Be decisive, stay balanced, and always find ways to grow. A SIMPLE PHILOSOPHY 2014 ANNUAL REPORT company overview Valeant Pharmaceuticals International, Inc. is a multinational specialty pharmaceutical and medical device company that develops, manufactures and markets a broad range of branded, generic and branded generic pharmaceuticals, over-the-counter (OTC) products and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment and aesthetics devices) which are marketed in more than 100 countries. In our Developed Markets segment, we focus most of our efforts in the eye health, dermatology and neurology therapeutic classes. In the Emerging Market segment, we focus primarily on branded generics, OTC products and medical devices. We are diverse not only in our sources of revenue from our drug and medical devices portfolio, but also among the therapeutic classes and areas we serve. Valeant’s strategy is to focus our business on core geographies and therapeutic classes that offer attractive growth opportunities while maintaining our lower selling, general and administrative cost model and decentralized operating structure. We have an established portfolio of durable products with a focus on eye health and dermatology. Another critical element of our strategy is business development. We have completed numerous transactions over the past few years to expand our portfolio offering and geographic footprint including, among others, the acquisition of Bausch + Lomb. We will continue to pursue value-added business development opportunities as they arise. The growth of our business is further augmented through our lower risk, output-focused research and development model, which allows us to advance promising developmental programs to drive future commercial growth. Valeant’s strategic markets are primarily in the United States, Canada, Europe, the Middle East, Latin America, Russia, Africa and Asia Pacific. Headquartered in Laval, Quebec, Valeant has approximately 17,000 employees worldwide. NON-GAAP INFORMATION To supplement the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses non-GAAP financial measures that exclude certain items, such as amortization of inventory step-up, amortization of alliance product assets & property, plant and equipment step up, stock-based compensation step-up, contingent consideration fair value adjustments, restructuring, acquisition-related and other costs, In-process research and development, impairments and other charges (“IPR&D”), legal settlements outside the ordinary course of business, the impact of currency fluctuations, amortization and other non-cash charges, amortization including intangible asset impairments and write-down of deferred financing costs, debt discounts and ASC 470-20 (FSP APB 14-1) interest, loss on extinguishment of debt, (gain) loss on assets sold/held for sale/impairment, net, (gain) loss on investments, net, and adjusts tax expense to cash taxes. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide investors with a meaningful, consistent comparison of the Company’s core operating results and trends for the periods presented. Non-GAAP financial measures are not prepared in accordance with GAAP. Therefore, the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Reconciliations of the non-GAAP financial measures contained herein to the comparable GAAP financial measures can be found in our press release dated February 22, 2015, which can be found, along with reconciliations of other historical non-GAAP financials, at www.valeant.com. FORWARD-LOOKING STATEMENTS In addition to current and historical information, this Annual Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (or forward-looking information within the meaning of the Canadian Securities Administrator’s National Instrument 51-102 Continuous Disclosure Obligations) (collectively, “forward-looking statements”). These forward- looking statements relate to, among other things: our strategy and operating principles and our ability to implement such strategy and operating principles; the prospects for (including anticipated sales revenue of) and anticipated timing of the regulatory submission, approval and launch of product candidates; our ability to achieve the anticipated benefits, results and targeted returns and paybacks of our acquisitions and other transactions; the prospects for, growth and future development of the Company, its business units and its products; and our expectations regarding our financial performance. Forward- looking statements can generally be identified by the use of words such as “believe,” “anticipate,” “expect,” “intend,” “estimate,” “plan,” “continue,” “will,” “may,” “should,” “could,” “would,” “target,” “potential,” “forecast,” “project” and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward- looking statements. Although we have indicated above certain of these statements set out herein, all of the statements in this Annual Report that contain forward-looking statements are qualified by these cautionary statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Actual results may differ materially from those expressed or implied in such statements. Factors that might cause or contribute to these differences include, but are not limited to, risks and uncertainties discussed in our most recent annual or quarterly report and other filings filed with the U.S. Securities and Exchange Commission and the Canadian Securities Administrators, which factors are incorporated herein by reference. You should consider these factors (and other uncertainties and potential events) in evaluating our prospects and future financial performance and in making decisions with respect to the Company. The forward-looking statements in this report speak only as of the date of this report. We undertake no obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes, except as required by law. THE RIGHT PRODUCTS. THE RIGHT PHILOSOPHY. RECORD ORGANIC GROWTH. 1 VALEANT LATE-STAGE PIPELINE Valeant runs a lean R&D model focused on productivity – outputs measured against inputs – and spend based on the promise of a program for the short- and long-term. Leveraging industry overcapacity, outsourcing commodity services and focusing on the critical skills and capabilities needed to bring new technologies to market, the results of this approach are a rich pipeline of products for the future sourced from inside, acquisitions and in-licensing. VALEANT LATE STAGE R&D PORTFOLIO Product Category Action Expected launch year enVista® Toric Eye Health Toric IOL 2016 Brimonidine Eye Health OTC 2016 VESNEO™ Eye Health Glaucoma 2016 Post-operative pain and Lotemax® Gel Next Gen Eye Health 2016 inflammation ULTRA™ Plus Powers Eye Health Contact lens 2016 Biotrue® ONEday Toric Eye Health Contact lens 2016 Moderate to severe IDP-118 Derm 2017/2018 plaque psoriasis IDP-120 Derm Novel acne combination 2019 Emerade® Allergy Anaphylaxis 2016/2017 Antibiotic treatment for Arestin® LCM Oral Health 2016 periodontal (gum) disease 2 A Wealth of Promising Ophthalmic Drugs on the Horizon During 2015, Valeant expects to progress three exciting and promising ophthalmology products currently in its R&D pipeline. Each has demonstrated positive clinical results and is scheduled to meet regulatory milestones in 2015, with commercial launches expected in 2016. Glaucoma is the second-leading cause of preventable blindness in the world and clinical data has shown that VESNEO™ can effectively lower intraocular pressure (IOP) which is critical in the management of glaucoma and ocular hypertension. Reducing IOP may prevent the progression of glaucoma in early and late stages of the disease. VESNEO™ is expected to have peak sales potential of approximately $500 million in the U.S. and $1 billion globally. A New Drug Application will be filed with the U.S. Food and Drug Administration (FDA) in the first half of 2015. Valeant expects to file a New Drug Application with the FDA sometime in the second half of 2015 for Lotemax® Gel Next Generation 0.38% (sub-micron gel formulation of loteprednol etabonate) which, if approved, would be the first twice-daily ophthalmic steroid available for eliminating inflammation and post-operative pain following ophthalmic surgeries. Lotemax® Gel Next Generation is a new formulation – a lower concentration – of Valeant’s currently marketed ophthalmic products Lotemax® and Lotemax® Gel. It will also require less dosing than the current formulation. The third compound, low-dose Brimonidine, is an over-the-counter eye-whitening product for relieving ocular redness or hyperemia, which can be triggered by a variety of factors, including contact lens wear, dry eye or ocular allergies, among others. A New Drug Application