AMERICAN MEDICAL SYSTEMS HOLDINGS INC

We have prepared the consolidated financial statements included in this Quarterly Report on Form 10-Q without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to these rules and regulations. The year-end balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited consolidated interim financial statements should be read in conjunction with our consolidated financial statements and related notes included in our Annual Report on Form 10-K for fiscal 2010. All amounts presented in tables are in thousands, except per share data.

2011 Senior Secured Revolving Credit Facility: On April 15, 2011, we and AMS, our wholly owned subsidiary, entered into a credit facility (Revolving Credit Facility) with the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent (Administrative Agent), PNC Bank, National Association, as Syndication Agent and U.S. Bank National Association, as Documentation Agent. The Revolving Credit Facility provides a $250 million five-year senior secured line of credit maturing on April 15, 2016 (Maturity Date). Principal amounts outstanding under the Revolving Credit Facility are due and payable on the Maturity Date or may voluntarily be prepaid without premium or penalty. Accrued interest is payable no later than quarterly. There are no borrowings outstanding under the Revolving Credit Facility.

The obligations under the Revolving Credit Facility may be accelerated at the discretion of the Administrative Agent and/or the lenders upon the occurrence of various customary Events of Default as set forth by the Revolving Credit Facility, including but not limited to, (i) failure to pay amounts when due under the Revolving Credit Facility, (ii) failure to observe or perform covenants, conditions or agreements under the Revolving Credit Facility, (iii) failure to make payments on other material indebtedness, and (iv) upon a change in control. The “change in control” Event of Default will be triggered if our pending merger with Endo Pharmaceuticals Holdings Inc. is consummated.

We are currently subject to the informational requirements of the Securities Exchange Act of 1934, as amended. As a result, we are required to file periodic reports and other information with the SEC, such as annual, quarterly, and current reports, and proxy and information statements. You are advised to read this Form 10-Q in conjunction with the other reports, proxy statements, and other documents we file with or furnish to the SEC from time to time. If you would like more information regarding our Company, you may read and copy the reports, proxy and information statements and other documents we file with or furnish to the SEC, at prescribed rates, at the SEC’s public reference room at 100 F. Street, NE, Room 1580, Washington, DC 20549. You may obtain information regarding the operation of the SEC’s public reference rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available to the public free of charge at the SEC’s website. The address of this website is http://www.sec.gov.

     On April 10, 2011, we entered into a definitive agreement with Endo Pharmaceuticals Holdings, Inc. (Endo) under which a wholly-owned indirect subsidiary of Endo will merge with and into American Medical Systems Holdings, Inc. and the outstanding common shares of American Medical Systems Holdings, Inc. will be cancelled in exchange for $30 per share. The aggregate purchase price for the merger is approximately $2.9 billion in cash, which includes the assumption and repayment of $312 million of principal on our convertible debt. The transaction is subject to approval of our stockholders and clearance by the relevant antitrust authorities, as well as other conditions described in the merger agreement. These conditions might not be satisfied and the proposed merger might not be completed. In the event that the proposed merger is not completed: