#1NG PERSHING SQUARE Filed by: Pershing Square Capital Management, L.P. Subject Company: Valeant Pharmaceuticals International, Inc. SEC File No. of Valeant Pharmaceuticals International, Inc.: 001-14956 The Outsider Perspectives from Allergan's Largest Shareholder Filing under Rule 425 under the Securities Act of 1933 and deemed filed under Rule 14a-12 of the Securities Exchange Act of 1934 Pershing Square Capital Management, L.P.#2Disclaimer ADDITIONAL INFORMATION This communication does not constitute an offer to buy or solicitation of an offer to sell any securities. This communication relates to a proposal which Valeant Pharmaceuticals International, Inc. ("Valeant") has made for a business combination transaction with Allergan, Inc. ("Allergan"). In furtherance of this proposal and subject to future developments, Pershing Square Capital Management, L.P. ("Pershing Square") and Valeant (and, if a negotiated transaction is agreed, Allergan) may file one or more registration statements, proxy statements or other documents with the U.S. Securities and Exchange Commission (the "SEC"). This communication is not a substitute for any proxy statement, registration statement, prospectus or other document Pershing Square, Valeant and/or Allergan may file with the SEC in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF VALEANT AND ALLERGAN ARE URGED TO READ THE PROXY STATEMENT(S), REGISTRATION STATEMENT, PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Any definitive proxy statement(s) (if and when available) will be mailed to stockholders of Allergan and/or Valeant, as applicable. Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents filed with the SEC by Pershing Square and/or Valeant through the web site maintained by the SEC at http://www.sec.gov. Pershing Square, PS Management GP, LLC, PS Fund 1, LLC, William A. Ackman, William F. Doyle, Jordan H. Rubin, Ben Hakim, and Roy J. Katzovicz in the future may be deemed "participants" under SEC rules in any solicitation of Allergan shareholders in respect of a Valeant proposal for a business combination with Allergan. Pershing Square, PS Management GP, LLC and William A. Ackman may be deemed to beneficially own the equity securities of Allergan described in Pershing Square's statement on Schedule 13D initially filed with the SEC on April 21, 2014 (the "Schedule 13D"), as it may be amended from time to time. Except as described in the Schedule 13D, none of the individuals listed above has a direct or indirect interest, by security holdings or otherwise, in Allergan or Valeant or the matters to be acted upon, if any, in connection with a potential Valeant-Allergan business combination. Information regarding the names and interests in Allergan and Valeant of Valeant and persons related to Valeant who may be deemed participants in any solicitation of Allergan or Valeant shareholders in respect of a Valeant proposal for a business combination with Allergan is available in the soliciting material in respect of Allergan filed with the SEC by Valeant on April 21, 2014. The additional definitive proxy soliciting material referred to in this paragraph can be obtained free of charge from the sources indicated above. 2#3Disclaimer DISCLAIMER The information in this presentation is for informational purposes only, and this presentation shall not constitute an offer to sell or a solicitation of an offer to purchase any security or investment product, nor does it constitute professional advice. This presentation and the information contained herein is not investment advice or a recommendation or solicitation to buy or sell any securities. All investments involve risk, including the loss of principal. Pershing Square recognizes that there may be confidential information in the possession of the companies discussed in this presentation that could lead these companies to disagree with Pershing Square's conclusions. The information contained in this presentation is subject in all respects to the disclosure set forth in the reports filed by Allergan and Valeant with the SEC. Except where otherwise indicated, the information in this presentation speaks only as of the date of this presentation. Permission to quote third-party reports in this presentation has been neither sought nor obtained. This presentation is not all inclusive and may not contain all of the information that you require in order to evaluate Allergan and Valeant and the transactions described in this presentation. You should review Valeant's and Allergan's most recent annual and quarterly reports and other reports filed by Valeant and Allergan with the SEC. You should rely on your own independent analysis to assess the accuracy and completeness of all information contained herein. No representation, warranty or undertaking, expressed or implied, is or will be made and no responsibility or liability is or will be accepted by Pershing Square or its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors, as to, or in relation to, the accuracy or completeness of the information contained in the presentation, or any other information, errors therein or omissions therefrom. By presenting this information, none of Pershing Square or its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors, is providing investment, legal, tax, financial, accounting or other advice to you or to any other party. None of Pershing Square or its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors, is acting as an advisor or fiduciary in any respect in connection with providing this information. Funds managed by Pershing Square and its affiliates are invested in Allergan common stock and other securities. Pershing Square manages funds that are in the business of trading - buying and selling - securities and financial instruments. It is possible that there will be developments in the future that cause Pershing Square to change its position regarding Allergan, Valeant and the proposed Valeant-Allergan business combination. Pershing Square may buy, sell, cover or otherwise change the form of its investment in Allergan for any reason. Pershing Square hereby disclaims any duty to provide any updates or changes to the analyses contained here including, without limitation, the manner or type of any Pershing Square investment. 3#4Disclaimer Non-GAAP Financial Measures This presentation includes certain non-GAAP financial measures, including but not limited to cash net income and EBIT (collectively, "non-GAAP financial measures"). These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP. Pershing Square believes that the presentation of these financial measures enhances an investor's understanding of Valeant's and Allergan's financial performance. Pershing Square further believes that these financial measures are useful financial metrics to assess operating performance from period to period by excluding certain items that it believes are not representative of Valeant's and Allergan's respective core businesses. Pershing Square also believes that these financial measures provide investors with a useful tool for assessing the comparability between periods of Valeant's and Allergan's respective abilities to generate cash from operations sufficient to pay taxes, to service debt and to undertake capital expenditures. Pershing Square believes these financial measures are commonly used by investors to evaluate companies' performance. However, the use of these non-GAAP financial measures in this presentation may vary from that of other companies in Valeant's and Allergan's industry. These non-GAAP financial measures should not be considered as alternatives to performance measures derived in accordance with GAAP.#5Disclaimer Forward-looking Statements This presentation contains forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding Valeant's offer to acquire Allergan, Valeant's financing of the proposed transaction, Valeant's or Allergan's expected future value and performance (including expected results of operations and financial guidance), and the combined company's future financial condition, operation results, strategy and plans. Forward-looking statements may be identified by the use of the words "anticipates," "expects," "intends," "plans," "should," "could," "would," "may," "will," "believes," "estimates," "potential," "target," "opportunity." "tentative," "positioning," "designed," "create," "predict," "project," "seek," "ongoing," "upside," "increases" or "continue" and variations or similar expressions and include but are not limited to beliefs expressed regarding future performance. These statements are based upon the current expectations and beliefs of Pershing Square and are subject to numerous assumptions, risks and uncertainties that change over time and could cause actual results to differ materially from those described in the forward-looking statements. These assumptions, risks and uncertainties include, but are not limited to, assumptions, risks and uncertainties discussed in Valeant's and/or Allergan's most recent annual or quarterly reports filed with the SEC and the Canadian Securities Administrators (the "CSA") and assumptions, risks and uncertainties relating to the proposed merger, as detailed from time to time in Valeant's filings with the SEC and the CSA. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this presentation are set forth in other reports or documents that Valeant and/or Allergan file from time to time with the SEC or the CSA, and include, but are not limited to: . . . . the ultimate outcome of any possible transaction between Valeant and Allergan, including the possibilities that Valeant will not pursue a transaction with Allergan and that Allergan will reject a transaction with Valeant; if a transaction between Valeant and Allergan were to occur, the ultimate outcome and results of integrating the operations of Valeant and Allergan, the ultimate outcome of Valeant's pricing and operating strategy applied to Allergan and the ultimate ability to realize synergies; the effects of the business combination of Valeant and Allergan, including the combined company's future financial condition, operating results, strategy and plans the effects of governmental regulation on Valeant's and Allergan's business or potential business combination transaction; ability to obtain regulatory approvals and meet other closing conditions to the transaction, including all necessary stockholder approvals, on a timely basis; • Valeant's and Allergan's ability to sustain and grow revenues and cash flow from operations in their respective markets and to maintain and grow their respective customer bases, the need for innovation and the related capital expenditures and the unpredictable economic conditions in the United States and other markets; the impact of competition from other market participants; . the development and commercialization of new products; the availability and access, in general, of funds to meet Valeant's and Allergan's debt obligations prior to or when they become due and to fund their operations and necessary capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets; • Valeant's and Allergan's ability to comply with all covenants in their respective indentures and credit facilities any violation of which, if not cured in a timely manner, could trigger a default of their respective other obligations under cross-default provisions; and • the risks and uncertainties detailed by Valeant and Allergan with respect to their respective businesses as described in their respective reports and documents filed with the SEC. All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. None of Pershing Square or any of its affiliates or associates, or any of their respective directors, officers, employees, agents, shareholders or advisors undertakes any obligation to update any of these forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect actual outcomes. 5#6Disclaimer Platform Value In this presentation, we have attempted to value an asset of Val-gan, which we refer to as its "Platform Value". Considerations in valuating this asset include management's ability to (1) identify new acquisitions, (2) execute those acquisitions on reasonable terms, and (3) integrate them effectively. There is always a risk that acquisitions may be too difficult to accomplish or otherwise be unsuccessful We are not aware of any recognized authority for valuing Platform Value, but we believe that the market should assign value to Platform Value. It is possible that the market will not assign any Platform Value to Valeant or Val-gan. And if so, the estimates and projections of Platform Value we provide will be inapplicable. 6#7Introduction to Pershing Square PERSHING SQUARE Pershing Square manages approximately $13 billion in capital ■ Concentrated, research-intensive, value investor ■ We seek to own high-quality businesses, often with a catalyst to unlock value ■ Pershing Square has a track record as an active, long-term, value-creating shareholder o Our target holding period for our active investments is generally four to six years ■ Pershing Square owns a 9.7% stake in Allergan 7#8Pershing Square Investment Criteria Pershing Square likes businesses with the following qualities: Durable products/brands ✓ Predictable financial results ✓ Superior long-term growth in free cash flow per share capital allocation Shareholder-friendly Representative Holdings P&G CANADIAN PACIFIC BURGER KING Beam 8 KRAFT GGP#9We Have Not Previously Invested in a Pharmaceutical Company The traditional pharmaceutical company's products are not durable, and growth is not predictable x Patent cliffs for major products x Huge investments in high-risk, low-return R&D to replace off-patent drugs x Price pressure in many segments x Bloated overhead and cost structures x Value-destroying acquisitions 9#10Why Valeant is Unique Valeant is a specialty pharmaceutical company that fits our investment criteria ✓ Durable products/brands ✓ Predictable financial results Superior long-term growth in free cash flow per share ✓ Culture of cost discipline and operational excellence Shareholder-friendly capital allocation 10#11Valeant TSR Under Mike Pearson's Leadership An investment in Valeant shares on the day Mike Pearson became CEO has appreciated 25x in six years including dividend reinvestment Valeant total shareholder return from 2/1/2008 to 4/21/2014 Valeant Total Shareholder Return 3,500% 3,000% 2,500% 2,000% 1,500% 1,000% 500% 2/1/08: Mike Pearson appointed CEO; Valeant share 6/20/10: Announced merger with Biovail 5/27/13: Announced acquisition of Bausch & Lomb for $8.7bn 11 9/3/12: Announced acquisition of Medicis for $2.6bn 2,544% 0% Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 Note: Chart shows the total shareholder return for an investment in Valeant Pharmaceuticals International, the entity that merged into Biovail Corporation on September 28, 2010. Subsequent to this transaction, Biovail Corporation changed its name to Valeant Pharmaceuticals International, Inc. Chart assumes that the special dividend of $16.77 paid to legacy Valeant shareholders at closing of the merger and the special dividend of $1.00 paid to new Valeant shareholders on December 22, 2010 were both immediately reinvested in new Valeant (fka Biovail) common stock.#12The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success OUT The Eight Unconventional CEOS and Their Radically Rational Blueprint for Success William N. Thorndike, Jr. HARVARD BUSINESS REVIEW PRESS SIDE ► Warren Buffett, Berkshire Hathaway ▸ Tom Murphy, Capital Cities ► Dick Smith, General Cinema ➤ Bill Anders, General Dynamics ► Bill Stiritz, Ralston Purina ► John Malone, TCI ► Henry Singleton, Teledyne ► Katharine Graham, The Washington Post SE References are to The Outsiders by author William N. Thorndike, Jr., Harvard Business Review Press, October 2012. 12#13The Outsiders' Principles remind us of Valeant "Capital allocation is a CEO's most important job" "What counts in the long run is the increase in per-share value, not overall growth or size" ▸ "Cash flow, not reported earnings, is what determines long-term value" ► "Decentralized organizations release entrepreneurial energy and keep both costs and 'rancor' down" "Independent thinking is essential to long-term success, and interactions with outside advisers (Wall Street, the press, etc.) can be distracting and time-consuming" ▸ "Sometimes, the best investment opportunity is your own stock" "With acquisitions, patience is a virtue... as is occasional boldness" The CEOs chronicled in The Outsiders produced returns of over 20x the S&P 500 and over 7x their respective peer groups 13#14Mike Pearson is an Outsider CEO "These eight CEOs were not charismatic visionaries, nor were they drawn to grandiose strategic pronouncements. They were practical and agnostic in temperament, and they systematically tuned out the noise of conventional wisdom by fostering a certain simplicity of focus, a certain asperity in their cultures and their communications." "Each ran a highly decentralized organization; made at least one very large acquisition; developed unusual, cash flow-based metrics; and bought back a significant amount of stock. None paid meaningful dividends... All received the same combination of derision, wonder, and skepticism from their peers and the business press. All also enjoyed eye-popping, credulity- straining performance over very long tenures...” William N. Thorndike, Jr., The Outsiders 14#15The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success OUT The Eight Unconventional CEOS and Their Radically Rational Blueprint for Success William N. Thorndike, Jr. HARVARD BUSINESS REVIEW PRESS SIDE ▸ Warren Buffett, Berkshire Hathaway ▸ Tom Murphy, Capital Cities ► Dick Smith, General Cinema ➤ Bill Anders, General Dynamics ► Bill Stiritz, Ralston Purina ► John Malone, TCI ► Henry Singleton, Teledyne Katharine Graham, The Washington Post Mike Pearson, Valeant SE References are to The Outsiders by author William N. Thorndike, Jr., Harvard Business Review Press, October 2012. 15#16Presentation Summary I. Why We Like Valeant's Business Model ✓ Durable Products and Cash Flows ✓ Growing Markets & Categories ✓ R&D and Acquisition Strategy ✓ Superior Operating Model ✔Organic Growth ✓ Shareholder-Oriented Culture and Incentive Structure II. Accounting Considerations III. How We Evaluate the Transaction ✓ Valuing "Val-gan" ✓ Platform Value IV. Summary V. Appendix#17I. Why We Like Valeant's Business Model#18Pershing Square Due Diligence on Valeant In the four months since our initial contact with Valeant, we have performed significant due diligence on the company ► Reviewed public company information for Valeant and Allergan On February 9th, 2014 we executed a confidentiality agreement with Valeant, which allowed us to conduct substantial due diligence ■ In-person meeting with board of directors ■ Extensive management interviews ■ Selective local due diligence at the country level ■ Review of parent and regional business plans ■ Review of historical and projected organic growth by business unit and region ■ Review of business development pipeline ■ Review of R&D pipeline ■ Review of global tax structure ■ Review of bear thesis 18#19Why We Like Valeant Durable Products and Cash Flows ✓ Low % of products with patent cliffs Low product concentration risk ✓ Lower price and reimbursement risk Growth High-growth categories High-growth geographies New products Superior Operating Model Shareholder-Friendly Capital Allocation ✓ Lower-risk, higher- return R&D ✓ Platform for accretive acquisitions Share buybacks Highly decentralized Local managers determine product mix, pricing & distribution strategy Culture of cost efficiency ✓ Management incentives aligned with shareholders Management is focused on creating shareholder value 19#20William F. Doyle Senior Advisor, Pershing Square Capital Management, L.P. ■ Massachusetts Institute of Technology; SB Engineering, 1984 ■ Harvard Business School; MBA, 1992 - Section H with Bill Ackman ■ McKinsey & Company; 1992-1995 - Worked with Mike Pearson o Global Healthcare Group ■ Johnson & Johnson; 1995-2000- Retained Mike Pearson o Group Operating Committee, OTC Pharmaceutical & Medical Device Group V.P. for licensing & acquisitions and medical device R&D o Board of Directors, Johnson & Johnson Development Corp. ■ WFD Ventures LLC; 2002-present o Managing Director Venture capital investments in medical device and specialty pharmaceutical sectors 20#21Durable Products and Cash Flows 21#22"Patent Cliff" vs. "Durable" Drugs/Medical Devices ► Patent Cliff Products ■ A patent provides a legal monopoly to the inventor of a drug or medical device for a limited period of time ■ During the period of patent exclusivity (usually 20 years from the filing of the patent application), superior profit margins are possible (and necessary to recoup the cost of developing the drug/device) ■ On the day the patent expires (the "patent cliff"), low-cost, generic products can enter the market. If generics enter, sales of more expensive, previously patented products usually decline substantially ► Durable Products ■ Do not depend on the legal monopoly afforded by patents for their market position ■ Similar to consumer packaged goods 22#23The Vast Majority of Valeant's Revenue is Durable Durable healthcare products are more comparable to high-margin consumer products than to traditional, patented pharma products % of 2014E Revenue 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Prescription ("Rx") 41% Devices 21% Over-the- Counter ("OTC") 20% Generics 18% Patent Cliff Rx 15% 0% Source: Valeant Presentations, April 22, 2014 and January 14, 2014 at JPMorgan Conference 23 Durable Products 85%#24The Majority of Prescription Drug Revenue is Durable ► Prescription ("Rx") revenues are expected to be 41% of total 2014 revenues ▶ -60% of Rx revenues (~26% of total) are durable: ■ Already off-patent o Example: Efudex ■ Too small to attract generic entrants o Example: Tetrix ■ Difficult to manufacture o Example: Retisert ■ Generics not physiologically equivalent o Example: Wellbutrin XL ■ Strong brands with patient/doctor loyalty o Example: Obagi Hydroquinone Source: Company Presentation, April 22, 2014. 24#25Valeant has Low Product Concentration Risk Unlike most traditional pharmaceutical companies, Valeant has a highly diversified product portfolio minimizing product concentration risk Revenue Contribution by Products 2014E Rest of Portfolio 70% Top 10 Products 18% Products 11 - 20 12% Source: Company presentation January 14, 2014 at JPMorgan Conference 25 The top 10 products of Merck and Pfizer represent -50% of revenues#26Valeant has Lower Price and Reimbursement Risk Valeant's products are predominantly cash-pay or reimbursed by private insurers Revenue Contribution by Payer 2014E Government Pay 25% Source: Company presentation January 14, 2014 at JPMorgan Conference 26 Cash / Private Payer 75%#27Growing Markets & Categories 27#28Categories with Attractive Growth Drivers Valeant U.S. Category Mix (2014E) Derm Rx / Pod, 19% Dental, 4% Lens, 4% Generics, 6% Other, 12% Surgical, 6% Ophthamology Rx, 11% Neurology, 12% Source: Valeant Internal Documents. Management Interviews Consumer, 14% Aesthetics / PDT, 13% 28 ► Growing faster than global pharma market ► Doctors or patients make product choices ► Receptive to new products and line extensions ► Cash-pay or reimbursed through private insurance#29International, Not Global Valeant executes product mix, distribution, and promotional strategies to drive growth in attractive geographies Patented Prescription Durable Prescription Over-the- Counter Branded Generic Generic Devices U.S./ Western Eastern Latin Canada Europe Japan Europe America China Source: Company Presentation, April 22, 2014. Management interviews. Emerging Asia -30% of 2014 estimated sales are in emerging markets 29 India#30Industry-Leading New Product Launch Program ► United States ■ 19 planned product launches in 2014 ■ Estimated new-product peak sales of $1.3bn to $2.3bn ► Emerging Markets ■ More than 300 product launches planned in 2014 Source: Company Presentation, April 22, 2014. 30#31Durable Franchise with Attractive Growth Organic growth has consistently been mid to high single-digit Pro-Forma Organic Growth Excluding the impact of generic entry, FX adjusted 14% 12% 10% 8% 6% 4% 2% 0% 8% 11% 2011 9% 9% 13% 2012 Developed Markets Emerging Markets 10% Source: 2011, 2012, 2013 Year End Earnings Press Release 6% 12% 7% 2013 Total Product Sales 31 Valeant's pro-forma organic growth, excluding the impact of generic entry, highlights the ongoing growth potential of the durable business (~85% of total)#32R&D and Acquisition Strategy 32#33Traditional Pharma R&D Model is Broken High-risk, low-return ►The Traditional model ■ Large, fixed-cost R&D organization ■ Discovery➡ Formulation Pre-clinical trials➡➡Scale-up➡Clinical trials ► High-Risk ■ Only 4% of pre-clinical compounds become approved medications (1) ► Low-Return ■ Total cost per drug $1.3bn, up 10x since 1975(2) ■ A 10- to 15-year investment to develop a novel drug (2) ■ 4.8% industry average ROI on R&D investment(³) (1) "Getting Pharmaceutical R&D Back on Target"; Mark E. Bunnage; Nature America, Inc. (2) "The Pharmaceutical Industry and Global Health Facts and Figures 2012"; IFPMA. (3) "Measuring the Return from Pharmaceutical Innovation in 2013, Deloitte / Thomson Reuters. 33#34High Risk "Traditional" R&D Model The New York Times December 4, 2006 "End of Drug Trial Is a Big Loss for Pfizer" THE WALL STREET JOURNAL. July 30, 2008 "Elan, Wyeth tumble on Alzheimer's study" Bloomberg May 7, 2012 "Roche Drops After Halting Cholesterol Drug Development" Source: Bloomberg Market Data 34 Market Cap Decline Day of Announcement -$21bn -$14bn -$5bn#35Valeant: Lower-Risk, Higher-Productivity R&D ► Focused on lower-risk, higher-reward programs ■ Line extensions and re-formulations ■ New indications and strengths for existing drugs ■ New branded generics ■ Prescription to OTC switches ■ High-probability development programs (Phase IIIs) ▸ No high-risk discovery R&D ▸ No pre-set R&D spend as a percentage of revenue ► Low, fixed-cost R&D Infrastructure ■ Outsource non-core R&D functions 35#36Track Record of R&D Productivity ► Line extensions and re-formulations ■ Example: Acanya ►New indications and strengths for existing drugs ■ Example: Retin-A Micro .08% ►New branded generics ■ Example: 300 new product launches expected in 2014 ► Prescription to OTC switches ■ Example: Bedoyecta ► High-probability development programs (Phase Ills) ■ Example: Luzu ► Low-risk New Chemical Entities (NCE's) ■ Example: Jublia 36#37Track Record of R&D Productivity Valeant's superior R&D productivity is indicative of its investment discipline and cost-focused culture ► 19 planned launches in 2014 ■ Peak sales potential: $1.3 -2.3 billion ► 7 late-stage pipeline projects ■ Peak sales potential: $1.4 - 3.4 billion ► Valeant standalone estimated 2015 R&D spend: -$200 million ■ ~2% of revenue ■ Industry-leading productivity Source: Company public presentation April 22, 2014. Pershing Square estimate of 2015 R&D spending is based off of Valeant's -$200mm run-rate end of 2014 spending rate 37#38Valeant's R&D Spending is Focused and Productive Valeant's disciplined focus on lower-risk, higher-return R&D projects has led to an R&D ratio that is lower than peers' Traditional Pharma(1) -77% -29% Gross Margin SG&A -19% R&D -28% EBIT Valeant Model (2013)² -75% -22% Gross Margin SG&A -3% R&D -50% 38 ¹Traditional Pharma represents the average of Pfizer, Merck, Eli Lilly, and Bristol-Myers Squibb (2014 Est) based on Sanford Bernstein estimate. 2 Valeant 2013 Q4 Earnings Press Release EBIT Targeted, high-return R&D is a driver of organic growth with an industry-leading number of product launches planned for 2014#39Core Competency in Licensing & Acquisitions Valeant is a nimble acquirer of attractive businesses, large and small Larger acquisitions of traditional pharma / device companies with bloated cost structures and unproductive R&D spending ▸ Smaller, bolt-on acquisitions of products easily integrated into Valeant's efficient, international distribution infrastructure ■ In-licenses from one-product companies ■ Acquisitions of sub-scale companies without adequate distribution ■ Declining products neglected by other companies that can return to growth with promotion ► Effective acquisition and integration process ■ CEO Mike Pearson is personally involved in evaluation, negotiation and execution of transactions 39#40Licensing & Acquisition Track Record ► Licenses & Acquisitions ■ Management has completed 100+ acquisitions and licenses, investing $19bn+ since 2008 ■ Acquisitions have been highly accretive ■ Collectively, since 2008, Valeant has earned a >20% unlevered return (before tax efficiencies) on its acquisitions ■ Valeant management expects the majority of the company's future free cash flow will be allocated to its value-creating acquisition strategy Source: Management interviews 40#41Superior Operating Model 41#42"[Henry] Singleton [the CEO of Teledyne] believed in an extreme form of organizational decentralization with a wafer-thin corporate staff at headquarters and operational responsibility and authority concentrated in the general managers of the business units. This was very different from the approach of his peers, who typically had elaborate headquarters staffs replete with vice presidents and MBAs." "Singleton was an iconoclast and the idiosyncratic path he chose to follow caused much comment and consternation on Wall Street and in the business press. It turned out that he was right to ignore the skeptics." William N. Thorndike, Jr., The Outsiders 42#43Highly Decentralized ► Product mix, price, and distribution optimized for each region ■ Not all products in all markets ■ Partner locally where it makes sense Operations ► SG&A zero-based for products and region ■ No pre-set percentages of revenue for sales & marketing expense Country / business unit managers' compensation aligned with local business performance 43#44Valeant has a Culture of Cost Efficiency "We will operate a low-cost operating model in all that we do. In essence, we will continue to apply a low-margin operating mindset to a high-margin business. We will take pride in our frugality, our ability to make quick decisions based on internal resources, our willingness to all wear different hats at different times." - Mike Pearson, 2010 Chairman's Letter 44#45Culture of Cost Control and Productivity Small corporate function / extremely limited overhead ■ Manage strategy, capital allocation, legal and financial controls ► Zero-base all SG&A categories ■ No pre-set percentages of revenue or annual budgets ► Expect industry-leading employee productivity ► Low gross-margin mindset in a high gross-margin business 45#46Valeant's Cost Structure is a Competitive Advantage The pharmaceutical industry's high gross margins have supported wasteful SG&A and R&D spending Traditional Pharma(1) -77% -29% Gross Margin SG&A -19% R&D -28% EBIT Valeant Model (2013)² -75% -22% Gross Margin SG&A -3% R&D -50% 46 Traditional Pharma represents the average of Pfizer, Merck, Eli Lilly, and Bristol-Myers Squibb (2014 Est) based off Sanford Bernstein estimate. 2 Valeant 2013 Q4 Earnings Press Release EBIT Valeant has achieved one of the most competitive SG&A ratios in the industry, while continuing to grow organically#47Organic Growth 47#48Why Detailed Growth Disclosure is Important The market does not do a good job valuing a business comprised of segments with materially different growth prospects ► Consider a company with the following growth characteristics ■ 75% of revenue grew at 10% ■ 25% of revenue grew at -30% Consolidated revenue growth = 0% ▸ Analysts would likely assign a multiple to the this business based on its 0% consolidated growth rate We believe valuing this business as a 0% grower is wrong ►As the negative growth business shrinks, consolidated growth will increase to the growth rate of the growing business 48#49Organic Revenue Growth Disclosure Valeant is the only major pharmaceutical company that discloses organic growth Valeant provides detailed organic growth transparency, reporting growth in four different ways to assist investors in valuing different components of the business Same Store 1) Including the effect of generic entry 2) Excluding the effect of generic entry Pro-Forma For Acquisitions (Assumes acquired companies were purchased at the beginning of the prior reporting period) 3) Including the effect of generic entry 4) Excluding the effect of generic entry 49#50Organic Growth Measuring Underlying Growth at Valeant Investors who do not adjust for the impact of new generic competition will underestimate the growth rate of the durable portfolio ■ As the portfolio subject to new generic competition winds down, reported corporate growth will approach the growth rate of the durable portfolio Temporary effect of new generic competition Reported corporate growth rate Durable portfolio growth rate Only ~7% of Valeant's revenue (-1/2 of the total patent cliff revenue) will face new generic competition by 2016, and thereafter a relatively small percentage of the business is at risk in any year¹ (1) Valeant Public Presentation January 14, 2014 at JPMorgan Conference 50#51Organic Growth Measuring Underlying Growth Organic growth, excluding the impact of new generic competition, has been consistently mid to high single-digit Pro-Forma Organic Growth Excluding the impact of generic entry, FX-adjusted Developed Markets Emerging Markets Total Product Sales 2011 8% 11% 9% 2012 9% 13% 10% 2013 6% 51 12% 7% Q1 1% 11% 4% Q2 2013 3% 12% 6% Q3 4% 13% 6% Q4 10% 13% 11% Note: 2011 and 2012 organic growth rates are not adjusted to exclude the impact of generic entry. The impact of generic entry was immaterial in 2011 and 2012. Growth rates for all periods are pro forma for acquisitions completed during the period but not for acquisitions completed in future periods (e.g. 2011 is not pro forma for 2013 acquisitions). Source: 2011, 2012, Q1-Q4 2013 Valeant Earnings Press Release#52Shareholder-Oriented Performance Culture and Incentive Structure 52#53"[T]he outsiders (who often had complicated balance sheets, active acquisition programs, and high debt levels) believed the key to long-term value creation was to optimize free cash flow, and this emphasis on cash informed all aspects of how they ran their companies - from the way they paid for acquisitions and managed their balance sheets to their accounting policies and compensation systems." - William N. Thorndike, Jr., The Outsiders 53#54Capital Allocation at Valeant Valeant's capital allocation strategy reflects management's focus on creating shareholder value ► Acquisitions ■ Management has completed 100+ acquisitions and licenses, investing $19bn+ since 2008 ■ These acquisitions have been highly accretive due to superior cost structure and operating model ■ Valeant management expects the majority of the company's future free cash flow will be allocated to its value-creating acquisition strategy ►Share Repurchases ■ Valeant has been an aggressive buyer of its stock ■ Between 2008 and 2012, Valeant repurchased $2.5bn of stock and convertible bonds Source: Management Interviews 54#55Management Is Incentivized To Create Shareholder Value CEO Mike Pearson and his senior team have the potential to be richly rewarded for outstanding long-term share price performance ► Annual Cash Incentive Compensation ■ Up to 200% of base salary possible if goals are achieved ► Long-Term Incentive Compensation ■ 50% time-vested stock options ■ 50% performance share units; three-year annualized Total Shareholder Return (TSR) vesting Michael Pearson & Howard Schiller 55 Annualized TSR (IRR) <15% 15% 30% 45% 60% % of PSUS vesting 0% 100% 200% 300% 400% Mike Pearson and his team own significant stock in Valeant, further aligning management with shareholders. Pearson owns ~10.6mm shares (or -$1.3 billion) which he is restricted from selling until 2017 Source: Valeant 2014 Schedule 14A#56Valeant's Culture and Execution Reminds Us of 3G 3G has achieved extraordinary success in various businesses by implementing a culture of efficiency, cost discipline, zero-based budgeting, and shareholder-oriented capital allocation 3G Case Studies ■ ABI: $175bn market cap, 511% TSR last decade (20% p.a.) BKW: bought in Oct. 2010, TEV from $4bn to $11bn in 3.5 years ■ HNZ: bought Feb. 2013, EBITDA margins are already up ~300-400bps to -29%1 ► Efficient operators and capital allocators enjoy unique, enduring advantages within an industry ► Superior capital allocation and operational efficiency allow Outsider CEOS to take advantage of opportunities others cannot profitably pursue ■ Revenue and market development opportunities ■ Investments for growth ■ Acquisitions (1) Deutsche Bank estimate, April 8, 2014. 56#57II. Accounting Considerations 57#58"In another departure from conventional wisdom, Singleton eschewed reported earnings, the key metric on Wall Street at the time, running his company instead to optimize free cash flow." - William N. Thorndike, Jr., The Outsiders 58#59Understanding Valeant's Financials We believe GAAP accounting does a poor job tracking the economic performance of platform businesses like Valeant To evaluate Valeant's business performance, we believe one first needs to translate GAAP earnings into economic earnings 59#60Valeant's GAAP Net Income Does Not Track Cash Flow GAAP Net Income has not been a good proxy for Valeant's free cash flow $mm $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 2011 $500 $- $(500) $(1,000) $(1,500) Source: 2011, 2012, 2013 Valeant Form 10-k. GAAP Net Income GAAP Cash From Operations 2012 60 2013 2011-2013 -$4.5bn Difference#61Valeant's Definition of Cash Net Income GAAP Net Income + Inventory Step-Up Reversal (COGS) + Acquired In-Process R&D Impairment + Restructuring & Integration Acquisition Costs + Amortization of Intangible Assets + Asset Impairments + Change in Fair Value of Contingent Consideration + Debt Extinguishment Loss (Gain) + Non-Cash Interest Expenses + Non-Cash Taxes + Other (Acq.-Related Litigation Settlements, Gain/Loss on Sale) Cash Net Income Valeant does not add back stock-based compensation, depreciation, or ordinary-course legal expense Source: Valeant Q4 2013 Earnings Press Release 61#62Reconciliation of Valeant 2013 GAAP Net Income to "Cash Net Income" Total Revenue Cost of Goods Sold (Ex- Int. Ammo) % Gross Margin SG&A % of Sales R&D % of Sales Contingent Consideration FV Adj. Acquired In-Process R&D Impairment Restructuring & Acq. Costs Amortization of Intangible Assets Other Expense/(Income) Operating Income % of Sales Interest Expense Other Income/(expense) Pre-Tax Income Tax Provision/(Recovery) % Tax Rate Net Income (Loss) Net Income Attributable to Noncontrolling Int. Net Income Source: Valeant Q4 2013 Earnings Press Release GAAP Earnings 5,770 $ $ 1,905 67% 1,305 23% 157 3% (29) 154 551 1,902 234 (410) -7% 836 (69) (1,314) (451) 34% (864) 2 (866) Adj. $ (436) 62 (22) 29 (154) (551) (1,902) (234) 3,270 (89) 66 $ 2,909 3,425 516 2,909 Non-GAAP Cash Earnings 5,770 1,469 1,283 22% 2,860 50% 157 3% earnings to 747 (3) 2,111 65 3% $ 2,046 2 These adjustments are required to $ 2,043 translate GAAP economic earnings#63Cash Net Income Reconciliation: Major Adjustments Four large adjustments comprise ~90% of Valeant's pre-tax income adjustments Major Adjustments: Non-Cash Expenses Amortization of Intangible Assets Inventory Step-Up Reversal (COGS) Acquired In-Process R&D Impairment Cash Expenses Restructuring & Acq. Costs Total "Major Adjustments" Other Adjustments Total Operating Inc. Adjustments Source: Valeant Q4 2013 Earnings Press Release Amount $ 1,902 436 154 $ 551 $ 3,043 382 $ 3,425 63 These non-cash charges are required by GAAP purchase accounting, but do not reflect a loss of economic value for Valeant A one-time cash charge that economically should be capitalized as purchase consideration rather than expensed in the income statement#64III. How We Evaluate the Transaction 64#65Allergan Unaffected Share Price Allergan's unaffected share price is $116.63, the closing price on April 10, the day before Pershing Square began its rapid accumulation program Allergan share price and volume from 2/25/2014 to 4/21/2014 Share Price (USD) $145 $140 $135 $130 $125 $120 $115 $110 $105 PS % of Volume Loohoold Apr. 9-10: No Pershing purchases Unaffected share price: $116.63 ➡Feb-25 Feb-26 Feb-27 Feb-28 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-24 Mar-25 Mar-26 Mar-27 Mar-28 Mar-31 Apr-01 Apr-02 Apr-03 Apr-04 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-14 Apr-15 Apr-16 Apr-17 Apr-21 12 17 21 15 16 15 18 14 10 18 19 17 15 16 26 23 18 22 23 17 21 19 12 25 13 18 18 27 5 Shares, Options, and Forwards Purchased by Pershing Square Volume 0 37 30 31 38 34 39 -Share Price 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Note: Chart shows Allergan's share price, volume, and the number of shares, delta-one options, and forwards purchased by Pershing Square from February 25, 2014, the day Pershing Square began its purchases, to April 21, 2014. Share price and volume data are as per Capital IQ. 65 Volume ('000 shares)#66Allergan Unaffected Share Price (Cont.) During the 31-day trading period from February 25th through April 8th, Pershing Square through its derivative counterparty accumulated a 4.99% economic stake¹ in Allergan ▸ During this period, Pershing Square's notional shares underlying its options accounted for ~17% of Allergan's average daily volume ► Volume during this period averaged 2.8mm shares ► After reaching a 4.99% economic stake on the morning of April 8th, Pershing Square stopped trading ▸ On April 9th and 10th Pershing Square did not trade Allergan stock or derivatives ▸ During this period, average volume in Allergan shares declined to 1.9mm ▸ With Pershing Square out of the market, Allergan settled to its unaffected price of $116.63 on the close of trading April 10th ¹Economic stake includes: Allergan common shares; 1% strike, deep in-the money Allergan call options; and Allergan forward contracts on common stock 66#67Pershing Square's Rapid Accumulation Program Beginning on the morning of April 11th and lasting through the close of trading on April 21st, Pershing Square engaged in a rapid accumulation program ▸ During these six trading days, volume averaged 6.6mm shares and Pershing Square's notional shares underlying its derivative contracts represented 35% of the average daily volume ▸ During these six trading days, Pershing Square acquired 14.0mm deep in the money Allergan call options and Allergan forward contracts representing 4.7% of Allergan shares outstanding During the period of Pershing Square's rapid accumulation program, Allergan's stock price rose from an unaffected price of $116.63 to $142.00, a 22% increase 67#68The Transaction Summary Terms: ► Cash Component: ■ $15bn; $48.30 per share (based on fully diluted share count) ■ Barclays and RBC Capital Markets financing commitment for 100% of cash component ► Stock Component: ■ Allergan shareholders will own -43% of the pro-forma company ■ Exchange ratio: 0.83 Valeant shares for every 1 Allergan share ► Pershing Square Will Elect To Receive 100% Stock 68#69Allergan Shareholders Will Participate in Ongoing Value Creation ► The Transaction gives Allergan shareholders ~43% ownership of Val-gan ► We believe the combination of Valeant and Allergan will create enormous shareholder value ▸ Between now and the close of the Transaction, Allergan shareholders will participate in any increase in Valeant's share price ► Over the short, intermediate, and long-term, we expect the Transaction will generate significant shareholder value 69#70Valuing Val-gan 70#71Sum of the Parts (SOTP) Valuation: Two Types of Cash Flow Durable Products Products: -74% (of 2014E Sales) ► Durable Rx ►Branded Generics ► OTC ► Durable Devices Source: Valeant Public Presentation April 22, 2014 Products: -26% (of 2014E Sales) ► Patent Cliff Rx Valuation Methodology Patent Cliff Products 71 ► Multiple of after-tax profits Valuation Methodology ► Discounted cash flow analysis#72Val-gan's Durable Portfolio ~74% of Val-gan's pro-forma 2014E sales will come from durable, growing cash flows Total Portfolio Patent Cliff 26% Durable 74% Source: Valeant Public Presentation April 22, 2014 72 Durable Portfolio Durable Devices 9% Branded Generics 16% Generics 2% OTC 17% Durable Rx 30%#73Durable Portfolio: Participation in Fast Growing Categories Based on management estimates and our independent research and analysis, we estimate 6% to 8% long-term revenue growth. Our estimate is a slight discount to Valeant management estimates Legacy Allergan Durable Botox Facial Aesthetics Breast Aesthetics Other Sub-Total Legacy Valeant Durable US Emerging Markets Non-US Developed Markets Sub-Total 2014E % of Total Sales 19.7% 4.9% 3.7% 5.2% 33.4% 29.8% 22.0% 14.8% 66.6% Est. Long-Term Growth Base High 8% 10% 3% 2% 7% 4% 8% 2% 5% 10% 12% 5% 3% 9% 6% 12% 4% 8% Total 100.0% 6% 8% The estimated long-term growth rates set forth above are derived from, among other sources, Company management statements regarding estimated future revenue growth. Those statements are subject to numerous assumptions, risks and uncertainties that may change over time and could cause actual results to differ materially. Valeant Public Presentation April 22, 2014: Valeant believes Val-gan can achieve "[hligh single-digit organic revenue growth for the foreseeable future across the entire business, including both the cliff and durable portfolio.#74Durable Portfolio: Few Healthcare Trading Comparables Val-gan's durable business would have few peers among publicly traded pharmaceutical companies x Big Pharma x Few durable assets x High exposure to competitive, low-growth categories x Biotech x High product concentration x Large R&D investment 74 * Specialty Pharmaceuticals x High product concentration x Few durable assets x Generic Pharmaceuticals x Focused on commodity categories x Low secular growth#75Durable Portfolio: Healthcare Trading Comparables Only a handful of public healthcare companies have durability similar to Val-gan's product portfolio ► Perrigo Co. ■ -78%¹ durable - assumes its large biologic drug is a patent cliff asset ■ Major businesses: Private label OTC; hard-to-manufacture generics ■ Lower gross margin than Val-gan: 2014E Gross Margin = 42% ¹ vs. ~80%³ ■ Trading multiple: 21x 2014 EPS² ► Zoetis Inc. ■ >80%4 durable ~80% of revenues are unpatented or existing patent does not provide market exclusivity; animal health pharmaceuticals face lower generic substitution risk than human pharma ■ Major business: Companion and livestock animal health pharmaceuticals ■ Trading multiple: 19x 2014 EPS² ¹RBC Capital Markets Analyst Report, January 6, 2014 *Based on the closing share prices and Bloomberg consensus EPS estimates as of April 21, 2014 *Valeant Public Presentation, April 22, 2014 "ISI Group Analyst Report, January 31, 2013#76Durable Portfolio: Healthcare Transaction Comparables Several large portfolios of durable OTC products have been sold in the last ten years Announced Date 10/07/05 06/26/06 12/10/07 07/21/10 11/15/12 Asset Boots Healthcare Int'l Pfizer Consumer Health Adams Respiratory SSL International Schiff Nutrition Buyer Reckitt Benckiser Johnson & Johnson Reckitt Benckiser Reckitt Benckiser Reckitt Benckiser Price ($bn) 76 $3.4 16.6 2.3 4.2 1.5 Average Source: Capital IQ and Wall Street research. Net Income multiples represent multiples of tax-effected EBIT excluding synergies. (1) Multiples adjusted downward for a hypothetical 25% control premium. xForward Net Income Adj. for 25% Premium¹ Reported 26x 36x 29x 25x 26x 28x 20x 29x 23x 20x 21x 23x#77Durable Portfolio: Trading Comparables Outside of Healthcare We believe there are many similarities between the Global Beauty industry and Val-gan's durable portfolio Industry Global Beauty Merged Company's Durable Pharma High Gross Margins >70%1 >70% Strong Organic Growth 5-7% 6-8%* Brand Loyalty Efficacy Brand Prestige Efficacy Safety Brand Prestige Product Diversity 100s of products per company 1,000s of products Significant opportunity for low-risk, high-return innovation (1) Based on the average calendar 2013 gross margin for L'Oreal, Estee-Lauder, and Beiersdorf of 71.6%. *Erratum: Original presentation referred to "5-7%" 77#78Durable Portfolio: Trading Comparables Outside of Healthcare The global beauty P/E average is 24x projected 2014 earnings 24x Average Global Beauty - 2014 P/E 22x Note: All multiples are based on Bloomberg consensus estimates as of 4/21/2014. 23x L'ORÉAL ESTEE LAUDER Beiersdorf 78 28x#79Durable Portfolio Comparables Range: 19x - 29x 2014 EPS If Val-gan's durable portfolio were valued similar to businesses that we believe to be comparable, then its resulting range of multiples could be as follows: Perrigo and Zoetis Trading Multiples Global Beauty Trading Multiples OTC M&A Multiples - Adj. for Control Premium¹ 19x 20x Comparables Range (1) Multiples adjusted downward for a hypothetical 25% control premium. 21x 22x 28x There is no assurance that Val-gan's durable portfolio would trade within this range 79 29x#80Patent Cliff Portfolio We use a discounted cash flow analysis to value the cliff portfolio Assumptions: ▸ No Life-Cycle Management ■ Assumes management is not able to extend patent exclusivity beyond the original expiration ► Revenues after patent cliff are zero ■ Assumes that the merged company's market share drops to zero immediately after the patent expires ■ Assumes the merged company will not enter the generic market ► Costs are variable ■ Assumes the merged company is able to reduce SG&A and R&D costs proportionate to the revenue lost from patent cliffs 80#81Patent Cliff Portfolio (Cont.) We use a discounted cash flow analysis to value the cliff portfolio Methodology: ► 10% Discount Rate ► Based on our analysis of Val-gan's patent cliff portfolio, we believe the portfolio has an average remaining life of ten years ► We sensitize our DCF analysis to annual growth rates of 0% to 5% until the patent cliff, after which cash flows fall to zero Years of Cash Flow Remaining 10yrs Annual Growth Until Patent Cliff DCF Value As a Multiple of 2014E Cash Flow Assumption: We assume generic Restasis competition in 2024 based on Allergan's recent patent filings. See appendix for model 81 0.0% 6.1x 10yrs 2.5% 6.8x 10yrs 5.0% 7.4x#82Illustrative Valuation Excluding Platform Value If Val-gan's durable portfolio were valued within the range of multiples of businesses that we believe to be comparable, and the cliff portfolio were valued on the DCF analysis presented, then Val-gan's multiple would be as follows: Portfolio Durable Cliff Base Business % Earnings Contribution 74% 26% 100% 2014 Earnings Multiple 20.0x 6.1x 16x 22.0x 6.8x 18x 82 Assumption: We assume the durable and cliff portfolios have earnings contributions equal to their sales contribution This analysis excludes Platform Value, the pipeline value of the merged company, revenue synergies, and life cycle management opportunities There is no assurance that Val-gan would trade at these multiples 24.0x 7.4x 20x#83Platform Value 83#84Platform Businesses Can Be Incredibly Valuable Businesses that execute value-enhancing acquisitions with shareholder-focused capital allocation deserve significant Platform Value a DANAHER ABInBev LIBERTY B Liberty Media JARDEN corporation These companies' stock prices have dramatically outperformed their competition because traditional multiple-of-earnings or cash-flow based valuations do not properly reflect Platform Value#85Jarden Has Been A Successful Platform Since Martin Franklin joined Jarden in 2001, the company has achieved success as a consumer products platform, generating a ~33x total shareholder return to-date Indexed total shareholder return of Jarden from 6/25/2001 to 4/21/2014 Indexed total shareholder return 4,000% 3,500% 3,000% 2,500% 2,000% 1,500% 1,000% 500% 3/27/02: Acquired Tilia for $160mm 2/7/03: Acquired Diamond Brands for $110mm 1/24/05: Acquired American Household for $845mm 9/2/03: Acquired Leigh for $155mm 7/18/05: Acquired Holmes Group for $625mm 9/5/06: Acquired Pine Mountain for $150mm 4/6/07: Acquired Pure Fishing for $400mm 6/28/04: Acquired U.S. Playing Card for $240mm 0% Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 -Jarden Corp. S&P 500 7/9/07: Acquired K2 for $1.2bn 4/1/10: Acquired MAPA for $500mm 10/3/13: Acquired Yankee Candle for $1.8bn Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 -S&P Mid Cap 400 Note: Total shareholder returns are calculated per Bloomberg from June 25, 2001 to April 21, 2014 with all starting values indexed to 100%. 85 3,268% 319% 198%#86Jarden's Platform Strategy Franklin has successfully implemented The Outsiders principles at Jarden "Capital allocation is a CEO's most important job" - The Outsiders ► Value-creating acquisition and capital allocation strategy Maintains high standards for quality and valuation of acquired businesses Focus on shareholder value creation not reported GAAP earnings ■ Intelligent use of debt and equity to finance acquisitions ■ Capital allocation and acquisitions are a core competency and a significant focus of senior management and the board "Decentralized organizations release entrepreneurial energy and keep both costs and 'rancor' down" - The Outsiders ▸ Small corporate staff; business unit managers are given autonomy ► Budgeting process and performance reviews ensure business units are setting and achieving strong goals ► Compensation program rewards strong business unit performance#87Martin Franklin's Next Platform Platform Specialty Products (NYSE: PAH) ► Martin Franklin, Chairman of Jarden, co-founded PAH in 2013 ► In May 2013, PAH raised ~$881mm¹ and began trading at a valuation close to this cash balance ► Pershing Square invested $250mm² in PAH and owns 27%³ of the company² ► In October 2013, PAH announced the acquisition of MacDermid Inc., for $1.8bn cash and equity, a specialty chemical company with significant platform potential (1) http://ir.platformspecialtyproducts.com/faq.cfm (2) TR-1 Notification of Major Interest in Shares filed May 29, 2013 and Pershing Square investment information. (3) Ownership calculated based on PAH shares outstanding as of April 10, 2014. 87#88Platform Specialty Products (NYSE:PAH) PAH has increased in value by ~100% in the six months since the announcement of the MacDermid acquisition PAH Share Price ($) $25 $20 $15 $10 $5 5/16/2013: Began trading near cash NAV $0 May-13 Jun-13 Jul-13 Aug-13 Source: Bloomberg. *Erratum: Original presentation referred to "4/17/13" 10/10/13: Announced acquisition of MacDermid for $1.8bn TEV Sep-13 1/24/14: PAH listed on NYSE Oct-13 Nov-13 Dec-13 88 Jan-14 $20.26 4/17/14*: Announced acquisition of Chemtura AgroSolutions for $1.0bn TEV Feb-14 Mar-14 Apr-14#89Platform Specialty Products (NYSE:PAH) PAH's share price has nearly doubled in the six months since the MacDermid acquisition was announced What are the possible explanations for this value creation? x Did PAH purchase MacDermid at materially less than its fair value? x PAH paid ~10x LTM EBITDA x The seller was a private equity firm with no urgency to sell OR Did Investors begin to ascribe Platform Value to PAH? ✓ Investors recognize the Platform Value of PAH ✓ PAH's stock price move implies a 100% platform premium 89#90How Can One Evaluate PAH's Platform Value? Platform Value is a function of several factors: Competitive advantages of the Platform Company Operational efficiencies relative to competitors Transaction and integration track record Revenue synergy potential Access to and cost of capital Target Opportunity Large relative size of the market opportunity Competitiveness of acquisition market High Platform Value: Low Platform Value: 90 PAH J#91Bad "Platforms" There are numerous examples of acquisition-intensive companies that have not succeeded ► These failures can be distinguished from the Outsider model in the following ways ■ They lacked a competitive advantage in cost structure or strategy ■ They overpaid for acquisitions to generate growth ■ They relied on overvalued equity as an acquisition currency ■ They failed to integrate and achieve cost synergies ■ They focused on growing reported GAAP earnings rather than economic earnings per share 91#92Valeant's Acquisitions Have Created Value We believe that Valeant's track record of value-creating acquisitions is a sustainable competitive advantage that should be reflected in the company's market value ► Conservatively underwrite attractive returns ■ Target 20% unlevered IRR, before tax synergies (est. 30% after-tax) ■ Target < 6-year payback ■ Pipeline value of acquisition target assigned zero value ► Rapid integration with synergies at or exceeding budget ■ Have met or exceeded synergy budget on all announced acquisitions ■ Typically, ~80% of synergies achieved within first year Source: Management interviews 92#93Valeant's Proven Integration Track Record BIOVAIL Synergies Announced "...The second year after close, we expect to achieve at minimum $175 million in cost synergies." "...We expect to realize annual run MEDICIS rate constant synergies of greater than $225 million." "...We expect to achieve at least BAUSCH + LOMB $800 million in annual cost savings." Source: Company data 93 Synergies Realized "By the end of the fourth quarter [of 2011] we expect to achieve approximately $350 million synergy run rate for the Company." "We now expect to achieve greater than $300 million in run rate synergies by the end of the year [2013]." "We have now identified greater than $900 million in synergies"#94Large Universe of Public and Private Targets Large universe of public targets for Val-gan with a market cap of at least $10 billion ► 58 pharmaceutical and medical device companies with a combined market cap of $3.2 trillion Rank Company Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Johnson & Johnson Roche Holding AG Novartis AG Pfizer Inc. Merck & Co. Inc. Sanofi GlaxoSmithKline plc Novo Nordisk A/S Gilead Sciences Inc. Bayer AG Amgen Inc. Bristol-Myers Squibb AstraZeneca PLC AbbVie Inc. Biogen Idec Inc. Eli Lilly and Company Abbott Laboratories Medtronic, Inc. Market Cap ($bn) $282.8 245.5 205.2 20 21 197.0 22 167.7 23 138.1 24 127.4 25 110.4 26 110.1 27 107.6 28 29 30 31 32 33 34 88.5 83.7 80.2 78.9 70.4 64.9 59.7 59.0 Rank Company Name Celgene Corporation Thermo Fisher Scientific 19 Note: Market caps are as of 4/21/2014 per Capital IQ. Table excludes Valeant and Allergan. 94 35 36 Teva Pharmaceutical Industries Baxter International Actavis plc Takeda Pharmaceutical Company Merck KGaA Covidien plc CSL Ltd. Regeneron Pharmaceuticals Alexion Pharmaceuticals Stryker Corporation Shire plc Forest Laboratories Astellas Pharma Becton, Dickinson and Company Sun Pharmaceutical Industries Essilor International SA Market Cap ($bn) $58.4 47.6 43.0 39.6 35.4 34.8 34.6 31.8 30.3 30.2 30.1 30.1 29.0 24.7 24.7 22.0 21.3 21.0#95Large Universe of Public and Private Targets Large universe of public targets for Val-gan with a market cap of at least $10 billion ► 58 pharmaceutical and medical device companies with a combined market cap of $3.2 trillion Rank Company Name 37 UCB SA 38 Perrigo Company plc 39 Agilent Technologies Inc. 40 Boston Scientific Corporation 41 Illumina Inc. 42 Mylan, Inc. St. Jude Medical Inc. Coloplast A/S Grifols, S.A. Intuitive Surgical, Inc. Zimmer Holdings, Inc. 43 44 45 46 47 Market Cap ($bn) Rank $20.5 48 19.4 49 18.2 50 18.2 51 52 18.1 18.0 53 17.8 54 16.3 55 15.9 56 15.8 57 58 15.5 Company Name Vertex Pharmaceuticals Inc. Otsuka Holdings Co., Ltd. Zoetis Inc. Chugai Pharmaceutical Co. Ltd. Smith & Nephew plc Aspen Pharmacare Holdings Daiichi Sankyo Company, Limited Eisai Co., Ltd. CR Bard Inc. Actelion Ltd. Olympus Corporation Market Cap ($bn) In addition, we estimate that there are ~$3 trillion of privately owned targets in the pharmaceutical and medical device industry¹ "We estimate that total pharmaceutical and medical device industry sales are approximately $2tn. Valued at 3x sales, the total industry value is $6tn. Market caps are as of 4/21/2014 per Capital IQ. 95 $15.5 15.4 14.5 13.4 13.0 12.1 11.9 10.9 10.9 10.8 10.0#96How Can One Evaluate Val-gan's Platform Value? Val-gan's Platform Value is a function of several factors: Competitive advantages of the Platform Company Operational efficiencies relative to competitors Transaction and integration track record Revenue synergy potential Access to and cost of capital Target Opportunity Large relative size of the market opportunity Competitiveness of acquisition market High Platform Value: Low Platform Value: Val-gan#97Illustrative Valeant Transaction: 98% Value Creation, Unlevered Sales Gross Profit % Margin SG&A % Margin R&D % Margin EBIT % Margin Taxes % Tax Rate Net Income Intrinsic Value: Earnings Multiple Value % Acquisition Premium % Restructuring Costs Stand Alone Financials $100 $75 75% 30 30% Purchase Price Source: Company data. Management Interviews 20 20% $25 25% $8 30% $18 16x $280 25% 4% $363 Pro Forma $100 $75 75% 22 22% 3 3% $50 50% $5 10% $45 16x $720 97 Consistent with synergies achieved historically Year 1, 12% Unlevered yield $45 / $363 = 12% (Pro Forma Net Income/Purchase Price) 98% Value creation $720 / $363 = 98% (Pro-Forma Value/Purchase Price)#98Platform Valuation Illustration Val-gan would only have to acquire ~$20bn of assets to justify a 26% platform premium Acquired Assets ($bn) Consideration: 100% cash, unlevered (a) Value Creation ($bn) (b) Pro-Forma Market Cap ($bn) At Current Valeant Share Price $10bn 10 78 $ 20bn $ 30bn $40bn % Sharholder Value Creation: (a/b) 13% Assumes acquisitions are 100% cash. No equity consideration 20 78 26% 30 78 38% 40 78 Pro-Forma Market Cap Assumptions: Valeant pro-forma share count of -600mm and a share price of $126.00 (closing price April 21, 2014) 'This illustrative example does not take into account present value analysis of the acquisition program 98 51% Assumes 100% increase in value of acquired assets¹ We believe the $6tn scale of the healthcare product market and Val-gan's extraordinary financial capacity could allow it to acquire substantially more assets than the table above illustrates#99We Believe Valeant's Platform has Been Continually Undervalued P/E Multiple In 2008, investors could have purchased Valeant's shares at ~0.5x 2014 EPS 18x 16x 14x 12x 10x 8x 6x 4x 2x Valeant's Historical Share Price as a Multiple of 2014E Earnings (2/1/2008 to 4/21/2014) Ox Feb-08 Aug-08 Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14 -P/E Multiple of 2014E Earnings Source: Bloomberg. Stock price adjusted assuming reinvestment of dividends. полковним 99#100If Val-gan can grow organically at a high single-digit rate as Valeant management projects, and management can invest the company's free cash flow in new acquisition targets at historical rates of return, then we believe management can achieve its goal of 15%-20% annual EPS growth¹ "Valeant Presentation April 22, 2014 100#101IV. Summary#102Standalone Allergan vs. Val-gan Allergan "Standalone" Sources of Incremental Value ► M&A ► R&D Success ► Cost Savings Transaction Sources of Value ► Cost Synergies ► Organic Growth ► Business Development } 102 Mixed track record Valeant has achieved announced cost synergies in all announced transactions Upside#103Large Margin of Safety Val-gan would need to trade at only 7.4x 2014 Pro-Forma Cash EPS¹ in order for the Transaction value to exceed Allergan's unaffected price P/E Ratio: 2014 Pro-Forma EPS Earnings Multuple Valeant* Stock Price x (Exchange Ratio) + Stock Value + Cash Value/Share = Total Value (Stock + Cash) % Change vs. Unaffected Price Source: Valeant Presentation April 22, 2014 2014 Pro-Forma Cash EPS Mid-Point *Erratum: Original presentation referred to "Venus" 103 $ 11.08 7.4x 82 0.83 68 $ $ 7.4x $ 48 $ 116 0%#104Val-Gan "It is impossible to produce superior performance unless you do something different." 104 - John Templeton#105V. Appendix#106Cash Net Income Reconciliation: Major Non-Cash Expense Adjustments Valeant removes certain non-cash expenses to better match Net Income with recurring Free Cash Flow ▸ Amortization of Intangible Assets ($1.9bn charge, 2013) ■ GAAP requires companies to amortize the accounting value of acquired assets ■ This amortization is purely a GAAP accounting convention and is unrelated to the economic value of the asset ► Acquired In-Process R&D Impairments ($154mm charge, 2013) ■ These are impairments of pipeline assets that Valeant is required to capitalize under GAAP purchase accounting rules ■ These impairments do not impact the company's free cash flow in the reporting period or management's expectation of future free cash flow ■ Valeant underwrites all of its acquisitions assuming the value of the target's pipeline is zero 106#107Cash Net Income Reconciliation: Major Non-Cash Expense Adjustments Valeant removes certain non-cash expenses to better match Net Income with recurring Free Cash Flow ► Inventory Step-Up ($436mm adjustment, 2013) ■ GAAP requires purchasers to write-up the value of an acquired company's inventory to estimated fair value ■ For Valeant, this write-up is often large because Valeant tends to acquire very high gross margin companies ■ Large inventory write-ups significantly reduce the GAAP gross margin Valeant reports when the written-up inventory is sold ■ We believe that removing the effect of this write up provides a better measure of recurring gross profits Non-Cash expenses Valeant does not remove ■ Unlike many companies that report Non-GAAP financials, Valeant does not add back Stock-Based Compensation 107#108Cash Net Income Reconciliation: Restructuring Costs ($551mm, 2013) Valeant removes restructuring charges to better match Net Income with recurring Free Cash Flow ■ Valeant's restructuring charges are cash and non-cash expenses incurred in connection with corporate restructurings ■ The vast majority of these restructurings relate to realizing synergies at newly acquired companies ■ We believe that if acquisitions were to stop today, restructuring charges would drop to zero 108#109Cash Net Income Reconciliation: Cash Taxes Valeant's adjusted tax rate is a more accurate measure of the company's annual cash tax expense ■ For GAAP purposes, Valeant reports an effective tax rate of 34% ■ Adjusting this rate to reflect the cash taxes that Valeant actually pays is a more accurate measure of Valeant's annual tax expense Valeant's cash tax rate is sustainably low ■ Valeant's cash tax rate in 2013 was 3% of Adjusted Pre-Tax Profits ■ We believe that Valeant, on a standalone basis, can continue to achieve a mid-single digit tax rate for the foreseeable future Source: Management Interviews 109#110Patent Cliff Discounted Cash Flow Analysis Discounted Cash Flow model detail Undiscounted Cash Flows Case Low Base High % Annual Growth Case Low Base High Discounted Cash Flows 0.0% 2.5% 5.0% % Annual Growth Discount Rate 0.0% 2.5% 5.0% Year 1 Year 2 Year 3 1.0 1.0 1.0 1.1 1.0 1.1 Year 1 0.9 0.9 0.9 10% 1.0 1.0 1.1 Year 2 0.8 0.8 0.9 Year 3 0.8 0.8 0.8 Year 4 1.0 1.1 1.2 Year 4 0.7 0.7 0.8 Year 5 1.0 1.1 1.2 Year 5 110 0.6 0.7 0.8 Year 6 1.0 1.1 1.3 Year 6 0.6 0.6 0.7 Year 7 1.0 1.2 1.3 Year 7 0.5 0.6 0.7 Year 8 1.0 1.2 1.4 Year 8 0.5 0.6 0.7 Year 9 1.0 1.2 1.5 Year 9 0.4 0.5 0.6 Year 10 1.0 1.2 1.6 Year 10 Total/Sum 0.4 0.5 0.6 6.1x to 7.4x Year 1 Cash Flow 6.1x 6.8x 7.4x