ENDO INTERNATIONAL PLC (NASDAQ:ENDP) Files An 8-K Results of Operations and Financial Condition

On February 28, 2017, Endo International plc (the Company, Endo, or
we) issued an earnings release announcing its financial results for
the three and twelve months>ended December 31, 2016>(the
Earnings Release). A copy of the Earnings Release is attached as
Exhibit 99.1 hereto and is incorporated herein by reference.

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”). The Company utilizes
these financial measures, commonly referred to as non-GAAP, because
(i) they are used by the Company, along with financial measures in
accordance with GAAP, to evaluate the Company’s operating
performance; (ii) the Company believes that they will be used by
certain investors to measure the Companys operating results; (iii)
adjusted diluted EPS is used by the Compensation Committee of its
Board of Directors in assessing the performance and compensation of
substantially all of its employees, including its executive
officers and (iv) the Companys leverage and interest coverage
ratios as defined by the Companys credit facility are calculated
based on non-GAAP financial measures. The Company believes that
presenting these non-GAAP measures provide useful information about
the Company’s performance across reporting periods on a consistent
basis by excluding items, which may be favorable or unfavorable.

The initial identification and review of the non-GAAP adjustments
to continuing operations is performed by a team of finance
professionals that include the Chief Accounting Officer and segment
finance leaders, and are identified in accordance with the Companys
Adjusted Income Statement Policy, which is reviewed and approved by
the Companys Audit Committee. Company tax professionals, including
the Senior Vice President of Tax, review and determine the tax
effect of adjusted pre-tax income at applicable tax rates and other
tax adjustments as described below. Proposed adjustments, along
with any items considered but excluded, are presented to the Chief
Executive Officer and the Chief Financial Officer for their
consideration. In turn, the non-GAAP adjustments are presented to
the Audit Committee on a quarterly basis as part of the Companys
standard procedures for preparation and reviewing the earnings
release and other quarterly materials.

These non-GAAP measures should be considered supplemental to and
not a substitute for financial information prepared in accordance
with GAAP. The Company’s definition of these non-GAAP measures may
differ from similarly titled measures used by others. The
definitions of the most commonly used non-GAAP financial measures
are presented below:

Adjusted income from continuing operations

Adjusted income from continuing operations represents income (loss)
from continuing operations, prepared in accordance with GAAP,
adjusted for certain items. Adjustments to GAAP amounts may
include, but are not limited to, certain upfront and milestone
payments to partners; acquisition-related and integration items,
including transaction costs, earn-out payments or adjustments,
changes in the fair value of contingent consideration and bridge
financing costs; cost reduction and integration-related initiatives
such as separation benefits, retention payments, other exit costs
and certain costs associated with integrating an acquired companys
operations; excess costs that will be eliminated to integration
plans; asset impairment charges; amortization of intangible assets;
inventory step-up recorded as part of our acquisitions; certain
non-cash interest expense; litigation-related and other contingent
matters; gains or losses from early termination of debt; foreign
currency gains or losses on intercompany financing arrangements;
certain other items; and the tax effect of adjusted pre-tax income
at applicable tax rates and other tax adjustments as described
below.

Adjusted diluted earnings per share from continuing operations

Adjusted diluted earnings per share from continuing operations
represent adjusted income from continuing operations divided by the
number of diluted shares.

Adjusted gross margin

Adjusted gross margin represents total revenues less cost of
revenues, prepared in accordance with GAAP, adjusted for certain
items that may include, but are not limited to, amortization of
intangible assets and inventory step-up recorded as part of our
acquisitions, excess inventory reserves resulting from
restructuring initiatives, separation benefits and certain excess
costs that will be eliminated to integration plans.

Adjusted operating expenses

Adjusted operating expenses represent operating expenses, prepared
in accordance with GAAP, adjusted for certain items that may
include, but are not limited to, acquisition and integration items,
including transaction costs, earn out payments or adjustments,
changes in the fair value of contingent consideration and bridge
financing costs; cost reduction and integration related initiatives
such as separation benefits, retention payments, other exit costs
and certain costs associated with integrating an acquired companys
operations; excess costs that will be eliminated to integration
plans; asset impairment charges; and litigation-related and other
contingent matters.

Adjusted interest expense

Adjusted interest expense represents interest expense, net,
prepared in accordance with GAAP, adjusted for non-cash interest
expense and penalty interest.

Adjusted income taxes

Adjusted income taxes are calculated by tax effecting adjusted
pre-tax income from continuing operations at the applicable
effective tax rate that will be determined by reference to
statutory tax rates in the relevant jurisdictions in which the
Company operates and includes current and deferred income tax
expense. Adjustments are then made for certain items relating to
prior years and for tax planning actions that are expected to be
distortive to the underlying effective tax rate and trend in the
effective tax rate. The adjusted effective tax rate represents the
rate generated when dividing adjusted income tax expense or benefit
as described above by the amount of adjusted pre-tax income from
continuing operations as described above.

EBITDA

EBITDA represents net (loss) income, prepared in accordance with
GAAP, before interest expense, net; income tax; depreciation and
amortization. Adjusted EBITDA further adjusts EBITDA by excluding
inventory step-up amortization recorded as part of our
acquisitions, other (income) expense, net; stock-based
compensation; certain upfront and milestone payments to partners;
acquisition-related and integration items, including transaction
costs, earn-out payments or adjustments, changes in the fair value
of contingent consideration and bridge financing costs; cost
reduction and integration-related initiatives such as separation
benefits, retention payments, excess inventory reserves, other exit
costs and certain costs associated with integrating an acquired
companys operations; excess costs that will be eliminated to
integration plans; asset impairment charges; litigation-related and
other contingent matters; gains or losses from early termination of
debt; discontinued operations, net of tax and certain other items.
Implied Adjusted EBITDA is calculated as Adjusted income from
continuing operations (as defined above), adjusted to exclude the
impact of Adjusted interest expense, Adjusted income taxes,
depreciation and stock-based compensation.

Net Debt Leverage Ratio

The net debt leverage ratio is calculated as net debt (total
principal debt outstanding less unrestricted cash) divided by
adjusted EBITDA for the trailing twelve-month period.

Because adjusted financial measures exclude the effect of items
that will increase or decrease the Company’s reported results of
operations, the Company strongly encourages investors to review the
Company’s consolidated financial statements and publicly filed
reports in their entirety. Investors are also encouraged to review
the reconciliation of the non-GAAP financial measures used in the
Earnings Release to their most directly comparable GAAP financial
measures as included in the Earnings Release and within the
quarterly Earnings Presentation available in the Investor Relations
section of the Registrants website at http://www.endo.com. However,
other than with respect to projected adjusted diluted EPS, the
Company only provides guidance on a non-GAAP basis and does not
provide reconciliations of such forward-looking non-GAAP measures
to GAAP due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliation, including adjustments that could be made for asset
impairments, contingent consideration adjustments, legal
settlements, loss on extinguishment of debt, adjustments to
inventory and other charges reflected in the reconciliation of
historic numbers, the amount of which could be significant.

The information in this Item 2.02 and in Exhibit 99.1 attached
hereto shall not be deemed to be filed for purposes of Section 18
of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that section. The information
contained in this Item 2.02 and in Exhibit 99.1 attached hereto
shall not be incorporated into any registration statement or other
document filed by the Registrant with the U.S. Securities and
Exchange Commission under the Securities Act of 1933, whether made
before or after the date hereof, regardless of any general
incorporation language in such filing, except as shall be expressly
set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

Not applicable.

Not applicable.

Not applicable.