XML 24 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Restructuring and Related Charges
 9 Months Ended
Sep. 28, 2018
Restructuring and Related Activities [Abstract]  
Restructuring and Related Charges
6.
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 segment and the Specialty Generics Disposal Group, as well as within corporate functions. The 2016 Mallinckrodt Program is substantially complete.
In February 2018, the Company's Board of Directors approved a $100.0 million to $125.0 million restructuring program ("the 2018 Mallinckrodt Program") that is of similar design as the 2016 Mallinckrodt Program. The utilization of the 2018 Mallinckrodt Program commenced upon substantial completion of the 2016 Mallinckrodt Program. There is no specified time period associated with the 2018 Mallinckrodt Program.
In addition to the 2016 and 2018 Mallinckrodt Programs, the Company takes certain restructuring actions to generate synergies from its acquisitions.
Net restructuring and related charges reflected in continuing operations by segment are as follows:
 
Three Months Ended
 
Nine Months Ended
 
September 28,
2018
 
September 29,
2017
 
September 28,
2018
 
September 29,
2017
Specialty Brands
$
3.2

 
$
14.6

 
$
73.7

 
$
24.1

Corporate
16.4

 
1.5

 
27.7

 
4.3

Restructuring and related charges, net
19.6

 
16.1

 
101.4

 
28.4

Less: accelerated depreciation
(4.9
)
 
(0.7
)
 
(4.9
)
 
(2.1
)
Restructuring charges, net
$
14.7

 
$
15.4

 
$
96.5

 
$
26.3



Net restructuring and related charges reflected in continuing operations by program are comprised of the following:
 
Three Months Ended
 
Nine Months Ended
 
September 28,
2018
 
September 29,
2017
 
September 28,
2018
 
September 29,
2017
2018 Mallinckrodt Program
$
5.2

 
$
—

 
$
5.2

 
$
—

2016 Mallinckrodt Program
9.7

 
16.1

 
65.1

 
28.4

Acquisition programs
4.7

 
—

 
31.1

 
—

Total
19.6

 
16.1

 
101.4

 
28.4

Less: non-cash charges, including accelerated depreciation and impairments
(4.9
)
 
(0.7
)
 
(4.9
)
 
(2.1
)
Total charges expected to be settled in cash
$
14.7

 
$
15.4

 
$
96.5

 
$
26.3




The following table summarizes cash activity for restructuring reserves reflected in continuing operations, substantially all of which are related to contract termination costs and employee severance and benefits:
 
2018 Mallinckrodt Program
 
2016 Mallinckrodt Program
 
Acquisition Programs
 
Total
Balance at December 29, 2017
$
—

 
$
14.1

 
$
0.8

 
$
14.9

Charges
2.2

 
68.4

 
29.9

 
100.5

Changes in estimate
—

 
(3.3
)
 
(0.7
)
 
(4.0
)
Cash payments
—

 
(11.5
)
 
(21.9
)
 
(33.4
)
Reclassifications
—

 
(1.0
)
 
—

 
(1.0
)
Currency translation
—

 
0.7

 
—

 
0.7

Balance at September 28, 2018
$
2.2

 
$
67.4

 
$
8.1

 
$
77.7



Total Company net restructuring and related charges, including associated asset impairments, incurred cumulative-to-date related to the 2018 and 2016 Mallinckrodt Programs were as follows:
 
2018 Mallinckrodt Program
 
2016 Mallinckrodt Program
Specialty Brands
$
3.0

 
$
80.0

Corporate
2.2

 
26.5

Specialty Generics Disposal Group
—

 
14.4

 
$
5.2

 
$
120.9


On January 8, 2018, the Company announced that it would discontinue marketing of Raplixa® after an evaluation of strategic options. During the nine months ended September 29, 2018, the Company incurred restructuring expenses of $48.8 million under the 2016 Mallinckrodt Program, consisting primarily of contract termination costs related to the production of Raplixa. Amounts paid in the future may differ from the amount currently recorded.
All of the restructuring reserves were included in accrued and other current liabilities on the Company's unaudited condensed consolidated balance sheets.