Pershing Square Activist Presentation Deck

Cash 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

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