

22.	Condensed Consolidating Financial Statements

MIFSA is a holding company established to own, directly or indirectly, substantially all of the operating subsidiaries of the Company, to issue debt securities and to perform treasury operations.

MIFSA is the borrower under 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 operating companies that represent assets of MIFSA. There are no subsidiary guarantees related to the Notes.

Set forth below are the condensed consolidating balance sheets as of September 30, 2016 and September 25, 2015 and condensed consolidating statements of comprehensive income and cash flows for the three years ended September 30, 2016. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among Mallinckrodt plc, MIFSA and the other subsidiaries. Condensed consolidating and combining 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 30, 2016

(in millions)



	Mallinckrodt plc		Mallinckrodt International Finance S.A.		Other Subsidiaries		Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	0.3	$	25.0	$	255.2	$	—		$	280.5
Accounts receivable, net	—		—		465.8		—			465.8
Inventories	—		—		335.6		—			335.6
Deferred income taxes	—		—		—		—			—
Prepaid expenses and other current assets	1.4		0.1		114.4		—			115.9
Current assets held for sale	—		—		308.8		—			308.8
Intercompany receivable	88.9		473.8		1,081.4		(1,644.1		)	—
Total current assets	90.6		498.9		2,561.2		(1,644.1		)	1,506.6
Property, plant and equipment, net	—		—		844.0		—			844.0
Goodwill	—		—		3,705.3		—			3,705.3
Intangible assets, net	—		—		9,182.3		—			9,182.3
Long-term assets held for sale	—		—		—		—			—
Investment in subsidiaries	5,657.8		20,168.4		11,020.0		(36,846.2		)	—
Intercompany loan receivable	143.5		—		3,159.4		(3,302.9		)	—
Other assets	—		—		260.5		—			260.5
Total Assets	$	5,891.9	$	20,667.3	$	30,732.7	$	(41,793.2	)	$	15,498.7
										—
Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-term debt	$	—	$	19.8	$	236.5	$	—		$	256.3
Accounts payable	0.2		—		109.9		—			110.1
Accrued payroll and payroll-related costs	—		—		116.0		—			116.0
Accrued interest	—		79.3		1.3		—			80.6
Accrued and other current liabilities	2.2		7.5		541.2		—			550.9
Current liabilities held for sale	—		—		120.8		—			120.8
Intercompany payable	618.8		462.6		562.7		(1,644.1		)	—
Total current liabilities	621.2		569.2		1,688.4		(1,644.1		)	1,234.7
Long-term debt	—		5,767.8		20.9		—			5,788.7
Pension and postretirement benefits	—		—		144.9		—			144.9
Environmental liabilities	—		—		73.4		—			73.4
Deferred income taxes	—		—		2,581.4		—			2,581.4
Other income tax liabilities	—		—		67.7		—			67.7
Long-term liabilities held for sale	—		—		—		—			—
Intercompany loans payable	—		3,302.9		—		(3,302.9		)	—
Other liabilities	—		7.4		329.8		—			337.2
Total liabilities	621.2		9,647.3		4,906.5		(4,947.0		)	10,228.0
Shareholders' equity	5,270.7		11,020.0		25,826.2		(36,846.2		)	5,270.7
Total Liabilities and Shareholders' Equity	$	5,891.9	$	20,667.3	$	30,732.7	$	(41,793.2	)	$	15,498.7

MALLINCKRODT PLC

CONDENSED CONSOLIDATING BALANCE SHEET

As of September 25, 2015

(in millions)



	Mallinckrodt plc		Mallinckrodt International Finance S.A.		Other Subsidiaries		Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	0.1	$	152.1	$	213.7	$	—		$	365.9
Accounts receivable, net	—		—		489.6		—			489.6
Inventories	—		—		262.1		—			262.1
Deferred income taxes	—		—		139.2		—			139.2
Prepaid expenses and other current assets	1.3		0.2		192.9		—			194.4
Current assets held for sale	—		—		394.9		—			394.9
Intercompany receivable	39.1		128.6		9,699.5		(9,867.2		)	—
Total current assets	40.5		280.9		11,391.9		(9,867.2		)	1,846.1
Property, plant and equipment, net	—		—		793.0		—			793.0
Goodwill	—		—		3,649.4		—			3,649.4
Intangible assets, net	—		—		9,666.3		—			9,666.3
Long-term assets held for sale	—		—		223.6		—			223.6
Investment in subsidiaries	14,797.7		18,838.6		10,050.0		(43,686.3		)	—
Intercompany loan receivable	174.4		—		2,498.2		(2,672.6		)	—
Other assets	—		0.1		225.6		—			225.7
Total Assets	$	15,012.6	$	19,119.6	$	38,498.0	$	(56,226.1	)	$	16,404.1

Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-term debt	$	—	$	20.0	$	2.0	$	—		$	22.0
Accounts payable	—		0.2		116.6		—			116.8
Accrued payroll and payroll-related costs	0.1		—		94.9		—			95.0
Accrued interest	—		77.1		3.1		—			80.2
Accrued and other current liabilities	1.8		0.3		484.0		—			486.1
Current liabilities held for sale	—		—		129.3		—			129.3
Intercompany payable	9,699.5		—		167.7		(9,867.2		)	—
Total current liabilities	9,701.4		97.6		997.6		(9,867.2		)	929.4
Long-term debt	—		6,299.4		174.9		—			6,474.3
Pension and postretirement benefits	—		—		114.2		—			114.2
Environmental liabilities	—		—		73.3		—			73.3
Deferred income taxes	—		—		3,117.5		—			3,117.5
Other income tax liabilities	—		—		121.3		—			121.3
Long-term liabilities held for sale	—		—		53.9		—			53.9
Intercompany loans payable	—		2,672.6		—		(2,672.6		)	—
Other liabilities	—		—		209.0		—			209.0
Total liabilities	9,701.4		9,069.6		4,861.7		(12,539.8		)	11,092.9
Shareholders' equity	5,311.2		10,050.0		33,636.3		(43,686.3		)	5,311.2
Total Liabilities and Shareholders' Equity	$	15,012.6	$	19,119.6	$	38,498.0	$	(56,226.1	)	$	16,404.1

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Fiscal year ended September 30, 2016

(in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—		$	3,380.8		$	—		$	3,380.8
Cost of sales	—			—			1,525.8			—			1,525.8
Gross profit	—			—			1,855.0			—			1,855.0
Selling, general and administrative expenses	51.3			0.8			873.2			—			925.3
Research and development expenses	—			—			262.2			—			262.2
Restructuring charges, net	—			—			33.3			—			33.3
Non-restructuring impairment charges	—			—			16.9			—			16.9
Separation costs	—			—			—			—			—
Gains on divestiture and license	—			—			—			—			—
Operating income (loss)	(51.3		)	(0.8		)	669.4			—			617.3
													—
Interest expense	(230.3		)	(327.0		)	(82.4		)	255.1			(384.6		)
Interest income	—			0.5			255.9			(255.1		)	1.3
Other income (expense), net	90.0			1.7			(92.3		)	—			(0.6		)
Intercompany interest and fees	(16.1		)	—			16.1			—			—
Equity in net income of subsidiaries	820.8			1,327.2			1,057.9			(3,205.9		)	—
Income from continuing operations before income taxes	613.1			1,001.6			1,824.6			(3,205.9		)	233.4
Benefit from income taxes	(30.6		)	(18.1		)	(206.9		)	—			(255.6		)
Income from continuing operations	643.7			1,019.7			2,031.5			(3,205.9		)	489.0
Income from discontinued operations, net of income taxes	—			38.2			116.5			—			154.7
Net income	643.7			1,057.9			2,148.0			(3,205.9		)	643.7
Other comprehensive loss, net of tax	(86.5		)	(86.5		)	(173.5		)	260.0			(86.5		)
Comprehensive income	$	557.2		$	971.4		$	1,974.5		$	(2,945.9	)	$	557.2

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Fiscal year ended September 25, 2015

(in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—		$	2,923.1		$	—		$	2,923.1
Cost of sales	—			—			1,300.2			—			1,300.2
Gross profit	—			—			1,622.9			—			1,622.9
Selling, general and administrative expenses	116.3			15.7			891.8			—			1,023.8
Research and development expenses	—			—			203.3			—			203.3
Restructuring charges, net	9.8			—			35.2			—			45.0
Non-restructuring impairments	—			—			—			—			—
Separation costs	—			—			—			—			—
Gains on divestiture and license	—			—			(3.0		)	—			(3.0		)
Operating income (loss)	(126.1		)	(15.7		)	495.6			—			353.8

Interest expense	(96.4		)	(230.2		)	(25.2		)	96.2			(255.6		)
Interest income	—			0.1			97.1			(96.2		)	1.0
Other income (expense), net	216.3			—			(208.2		)	—			8.1
Intercompany interest and fees	(14.7		)	—			14.7			—			—
Equity in net income of subsidiaries	330.6			496.3			250.5			(1,077.4		)	—
Income from continuing operations before income taxes	309.7			250.5			624.5			(1,077.4		)	107.3
Benefit from income taxes	(15.9		)	—			(113.4		)	—			(129.3		)
Income from continuing operations	325.6			250.5			737.9			(1,077.4		)	236.6
Income (loss) from discontinued operations, net of income taxes	(0.9		)	—			89.0			—			88.1
Net income	324.7			250.5			826.9			(1,077.4		)	324.7
Other comprehensive loss, net of tax	(64.8		)	(64.8		)	(69.9		)	134.7			(64.8		)
Comprehensive income	$	259.9		$	185.7		$	757.0		$	(942.7	)	$	259.9

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

Fiscal year ended September 26, 2014

(in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—		$	1,650.3		$	—		$	1,650.3
Cost of sales	—			—			765.7			—			765.7
Gross profit	—			—			884.6			—			884.6
Selling, general and administrative expenses	37.7			7.3			566.0			—			611.0
Research and development expenses	—			—			140.5			—			140.5
Restructuring charges, net	35.3			—			32.7			—			68.0
Non-restructuring impairments	—			—			27.1			—			27.1
Separation costs	2.5			—			7.1			—			9.6
Gains on divestiture and license	—			—			(15.0		)	—			(15.0		)
Operating income (loss)	(75.5		)	(7.3		)	126.2			—			43.4

Interest expense	—			(86.3		)	—			3.7			(82.6		)
Interest income	—			—			5.2			(3.7		)	1.5
Other income (expense), net	30.9			—			(27.8		)	—			3.1
Intercompany interest and fees	(9.0		)	—			9.0			—			—
Equity in net income of subsidiaries	(264.8		)	(171.2		)	(300.2		)	736.2			—
Loss from continuing operations before income taxes	(318.4		)	(264.8		)	(187.6		)	736.2			(34.6		)
benefit from income taxes	—			—			(12.6		)	—			(12.6		)
Loss from continuing operations	(318.4		)	(264.8		)	(175.0		)	736.2			(22.0		)
Loss from discontinued operations, net of income taxes	(0.9		)	—			(296.4		)	—			(297.3		)
Net loss	(319.3		)	(264.8		)	(471.4		)	736.2			(319.3		)
Other comprehensive loss, net of tax	(42.8		)	(42.8		)	(84.1		)	126.9			(42.8		)
Comprehensive loss	$	(362.1	)	$	(307.6	)	$	(555.5	)	$	863.1		$	(362.1	)

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Fiscal year ended September 30, 2016

(in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities:
Net cash provided by (used in) operating activities	$	17.9		$	(47.4	)	$	1,214.1		$	—		$	1,184.6
Cash Flows From Investing Activities:
Capital expenditures	—			—			(182.9		)	—			(182.9		)
Acquisitions and intangibles, net of cash acquired	—			—			(245.4		)	—			(245.4		)
Proceeds from disposal of discontinued operations, net of cash	—			234.0			33.0			—			267.0
Intercompany loan investment	—			(175.2		)	(1,714.5		)	1,889.7			—
Investment in subsidiary	—			(861.2		)	—			861.2			—
Proceeds from sale of subsidiary	3.4			—			—			(3.4		)	—
Acquisition of subsidiary	—			—			(3.4		)	3.4			—
Restricted cash	—			—			47.3			—			47.3
Other	—			—			6.0			—			6.0
Net cash used in investing activities	3.4			(802.4		)	(2,059.9		)	2,750.9			(108.0		)
Cash Flows From Financing Activities:
Issuance of external debt	—			—			98.3			—			98.3
Repayment of external debt and capital leases	—			(549.2		)	(19.4		)	—			(568.6		)
Excess tax benefit from share-based compensation	—			—			—			—			—
Debt financing costs	—			—			(0.1		)	—			(0.1		)
Proceeds from exercise of share options	14.0			—			—			—			14.0
Intercompany loan borrowings	617.8			1,271.9			—			(1,889.7		)	—
Capital contribution	—			—			861.2			(861.2		)	—
Repurchase of shares	(652.9		)	—			—			—			(652.9		)
Other	—			—			(53.0		)	—			(53.0		)
Net cash provided by financing activities	(21.1		)	722.7			887.0			(2,750.9		)	(1,162.3		)
Effect of currency rate changes on cash	—			—			0.3			—			0.3
Net (decrease) increase in cash and cash equivalents	0.2			(127.1		)	41.5			—			(85.4		)
Cash and cash equivalents at beginning of period	0.1			152.1			213.7			—			365.9
Cash and cash equivalents at end of period	0.3			25.0			255.2			—			280.5

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Fiscal year ended September 25, 2015

(in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.				Other Subsidiaries				Eliminations			Consolidated
Cash Flows From Operating Activities:
Net cash provided by (used in) operating activities	$	207.0		$	(148.2	)		$	837.6			$	—		$	896.4
Cash Flows From Investing Activities:
Capital expenditures	—			—				(148.0		)		—			(148.0		)
Acquisitions and intangibles, net of cash acquired	—			—				(2,154.7		)		—			(2,154.7		)
Intercompany loan investment	(149.4		)	—				(554.2		)		703.6			—
Investment in subsidiary	—			(3,014.4		)		—				3,014.4			—
Restricted Cash	—			—				3.1				—			3.1
Other	—			—				3.0				—			3.0
Net cash used in investing activities	(149.4		)	(3,014.4		)		(2,850.8		)	—	3,718.0			(2,296.6		)
Cash Flows From Financing Activities:
Issuance of external debt	—			2,890.0				120.0				—			3,010.0
Repayment of external debt and capital leases	—			(258.3		)		(1,590.1		)		—			(1,848.4		)
Excess tax benefit from share-based compensation	—			—				34.1				—			34.1
Debt financing costs	—			(39.1		)		(0.8		)		—			(39.9		)
Proceeds from exercise of share options	34.4			—				—				—			34.4
Intercompany loan borrowings	—			703.6				—				(703.6		)	—
Capital contribution	—			—				3,014.4				(3,014.4		)	—
Repurchase of shares	(92.2		)	—				—				—			(92.2		)
Other	—			—				(28.1		)		—			(28.1		)
Net cash provided by financing activities	(57.8		)	3,296.2			—	1,549.5				(3,718.0		)	1,069.9
Effect of currency rate changes on cash	—			—				(11.6		)		—			(11.6		)
Net increase (decrease) in cash and cash equivalents	(0.2		)	133.6				(475.3		)		—			(341.9		)
Cash and cash equivalents at beginning of period	0.3			18.5				689.0				—			707.8
Cash and cash equivalents at end of period	$	0.1		$	152.1			$	213.7			$	—		$	365.9

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

Fiscal year ended September 26, 2014

(in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.				Other Subsidiaries				Eliminations			Consolidated
Cash Flows From Operating Activities:
Net cash provided by (used in) operating activities	$	18.2		$	(65.0	)		$	420.2			$	—		$	373.4
Cash Flows From Investing Activities:
Capital expenditures	—			—				(127.8		)		—			(127.8		)
Acquisitions and intangibles, net of cash acquired	—			—				(2,793.8		)		—			(2,793.8		)
Intercompany loan investment	(25.0		)	(298.1		)		(915.8		)		1,238.9			—
Subsidiary dividend proceeds	—			300.5				—				(300.5		)	—
Investment in subsidiary	—			(3,735.5		)		—				3,735.5			—
Restricted cash	—			—				4.1				—			4.1
Other	—			—				26.7				—			26.7
Net cash used in investing activities	(25.0		)	(3,733.1		)		(3,806.6		)	—	4,673.9			(2,890.8		)
Cash Flows From Financing Activities:
Issuance of external debt	—			2,893.3				149.9				—			3,043.2
Repayment of external debt and capital leases	—			(3.3		)		(31.5		)		—			(34.8		)
Excess tax benefit from share-based compensation	—			—				8.9				—			8.9
Debt financing costs	—			(70.7		)		(1.0		)		—			(71.7		)
Proceeds from exercise of share options	25.8			—				—				—			25.8
Subsidiary dividend payment	—			—				(300.5		)		300.5			—
Intercompany loan borrowings	(2.4		)	940.8				300.5				(1,238.9		)	—
Capital contribution	—			—				3,735.5				(3,735.5		)	—
Repurchase of shares	(17.5		)	—				—				—			(17.5		)
Other	—			—				—				—			—
Net cash provided by financing activities	5.9			3,760.1			—	3,861.8				(4,673.9		)	2,953.9
Effect of currency rate changes on cash	—			—				(4.2		)		—			(4.2		)
Net increase in cash and cash equivalents	(0.9		)	(38.0		)		471.2				—			432.3
Cash and cash equivalents at beginning of period	1.2			56.5				217.8				—			275.5
Cash and cash equivalents at end of period	$	0.3		$	18.5			$	689.0			$	—		$	707.8