diluted EPS from Continuing Operations for the six months ended June 30, 2015:

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

4

4

(15) To exclude the results of the Astora business reported as discontinued operations, net of tax.

(16) This amount includes noncontrolling interests of $16 and $(107) for the six months ended June 30, 2016 and 2015, respectively.

(17) Calculated as income from continuing operations divided by the applicable weighted average share number. The applicable weighted average share number for the six months ended June 30, 2016 and 2015 is 223,021 and 182,822, respectively, for both the GAAP and non-GAAP EPS calculations.

Reconciliation of Projected GAAP Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share Guidance for 2016

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

5

5

Press Release: Endo Reports Second Quarter 2016 -8-

The Company’s guidance is being issued based on certain assumptions including:

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

6

6

Non-GAAP Financial Measures

The Company utilizes certain financial measures that are not prescribed by or prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). These Non-GAAP financial measures are not, and should not be viewed as, substitutes for U.S. GAAP net income and its components and diluted earnings per share amounts. 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 EBITDA and 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 furnished today to the Securities and Exchange Commission for an explanation of Endo’s non-GAAP financial measures.

About Endo International plc

Endo International plc (NASDAQ: ENDP) (TSX: ENL) is a global specialty pharmaceutical company focused on improving patients’ lives while creating shareholder value. Endo develops, manufactures, markets and distributes quality branded and generic pharmaceutical products as well as over-the-counter medications though its operating companies. Endo has global headquarters in Dublin, Ireland, and U.S. headquarters in Malvern, PA. Learn more at www.endo.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements, including but not limited to the statements by Mr. De Silva and other statements regarding product development, market potential, corporate strategy, optimization efforts and restructurings, expected growth and regulatory approvals, as well as Endo’s earnings per share amounts, product net sales, revenue forecasts and any other statements that refer to Endo’s expected, estimated or anticipated future results. Because forecasts are inherently estimates that cannot be made with precision, Endo’s performance at times differs materially from its estimates and targets, and Endo often does not know what the actual results will be until after the end of the applicable reporting period. Therefore, Endo will not report or comment on its progress during a current quarter except through public announcement. Any statement made by others with respect to progress during a current quarter cannot be attributed to Endo.

All forward-looking statements in this press release reflect Endo’s current analysis of existing trends and information and represent Endo’s judgment only as of the date of this press release. Actual results may differ materially from current expectations based on a number of factors affecting Endo’s businesses, including, among other things, the following: changing competitive, market and regulatory conditions; Endo’s ability to obtain and maintain adequate protection for its intellectual property rights; the timing and uncertainty of the results of both the research and development and regulatory processes; domestic and foreign health care and cost containment reforms, including government pricing, tax and reimbursement policies; technological advances and patents obtained by competitors; the performance, including the approval, introduction, and consumer and physician acceptance of new products and the continuing acceptance of currently marketed products; the effectiveness of advertising and other promotional campaigns; the timely and successful implementation of strategic initiatives; the results of any pending or future litigation, investigations or claims; the uncertainty associated with the identification of and successful consummation and execution of external corporate development initiatives and strategic partnering transactions; and Endo’s ability to obtain and successfully maintain a sufficient supply of products to meet market demand in a timely manner. In addition, U.S. and international economic conditions, including higher unemployment, political instability, financial hardship, consumer confidence and debt levels, taxation, changes in interest and currency exchange rates, international relations, capital and credit availability, the status of financial markets and institutions, fluctuations or devaluations in the value of sovereign government debt, as well as the general impact of continued economic volatility, can materially affect Endo’s results. Therefore, the reader is cautioned not to rely on these forward-looking statements. Endo expressly disclaims any intent or obligation to update these forward-looking statements except as required to do so by law.

Additional information concerning the above-referenced risk factors and other risk factors can be found in press releases issued by Endo, as well as Endo’s public periodic filings with the U.S. Securities and Exchange Commission and with securities regulators in Canada, including the discussion under the heading “Risk Factors” in Endo’s 2015 Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. Copies of Endo’s press releases and additional information about Endo are available at www.endo.com or you can contact the Endo Investor Relations Department by calling 484-216-0000.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/endo-reports-second-quarter-2016-financial-results-300310706.html

SOURCE Endo International plc

/CONTACT:

Investors/Media: Keri P. Mattox, (484) 216-7912; Media: Heather Zoumas-Lubeski, (484) 216-6829

   -- Revenues of $288 million, a 9 percent decrease compared to second quarter 
      2015; this decrease was primarily attributable to a generic entrant for 
      Voltaren(R) Gel in March 2016. 
 
   -- Net sales of XIAFLEX(R) increased 6 percent compared to second quarter 
      2015; this increase reflects continued double-digit demand growth for the 
      product, partially offset by customer de-stocking in the quarter. 
 
   -- Net sales of Voltaren(R) Gel decreased 46 percent compared to second 
      quarter 2015; this decrease was attributable to a decrease in both volume 
      and price as a result of the entrance of a generic competitor in March 
      2016. 
 

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