x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Ireland | 98-1088325 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | o | ||||
Non-accelerated filer | o | (Do not check if smaller reporting company) | Smaller reporting company | o | |||
Emerging growth company | o |
Page | ||
Item 1. | Financial Statements. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Net sales | $ | 793.9 | $ | 887.2 | $ | 2,429.3 | $ | 2,569.6 | |||||||
Cost of sales | 393.3 | 397.0 | 1,194.0 | 1,165.5 | |||||||||||
Gross profit | 400.6 | 490.2 | 1,235.3 | 1,404.1 | |||||||||||
Selling, general and administrative expenses | 205.7 | 267.8 | 745.9 | 702.0 | |||||||||||
Research and development expenses | 59.5 | 67.9 | 190.9 | 200.8 | |||||||||||
Restructuring charges, net | 14.3 | 6.8 | 32.1 | 29.2 | |||||||||||
Non-restructuring impairment charges | — | — | — | 16.9 | |||||||||||
Losses (gains) on divestiture and license | 0.4 | — | (56.6 | ) | — | ||||||||||
Operating income | 120.7 | 147.7 | 323.0 | 455.2 | |||||||||||
Interest expense | (92.6 | ) | (94.0 | ) | (279.0 | ) | (286.8 | ) | |||||||
Interest income | 1.3 | 0.5 | 2.8 | 1.1 | |||||||||||
Other income (expense), net | 3.7 | (0.6 | ) | 6.2 | (2.6 | ) | |||||||||
Income from continuing operations before income taxes | 33.1 | 53.6 | 53.0 | 166.9 | |||||||||||
Income tax benefit | (31.2 | ) | (56.4 | ) | (110.8 | ) | (218.3 | ) | |||||||
Income from continuing operations | 64.3 | 110.0 | 163.8 | 385.2 | |||||||||||
(Loss) income from discontinued operations, net of income taxes | (0.6 | ) | 5.0 | 361.9 | 47.4 | ||||||||||
Net income | $ | 63.7 | $ | 115.0 | $ | 525.7 | $ | 432.6 | |||||||
Basic earnings per share (Note 7): | |||||||||||||||
Income from continuing operations | $ | 0.66 | $ | 1.02 | $ | 1.65 | $ | 3.53 | |||||||
(Loss) income from discontinued operations | (0.01 | ) | 0.05 | 3.64 | 0.43 | ||||||||||
Net income | $ | 0.66 | $ | 1.07 | $ | 5.28 | $ | 3.97 | |||||||
Basic weighted-average shares outstanding | 96.7 | 107.6 | 99.5 | 109.1 | |||||||||||
Diluted earnings per share (Note 7): | |||||||||||||||
Income from continuing operations | $ | 0.66 | $ | 1.01 | $ | 1.64 | $ | 3.50 | |||||||
(Loss) income from discontinued operations | (0.01 | ) | 0.05 | 3.63 | 0.43 | ||||||||||
Net income | $ | 0.66 | $ | 1.06 | $ | 5.27 | $ | 3.93 | |||||||
Diluted weighted-average shares outstanding | 97.0 | 108.6 | 99.8 | 110.0 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Net income | $ | 63.7 | $ | 115.0 | $ | 525.7 | $ | 432.6 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Currency translation adjustments | 5.6 | 1.9 | 13.0 | 9.5 | |||||||||||
Unrecognized gain on derivatives, net of $-, $0.2, $0.2 and $0.2 tax | 0.3 | — | 0.9 | 0.4 | |||||||||||
Unrecognized (loss) gain on benefit plans, net of $-, ($19.1), ($31.4) and ($14.0) tax | (0.5 | ) | (21.8 | ) | 45.4 | (30.2 | ) | ||||||||
Unrecognized (loss) gain on investments, net of $-, $-, $- and $- tax | (10.5 | ) | — | 0.1 | — | ||||||||||
Total other comprehensive income (loss), net of tax | (5.1 | ) | (19.9 | ) | 59.4 | (20.3 | ) | ||||||||
Comprehensive Income | $ | 58.6 | $ | 95.1 | $ | 585.1 | $ | 412.3 |
September 29, 2017 | December 30, 2016 | ||||||
Assets | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 371.8 | $ | 342.0 | |||
Accounts receivable, less allowance for doubtful accounts of $4.0 and $4.0 | 464.3 | 431.0 | |||||
Inventories | 341.3 | 350.7 | |||||
Prepaid expenses and other current assets | 121.1 | 131.9 | |||||
Notes receivable | 154.0 | — | |||||
Current assets held for sale | — | 310.9 | |||||
Total current assets | 1,452.5 | 1,566.5 | |||||
Property, plant and equipment, net | 962.4 | 881.5 | |||||
Goodwill | 3,459.5 | 3,498.1 | |||||
Intangible assets, net | 8,545.9 | 9,000.5 | |||||
Other assets | 191.6 | 259.7 | |||||
Total Assets | $ | 14,611.9 | $ | 15,206.3 | |||
Liabilities and Shareholders' Equity | |||||||
Current Liabilities: | |||||||
Current maturities of long-term debt | $ | 318.2 | $ | 271.2 | |||
Accounts payable | 104.9 | 112.1 | |||||
Accrued payroll and payroll-related costs | 84.4 | 76.1 | |||||
Accrued interest | 78.1 | 68.7 | |||||
Income taxes payable | 28.1 | 101.7 | |||||
Accrued and other current liabilities | 440.4 | 557.1 | |||||
Current liabilities held for sale | — | 120.3 | |||||
Total current liabilities | 1,054.1 | 1,307.2 | |||||
Long-term debt | 5,517.4 | 5,880.8 | |||||
Pension and postretirement benefits | 67.5 | 136.4 | |||||
Environmental liabilities | 73.1 | 73.0 | |||||
Deferred income taxes | 2,294.1 | 2,398.1 | |||||
Other income tax liabilities | 78.5 | 70.4 | |||||
Other liabilities | 414.2 | 356.1 | |||||
Total Liabilities | 9,498.9 | 10,222.0 | |||||
Shareholders' Equity: | |||||||
Preferred shares, $0.20 par value, 500,000,000 authorized; none issued and outstanding | — | — | |||||
Ordinary A shares, €1.00 par value, 40,000 authorized; none issued and outstanding | — | — | |||||
Ordinary shares, $0.20 par value, 500,000,000 authorized; 118,666,830 and 118,182,944 issued; 95,662,446 and 104,667,545 outstanding | 23.7 | 23.6 | |||||
Ordinary shares held in treasury at cost, 23,004,384 and 13,515,399 | (1,352.3 | ) | (919.8 | ) | |||
Additional paid-in capital | 5,474.1 | 5,424.0 | |||||
Retained earnings | 980.6 | 529.0 | |||||
Accumulated other comprehensive loss | (13.1 | ) | (72.5 | ) | |||
Total Shareholders' Equity | 5,113.0 | 4,984.3 | |||||
Total Liabilities and Shareholders' Equity | $ | 14,611.9 | $ | 15,206.3 |
Nine Months Ended | |||||||
September 29, 2017 | September 30, 2016 | ||||||
Cash Flows From Operating Activities: | |||||||
Net income | $ | 525.7 | $ | 432.6 | |||
Adjustments to reconcile net cash from operating activities: | |||||||
Depreciation and amortization | 606.5 | 628.5 | |||||
Share-based compensation | 46.1 | 34.4 | |||||
Deferred income taxes | (128.7 | ) | (324.0 | ) | |||
Non-cash impairment charges | — | 16.9 | |||||
Gain on divestitures | (418.1 | ) | 1.7 | ||||
Other non-cash items | 40.8 | 54.7 | |||||
Changes in assets and liabilities, net of the effects of acquisitions: | |||||||
Accounts receivable, net | (34.7 | ) | (37.2 | ) | |||
Inventories | (18.2 | ) | (2.8 | ) | |||
Accounts payable | (30.2 | ) | 3.3 | ||||
Income taxes | (68.1 | ) | 11.6 | ||||
Other | (72.6 | ) | 53.5 | ||||
Net cash from operating activities | 448.5 | 873.2 | |||||
Cash Flows From Investing Activities: | |||||||
Capital expenditures | (151.3 | ) | (133.9 | ) | |||
Acquisitions and intangibles, net of cash acquired | (35.9 | ) | (245.4 | ) | |||
Proceeds from divestitures, net of cash | 576.9 | 3.0 | |||||
Other | 0.5 | 5.3 | |||||
Net cash from investing activities | 390.2 | (371.0 | ) | ||||
Cash Flows From Financing Activities: | |||||||
Issuance of external debt | 540.0 | 36.3 | |||||
Repayment of external debt and capital leases | (887.5 | ) | (439.0 | ) | |||
Debt financing costs | (12.7 | ) | — | ||||
Proceeds from exercise of share options | 4.0 | 10.4 | |||||
Repurchase of shares | (437.7 | ) | (377.5 | ) | |||
Other | (18.6 | ) | (23.0 | ) | |||
Net cash from financing activities | (812.5 | ) | (792.8 | ) | |||
Effect of currency rate changes on cash | 2.7 | 1.8 | |||||
Net change in cash, cash equivalents and restricted cash | 28.9 | (288.8 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 361.1 | 588.4 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 390.0 | $ | 299.6 | |||
Cash and cash equivalents at end of period | $ | 371.8 | $ | 280.5 | |||
Restricted cash included in prepaid expenses and other current assets at end of period | — | 0.1 | |||||
Restricted cash included in other assets at end of period | 18.2 | 19.0 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 390.0 | $ | 299.6 |
Ordinary Shares | Treasury Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||||
Number | Par Value | Number | Amount | ||||||||||||||||||||||||||
Balance at December 30, 2016 | 118.2 | $ | 23.6 | 13.5 | $ | (919.8 | ) | $ | 5,424.0 | $ | 529.0 | $ | (72.5 | ) | $ | 4,984.3 | |||||||||||||
Impact of accounting standard adoptions | — | — | — | — | — | (72.1 | ) | — | (72.1 | ) | |||||||||||||||||||
Net income | — | — | — | — | — | 525.7 | — | 525.7 | |||||||||||||||||||||
Currency translation adjustments | — | — | — | — | — | — | 13.0 | 13.0 | |||||||||||||||||||||
Change in derivatives, net of tax | — | — | — | — | — | — | 0.9 | 0.9 | |||||||||||||||||||||
Unrecognized gain on benefit plans | — | — | — | — | — | — | 45.4 | 45.4 | |||||||||||||||||||||
Unrecognized gain on investments | — | — | — | — | — | — | 0.1 | 0.1 | |||||||||||||||||||||
Share options exercised | 0.1 | — | — | — | 4.0 | — | — | 4.0 | |||||||||||||||||||||
Vesting of restricted shares | 0.4 | 0.1 | — | (4.7 | ) | — | — | — | (4.6 | ) | |||||||||||||||||||
Share-based compensation | — | — | — | — | 46.1 | — | — | 46.1 | |||||||||||||||||||||
Reissuance of treasury shares | — | — | — | 5.2 | — | (2.0 | ) | — | 3.2 | ||||||||||||||||||||
Repurchase of shares | — | — | 9.5 | (433.0 | ) | — | — | — | (433.0 | ) | |||||||||||||||||||
Balance at September 29, 2017 | 118.7 | $ | 23.7 | 23.0 | $ | (1,352.3 | ) | $ | 5,474.1 | $ | 980.6 | $ | (13.1 | ) | $ | 5,113.0 |
1. | Background and Basis of Presentation |
• | Specialty Brands includes branded medicines; and |
• | Specialty Generics includes specialty generic drugs, active pharmaceutical ingredients ("API") and external manufacturing. |
2. | Recently Issued Accounting Standards |
3. | Discontinued Operations and Divestitures |
Three Months Ended | Nine Months Ended | ||||||||||||||
Major line items constituting income from discontinued operations | September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | |||||||||||
Net sales | $ | — | $ | 108.8 | $ | 31.6 | $ | 315.0 | |||||||
Cost of sales | — | 54.6 | 15.6 | 153.8 | |||||||||||
Selling, general and administrative expenses | — | 19.1 | 7.8 | 64.5 | |||||||||||
Restructuring charges, net | — | (0.3 | ) | — | 0.1 | ||||||||||
Other | — | 2.2 | (0.2 | ) | 3.6 | ||||||||||
Income from discontinued operations | — | 33.2 | 8.4 | 93.0 | |||||||||||
(Loss) gain on divestiture of discontinued operations | (0.6 | ) | — | 362.8 | — | ||||||||||
(Loss) income from discontinued operations, before income taxes | (0.6 | ) | 33.2 | 371.2 | 93.0 | ||||||||||
Income tax (benefit) expense | (0.1 | ) | 24.8 | 5.2 | 43.8 | ||||||||||
(Loss) income from discontinued operations, net of income taxes | $ | (0.5 | ) | $ | 8.4 | $ | 366.0 | $ | 49.2 |
September 29, 2017 | December 30, 2016 | ||||||
Carrying amounts of major classes of assets included as part of discontinued operations | |||||||
Accounts receivable | $ | — | $ | 49.6 | |||
Inventories | — | 20.0 | |||||
Property, plant and equipment, net | — | 188.7 | |||||
Other current and non-current assets | — | 52.6 | |||||
Total assets classified as held for sale in the balance sheet | $ | — | $ | 310.9 | |||
Carrying amounts of major classes of liabilities included as part of discontinued operations | |||||||
Accounts payable | $ | — | $ | 19.7 | |||
Other current and non-current liabilities | — | 100.6 | |||||
Total liabilities classified as held for sale in the balance sheet | $ | — | $ | 120.3 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Depreciation | $ | — | $ | 4.5 | $ | — | $ | 14.3 | |||||||
Capital expenditures | — | 4.0 | 0.3 | 7.8 |
4. | Acquisitions, License Agreements and Other Investments |
InfaCare | |||
Cash and cash equivalents | $ | 1.3 | |
Intangible assets | 113.5 | ||
Goodwill | 13.3 | ||
Other assets, current and non-current | 0.1 | ||
Total assets acquired | 128.2 | ||
Current liabilities | 14.7 | ||
Deferred tax liabilities, net (non-current) | 11.3 | ||
Contingent consideration | 35.0 | ||
Total debt | 30.0 | ||
Total liabilities assumed | 91.0 | ||
Net assets acquired | $ | 37.2 |
InfaCare | |||
Total consideration, net of cash | $ | 70.9 | |
Plus: cash assumed in acquisition | 1.3 | ||
Total consideration | 72.2 | ||
Less: contingent consideration | (35.0 | ) | |
Net assets acquired | $ | 37.2 |
InfaCare | Amount | Amortization Period | |||
In-process research and development ("IPR&D") - stannsoporfin | $ | 113.5 | Non-Amortizable |
5. | Restructuring and Related Charges |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Specialty Brands | $ | 14.6 | $ | 4.9 | $ | 24.1 | $ | 21.7 | |||||||
Specialty Generics | (0.6 | ) | 0.7 | 7.3 | 2.3 | ||||||||||
Corporate | 1.5 | 3.1 | 4.3 | 10.0 | |||||||||||
Restructuring and related charges, net | 15.5 | 8.7 | 35.7 | 34.0 | |||||||||||
Less: accelerated depreciation | (1.2 | ) | (1.9 | ) | (3.6 | ) | (4.8 | ) | |||||||
Restructuring charges, net | $ | 14.3 | $ | 6.8 | $ | 32.1 | $ | 29.2 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
2016 Mallinckrodt Program | $ | 15.5 | $ | 8.3 | $ | 35.7 | $ | 8.3 | |||||||
2013 Mallinckrodt Program | — | 0.3 | — | 22.7 | |||||||||||
Acquisitions | — | 0.1 | — | 3.0 | |||||||||||
Total | 15.5 | 8.7 | 35.7 | 34.0 | |||||||||||
Less: accelerated depreciation | (1.2 | ) | (1.9 | ) | (3.6 | ) | (4.8 | ) | |||||||
Total charges expected to be settled in cash | $ | 14.3 | $ | 6.8 | $ | 32.1 | $ | 29.2 |
2016 Mallinckrodt Program | 2013 Mallinckrodt Program | Acquisitions | Total | ||||||||||||
Balance at December 30, 2016 | $ | 9.5 | $ | 5.1 | $ | 0.2 | $ | 14.8 | |||||||
Charges | 33.9 | — | — | 33.9 | |||||||||||
Changes in estimate | (1.8 | ) | — | — | (1.8 | ) | |||||||||
Cash payments | (19.8 | ) | (3.7 | ) | (0.2 | ) | (23.7 | ) | |||||||
Reclassifications | (0.7 | ) | 0.3 | — | (0.4 | ) | |||||||||
Balance at September 29, 2017 | $ | 21.1 | $ | 1.7 | $ | — | $ | 22.8 |
2016 Mallinckrodt Program | |||
Specialty Brands | $ | 31.3 | |
Specialty Generics | 8.6 | ||
Corporate | 9.3 | ||
$ | 49.2 |
6. | Income Taxes |
7. | Earnings per Share |
Three Months Ended | Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||
Basic | 96.7 | 107.6 | 99.5 | 109.1 | |||||||
Dilutive impact of restricted share units and share options | 0.3 | 1.0 | 0.3 | 0.9 | |||||||
Diluted | 97.0 | 108.6 | 99.8 | 110.0 |
8. | Inventories |
September 29, 2017 | December 30, 2016 | ||||||
Raw materials and supplies | $ | 76.3 | $ | 72.6 | |||
Work in process | 160.4 | 178.4 | |||||
Finished goods | 104.6 | 99.7 | |||||
$ | 341.3 | $ | 350.7 |
9. | Property, Plant and Equipment |
September 29, 2017 | December 30, 2016 | ||||||
Property, plant and equipment, gross | $ | 1,820.4 | $ | 1,679.4 | |||
Less: accumulated depreciation | (858.0 | ) | (797.9 | ) | |||
Property, plant and equipment, net | $ | 962.4 | $ | 881.5 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Depreciation expense | $ | 27.3 | $ | 27.3 | $ | 83.5 | $ | 87.6 |
10. | Goodwill and Intangible Assets |
September 29, 2017 | December 30, 2016 | ||||||||||||||
Gross Carrying Amount | Accumulated Impairment | Gross Carrying Amount | Accumulated Impairment | ||||||||||||
Specialty Brands | $ | 3,459.5 | $ | — | $ | 3,498.1 | $ | — | |||||||
Specialty Generics | 207.0 | (207.0 | ) | 207.0 | (207.0 | ) | |||||||||
Total | $ | 3,666.5 | $ | (207.0 | ) | $ | 3,705.1 | $ | (207.0 | ) |
September 29, 2017 | December 30, 2016 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||
Amortizable: | |||||||||||||||
Completed technology | $ | 9,955.6 | $ | 2,101.3 | $ | 10,028.7 | $ | 1,617.1 | |||||||
Licenses | 177.1 | 120.1 | 177.1 | 112.7 | |||||||||||
Customer relationships | 30.0 | 11.7 | 27.6 | 8.4 | |||||||||||
Trademarks | 82.2 | 13.5 | 82.1 | 10.9 | |||||||||||
Other | 8.6 | 8.6 | 6.7 | 6.7 | |||||||||||
Total | $ | 10,253.5 | $ | 2,255.2 | $ | 10,322.2 | $ | 1,755.8 | |||||||
Non-Amortizable: | |||||||||||||||
Trademarks | $ | 35.0 | $ | 35.0 | |||||||||||
In-process research and development | 512.6 | 399.1 | |||||||||||||
Total | $ | 547.6 | $ | 434.1 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Amortization expense | $ | 173.2 | $ | 175.9 | $ | 523.0 | $ | 526.7 |
Remainder of Fiscal 2017 | $ | 172.6 | |
Fiscal 2018 | 686.7 | ||
Fiscal 2019 | 686.3 | ||
Fiscal 2020 | 686.0 | ||
Fiscal 2021 | 685.8 |
11. | Debt |
September 29, 2017 | December 30, 2016 | ||||||||||||||
Principal | Unamortized Discount and Debt Issuance Costs | Principal | Unamortized Discount and Debt Issuance Costs | ||||||||||||
Current maturities of long-term debt: | |||||||||||||||
Variable-rate receivable securitization due July 2017 | $ | — | $ | — | $ | 250.0 | $ | 0.3 | |||||||
3.50% notes due April 2018 | 300.0 | 0.4 | — | — | |||||||||||
Term loan due March 2021 | — | — | 20.0 | 0.3 | |||||||||||
4.00% term loan due February 2022 | — | — | 1.0 | — | |||||||||||
Term loan due September 2024 | 18.6 | 0.2 | — | — | |||||||||||
Capital lease obligation and vendor financing agreements | 0.2 | — | 0.8 | — | |||||||||||
Total current debt | 318.8 | 0.6 | 271.8 | 0.6 | |||||||||||
Long-term debt: | |||||||||||||||
3.50% notes due April 2018 | — | — | 300.0 | 0.9 | |||||||||||
4.875% notes due April 2020 | 700.0 | 6.3 | 700.0 | 8.2 | |||||||||||
Variable-rate receivable securitization due July 2020 | 200.0 | 0.7 | — | — | |||||||||||
Term loan due March 2021 | — | — | 1,928.5 | 33.4 | |||||||||||
4.00% term loan due February 2022 | — | — | 5.5 | — | |||||||||||
9.50% debentures due May 2022 | 10.4 | — | 10.4 | — | |||||||||||
5.75% notes due August 2022 | 884.0 | 10.0 | 884.0 | 11.6 | |||||||||||
8.00% debentures due March 2023 | 4.4 | — | 4.4 | — | |||||||||||
4.75% notes due April 2023 | 526.5 | 4.7 | 600.0 | 6.1 | |||||||||||
5.625% notes due October 2023 | 738.0 | 10.1 | 738.0 | 11.4 | |||||||||||
Term loan due September 2024 | 1,837.1 | 27.7 | — | — | |||||||||||
5.50% notes due April 2025 | 692.1 | 9.3 | 695.0 | 10.2 | |||||||||||
Revolving credit facility | — | 6.3 | 100.0 | 3.2 | |||||||||||
Total long-term debt | 5,592.5 | 75.1 | 5,965.8 | 85.0 | |||||||||||
Total debt | $ | 5,911.3 | $ | 75.7 | $ | 6,237.6 | $ | 85.6 |
12. | Retirement Plans |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Service cost | $ | — | $ | 0.6 | $ | 1.5 | $ | 1.4 | |||||||
Interest cost | 0.1 | 2.7 | 2.2 | 9.7 | |||||||||||
Expected return on plan assets | — | (4.1 | ) | (1.3 | ) | (12.5 | ) | ||||||||
Amortization of net actuarial loss | 0.1 | 3.5 | 2.7 | 8.7 | |||||||||||
Amortization of prior service cost | — | — | 0.2 | — | |||||||||||
Plan settlements | — | 1.1 | 69.7 | 8.1 | |||||||||||
Net periodic benefit cost | $ | 0.2 | $ | 3.8 | $ | 75.0 | $ | 15.4 |
13. | Accumulated Other Comprehensive Income (Loss) |
Currency Translation | Unrecognized Gain (Loss) on Derivatives | Unrecognized Gain (Loss) on Benefit Plans | Unrecognized Gain on Equity Securities | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at December 30, 2016 | $ | (19.5 | ) | $ | (5.7 | ) | $ | (47.3 | ) | $ | — | $ | (72.5 | ) | |||||
Other comprehensive income before reclassifications | 17.7 | — | 5.3 | 0.1 | 23.1 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income | (4.7 | ) | 0.9 | 40.1 | — | 36.3 | |||||||||||||
Net current period other comprehensive income | 13.0 | 0.9 | 45.4 | 0.1 | 59.4 | ||||||||||||||
Balance at September 29, 2017 | $ | (6.5 | ) | $ | (4.8 | ) | $ | (1.9 | ) | $ | 0.1 | $ | (13.1 | ) |
Currency Translation | Unrecognized Gain (Loss) on Derivatives | Unrecognized Gain (Loss) on Benefit Plans | Unrecognized Gain on Equity Securities | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||
Balance at December 25, 2015 | $ | (7.9 | ) | $ | (6.3 | ) | $ | (51.1 | ) | $ | — | $ | (65.3 | ) | |||||
Other comprehensive income (loss) before reclassifications | 10.2 | — | (39.5 | ) | — | (29.3 | ) | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | (0.7 | ) | 0.4 | 9.3 | — | 9.0 | |||||||||||||
Net current period other comprehensive income (loss) | 9.5 | 0.4 | (30.2 | ) | — | (20.3 | ) | ||||||||||||
Balance at Balance at September 30, 2016 | $ | 1.6 | $ | (5.9 | ) | $ | (81.3 | ) | $ | — | $ | (85.6 | ) |
Amount Reclassified from Accumulated Other Comprehensive Income | |||||||||
Nine Months Ended | |||||||||
September 29, 2017 | September 30, 2016 | Line Item in the Unaudited Condensed Consolidated Statement of Income | |||||||
Amortization and other of unrealized loss on derivatives | $ | 1.1 | $ | 0.6 | Interest expense | ||||
Income tax provision | (0.2 | ) | (0.2 | ) | Income tax benefit | ||||
Net of income taxes | 0.9 | 0.4 | |||||||
Amortization of pension and post-retirement benefit plans: | |||||||||
Net actuarial loss | 2.8 | 8.8 | (1) | ||||||
Prior service credit | (1.6 | ) | (2.1 | ) | (1) | ||||
Divestiture of discontinued operations | (3.1 | ) | — | Income from discontinued operations, net of income taxes | |||||
Plan settlements | 69.7 | 8.1 | (1) Selling, general and administrative expenses | ||||||
Total before tax | 67.8 | 14.8 | |||||||
Income tax provision | (27.7 | ) | (5.5 | ) | Income tax benefit | ||||
Net of income taxes | 40.1 | 9.3 | |||||||
Currency translation | (4.7 | ) | (0.7 | ) | Income from discontinued operations, net of income taxes | ||||
Total reclassifications for the period | $ | 36.3 | $ | 9.0 |
(1) | These accumulated other comprehensive income components are included in the computation of net periodic benefit cost. See Note 12 for additional details. |
14. | Equity |
March 2017 Repurchase Program | March 2016 Repurchase Program | November 2015 Repurchase Program | ||||||||||||||||||
Number of Shares | Amount | Number of Shares | Amount | Number of Shares | Amount | |||||||||||||||
Authorized repurchase amount | $ | 1,000.0 | $ | 350.0 | $ | 500.0 | ||||||||||||||
Repurchases: | ||||||||||||||||||||
Fiscal 2016 (1) | — | — | — | — | 6,510,824 | 425.6 | ||||||||||||||
Transition Period 2016 | — | — | 1,501,676 | 84.0 | 1,063,337 | 74.4 | ||||||||||||||
Fiscal 2017 | 4,111,722 | 167.0 | 5,366,741 | 266.0 | — | — | ||||||||||||||
Remaining amount available | $ | 833.0 | $ | — | $ | — |
(1) | Represents the Company's historical fiscal year ending on the last Friday in September. |
15. | Guarantees |
16. | Commitments and Contingencies |
17. | Financial Instruments and Fair Value Measurements |
September 29, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Debt and equity securities held in rabbi trusts | $ | 34.1 | $ | 23.2 | $ | 10.9 | $ | — | |||||||
Equity securities | 21.6 | 21.6 | — | — | |||||||||||
Foreign exchange forward and option contracts | 0.6 | 0.6 | — | — | |||||||||||
$ | 56.3 | $ | 45.4 | $ | 10.9 | $ | — | ||||||||
Liabilities: | |||||||||||||||
Deferred compensation liabilities | $ | 38.9 | $ | — | $ | 38.9 | $ | — | |||||||
Contingent consideration and acquired contingent liabilities | 268.6 | — | — | 268.6 | |||||||||||
Foreign exchange forward and option contracts | 1.2 | 1.2 | — | — | |||||||||||
$ | 308.7 | $ | 1.2 | $ | 38.9 | $ | 268.6 |
December 30, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||
Assets: | |||||||||||||||
Debt and equity securities held in rabbi trusts | $ | 33.6 | $ | 22.8 | $ | 10.8 | $ | — | |||||||
Foreign exchange forward and option contracts | 0.7 | 0.7 | — | — | |||||||||||
$ | 34.3 | $ | 23.5 | $ | 10.8 | $ | — | ||||||||
Liabilities: | |||||||||||||||
Deferred compensation liabilities | $ | 32.5 | $ | — | $ | 32.5 | $ | — | |||||||
Contingent consideration and acquired contingent liabilities | 250.5 | — | — | 250.5 | |||||||||||
Foreign exchange forward and option contracts | 3.4 | 3.4 | — | — | |||||||||||
$ | 286.4 | $ | 3.4 | $ | 32.5 | $ | 250.5 |
Balance at December 30, 2016 | $ | 250.5 | |
Acquisition date fair value of contingent consideration | 35.0 | ||
Payments | (25.0 | ) | |
Accretion expense | 4.0 | ||
Fair value adjustment | 4.1 | ||
Balance at September 29, 2017 | $ | 268.6 |
• | The carrying amounts of cash and cash equivalents, accounts receivable, notes receivable, accounts payable and the majority of other current assets and liabilities approximate fair value because of their short-term nature. The Company classifies cash on hand and deposits in banks, including commercial paper, money market accounts and other investments it may hold from time to time, with an original maturity of three months or less, as cash and cash equivalents (level 1). The fair value of restricted cash was equivalent to its carrying value of $18.2 million and $19.1 million as of September 29, 2017 and December 30, 2016, (level 1), respectively, which was included in prepaid expenses and other current assets and other assets on the unaudited condensed consolidated balance sheets. |
• | The Company received a portion of consideration for the sale of the Intrathecal business in the form of a note receivable. The fair value of the note receivable was equivalent to its carrying value of $154.0 million as of September 29, 2017 (level 1). |
• | The Company entered into short-term investment certificates during the three months ended December 30, 2016. These certificates are carried at cost, which approximates fair value, of $1.6 million and $11.1 million at September 29, 2017 and December 30, 2016, respectively (level 2). These certificates are included in prepaid expenses and other current assets on the unaudited condensed consolidated balance sheets. |
• | The Company's life insurance contracts are carried at cash surrender value, which is based on the present value of future cash flows under the terms of the contracts (level 3). Significant assumptions used in determining the cash surrender value include the amount and timing of future cash flows, interest rates and mortality charges. The fair value of these contracts approximates the carrying value of $66.8 million and $67.6 million at September 29, 2017 and December 30, 2016, respectively. These contracts are included in other assets on the unaudited condensed consolidated balance sheets. |
• | The carrying value of the Company's revolving credit facility and variable-rate receivable securitization approximates fair value due to the short-term nature of these instruments. The carrying value of the 4.00% term loan approximates the fair value of the instrument, as calculated using the discounted exit price, which is therefore classified as level 3. Since the quoted market prices for the Company's term loans and 8.00% and 9.50% debentures are not available in an active market, they are classified as level 2 for purposes of developing an estimate of fair value. The Company's 3.50%, 4.75%, 4.875%, 5.50%, 5.625% and 5.75% notes are classified as level 1, as quoted prices are available in an active market for these notes. The following table presents the carrying values and estimated fair values of the Company's long-term debt, excluding capital leases, as of the end of each period: |
September 29, 2017 | December 30, 2016 | ||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Variable-rate receivable securitization due July 2017 | $ | — | $ | — | $ | 250.0 | $ | 250.0 | |||||||
3.50% notes due April 2018 | 300.0 | 300.2 | 300.0 | 298.7 | |||||||||||
4.875% notes due April 2020 | 700.0 | 696.7 | 700.0 | 699.5 | |||||||||||
Variable-rate receivable securitization due July 2020 | 200.0 | 200.0 | — | — | |||||||||||
Term loans due March 2021 | — | — | 1,948.5 | 1,953.2 | |||||||||||
4.00% term loan due February 2022 | — | — | 6.5 | 6.5 | |||||||||||
9.50% debentures due May 2022 | 10.4 | 11.5 | 10.4 | 12.0 | |||||||||||
5.75% notes due August 2022 | 884.0 | 853.3 | 884.0 | 850.3 | |||||||||||
8.00% debentures due March 2023 | 4.4 | 4.7 | 4.4 | 4.9 | |||||||||||
4.75% notes due April 2023 | 526.5 | 448.5 | 600.0 | 520.9 | |||||||||||
5.625% notes due October 2023 | 738.0 | 689.5 | 738.0 | 682.4 | |||||||||||
Term loan due September 2024 | 1,855.7 | 1,853.8 | — | — | |||||||||||
5.50% notes due April 2025 | 692.1 | 625.4 | 695.0 | 615.7 | |||||||||||
Revolving credit facility | — | — | 100.0 | 100.0 |
Three Months Ended | Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||
CuraScript, Inc. | 41 | % | 40 | % | 40 | % | 37 | % | |||
McKesson Corporation | 9 | % | 11 | % | 9 | % | 11 | % |
September 29, 2017 | December 30, 2016 | ||||
McKesson Corporation | 20 | % | 28 | % | |
Amerisource Bergen Corporation | 14 | % | 15 | % | |
CuraScript, Inc. | 14 | % | 15 | % | |
Cardinal Health, Inc. | 11 | % | 10 | % |
Three Months Ended | Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||
Acthar | 39 | % | 37 | % | 37 | % | 34 | % | |||
Inomax | 16 | % | 14 | % | 16 | % | 14 | % |
18. | Segment Data |
• | Specialty Brands includes branded medicines; and |
• | Specialty Generics includes specialty generic drugs, API and external manufacturing. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Net sales: | |||||||||||||||
Specialty Brands | $ | 591.4 | $ | 633.1 | $ | 1,743.1 | $ | 1,757.4 | |||||||
Specialty Generics | 189.1 | 239.8 | 643.7 | 767.6 | |||||||||||
Net sales of reportable segments | 780.5 | 872.9 | 2,386.8 | 2,525.0 | |||||||||||
Other (1) | 13.4 | 14.3 | 42.5 | 44.6 | |||||||||||
Net sales | $ | 793.9 | $ | 887.2 | $ | 2,429.3 | $ | 2,569.6 | |||||||
Operating income: | |||||||||||||||
Specialty Brands | $ | 316.6 | $ | 334.1 | $ | 865.7 | $ | 897.1 | |||||||
Specialty Generics | 40.4 | 63.9 | 179.9 | 260.9 | |||||||||||
Segment operating income | 357.0 | 398.0 | 1,045.6 | 1,158.0 | |||||||||||
Unallocated amounts: | |||||||||||||||
Corporate and unallocated expenses (2) | (47.6 | ) | (65.7 | ) | (163.9 | ) | (125.2 | ) | |||||||
Intangible asset amortization | (173.2 | ) | (175.9 | ) | (523.0 | ) | (526.7 | ) | |||||||
Restructuring and related charges, net (3) | (15.5 | ) | (8.7 | ) | (35.7 | ) | (34.0 | ) | |||||||
Non-restructuring impairment charges | — | — | — | (16.9 | ) | ||||||||||
Operating income | $ | 120.7 | $ | 147.7 | $ | 323.0 | $ | 455.2 |
(1) | Represents net sales under an ongoing supply agreement with the acquirer of the CMDS business. |
(2) | Includes administration expenses and certain compensation, legal, environmental and other costs not charged to the Company's reportable segments. |
(3) | Includes restructuring-related accelerated depreciation. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 29, 2017 | September 30, 2016 | September 29, 2017 | September 30, 2016 | ||||||||||||
Acthar | $ | 308.7 | $ | 327.0 | $ | 899.9 | $ | 873.7 | |||||||
Inomax | 125.7 | 126.9 | 379.6 | 363.5 | |||||||||||
Ofirmev | 75.4 | 75.6 | 224.5 | 217.4 | |||||||||||
Therakos immunotherapy | 55.3 | 54.5 | 157.7 | 157.2 | |||||||||||
Hemostasis products | 16.2 | 17.2 | 42.8 | 42.5 | |||||||||||
Other | 10.1 | 31.9 | 38.6 | 103.1 | |||||||||||
Specialty Brands | 591.4 | 633.1 | 1,743.1 | 1,757.4 | |||||||||||
Hydrocodone (API) and hydrocodone-containing tablets | 10.0 | 30.8 | 63.3 | 109.8 | |||||||||||
Oxycodone (API) and oxycodone-containing tablets | 13.4 | 28.8 | 60.6 | 97.3 | |||||||||||
Methylphenidate ER | 14.3 | 23.4 | 58.2 | 72.3 | |||||||||||
Other controlled substances | 103.9 | 111.8 | 319.0 | 358.4 | |||||||||||
Other products | 47.5 | 45.0 | 142.6 | 129.8 | |||||||||||
Specialty Generics | 189.1 | 239.8 | 643.7 | 767.6 | |||||||||||
Other (1) | 13.4 | 14.3 | 42.5 | 44.6 | |||||||||||
Net sales | $ | 793.9 | $ | 887.2 | $ | 2,429.3 | $ | 2,569.6 |
(1) | Represents net sales under an ongoing supply agreement with the acquirer of the CMDS business. |
19. | Condensed Consolidating Financial Statements |
Mallinckrodt plc | Mallinckrodt International Finance S.A. | Other Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Current Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 0.7 | $ | 37.6 | $ | 333.5 | $ | — | $ | 371.8 | |||||||||
Accounts receivable, net | — | — | 464.3 | — | 464.3 | ||||||||||||||
Inventories | — | — | 341.3 | — | 341.3 | ||||||||||||||
Prepaid expenses and other current assets | 0.3 | 0.2 | 120.6 | — | 121.1 | ||||||||||||||
Notes receivable | — | — | 154.0 | — | 154.0 | ||||||||||||||
Current assets held for sale | — | — | — | — | — | ||||||||||||||
Intercompany receivables | 127.9 | 246.8 | 694.1 | (1,068.8 | ) | — | |||||||||||||
Total current assets | 128.9 | 284.6 | 2,107.8 | (1,068.8 | ) | 1,452.5 | |||||||||||||
Property, plant and equipment, net | — | — | 962.4 | — | 962.4 | ||||||||||||||
Goodwill | — | — | 3,459.5 | — | 3,459.5 | ||||||||||||||
Intangible assets, net | — | — | 8,545.9 | — | 8,545.9 | ||||||||||||||
Investment in subsidiaries | 4,923.4 | 21,531.2 | 10,654.1 | (37,108.7 | ) | — | |||||||||||||
Intercompany loans receivable | 744.8 | — | 4,710.0 | (5,454.8 | ) | — | |||||||||||||
Other assets | — | — | 191.6 | — | 191.6 | ||||||||||||||
Total Assets | $ | 5,797.1 | $ | 21,815.8 | $ | 30,631.3 | $ | (43,632.3 | ) | $ | 14,611.9 | ||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||
Current Liabilities: | |||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | 318.0 | $ | 0.2 | $ | — | $ | 318.2 | |||||||||
Accounts payable | — | — | 104.9 | — | 104.9 | ||||||||||||||
Accrued payroll and payroll-related costs | — | — | 84.4 | — | 84.4 | ||||||||||||||
Accrued interest | — | 77.5 | 0.6 | — | 78.1 | ||||||||||||||
Income taxes payable | — | — | 28.1 | — | 28.1 | ||||||||||||||
Accrued and other current liabilities | 1.3 | 0.4 | 438.7 | — | 440.4 | ||||||||||||||
Current liabilities held for sale | — | — | — | — | — | ||||||||||||||
Intercompany payables | 682.8 | — | 386.0 | (1,068.8 | ) | — | |||||||||||||
Total current liabilities | 684.1 | 395.9 | 1,042.9 | (1,068.8 | ) | 1,054.1 | |||||||||||||
Long-term debt | — | 5,303.3 | 214.1 | — | 5,517.4 | ||||||||||||||
Pension and postretirement benefits | — | — | 67.5 | — | 67.5 | ||||||||||||||
Environmental liabilities | — | — | 73.1 | — | 73.1 | ||||||||||||||
Deferred income taxes | — | — | 2,294.1 | — | 2,294.1 | ||||||||||||||
Other income tax liabilities | — | — | 78.5 | — | 78.5 | ||||||||||||||
Intercompany loans payable | — | 5,454.8 | — | (5,454.8 | ) | — | |||||||||||||
Other liabilities | — | 7.7 | 406.5 | — | 414.2 | ||||||||||||||
Total Liabilities | 684.1 | 11,161.7 | 4,176.7 | (6,523.6 | ) | 9,498.9 | |||||||||||||
Shareholders' Equity | 5,113.0 | 10,654.1 | 26,454.6 | (37,108.7 | ) | 5,113.0 | |||||||||||||
Total Liabilities and Shareholders' Equity | $ | 5,797.1 | $ | 21,815.8 | $ | 30,631.3 | $ | (43,632.3 | ) | $ | 14,611.9 |
Mallinckrodt plc | Mallinckrodt International Finance S.A. | Other Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Current Assets: | |||||||||||||||||||
Cash and cash equivalents | $ | 0.5 | $ | 44.5 | $ | 297.0 | $ | — | $ | 342.0 | |||||||||
Accounts receivable, net | — | — | 431.0 | — | 431.0 | ||||||||||||||
Inventories | — | — | 350.7 | — | 350.7 | ||||||||||||||
Prepaid expenses and other current assets | 1.0 | — | 130.9 | — | 131.9 | ||||||||||||||
Notes receivable | — | — | — | — | — | ||||||||||||||
Current assets held for sale | — | — | 310.9 | — | 310.9 | ||||||||||||||
Intercompany receivables | 59.7 | 65.1 | 1,081.3 | (1,206.1 | ) | — | |||||||||||||
Total current assets | 61.2 | 109.6 | 2,601.8 | (1,206.1 | ) | 1,566.5 | |||||||||||||
Property, plant and equipment, net | — | — | 881.5 | — | 881.5 | ||||||||||||||
Goodwill | — | — | 3,498.1 | — | 3,498.1 | ||||||||||||||
Intangible assets, net | — | — | 9,000.5 | — | 9,000.5 | ||||||||||||||
Investment in subsidiaries | 5,534.1 | 20,624.1 | 10,988.5 | (37,146.7 | ) | — | |||||||||||||
Intercompany loans receivable | 3.5 | — | 3,325.9 | (3,329.4 | ) | — | |||||||||||||
Other assets | — | — | 259.7 | — | 259.7 | ||||||||||||||
Total Assets | $ | 5,598.8 | $ | 20,733.7 | $ | 30,556.0 | $ | (41,682.2 | ) | $ | 15,206.3 | ||||||||
Liabilities and Shareholders' Equity | |||||||||||||||||||
Current Liabilities: | |||||||||||||||||||
Current maturities of long-term debt | $ | — | $ | 19.7 | $ | 251.5 | $ | — | $ | 271.2 | |||||||||
Accounts payable | 0.1 | 0.1 | 111.9 | — | 112.1 | ||||||||||||||
Accrued payroll and payroll-related costs | — | — | 76.1 | — | 76.1 | ||||||||||||||
Accrued interest | — | 53.9 | 14.8 | — | 68.7 | ||||||||||||||
Income taxes payable | — | — | 101.7 | — | 101.7 | ||||||||||||||
Accrued and other current liabilities | 1.9 | 7.5 | 547.7 | — | 557.1 | ||||||||||||||
Current liabilities held for sale | — | — | 120.3 | — | 120.3 | ||||||||||||||
Intercompany payables | 612.5 | 467.1 | 126.5 | (1,206.1 | ) | — | |||||||||||||
Total current liabilities | 614.5 | 548.3 | 1,350.5 | (1,206.1 | ) | 1,307.2 | |||||||||||||
Long-term debt | — | 5,860.6 | 20.2 | — | 5,880.8 | ||||||||||||||
Pension and postretirement benefits | — | — | 136.4 | — | 136.4 | ||||||||||||||
Environmental liabilities | — | — | 73.0 | — | 73.0 | ||||||||||||||
Deferred income taxes | — | — | 2,398.1 | — | 2,398.1 | ||||||||||||||
Other income tax liabilities | — | — | 70.4 | — | 70.4 | ||||||||||||||
Intercompany loans payable | — | 3,329.4 | — | (3,329.4 | ) | — | |||||||||||||
Other liabilities | — | 7.0 | 349.1 | — | 356.1 | ||||||||||||||
Total Liabilities | 614.5 | 9,745.3 | 4,397.7 | (4,535.5 | ) | 10,222.0 | |||||||||||||
Shareholders' Equity | 4,984.3 | 10,988.4 | 26,158.3 | (37,146.7 | ) | 4,984.3 | |||||||||||||
Total Liabilities and Shareholders' Equity | $ | 5,598.8 | $ | 20,733.7 | $ | 30,556.0 | $ | (41,682.2 | ) | $ | 15,206.3 |
Mallinckrodt plc | Mallinckrodt International Finance S.A. | Other Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | — | $ | 793.9 | $ | — | $ | 793.9 | |||||||||
Cost of sales | 0.9 | — | 392.4 | — | 393.3 | ||||||||||||||
Gross profit | (0.9 | ) | — | 401.5 | — | 400.6 | |||||||||||||
Selling, general and administrative expenses | 13.4 | 0.2 | 192.1 | — | 205.7 | ||||||||||||||
Research and development expenses | 1.8 | — | 57.7 | — | 59.5 | ||||||||||||||
Restructuring charges, net | — | — | 14.3 | — | 14.3 | ||||||||||||||
Non-restructuring impairment charges | — | — | — | — | — | ||||||||||||||
Losses on divestiture and license | — | — | 0.4 | — | 0.4 | ||||||||||||||
Operating (loss) income | (16.1 | ) | (0.2 | ) | 137.0 | — | 120.7 | ||||||||||||
Interest expense | (3.3 | ) | (90.9 | ) | (19.0 | ) | 20.6 | (92.6 | ) | ||||||||||
Interest income | 2.2 | 0.4 | 19.3 | (20.6 | ) | 1.3 | |||||||||||||
Other income, net | 1.4 | 1.7 | 0.6 | — | 3.7 | ||||||||||||||
Intercompany fees | (4.3 | ) | — | 4.3 | — | — | |||||||||||||
Equity in net income of subsidiaries | 82.4 | 261.8 | 174.7 | (518.9 | ) | — | |||||||||||||
Income from continuing operations before income taxes | 62.3 | 172.8 | 316.9 | (518.9 | ) | 33.1 | |||||||||||||
Income tax benefit | (1.4 | ) | (2.1 | ) | (27.7 | ) | — | (31.2 | ) | ||||||||||
Income from continuing operations | 63.7 | 174.9 | 344.6 | (518.9 | ) | 64.3 | |||||||||||||
Loss from discontinued operations, net of income taxes | — | (0.2 | ) | (0.4 | ) | — | (0.6 | ) | |||||||||||
Net income | 63.7 | 174.7 | 344.2 | (518.9 | ) | 63.7 | |||||||||||||
Other comprehensive loss, net of tax | (5.1 | ) | (5.1 | ) | (10.5 | ) | 15.6 | (5.1 | ) | ||||||||||
Comprehensive income | $ | 58.6 | $ | 169.6 | $ | 333.7 | $ | (503.3 | ) | $ | 58.6 |
Mallinckrodt plc | Mallinckrodt International Finance S.A. | Other Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | — | $ | 887.2 | $ | — | $ | 887.2 | |||||||||
Cost of sales | — | — | 397.0 | — | 397.0 | ||||||||||||||
Gross profit | — | — | 490.2 | — | 490.2 | ||||||||||||||
Selling, general and administrative expenses | 14.7 | 0.1 | 253.0 | — | 267.8 | ||||||||||||||
Research and development expenses | — | — | 67.9 | — | 67.9 | ||||||||||||||
Restructuring charges, net | — | — | 6.8 | — | 6.8 | ||||||||||||||
Non-restructuring impairment charge | — | — | — | — | — | ||||||||||||||
Losses on divestiture and license | — | — | — | — | — | ||||||||||||||
Operating (loss) income | (14.7 | ) | (0.1 | ) | 162.5 | — | 147.7 | ||||||||||||
Interest expense | (36.1 | ) | (82.0 | ) | (19.4 | ) | 43.5 | (94.0 | ) | ||||||||||
Interest income | — | 0.2 | 43.8 | (43.5 | ) | 0.5 | |||||||||||||
Other income (expense), net | 7.4 | — | (8.0 | ) | — | (0.6 | ) | ||||||||||||
Intercompany fees | (5.6 | ) | — | 5.6 | — | — | |||||||||||||
Equity in net income of subsidiaries | 157.1 | 302.7 | 224.5 | (684.3 | ) | — | |||||||||||||
Income from continuing operations before income taxes | 108.1 | 220.8 | 409.0 | (684.3 | ) | 53.6 | |||||||||||||
Income tax benefit | (6.9 | ) | (4.1 | ) | (45.4 | ) | — | (56.4 | ) | ||||||||||
Income from continuing operations | 115.0 | 224.9 | 454.4 | (684.3 | ) | 110.0 | |||||||||||||
(Loss) income from discontinued operations, net of income taxes | — | (0.4 | ) | 5.4 | — | 5.0 | |||||||||||||
Net income | 115.0 | 224.5 | 459.8 | (684.3 | ) | 115.0 | |||||||||||||
Other comprehensive loss, net of tax | (19.9 | ) | (19.9 | ) | (39.8 | ) | 59.7 | (19.9 | ) | ||||||||||
Comprehensive income | $ | 95.1 | $ | 204.6 | $ | 420.0 | $ | (624.6 | ) | $ | 95.1 |
Mallinckrodt plc | Mallinckrodt International Finance S.A. | Other Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | — | $ | 2,429.3 | $ | — | $ | 2,429.3 | |||||||||
Cost of sales | 1.8 | — | 1,192.2 | — | 1,194.0 | ||||||||||||||
Gross profit | (1.8 | ) | — | 1,237.1 | — | 1,235.3 | |||||||||||||
Selling, general and administrative expenses | 46.7 | 0.6 | 698.6 | — | 745.9 | ||||||||||||||
Research and development expenses | 3.6 | — | 187.3 | — | 190.9 | ||||||||||||||
Restructuring charges, net | — | — | 32.1 | — | 32.1 | ||||||||||||||
Non-restructuring impairment charge | — | — | — | — | — | ||||||||||||||
Gains on divestiture and license | — | — | (56.6 | ) | — | (56.6 | ) | ||||||||||||
Operating income | (52.1 | ) | (0.6 | ) | 375.7 | — | 323.0 | ||||||||||||
Interest expense | (10.0 | ) | (264.9 | ) | (57.9 | ) | 53.8 | (279.0 | ) | ||||||||||
Interest income | 5.3 | 1.0 | 50.3 | (53.8 | ) | 2.8 | |||||||||||||
Other income (expense), net | 19.0 | (1.6 | ) | (11.2 | ) | — | 6.2 | ||||||||||||
Intercompany fees | (13.3 | ) | — | 13.3 | — | — | |||||||||||||
Equity in net income of subsidiaries | 572.1 | 1,113.5 | 848.1 | (2,533.7 | ) | — | |||||||||||||
Income from continuing operations before income taxes | 521.0 | 847.4 | 1,218.3 | (2,533.7 | ) | 53.0 | |||||||||||||
Income tax benefit | (4.7 | ) | (2.6 | ) | (103.5 | ) | — | (110.8 | ) | ||||||||||
Income from continuing operations | 525.7 | 850.0 | 1,321.8 | (2,533.7 | ) | 163.8 | |||||||||||||
(Loss) income from discontinued operations, net of income taxes | — | (1.9 | ) | 363.8 | — | 361.9 | |||||||||||||
Net income | 525.7 | 848.1 | 1,685.6 | (2,533.7 | ) | 525.7 | |||||||||||||
Other comprehensive income, net of tax | 59.4 | 59.4 | 117.9 | (177.3 | ) | 59.4 | |||||||||||||
Comprehensive income | $ | 585.1 | $ | 907.5 | $ | 1,803.5 | $ | (2,711.0 | ) | $ | 585.1 |
Mallinckrodt plc | Mallinckrodt International Finance S.A. | Other Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Net sales | $ | — | $ | — | $ | 2,569.6 | $ | — | $ | 2,569.6 | |||||||||
Cost of sales | — | — | 1,165.5 | — | 1,165.5 | ||||||||||||||
Gross profit | — | — | 1,404.1 | — | 1,404.1 | ||||||||||||||
Selling, general and administrative expenses | 40.9 | 0.5 | 660.6 | — | 702.0 | ||||||||||||||
Research and development expenses | — | — | 200.8 | — | 200.8 | ||||||||||||||
Restructuring charges, net | — | — | 29.2 | — | 29.2 | ||||||||||||||
Non-restructuring impairment charge | — | — | 16.9 | — | 16.9 | ||||||||||||||
Gains on divestiture and license | — | — | — | — | — | ||||||||||||||
Operating income | (40.9 | ) | (0.5 | ) | 496.6 | — | 455.2 | ||||||||||||
Interest expense | (162.3 | ) | (245.1 | ) | (61.4 | ) | 182.0 | (286.8 | ) | ||||||||||
Interest income | — | 0.5 | 182.6 | (182.0 | ) | 1.1 | |||||||||||||
Other income (expense), net | 22.3 | — | (24.9 | ) | — | (2.6 | ) | ||||||||||||
Intercompany fees | (12.9 | ) | 0.1 | 12.8 | — | — | |||||||||||||
Equity in net income of subsidiaries | 609.8 | 1,015.2 | 786.2 | (2,411.2 | ) | — | |||||||||||||
Income from continuing operations before income taxes | 416.0 | 770.2 | 1,391.9 | (2,411.2 | ) | 166.9 | |||||||||||||
Income tax benefit | (16.6 | ) | (18.1 | ) | (183.6 | ) | — | (218.3 | ) | ||||||||||
Income from continuing operations | 432.6 | 788.3 | 1,575.5 | (2,411.2 | ) | 385.2 | |||||||||||||
(Loss) income from discontinued operations, net of income taxes | — | (2.1 | ) | 49.5 | — | 47.4 | |||||||||||||
Net income | 432.6 | 786.2 | 1,625.0 | (2,411.2 | ) | 432.6 | |||||||||||||
Other comprehensive loss, net of tax | (20.3 | ) | (20.3 | ) | (41.0 | ) | 61.3 | (20.3 | ) | ||||||||||
Comprehensive income | $ | 412.3 | $ | 765.9 | $ | 1,584.0 | $ | (2,349.9 | ) | $ | 412.3 |
Mallinckrodt plc | Mallinckrodt International Finance S.A. | Other Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||
Net cash from operating activities | $ | 1,172.0 | $ | 1,233.7 | $ | 1,963.0 | $ | (3,920.2 | ) | $ | 448.5 | ||||||||
Cash Flows From Investing Activities: | |||||||||||||||||||
Capital expenditures | — | — | (151.3 | ) | — | (151.3 | ) | ||||||||||||
Acquisitions and intangibles, net of cash acquired | — | — | (35.9 | ) | — | (35.9 | ) | ||||||||||||
Proceeds from divestiture of discontinued operations, net of cash | — | — | 576.9 | — | 576.9 | ||||||||||||||
Intercompany loan investment, net | (741.3 | ) | — | (920.8 | ) | 1,662.1 | — | ||||||||||||
Investment in subsidiary | — | (1,412.5 | ) | — | 1,412.5 | — | |||||||||||||
Other | — | — | 0.5 | — | 0.5 | ||||||||||||||
Net cash from investing activities | (741.3 | ) | (1,412.5 | ) | (530.6 | ) | 3,074.6 | 390.2 | |||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||
Issuance of external debt | — | 500.0 | 40.0 | — | 540.0 | ||||||||||||||
Repayment of external debt and capital leases | — | (759.9 | ) | (127.6 | ) | — | (887.5 | ) | |||||||||||
Debt financing costs | — | (12.7 | ) | — | — | (12.7 | ) | ||||||||||||
Proceeds from exercise of share options | 4.0 | — | — | — | 4.0 | ||||||||||||||
Repurchase of shares | (437.7 | ) | — | — | — | (437.7 | ) | ||||||||||||
Intercompany loan borrowings, net | — | 1,614.5 | 47.6 | (1,662.1 | ) | — | |||||||||||||
Intercompany dividends | — | (1,170.0 | ) | (2,750.2 | ) | 3,920.2 | — | ||||||||||||
Capital contribution | — | — | 1,412.5 | (1,412.5 | ) | — | |||||||||||||
Other | 3.2 | — | (21.8 | ) | — | (18.6 | ) | ||||||||||||
Net cash from financing activities | (430.5 | ) | 171.9 | (1,399.5 | ) | 845.6 | (812.5 | ) | |||||||||||
Effect of currency rate changes on cash | — | — | 2.7 | — | 2.7 | ||||||||||||||
Net change in cash, cash equivalents and restricted cash | 0.2 | (6.9 | ) | 35.6 | — | 28.9 | |||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 0.5 | 44.5 | 316.1 | — | 361.1 | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 0.7 | $ | 37.6 | $ | 351.7 | $ | — | $ | 390.0 | |||||||||
Cash and cash equivalents at end of period | $ | 0.7 | $ | 37.6 | $ | 333.5 | $ | — | $ | 371.8 | |||||||||
Restricted Cash, current at end of period | — | — | — | — | — | ||||||||||||||
Restricted Cash, noncurrent at end of period | — | — | 18.2 | — | 18.2 | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 0.7 | $ | 37.6 | $ | 351.7 | $ | — | $ | 390.0 |
Mallinckrodt plc | Mallinckrodt International Finance S.A. | Other Subsidiaries | Eliminations | Consolidated | |||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||||
Net cash from operating activities | $ | (21.3 | ) | $ | (99.3 | ) | $ | 993.8 | $ | — | $ | 873.2 | |||||||
Cash Flows From Investing Activities: | |||||||||||||||||||
Capital expenditures | — | — | (133.9 | ) | — | (133.9 | ) | ||||||||||||
Acquisitions and intangibles, net of cash acquired | — | — | (245.4 | ) | — | (245.4 | ) | ||||||||||||
Proceeds from divestiture of discontinued operations, net of cash | — | (1.4 | ) | 4.4 | — | 3.0 | |||||||||||||
Intercompany loan investment, net | — | (69.4 | ) | (1,587.5 | ) | 1,656.9 | — | ||||||||||||
Investment in subsidiary | — | (815.0 | ) | — | 815.0 | — | |||||||||||||
Proceeds from sale of subsidiary | 3.4 | — | — | (3.4 | ) | — | |||||||||||||
Acquisition of subsidiary | — | — | (3.4 | ) | 3.4 | — | |||||||||||||
Other | — | — | 5.3 | — | 5.3 | ||||||||||||||
Net cash from investing activities | 3.4 | (885.8 | ) | (1,960.5 | ) | 2,471.9 | (371.0 | ) | |||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||||
Issuance of external debt | — | — | 36.3 | — | 36.3 | ||||||||||||||
Repayment of external debt and capital leases | — | (420.3 | ) | (18.7 | ) | — | (439.0 | ) | |||||||||||
Debt financing costs | — | — | — | — | — | ||||||||||||||
Proceeds from exercise of share options | 10.4 | — | — | — | 10.4 | ||||||||||||||
Repurchase of shares | (377.5 | ) | — | — | — | (377.5 | ) | ||||||||||||
Intercompany loan borrowings, net | 385.0 | 1,271.9 | — | (1,656.9 | ) | — | |||||||||||||
Capital contribution | — | — | 815.0 | (815.0 | ) | — | |||||||||||||
Other | — | — | (23.0 | ) | — | (23.0 | ) | ||||||||||||
Net cash from financing activities | 17.9 | 851.6 | 809.6 | (2,471.9 | ) | (792.8 | ) | ||||||||||||
Effect of currency rate changes on cash | — | — | 1.8 | — | 1.8 | ||||||||||||||
Net change in cash, cash equivalents and restricted cash | — | (133.5 | ) | (155.3 | ) | — | (288.8 | ) | |||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 0.3 | 158.5 | 429.6 | — | 588.4 | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 0.3 | $ | 25.0 | $ | 274.3 | $ | — | $ | 299.6 | |||||||||
Cash and cash equivalents at end of period | $ | 0.3 | $ | 25.0 | $ | 255.2 | $ | — | $ | 280.5 | |||||||||
Restricted Cash, current at end of period | — | — | 0.1 | — | 0.1 | ||||||||||||||
Restricted Cash, noncurrent at end of period | — | — | 19.0 | — | 19.0 | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 0.3 | $ | 25.0 | $ | 274.3 | $ | — | $ | 299.6 |
20. | Subsequent Events |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. |
• | Specialty Brands includes branded medicines; and |
• | Specialty Generics includes specialty generic drugs, active pharmaceutical ingredients ("API") and external manufacturing. |
• | Terlipressin is being investigated for the treatment of Hepatorenal Syndrome ("HRS") type 1, an acute, rare and life-threatening condition requiring hospitalization, with no currently approved therapy in the U.S. or Canada. In July 2016, we enrolled the first patient in our Phase 3 clinical study to evaluate the efficacy and safety of terlipressin (for injection) in subjects with HRS type 1. In July 2017, we announced the enrollment of the 75th subject in our ongoing Phase 3 clinical study, achieving one quarter of our target enrollment for this trial. |
• | StrataGraft is an investigational product in Phase 3 development for treatment of severe, deep partial thickness burns and Phase 2 development for treatment of severe, full thickness burns. In 2012, the FDA granted StrataGraft orphan product status, and the product is being developed as a biologic to be filed under a biologic license application that would confer regulatory protection until 2032. In June 2017, we announced the enrollment of the first patient in our Phase 3 clinical study to evaluate the efficacy and safety of StrataGraft regenerative skin tissue in the promotion of autologous skin regeneration of complex skin defects due to thermal burns that contain intact dermal elements. In July 2017, we announced that StrataGraft is among the first products to be designated as a Regenerative Medicine Advanced Therapy ("RMAT") by the FDA under the provisions of the 21st Century Cures Act. The RMAT designation allows for earlier and increased interactions with the FDA, including discussions of whether priority review and/or accelerated approval would be appropriate based on surrogate or intermediate endpoints that would be reasonably likely to predict long-term clinical benefit; or reliance upon data obtained from a meaningful number of sites. |
• | MNK-1411 (the product formerly described as Synacthen Depot®) is a depot formulation of Synacthen (tetracosactide), a synthetic 24 amino acid melanocortin receptor agonist. In August 2016, we announced that the FDA has granted our request for fast track designation for its Investigational New Drug ("IND") application for MNK-1411 in the treatment of Duchenne muscular dystrophy ("DMD"). The FDA's fast track designation is a process designed to facilitate the development, and expedite the review of drugs to treat serious conditions that fill an unmet medical need. We completed a Phase 1 study for MNK-1411 in healthy volunteers, and are using the information that was derived to determine optimal dosing in our Phase 2 trial, which is expected to commence during the next six months. In July 2017, we announced that the FDA had granted orphan drug designation to MNK-1411 for the treatment of DMD. |
• | Stannsoporfin, a heme oxygenase inhibitor, is under investigation for its potential to reduce the production of bilirubin. If approved, stannsoporfin is expected to be a highly effective therapy used for near- and full-term infants at risk of developing complications associated with severe jaundice. This new treatment option may reduce the number of newborns advancing to bilirubin levels requiring more intrusive, less specific therapies, most often blood exchange transfusion and less frequently intravenous immunoglobululin infusions ("IVIG"), both of which have a more complex and lengthy administration than stannsoporfin's single injection. Stannsoporfin, if approved, may also decrease the risks associated with other treatments (e.g., bilirubin rebound) and the risk of prolonged and/or severe bilirubin elevation, which can impact central nervous system development. In December 2016, stannsoporfin was granted fast track designation by the FDA. After our recent acquisition of this product through the InfaCare Acquisition, we expect to submit our new drug application ("NDA") to the FDA by the end of fiscal 2017. |
• | Xenon is a noble gas that has been used safely as an inhaled therapy in several studies to date. Following cardiac arrest, calcium channels in the brain can get over-activated, causing neuronal damage and cell death. When inhaled, xenon binds to N-methyl-D-aspartate receptors through a unique glycine-binding mechanism and can help regulate the flow of ions through the calcium channels. By mitigating neuronal damage and cell death following a cardiac arrest, inhaled xenon may be able to reduce time in coma, lower mortality rates and improve cognitive and motor functions. The Phase 3 trial, being conducted under an FDA Special Protocol Agreement, or SPA, is currently expected to begin in early 2018. |
Three Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
U.S. | $ | 711.0 | $ | 814.1 | (12.7 | )% | ||||
Europe, Middle East and Africa | 60.3 | 54.4 | 10.8 | |||||||
Other | 22.6 | 18.7 | 20.9 | |||||||
Net sales | $ | 793.9 | $ | 887.2 | (10.5 | ) |
Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
U.S. | $ | 2,197.7 | $ | 2,355.2 | (6.7 | )% | ||||
Europe, Middle East and Africa | 176.2 | 162.5 | 8.4 | |||||||
Other | 55.4 | 51.9 | 6.7 | |||||||
Net sales | $ | 2,429.3 | $ | 2,569.6 | (5.5 | ) |
Three Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
Specialty Brands | $ | 591.4 | $ | 633.1 | (6.6 | )% | ||||
Specialty Generics | 189.1 | 239.8 | (21.1 | ) | ||||||
Net sales of operating segments | 780.5 | 872.9 | (10.6 | ) | ||||||
Other (1) | 13.4 | 14.3 | (6.3 | ) | ||||||
Net sales | $ | 793.9 | $ | 887.2 | (10.5 | ) |
(1) | Represents net sales from an ongoing, post-divestiture supply agreement with the acquirer of the CMDS business. |
Three Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
U.S. | $ | 570.3 | $ | 613.9 | (7.1 | )% | ||||
Europe, Middle East and Africa | 19.1 | 17.7 | 7.9 | |||||||
Other | 2.0 | 1.5 | 33.3 | |||||||
Net sales | $ | 591.4 | $ | 633.1 | (6.6 | ) |
Three Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
Acthar | $ | 308.7 | $ | 327.0 | (5.6 | )% | ||||
Inomax | 125.7 | 126.9 | (0.9 | ) | ||||||
Ofirmev | 75.4 | 75.6 | (0.3 | ) | ||||||
Therakos immunotherapy | 55.3 | 54.5 | 1.5 | |||||||
Hemostasis products | 16.2 | 17.2 | (5.8 | ) | ||||||
Other | 10.1 | 31.9 | (68.3 | ) | ||||||
Specialty Brands | $ | 591.4 | $ | 633.1 | (6.6 | ) |
Three Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
U.S. | $ | 140.7 | $ | 200.3 | (29.8 | )% | ||||
Europe, Middle East and Africa | 27.8 | 22.2 | 25.2 | |||||||
Other | 20.6 | 17.3 | 19.1 | |||||||
Net sales | $ | 189.1 | $ | 239.8 | (21.1 | ) |
Three Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
Hydrocodone (API) and hydrocodone-containing tablets | $ | 10.0 | $ | 30.8 | (67.5 | )% | ||||
Oxycodone (API) and oxycodone-containing tablets | 13.4 | 28.8 | (53.5 | ) | ||||||
Methylphenidate ER | 14.3 | 23.4 | (38.9 | ) | ||||||
Other controlled substances | 103.9 | 111.8 | (7.1 | ) | ||||||
Other products | 47.5 | 45.0 | 5.6 | |||||||
Specialty Generics | $ | 189.1 | $ | 239.8 | (21.1 | ) |
Three Months Ended | |||||||||||||
September 29, 2017 | September 30, 2016 | ||||||||||||
Specialty Brands | $ | 316.6 | 53.5 | % | $ | 334.1 | 52.8 | % | |||||
Specialty Generics | 40.4 | 21.4 | 63.9 | 26.6 | |||||||||
Segment operating income | 357.0 | 45.7 | 398.0 | 45.6 | |||||||||
Unallocated amounts: | |||||||||||||
Corporate and allocated expenses | (47.6 | ) | (65.7 | ) | |||||||||
Intangible asset amortization | (173.2 | ) | (175.9 | ) | |||||||||
Restructuring and related charges, net (1) | (15.5 | ) | (8.7 | ) | |||||||||
Total operating income | $ | 120.7 | $ | 147.7 |
(1) | Includes restructuring-related accelerated depreciation. |
Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
Specialty Brands | $ | 1,743.1 | $ | 1,757.4 | (0.8 | )% | ||||
Specialty Generics | 643.7 | 767.6 | (16.1 | ) | ||||||
Net sales of operating segments | 2,386.8 | 2,525.0 | (5.5 | ) | ||||||
Other (1) | 42.5 | 44.6 | (4.7 | ) | ||||||
Net sales | $ | 2,429.3 | $ | 2,569.6 | (5.5 | ) |
(1) | Represents net sales from an ongoing, post-divestiture supply agreement with the acquirer of the CMDS business. |
Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
U.S. | $ | 1,684.0 | $ | 1,700.1 | (0.9 | )% | ||||
Europe, Middle East and Africa | 53.6 | 52.8 | 1.5 | |||||||
Other | 5.5 | 4.5 | 22.2 | |||||||
Net sales | $ | 1,743.1 | $ | 1,757.4 | (0.8 | ) |
Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
Acthar | $ | 899.9 | $ | 873.7 | 3.0 | % | ||||
Inomax | 379.6 | 363.5 | 4.4 | |||||||
Ofirmev | 224.5 | 217.4 | 3.3 | |||||||
Therakos immunotherapy | 157.7 | 157.2 | 0.3 | |||||||
Hemostasis products | 42.8 | 42.5 | 0.7 | |||||||
Other | 38.6 | 103.1 | (62.6 | ) | ||||||
Specialty Brands | $ | 1,743.1 | $ | 1,757.4 | (0.8 | ) |
Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
U.S. | $ | 513.7 | $ | 655.2 | (21.6 | )% | ||||
Europe, Middle East and Africa | 80.1 | 64.9 | 23.4 | |||||||
Other | 49.9 | 47.5 | 5.1 | |||||||
Net sales | $ | 643.7 | $ | 767.6 | (16.1 | ) |
Nine Months Ended | ||||||||||
September 29, 2017 | September 30, 2016 | Percentage Change | ||||||||
Hydrocodone (API) and hydrocodone-containing tablets | $ | 63.3 | $ | 109.8 | (42.3 | )% | ||||
Oxycodone (API) and oxycodone-containing tablets | 60.6 | 97.3 | (37.7 | ) | ||||||
Methylphenidate ER | 58.2 | 72.3 | (19.5 | ) | ||||||
Other controlled substances | 319.0 | 358.4 | (11.0 | ) | ||||||
Other products | 142.6 | 129.8 | 9.9 | |||||||
Specialty Generics | $ | 643.7 | $ | 767.6 | (16.1 | ) |
Nine Months Ended | |||||||||||||
September 29, 2017 | September 30, 2016 | ||||||||||||
Specialty Brands | $ | 865.7 | 49.7 | % | $ | 897.1 | 51.0 | % | |||||
Specialty Generics | 179.9 | 27.9 | 260.9 | 34.0 | |||||||||
Segment operating income | 1,045.6 | 43.8 | 1,158.0 | 45.9 | |||||||||
Unallocated amounts: | |||||||||||||
Corporate and allocated expenses | (163.9 | ) | (125.2 | ) | |||||||||
Intangible asset amortization | (523.0 | ) | (526.7 | ) | |||||||||
Restructuring and related charges, net (1) | (35.7 | ) | (34.0 | ) | |||||||||
Non-restructuring impairment | — | (16.9 | ) | ||||||||||
Total operating income | $ | 323.0 | $ | 455.2 |
(1) | Includes restructuring-related accelerated depreciation. |
Nine Months Ended | |||||||
September 29, 2017 | September 30, 2016 | ||||||
Net cash from: | |||||||
Operating activities | $ | 448.5 | $ | 873.2 | |||
Investing activities | 390.2 | (371.0 | ) | ||||
Financing activities | (812.5 | ) | (792.8 | ) | |||
Effect of currency exchange rate changes on cash and cash equivalents | 2.7 | 1.8 | |||||
Net decrease in cash and cash equivalents | $ | 28.9 | $ | (288.8 | ) |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Item 4. | Controls and Procedures. |
Item 1. | Legal Proceedings. |
Item 1A. | Risk Factors. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under Plans or Programs | ||||||||||
July 1, 2017 to July 28, 2017 | 4,100 | $ | 44.83 | — | $ | 889.7 | |||||||
July 29, 2017 to August 25, 2017 | 731,836 | 37.82 | 731,707 | 862.0 | |||||||||
August 26, 2017 to September 29, 2017 | 785,312 | 36.97 | 785,312 | 833.0 |
Item 3. | Defaults Upon Senior Securities. |
Item 4. | Mine Safety Disclosures. |
Item 5. | Other Information. |
Item 6. | Exhibits. |
Exhibit Number | Exhibit | |
3.1 | ||
3.2 | ||
31.1 | ||
31.2 | ||
32.1 | ||
101 | Interactive Data File (Form 10-Q for the quarterly period ended September 29, 2017 filed in XBRL). The financial information contained in the XBRL-related documents is "unaudited" and "unreviewed." |
MALLINCKRODT PUBLIC LIMITED COMPANY | ||
By: | /s/ Matthew K. Harbaugh | |
Matthew K. Harbaugh Executive Vice President and Chief Financial Officer (principal financial officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Mallinckrodt plc; | ||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||||
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: | ||||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||||
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||||
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | ||||
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | ||||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | ||||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 7, 2017 | By: | /s/ Mark C. Trudeau | |
Mark C. Trudeau | |||
President and Chief Executive Officer and Director (principal executive officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Mallinckrodt plc; | ||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||||
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have: | ||||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||||
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||||
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | ||||
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | ||||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | ||||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 7, 2017 | By: | /s/ Matthew K. Harbaugh | |
Matthew K. Harbaugh | |||
Executive Vice President and Chief Financial Officer (principal financial officer) |
By: | /s/ Mark C. Trudeau |
Mark C. Trudeau | |
President and Chief Executive Officer and Director (principal executive officer) |
By: | /s/ Matthew K. Harbaugh |
Matthew K. Harbaugh | |
Executive Vice President and Chief Financial Officer (principal financial officer) |
Document And Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 29, 2017 |
Nov. 03, 2017 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Mallinckrodt plc | |
Entity Central Index Key | 0001567892 | |
Trading Symbol | MNK | |
Current Fiscal Year End Date | --12-29 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 29, 2017 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Ordinary Shares Outstanding | 95,004,912 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Net income | $ 63.7 | $ 115.0 | $ 525.7 | $ 432.6 |
Other comprehensive income (loss), net of tax: | ||||
Currency translation adjustments | 5.6 | 1.9 | 13.0 | 9.5 |
Unrecognized gain on derivatives, net of $-, $0.2, $0.2 and $0.2 tax | 0.3 | 0.0 | 0.9 | 0.4 |
Unrecognized (loss) gain on benefit plans, net of $-, ($19.1), ($31.4) and ($14.0) tax | (0.5) | (21.8) | 45.4 | (30.2) |
Unrecognized (loss) gain on investments, net of $-, $-, $- and $- tax | (10.5) | 0.0 | 0.1 | 0.0 |
Total other comprehensive income (loss), net of tax | (5.1) | (19.9) | 59.4 | (20.3) |
Comprehensive Income | $ 58.6 | $ 95.1 | $ 585.1 | $ 412.3 |
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Unrecognized gain derivatives, tax | $ 0.0 | $ 0.2 | $ 0.2 | $ 0.2 |
Unrecognized (loss) gain on benefit plans, tax | 0.0 | (19.1) | (31.4) | (14.0) |
Unrecognized (loss) gain on investments, tax | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
Background and Basis of Presentation |
9 Months Ended | ||||||||||||||
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Sep. 29, 2017 | |||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||
Background and Basis of Presentation |
Background Mallinckrodt plc and its subsidiaries (collectively, "Mallinckrodt" or "the Company"), is a global business that develops, manufactures, markets and distributes specialty pharmaceutical products and therapies. Areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; and analgesics and hemostasis products. The Company operates in two reportable segments, which are further described below:
The Company owns or has rights to use the trademarks and trade names that are used in conjunction with the operation of its business. One of the more important trademarks that the Company owns or has rights to use that appears in this Quarterly Report on Form 10-Q is "Mallinckrodt," which is a registered trademark or the subject of pending trademark applications in the United States ("U.S.") and other jurisdictions. Solely for convenience, the Company only uses the ™ or ® symbols the first time any trademark or trade name is mentioned in the following notes. Such references are not intended to indicate in any way that the Company will not assert, to the fullest extent permitted under applicable law, its rights to its trademarks and trade names. Each trademark or trade name of any other company appearing in the following notes is, to the Company's knowledge, owned by such other company. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in U.S. Dollars and in accordance with accounting principles generally accepted in the U.S. ("GAAP"). The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of net sales and expenses. Actual results may differ from those estimates. The unaudited condensed consolidated financial statements include the accounts of Mallinckrodt plc, its wholly-owned subsidiaries and entities in which they own or control more than fifty percent of the voting shares, or have the ability to control through similar rights. The results of entities disposed of are included in the unaudited condensed consolidated financial statements up to the date of disposal and, where appropriate, these operations have been reflected as discontinued operations. Divestitures of product lines and businesses that did not qualify as discontinued operations have been reflected in operating income. All intercompany balances and transactions have been eliminated in consolidation and, in the opinion of management, all normal recurring adjustments necessary for a fair presentation have been included in the interim results reported. The December 30, 2016 balance sheet data was derived from the unaudited condensed consolidated financial statements, but does not include all of the annual disclosures required by GAAP; accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited annual consolidated and combined financial statements included in its Annual Report on Form 10-K for the period ended September 30, 2016, filed with the U.S. Securities and Exchange Commission ("SEC") on November 29, 2016. The Company completed the sale of its Nuclear Imaging business on January 27, 2017. As a result, prior year balances have been recast to present the financial results of this business as a discontinued operation. Fiscal Year The Company historically reported its results based on a "52-53 week" year ending on the last Friday of September. On May 17, 2016, the Board of Directors of the Company approved a change in the Company’s fiscal year end to the last Friday in December from the last Friday in September. The change in fiscal year became effective for the Company’s 2017 fiscal year, which began on December 31, 2016 and will end on December 29, 2017. As a result of the change in fiscal year end, the Company filed a Transition Report on Form 10-Q on February 7, 2017 covering the period from October 1, 2016 through December 30, 2016. Unless otherwise indicated, the three and nine months ended September 29, 2017 refers to the thirteen and thirty-nine week period ended September 29, 2017 and the three and nine months ended September 30, 2016 refers to the fourteen and forty week period ended September 30, 2016. |
Recently Issued Accounting Standards |
9 Months Ended | ||||||
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Sep. 29, 2017 | |||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||
Recently Issued Accounting Standards |
Adopted The Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2017-04, "Intangibles - Goodwill and Other: Simplifying the Test for Goodwill Impairment," in January 2017. This update eliminates step 2 from the goodwill impairment test, and requires the goodwill impairment test to be performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The Company early adopted this standard in fiscal 2017, which did not have a material impact to the unaudited condensed consolidated financial statements. The Company will apply this standard to prospective goodwill impairment tests. The FASB issued ASU 2016-16, "Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory," in October 2016. This update simplifies the practice of how income tax consequences of an intra-entity transfer of an asset other than inventory should be recognized. Upon adoption, the entity must recognize such income tax consequences when the intra-entity transfer occurs rather than waiting until such time as the asset has been sold to an outside party. The Company early adopted this standard in fiscal 2017, which resulted in a $75.0 million decrease to beginning retained earnings with an offsetting decrease of $67.2 million to other assets and a $7.8 million decrease to prepaid expenses on its unaudited condensed consolidated balance sheet. The prior periods were not restated. The FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments," in August 2016 and ASU 2016-18 "Statement of Cash Flows (Topic 230): Restricted Cash," in November 2016. These updates provide guidance for nine targeted clarifications with respect to how cash receipts and cash payments are classified in the statements of cash flows, with the objective of reducing diversity in practice. The Company early adopted these standards in fiscal 2017 and revised the prior year statement of cash flows. The adoption of ASU 2016-18, regarding presentation of restricted cash, increased the net cash used in investing activities during the nine months ended September 30, 2016 by $47.4 million. The adoption of ASU 2016-15, regarding the other targeted clarifications, did not result in any material changes to the unaudited condensed consolidated financial statements. The FASB issued ASU 2016-09, "Stock Compensation," in March 2016. This update simplifies several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification of certain tax effects within the statement of cash flows. The Company adopted this guidance in fiscal 2017, which resulted in a $2.9 million increase to beginning retained earnings to recognize net operating loss carryforwards, net of a valuation allowance, attributable to excess tax benefits on stock compensation that had not been previously recognized in additional paid-in capital. The FASB issued ASU 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments," in September 2015. This update requires an acquirer to recognize adjustments to the provisional amounts that are identified during the measurement period in the reporting period in which the adjusting amounts are determined. The amendments in this update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this standard in fiscal 2017, which did not have any impact on historical acquisitions. The FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory," in July 2015. The issuance of this update is part of the FASB's initiative to more closely align the measurement of inventory between GAAP and International Financial Reporting Standards ("IFRS"). Under the new guidance, inventory must be measured at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The Company adopted this standard in fiscal 2017, which did not have a material impact to the unaudited condensed consolidated financial statements. Not Yet Adopted The FASB issued ASU 2017-12, "Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities" in August 2017. This update simplifies the application of hedge accounting and enhances the economics of the entity’s risk management activities in its financial statements. The update amends the guidance on designation and measurement for qualifying hedging relationships requiring the application of a modified retrospective approach on the date of adoption. This guidance is effective for the Company in the first quarter of fiscal 2019. The Company is assessing the timing of adoption and the impact of this guidance on the unaudited condensed consolidated financial statements. The FASB issued ASU 2017-09, "Compensation - Stock Compensation: Scope of Modification Accounting," in May 2017. Under the new guidance, the effects of a modification should be accounted for unless all of the following are met: (1) the fair value or calculated intrinsic value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This guidance is effective for the Company in the first quarter of fiscal 2018. The Company expects the impact of this guidance to be immaterial to the unaudited condensed consolidated financial statements upon adoption. The FASB issued ASU 2017-07, "Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Post Retirement Benefit Cost," in March 2017. This update requires that the service cost component be disaggregated from the other components of net benefit cost. Service cost should be reported in the same line item or items as other compensation costs arising from services rendered by pertinent employees during the period. The other components of net benefit cost should be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. This guidance is effective for the Company in the first quarter of fiscal 2018. The Company expects the impact of this guidance to be immaterial to the unaudited condensed consolidated financial statements upon adoption. The FASB issued ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business," in January 2017. This update provides a screen to determine whether or not a set of assets is a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. If the screen is not met, the amendments in this update (1) require that to be considered a business, a set of assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output and (2) remove the evaluation of whether a market participant could replace missing elements. This guidance is effective for the Company in the first quarter of fiscal 2018. Depending upon the individual facts and circumstances of future transactions, this guidance may result in more transactions being accounted for as asset acquisitions rather than business combinations. The FASB issued ASU 2014-09, "Revenue from Contracts with Customers," in May 2014. The issuance of ASU 2014-09 and IFRS 15, "Revenue from Contracts with Customers," completes the joint effort by the FASB and the International Accounting Standards Board to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and IFRS. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services, applying the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract(s); (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract(s); and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The guidance is effective for the Company in the first quarter of fiscal year 2018. The FASB subsequently issued additional ASUs to clarify the guidance in ASU 2014-09. The ASUs issued include ASU 2016-08, "Revenue from Contracts with Customers;" ASU 2016-10 "Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing;" and ASU 2016-12, "Narrow-Scope Improvements and Practical Expedients." The Company has completed its assessment of certain customer arrangements and has preliminarily assessed certain other customer arrangements based on the nature of its business; and at this time, the Company does not anticipate a significant impact upon adoption. However, the assessment is ongoing and a more detailed analysis of contracts subject to the preliminary assessment or review of additional contracts may identify a more significant impact. The Company currently expects, in part due to the limited anticipated impact, that it will utilize the modified retrospective transition approach of adopting the ASU. The Company's status of various ASUs are further described within the notes to the financial statements included within the Company's Annual Report filed on Form 10-K for the fiscal year ended September 30, 2016. |
Discontinued Operations and Divestitures |
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Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Divestitures |
Discontinued Operations Nuclear Imaging: On January 27, 2017, the Company completed the sale of its Nuclear Imaging business to IBA Molecular ("IBAM") for approximately $690.0 million before tax impacts, including up-front consideration of approximately $574.0 million, up to $77.0 million of contingent consideration and the assumption of certain liabilities. The Company recorded a pre-tax gain on the sale of the Nuclear Imaging business of $362.8 million during the nine months ended September 29, 2017, which excluded any potential proceeds from the contingent consideration and reflects a charge of $0.6 million during the three months ended September 29, 2017 primarily as a result of the final working capital adjustment associated with the purchase agreement. The following table summarizes the financial results of the Nuclear Imaging business presented in the unaudited condensed consolidated statements of income:
During the three months ended September 29, 2017, there was an income tax benefit of $0.1 million associated with the $0.6 million loss recognized on divestiture. During the nine months ended September 29, 2017, there was income tax expense of $0.9 million associated with the $362.8 million gain on divestiture and a $4.3 million income tax expense associated with the $8.4 million income from discontinued operations. The tax impact of the gain recognized on divestiture was favorably impacted by a benefit from permanently deductible items. The following table summarizes the assets and liabilities of the Nuclear Imaging business that are classified as held for sale on the unaudited condensed consolidated balance sheets:
The following table summarizes significant cash and non-cash transactions of the Nuclear Imaging business that are included within the unaudited condensed consolidated statements of cash flows for the respective periods:
All other notes to the unaudited condensed consolidated financial statements that were impacted by this discontinued operation have been reclassified accordingly. CMDS: On November 27, 2015, the Company completed the sale of its contrast media and delivery systems ("CMDS") business to Guerbet S.A. ("Guerbet") for cash consideration of approximately $270.0 million, subject to net working capital adjustments. During the three months ended September 30, 2016, the Company had no net sales and a loss on the sale of business of $4.0 million, with $0.4 million related income tax effect. During the nine months ended September 30, 2016, the Company had $1.8 million of net sales, a $0.2 million income tax effect and $4.4 million loss, net of tax. All activity related to the CMDS business has been reported in discontinued operations. Divestitures On January 30, 2017, the Company announced that it had entered into a definitive agreement to sell its Intrathecal Therapy business to Piramal Enterprises Limited's subsidiary in the United Kingdom ("U.K."), Piramal Critical Care ("Piramal"), for approximately $203.0 million, including fixed consideration of $171.0 million and contingent consideration of up to $32.0 million. The $171.0 million of fixed consideration consisted of $17.0 million received at closing and a $154.0 million note receivable that is due one year from the transaction closing date. The transaction was completed on March 17, 2017. The Company recorded a pre-tax gain on the sale of the business of $56.6 million during the nine months ended September 29, 2017, which excluded any potential proceeds from the contingent consideration and reflects a post-sale working capital adjustment of $0.4 million during the three months ended September 29, 2017. The financial results of the Intrathecal Therapy business are presented within continuing operations as this divestiture did not meet the criteria for discontinued operations classification. As part of the divestiture and calculation of the gain, the Company wrote off intangible assets of $48.7 million and goodwill of $49.8 million, from the Specialty Brands segment, ascribed to the Intrathecal Therapy business. The Company is committed to reimburse up to $7.3 million of product development expenses incurred by Piramal. The remaining items included in the gain calculation are attributable to inventory transferred and transaction costs incurred by the Company. |
Acquisitions, License Agreements and Other Investments |
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Acquisitions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions, License Agreements and Other Investments |
During the three months ended September 29, 2017 and September 30, 2016, the Company recognized $2.7 million and $3.4 million, respectively, of expense primarily associated with fair value adjustments of acquired inventory. During the nine months ended September 29, 2017 and September 30, 2016, the Company recognized $8.6 million and $8.1 million, respectively, of expense primarily associated with fair value adjustments of acquired inventory. The amount of acquisition-related costs included within operating income for the three and nine months ended September 29, 2017 were $1.2 million and $2.3 million, respectively. The amount of acquisition-related costs included within operating income for the three and nine months ended September 30, 2016 was $3.8 million and $5.8 million, respectively. The Company's acquisitions and license agreements are described further within the notes to the financial statements included within the Company's Annual Report filed on Form 10-K for the fiscal year ended September 30, 2016. InfaCare On September 25, 2017, the Company acquired InfaCare Pharmaceutical Corporation ("InfaCare") in a transaction valued at approximately $80.4 million, with additional payments of up to $345.0 million dependent on regulatory and sales milestones ("the InfaCare Acquisition"). Consideration for the transaction consisted of approximately $37.2 million in cash paid to the prior shareholders of InfaCare and the assumption of approximately $43.2 million of debt and other liabilities, which was repaid in conjunction with the InfaCare Acquisition. InfaCare is focused on development and commercialization of proprietary pharmaceuticals for neonatal and pediatric patient populations. InfaCare's developmental product stannsoporfin, a heme oxygenase inhibitor, is under investigation for its potential to reduce the production of bilirubin, the elevation of which can contribute to serious consequences in infants. The fair value of the contingent consideration associated with the transaction was $35.0 million at September 25, 2017. The InfaCare Acquisition was funded with cash on hand. Stratatech On August 31, 2016, the Company acquired Stratatech Corporation ("Stratatech") - which includes StrataGraft®, a regenerative skin tissue and a technology platform for genetically enhanced skin tissues - for upfront considerations of $76.0 million, and contingent milestone payments, which are primarily regulatory, and royalty obligations that could result in up to $121.0 million of additional consideration ("the Stratatech Acquisition"). Stratatech is a regenerative medicine company focused on the development of unique, proprietary skin substitute products. Developmental products include StrataGraft® regenerative skin tissue ("StrataGraft") and a technology platform for genetically enhanced skin tissues. The Stratatech Acquisition was funded with cash on hand. Hemostasis Products On February 1, 2016, the Company acquired three commercial stage topical hemostasis drugs from The Medicines Company ("the Hemostasis Acquisition") - RECOTHROM® Thrombin topical (Recombinant) ("Recothrom"), PreveLeakTM Surgical Sealant ("PreveLeak"), and RAPLIXATM (Fibrin Sealant (Human)) ("Raplixa") - for upfront consideration of $173.5 million, inclusive of existing inventory, and contingent sales-based milestone payments that could result in up to $395.0 million of additional consideration. The fair value of the contingent consideration and acquired contingent liabilities associated with the transaction were $52.0 million and $10.6 million, respectively, at February 1, 2016. The Hemostasis Acquisition was funded with cash on hand. Fair Value Allocation The following amounts represent the preliminary allocations of the fair value of the identifiable assets acquired and liabilities assumed for the InfaCare Acquisition, including preliminary goodwill, intangible assets and the related deferred tax balances. The Company expects to complete its valuation analysis and finalize deferred tax balances as of the acquisition date no later than twelve months from the date of the acquisition. The changes in the purchase price allocation and preliminary goodwill based on the final valuation may include, but are not limited to, finalization of working capital settlements, the impact of U.S. state tax rates in determining the deferred tax balances and changes in assumptions utilized in the preliminary valuation report.
The following is a reconciliation of the total consideration to net assets acquired:
Intangible assets acquired consist of the following:
The IPR&D intangible assets relates to stannsoporfin. The fair value of the IPR&D was determined using the income approach, which is a valuation technique that provides an estimate of fair value of the assets based on the market participant expectations of cash flows the asset would generate. The cash flows were discounted at a rate of 13.5%. The IPR&D discount rate for stannsoporfin was developed after assigning a probability of success to achieving the projected cash flows based on the current stage of development, inherent uncertainty in the FDA approval process and risks associated with commercialization of a new product. Based on the Company's preliminary estimate, the excess of purchase price over net tangible and intangible assets acquired resulted in goodwill, which represents future product development, the assembled workforce, and the tax status of the transaction. The goodwill is not deductible for U.S. income tax purposes. All assets acquired are included within the Company's Specialty Brands segment. Licenses and Other Investments In January 2017, $21.5 million of consideration was remitted to Mesoblast Limited ("Mesoblast") in exchange for equity shares and rights to a nine month exclusivity period related to any potential commercial and development agreements the Company may enter into for Mesoblast's therapy products used to treat acute graft versus host disease and/or chronic low back pain. As a result of this transaction the Company recorded an available for sale investment of $19.7 million included within prepaid and other current assets and an intangible asset of $1.8 million in the unaudited condensed consolidated balance sheet. This intangible asset was fully amortized as of September 29, 2017 as the nine month exclusivity period had ended. |
Restructuring and Related Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Charges |
In July 2016, the Company's Board of Directors approved a $100.0 million to $125.0 million restructuring program ("the 2016 Mallinckrodt Program") designed to further improve the Company's cost structure as it continues to transform the business. The 2016 Mallinckrodt Program is expected to include actions across both the Specialty Brands and Specialty Generics segments, as well as within corporate functions. There is no specified time period associated with the 2016 Mallinckrodt Program. In addition to the 2016 Mallinckrodt Program, the Company takes certain restructuring actions to generate synergies from its acquisitions. Net restructuring and related charges by segment are as follows:
Net restructuring and related charges by program are comprised of the following:
The following table summarizes cash activity for restructuring reserves, substantially all of which are related to employee severance and benefits:
Net restructuring and related charges, including associated asset impairments, incurred cumulative-to-date related to the 2016 Mallinckrodt Program was as follows:
Substantially all of the restructuring reserves were included in accrued and other current liabilities on the Company's unaudited condensed consolidated balance sheets. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||
Income Taxes |
The Company recognized an income tax benefit of $31.2 million on income from continuing operations before income taxes of $33.1 million for the three months ended September 29, 2017, and an income tax benefit of $56.4 million on income from continuing operations before income taxes of $53.6 million for the three months ended September 30, 2016. This resulted in effective tax rates of negative 94.3% and negative 105.2% for the three months ended September 29, 2017 and September 30, 2016, respectively. The income tax benefit for the three months ended September 29, 2017 is comprised of $60.0 million of current tax benefit and $28.8 million of deferred tax expense. The net deferred tax expense of $28.8 million includes $45.5 million of deferred tax benefit which is predominantly related to acquired intangible assets offset by $74.3 million of deferred tax expense related to utilization of tax attributes. The income tax benefit for the three months ended September 30, 2016 is comprised of $37.9 million of current tax expense and $94.3 million of deferred tax benefit which is predominantly related to acquired intangible assets. The Company recognized an income tax benefit of $110.8 million on income from continuing operations before income taxes of $53.0 million for the nine months ended September 29, 2017, and an income tax benefit of $218.3 million on income from continuing operations before income taxes of $166.9 million for the nine months ended September 30, 2016. This resulted in effective tax rates of negative 209.1% and negative 130.8% for the nine months ended September 29, 2017 and September 30, 2016, respectively. The income tax benefit for the nine months ended September 29, 2017 is comprised of $20.5 million of current tax expense and $131.3 million of deferred tax benefit. The net deferred tax benefit of $131.3 million includes $232.8 million of deferred tax benefit which is predominantly related to acquired intangible assets offset by $101.5 million of deferred tax expense related to utilization of tax attributes. The income tax benefit for the nine months ended September 30, 2016 is comprised of $85.9 million of current tax expense and $304.2 million of deferred tax benefit which is predominantly related to acquired intangible assets. The effective tax rate for the three months ended September 29, 2017, as compared with the three months ended September 30, 2016 increased by 10.9 percentage points. Included within this net increase was a 109.4 percentage point increase related to the completion of certain aspects of the reorganization of the Company's legal entity ownership discussed further below, which occurred during the three months ended September 29, 2017. Also within this increase was a 36.7 percentage point increase attributable to the recognition of previously unrecognized tax benefits, which occurred during the three months ended September 30, 2016. The remaining 135.2 percentage point decrease was primarily attributable to differing levels of income from continuing operations before taxes for the three months ended September 29, 2017 as compared with the three months ended September 30, 2016. The effective tax rate for the nine months ended September 29, 2017, as compared with the nine months ended September 30, 2016 decreased by 78.3 percentage points. Included within this net decrease was a 183.5 percentage point decrease primarily attributable to differing levels of income from continuing operations before taxes for the nine months ended September 29, 2017 as compared with the nine months ended September 30, 2016. Of the remaining 105.2 percentage point increase, a 16.5 percentage point increase is related to the tax benefit of a U.K. tax credit on a dividend between affiliates, which occurred during the nine months ended September 30, 2016, a 5.0 percentage point increase related to the divestiture of the Intrathecal Therapy Business, which occurred during the nine months ended September 29, 2017, a 15.5 percentage point increase attributable to the recognition of previously unrecognized tax benefits, which occurred within the nine months ended September 30, 2016, and a 68.2 percentage point increase related to the completion of certain aspects of the reorganization of the Company's legal entity ownership discussed further below, which occurred during the nine months ended September 29, 2017. During the nine months ended September 29, 2017, the three months ended December 30, 2016 and the twelve months ended September 30, 2016, the Company’s cash paid for income taxes, net was $90.9 million, $95.6 million and $165.4 million, respectively. During the three and nine months ended September 29, 2017, the Company recognized an income tax benefit of $0.1 million and income tax expense of $5.2 million, respectively associated with the Nuclear Imaging business divestiture, as discussed in Note 3, in discontinued operations within the unaudited condensed consolidated statement of income. On October 6, 2017 the Company completed a reorganization of its legal entity ownership (“the Reorganization”) to align with its ongoing transformation to become an innovation-driven specialty pharmaceuticals growth company. Many factors were considered in effecting the Reorganization, including streamlining treasury functions, simplifying legal entity reporting processes, and capital allocation efficiencies. During the three months ended September 29, 2017, the Company recognized income tax expense of $36.1 million, with an offset to deferred tax liabilities commensurate with the completion of certain aspects of the Reorganization during the third quarter of 2017. See Note 20 Subsequent Events for additional information related to the future tax effects of this Reorganization. The Company early adopted ASU 2016-16 in the first quarter of 2017 utilizing the modified retrospective basis adoption method, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period for $75.0 million with an offsetting decrease of $67.2 million to other assets and a $7.8 million decrease to prepaid expenses on its unaudited condensed consolidated balance sheets. The prior periods were not restated. The Company adopted ASU 2016-09 in the first quarter of 2017 and recorded an adjustment to retained earnings of $2.9 million to recognize net operating loss carryforwards, net of a valuation allowance, attributable to excess tax benefits on stock compensation that had not been previously recognized in additional paid-in capital. The Company refined its acquisition accounting estimate associated with the measurement of its acquired Stratatech net deferred tax liabilities in the first quarter of 2017, resulting in a decrease to the acquired net deferred tax liabilities from $24.3 million to $22.1 million. The InfaCare Acquisition resulted in a net deferred tax liability increase of $11.3 million. Significant components of this include $20.3 million of net deferred tax liabilities associated with intangibles partially offset by $8.7 million of deferred tax assets associated with non U.K. net operating losses. The divestiture of the Intrathecal Therapy Business was completed on March 17, 2017. This divestiture resulted in a net deferred tax liability increase of $38.9 million. Significant components of this increase include an increase of $56.5 million of deferred tax liability associated with future consideration, a decrease of $2.3 million of deferred tax asset associated with net operating losses, a decrease of $17.9 million of deferred tax liability associated with intangibles, an increase of $2.6 million of deferred tax asset associated with committed product development, and a decrease of $0.6 million of other net deferred tax assets. The Company's unrecognized tax benefits, excluding interest, totaled $123.0 million at September 29, 2017 and $118.7 million at December 30, 2016. The net increase of $4.3 million primarily resulted from a net increase to current year positions of $8.7 million, net decreases from prior period tax positions of $1.7 million, and net decreases from lapse of statute of limitations of $2.7 million. If favorably settled, $121.3 million of unrecognized tax benefits at September 29, 2017 would favorably impact the effective tax rate. The total amount of accrued interest related to these obligations was $6.8 million at September 29, 2017 and $7.1 million at December 30, 2016. It is reasonably possible that within the next twelve months, as a result of the resolution of various U.K. and non-U.K. examinations, appeals and litigation and the expiration of various statutes of limitation, that the unrecognized tax benefits will decrease by up to $30.2 million and the amount of related interest and penalties will decrease by up to $4.4 million. |
Earnings per Share |
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Earnings per Share |
Basic earnings per share is computed by dividing net income by the number of weighted-average shares outstanding during the period. Diluted earnings per share is computed using the weighted-average shares outstanding and, if dilutive, potential ordinary shares outstanding during the period. Potential ordinary shares represent the incremental ordinary shares issuable for restricted share units and share option exercises. The Company calculates the dilutive effect of outstanding restricted share units and share options on earnings per share by application of the treasury stock method. The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows (in millions):
The computation of diluted weighted-average shares outstanding for the three and nine months ended September 29, 2017 excludes approximately 4.3 million and 3.6 million shares of equity awards, respectively, because the effect would have been anti-dilutive. The computation of diluted weighted-average shares outstanding for the three and nine months ended September 30, 2016 excludes approximately 1.6 million and 1.7 million shares of equity awards, respectively, because the effect would have been anti-dilutive. |
Inventories |
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Inventories |
Inventories were comprised of the following at the end of each period:
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Property, Plant and Equipment |
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Property, Plant and Equipment Disclosure |
The gross carrying amount and accumulated depreciation of property, plant and equipment at the end of each period was as follows:
Depreciation expense for property, plant and equipment was as follows:
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets |
The gross carrying amount and accumulated impairment of goodwill by segment at the end of each period were as follows:
During the nine months ended September 29, 2017, the gross carrying value of goodwill within the Specialty Brands segment decreased by $38.6 million. The decrease was primarily attributable to the sale of the Intrathecal Therapy business to Piramal. The Company ascribed $49.8 million of goodwill to that business and it was factored into the gain on sale of the business. The decrease was offset by $13.3 million attributable to the InfaCare Acquisition. The remaining change in goodwill was related to a purchase accounting adjustment for the Stratatech Acquisition primarily attributable to changes in deferred tax balances. The gross carrying amount and accumulated amortization of intangible assets at the end of each period were as follows:
Intangible asset amortization expense was as follows:
The estimated aggregate amortization expense on intangible assets owned by the Company is expected to be as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt |
Debt was comprised of the following at the end of each period:
The Company's debt instruments are further described within the notes to the financial statements included within the Company's Annual Report filed on Form 10-K for the fiscal year ended September 30, 2016. On July 28, 2017, Mallinckrodt Securitization S.à r.l. ("Mallinckrodt Securitization"), a wholly-owned special purpose subsidiary of the Company, entered into a $250.0 million accounts receivable securitization facility ("the Receivable Securitization") with a three year term. Mallinckrodt Securitization may, from time to time, obtain up to $250.0 million in third-party borrowings secured by certain receivables. The borrowings under the Receivable Securitization are to be repaid as the secured receivables are collected. Loans under the Receivable Securitization will bear interest (including facility fees) at a rate equal to one month LIBOR rate plus a margin of 0.9%. Unused commitments on the Receivables Securitization are subject to an annual commitment fee of 0.4%. The Receivable Securitization agreements contain customary representations, warranties, and affirmative and negative covenants. The size of the securitization facility may be increased to $300.0 million upon approval of the third-party lenders. On February 28, 2017, Mallinckrodt International Finance, S.A. ("MIFSA") and Mallinckrodt CB LLC ("MCB") refinanced the March 2014 and August 2014 term loans, both of which were due in March 2021 ("the Existing Term Loans"). The refinanced term loans had an initial aggregate principal amount of $1,865.0 million, are due in September 2024 and bear interest at LIBOR plus 2.75% ("the 2017 Term Loan"). The 2017 Term Loan requires quarterly principal amortization payments in an amount equal to 0.25% of the original principal balance of the 2017 Term Loan payable on the last day of each calendar quarter, which commenced on June 30, 2017, with the remaining balance due on September 24, 2024. The Company accounted for the term loan refinancing as a debt modification. In conjunction with the term loan refinancing, MIFSA and MCB replaced the existing revolving credit facility of $500.0 million due in March 2019 with a $900.0 million facility that matures on February 28, 2022 ("the 2017 Revolving Credit Facility"). The 2017 Revolving Credit Facility bears interest at LIBOR plus 2.25%. The 2017 Revolving Credit Facility reduced the letter of credit provision from $150.0 million to $50.0 million. Unused commitments under the 2017 Revolving Credit Facility are subject to an annual commitment fee of 0.275%. Fees applied to outstanding letters of credit is based on the interest rate applied to borrowings. The 2017 Revolving Credit Facility added certain wholly-owned subsidiaries of the Company as borrowers, in addition to Mallinckrodt plc, MIFSA and MCB. The 2017 Term Loan and 2017 Revolving Credit Facility (collectively "the 2017 Facilities") are fully and unconditionally guaranteed by Mallinckrodt plc, certain of its direct or indirect wholly-owned U.S. subsidiaries and each of its direct or indirect wholly-owned subsidiaries that owns directly or indirectly any such wholly-owned U.S. subsidiaries and certain of its other subsidiaries (collectively, "the Guarantors"). The 2017 Facilities are secured by a security interest in certain assets of MIFSA, MCB and the Guarantors. The 2017 Facilities contain customary affirmative and negative covenants, which include, among other things, restrictions on the Company's ability to declare or pay dividends, create liens, incur additional indebtedness, enter into sale and lease-back transactions, make investments, dispose of assets and merge or consolidate with any other person. As a result of the 2017 Facilities financing transaction and the write-off of certain deferred financing costs associated with an $83.5 million payment on the Existing Term Loans, the Company recorded a $10.0 million charge included within the other expense line in the unaudited condensed consolidated statement of income. As of September 29, 2017, the applicable interest rate on outstanding borrowings under the Company's revolving credit facility was approximately 3.58%, and there were no outstanding borrowings. As of September 29, 2017, the applicable interest rate on outstanding borrowings under the variable-rate receivable securitization was 2.13%, and outstanding borrowings totaled $200.0 million. At September 29, 2017, the applicable interest rate for the term loan due September 2024 was 4.08%, and outstanding borrowings totaled $1,855.7 million. As of September 29, 2017, the Company continues to be in full compliance with the provisions and covenants associated with its debt agreements. |
Retirement Plans |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Plans |
The net periodic benefit cost for the Company's defined benefit pension plans was as follows:
The net periodic benefit credit for the Company's postretirement benefit plans was approximately zero and $0.1 million for the three months ended September 29, 2017 and September 30, 2016, respectively, and for both the nine months ended September 29, 2017 and September 30, 2016 the net periodic benefit credit was approximately zero. Net periodic benefit cost for the Company's defined benefit pension plans and postretirement benefit plans was included within cost of sales; research and development; and selling, general and administrative ("SG&A") expenses on the unaudited condensed consolidated statements of income. Pension Plan Termination During the nine months ended September 29, 2017, the Company completed the third-party settlement of remaining obligations of six defined benefit pension plans that were terminated during fiscal 2016. In conjunction with this final settlement, the Company made a $61.3 million cash contribution to the terminated plans and recognized a $69.7 million charge, included within SG&A expenses. |
Accumulated Other Comprehensive Income |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income |
The following summarizes the change in accumulated other comprehensive income (loss) for the nine months ended September 29, 2017 and September 30, 2016:
The following summarizes reclassifications from accumulated other comprehensive income for the nine months ended September 29, 2017 and September 30, 2016:
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Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity |
Share Repurchases On November 19, 2015, the Company's Board of Directors authorized a $500.0 million share repurchase program (the "November 2015 Program"), which was completed in the three months ended December 30, 2016. On March 16, 2016, the Company's Board of Directors authorized an additional $350.0 million share repurchase program (the "March 2016 Program"), which was completed during the three months ended March 31, 2017. On March 1, 2017, the Company's Board of Directors authorized an additional $1.0 billion share repurchase program (the "March 2017 Program"), which commenced upon the completion of the March 2016 Program. The March 2017 Program has no time limit or expiration date, and the Company currently expects to fully utilize the program.
The Company also repurchases shares from employees in order to satisfy employee tax withholding requirements in connection with the vesting of restricted shares and share option exercises. |
Guarantees |
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Guarantees [Abstract] | |||||||
Guarantees |
In disposing of assets or businesses, the Company has historically provided representations, warranties and indemnities to cover various risks and liabilities, including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities related to periods prior to disposition. The Company assesses the probability of potential liabilities related to such representations, warranties and indemnities and adjusts potential liabilities as a result of changes in facts and circumstances. The Company believes, given the information currently available, that their ultimate resolutions will not have a material adverse effect on its financial condition, results of operations and cash flows. In connection with the sale of the Specialty Chemicals business (formerly known as Mallinckrodt Baker) in fiscal 2010, the Company agreed to indemnify the purchaser with respect to various matters, including certain environmental, health, safety, tax and other matters. The indemnification obligations relating to certain environmental, health and safety matters have a term of 17 years from the sale, while some of the other indemnification obligations have an indefinite term. The amount of the liability relating to all of these indemnification obligations included in other liabilities on the Company's unaudited condensed consolidated balance sheets as of September 29, 2017 and December 30, 2016 was $14.9 million and $15.1 million, respectively, of which $12.2 million and $12.4 million, respectively, related to environmental, health and safety matters. The value of the environmental, health and safety indemnity was measured based on the probability-weighted present value of the costs expected to be incurred to address environmental, health and safety claims made under the indemnity. The aggregate fair value of these indemnification obligations did not differ significantly from their aggregate carrying value at September 29, 2017 and December 30, 2016. As of September 29, 2017, the maximum future payments the Company could be required to make under these indemnification obligations were $70.2 million. The Company was required to pay $30.0 million into an escrow account as collateral to the purchaser, of which $18.2 million and $19.0 million remained in restricted cash, included in long-term other assets on the unaudited condensed consolidated balance sheets at September 29, 2017 and December 30, 2016, respectively. The Company has recorded liabilities for known indemnification obligations included as part of environmental liabilities, which are discussed in Note 16. The Company is also liable for product performance; however, the Company believes, given the information currently available, that their ultimate resolutions will not have a material adverse effect on its financial condition, results of operations and cash flows. The Company was previously required to provide the U.S. Nuclear Regulatory Commission financial assurance demonstrating its ability to fund the decommissioning of its Maryland Heights, Missouri, radiopharmaceuticals production facility upon closure. Following the sale of the Nuclear Imaging business, the surety bond was canceled in April 2017 and the Company is no longer required to provide financial assurance to the U.S. Nuclear Regulatory Commission for that facility. As of September 29, 2017, the Company had various other letters of credit, guarantees and surety bonds totaling $29.1 million. As part of the Company's legal separation, the Company entered into a separation and distribution agreement with Covidien plc ("Covidien"), which was subsequently acquired by Medtronic plc. Such agreement provides for cross-indemnities principally designed to place financial responsibility of the obligations and liabilities of the Company's business with the Company and financial responsibility for the obligations and liabilities of Covidien's remaining business with Covidien, among other indemnities. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||
Commitments and Contingencies |
The Company is subject to various legal proceedings and claims, including patent infringement claims, product liability matters, environmental matters, employment disputes, contractual disputes and other commercial disputes, including those described below. The Company believes that these legal proceedings and claims likely will be resolved over an extended period of time. Although it is not feasible to predict the outcome of these matters, the Company believes, unless indicated below, given the information currently available, that their ultimate resolutions will not have a material adverse effect on its financial condition, results of operations and cash flows. Governmental Proceedings Opioid Related Matters The Company has been named in several lawsuits filed in federal court brought by various counties and cities, along with other opioid manufacturers and, often, distributors. In general, the lawsuits assert claims of public nuisance, negligence, civil conspiracy, fraud, violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) or similar state laws, consumer fraud, deceptive trade practices, insurance fraud, unjust enrichment and other common law claims arising from defendants’ manufacturing, distribution, marketing and promotion of opioids and seek restitution, damages, injunctive and other relief and attorneys’ fees and costs. These claims have been filed or amended to include the Company in the U.S. District Court for the Southern District of Illinois (October 26, 2017 and October 27, 2017), the U.S. District Court for the Southern District of Ohio (between September 22, 2017 and November 6, 2017), the U.S. District Court for the Northern District of Alabama (October 25, 2017), the U.S. District Court for the Eastern District of Michigan (October 12, 2017), and the U.S. District Courts for the Eastern and Western Districts of Kentucky (between October 3 and October 30, 2017). The Company intends to vigorously defend itself in these matters. On June 13, 2017, the District Attorneys General of Tennessee’s First, Second and Third Judicial Districts and Baby Doe jointly filed a lawsuit in Circuit Court for Sullivan County in Kingsport, Tennessee against certain prescription opioid manufacturers, including the Company, and other parties. The lawsuit alleges violations of Tennessee’s Drug Dealer Liability Act and public nuisance laws arising out of defendants’ alleged opioid sales and marketing practices, seeking restitution, damages, injunctive and other relief and attorneys’ fees and costs. On September 29, 2017, a similar lawsuit was filed against the Company and other parties by several other Tennessee District Attorneys General and two Baby Does in the Circuit Court for Campbell County in Jacksboro, Tennessee and generally parallels the claims in the Sullivan County lawsuit and seeks similar relief. On August 3, 2017, a lawsuit was filed in Multnomah County Circuit Court in Oregon by the County of Multnomah against certain prescription opioid manufacturers, including the Company, as well as distributors and healthcare providers, asserting claims of public nuisance, abnormally dangerous activity, fraud, and negligence, and seeking relief similar to that sought in the Tennessee and federal actions. The Company intends to vigorously defend itself in these matters. The Company has also received various subpoenas and requests for information related to the distribution, marketing and sale of the Company’s opioid products. On July 26, 2017, the Company received a subpoena from the Department of Justice, on August 24, 2017, the Company received a Civil Investigative Demand (“CID”) from the Missouri Attorney General’s Office and on September 22, 2017, the Company received a subpoena from the New Hampshire Attorney General’s Office. The Company is in the process of responding to these subpoenas and the CID, and the Company intends to cooperate fully in these investigations. SEC Subpoena. In January 2017, the Company received a subpoena from the SEC for documents related to the Company’s public statements, filings and other disclosures regarding Acthar sales, profits, revenue, promotion and pricing. The Company has responded to this subpoena, and the Company intends to cooperate fully in the investigation. Boston Subpoena. In December 2016, the Company received a subpoena from the United States Attorney’s Office ("USAO") for the District of Massachusetts for documents related to the Company’s provision of financial and other support to patients, including through charitable foundations, and related matters. The Company is in the process of responding to this subpoena, and the Company intends to cooperate fully in the investigation. Texas Pricing Investigation. In November 2014, the Company received a CID from the Civil Medicaid Fraud Division of the Texas Attorney General's Office. According to the CID, the Attorney General's office is investigating the possibility of false reporting of information by the Company regarding the prices of certain of its drugs used by Texas Medicaid to establish reimbursement rates for pharmacies that dispensed the Company's drugs to Texas Medicaid recipients. The Company is in the process of responding to these requests. Mallinckrodt Inc. v. U.S. Food and Drug Administration, et al. In November 2014, the Company filed a Complaint ("the Complaint") in the U.S. District Court for the District of Maryland Greenbelt Division against the FDA and the United States for judicial review of what the Company believes is the FDA's inappropriate and unlawful reclassification of the Company's Methylphenidate HCl Extended-Release tablets USP (CII) ("Methylphenidate ER") in the Orange Book: Approved Drug Products with Therapeutic Equivalence ("Orange Book") on November 13, 2014. The Company also sought a temporary restraining order ("TRO") directing the FDA to reinstate the Orange Book AB rating for the Company's Methylphenidate ER products. The court denied the Company's motion for a TRO and in July 2015, the court granted the FDA’s motion to dismiss with respect to three of the five counts in the Complaint and granted summary judgment in favor of the FDA with respect to the two remaining counts. The Company appealed the court’s decision to the U.S. Court of Appeals for the Fourth Circuit. On October 18, 2016, the FDA initiated proceedings, proposing to withdraw approval of the Company's Abbreviated New Drug Application ("ANDA") for Methylphenidate ER. On October 21, 2016, the United States Court of Appeals for the Fourth Circuit issued an order placing that litigation in abeyance pending the outcome of the withdrawal proceedings. The Company concurrently submitted to the FDA requests for a hearing in the withdrawal proceeding and for an extension of the deadline for submitting documentation supporting the necessity of a hearing. The FDA granted the Company’s initial request to extend the deadline, and on February 21, 2017, the FDA suspended the deadline in order to give the Center for Drug Evaluation and Research ("CDER") an opportunity to complete its production of documents. CDER shared an initial set of documents with the Company in June 2017 and is in the process of completing production documents to the Company. The Company is preparing the supporting documentation for its submission and plans to vigorously set forth its position in the withdrawal proceedings. Therakos Investigation. In March 2014, the USAO for the Eastern District of Pennsylvania requested the production of documents related to an investigation of the U.S. promotion of Therakos’ immunotherapy drug/device system UVADEX/UVAR XTS and UVADEX/CELLEX (collectively, the "Therakos System"), for indications not approved by the FDA, including treatment of patients with graft versus host disease ("GvHD") and solid organ transplant patients, including pediatric patients. The investigation also includes Therakos’ efforts to secure FDA approval for additional uses of, and alleged quality issues relating to, UVADEX/UVAR. In August 2015, the USAO for the Eastern District of Pennsylvania sent Therakos a subsequent request for documents related to the investigation and has since made certain related requests. The Company is in the process of responding to these requests. FTC Investigation. In June 2014, Questcor Inc. ("Questcor") received a subpoena and CID from the FTC seeking documentary materials and information regarding the FTC's investigation into whether Questcor's acquisition of certain rights to develop, market, manufacture, distribute, sell and commercialize MNK-1411 (the product formerly described as Synacthen Depot®) from Novartis AG and Novartis Pharma AG (collectively, "Novartis") violates antitrust laws. Subsequently, California, Maryland, Texas, Washington, New York and Alaska (collectively, "the Investigating States") commenced similar investigations focused on whether the transaction violates state antitrust laws. On January 17, 2017, the FTC, all Investigating States (except California) ("the Settling States") and the Company entered into an agreement to resolve this matter for a one-time cash payment of $102.0 million and an agreement to license MNK-1411 to a third party designated by the FTC for possible development in Infantile Spasms ("IS") and Nephrotic Syndrome ("NS") in the U.S. To facilitate that settlement, a complaint was filed on January 18, 2017, in the U.S. District Court for the District of Columbia. The settlement was approved by the court on January 30, 2017. On July 16, 2017, the Company announced the completion of the U.S. license of both the Synacthen trademark and certain intellectual property associated with MNK-1411 to West Pharmaceuticals to develop and pursue possible FDA approval of the product in IS and NS. The Company retains the right to develop MNK-1411 for all other indications in the U.S. and retains rights to the Synacthen trademark outside the U.S. Questcor DOJ Investigation. In September 2012, Questcor received a subpoena from the USAO for the Eastern District of Pennsylvania for information relating to its promotional practices related to Acthar. Questcor has also been informed by the USAO for the Eastern District of Pennsylvania that the USAO for the Southern District of New York and the SEC are participating in the investigation to review Questcor's promotional practices and related matters related to Acthar. On March 9, 2015, the Company received a "No Action" letter from the SEC regarding its review of the Company's promotional practices related to Acthar. DEA Investigation. In November 2011 and October 2012, the Company received subpoenas from the U.S. Drug Enforcement Administration requesting production of documents relating to its suspicious order monitoring program for controlled substances. The USAO for the Eastern District of Michigan is investigating the possibility that the Company failed to report suspicious orders of controlled substances during the period 2006-2011 in violation of the Controlled Substances Act and its related regulations. The USAO for the Northern District of New York and Office of Chief Counsel for the U.S. Drug Enforcement Administration ("DEA") are investigating the possibility that the Company failed to maintain appropriate records and security measures with respect to manufacturing of certain controlled substances at its Hobart facility during the period 2012-2013. On July 11, 2017, the Company entered into a final settlement with the DEA and the USAOs for the Eastern District of Michigan and the Northern District of New York to settle these investigations. As part of the agreement, the Company paid $35.0 million to resolve all potential claims. Patent Litigation Inomax Patent Litigation: Praxair Distribution, Inc. and Praxair, Inc. (collectively "Praxair"). In February 2015, INO Therapeutics LLC and Ikaria, Inc., subsidiaries of the Company, filed suit in the U.S. District Court for the District of Delaware against Praxair following receipt of a January 2015 notice from Praxair concerning its submission of an ANDA containing a Paragraph IV patent certification with the FDA for a generic version of Inomax. In July 2016, the Company filed a second suit against Praxair in the U.S. District Court for the District of Delaware following receipt of a Paragraph IV notice concerning three additional patents recently added to the FDA Orange Book that was submitted by Praxair regarding its ANDA for a generic version of Inomax. The infringement claims in the second suit have been added to the original suit. In September 2016, the Company filed a third suit against Praxair in the U.S. District Court for the District of Delaware following receipt of a Paragraph IV notice concerning a fourth patent recently added to the FDA Orange Book that was submitted by Praxair regarding its ANDA for a generic version of Inomax. The Company intends to vigorously enforce its intellectual property rights relating to Inomax in both the Inter Partes Review ("IPR") and Praxair litigation proceedings to prevent the marketing of infringing generic products prior to the expiration of the patents covering Inomax. Trial of the suit filed in February 2015 was held in March 2017 and a decision was rendered September 5, 2017 that ruled five patents invalid and six patents not infringed. The Company has appealed the decision to the Court of Appeals for the Federal Circuit. An adverse outcome in the appeal of the Praxair litigation decision ultimately could result in the launch of a generic version of Inomax before the expiration of the last of the listed patents on February 19, 2034 (August 19, 2034 including pediatric exclusivity), which could adversely affect the Company's ability to successfully maximize the value of Inomax and have an adverse effect on its financial condition, results of operations and cash flows. Inomax Patents: IPR Proceedings. In February 2015 and March 2015, the U.S. Patent and Trademark Office ("USPTO") issued Notices of Filing Dates Accorded to Petitions for IPR petitions filed by Praxair Distribution, Inc. concerning ten patents covering Inomax (i.e., five patents expiring in 2029 and five patents expiring in 2031). In July 2015, the USPTO Patent Trial and Appeal Board ("PTAB") issued rulings denying the institution of four of the five IPR petitions challenging the five patents expiring in 2029. The PTAB also issued a ruling in July 2015 that instituted the IPR proceeding in the fifth of this group of patents and the PTAB ruled in July 2016 that one claim of this patent survived review and is valid while the remaining claims were unpatentable. The Company believes the valid claim describes and encompasses the manner in which Inomax is distributed in conjunction with its approved labeling and that Praxair infringes that claim. Praxair filed an appeal and the Company filed a cross-appeal of this decision to the Court of Appeals for the Federal Circuit. In March 2016, Praxair Distribution, Inc. submitted additional IPR petitions for the five patents expiring in 2029. The PTAB issued non-appealable rulings in August and September 2016 denying institution of all five of these additional IPR petitions. This group of five patents are those patents ruled invalid by the District Court in the September 5, 2017 decision. In September 2015, the USPTO PTAB issued rulings that instituted the IPR proceedings in each of the second set of five patents that expire in 2031. In September 2016, the PTAB ruled that all claims in the five patents expiring in 2031 are patentable. Three of these patents were asserted in the Praxair litigation and part of the six patents ruled not infringed by the District Court in the September 5, 2017 decision. Ofirmev Patent Litigation: B. Braun Medical Inc. In April 2017, Mallinckrodt Hospital Products Inc. and Mallinckrodt IP, subsidiaries of the Company, and Pharmatop, the owner of the two U.S. patents licensed exclusively by the Company, filed suit in the U.S. District Court for the District of Delaware against B. Braun Medical Inc. ("B. Braun") alleging that B. Braun infringed U.S. Patent Nos. 6,992,218 ("the ‘218 patent") and 9,399,012 ("the ‘012 patent") following receipt of a February 2017 notice from B. Braun concerning its submission of a New Drug Application ("NDA"), containing a Paragraph IV patent certification with the FDA for a competing version of Ofirmev. Following receipt of a second Paragraph IV notice letter from B. Braun on April 24, 2017 directed to the ‘012 patent, Mallinckrodt Hospital Products Inc. and Mallinckrodt IP filed suit in June 2017 in the U.S. District Court for the District of Delaware against B. Braun alleging that B. Braun infringed the ‘012 patent and U.S. 9,610,265 (“the ‘265 patent”). In both instances, a protective suit was filed in the U.S. District Court for the Eastern District of Pennsylvania to protect the 30-month stay against any venue challenge in Delaware. In July 2017, B. Braun filed motions to dismiss both actions in Delaware due to improper venue based on the recent U.S. Supreme Court TC Heartland decision on venue in patent cases, and also filed a separate motion to dismiss in the original action in Pennsylvania. Following receipt of a third Paragraph IV notice letter from B. Braun on July 13, 2017 that included a certification to the ‘265 patent, amended complaints were filed in July 2017 in the U.S. District Courts for the Districts of Delaware and Eastern District of Pennsylvania by Mallinckrodt Hospital Products Inc., Mallinckrodt IP and Pharmatop. Also in July 2017, Mallinckrodt Hospital Products Inc., Mallinckrodt IP and Pharmatop filed a motion to stay the action in the Eastern District of Pennsylvania. A hearing occurred August 24, 2017 in the U.S. District Court for the District of Delaware regarding B. Braun’s motion to dismiss the Delaware actions for improper venue. A decision has not been rendered. A scheduling conference occurred October 4, 2017 in the U.S. District Court for the Eastern District of Pennsylvania and no decisions were rendered on any of the pending motions. A hearing on these pending motions has been scheduled for December 29, 2017. Ofirmev Patent Litigation: Agila Specialties Private Limited, Inc. (now Mylan Laboratories Ltd.) and Agila Specialties Inc. (a Mylan Inc. Company), (collectively “Agila”). In December 2014, Cadence and Mallinckrodt IP, subsidiaries of the Company, and Pharmatop, the owner of the two U.S. patents licensed exclusively by the Company, filed suit in the U.S. District Court for the District of Delaware against Agila alleging that Agila infringed U.S. Patent No. 6,028,222 ("the '222") patent and the '218 patent following receipt of a November 2014 notice from Agila concerning its submission of a NDA containing a Paragraph IV patent certification with the FDA for a competing version of Ofirmev. Separately, on December 1, 2016 Mallinckrodt IP filed suit in the U.S. District Court for the District of Delaware against Agila alleging that Agila infringed the ‘012 patent. On December 31, 2016, the parties entered into settlement agreements on both suits under which Agila was granted the non-exclusive right to market a competing intravenous acetaminophen product in the U.S. under its NDA on or after December 6, 2020, or earlier under certain circumstances. Ofirmev Patent Litigation: InnoPharma Licensing LLC and InnoPharma, Inc. In September 2014, Cadence and Mallinckrodt IP, subsidiaries of the Company, and Pharmatop, the owner of the two U.S. patents licensed exclusively by the Company, filed suit in the U.S. District Court for the District of Delaware against InnoPharma Licensing LLC and InnoPharma, Inc. (both are subsidiaries of Pfizer and collectively "InnoPharma") alleging that InnoPharma infringed the '222 patent and the '218 patent following receipt of an August 2014 notice from InnoPharma concerning its submission of a NDA, containing a Paragraph IV patent certification with the FDA for a competing version of Ofirmev. Separately, on December 1, 2016 Mallinckrodt IP filed suit in the U.S. District Court for the District of Delaware against InnoPharma alleging that InnoPharma infringed the ‘012 patent. On May 4, 2017, the parties entered into settlement agreements on both suits under which InnoPharma was granted the non-exclusive right to market a competing intravenous acetaminophen product in the U.S. under its NDA on or after December 6, 2020, or earlier under certain circumstances. The Company has successfully asserted the ‘222 and ‘218 patents and maintained their validity in both litigation and proceedings at the USPTO. The Company will continue to vigorously enforce its intellectual property rights relating to Ofirmev to prevent the marketing of infringing generic or competing products prior to December 6, 2020, which, if unsuccessful, could adversely affect the Company's ability to successfully maximize the value of Ofirmev and have an adverse effect on its financial condition, results of operations and cash flows. Tyco Healthcare Group LP, et al. v. Mutual Pharmaceutical Company, Inc. In March 2007, the Company filed a patent infringement suit in the U.S. District Court for the District of New Jersey against Mutual Pharmaceutical Co., Inc., et al. (collectively, "Mutual") after Mutual submitted an ANDA to the FDA seeking to sell a generic version of the Company's 7.5 mg RESTORIL™ sleep aid product. Mutual also filed antitrust and unfair competition counterclaims. The patents at issue have since expired or been found invalid. The trial court issued an opinion and order granting the Company's motion for summary judgment regarding Mutual's antitrust and unfair competition counterclaims. Mutual appealed this decision to the U.S. Court of Appeals for the Federal Circuit and the Federal Circuit issued a split decision, affirming the trial court in part and remanding to the trial court certain counterclaims for further proceedings. The Company filed a motion for summary judgment with the U.S. District Court regarding the remanded issues. In May 2015, the trial court issued an opinion granting-in-part and denying-in-part the Company’s motion for summary judgment. In March 2017, the parties entered into a settlement agreement and the case was dismissed. Commercial and Securities Litigation Putative Class Action Litigation (MSP). On October 30, 2017, a putative class action lawsuit was filed against the Company and United BioSource Corporation ("UBC") in the U.S. District Court for the Central District of California. The case is captioned MSP Recovery Claims, Series II LLC, et al. v. Mallinckrodt ARD, Inc., et al. The complaint purports to be brought on behalf of two classes: all Medicare Advantage Organizations and related entities in the U.S. who purchased or provided reimbursement for Acthar pursuant to (i) Medicare Part C contracts (Class 1) and (ii) Medicare Part D contracts (Class 2) since January 1, 2011, with certain exclusions. The complaint alleges that the Company engaged in anticompetitive, unfair, and deceptive acts to artificially raise and maintain the price of Acthar. To this end, the complaint alleges that the Company unlawfully maintained a monopoly in a purported ACTH product market by acquiring the U.S. rights to Synacthen Depot and reaching anti-competitive agreements with the other defendants by selling Acthar through an exclusive distribution network. The complaint purports to allege claims under federal and state antitrust laws and state unfair competition and unfair trade practice laws. The Company intends to vigorously defend itself in this matter. Employee Stock Purchase Plan Securities Litigation. On July 20, 2017, a purported purchaser of Mallinckrodt stock through Mallinckrodt’s Employee Stock Purchase Plans (“ESPPs”), filed a derivative and class action lawsuit in the Federal District Court in the Eastern District of Missouri, captioned Solomon v. Mallinckrodt plc, et al., against the Company, its Chief Executive Officer Mark C. Trudeau ("CEO") , its Chief Financial Officer Matthew K. Harbaugh ("CFO"), its Controller Kathleen A. Schaefer, and current and former directors of the Company. The plaintiff voluntarily dismissed the Missouri complaint and refiled it in the U.S. District Court for the District of Columbia. The complaint purports to be brought on behalf of all persons who purchased or otherwise acquired Mallinckrodt stock between November 25, 2014, and January 18, 2017, in the ESPPs. In the alternative, the plaintiff alleges a class action for those same purchasers/acquirers of stock in the ESPPs during the same period. The complaint asserts claims under Section 11 of the Securities Act, and for breach of fiduciary duty, misrepresentation, non-disclosure, mismanagement of the ESPPs’ assets and breach of contract arising from substantially similar allegations as those contained in the putative class action securities litigation filed on January 23, 2017 and described below. There are two competing movants to serve as lead plaintiff/lead counsel, and those motions remain pending. The Company intends to vigorously defend itself in this matter. Putative Class Action Litigation (Rockford). On April 6, 2017, a putative class action lawsuit was filed against the Company and United BioSource Corporation ("UBC") in the U.S. District Court for the Northern District of Illinois. The case is captioned City of Rockford v. Mallinckrodt ARD, Inc., et al. The complaint purports to be brought on behalf of all self-funded entities in the U.S. and its Territories that paid for Acthar from August 2007 to the present. An amended complaint was filed on October 9, 2017, adding defendants and alleging that the Company engaged in anticompetitive, fraudulent, and deceptive acts to artificially raise and maintain the price of Acthar. To this end, the amended complaint alleges that the Company unlawfully maintained a monopoly in a purported ACTH product market by acquiring the U.S. rights to Synacthen Depot; conspired with the other defendants and violated anti-racketeering laws by selling Acthar through an exclusive distribution network; and committed a fraud on consumers by misrepresenting the value of Acthar. The Company intends to vigorously defend itself in this matter. Putative Class Action Securities Litigation. On January 23, 2017, a putative class action lawsuit was filed against the Company and its CEO in the U.S. District Court for the District of Columbia, captioned Patricia A. Shenk v. Mallinckrodt plc, et al. The complaint purports to be brought on behalf of all persons who purchased Mallinckrodt’s publicly traded securities on a domestic exchange between November 25, 2014 and January 18, 2017. The lawsuit generally alleges that the Company made false or misleading statements related to Acthar and Synacthen to artificially inflate the price of the Company’s stock. In particular, the complaint alleges a failure by the Company to provide accurate disclosures concerning the long-term sustainability of Acthar revenues, and the exposure of Acthar to Medicare and Medicaid reimbursement rates. On January 26, 2017, a second putative class action lawsuit, captioned Jyotindra Patel v. Mallinckrodt plc, et al. was filed against the same defendants named in the Shenk lawsuit in the U.S. District Court for the District of Columbia. The Patel complaint purports to be brought on behalf of shareholders during the same period of time as that set forth in the Shenk lawsuit and asserts claims similar to those set forth in the Shenk lawsuit. On March 13, 2017, a third putative class action lawsuit, captioned Amy T. Schwartz, et al., v. Mallinckrodt plc, et al., was filed against the same defendants named in the Shenk lawsuit in the U.S. District Court for the District of Columbia. The Schwartz complaint purports to be brought on behalf of shareholders who purchased shares of the Company between July 14, 2014 and January 18, 2017 and asserts claims similar to those set forth in the Shenk lawsuit. On March 23, 2017, a fourth putative class action lawsuit, captioned Fulton County Employees’ Retirement System v. Mallinckrodt plc, et al., was filed against the Company and its CEO and CFO in the U.S. District Court for the District of Columbia. The Fulton County complaint purports to be brought on behalf of shareholders during the same period of time as that set forth in the Schwartz lawsuit and asserts claims similar to those set forth in the Shenk lawsuit. On March 27, 2017, four separate plaintiff groups moved to consolidate the pending cases and to be appointed as lead plaintiffs in the consolidated case. Since that time, two of the plaintiff groups have withdrawn their motions. There are two competing movants to serve as lead plaintiff/lead counsel, and those motions remain pending. The Company intends to vigorously defend itself in this matter. Retrophin Litigation. In January 2014, Retrophin, Inc. ("Retrophin") filed a lawsuit against Questcor in the U.S. District Court for the Central District of California, alleging a variety of federal and state antitrust violations based on Questcor's acquisition from Novartis of certain rights to develop, market, manufacture, distribute, sell and commercialize Synacthen. In June 2015, the parties entered into a binding settlement agreement, under the terms of which Retrophin agreed to dismiss the litigation with prejudice and Questcor agreed to make a one-time cash payment to Retrophin in the amount of $15.5 million. Putative Class Action Securities Litigation. In September 2012, a putative class action lawsuit was filed against Questcor and certain of its officers and directors in the U.S. District Court for the Central District of California, captioned John K. Norton v. Questcor Pharmaceuticals, et al. The complaint purported to be brought on behalf of shareholders who purchased Questcor common stock between April 26, 2011 and September 21, 2012. The complaint generally alleged that Questcor and certain of its officers and directors engaged in various acts to artificially inflate the price of Questcor stock and enable insiders to profit through stock sales. The complaint asserted that Questcor and certain of its officers and directors violated sections l0(b) and/or 20(a) of the Securities Exchange Act of 1934, as amended ("the Exchange Act"), by making allegedly false and/or misleading statements concerning the clinical evidence to support the use of Acthar for indications other than infantile spasms, the promotion of the sale and use of Acthar in the treatment of multiple sclerosis and nephrotic syndrome, reimbursement for Acthar from third-party insurers, and Questcor's outlook and potential market growth for Acthar. The complaint sought damages in an unspecified amount and equitable relief against the defendants. This lawsuit was consolidated with four subsequently-filed actions asserting similar claims under the caption: In re Questcor Securities Litigation. In October 2013, the District Court granted in part and denied in part Questcor's motion to dismiss the consolidated amended complaint. In October 2013, Questcor filed an answer to the consolidated amended complaint and fact discovery was concluded in January 2015. In April 2015, the parties executed a long-form settlement agreement, under the terms of which Questcor agreed to pay $38.0 million to resolve the plaintiff's claims, inclusive of all fees and costs. Questcor and the individual defendants maintain that the plaintiffs' claims are without merit, and entered into the settlement to eliminate the uncertainties, burden and expense of further protracted litigation. During fiscal 2015, the Company established a $38.0 million reserve for this settlement, which was subsequently paid to a settlement fund. The court issued its final approval of the settlement on September 18, 2015. Glenridge Litigation. In June 2011, Glenridge Pharmaceuticals, LLC ("Glenridge"), filed a lawsuit against Questcor in the Superior Court of California, Santa Clara County, alleging that Questcor had underpaid royalties to Glenridge under a royalty agreement related to net sales of Acthar. In August 2012, Questcor filed a separate lawsuit against the three principals of Glenridge, as well as Glenridge, challenging the enforceability of the royalty agreement. In August 2013, the lawsuits were consolidated into one case in the Superior Court of California, Santa Clara County. In October 2014, the parties entered into a binding term sheet settling the lawsuit. Under the terms of the settlement, the royalty rate payable by Questcor was reduced, royalties were capped instead of being payable for so long as Acthar was sold and Questcor agreed to pay Glenridge a reduced amount in satisfaction of royalties Questcor had previously accrued but not paid during the course of the lawsuit. In February 2015, the settlement agreement was finalized, with terms consistent with the October 2014 term sheet. Pricing Litigation State of Utah v. Apotex Corp., et al. The Company, along with several other pharmaceutical companies, was a defendant in this matter which was filed in May 2008, in the Third Judicial Circuit of Salt Lake County, Utah. The State of Utah alleges, generally, that the defendants reported false pricing information in connection with certain drugs that are reimbursable under Utah Medicaid, resulting in overpayment by Utah Medicaid for those drugs, and is seeking monetary damages and attorneys' fees. The Company believes that it has meritorious defenses to these claims and vigorously defended against them. In December 2015, the parties entered into a binding settlement agreement, under the terms of which the State of Utah agreed to dismiss the litigation with prejudice and the Company agreed to make a one-time cash payment to the State of Utah within the reserve established for this matter. Environmental Remediation and Litigation Proceedings The Company is involved in various stages of investigation and cleanup related to environmental remediation matters at a number of sites, including those described below. The ultimate cost of site cleanup and timing of future cash outlays is difficult to predict, given the uncertainties regarding the extent of the required cleanup, the interpretation of applicable laws and regulations and alternative cleanup methods. The Company concluded that, as of September 29, 2017, it was probable that it would incur remedial costs in the range of $37.8 million to $114.2 million. The Company also concluded that, as of September 29, 2017, the best estimate within this range was $75.5 million, of which $2.4 million was included in accrued and other current liabilities and the remainder was included in environmental liabilities on the unaudited condensed consolidated balance sheet at September 29, 2017. While it is not possible at this time to determine with certainty the ultimate outcome of these matters, the Company believes, given the information currently available, that the final resolution of all known claims, after taking into account amounts already accrued, will not have a material adverse effect on its financial condition, results of operations and cash flows. Coldwater Creek, Saint Louis County, Missouri. The Company is named as a defendant in numerous tort complaints with numerous plaintiffs pending in the U.S. District Court for the Eastern District of Missouri that were filed in or after February 2012. These cases allege personal injury for alleged exposure to radiological substances, including in Coldwater Creek in Missouri, and in the air. Plaintiffs allegedly lived and/or worked in various locations in Saint Louis County, Missouri, near Coldwater Creek. Radiological residues which may have been present in the creek have previously been remediated by the U.S. Army Corps of Engineers ("USACE"). The USACE continues to study and remediate the creek and surrounding areas. The Company believes that it has meritorious defenses to these complaints and is vigorously defending against them. The Company is unable to estimate a range of reasonably possible losses for the following reasons: (i) the proceedings are in intermediate stages; (ii) the Company has not received and reviewed complete information regarding the plaintiffs and their medical conditions; and (iii) there are significant factual and scientific issues to be resolved. Groups of bellwether plaintiffs have been selected by the court and discovery is ongoing. While it is not possible at this time to determine with certainty the ultimate outcome of this case, the Company believes, given the information currently available, that the final resolution of all known claims, after taking into account amounts already accrued, will not have a material adverse effect on its financial condition, results of operations and cash flows. Lower Passaic River, New Jersey. The Company and approximately 70 other companies originally comprised the Lower Passaic Cooperating Parties Group ("the CPG") and are parties to a May 2007 Administrative Order on Consent ("AOC") with the Environmental Protection Agency ("EPA") to perform a remedial investigation and feasibility study ("RI/FS") of the 17-mile stretch known as the Lower Passaic River Study Area ("the River"). The Company's potential liability stems from former operations at Lodi and Belleville, New Jersey. In June 2007, the EPA issued a draft Focused Feasibility Study ("FFS") that considered interim remedial options for the lower 8-miles of the river, in addition to a "no action" option. As an interim step related to the 2007 AOC, on June 18, 2012 the CPG voluntarily entered into an AOC with the EPA for remediation actions focused solely at mile 10.9 of the River. The Company's estimated costs related to the RI/FS and focused remediation at mile 10.9, based on interim allocations, are immaterial and have been accrued. In April 2014, the EPA issued its revised FFS, with remedial alternatives to address cleanup of the lower 8-mile stretch of the River, which also included a "no action" option. The EPA estimated the cost for the remediation alternatives ranged from $365.0 million to $3.2 billion. The EPA's preferred approach would involve bank-to-bank dredging of the lower 8-mile stretch of the River and installing an engineered cap at a discounted, estimated cost of $1.7 billion. Based on the issuance of the EPA's revised FFS, the Company recorded a $23.1 million accrual in the second quarter of fiscal 2014 representing the Company's estimate of its allocable share of the joint and several remediation liability resulting from this matter. In April 2015, the CPG presented a draft of the RI/FS of the River to the EPA. The CPG's RI/FS included alternatives that ranged from "no action," targeted remediation of the entire 17-mile stretch of the River to remedial actions consistent with the EPA's preferred approach for the lower 8-mile stretch of the River and also included remediation alternatives for the upper 9-mile stretch of the River. The discounted cost estimates for the CPG remediation alternatives ranged from $483.4 million to $2.7 billion. The Company recorded an additional accrual of $13.3 million in the second quarter of fiscal 2015 based on the Company's estimate of its allocable share of the joint and several remediation liability resulting from this matter. On November 20, 2015, the Company withdrew from the CPG, but remains liable for its obligations under the two above-referenced AOCs, as well as potential future liabilities. On March 4, 2016, the EPA issued the Record of Decision ("ROD") for the lower 8 miles of the River. The EPA's selected remedy for this stretch of the River was a slight modification of the preferred approach it identified in the revised FFS issued in April 2014. The new discounted, estimated cost was $1.38 billion. By letter dated March 31, 2016, EPA notified the Company, and approximately 98 other parties, of the Company’s potential liability for the lower 8 miles of the River. The letter also announced the EPA's intent to seek to determine whether one company, Occidental Chemicals Corporation ("OCC"), would voluntarily enter into an agreement to perform the remedial design for the remedy selected in the ROD. The letter stated that, after execution of such an agreement, EPA planned to begin negotiation of an agreement under which OCC and the other major PRPs would implement and/or pay for the EPA’s selected remedy for the lower 8 miles of the River. Finally, the letter announced EPA's intent to provide a separate notice to unspecified parties of the opportunity to discuss a cash out settlement for the lower 8 miles of the River at a later date. On October 5, 2016, EPA announced that OCC had entered into an agreement to develop the remedial design. By letter dated March 30, 2017, the EPA notified the Company, limited to its former Lodi facility, and nineteen other PRPs of their eligibility to enter into a cash out settlement for the lower 8 miles of the River. In exchange for the settlement, the Company would receive, inter alia, a covenant not to sue and contribution protection. There is no reopener provision should costs exceed estimated amounts. The Company submitted the executed settlement agreement to EPA on July 26, 2017. The settlement will be announced in the Federal Register and be subject to public comment, after which EPA will determine whether to proceed with the settlement. Despite the issuance of the revised FFS and ROD by the EPA, and the RI/FS by the CPG, there are many uncertainties associated with the final agreed-upon remediation and the Company's allocable share of the remediation. Given those uncertainties, the amounts accrued may not be indicative of the amounts for which the Company may be ultimately responsible and will be refined as the remediation progresses. Mallinckrodt Veterinary, Inc., Millsboro, Delaware. The Company previously operated a facility in Millsboro, Delaware ("the Millsboro Site") where various animal healthcare products were manufactured. In 2005, the Delaware Department of Natural Resources and Environmental Control found trichloroethylene ("TCE") in the Millsboro public water supply at levels that exceeded the federal drinking water standards. Further investigation to identify the TCE plume in the ground water indicated that the plume has extended to property owned by a third party near the Millsboro Site. The Company, and another former owner, have assumed responsibility for the Millsboro Site cleanup under the Alternative Superfund Program administered by the EPA. The Company and another PRP have entered into two AOCs with the EPA to perform investigations to abate, mitigate or eliminate the release or threat of release of hazardous substances at the Millsboro Site and to conduct an Engineering Evaluation/Cost Analysis ("EE/CA") to characterize the nature and extent of the contamination. The Company, along with the other party, continues to conduct the studies and prepare remediation plans in accordance with the AOCs. In January 2017, the EPA issued its Action Memorandum regarding the EE/CA. The parties have negotiated a third AOC to implement the removal action. The AOC has been fully executed, with an effective date of August 8, 2017. While it is not possible at this time to determine with certainty the ultimate outcome of this matter, the Company believes, given the information currently available, that the ultimate resolution of all known claims, after taking into account amounts already accrued, will not have a material adverse effect on its financial condition, results of operations and cash flows. Crab Orchard National Wildlife Refuge Superfund Site, near Marion, Illinois. The Company is a successor in interest to International Minerals and Chemicals Corporation ("IMC"). Between 1967 and 1982, IMC leased portions of the Additional and Uncharacterized Sites ("AUS") Operable Unit at the Crab Orchard Superfund Site ("the Site") from the government and manufactured various explosives for use in mining and other operations. In March 2002, the Department of Justice, the U.S. Department of the Interior and the EPA (together, "the Government Agencies") issued a special notice letter to General Dynamics Ordnance and Tactical Systems, Inc. ("General Dynamics"), one of the other potentially responsible parties ("PRPs") at the Site, to compel General Dynamics to perform the RI/FS for the AUS Operable Unit. General Dynamics negotiated an AOC with the Government Agencies to conduct an extensive RI/FS at the Site under the direction of the U.S. Fish and Wildlife Service. General Dynamics asserted in August 2004 that the Company is jointly and severally liable, along with approximately eight other lessees and operators at the AUS Operable Unit, for alleged contamination of soils and groundwater resulting from historic operations, and has threatened to file a contribution claim against the Company and other parties for recovery of its costs incurred in connection with the RI/FS activities being conducted at the AUS Operable Unit. The Company and other PRPs who received demand letters from General Dynamics have explored settlement alternatives, but have not reached settlement to date. General Dynamics has completed the RI and initiated the FS, and the PRPs have reached an agreement to enter into a non-binding mediation process, which has begun. While it is not possible at this time to determine with certainty the ultimate outcome of this matter, the Company believes, given the information currently available, that the final resolution of all known claims, after taking into account amounts already accrued, will not have a material adverse effect on its financial condition, results of operations and cash flows. Products Liability Litigation Beginning with lawsuits brought in July 1976, the Company is named as a defendant in personal injury lawsuits based on alleged exposure to asbestos-containing materials. A majority of the cases involve product liability claims based principally on allegations of past distribution of products containing asbestos. A limited number of the cases allege premises liability based on claims that individuals were exposed to asbestos while on the Company's property. Each case typically names dozens of corporate defendants in addition to the Company. The complaints generally seek monetary damages for personal injury or bodily injury resulting from alleged exposure to products containing asbestos. The Company's involvement in asbestos cases has been limited because it did not mine or produce asbestos. Furthermore, in the Company's experience, a large percentage of these claims have never been substantiated and have been dismissed by the courts. The Company has not suffered an adverse verdict in a trial court proceeding related to asbestos claims and intends to continue to vigorously defend itself in these matters. When appropriate, the Company settles claims; however, amounts paid to settle and defend all asbestos claims have been immaterial. As of September 29, 2017, there were approximately 11,500 asbestos-related cases pending against the Company. The Company estimates pending asbestos claims and claims that were incurred but not reported and related insurance recoveries, which are recorded on a gross basis in the unaudited condensed consolidated balance sheets. The Company's estimate of its liability for pending and future claims is based on claims experience over the past five years and covers claims either currently filed or expected to be filed over the next seven years. The Company believes that it has adequate amounts recorded related to these matters. While it is not possible at this time to determine with certainty the ultimate outcome of these asbestos-related proceedings, the Company believes, given the information currently available, that the ultimate resolutions of all known and anticipated future claims, after taking into account amounts already accrued, along with recoveries from insurance, will not have a material adverse effect on its financial condition, results of operations and cash flows. Industrial Revenue Bonds Through September 29, 2017, the Company exchanged title to $16.0 million of its plant assets in return for an equal amount of Industrial Revenue Bonds ("IRB") issued by Saint Louis County. The Company also simultaneously leased such assets back from Saint Louis County under capital leases expiring through December 2025, the terms of which provide it with the right of offset against the IRBs. The lease also provides an option for the Company to repurchase the assets at the end of the lease for nominal consideration. These transactions collectively result in a ten year property tax abatement from the date the property is placed in service. Due to the right of offset, the capital lease obligations and IRB assets are recorded net in the unaudited condensed consolidated balance sheets. The Company expects that the right of offset will be applied to payments required under these arrangements. Interest-bearing Deferred Tax Obligation As part of the integration of Questcor, the Company entered into an internal installment sale transaction related to certain Acthar intangible assets during the three months ended December 26, 2014. The installment sale transaction resulted in a taxable gain. In accordance with Internal Revenue Code Section 453A ("Section 453A") the gain is considered taxable in the period in which installment payments are received. During the three months ended December 25, 2015, the Company entered into similar transactions with certain intangible assets acquired in the acquisitions of Ikaria, Inc. and Therakos, Inc. During the three months ended March 31, 2017, the Company sold its Intrathecal Therapy business with a portion of the consideration from the sale being in the form of a note receivable subject to the installment sale provisions described above. As of September 29, 2017, the Company had an aggregate $1,606.7 million of interest-bearing U.S. deferred tax liabilities associated with outstanding installment notes. The GAAP calculation of interest associated with these deferred tax liabilities is subject to variable interest rates. The Company recognized interest expense associated with these deferred tax liabilities of $17.6 million and $17.4 million for the three months ended September 29, 2017 and September 30, 2016, respectively, and $53.9 million and $55.1 million for the nine months ended September 29, 2017 and September 30, 2016, respectively. The Company has reported Section 453A interest on its tax returns on the basis of its interpretation of the U.S. Internal Revenue Code and Regulations. Alternative interpretations of these provisions could result in additional interest payable on the deferred tax liability. Due to the inherent uncertainty in these interpretations, the Company has deferred the recognition of the benefit associated with the Company’s interpretation and maintains a corresponding liability of $42.9 million and $30.3 million as of September 29, 2017 and December 30, 2016, respectively. The balance of this liability is expected to increase over future periods until such uncertainty is resolved. Favorable resolution of this uncertainty would likely result in a material reversal of this liability and a benefit being recorded to interest expense within the unaudited condensed consolidated statements of income. Acquisition-Related Litigation Several putative class actions were filed by purported holders of Questcor common stock in connection with the Questcor Acquisition (Hansen v. Thompson, et al., Heng v. Questcor Pharmaceuticals, Inc., et al., Buck v. Questcor Pharmaceuticals, Inc., et al., Ellerbeck v. Questcor Pharmaceuticals, Inc., et al., Yokem v. Questcor Pharmaceuticals, Inc., et al., Richter v. Questcor Pharmaceuticals, Inc., et al., Tramantano v. Questcor Pharmaceuticals, Inc., et al., Crippen v. Questcor Pharmaceuticals, Inc., et al., Patel v. Questcor Pharmaceuticals, Inc., et al., and Postow v. Questcor Pharmaceuticals, Inc., et al.). The actions were consolidated on June 3, 2014. The consolidated complaint named as defendants, and generally alleged that, the directors of Questcor breached their fiduciary duties in connection with the acquisition by, among other things, agreeing to sell Questcor for inadequate consideration and pursuant to an inadequate process. The consolidated complaint also alleged that the Questcor directors breached their fiduciary duties by failing to disclose purportedly material information to shareholders in connection with the merger. The consolidated complaint also alleged, among other things, that the Company aided and abetted the purported breaches of fiduciary duty. The lawsuits sought various forms of relief, including but not limited to, rescission of the transaction, damages and attorneys' fees and costs. On July 29, 2014, the defendants reached an agreement in principle with the plaintiffs in the consolidated actions, and that agreement was reflected in a Memorandum of Understanding ("MOU"). In connection with the settlement contemplated by the MOU, Questcor agreed to make certain additional disclosures related to the proposed transaction with the Company, which are contained in the Company's Current Report on Form 8-K filed with the SEC on July 30, 2014. Additionally, as part of the settlement and pursuant to the MOU, the Company agreed to forbear from exercising certain rights under the merger agreement with Questcor, as follows: the four business day period referenced in Section 5.3(e) of the merger agreement with Questcor was reduced to three business days. Consistent with the terms of the MOU, the parties entered into a formal stipulation of settlement in February 2015 and re-executed the stipulation of settlement on May 7, 2015 (collectively the "Stipulation of Settlement"). The Stipulation of Settlement was subject to customary conditions, including court approval. On May 8, 2015, the California Court denied plaintiffs' Motion for Preliminary Approval of Settlement. On October 23, 2015, the parties submitted a proposed Stipulation and Order re Dismissal With Prejudice dismissing the action with prejudice as to each of the named plaintiffs and without prejudice as to the remainder of the class and, on October 30, 2015, the California Court entered that Order. Other Matters The Company is a defendant in a number of other pending legal proceedings relating to present and former operations, acquisitions and dispositions. The Company does not expect the outcome of these proceedings, either individually or in the aggregate, to have a material adverse effect on its financial condition, results of operations and cash flows. |
Financial Instruments and Fair Value Measurements |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Fair Value Measurements |
Fair value is defined as the exit price that would be received from the sale of an asset or paid to transfer a liability, using assumptions that market participants would use in pricing an asset or liability. The fair value guidance establishes a three-level fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs used in measuring fair value. The levels within the hierarchy are as follows: Level 1— observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2— significant other observable inputs that are observable either directly or indirectly; and Level 3— significant unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. The following tables provide a summary of the significant assets and liabilities that are measured at fair value on a recurring basis at the end of each period:
Debt and equity securities held in rabbi trusts. Debt securities held in rabbi trusts primarily consist of U.S. government and agency securities and corporate bonds. When quoted prices are available in an active market, the investments are classified as level 1. When quoted market prices for a security are not available in an active market, they are classified as level 2. Equity securities held in rabbi trusts primarily consist of U.S. common stocks, which are valued using quoted market prices reported on nationally recognized securities exchanges. Equity securities. Equity securities consist of shares in Mesoblast, for which quoted prices are available in an active market; therefore, the investment is classified as level 1 and is valued based on quoted market prices reported on a nationally recognized securities exchange. Foreign exchange forward and option contracts. Foreign currency option and forward contracts are used to economically manage the foreign exchange exposures of operations outside the U.S. Quoted prices are available in an active market; as such, these derivatives are classified as level 1. Deferred compensation liabilities. The Company maintains a non-qualified deferred compensation plan in the U.S., which permits eligible employees of the Company to defer a portion of their compensation. A recordkeeping account is set up for each participant and the participant chooses from a variety of funds for the deemed investment of their accounts. The recordkeeping accounts generally correspond to the funds offered in the Company's U.S. tax-qualified defined contribution retirement plan and the account balance fluctuates with the investment returns on those funds. Contingent consideration and acquired contingent liabilities. The Company maintains various contingent consideration and acquired contingent liabilities associated with the acquisitions of Questcor, Hemostasis products, Stratatech and InfaCare. During the nine months ended September 29, 2017, the Company paid the required annual payment of $25.0 million related to the license of developmental product MNK-1411 from Novartis. The fair value of the remaining contingent payments was measured based on the net present value of a probability-weighted assessment. At September 29, 2017, the total remaining payments under the license agreement shall not exceed $140.0 million. At September 29, 2017 and December 30, 2016, the fair value of the MNK-1411 contingent liability was $104.5 million and $124.7 million, respectively. As part of the Hemostasis Acquisition, the Company provided contingent consideration to The Medicines Company in the form of sales-based milestones associated with Raplixa and PreveLeak, and acquired contingent liabilities associated with The Medicines Company's prior acquisitions of the aforementioned products. The Company determined the fair value of the contingent consideration and acquired contingent liabilities based on an option pricing model to be $62.2 million and $11.6 million, respectively, at September 29, 2017. The fair value of the contingent consideration and acquired contingent liabilities based on an option pricing model were $58.9 million and $11.2 million, respectively, as of December 30, 2016. As part of the Stratatech Acquisition, the Company provided contingent consideration to the prior shareholders of Stratatech, primarily in the form of regulatory filing and approval milestones associated with the deep partial thickness and full thickness indications associated with the StrataGraft product. The Company assesses the likelihood of and timing of making such payments. The fair value of the contingent payments was measured based on the net present value of a probability-weighted assessment. The Company determined the fair value of the contingent consideration associated with the Stratatech Acquisition to be $55.3 million and $55.7 million at September 29, 2017 and December 30, 2016, respectively. As part of the InfaCare Acquisition, the Company provided contingent consideration to the prior shareholders of InfaCare in the form of both regulatory approval milestones for full-term and pre-term neonates for stannsoporfin and sales-based milestones associated with stannsoporfin. The Company determined the fair value of the contingent consideration based on an option pricing model to be $35.0 million as of September 25, 2017. The following table provides a summary of the changes in the Company's contingent consideration and acquired contingent liabilities:
Financial Instruments Not Measured at Fair Value The following methods and assumptions were used by the Company in estimating fair values for financial instruments not measured at fair value as of September 29, 2017 and December 30, 2016:
Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of accounts receivable. The Company does not typically require collateral from customers. A portion of the Company's accounts receivable outside the U.S. includes sales to government-owned or supported healthcare systems in several countries, which are subject to payment delays. Payment is dependent upon the financial stability and creditworthiness of those countries' national economies. The following table shows net sales attributable to distributors that accounted for 10% or more of the Company's total net sales:
The following table shows accounts receivable attributable to distributors that accounted for 10% or more of the Company's gross accounts receivable at the end of each period:
The following table shows net sales attributable to products that accounted for 10% or more of the Company's total net sales:
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Segment Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data |
The two reportable segments are further described below:
Selected information by reportable segment was as follows:
Net sales by product family within the Company's reportable segments are as follows:
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Condensed Consolidating Financial Statements |
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Condensed Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Financial Statements |
MIFSA, an indirectly 100%-owned subsidiary of Mallinckrodt plc, is the borrower under the 3.50% notes due April 2018 and the 4.75% notes due April 2023 (collectively, "the Notes"), which are fully and unconditionally guaranteed by Mallinckrodt plc. The following information provides the composition of the Company's comprehensive income, assets, liabilities, equity and cash flows by relevant group within the Company: Mallinckrodt plc as guarantor of the Notes, MIFSA as issuer of the Notes and the other subsidiaries. There are no subsidiary guarantees related to the Notes. Set forth on the following pages are the condensed consolidating financial statements for the three and nine months ended September 29, 2017 and September 30, 2016, and as of September 29, 2017 and December 30, 2016. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among Mallinckrodt plc, MIFSA and other subsidiaries. Condensed consolidating financial information for Mallinckrodt plc and MIFSA, on a standalone basis, has been presented using the equity method of accounting for subsidiaries. MALLINCKRODT PLC CONDENSED CONSOLIDATING BALANCE SHEET As of September 29, 2017 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING BALANCE SHEET As of December 30, 2016 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME For the three months ended September 29, 2017 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME For the three months ended September 30, 2016 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME For the nine months ended September 29, 2017 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME For the nine months ended September 30, 2016 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the nine months ended September 29, 2017 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the nine months ended September 30, 2016 (unaudited, in millions)
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Subsequent Events |
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Sep. 29, 2017 | |||||||
Subsequent Events [Abstract] | |||||||
Subsequent Events |
Commitments and Contingencies Putative Class Action Litigation (MSP). On October 30, 2017, a putative class action lawsuit was filed against the Company and United BioSource Corporation ("UBC") in the U.S. District Court for the Central District of California. The case is captioned MSP Recovery Claims, Series II LLC, et al. v. Mallinckrodt ARD, Inc., et al. The complaint purports to be brought on behalf of two classes: all Medicare Advantage Organizations and related entities in the U.S. who purchased or provided reimbursement for Acthar pursuant to (i) Medicare Part C contracts (Class 1) and (ii) Medicare Part D contracts (Class 2) since January 1, 2011, with certain exclusions. The complaint alleges that the Company engaged in anticompetitive, unfair, and deceptive acts to artificially raise and maintain the price of Acthar. To this end, the complaint alleges that the Company unlawfully maintained a monopoly in a purported ACTH product market by acquiring the U.S. rights to Synacthen Depot and reaching anti-competitive agreements with the other defendants by selling Acthar through an exclusive distribution network. The complaint purports to allege claims under federal and state antitrust laws and state unfair competition and unfair trade practice laws. The Company intends to vigorously defend itself in this matter. Opioid Related Matters. The Company has been named in several lawsuits filed in federal court brought by various counties and cities, along with other opioid manufacturers and, often, distributors. In general, the lawsuits assert claims of public nuisance, negligence, civil conspiracy, fraud, violations of RICO or similar state laws, consumer fraud, deceptive trade practices, insurance fraud, unjust enrichment and other common law claims arising from defendants’ manufacturing, distribution, marketing and promotion of opioids and seek restitution, damages, injunctive and other relief and attorneys’ fees and costs. These claims have been filed or amended to include the Company in the U.S. District Court for the Southern District of Illinois (October 26, 2017 and October 27, 2017), the U.S. District Court for the Southern District of Ohio (between September 22, 2017 and November 6, 2017), the U.S. District Court for the Northern District of Alabama (October 25, 2017), the U.S. District Court for the Eastern District of Michigan (October 12, 2017), and the U.S. District Courts for the Eastern and Western Districts of Kentucky (between October 3 and October 30, 2017). The Company intends to vigorously defend itself in these matters. Inhaled Xenon Gas Licensing Agreement On October 2, 2017, the Company entered into a licensing agreement ("the Licensing Agreement") for development and commercialization of NeuroproteXeon Inc.'s ("NeuroproteXeon") investigational, pharmaceutical-grade xenon gas for inhalation therapy being evaluated to improve survival and functional outcomes for patients resuscitated after a cardiac arrest. If approved, xenon gas for inhalation will expand the Company's portfolio of hospital drug-device combination products providing therapies for critically ill patients. The Company paid $10.0 million upfront with cash on hand to reimburse NeuroproteXeon for certain product development costs, and gained exclusive rights to commercialize the therapy, if approved, in the U.S., Canada, Japan and Australia. The Licensing Agreement includes additional payments of up to $25.0 million dependent on developmental, regulatory and sales milestones. In addition, NeuroproteXeon will receive tiered royalties on applicable worldwide net sales and a transfer price for commercial product supply. NeuroproteXeon will continue to be responsible for the cost of development and will manage the development of the product in collaboration with the Company. Reorganization of Legal Entity Ownership On October 6, 2017, the Company completed a reorganization of its legal entity ownership ("the Reorganization") to align with its ongoing transformation to become an innovation-driven specialty pharmaceuticals growth company. Many factors were considered in effecting the Reorganization, including streamlining treasury functions, simplifying legal entity reporting processes, and capital allocation efficiencies. Given this Reorganization, the Internal Revenue Code required the Company to reallocate its tax basis from an investment in shares of a wholly-owned subsidiary to assets within another legal entity with no corresponding change in accounting basis. A deferred tax liability is not recognized on the wholly-owned subsidiary as there is a means for its recovery in a tax-free manner. The reallocation of tax basis resulted in a decrease to the net deferred tax liabilities associated with the assets within the other legal entity. During the three months ending December 29, 2017, the Company expects to record the reduction in its net deferred tax liabilities of $800.0 million to $950.0 million, which will result in the recognition of a net deferred income tax benefit of an equal amount. The reduction to net deferred tax liabilities is expected to be comprised of a $650.0 million to $775.0 million reduction to interest-bearing U.S. deferred tax liabilities and a $150.0 million to $175.0 million reduction to net deferred tax liabilities associated with intangible assets. During the three months ended September 29, 2017, the Company recognized income tax expense of $36.1 million, with an offset to deferred tax liabilities commensurate with the completion of certain aspects of the Reorganization during the third quarter of 2017. Ocera Acquisition On November 2, 2017, the Company entered into an agreement to acquire Ocera Therapeutics, Inc. ("Ocera") through a cash tender offer to purchase all of the outstanding shares of Ocera common stock for upfront consideration of approximately $42.0 million and contingent consideration up to $75.0 million based on the successful completion of certain development and sales milestones. Ocera is a clinical stage biopharmaceutical company focused on the development and commercialization of novel therapeutics for orphan and other serious liver diseases with a high unmet medical need. Ocera’s developmental product OCR-002, an ammonia scavenger, is being studied for treatment of hepatic encephalopathy, a neuropsychiatric syndrome associated with hyperammonemia, a complication of acute or chronic liver disease. This transaction is expected to close in the fourth quarter of 2017. Goodwill and Other Long-Lived Assets Impairment Analysis Goodwill is tested for impairment on an annual basis or more frequently if certain indicators are present or changes in circumstances suggest that impairment may exist. Management relies on a number of qualitative factors when considering a potential impairment such as its operating results, business plans, economic projections, anticipated future cash flows, transactions and market capitalization. Subsequent to September 29, 2017, the Company's market capitalization has declined, which may be an indicator of impairment should this decrease be more than temporary. The Company will continue to assess the impact of its market capitalization. It is possible that if the Company's market capitalization decline is more than temporary, such decline could result in an impairment of goodwill and other long-lived assets associated with its reporting units. |
Discontinued Operations and Divestitures (Tables) |
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | The following table summarizes the assets and liabilities of the Nuclear Imaging business that are classified as held for sale on the unaudited condensed consolidated balance sheets:
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Schedule of Income (Loss) from Discontinued Operations | The following table summarizes the financial results of the Nuclear Imaging business presented in the unaudited condensed consolidated statements of income:
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Schedule of Significant Cash and Non-Cash Transactions | The following table summarizes significant cash and non-cash transactions of the Nuclear Imaging business that are included within the unaudited condensed consolidated statements of cash flows for the respective periods:
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Acquisitions, License Agreements and Other Investments Tables |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following amounts represent the preliminary allocations of the fair value of the identifiable assets acquired and liabilities assumed for the InfaCare Acquisition, including preliminary goodwill, intangible assets and the related deferred tax balances. The Company expects to complete its valuation analysis and finalize deferred tax balances as of the acquisition date no later than twelve months from the date of the acquisition. The changes in the purchase price allocation and preliminary goodwill based on the final valuation may include, but are not limited to, finalization of working capital settlements, the impact of U.S. state tax rates in determining the deferred tax balances and changes in assumptions utilized in the preliminary valuation report.
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Business Combination, Reconciliation of Total Consideration [Table Text Block] | The following is a reconciliation of the total consideration to net assets acquired:
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | Intangible assets acquired consist of the following:
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Restructuring and Related Charges (Tables) |
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Charges by Segment | Net restructuring and related charges by segment are as follows:
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Schedule of Net Restructuring and Related Charges | Net restructuring and related charges by program are comprised of the following:
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Schedule of Restructuring Reserves by Type of Cost | The following table summarizes cash activity for restructuring reserves, substantially all of which are related to employee severance and benefits:
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Schedule of Restructuring Charges Incurred Cumulative to Date | Net restructuring and related charges, including associated asset impairments, incurred cumulative-to-date related to the 2016 Mallinckrodt Program was as follows:
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Earnings per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings per Share | The weighted-average number of shares outstanding used in the computations of basic and diluted earnings per share were as follows (in millions):
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Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories were comprised of the following at the end of each period:
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Property, Plant and Equipment (Tables) |
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment | The gross carrying amount and accumulated depreciation of property, plant and equipment at the end of each period was as follows:
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Depreciation of Fixed Assets | Depreciation expense for property, plant and equipment was as follows:
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Goodwill and Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The gross carrying amount and accumulated impairment of goodwill by segment at the end of each period were as follows:
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Schedule of Intangible Assets | The gross carrying amount and accumulated amortization of intangible assets at the end of each period were as follows:
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Schedule of Future Amortization Expense, Intangible Assets | The estimated aggregate amortization expense on intangible assets owned by the Company is expected to be as follows:
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Intangible Asset Amortization Expense | Intangible asset amortization expense was as follows:
|
Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt including Capital Lease Obligation | Debt was comprised of the following at the end of each period:
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Retirement Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension Plan [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Periodic Benefit Cost | The net periodic benefit cost for the Company's defined benefit pension plans was as follows:
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Accumulated Other Comprehensive Income (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income |
The following summarizes the change in accumulated other comprehensive income (loss) for the nine months ended September 29, 2017 and September 30, 2016:
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Schedule of Reclassifications out of Accumulated Other Comprehensive Income | The following summarizes reclassifications from accumulated other comprehensive income for the nine months ended September 29, 2017 and September 30, 2016:
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Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share Repurchases under the Repurchase Plan | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share Repurchases under the Repurchase Plan |
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Financial Instruments and Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following tables provide a summary of the significant assets and liabilities that are measured at fair value on a recurring basis at the end of each period:
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Schedule of Reconciliation of Changes in Fair Value of Contingent Liabilities | The following table provides a summary of the changes in the Company's contingent consideration and acquired contingent liabilities:
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Schedule of Carrying Amount and Fair Value of Long-term Debt | The following table presents the carrying values and estimated fair values of the Company's long-term debt, excluding capital leases, as of the end of each period:
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Schedules of Concentration of Risk | The following table shows net sales attributable to distributors that accounted for 10% or more of the Company's total net sales:
The following table shows accounts receivable attributable to distributors that accounted for 10% or more of the Company's gross accounts receivable at the end of each period:
The following table shows net sales attributable to products that accounted for 10% or more of the Company's total net sales:
|
Segment Data (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 29, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information by Reportable Segment | Selected information by reportable segment was as follows:
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Schedule of Net Sales from External Customers by Products | Net sales by product family within the Company's reportable segments are as follows:
|
Condensed Consolidating Financial Statements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Condensed Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Consolidating Balance Sheets | MALLINCKRODT PLC CONDENSED CONSOLIDATING BALANCE SHEET As of September 29, 2017 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING BALANCE SHEET As of December 30, 2016 (unaudited, in millions)
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Schedule of Condensed Consolidating Statements of Comprehensive Income | MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME For the three months ended September 29, 2017 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME For the three months ended September 30, 2016 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME For the nine months ended September 29, 2017 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME For the nine months ended September 30, 2016 (unaudited, in millions)
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Schedule of Condensed Consolidating Statements of Cash Flows | MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the nine months ended September 29, 2017 (unaudited, in millions)
MALLINCKRODT PLC CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS For the nine months ended September 30, 2016 (unaudited, in millions)
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Discontinued Operations and Divestitures Discontinued Operations (Assets and Liabilities Held-for-sale) (Details) - Nuclear Imaging - Discontinued Operations, Held-for-sale [Member] - USD ($) $ in Millions |
Sep. 29, 2017 |
Dec. 30, 2016 |
---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts receivable, held for sale | $ 0.0 | $ 49.6 |
Inventories, held for sale | 0.0 | 20.0 |
Property, plant and equipment, net, held for sale | 0.0 | 188.7 |
Other current assets and non-current assets, held for sale | 0.0 | 52.6 |
Total assets classified as held for sale in the balance sheet | 0.0 | 310.9 |
Accounts payable, held for sale | 0.0 | 19.7 |
Other current and non-current liabilities, held for sale | 0.0 | 100.6 |
Total liabilities classified as held for sale in the balance sheet | $ 0.0 | $ 120.3 |
Discontinued Operations and Divestitures Discontinued Operations (Significant Cash and Non-Cash Transactions) (Details) - Nuclear Imaging - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Depreciation, Discontinued Operations | $ 0.0 | $ 4.5 | $ 0.0 | $ 14.3 |
Capital Expenditure, Discontinued Operations | $ 0.0 | $ 4.0 | $ 0.3 | $ 7.8 |
Acquisitions, License Agreements and Other Investments Schedule of Reconciliation of Total Consideration (Details) - InfaCare Acquisition $ in Millions |
Sep. 25, 2017
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Business Combination Consideration Transferred, Net Of Cash | $ 70.9 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | 1.3 |
Business Combination, Consideration Transferred | 72.2 |
Business Combination, Contingent Consideration, Liability | (35.0) |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $ 37.2 |
Acquisitions, License Agreements and Other Investments Schedule of Intangible Assets Acquired (Details) - InfaCare Acquisition $ in Millions |
Sep. 25, 2017
USD ($)
|
---|---|
In-process Research and Development | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | $ 113.5 |
Stannsoporfin [Member] | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Business Combination, Cash Flow Discount Rate | 13.50% |
Restructuring and Related Charges (Narrative) (Details) - Restructuring Fiscal 2016 Plan $ in Millions |
Sep. 29, 2017
USD ($)
|
---|---|
Minimum | |
Restructuring Cost and Reserve | |
Restructuring and Related Cost, Expected Cost | $ 100.0 |
Maximum | |
Restructuring Cost and Reserve | |
Restructuring and Related Cost, Expected Cost | $ 125.0 |
Restructuring and Related Charges (Schedule of Restructuring and Related Charges by Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Restructuring Cost and Reserve | ||||
Restructuring and related charges, net | $ 15.5 | $ 8.7 | $ 35.7 | $ 34.0 |
Less: accelerated depreciation | (1.2) | (1.9) | (3.6) | (4.8) |
Restructuring charges, net | 14.3 | 6.8 | 32.1 | 29.2 |
Specialty Brands | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related charges, net | 14.6 | 4.9 | 24.1 | 21.7 |
Specialty Generics | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related charges, net | (0.6) | 0.7 | 7.3 | 2.3 |
Corporate | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related charges, net | $ 1.5 | $ 3.1 | $ 4.3 | $ 10.0 |
Restructuring and Related Charges (Schedule of Net Restructuring and Related Charges) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Restructuring Cost and Reserve | ||||
Restructuring and related charges, net | $ 15.5 | $ 8.7 | $ 35.7 | $ 34.0 |
Less: accelerated depreciation | (1.2) | (1.9) | (3.6) | (4.8) |
Total charges expected to be settled in cash | 14.3 | 6.8 | 32.1 | 29.2 |
Restructuring Fiscal 2016 Plan | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related charges, net | 15.5 | 8.3 | 35.7 | 8.3 |
2013 Mallinckrodt program | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related charges, net | 0.0 | 0.3 | 0.0 | 22.7 |
Acquisitions | ||||
Restructuring Cost and Reserve | ||||
Restructuring and related charges, net | $ 0.0 | $ 0.1 | $ 0.0 | $ 3.0 |
Restructuring and Related Charges (Schedule of Restructuring Reserves by Type of Cost) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 29, 2017
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 14.8 |
Charges | 33.9 |
Changes in estimate | (1.8) |
Cash payments | (23.7) |
Reclassification | (0.4) |
Ending Balance | 22.8 |
Restructuring Fiscal 2016 Plan | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 9.5 |
Charges | 33.9 |
Changes in estimate | (1.8) |
Cash payments | (19.8) |
Reclassification | (0.7) |
Ending Balance | 21.1 |
2013 Mallinckrodt program | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 5.1 |
Charges | 0.0 |
Changes in estimate | 0.0 |
Cash payments | (3.7) |
Reclassification | 0.3 |
Ending Balance | 1.7 |
Acquisitions | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 0.2 |
Charges | 0.0 |
Changes in estimate | 0.0 |
Cash payments | (0.2) |
Reclassification | 0.0 |
Ending Balance | $ 0.0 |
Restructuring and Related Charges (Schedule of Restructuring Charges Incurred Cumulative to Date) (Details) - Restructuring Fiscal 2016 Plan $ in Millions |
Sep. 29, 2017
USD ($)
|
---|---|
Restructuring Cost and Reserve | |
Restructuring costs incurred cumulative to date | $ 49.2 |
Specialty Brands | |
Restructuring Cost and Reserve | |
Restructuring costs incurred cumulative to date | 31.3 |
Specialty Generics | |
Restructuring Cost and Reserve | |
Restructuring costs incurred cumulative to date | 8.6 |
Corporate | |
Restructuring Cost and Reserve | |
Restructuring costs incurred cumulative to date | $ 9.3 |
Earnings per Share (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share | ||||
Weighted-average shares outstanding - basic (in shares) | 96.7 | 107.6 | 99.5 | 109.1 |
Dilutive impact of restricted share units and share options (in shares) | 0.3 | 1.0 | 0.3 | 0.9 |
Weighted-average shares outstanding - diluted (in shares) | 97.0 | 108.6 | 99.8 | 110.0 |
Earnings per Share Anti-Dilutive Shares (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4.3 | 1.6 | 3.6 | 1.7 |
Inventories (Details) - USD ($) $ in Millions |
Sep. 29, 2017 |
Dec. 30, 2016 |
---|---|---|
Raw materials and supplies | $ 76.3 | $ 72.6 |
Work in process | 160.4 | 178.4 |
Finished goods | 104.6 | 99.7 |
Inventories | $ 341.3 | $ 350.7 |
Property, Plant and Equipment (Schedule of Property, Plant and Equipment) (Details) - USD ($) $ in Millions |
Sep. 29, 2017 |
Dec. 30, 2016 |
---|---|---|
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 1,820.4 | $ 1,679.4 |
Less: accumulated depreciation | (858.0) | (797.9) |
Property, plant and equipment, net | $ 962.4 | $ 881.5 |
Property, Plant and Equipment Depreciation (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Property, Plant and Equipment | ||||
Depreciation | $ 27.3 | $ 27.3 | $ 83.5 | $ 87.6 |
Goodwill and Intangible Assets (Schedule Of Goodwill) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 29, 2017 |
Dec. 30, 2016 |
|
Goodwill | ||
Goodwill | $ 3,459.5 | $ 3,498.1 |
Gross Carrying Amount | 3,666.5 | 3,705.1 |
Accumulated Impairment | (207.0) | (207.0) |
Specialty Brands | ||
Goodwill | ||
Goodwill, Period Increase (Decrease) | (38.6) | |
Gross Carrying Amount | 3,459.5 | 3,498.1 |
Accumulated Impairment | 0.0 | 0.0 |
Specialty Generics | ||
Goodwill | ||
Gross Carrying Amount | 207.0 | 207.0 |
Accumulated Impairment | $ (207.0) | $ (207.0) |
Goodwill and Intangible Assets (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 25, 2017 |
Dec. 30, 2016 |
|
Goodwill | ||||||
Non-restructuring impairment charges | $ 0.0 | $ 0.0 | $ 0.0 | $ 16.9 | ||
Goodwill | 3,459.5 | 3,459.5 | $ 3,498.1 | |||
Specialty Brands | ||||||
Goodwill | ||||||
Goodwill, Period Increase (Decrease) | 38.6 | |||||
Intrathecal Therapy | ||||||
Goodwill | ||||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ (0.4) | 56.6 | ||||
Intrathecal Therapy | Goodwill | ||||||
Goodwill | ||||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ (49.8) | |||||
InfaCare Acquisition | Goodwill | ||||||
Goodwill | ||||||
Goodwill | $ 13.3 |
Goodwill and Intangible Assets (Schedule of Intangible Asset Amortization Expense) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of Intangible Assets | $ 173.2 | $ 175.9 | $ 523.0 | $ 526.7 |
Goodwill and Intangible Assets (Schedule of Future Amortization Expense, Intangible Assets) (Details) $ in Millions |
Sep. 29, 2017
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of Fiscal 2017 | $ 172.6 |
Fiscal 2018 | 686.7 |
Fiscal 2019 | 686.3 |
Fiscal 2020 | 686.0 |
Fiscal 2021 | $ 685.8 |
Retirement Plans (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Postretirement Benefits | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Net periodic benefit credit | $ 0.0 | $ 0.1 | $ 0.0 | $ 0.0 |
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Net periodic benefit credit | 0.2 | 3.8 | 75.0 | 15.4 |
Defined Benefit Plan, Contributions by Employer | 61.3 | |||
Plan settlements | $ 0.0 | $ 1.1 | $ 69.7 | $ 8.1 |
Retirement Plans (Schedule of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Pension Plan [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 0.0 | $ 0.6 | $ 1.5 | $ 1.4 |
Interest cost | 0.1 | 2.7 | 2.2 | 9.7 |
Expected return on plan assets | 0.0 | (4.1) | (1.3) | (12.5) |
Amortization of net actuarial loss | 0.1 | 3.5 | 2.7 | 8.7 |
Amortization of prior service cost | 0.0 | 0.0 | 0.2 | 0.0 |
Plan settlements | 0.0 | 1.1 | 69.7 | 8.1 |
Net periodic benefit cost | 0.2 | 3.8 | 75.0 | 15.4 |
Postretirement Benefits | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Net periodic benefit cost | $ 0.0 | $ 0.1 | $ 0.0 | $ 0.0 |
Guarantees (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Sep. 29, 2017 |
Dec. 30, 2016 |
|
Others | ||
Guarantor Obligations [Line Items] | ||
Maximum future payments | $ 29.1 | |
Mallinckrodt Baker | Indemnification Agreement | ||
Guarantor Obligations [Line Items] | ||
Guarantor obligations, obligation term | 17 years | |
Maximum future payments | $ 70.2 | |
Escrow Deposit | 30.0 | |
Mallinckrodt Baker | Indemnification Agreement | Other Liabilities | ||
Guarantor Obligations [Line Items] | ||
Guarantors obligation | 14.9 | $ 15.1 |
Mallinckrodt Baker | Indemnification Agreement | Other Assets | ||
Guarantor Obligations [Line Items] | ||
Escrow Deposit | 18.2 | 19.0 |
Mallinckrodt Baker | Environmental, Health and Safety Matters | Indemnification Agreement | Other Liabilities | ||
Guarantor Obligations [Line Items] | ||
Guarantors obligation | $ 12.2 | $ 12.4 |
Commitments and Contingencies (Narrative) (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Apr. 01, 2014
USD ($)
Defendent
|
Sep. 26, 2012
action
|
Aug. 31, 2012
principal
|
Sep. 29, 2017
USD ($)
Case
|
Sep. 30, 2016
USD ($)
|
Sep. 29, 2017
USD ($)
Defendent
Case
order
|
Sep. 30, 2016
USD ($)
|
Jun. 26, 2015
USD ($)
|
Sep. 25, 2015
USD ($)
|
Dec. 30, 2016
USD ($)
|
Mar. 25, 2016
USD ($)
|
Mar. 27, 2015
USD ($)
|
Mar. 28, 2014
USD ($)
|
Aug. 31, 2013
Case
|
|
Loss Contingencies [Line Items] | ||||||||||||||
Payments for Legal Settlements | $ 35.0 | |||||||||||||
Environmental liabilities | 75.5 | $ 75.5 | ||||||||||||
Deferred tax liabilities related to installment sales | 1,606.7 | 1,606.7 | ||||||||||||
Section 453(a) interest | 17.6 | $ 17.4 | 53.9 | $ 55.1 | ||||||||||
Interest Payable, Installment Sales | $ 42.9 | $ 42.9 | $ 30.3 | |||||||||||
Lower Passaic River, New Jersey | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Number of defendants | Defendent | 70 | 98 | ||||||||||||
Environmental liabilities | $ 13.3 | $ 23.1 | ||||||||||||
Remedial cost, estimate | $ 1,700.0 | $ 1,380.0 | ||||||||||||
Asbestos Matters | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Pending claims | Case | 11,500 | 11,500 | ||||||||||||
Estimation of liability, historical term | 5 years | |||||||||||||
Estimation of liability, expected future term of claims | 7 years | |||||||||||||
Accrued and other current liabilities | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Environmental liabilities, current | $ 2.4 | $ 2.4 | ||||||||||||
Questcor Acquisition of Synacthen [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Litigation Settlement, Expense | $ 102.0 | |||||||||||||
Retrophin Litigation [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Litigation Settlement, Expense | $ 15.5 | |||||||||||||
Glenridge Litigation | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Number of defendants | principal | 3 | |||||||||||||
Pending claims | Case | 1 | |||||||||||||
Questcor Securities Litigation | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Subsequent actions consolidated into lawsuit | action | 4 | |||||||||||||
Litigation Settlement, Amount | $ 38.0 | |||||||||||||
Loss Contingency Accrual | $ 38.0 | |||||||||||||
Mallinckrodt Veterinary, Inc., Millsboro, Delaware [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Number of Administrative Orders of Consent Entered Into | order | 2 | |||||||||||||
Industrial Revenue Bonds | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Plant assets exchanged for IRBs | $ 16.0 | |||||||||||||
Minimum | Environmental Remediation | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Remedial cost, estimate | 37.8 | 37.8 | ||||||||||||
Minimum | Lower Passaic River, New Jersey | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Remedial cost, estimate | 365.0 | 483.4 | 483.4 | |||||||||||
Maximum | Environmental Remediation | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Remedial cost, estimate | 114.2 | 114.2 | ||||||||||||
Maximum | Lower Passaic River, New Jersey | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Remedial cost, estimate | $ 3,200.0 | $ 2,700.0 | $ 2,700.0 |
Financial Instruments and Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 29, 2017 |
Sep. 29, 2017 |
Sep. 25, 2017 |
Dec. 30, 2016 |
Feb. 01, 2016 |
Apr. 30, 2013 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Fair Value, Annual Payment | $ 25.0 | |||||
Notes receivable | $ 154.0 | 154.0 | $ 0.0 | |||
Hemostasis Products | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Fair value of contingent consideration | $ 52.0 | |||||
Fair value of contingent liability | $ 10.6 | |||||
InfaCare Acquisition | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Fair value of contingent consideration | $ 35.0 | |||||
Senior Notes | 3.50% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | |||||
Senior Notes | 4.75% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | |||||
Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Investments, Fair Value Disclosure | $ 34.1 | $ 34.1 | 33.6 | |||
Level 3 | Secured Debt | 4.00% Term Loan | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.00% | 4.00% | ||||
Level 3 | Other Assets | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Cash surrender value of life insurance | $ 66.8 | $ 66.8 | 67.6 | |||
Level 3 | Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Investments, Fair Value Disclosure | 0.0 | 0.0 | 0.0 | |||
Level 3 | Recurring | Questcor Pharmaceuticals, Inc. | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Fair value of contingent liability | 104.5 | 104.5 | 124.7 | |||
Level 3 | Recurring | Stratatech | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Fair value of contingent liability | 55.3 | 55.3 | 55.7 | |||
Level 3 | Raplixa | Recurring | Hemostasis Products | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Fair value of contingent consideration | 62.2 | 62.2 | 58.9 | |||
Level 3 | PreveLeak | Recurring | Hemostasis Products | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Fair value of contingent liability | $ 11.6 | $ 11.6 | 11.2 | |||
Level 3 | Stannsoporfin [Member] | Recurring | InfaCare Acquisition | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Fair value of contingent consideration | $ 35.0 | |||||
Level 2 | Debentures | 8.00% Debenture | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 8.00% | 8.00% | ||||
Level 2 | Debentures | 9.50% Debenture | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.50% | 9.50% | ||||
Level 2 | Other Assets | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Investments, Fair Value Disclosure | $ 1.6 | $ 1.6 | 11.1 | |||
Level 2 | Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Investments, Fair Value Disclosure | $ 10.9 | $ 10.9 | 10.8 | |||
Level 1 | Senior Notes | 3.50% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | 3.50% | ||||
Level 1 | Senior Notes | 4.75% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | 4.75% | ||||
Level 1 | Senior Notes | 5.75% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.75% | 5.75% | ||||
Level 1 | Senior Notes | 4.88% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 4.875% | 4.875% | ||||
Level 1 | Senior Notes | 5.50% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | 5.50% | ||||
Level 1 | Unsecured Debt | 5.625% Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.625% | 5.625% | ||||
Level 1 | Recurring | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Investments, Fair Value Disclosure | $ 23.2 | $ 23.2 | 22.8 | |||
Maximum | Synacthen | Questcor Pharmaceuticals, Inc. | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Milestone Payment | 140.0 | |||||
Indemnification Agreement | Mallinckrodt Baker | Level 1 | Other Assets | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||||||
Restricted Cash and Cash Equivalents | $ 18.2 | $ 18.2 | $ 19.1 |
Financial Instruments and Fair Value Measurements (Schedule of Fair Value of Assets and Liabilities Measured on a Recurring Basis) (Details) - Recurring - USD ($) $ in Millions |
Sep. 29, 2017 |
Dec. 30, 2016 |
---|---|---|
Assets: | ||
Rabbi Trust Investments, Fair Value Disclosure | $ 34.1 | $ 33.6 |
Equity Securities, Fair Value Disclosure | 21.6 | |
Foreign exchange forward and option contracts | 0.6 | 0.7 |
Total assets at fair value | 56.3 | 34.3 |
Liabilities: | ||
Deferred Compensation Liability, Fair Value | 38.9 | 32.5 |
Contingent consideration and acquired contingent liabilities | 268.6 | 250.5 |
Foreign exchange forward and option contracts | 1.2 | 3.4 |
Total liabilities at fair value | 308.7 | 286.4 |
Level 1 | ||
Assets: | ||
Rabbi Trust Investments, Fair Value Disclosure | 23.2 | 22.8 |
Equity Securities, Fair Value Disclosure | 21.6 | |
Foreign exchange forward and option contracts | 0.6 | 0.7 |
Total assets at fair value | 45.4 | 23.5 |
Liabilities: | ||
Deferred Compensation Liability, Fair Value | 0.0 | 0.0 |
Contingent consideration and acquired contingent liabilities | 0.0 | 0.0 |
Foreign exchange forward and option contracts | 1.2 | 3.4 |
Total liabilities at fair value | 1.2 | 3.4 |
Level 2 | ||
Assets: | ||
Rabbi Trust Investments, Fair Value Disclosure | 10.9 | 10.8 |
Equity Securities, Fair Value Disclosure | 0.0 | |
Foreign exchange forward and option contracts | 0.0 | 0.0 |
Total assets at fair value | 10.9 | 10.8 |
Liabilities: | ||
Deferred Compensation Liability, Fair Value | 38.9 | 32.5 |
Contingent consideration and acquired contingent liabilities | 0.0 | 0.0 |
Foreign exchange forward and option contracts | 0.0 | 0.0 |
Total liabilities at fair value | 38.9 | 32.5 |
Level 3 | ||
Assets: | ||
Rabbi Trust Investments, Fair Value Disclosure | 0.0 | 0.0 |
Equity Securities, Fair Value Disclosure | 0.0 | |
Foreign exchange forward and option contracts | 0.0 | 0.0 |
Total assets at fair value | 0.0 | 0.0 |
Liabilities: | ||
Deferred Compensation Liability, Fair Value | 0.0 | 0.0 |
Contingent consideration and acquired contingent liabilities | 268.6 | 250.5 |
Foreign exchange forward and option contracts | 0.0 | 0.0 |
Total liabilities at fair value | $ 268.6 | $ 250.5 |
Financial Instruments and Fair Value Measurements (Schedule of Reconciliation of Changes in Fair Value of Contingent Liabilities) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 29, 2017
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Acquisition date fair value of contingent consideration | $ 35.0 |
Payments | (25.0) |
Level 3 | Recurring | Contingent Liabilities | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | 250.5 |
Accretion expense | 4.0 |
Fair value adjustment | 4.1 |
Ending balance | $ 268.6 |
Financial Instruments and Fair Value Measurements (Schedule of Carrying Amount and Fair Value of Long-term Debt) (Details) - USD ($) $ in Millions |
Sep. 29, 2017 |
Dec. 30, 2016 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term Debt, Current Maturities | $ 318.8 | $ 271.8 |
Long-term Debt | 5,592.5 | 5,965.8 |
Receivable Securitization | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Variable Rate Receivable Securitization | 0.0 | 250.0 |
Variable Rate Receivable Securitization, Fair Value | 0.0 | 250.0 |
Receivable securitization, Maturity Date of July 2020 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 200.0 | 0.0 |
Long-term Debt | 200.0 | 0.0 |
4.00% Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Loans Payable | 0.0 | 6.5 |
Loans Payable, Fair Value Disclosure | 0.0 | 6.5 |
Secured Debt | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term Debt, Current Maturities | 0.0 | 20.0 |
Loans Payable | 0.0 | 1,948.5 |
Long-term Debt | 0.0 | 1,928.5 |
Loans Payable, Fair Value Disclosure | 0.0 | 1,953.2 |
Secured Debt | 4.00% Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term Debt, Current Maturities | 0.0 | 1.0 |
Long-term Debt | 0.0 | 5.5 |
Secured Debt | New Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term Debt, Current Maturities | 18.6 | 0.0 |
Loans Payable | 1,855.7 | 0.0 |
Long-term Debt | 1,837.1 | 0.0 |
Loans Payable, Fair Value Disclosure | 1,853.8 | 0.0 |
Secured Debt | 2017 Revolving Credit Facility [Member] [Domain] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 0.0 | |
Long-term Debt | 0.0 | |
Secured Debt | 2015 Revolving Credit Facility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 100.0 | |
Long-term Debt | 100.0 | |
Senior Notes | 3.50% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 300.2 | 298.7 |
Senior Notes | 5.75% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 853.3 | 850.3 |
Senior Notes | 4.75% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 448.5 | 520.9 |
Unsecured Debt | 3.50% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term Debt, Current Maturities | 300.0 | 0.0 |
Long-term Debt | 0.0 | 300.0 |
Unsecured Debt | 4.88% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 696.7 | 699.5 |
Long-term Debt | 700.0 | 700.0 |
Unsecured Debt | 5.75% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term Debt | 884.0 | 884.0 |
Unsecured Debt | 4.75% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long-term Debt | 526.5 | 600.0 |
Unsecured Debt | 5.625% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 689.5 | 682.4 |
Long-term Debt | 738.0 | 738.0 |
Unsecured Debt | 5.50% Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 625.4 | 615.7 |
Long-term Debt | 692.1 | 695.0 |
Debentures | 9.50% Debenture | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 11.5 | 12.0 |
Long-term Debt | 10.4 | 10.4 |
Debentures | 8.00% Debenture | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Long term debt, fair value | 4.7 | 4.9 |
Long-term Debt | $ 4.4 | $ 4.4 |
Financial Instruments and Fair Value Measurements (Schedules of Concentration of Risk) (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 29, 2017 |
Dec. 30, 2016 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Distributor Concentration Risk | Net Sales Attributable to Distributors | McKesson Corporation | |||||
Concentration Risk | |||||
Concentration Risk, Percentage | 9.00% | 11.00% | 9.00% | 11.00% | |
Distributor Concentration Risk | Net Sales Attributable to Distributors | CuraScript, Inc | |||||
Concentration Risk | |||||
Concentration Risk, Percentage | 41.00% | 40.00% | 40.00% | 37.00% | |
Distributor Concentration Risk | Accounts Receivable Attributable to Distributors | McKesson Corporation | |||||
Concentration Risk | |||||
Concentration Risk, Percentage | 20.00% | 28.00% | |||
Distributor Concentration Risk | Accounts Receivable Attributable to Distributors | Amerisource Bergen Corporation | |||||
Concentration Risk | |||||
Concentration Risk, Percentage | 14.00% | 15.00% | |||
Distributor Concentration Risk | Accounts Receivable Attributable to Distributors | CuraScript, Inc | |||||
Concentration Risk | |||||
Concentration Risk, Percentage | 14.00% | 15.00% | |||
Distributor Concentration Risk | Accounts Receivable Attributable to Distributors | Cardinal Health, Inc. | |||||
Concentration Risk | |||||
Concentration Risk, Percentage | 11.00% | 10.00% | |||
Product Concentration Risk | Net Sales Attributable to Products | Acthar | |||||
Concentration Risk | |||||
Concentration Risk, Percentage | 39.00% | 37.00% | 37.00% | 34.00% | |
Product Concentration Risk | Net Sales Attributable to Products | Inomax | |||||
Concentration Risk | |||||
Concentration Risk, Percentage | 16.00% | 14.00% | 16.00% | 14.00% |
Segment Data (Schedule of Segment Reporting Information by Business Segment) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
||||||||
Net sales | $ 793.9 | $ 887.2 | $ 2,429.3 | $ 2,569.6 | |||||||
Operating income | 120.7 | 147.7 | 323.0 | 455.2 | |||||||
Intangible asset amortization | (173.2) | (175.9) | (523.0) | (526.7) | |||||||
Restructuring and related charges, net | (15.5) | (8.7) | (35.7) | (34.0) | |||||||
Non-restructuring impairment charges | 0.0 | 0.0 | 0.0 | (16.9) | |||||||
Specialty Brands | |||||||||||
Restructuring and related charges, net | (14.6) | (4.9) | (24.1) | (21.7) | |||||||
Specialty Generics | |||||||||||
Restructuring and related charges, net | 0.6 | (0.7) | (7.3) | (2.3) | |||||||
Operating Segments | |||||||||||
Net sales | 780.5 | 872.9 | 2,386.8 | 2,525.0 | |||||||
Operating income | 357.0 | 398.0 | 1,045.6 | 1,158.0 | |||||||
Operating Segments | Specialty Brands | |||||||||||
Net sales | 591.4 | 633.1 | 1,743.1 | 1,757.4 | |||||||
Operating income | 316.6 | 334.1 | 865.7 | 897.1 | |||||||
Operating Segments | Specialty Generics | |||||||||||
Net sales | 189.1 | 239.8 | 643.7 | 767.6 | |||||||
Operating income | 40.4 | 63.9 | 179.9 | 260.9 | |||||||
Corporate, Non-Segment | |||||||||||
Net sales | [1] | 13.4 | 14.3 | 42.5 | 44.6 | ||||||
Corporate and unallocated expenses | [2] | (47.6) | (65.7) | (163.9) | (125.2) | ||||||
Intangible asset amortization | (173.2) | (175.9) | (523.0) | (526.7) | |||||||
Restructuring and related charges, net | [3] | (15.5) | (8.7) | (35.7) | (34.0) | ||||||
Non-restructuring impairment charges | $ 0.0 | $ 0.0 | $ 0.0 | $ 16.9 | |||||||
|
Segment Data (Schedule of Net Sales from External Customers by Products) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|||
Segment Reporting Information | ||||||
Net sales | $ 793.9 | $ 887.2 | $ 2,429.3 | $ 2,569.6 | ||
Operating Segments | ||||||
Segment Reporting Information | ||||||
Net sales | 780.5 | 872.9 | 2,386.8 | 2,525.0 | ||
Operating Segments | Specialty Brands | ||||||
Segment Reporting Information | ||||||
Net sales | 591.4 | 633.1 | 1,743.1 | 1,757.4 | ||
Operating Segments | Specialty Generics | ||||||
Segment Reporting Information | ||||||
Net sales | 189.1 | 239.8 | 643.7 | 767.6 | ||
Corporate, Non-Segment | ||||||
Segment Reporting Information | ||||||
Net sales | [1] | 13.4 | 14.3 | 42.5 | 44.6 | |
Acthar | Operating Segments | Specialty Brands | ||||||
Segment Reporting Information | ||||||
Net sales | 308.7 | 327.0 | 899.9 | 873.7 | ||
Inomax | Operating Segments | Specialty Brands | ||||||
Segment Reporting Information | ||||||
Net sales | 125.7 | 126.9 | 379.6 | 363.5 | ||
Ofirmev | Operating Segments | Specialty Brands | ||||||
Segment Reporting Information | ||||||
Net sales | 75.4 | 75.6 | 224.5 | 217.4 | ||
Therakos immunotherapy | Operating Segments | Specialty Brands | ||||||
Segment Reporting Information | ||||||
Net sales | 55.3 | 54.5 | 157.7 | 157.2 | ||
Hemostasis Products | Operating Segments | Specialty Brands | ||||||
Segment Reporting Information | ||||||
Net sales | 16.2 | 17.2 | 42.8 | 42.5 | ||
Other | Operating Segments | Specialty Brands | ||||||
Segment Reporting Information | ||||||
Net sales | 10.1 | 31.9 | 38.6 | 103.1 | ||
Other | Operating Segments | Specialty Generics | ||||||
Segment Reporting Information | ||||||
Net sales | 47.5 | 45.0 | 142.6 | 129.8 | ||
Hydrocodone (API) and hydrocodone-containing tablets | Operating Segments | Specialty Generics | ||||||
Segment Reporting Information | ||||||
Net sales | 10.0 | 30.8 | 63.3 | 109.8 | ||
Oxycodone (API) and oxycodone-containing tablets | Operating Segments | Specialty Generics | ||||||
Segment Reporting Information | ||||||
Net sales | 13.4 | 28.8 | 60.6 | 97.3 | ||
Methylphenidate ER | Operating Segments | Specialty Generics | ||||||
Segment Reporting Information | ||||||
Net sales | 14.3 | 23.4 | 58.2 | 72.3 | ||
Other Controlled Substances | Operating Segments | Specialty Generics | ||||||
Segment Reporting Information | ||||||
Net sales | $ 103.9 | $ 111.8 | $ 319.0 | $ 358.4 | ||
|
Condensed Consolidating Financial Statements (Narrative) (Details) |
Sep. 29, 2017 |
Apr. 30, 2013 |
---|---|---|
Condensed Consolidating Financial Statements | ||
Percentage of ownership in MIFSA | 100.00% | |
Senior Notes | 3.50% Senior Notes | ||
Condensed Consolidating Financial Statements | ||
Stated interest rate | 3.50% | |
Senior Notes | 4.75% Senior Notes | ||
Condensed Consolidating Financial Statements | ||
Stated interest rate | 4.75% |
Condensed Consolidating Financial Statements (Schedule of Condensed Consolidating Balance Sheets) (Details) - USD ($) $ in Millions |
Sep. 29, 2017 |
Dec. 30, 2016 |
Sep. 30, 2016 |
---|---|---|---|
Current Assets: | |||
Cash and cash equivalents | $ 371.8 | $ 342.0 | $ 280.5 |
Accounts receivable, net | 464.3 | 431.0 | |
Inventories | 341.3 | 350.7 | |
Prepaid expenses and other current assets | 121.1 | 131.9 | |
Notes receivable | 154.0 | 0.0 | |
Current assets held for sale | 0.0 | 310.9 | |
Intercompany receivables | 0.0 | 0.0 | |
Total current assets | 1,452.5 | 1,566.5 | |
Property, plant and equipment, net | 962.4 | 881.5 | |
Goodwill | 3,459.5 | 3,498.1 | |
Intangible assets, net | 8,545.9 | 9,000.5 | |
Investment in subsidiaries | 0.0 | 0.0 | |
Intercompany loans receivable | 0.0 | 0.0 | |
Other assets | 191.6 | 259.7 | |
Total Assets | 14,611.9 | 15,206.3 | |
Current Liabilities: | |||
Current maturities of long-term debt | 318.2 | 271.2 | |
Accounts payable | 104.9 | 112.1 | |
Accrued payroll and payroll-related costs | 84.4 | 76.1 | |
Accrued interest | 78.1 | 68.7 | |
Income taxes payable | 28.1 | 101.7 | |
Accrued and other current liabilities | 440.4 | 557.1 | |
Current liabilities held for sale | 0.0 | 120.3 | |
Intercompany payables | 0.0 | 0.0 | |
Total current liabilities | 1,054.1 | 1,307.2 | |
Long-term debt | 5,517.4 | 5,880.8 | |
Pension and postretirement benefits | 67.5 | 136.4 | |
Environmental liabilities | 73.1 | 73.0 | |
Deferred income taxes | 2,294.1 | 2,398.1 | |
Other income tax liabilities | 78.5 | 70.4 | |
Intercompany loans payable | 0.0 | 0.0 | |
Other liabilities | 414.2 | 356.1 | |
Total Liabilities | 9,498.9 | 10,222.0 | |
Shareholders' Equity | 5,113.0 | 4,984.3 | |
Total Liabilities and Shareholders' Equity | 14,611.9 | 15,206.3 | |
Mallinckrodt plc | |||
Current Assets: | |||
Cash and cash equivalents | 0.7 | 0.5 | 0.3 |
Accounts receivable, net | 0.0 | 0.0 | |
Inventories | 0.0 | 0.0 | |
Prepaid expenses and other current assets | 0.3 | 1.0 | |
Notes receivable | 0.0 | 0.0 | |
Current assets held for sale | 0.0 | 0.0 | |
Intercompany receivables | 127.9 | 59.7 | |
Total current assets | 128.9 | 61.2 | |
Property, plant and equipment, net | 0.0 | 0.0 | |
Goodwill | 0.0 | 0.0 | |
Intangible assets, net | 0.0 | 0.0 | |
Investment in subsidiaries | 4,923.4 | 5,534.1 | |
Intercompany loans receivable | 744.8 | 3.5 | |
Other assets | 0.0 | 0.0 | |
Total Assets | 5,797.1 | 5,598.8 | |
Current Liabilities: | |||
Current maturities of long-term debt | 0.0 | 0.0 | |
Accounts payable | 0.0 | 0.1 | |
Accrued payroll and payroll-related costs | 0.0 | 0.0 | |
Accrued interest | 0.0 | 0.0 | |
Income taxes payable | 0.0 | 0.0 | |
Accrued and other current liabilities | 1.3 | 1.9 | |
Current liabilities held for sale | 0.0 | 0.0 | |
Intercompany payables | 682.8 | 612.5 | |
Total current liabilities | 684.1 | 614.5 | |
Long-term debt | 0.0 | 0.0 | |
Pension and postretirement benefits | 0.0 | 0.0 | |
Environmental liabilities | 0.0 | 0.0 | |
Deferred income taxes | 0.0 | 0.0 | |
Other income tax liabilities | 0.0 | 0.0 | |
Intercompany loans payable | 0.0 | 0.0 | |
Other liabilities | 0.0 | 0.0 | |
Total Liabilities | 684.1 | 614.5 | |
Shareholders' Equity | 5,113.0 | 4,984.3 | |
Total Liabilities and Shareholders' Equity | 5,797.1 | 5,598.8 | |
Mallinckrodt International Finance S.A. | |||
Current Assets: | |||
Cash and cash equivalents | 37.6 | 44.5 | 25.0 |
Accounts receivable, net | 0.0 | 0.0 | |
Inventories | 0.0 | 0.0 | |
Prepaid expenses and other current assets | 0.2 | 0.0 | |
Notes receivable | 0.0 | 0.0 | |
Current assets held for sale | 0.0 | 0.0 | |
Intercompany receivables | 246.8 | 65.1 | |
Total current assets | 284.6 | 109.6 | |
Property, plant and equipment, net | 0.0 | 0.0 | |
Goodwill | 0.0 | 0.0 | |
Intangible assets, net | 0.0 | 0.0 | |
Investment in subsidiaries | 21,531.2 | 20,624.1 | |
Intercompany loans receivable | 0.0 | 0.0 | |
Other assets | 0.0 | 0.0 | |
Total Assets | 21,815.8 | 20,733.7 | |
Current Liabilities: | |||
Current maturities of long-term debt | 318.0 | 19.7 | |
Accounts payable | 0.0 | 0.1 | |
Accrued payroll and payroll-related costs | 0.0 | 0.0 | |
Accrued interest | 77.5 | 53.9 | |
Income taxes payable | 0.0 | 0.0 | |
Accrued and other current liabilities | 0.4 | 7.5 | |
Current liabilities held for sale | 0.0 | 0.0 | |
Intercompany payables | 0.0 | 467.1 | |
Total current liabilities | 395.9 | 548.3 | |
Long-term debt | 5,303.3 | 5,860.6 | |
Pension and postretirement benefits | 0.0 | 0.0 | |
Environmental liabilities | 0.0 | 0.0 | |
Deferred income taxes | 0.0 | 0.0 | |
Other income tax liabilities | 0.0 | 0.0 | |
Intercompany loans payable | 5,454.8 | 3,329.4 | |
Other liabilities | 7.7 | 7.0 | |
Total Liabilities | 11,161.7 | 9,745.3 | |
Shareholders' Equity | 10,654.1 | 10,988.4 | |
Total Liabilities and Shareholders' Equity | 21,815.8 | 20,733.7 | |
Other Subsidiaries | |||
Current Assets: | |||
Cash and cash equivalents | 333.5 | 297.0 | 255.2 |
Accounts receivable, net | 464.3 | 431.0 | |
Inventories | 341.3 | 350.7 | |
Prepaid expenses and other current assets | 120.6 | 130.9 | |
Notes receivable | 154.0 | 0.0 | |
Current assets held for sale | 0.0 | 310.9 | |
Intercompany receivables | 694.1 | 1,081.3 | |
Total current assets | 2,107.8 | 2,601.8 | |
Property, plant and equipment, net | 962.4 | 881.5 | |
Goodwill | 3,459.5 | 3,498.1 | |
Intangible assets, net | 8,545.9 | 9,000.5 | |
Investment in subsidiaries | 10,654.1 | 10,988.5 | |
Intercompany loans receivable | 4,710.0 | 3,325.9 | |
Other assets | 191.6 | 259.7 | |
Total Assets | 30,631.3 | 30,556.0 | |
Current Liabilities: | |||
Current maturities of long-term debt | 0.2 | 251.5 | |
Accounts payable | 104.9 | 111.9 | |
Accrued payroll and payroll-related costs | 84.4 | 76.1 | |
Accrued interest | 0.6 | 14.8 | |
Income taxes payable | 28.1 | 101.7 | |
Accrued and other current liabilities | 438.7 | 547.7 | |
Current liabilities held for sale | 0.0 | 120.3 | |
Intercompany payables | 386.0 | 126.5 | |
Total current liabilities | 1,042.9 | 1,350.5 | |
Long-term debt | 214.1 | 20.2 | |
Pension and postretirement benefits | 67.5 | 136.4 | |
Environmental liabilities | 73.1 | 73.0 | |
Deferred income taxes | 2,294.1 | 2,398.1 | |
Other income tax liabilities | 78.5 | 70.4 | |
Intercompany loans payable | 0.0 | 0.0 | |
Other liabilities | 406.5 | 349.1 | |
Total Liabilities | 4,176.7 | 4,397.7 | |
Shareholders' Equity | 26,454.6 | 26,158.3 | |
Total Liabilities and Shareholders' Equity | 30,631.3 | 30,556.0 | |
Eliminations | |||
Current Assets: | |||
Cash and cash equivalents | 0.0 | 0.0 | $ 0.0 |
Accounts receivable, net | 0.0 | 0.0 | |
Inventories | 0.0 | 0.0 | |
Prepaid expenses and other current assets | 0.0 | 0.0 | |
Notes receivable | 0.0 | 0.0 | |
Current assets held for sale | 0.0 | 0.0 | |
Intercompany receivables | (1,068.8) | (1,206.1) | |
Total current assets | (1,068.8) | (1,206.1) | |
Property, plant and equipment, net | 0.0 | 0.0 | |
Goodwill | 0.0 | 0.0 | |
Intangible assets, net | 0.0 | 0.0 | |
Investment in subsidiaries | (37,108.7) | (37,146.7) | |
Intercompany loans receivable | (5,454.8) | (3,329.4) | |
Other assets | 0.0 | 0.0 | |
Total Assets | (43,632.3) | (41,682.2) | |
Current Liabilities: | |||
Current maturities of long-term debt | 0.0 | 0.0 | |
Accounts payable | 0.0 | 0.0 | |
Accrued payroll and payroll-related costs | 0.0 | 0.0 | |
Accrued interest | 0.0 | 0.0 | |
Income taxes payable | 0.0 | 0.0 | |
Accrued and other current liabilities | 0.0 | 0.0 | |
Current liabilities held for sale | 0.0 | 0.0 | |
Intercompany payables | (1,068.8) | (1,206.1) | |
Total current liabilities | (1,068.8) | (1,206.1) | |
Long-term debt | 0.0 | 0.0 | |
Pension and postretirement benefits | 0.0 | 0.0 | |
Environmental liabilities | 0.0 | 0.0 | |
Deferred income taxes | 0.0 | 0.0 | |
Other income tax liabilities | 0.0 | 0.0 | |
Intercompany loans payable | (5,454.8) | (3,329.4) | |
Other liabilities | 0.0 | 0.0 | |
Total Liabilities | (6,523.6) | (4,535.5) | |
Shareholders' Equity | (37,108.7) | (37,146.7) | |
Total Liabilities and Shareholders' Equity | (43,632.3) | (41,682.2) | |
Ordinary A | |||
Condensed Consolidating Financial Statements | |||
Ordinary A shares | $ 0.0 | $ 0.0 |
Condensed Consolidating Financial Statements (Schedule of Condensed Consolidating Statements of Comprehensive Income) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Condensed Consolidating Financial Statements | ||||
Net sales | $ 793.9 | $ 887.2 | $ 2,429.3 | $ 2,569.6 |
Cost of sales | 393.3 | 397.0 | 1,194.0 | 1,165.5 |
Gross profit | 400.6 | 490.2 | 1,235.3 | 1,404.1 |
Selling, general and administrative expenses | 205.7 | 267.8 | 745.9 | 702.0 |
Research and development expenses | 59.5 | 67.9 | 190.9 | 200.8 |
Restructuring charges, net | 14.3 | 6.8 | 32.1 | 29.2 |
Non-restructuring impairment charges | 0.0 | 0.0 | 0.0 | 16.9 |
Losses (gains) on divestiture and license | (0.4) | 0.0 | 56.6 | 0.0 |
Operating income | 120.7 | 147.7 | 323.0 | 455.2 |
Interest expense | (92.6) | (94.0) | (279.0) | (286.8) |
Interest income | 1.3 | 0.5 | 2.8 | 1.1 |
Other income (expense), net | 3.7 | (0.6) | 6.2 | (2.6) |
Intercompany Interest And Fees | 0.0 | 0.0 | 0.0 | 0.0 |
Income (Loss) from Equity Method Investments | 0.0 | 0.0 | 0.0 | 0.0 |
Income from continuing operations before income taxes | 33.1 | 53.6 | 53.0 | 166.9 |
Income tax benefit | (31.2) | (56.4) | (110.8) | (218.3) |
Income (Loss) from Continuing Operations | 64.3 | 110.0 | 163.8 | 385.2 |
(Loss) income from discontinued operations, net of income taxes | (0.6) | 5.0 | 361.9 | 47.4 |
Net Income (Loss) | 63.7 | 115.0 | 525.7 | 432.6 |
Other Comprehensive Income (Loss), Net of Tax | (5.1) | (19.9) | 59.4 | (20.3) |
Comprehensive Income (Loss) | 58.6 | 95.1 | 585.1 | 412.3 |
Mallinckrodt plc | ||||
Condensed Consolidating Financial Statements | ||||
Net sales | 0.0 | 0.0 | 0.0 | 0.0 |
Cost of sales | 0.9 | 0.0 | 1.8 | 0.0 |
Gross profit | (0.9) | 0.0 | (1.8) | 0.0 |
Selling, general and administrative expenses | 13.4 | 14.7 | 46.7 | 40.9 |
Research and development expenses | 1.8 | 0.0 | 3.6 | 0.0 |
Restructuring charges, net | 0.0 | 0.0 | 0.0 | 0.0 |
Non-restructuring impairment charges | 0.0 | 0.0 | 0.0 | 0.0 |
Losses (gains) on divestiture and license | 0.0 | 0.0 | 0.0 | 0.0 |
Operating income | (16.1) | (14.7) | (52.1) | (40.9) |
Interest expense | (3.3) | (36.1) | (10.0) | (162.3) |
Interest income | 2.2 | 0.0 | 5.3 | 0.0 |
Other income (expense), net | 1.4 | 7.4 | 19.0 | 22.3 |
Intercompany Interest And Fees | (4.3) | (5.6) | (13.3) | (12.9) |
Income (Loss) from Equity Method Investments | 82.4 | 157.1 | 572.1 | 609.8 |
Income from continuing operations before income taxes | 62.3 | 108.1 | 521.0 | 416.0 |
Income tax benefit | (1.4) | (6.9) | (4.7) | (16.6) |
Income (Loss) from Continuing Operations | 63.7 | 115.0 | 525.7 | 432.6 |
(Loss) income from discontinued operations, net of income taxes | 0.0 | 0.0 | 0.0 | 0.0 |
Net Income (Loss) | 63.7 | 115.0 | 525.7 | 432.6 |
Other Comprehensive Income (Loss), Net of Tax | (5.1) | (19.9) | 59.4 | (20.3) |
Comprehensive Income (Loss) | 58.6 | 95.1 | 585.1 | 412.3 |
Mallinckrodt International Finance S.A. | ||||
Condensed Consolidating Financial Statements | ||||
Net sales | 0.0 | 0.0 | 0.0 | 0.0 |
Cost of sales | 0.0 | 0.0 | 0.0 | 0.0 |
Gross profit | 0.0 | 0.0 | 0.0 | 0.0 |
Selling, general and administrative expenses | 0.2 | 0.1 | 0.6 | 0.5 |
Research and development expenses | 0.0 | 0.0 | 0.0 | 0.0 |
Restructuring charges, net | 0.0 | 0.0 | 0.0 | 0.0 |
Non-restructuring impairment charges | 0.0 | 0.0 | 0.0 | 0.0 |
Losses (gains) on divestiture and license | 0.0 | 0.0 | 0.0 | 0.0 |
Operating income | (0.2) | (0.1) | (0.6) | (0.5) |
Interest expense | (90.9) | (82.0) | (264.9) | (245.1) |
Interest income | 0.4 | 0.2 | 1.0 | 0.5 |
Other income (expense), net | 1.7 | 0.0 | (1.6) | 0.0 |
Intercompany Interest And Fees | 0.0 | 0.0 | 0.0 | 0.1 |
Income (Loss) from Equity Method Investments | 261.8 | 302.7 | 1,113.5 | 1,015.2 |
Income from continuing operations before income taxes | 172.8 | 220.8 | 847.4 | 770.2 |
Income tax benefit | (2.1) | (4.1) | (2.6) | (18.1) |
Income (Loss) from Continuing Operations | 174.9 | 224.9 | 850.0 | 788.3 |
(Loss) income from discontinued operations, net of income taxes | (0.2) | (0.4) | (1.9) | (2.1) |
Net Income (Loss) | 174.7 | 224.5 | 848.1 | 786.2 |
Other Comprehensive Income (Loss), Net of Tax | (5.1) | (19.9) | 59.4 | (20.3) |
Comprehensive Income (Loss) | 169.6 | 204.6 | 907.5 | 765.9 |
Other Subsidiaries | ||||
Condensed Consolidating Financial Statements | ||||
Net sales | 793.9 | 887.2 | 2,429.3 | 2,569.6 |
Cost of sales | 392.4 | 397.0 | 1,192.2 | 1,165.5 |
Gross profit | 401.5 | 490.2 | 1,237.1 | 1,404.1 |
Selling, general and administrative expenses | 192.1 | 253.0 | 698.6 | 660.6 |
Research and development expenses | 57.7 | 67.9 | 187.3 | 200.8 |
Restructuring charges, net | 14.3 | 6.8 | 32.1 | 29.2 |
Non-restructuring impairment charges | 0.0 | 0.0 | 0.0 | 16.9 |
Losses (gains) on divestiture and license | (0.4) | 0.0 | 56.6 | 0.0 |
Operating income | 137.0 | 162.5 | 375.7 | 496.6 |
Interest expense | (19.0) | (19.4) | (57.9) | (61.4) |
Interest income | 19.3 | 43.8 | 50.3 | 182.6 |
Other income (expense), net | 0.6 | (8.0) | (11.2) | (24.9) |
Intercompany Interest And Fees | 4.3 | 5.6 | 13.3 | 12.8 |
Income (Loss) from Equity Method Investments | 174.7 | 224.5 | 848.1 | 786.2 |
Income from continuing operations before income taxes | 316.9 | 409.0 | 1,218.3 | 1,391.9 |
Income tax benefit | (27.7) | (45.4) | (103.5) | (183.6) |
Income (Loss) from Continuing Operations | 344.6 | 454.4 | 1,321.8 | 1,575.5 |
(Loss) income from discontinued operations, net of income taxes | (0.4) | 5.4 | 363.8 | 49.5 |
Net Income (Loss) | 344.2 | 459.8 | 1,685.6 | 1,625.0 |
Other Comprehensive Income (Loss), Net of Tax | (10.5) | (39.8) | 117.9 | (41.0) |
Comprehensive Income (Loss) | 333.7 | 420.0 | 1,803.5 | 1,584.0 |
Eliminations | ||||
Condensed Consolidating Financial Statements | ||||
Net sales | 0.0 | 0.0 | 0.0 | 0.0 |
Cost of sales | 0.0 | 0.0 | 0.0 | 0.0 |
Gross profit | 0.0 | 0.0 | 0.0 | 0.0 |
Selling, general and administrative expenses | 0.0 | 0.0 | 0.0 | 0.0 |
Research and development expenses | 0.0 | 0.0 | 0.0 | 0.0 |
Restructuring charges, net | 0.0 | 0.0 | 0.0 | 0.0 |
Non-restructuring impairment charges | 0.0 | 0.0 | 0.0 | 0.0 |
Losses (gains) on divestiture and license | 0.0 | 0.0 | 0.0 | 0.0 |
Operating income | 0.0 | 0.0 | 0.0 | 0.0 |
Interest expense | 20.6 | 43.5 | 53.8 | 182.0 |
Interest income | (20.6) | (43.5) | (53.8) | (182.0) |
Other income (expense), net | 0.0 | 0.0 | 0.0 | 0.0 |
Intercompany Interest And Fees | 0.0 | 0.0 | 0.0 | 0.0 |
Income (Loss) from Equity Method Investments | (518.9) | (684.3) | (2,533.7) | (2,411.2) |
Income from continuing operations before income taxes | (518.9) | (684.3) | (2,533.7) | (2,411.2) |
Income tax benefit | 0.0 | 0.0 | 0.0 | 0.0 |
Income (Loss) from Continuing Operations | (518.9) | (684.3) | (2,533.7) | (2,411.2) |
(Loss) income from discontinued operations, net of income taxes | 0.0 | 0.0 | 0.0 | 0.0 |
Net Income (Loss) | (518.9) | (684.3) | (2,533.7) | (2,411.2) |
Other Comprehensive Income (Loss), Net of Tax | 15.6 | 59.7 | (177.3) | 61.3 |
Comprehensive Income (Loss) | $ (503.3) | $ (624.6) | $ (2,711.0) | $ (2,349.9) |
Condensed Consolidating Financial Statements (Schedule of Condensed Consolidating Statements of Cash Flows) (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 29, 2017 |
Sep. 30, 2016 |
|
Condensed Consolidating Financial Statements | ||
Restricted Cash and Investments, Current | $ 0.0 | $ 0.1 |
Cash Flows From Operating Activities: | ||
Net cash from operating activities | 448.5 | 873.2 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (151.3) | (133.9) |
Acquisitions and intangibles, net of cash acquired | (35.9) | (245.4) |
Proceeds from divestitures, net of cash | 576.9 | 3.0 |
Intercompany loan investment, net | 0.0 | 0.0 |
Investment in subsidiary | 0.0 | 0.0 |
Proceeds from Divestiture of Subsidiary | 0.0 | |
Payments to Acquire Subsidiary | 0.0 | |
Other | 0.5 | 5.3 |
Net cash from investing activities | 390.2 | (371.0) |
Cash Flows From Financing Activities: | ||
Issuance of external debt | 540.0 | 36.3 |
Repayment of external debt and capital leases | (887.5) | (439.0) |
Debt financing costs | (12.7) | 0.0 |
Proceeds from exercise of share options | 4.0 | 10.4 |
Repurchase of shares | (437.7) | (377.5) |
Intercompany loan borrowings, net | 0.0 | 0.0 |
Payment of Subsidiary Dividend | 0.0 | |
Capital contribution | 0.0 | 0.0 |
Other | (18.6) | (23.0) |
Net cash from financing activities | (812.5) | (792.8) |
Effect of currency rate changes on cash | 2.7 | 1.8 |
Net change in cash, cash equivalents and restricted cash | 28.9 | (288.8) |
Cash and cash equivalents, end of period | 371.8 | 280.5 |
Restricted Cash and Investments, Noncurrent | 18.2 | 19.0 |
Cash and Cash Equivalents and Restricted Cash | 361.1 | 588.4 |
Cash and Cash Equivalents, Including Restricted Cash, Period End | 390.0 | 299.6 |
Mallinckrodt plc | ||
Condensed Consolidating Financial Statements | ||
Restricted Cash and Investments, Current | 0.0 | 0.0 |
Cash Flows From Operating Activities: | ||
Net cash from operating activities | 1,172.0 | (21.3) |
Cash Flows From Investing Activities: | ||
Capital expenditures | 0.0 | 0.0 |
Acquisitions and intangibles, net of cash acquired | 0.0 | 0.0 |
Proceeds from divestitures, net of cash | 0.0 | 0.0 |
Intercompany loan investment, net | (741.3) | 0.0 |
Investment in subsidiary | 0.0 | 0.0 |
Proceeds from Divestiture of Subsidiary | 3.4 | |
Payments to Acquire Subsidiary | 0.0 | |
Other | 0.0 | 0.0 |
Net cash from investing activities | (741.3) | 3.4 |
Cash Flows From Financing Activities: | ||
Issuance of external debt | 0.0 | 0.0 |
Repayment of external debt and capital leases | 0.0 | 0.0 |
Debt financing costs | 0.0 | 0.0 |
Proceeds from exercise of share options | 4.0 | 10.4 |
Repurchase of shares | (437.7) | (377.5) |
Intercompany loan borrowings, net | 0.0 | 385.0 |
Payment of Subsidiary Dividend | 0.0 | |
Capital contribution | 0.0 | 0.0 |
Other | 3.2 | 0.0 |
Net cash from financing activities | (430.5) | 17.9 |
Effect of currency rate changes on cash | 0.0 | 0.0 |
Net change in cash, cash equivalents and restricted cash | 0.2 | 0.0 |
Cash and cash equivalents, end of period | 0.7 | 0.3 |
Restricted Cash and Investments, Noncurrent | 0.0 | 0.0 |
Cash and Cash Equivalents and Restricted Cash | 0.5 | 0.3 |
Cash and Cash Equivalents, Including Restricted Cash, Period End | 0.7 | 0.3 |
Mallinckrodt International Finance S.A. | ||
Condensed Consolidating Financial Statements | ||
Restricted Cash and Investments, Current | 0.0 | 0.0 |
Cash Flows From Operating Activities: | ||
Net cash from operating activities | 1,233.7 | (99.3) |
Cash Flows From Investing Activities: | ||
Capital expenditures | 0.0 | 0.0 |
Acquisitions and intangibles, net of cash acquired | 0.0 | 0.0 |
Proceeds from divestitures, net of cash | 0.0 | (1.4) |
Intercompany loan investment, net | 0.0 | (69.4) |
Investment in subsidiary | (1,412.5) | (815.0) |
Proceeds from Divestiture of Subsidiary | 0.0 | |
Payments to Acquire Subsidiary | 0.0 | |
Other | 0.0 | 0.0 |
Net cash from investing activities | (1,412.5) | (885.8) |
Cash Flows From Financing Activities: | ||
Issuance of external debt | 500.0 | 0.0 |
Repayment of external debt and capital leases | (759.9) | (420.3) |
Debt financing costs | (12.7) | 0.0 |
Proceeds from exercise of share options | 0.0 | 0.0 |
Repurchase of shares | 0.0 | 0.0 |
Intercompany loan borrowings, net | 1,614.5 | 1,271.9 |
Payment of Subsidiary Dividend | (1,170.0) | |
Capital contribution | 0.0 | 0.0 |
Other | 0.0 | 0.0 |
Net cash from financing activities | 171.9 | 851.6 |
Effect of currency rate changes on cash | 0.0 | 0.0 |
Net change in cash, cash equivalents and restricted cash | (6.9) | (133.5) |
Cash and cash equivalents, end of period | 37.6 | 25.0 |
Restricted Cash and Investments, Noncurrent | 0.0 | 0.0 |
Cash and Cash Equivalents and Restricted Cash | 44.5 | 158.5 |
Cash and Cash Equivalents, Including Restricted Cash, Period End | 37.6 | 25.0 |
Other Subsidiaries | ||
Condensed Consolidating Financial Statements | ||
Restricted Cash and Investments, Current | 0.0 | 0.1 |
Cash Flows From Operating Activities: | ||
Net cash from operating activities | 1,963.0 | 993.8 |
Cash Flows From Investing Activities: | ||
Capital expenditures | (151.3) | (133.9) |
Acquisitions and intangibles, net of cash acquired | (35.9) | (245.4) |
Proceeds from divestitures, net of cash | 576.9 | 4.4 |
Intercompany loan investment, net | (920.8) | (1,587.5) |
Investment in subsidiary | 0.0 | 0.0 |
Proceeds from Divestiture of Subsidiary | 0.0 | |
Payments to Acquire Subsidiary | (3.4) | |
Other | 0.5 | 5.3 |
Net cash from investing activities | (530.6) | (1,960.5) |
Cash Flows From Financing Activities: | ||
Issuance of external debt | 40.0 | 36.3 |
Repayment of external debt and capital leases | (127.6) | (18.7) |
Debt financing costs | 0.0 | 0.0 |
Proceeds from exercise of share options | 0.0 | 0.0 |
Repurchase of shares | 0.0 | 0.0 |
Intercompany loan borrowings, net | 47.6 | 0.0 |
Payment of Subsidiary Dividend | (2,750.2) | |
Capital contribution | 1,412.5 | 815.0 |
Other | (21.8) | (23.0) |
Net cash from financing activities | (1,399.5) | 809.6 |
Effect of currency rate changes on cash | 2.7 | 1.8 |
Net change in cash, cash equivalents and restricted cash | 35.6 | (155.3) |
Cash and cash equivalents, end of period | 333.5 | 255.2 |
Restricted Cash and Investments, Noncurrent | 18.2 | 19.0 |
Cash and Cash Equivalents and Restricted Cash | 316.1 | 429.6 |
Cash and Cash Equivalents, Including Restricted Cash, Period End | 351.7 | 274.3 |
Eliminations | ||
Condensed Consolidating Financial Statements | ||
Restricted Cash and Investments, Current | 0.0 | 0.0 |
Cash Flows From Operating Activities: | ||
Net cash from operating activities | (3,920.2) | 0.0 |
Cash Flows From Investing Activities: | ||
Capital expenditures | 0.0 | 0.0 |
Acquisitions and intangibles, net of cash acquired | 0.0 | 0.0 |
Proceeds from divestitures, net of cash | 0.0 | 0.0 |
Intercompany loan investment, net | 1,662.1 | 1,656.9 |
Investment in subsidiary | 1,412.5 | 815.0 |
Proceeds from Divestiture of Subsidiary | (3.4) | |
Payments to Acquire Subsidiary | 3.4 | |
Other | 0.0 | 0.0 |
Net cash from investing activities | 3,074.6 | 2,471.9 |
Cash Flows From Financing Activities: | ||
Issuance of external debt | 0.0 | 0.0 |
Repayment of external debt and capital leases | 0.0 | 0.0 |
Debt financing costs | 0.0 | 0.0 |
Proceeds from exercise of share options | 0.0 | 0.0 |
Repurchase of shares | 0.0 | 0.0 |
Intercompany loan borrowings, net | (1,662.1) | (1,656.9) |
Payment of Subsidiary Dividend | 3,920.2 | |
Capital contribution | (1,412.5) | (815.0) |
Other | 0.0 | 0.0 |
Net cash from financing activities | 845.6 | (2,471.9) |
Effect of currency rate changes on cash | 0.0 | 0.0 |
Net change in cash, cash equivalents and restricted cash | 0.0 | 0.0 |
Cash and cash equivalents, end of period | 0.0 | 0.0 |
Restricted Cash and Investments, Noncurrent | 0.0 | 0.0 |
Cash and Cash Equivalents and Restricted Cash | 0.0 | 0.0 |
Cash and Cash Equivalents, Including Restricted Cash, Period End | $ 0.0 | $ 0.0 |
Subsequent Events Subsequent Events (Details) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Nov. 02, 2017 |
Oct. 02, 2017 |
Dec. 29, 2017 |
Sep. 29, 2017 |
|
Subsequent Event [Line Items] | ||||
Income Tax Expense (Benefit), Legal Reorganization | $ 36.1 | |||
NeuroproteXeon | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Business Combination, Consideration Transferred, Other | $ 10.0 | |||
Business Combination, Contingent Consideration Arrangements, Potential Payment | $ 25.0 | |||
Ocera Acquisition [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Business Combination, Consideration Transferred, Other | $ 42.0 | |||
Business Combination, Contingent Consideration Arrangements, Potential Payment | $ 75.0 | |||
Minimum | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Increase (Decrease), Deferred Tax Liability, Net, Noncurrent | $ (800.0) | |||
Increase (Decrease) in Deferred Tax Liability, Installment Sales | (650.0) | |||
Increase (Decrease), Deferred Tax Liability, Net | (150.0) | |||
Maximum | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Increase (Decrease), Deferred Tax Liability, Net, Noncurrent | (950.0) | |||
Increase (Decrease) in Deferred Tax Liability, Installment Sales | (775.0) | |||
Increase (Decrease), Deferred Tax Liability, Net | $ (175.0) |
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