

19.	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 six months ended June 30, 2017 and June 24, 2016, and as of June 30, 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 June 30, 2017

(unaudited, in millions)



	Mallinckrodt plc		Mallinckrodt International Finance S.A.		Other Subsidiaries		Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	0.9	$	149.9	$	179.4	$	—		$	330.2
Accounts receivable, net	—		—		482.1		—			482.1
Inventories	—		—		339.4		—			339.4
Prepaid expenses and other current assets	0.4		0.4		133.2		—			134.0
Notes receivable	—		—		154.0		—			154.0
Current assets held for sale	—		—		—		—			—
Intercompany receivables	95.7		19.7		1,135.7		(1,251.1		)	—
Total current assets	97.0		170.0		2,423.8		(1,251.1		)	1,439.7
Property, plant and equipment, net	—		—		940.7		—			940.7
Goodwill	—		—		3,446.2		—			3,446.2
Intangible assets, net	—		—		8,604.7		—			8,604.7
Investment in subsidiaries	4,846.2		21,498.0		10,484.6		(36,828.8		)	—
Intercompany loans receivable	805.2		—		4,203.7		(5,008.9		)	—
Other assets	—		—		189.9		—			189.9
Total Assets	$	5,748.4	$	21,668.0	$	30,293.6	$	(43,088.8	)	$	14,621.2

Liabilities and Shareholders' Equity
Current Liabilities:
Current maturities of long-term debt	$	—	$	317.8	$	201.6	$	—		$	519.4
Accounts payable	0.1		0.9		112.9		—			113.9
Accrued payroll and payroll-related costs	—		—		92.8		—			92.8
Accrued interest	—		53.0		1.1		—			54.1
Income taxes payable	—		—		122.0		—			122.0
Accrued and other current liabilities	0.5		0.4		459.3		—			460.2
Current liabilities held for sale	—		—		—		—			—
Intercompany payables	651.8		476.3		123.0		(1,251.1		)	—
Total current liabilities	652.4		848.4		1,112.7		(1,251.1		)	1,362.4
Long-term debt	—		5,318.6		19.9		—			5,338.5
Pension and postretirement benefits	—		—		67.7		—			67.7
Environmental liabilities	—		—		73.6		—			73.6
Deferred income taxes	—		—		2,254.4		—			2,254.4
Other income tax liabilities	—		—		67.5		—			67.5
Intercompany loans payable	—		5,008.9		—		(5,008.9		)	—
Other liabilities	—		7.5		353.6		—			361.1
Total Liabilities	652.4		11,183.4		3,949.4		(6,260.0		)	9,525.2
Shareholders' Equity	5,096.0		10,484.6		26,344.2		(36,828.8		)	5,096.0
Total Liabilities and Shareholders' Equity	$	5,748.4	$	21,668.0	$	30,293.6	$	(43,088.8	)	$	14,621.2

MALLINCKRODT PLC

CONDENSED CONSOLIDATING BALANCE SHEET

As of December 30, 2016

(unaudited, in millions)



	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

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the three months ended June 30, 2017

(unaudited, in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—		$	824.5		$	—		$	824.5
Cost of sales	0.9			—			407.5			—			408.4
Gross profit	(0.9		)	—			417.0			—			416.1
Selling, general and administrative expenses	15.1			0.2			216.8			—			232.1
Research and development expenses	1.8			—			67.4			—			69.2
Restructuring charges, net	—			—			0.6			—			0.6
Non-restructuring impairment charges	—			—			—			—			—
Losses on divestiture and license	—			—			2.1			—			2.1
Operating income	(17.8		)	(0.2		)	130.1			—			112.1

Interest expense	(3.4		)	(88.7		)	(18.7		)	18.6			(92.2		)
Interest income	2.0			0.3			16.9			(18.6		)	0.6
Other income, net	2.2			6.6			1.2			—			10.0
Intercompany fees	(3.5		)	—			3.5			—			—
Equity in net income of subsidiaries	81.0			254.7			172.9			(508.6		)	—
Income from continuing operations before income taxes	60.5			172.7			305.9			(508.6		)	30.5
Income tax benefit	(1.3		)	(0.2		)	(38.6		)	—			(40.1		)
Income from continuing operations	61.8			172.9			344.5			(508.6		)	70.6
Income (loss) from discontinued operations, net of income taxes	1.0			—			(8.8		)	—			(7.8		)
Net income	62.8			172.9			335.7			(508.6		)	62.8
Other comprehensive income, net of tax	1.9			1.9			3.4			(5.3		)	1.9
Comprehensive income	$	64.7		$	174.8		$	339.1		$	(513.9	)	$	64.7

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the three months ended June 24, 2016

(unaudited, in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—		$	866.6		$	—		$	866.6
Cost of sales	—			—			377.8			—			377.8
Gross profit	—			—			488.8			—			488.8
Selling, general and administrative expenses	12.3			0.2			212.4			—			224.9
Research and development expenses	—			—			74.8			—			74.8
Restructuring charges, net	—			—			14.0			—			14.0
Non-restructuring impairment charge	—			—			—			—			—
Losses on divestiture and license	—			—			—			—			—
Operating income	(12.3		)	(0.2		)	187.6			—			175.1

Interest expense	(56.3		)	(81.6		)	(20.3		)	62.6			(95.6		)
Interest income	—			0.1			62.9			(62.6		)	0.4
Other income (expense), net	2.6			0.1			(4.0		)	—			(1.3		)
Intercompany fees	(4.5		)	—			4.5			—			—
Equity in net income of subsidiaries	260.2			380.5			308.9			(949.6		)	—
Income from continuing operations before income taxes	189.7			298.9			539.6			(949.6		)	78.6
Income tax benefit	(9.6		)	(10.2		)	(78.3		)	—			(98.1		)
Income from continuing operations	199.3			309.1			617.9			(949.6		)	176.7
(Loss) income from discontinued operations, net of income taxes	—			(0.2		)	22.8			—			22.6
Net income	199.3			308.9			640.7			(949.6		)	199.3
Other comprehensive loss, net of tax	(0.6		)	(0.6		)	(1.4		)	2.0			(0.6		)
Comprehensive income	$	198.7		$	308.3		$	639.3		$	(947.6	)	$	198.7

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the six months ended June 30, 2017

(unaudited, in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—		$	1,635.4		$	—		$	1,635.4
Cost of sales	0.9			—			799.8			—			800.7
Gross profit	(0.9		)	—			835.6			—			834.7
Selling, general and administrative expenses	33.3			0.4			506.5			—			540.2
Research and development expenses	1.8			—			129.6			—			131.4
Restructuring charges, net	—			—			17.8			—			17.8
Non-restructuring impairment charge	—			—			—			—			—
Gains on divestiture and license	—			—			(57.0		)	—			(57.0		)
Operating income	(36.0		)	(0.4		)	238.7			—			202.3

Interest expense	(6.7		)	(174.0		)	(38.9		)	33.2			(186.4		)
Interest income	3.1			0.6			31.0			(33.2		)	1.5
Other income (expense), net	17.6			(3.3		)	(11.8		)	—			2.5
Intercompany fees	(9.0		)	—			9.0			—			—
Equity in net income of subsidiaries	489.7			851.7			673.4			(2,014.8		)	—
Income from continuing operations before income taxes	458.7			674.6			901.4			(2,014.8		)	19.9
Income tax benefit	(3.3		)	(0.5		)	(75.8		)	—			(79.6		)
Income from continuing operations	462.0			675.1			977.2			(2,014.8		)	99.5
(Loss) income from discontinued operations, net of income taxes	—			(1.7		)	364.2			—			362.5
Net income	462.0			673.4			1,341.4			(2,014.8		)	462.0
Other comprehensive income, net of tax	64.5			64.5			128.4			(192.9		)	64.5
Comprehensive income	$	526.5		$	737.9		$	1,469.8		$	(2,207.7	)	$	526.5

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME

For the six months ended June 24, 2016

(unaudited, in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	—		$	1,682.4		$	—		$	1,682.4
Cost of sales	—			—			768.5			—			768.5
Gross profit	—			—			913.9			—			913.9
Selling, general and administrative expenses	26.2			0.4			407.6			—			434.2
Research and development expenses	—			—			132.9			—			132.9
Restructuring charges, net	—			—			22.4			—			22.4
Non-restructuring impairment charge	—			—			16.9			—			16.9
Gains on divestiture and license	—			—			—			—			—
Operating income	(26.2		)	(0.4		)	334.1			—			307.5

Interest expense	(126.2		)	(163.1		)	(42.0		)	138.5			(192.8		)
Interest income	—			0.3			138.8			(138.5		)	0.6
Other income (expense), net	14.9			—			(16.9		)	—			(2.0		)
Intercompany fees	(7.3		)	0.1			7.2			—			—
Equity in net income of subsidiaries	452.7			712.5			561.7			(1,726.9		)	—
Income from continuing operations before income taxes	307.9			549.4			982.9			(1,726.9		)	113.3
Income tax benefit	(9.7		)	(14.0		)	(138.2		)	—			(161.9		)
Income from continuing operations	317.6			563.4			1,121.1			(1,726.9		)	275.2
(Loss) income from discontinued operations, net of income taxes	—			(1.7		)	44.1			—			42.4
Net income	317.6			561.7			1,165.2			(1,726.9		)	317.6
Other comprehensive loss, net of tax	(0.4		)	(0.4		)	(1.2		)	1.6			(0.4		)
Comprehensive income	$	317.2		$	561.3		$	1,164.0		$	(1,725.3	)	$	317.2

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 30, 2017

(unaudited, in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities:
Net cash from operating activities	$	1,177.0		$	175.8		$	1,487.0		$	(2,617.3	)	$	222.5
Cash Flows From Investing Activities:
Capital expenditures	—			—			(101.6		)	—			(101.6		)
Acquisitions and intangibles, net of cash acquired	—			—			—			—			—
Proceeds from divestiture of discontinued operations, net of cash	—			—			576.9			—			576.9
Intercompany loan investment, net	(801.7		)	—			(860.4		)	1,662.1			—
Investment in subsidiary	—			(307.9		)	—			307.9			—
Other	—			—			(9.9		)	—			(9.9		)
Net cash from investing activities	(801.7		)	(307.9		)	(395.0		)	1,970.0			465.4
Cash Flows From Financing Activities:
Issuance of external debt	—			—			40.0			—			40.0
Repayment of external debt and capital leases	—			(242.1		)	(90.7		)	—			(332.8		)
Debt financing costs	—			(12.5		)	(0.5		)	—			(13.0		)
Proceeds from exercise of share options	3.9			—			—			—			3.9
Repurchase of shares	(380.8		)	—			—			—			(380.8		)
Intercompany loan borrowings, net	—			1,662.1			—			(1,662.1		)	—
Intercompany dividends	—			(1,170.0		)	(1,447.3		)	2,617.3			—
Capital contribution	—			—			307.9			(307.9		)	—
Other	2.0			—			(21.5		)	—			(19.5		)
Net cash from financing activities	(374.9		)	237.5			(1,212.1		)	647.3			(702.2		)
Effect of currency rate changes on cash	—			—			1.6			—			1.6
Net change in cash, cash equivalents and restricted cash	0.4			105.4			(118.5		)	—			(12.7		)
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	$	0.9		$	149.9		$	197.6		$	—		$	348.4

Cash and cash equivalents at end of period	$	0.9		$	149.9		$	179.4		$	—		$	330.2
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	$	0.9		$	149.9		$	197.6		$	—		$	348.4

MALLINCKRODT PLC

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

For the six months ended June 24, 2016

(unaudited, in millions)



	Mallinckrodt plc			Mallinckrodt International Finance S.A.			Other Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities:
Net cash from operating activities	$	(4.3	)	$	(72.9	)	$	760.2		$	—		$	683.0
Cash Flows From Investing Activities:
Capital expenditures	—			—			(84.5		)	—			(84.5		)
Acquisitions and intangibles, net of cash acquired	—			—			(169.5		)	—			(169.5		)
Proceeds from divestiture of discontinued operations, net of cash	—			(1.4		)	4.4			—			3.0
Intercompany loan investment, net	—			105.8			(952.4		)	846.6			—
Investment in subsidiary	—			(461.7		)	—			461.7			—
Other	—			—			4.6			—			4.6
Net cash from investing activities	—			(357.3		)	(1,197.4		)	1,308.3			(246.4		)
Cash Flows From Financing Activities:
Issuance of external debt	—			—			36.3			—			36.3
Repayment of external debt and capital leases	—			(160.3		)	(17.2		)	—			(177.5		)
Debt financing costs	—			—			—			—			—
Proceeds from exercise of share options	4.9			—			—			—			4.9
Repurchase of shares	(326.6		)	—			—			—			(326.6		)
Intercompany loan borrowings, net	325.8			520.8			—			(846.6		)	—
Capital contribution	—			—			461.7			(461.7		)	—
Other	—			—			(23.0		)	—			(23.0		)
Net cash from financing activities	4.1			360.5			457.8			(1,308.3		)	(485.9		)
Effect of currency rate changes on cash	—			—			2.1			—			2.1
Net change in cash, cash equivalents and restricted cash	(0.2		)	(69.7		)	22.7			—			(47.2		)
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	$	0.1		$	88.8		$	452.3		$	—		$	541.2

Cash and cash equivalents at end of period	$	0.1		$	88.8		$	433.0		$	—		$	521.9
Restricted Cash, Current at end of period	—			—			0.3			—			0.3
Restricted Cash, Noncurrent at end of period	—			—			19.0			—			19.0
Cash, cash equivalents and restricted cash at end of period	$	0.1		$	88.8		$	452.3		$	—		$	541.2