-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WW7K98Fkb0iAAjVQT0HDQLzSrFGOabNkoGrvuqSv/2CNUzMgUCLgd0MHKTH+nfnn zCWxuS6L+NC46NTw5fBSHQ== 0000950131-98-006556.txt : 19981221 0000950131-98-006556.hdr.sgml : 19981221 ACCESSION NUMBER: 0000950131-98-006556 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19981218 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MALLINCKRODT INC /MO CENTRAL INDEX KEY: 0000051396 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 361263901 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-00483 FILM NUMBER: 98771828 BUSINESS ADDRESS: STREET 1: 675 MCDONNELL BLVD STREET 2: PO BOX 5840 CITY: ST LOUIS STATE: MO ZIP: 63134 BUSINESS PHONE: 3146542000 MAIL ADDRESS: STREET 1: 7733 FORSYTH BLVD CITY: ST LOUIS STATE: MO ZIP: 63105-1820 FORMER COMPANY: FORMER CONFORMED NAME: MALLINCKRODT INC /MO DATE OF NAME CHANGE: 19970625 FORMER COMPANY: FORMER CONFORMED NAME: MALLINCKRODT GROUP INC DATE OF NAME CHANGE: 19940322 FORMER COMPANY: FORMER CONFORMED NAME: IMCERA GROUP INC DATE OF NAME CHANGE: 19920703 11-K 1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the Year Ended June 30, 1998 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission File Number 1-483 Title of the Plan -- INVESTMENT PLAN FOR EMPLOYEES OF MALLINCKRODT INC. Name and Address of the Issuer of the Securities Held Pursuant to the Plan -- Mallinckrodt Inc. 675 McDonnell Boulevard St. Louis, Missouri 63134 Signature The Plan--Pursuant to the requirements of the Securities Exchange Act of 1934, the undersigned, the persons who administer the Employee Benefit Plan and who are duly authorized, have caused this annual report to be signed. Investment Plan for Employees of Mallinckrodt Inc. Employee Benefits Committee
Signature Title Date - ----------------------------------------------------------------------------------------- BRUCE K. CROCKETT - ------------------------------- Bruce K. Crockett Vice President, Human Resources December 15, 1998 ROGER A. KELLER - ------------------------------- Roger A. Keller Vice President, Secretary and December 15, 1998 General Counsel DAVID R. KUPFERER - ------------------------------- David R. Kupferer Vice President, Human Resources, December 15, 1998 Pharmaceutical Group JUDITH C. REBHOLZ - ------------------------------- Judith C. Rebholz Director, International Treasury December 15, 1998 and Corporate Finance JOHN J. RIORDAN - ------------------------------- John J. Riordan Vice President, Pension and December 15, 1998 Profit Sharing Plans NANCY J. STEMME - ------------------------------- Nancy J. Stemme Director of Compensation and December 15, 1998 Welfare Benefits WILLIAM B. STONE - ------------------------------- William B. Stone Vice President, Information December 15, 1998 Technology (Chairman of the Committee) FRANK A. VOLTOLINA - ------------------------------- Frank A. Voltolina Vice President and Treasurer December 15, 1998
Investment Plan for Employees of Mallinckrodt Inc. Financial Statements and Supplemental Schedules Years ended June 30, 1998 and 1997 with Independent Auditors' Reports Investment Plan for Employees of Mallinckrodt Inc. Financial Statements and Supplemental Schedules Years ended June 30, 1998 and 1997 Contents
Independent Auditors' Reports..................................................... 1-2 Financial Statements Statements of Net Assets Available for Benefits with Fund Information............. 3-6 Statements of Changes in Net Assets Available for Benefits with Fund Information.. 7-10 Notes to Financial Statements..................................................... 11-16 Supplemental Schedules Line 27(a)--Schedule of Assets Held for Investment................................ 18 Line 27(d)--Schedule of Reportable Transactions................................... 19-20
Independent Auditors' Report Plan Administrator Investment Plan for Employees of Mallinckrodt Inc. We have audited the accompanying statement of net assets available for benefits of the Investment Plan for Employees of Mallinckrodt Inc. as of June 30, 1998 and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at June 30, 1998, and the changes in net assets available for benefits for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment as of June 30, 1998 and reportable transactions for the year then ended are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 and are not a required part of the basic financial statements. The fund information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, are fairly stated in all material respects to the financial statements taken as a whole. /s/ Stone Carlie & Company, L.L.C. St. Louis, Missouri November 24, 1998 Report of Independent Auditors Plan Administrator Investment Plan for Employees of Mallinckrodt Inc. We have audited the accompanying statement of net assets available for benefits of the Investment Plan for Employees of Mallinckrodt Inc. as of June 30, 1997 and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at June 30, 1997, and the changes in net assets available for benefits for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The fund information in the statement of net assets available for benefits and the statement of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The fund information has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects to the financial statements taken as a whole. /s/ Ernst & Young LLP St. Louis, Missouri October 29, 1997 Investment Plan for Employees of Mallinckrodt Inc. Statement of Net Assets Available for Benefits with Fund Information June 30, 1998
State Street AMEX Trust AMEX Trust PBHG Fidelity Low- Mallinckrodt International Equity Index State Street Money Market Growth Price Stock Total Stock Fund Index Fund Fund II Bond Fund Fund II Fund Fund ------------------------------------------------------------------------------------------------------ Investments: State Street International Index Fund (shares- 274,039; cost-$3,121,578) $3,307,374 - $3,307,374 - - - - - American Express Trust Equity Index Fund II (shares-2,879,777; cost- $68,276,633) 87,556,750 - - $87,556,750 - - - - State Street Bond Fund (shares-276,054; cost- $3,111,129) 3,245,846 - - - $3,245,846 - - - American Express Trust Money Market Fund II (shares- 2,765,731; cost-$2,765,731) 2,765,731 - - - - $2,765,731 - - PBHG Growth Fund (shares- 293,130; cost-$7,588,843) 7,964,331 - - - - - $7,964,331 - Fidelity Low-Price Stock Fund (shares-364,705; cost-$9,190,201) 9,890,810 - - - - - - $9,890,810 IDS New Dimensions Fund (Y) (shares-351,191; cost-$8,730,608) 9,784,526 - - - - - - - Dodge & Cox Stock Fund (shares-120,574; cost-$11,727,268) 12,104,456 - - - - - - - Investments in collective funds, at fair value (Mallinckrodt Stock Fund- units 4,062,070, cost- $30,831,111; AMEX Aggressive Fund- units 816,992, cost- $9,166,650; AMEX Moderate Fund-units 369,247, cost- $4,072,794; AMEX Conservative Fund-units 123,787, cost- $1,395,079; Stable Value Fund-units 7,052,049, cost-$75,775,139) 120,187,471 $27,528,650 - - - - - - Loans to participants 9,498,150 - - - - - - - ---------------------------------------------------------------------------------------------------- Total investments 266,305,445 27,528,650 3,307,374 87,556,750 3,245,846 2,765,731 7,964,331 9,890,810 Receivables: Employer contributions 6,031,681 5,965,285 2,314 9,525 1,971 1,293 7,687 6,392 Participant contributions 589,735 51,010 19,207 80,846 15,192 9,460 64,311 55,043 ---------------------------------------------------------------------------------------------------- Total receivables 6,621,416 6,016,295 21,521 90,371 17,163 10,753 71,998 61,435 ---------------------------------------------------------------------------------------------------- Net assets available for benefits $272,926,861 $33,544,945 $3,328,895 $87,647,121 $3,263,009 $2,776,484 $8,036,329 $9,952,245 ====================================================================================================
See notes to financial statements. Page 3 Investment Plan for Employees of Mallinckrodt Inc. Statement of Net Assets Available for Benefits with Fund Information (continued) June 30, 1998
IDS New AMEX AMEX AMEX Dimensions Dodge & Cox Aggressive Moderate Conservative Stable Value Loan Fund Fund Fund Fund Fund Fund Account ----------------------------------------------------------------------------------------- Investments: State Street International Index Fund (shares-274,039; cost-$3,121,578) - - - - - - - American Express Trust Equity Index Fund II (shares-2,879,777; cost-$68,276,633) - - - - - - - State Street Bond Fund (shares- 276,054; cost-$3,111,129) - - - - - - - American Express Trust Money Market Fund II (shares-2,765,731; cost-$2,765,731) - - - - - - - PBHG Growth Fund (shares-293,130; cost-$7,588,843) - - - - - - - Fidelity Low-Price Stock Fund (shares-364,705; cost-$9,190,201) - - - - - - - IDS New Dimensions Fund (Y) (shares- 351,191; cost-$8,730,608) $9,784,526 - - - - - - Dodge & Cox Fund (shares-120,574; cost-$11,727,268) - $12,104,456 - - - - - Investments in collective funds, at fair value (Mallinckrodt Stock Fund-units 4,062,070, cost- $30,831,111; AMEX Aggressive Fund- units 816,992, cost-$9,166,650; AMEX Moderate Fund-units 369,247, cost-$4,072,794; AMEX Conservative Fund-units 123,787, cost-$1,395,079; Stable Value Fund-units 7,052,049, cost-$75,775,139) - - $10,372,529 $4,498,910 $1,498,321 $76,289,061 - Loans to participants - - - - - - $9,498,150 ----------------------------------------------------------------------------------------- Total investments 9,784,526 12,104,456 10,372,529 4,498,910 1,498,321 76,289,061 9,498,150 Receivables: Employer contributions 6,865 6,975 10,904 5,675 1,561 5,234 - Participant contributions 56,873 59,555 87,640 41,567 11,386 37,645 - ----------------------------------------------------------------------------------------- Total receivables 63,738 66,530 98,544 47,242 12,947 42,879 - ----------------------------------------------------------------------------------------- Net assets available for benefits $9,848,264 $12,170,986 $10,471,073 $4,546,152 $1,511,268 $76,331,940 $9,498,150 =========================================================================================
See notes to financial statements. Page 4 Investment Plan for Employees of Mallinckrodt Inc. Statement of Net Assets Available for Benefits with Fund Information June 30, 1997
State Street AMEX Trust Mallinckrodt International Equity Index Total Stock Fund Index Fund Fund II ------------------------------------------------------------------------- Investments: State Street International Index Fund (shares--115,917; cost--$1,218,009) $ 1,323,544 -- $1,323,544 -- American Express Trust Equity Index Fund II (shares--3,446,152; cost--$67,597,820) 80,795,023 -- -- $80,795,023 State Street Bond Fund (shares 88,644; cost--$924,890) 945,387 -- -- -- American Express Trust Money Market Fund II (shares-- 638,823; cost--$638,823) 638,823 -- -- -- Pilgrim, Baxter & Associates Growth Fund (shares-- 156,921; cost--$3,539,683) 3,886,935 -- -- -- Fidelity Low-Price Stock Fund (shares--130,987; cost--$2,900,825) 3,137,141 -- -- -- IDS New Dimensions Fund (Y) (shares--146,099; cost--$3,175,799) 3,439,180 -- -- -- Dodge & Cox Stock Fund (shares--45,533; cost--$3,929,663) 4,240,982 -- -- -- Investments in insurance contracts, at contract value 107,072,199 -- -- -- Investments in pooled accounts, at fair value (Mallinckrodt Stock Fund--units 3,906,696; cost-- $27,562,305; AMEX Aggressive Fund--units 412,120; cost--$4,158,129; AMEX Moderate Fund --units 167,496; cost--$1,687,755; AMEX Conservative Fund--units 37,589; cost--$381,303) 41,339,683 $34,620,356 -- -- Loans to participants 8,956,875 -- -- -- ----------------------------------------------------------------------- Total investments 255,775,772 34,620,356 1,323,544 80,795,023 Receivables: Employer contributions 9,862,108 9,761,459 3,132 12,320 Participant contributions 913,276 88,256 35,526 103,597 Interest and dividends 146,631 144,310 -- -- ----------------------------------------------------------------------- Total receivables 10,922,015 9,994,025 38,658 115,917 Amounts owed to (from) other funds -- (50,944) 6,541 44,820 ----------------------------------------------------------------------- Net assets available for benefits $266,697,787 $44,563,437 $1,368,743 $80,955,760 =======================================================================
See notes to financial statements.
AMEX Trust Fidelity State Street Money Market PBHG Growth Low-Price Bond Fund Fund II Fund Stock Fund --------------------------------------------------------------------------- Investments: State Street International Index Fund (shares--115,917; cost--$1,218,009) -- -- -- -- American Express Trust Equity Index Fund II (shares--3,446,152; cost--$67,597,820) -- -- -- -- State Street Bond Fund (shares 88,644; cost--$924,890) $945,387 -- -- -- American Express Trust Money Market Fund II (shares-- 638,823; cost--$638,823) -- $638,823 -- -- Pilgrim, Baxter & Associates Growth Fund (shares-- 156,921; cost--$3,539,683) -- -- $3,886,935 -- Fidelity Low-Price Stock Fund (shares--130,987; cost--$2,900,825) -- -- -- 3,137,141 IDS New Dimensions Fund (Y) (shares--146,099; cost--$3,175,799) -- -- -- -- Dodge & Cox Stock Fund (shares--45,533; cost--$3,929,663) -- -- -- -- Investments in insurance contracts, at contract value -- -- -- -- Investments in pooled accounts, at fair value (Mallinckrodt Stock Fund--units 3,906,696; cost-- $27,562,305; AMEX Aggressive Fund--units 412,120; cost--$4,158,129; AMEX Moderate Fund --units 167,496; cost--$1,687,755; AMEX Conservative Fund--units 37,589; cost--$381,303) -- -- -- -- Loans to participants -- -- -- -- ----------------------------------------------------------------------- Total investments 945,387 638,823 3,886,935 3,137,141 Receivables: Employer contributions 4,269 1,509 13,569 9,360 Participant contributions 24,418 11,228 115,679 79,888 Interest and dividends -- 2,321 -- -- ----------------------------------------------------------------------- Total receivables 28,687 15,058 129,248 89,248 Amounts owed to (from) other funds 1,454 (6,572) 43,352 15,684 ----------------------------------------------------------------------- Net assets available for benefits $975,528 $647,309 $4,059,535 $3,242,073 =======================================================================
Page 5 See notes to financial statements. Investment Plan for Employees of Mallinckrodt Inc. Statement of Net Assets Available for Benefits with Fund Information (continued) June 30, 1997
IDS New AMEX AMEX AMEX Dimensions Dodge & Cox Aggressive Moderate Conservative Stable Value Fund Fund Fund Fund Fund Fund Loan Account ------------------------------------------------------------------------------------------------- Investments: State Street International Index Fund (shares--115,917; cost--$1,218,009) -- -- -- -- -- -- -- American Express Trust Equity Index Fund II (shares-- 3,446,152; cost-- $67,597,820) -- -- -- -- -- -- -- State Street Bond Fund (shares--88,644; cost-- $924,890) -- -- -- -- -- -- -- American Express Trust Money Market Fund II (shares-- 638,823; cost--$638,823) -- -- -- -- -- -- -- Pilgrim, Baxter & Associates Growth Fund (shares-- 156,921; cost--$3,539,683) -- -- -- -- -- -- -- Fidelity Low-Price Stock Fund (shares--130,987; cost-- $2,900,825) -- -- -- -- -- -- -- IDS New Dimensions Fund (Y) (shares--146,099; cost--$3,175,799) $3,439,180 -- -- -- -- -- -- Dodge & Cox Fund (shares--45,533; cost--$3,929,663) -- $4,240,982 -- -- -- -- -- Investments in insurance contracts, at contract value -- -- -- -- -- $107,072,199 -- Investments in pooled accounts, at fair value (Mallinckrodt Stock Fund--units 3,906,696; cost--$27,535,603; AMEX Aggressive Fund--units 412,120; cost--$4,158,129; AMEX Moderate Fund--units 167,496; cost-- $1,687,755; AMEX Conservative Fund--units 37,589; cost-- $381,303) -- -- $4,523,837 $1,794,719 $400,771 -- -- Loans to participants -- -- -- -- -- -- $8,956,875 ------------------------------------------------------------------------------------------------ Total investments 3,439,180 4,240,982 4,523,837 1,794,719 400,771 107,072,199 8,956,875 Receivables: Employer contributions 11,119 10,156 16,223 8,803 2,374 7,815 -- Participant contributions 92,157 87,289 132,367 66,878 18,481 57,512 -- Interest and dividends -- -- -- -- -- -- -- ------------------------------------------------------------------------------------------------ Total receivables 103,276 97,445 148,590 75,681 20,855 65,327 -- Amounts owed to (from) other funds 5,581 19,178 6,806 3,177 -- (89,077) -- ------------------------------------------------------------------------------------------------ Net assets available for benefits $3,548,037 $4,357,605 $4,679,233 $1,873,577 $ 421,626 $107,048,449 $8,956,875 ================================================================================================
Page 6 Investment Plan for Employees of Mallinckrodt Inc. Statement of Changes in Net Assets Available for Benefits with Fund Information Year ended June 30, 1998
State Street AMEX Trust Mallinckrodt International Equity Index Total Stock Fund Index Fund Fund II ---------------------------------------------------------------- Investment income: Interest and dividend income $ 8,856,401 $ 609,702 - $ 3,268 Realized and unrealized gains (losses) 18,275,739 (7,909,910) $ 211,232 21,484,193 ---------------------------------------------------------------- Net investment income 27,132,140 (7,300,208) 211,232 21,487,461 Contributions: Employer cash 2,216,848 203,019 77,783 271,345 Employer common stock 5,958,902 5,958,902 - - Participant 18,647,293 2,049,529 819,882 2,987,611 ---------------------------------------------------------------- Total contributions 26,823,043 8,211,450 897,665 3,258,956 Cash and stock distributed to participants (47,726,109) (5,307,039) (346,103) (14,577,173) Transfers of investment direction - (6,622,695) 1,197,358 (3,477,883) ---------------------------------------------------------------- Net increase (decrease) 6,229,074 (11,018,492) 1,960,152 6,691,361 Net assets available for benefits at beginning of year 266,697,787 44,563,437 1,368,743 80,955,760 ---------------------------------------------------------------- Net assets available for benefits at end of year $272,926,861 $ 33,544,945 $3,328,895 $ 87,647,121 ================================================================
AMEX Trust PBHG Fidelity State Street Money Market Growth Low-Price Bond Fund Fund II Fund Stock Fund ------------------------------------------------------------ Investment income: Interest and dividend income - $ 66,922 - $ 424,630 Realized and unrealized gains (losses) $ 189,545 - $ 424,256 779,252 ------------------------------------------------------------ Net investment income 189,545 66,922 424,256 1,203,882 Contributions: Employer cash 59,554 33,617 257,556 197,483 Employer common stock - - - - Participant 606,944 325,250 2,708,079 2,150,544 ------------------------------------------------------------ Total contributions 666,498 358,867 2,965,635 2,348,027 Cash and stock distributed to participants (324,851) (1,323,148) (805,790) (1,034,517) Transfers of investment direction 1,756,289 3,026,534 1,392,693 4,192,780 ------------------------------------------------------------ Net increase (decrease) 2,287,481 2,129,175 3,976,794 6,710,172 Net assets available for benefits at beginning of year 975,528 647,309 4,059,535 3,242,073 ------------------------------------------------------------ Net assets available for benefits at end of year $3,263,009 $ 2,776,484 $8,036,329 $ 9,952,245 ============================================================
Page 7 See notes to financial statements. Investment Plan for Employees of Mallinckrodt Inc. Statement of Changes in Net Assets Available for Benefits with Fund Information (continued) Year ended June 30, 1998
IDS New AMEX AMEX AMEX Stable Dimensions Dodge & Fox Aggressive Moderate Conservative Value Loan Fund Fund Fund Fund Fund Fund Account ------------------------------------------------------------------------------------------- Investment income: Interest and dividend income $ 519,708 $ 931,491 -- -- -- $5,555,842 $ 744,838 Realized and unrealized gains 1,103,988 427,192 $ 1,044,971 $ 405,991 $ 115,029 -- -- ------------------------------------------------------------------------------------------- Net investment income 1,623,696 1,358,683 1,044,971 405,991 115,029 5,555,842 744,838 Contributions: Employer cash 216,311 214,615 328,944 171,001 40,609 145,011 -- Employer common stock -- -- -- -- -- -- -- Participant 2,301,934 2,355,747 3,503,110 1,731,077 415,327 1,523,688 (4,831,429) ------------------------------------------------------------------------------------------- Total contributions 2,518,245 2,570,362 3,832,054 1,902,078 455,936 1,668,699 (4,831,429) Cash and stock distributed to participants (895,365) (1,882,297) (1,515,540) (643,089) (260,920) (23,438,143) 4,627,866 Transfers of investment direction 3,053,651 5,766,633 2,430,355 1,007,595 779,597 (14,502,907) -- ------------------------------------------------------------------------------------------- Net increase (decrease) 6,300,227 7,813,381 5,791,840 2,672,575 1,089,642 (30,716,509) 541,275 Net assets available for benefits at beginning of year 3,548,037 4,357,605 4,679,233 1,873,577 421,626 107,048,449 8,956,875 ------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $9,848,264 $12,170,986 $10,471,073 $4,546,152 $1,511,268 $76,331,940 $9,498,150 ===========================================================================================
See notes to financial statements. Page 8 Investment Plan for Employees of Mallinckrodt Inc. Statement of Changes in Net Assets Available for Benefits with Fund Information Year ended June 30, 1997
Mallinckrodt Fixed Income Balanced S&P 500 Total Stock Fund Fund Fund Index Fund -------------------------------------------------------------------------- Investment income: Interest and dividend income $11,651,063 $466,394 $3,137,404 $1,081,783 $762,552 Realized and unrealized gains 21,419,126 334,021 -- 2,364,750 5,847,133 -------------------------------------------------------------------------- Net investment income 33,070,189 800,415 3,137,404 3,446,533 6,609,685 Contributions: Employer 13,448,055 10,375,628 382,224 140,724 1,009,306 Participant 22,631,014 3,914,334 2,877,880 2,772,506 4,364,087 -------------------------------------------------------------------------- Total contributions 36,079,069 14,289,962 3,260,104 2,913,230 5,373,393 Cash and stock distributed to participants (22,100,620) (3,330,729) (6,690,978) (1,953,787) (2,892,044) Transfers (to) from other plans (79,946) (41,680) (24,378) 3,611 (18,400) Transfers of investment direction -- (3,787,650) 222,733 (819,293) 1,308,457 Transfers (to) from other trustees -- -- (87,856,536) (38,293,844) (63,921,394) -------------------------------------------------------------------------- Net increase (decrease) 46,968,692 7,930,318 (87,951,651) (34,703,550) (53,540,303) Net assets available for benefits at beginning of year 219,729,095 36,633,119 87,951,651 34,703,550 53,540,303 -------------------------------------------------------------------------- Net assets available for benefits at end of year $266,697,787 $44,563,437 -- -- -- ==========================================================================
State Street AMEX Trust AMEX Trust International Equity Index State Street Money Market Index Fund Fund II Bond Fund Fund II ------------------------------------------------------------ Investment income: Interest and dividend income $1,220 $3,117,998 $1,720 $5,881 Realized and unrealized gains 108,689 11,060,728 21,066 -- --------------------------------------------------------- Net investment income 109,909 14,178,726 22,786 5,881 Contributions: Employer 51,228 261,750 40,154 19,518 Participant 519,925 1,452,542 372,254 244,784 --------------------------------------------------------- Total contributions 571,153 1,714,292 412,408 264,302 Cash and stock distributed to participants (19,927) (3,055,727) (7,567) (45,887) Transfers (to) from other plans -- 901 -- -- Transfers of investment direction 707,608 4,196,174 547,901 423,013 Transfers (to) from other trustees -- 63,921,394 -- -- -------------------------------------------------------- Net increase (decrease) 1,368,743 80,955,760 975,528 647,309 Net assets available for benefits at beginning of year -- -- -- -- -------------------------------------------------------- Net assets available for benefits at end of year $1,368,743 $80,955,760 $975,528 $647,309 ========================================================
See notes to financial statements. Page 9 Investment Plan for Employees of Mallinckrodt Inc. Statement of Changes in Net Assets Available for Benefits with Fund Information (continued) Year ended June 30, 1997
PBHG Fidelity Low- IDS New Dodge & AMEX AMEX AMEX Growth Price Stock Dimensions Cox Aggressive Moderate Conservative Stable Value Loan Fund Fund Fund Fund Fund Fund Fund Fund Account ---------------------------------------------------------------------------------------------------------------- Investment income: Interest and dividend income $7,565 $2,830 $3,840 $27,718 $6,489 $2,361 $514 $3,024,794 -- Realized and unrealized gains 357,045 237,734 266,856 313,249 373,076 111,848 22,931 -- -- ---------------------------------------------------------------------------------------------------------------- Net investment income 364,610 240,564 270,696 340,967 379,565 114,209 23,445 3,024,794 -- Contributions: Employer 175,890 114,748 137,915 114,044 200,379 109,764 29,993 284,790 -- Participant 1,759,105 1,169,078 1,358,237 1,098,247 1,971,631 986,893 285,410 985,759 ($3,501,658) ---------------------------------------------------------------------------------------------------------------- Total contributions 1,934,995 1,283,826 1,496,152 1,212,291 2,172,010 1,096,657 315,403 1,270,549 (3,501,658) Cash and stock distributed to participants (39,203) (33,063) (39,870) (50,022) (50,664) (22,340) (12,729) (9,414,144) 5,558,061 Transfers (to) from other plans -- -- -- -- -- -- -- -- -- Transfers of investment direction 1,799,133 1,750,746 1,821,059 2,854,369 2,178,322 685,051 95,507 (13,983,130) -- Transfers (to) from other trustees -- -- -- -- -- -- -- 126,150,380 -- ---------------------------------------------------------------------------------------------------------------- Net increase (decrease) 4,059,535 3,242,073 3,548,037 4,357,605 4,679,233 1,873,577 421,626 107,048,449 2,056,403 Net assets available for benefits at beginning of year -- -- -- -- -- -- -- -- 6,900,472 ---------------------------------------------------------------------------------------------------------------- Net assets available for benefits at end of year $4,059,535 $3,242,073 $3,548,037 $4,357,605 $4,679,233 $1,873,577 $421,626 $107,048,449 $8,956,875 ================================================================================================================
See notes to financial statements. Page 10 Investment Plan for Employees of Mallinckrodt Inc. Notes to Financial Statements June 30, 1998 1. Description of the Plan General This plan description is provided for general information purposes only. Participants should refer to the September 1997 plan summary, which is part of the prospectus for the Investment Plan for Employees of Mallinckrodt Inc. (the Plan), for a more complete description of the provisions of the Plan. The Plan was established effective July 1, 1970 and has been amended from time to time to incorporate certain changes in plan features and other legislatively required changes. All nonunion employees of Mallinckrodt Inc. (Mallinckrodt or the Company) and certain wholly owned subsidiaries and certain union employees employed in the U.S. or on a U.S. payroll are eligible to participate in the Plan. Effective January 1, 1997, American Express Trust Company (AMEX) became the Plan's recordkeeper and trustee. Assets totaling $219.5 million were transferred from the previous trustee (The Northern Trust Company) and recordkeeper on January 2, 1997. Participation and Vesting Eligible employees may join the Plan immediately upon being hired. Participants are fully vested in all participant and employer contributions and the earnings thereon. Participants' Accounts Separate accounts are maintained for each participant. Participant account balances are adjusted daily for contributions, distributions, loans, income, gains, and losses. Contributions Participants generally can contribute up to 15 percent of their base salaries on a pre-tax, after-tax, or combined basis. The Company makes matching contributions equal to 20 percent of a participant's eligible contributions. Eligible contributions are limited to 6 percent of a participant's base monthly salary. The Company may make additional discretionary contributions ("Supermatch") each year as determined by its Board of Directors. Supermatch contributions are made in or invested in Mallinckrodt Inc. common stock. Supermatch contributions may not be withdrawn, borrowed, or transferred from Company stock into another investment fund except to the extent that the value of these contributions credited to the participant's account after June 30, 1997 plus investment return thereon exceeds 15 percent of the total value of the participant's accounts. Page 11 Investment Plan for Employees of Mallinckrodt Inc. 1. Description of the Plan (continued) Contributions (continued) Total employer contributions (including Supermatch) were equal to 77 percent of participants' eligible contributions for the year ended June 30, 1998 and 97 percent for the year ended June 30, 1997. Contributions to the Plan, including employee and employer contributions, are subject to various limitations imposed by the Internal Revenue Code. Fund Asset Valuation Participants' equity in each investment fund is valued in dollars each business day (valuation date). As of each valuation date, the market value of the assets in each of the investment funds is determined, and the increase or decrease of each fund is allocated to each participant's account invested in that fund, based on the participant's proportionate interest (units or shares) in such fund as of the previous valuation date. Investments Participants direct investment of their contributions as well as employer contributions among the following funds: . State Street International Index Fund -- This fund invests in equity securities of companies located outside North and South America and is structured to match returns of the Morgan Stanley Capital International Europe, Australia, Far East (EAFE) Index. . AMEX Trust Equity Index Fund II -- This fund invests in equity securities of companies with sector and industry weighting similar to the Standard and Poor's 500. . State Street Bond Market Fund -- This fund invests primarily in investment grade corporate, governmental and mortgage-backed bonds with the objective of producing current income. . AMEX Trust Money Market Fund II -- This fund invests in high quality commercial paper, bankers acceptance obligations, certificates of deposit, and United States Treasury Bills with the object of providing high liquidity, capital preservation, and generating moderate levels of current income. . PBHG Growth Fund -- This mutual fund invests primarily in equity securities of medium size domestic companies with the objective of long-term capital growth. Page 12 1. Description of the Plan (continued) Investments (continued) . Fidelity Low-Price Stock Fund -- This mutual fund invests primarily in equity securities of medium size domestic companies with the objective of long-term capital growth. . IDS New Dimensions Fund -- This mutual fund invests primarily in equity securities of medium to large companies with the objective of long-term capital growth. . Dodge & Cox Fund -- This mutual fund invests principally in the common stock of large companies with the objective of long-term capital growth. . Mallinckrodt Stock Fund -- This fund is invested in Mallinckrodt Inc. common stock. . Lifestyle Funds (Aggressive, Moderate, and Conservative) -- These funds invest among the other fund options of the Plan in order to maintain an overall investment asset allocation commensurate with either an aggressive, moderate or conservative risk profile. Investments in the component funds are periodically rebalanced in order to maintain the desired risk profile amid market fluctuations. . Stable Value Fund -- This fund invests in Guaranteed Investment Contracts issued by insurance companies and in the American Express Income Fund II. The investment objective is to preserve principal and provide current income. Prior to January 1, 1997, the Plan offered four investment funds trusteed at The Northern Trust Company. These investments included a Mallinckrodt Inc. Stock Fund, a Balanced Fund, an S&P 500 Index Fund, and a Fixed Income Fund. All balances were transferred to American Express Trust Company, effective January 1, 1997. Upon transfer, the Balanced Fund and Fixed Income Fund were transferred into the Stable Value Fund, and the S&P 500 Index Fund was transferred into the AMEX Trust Equity Index Fund II. The assets at June 30, 1998 and 1997 of the Mallinckrodt Stock Fund, AMEX Trust Equity Index Fund II and the Stable Value Fund represent 5 percent or more of the fair value of net assets available for benefits at June 30, 1998 and 1997. Withdrawals Participants may withdraw their balances in the Plan upon retirement, termination of employment, or becoming disabled as defined by the Plan. Upon termination of employment with Mallinckrodt or its affiliates, plan participants generally may elect to receive a full or partial distribution, or may elect to maintain their balances in the Plan. Page 13 Investment Plan for Employees of Mallinckrodt Inc. 1. Description of the Plan (continued) Withdrawals (continued) Active participants can make hardship withdrawals of employee contributions in certain circumstances and can make withdrawals of employer contributions on a hardship or non-hardship basis. All such withdrawals are subject to various restrictions, including Supermatch restrictions, and may be subject to income tax penalties. Loans to Participants Participants may obtain loans from their plan accounts subject to certain terms, as defined by the Plan. General purpose loans are made for periods of one to five years and residential loans are made for periods of one to ten years. The interest rate charged is the prime rate quoted in The Wall Street Journal on the first business day of the month in which the loan is approved. Principal and interest payments are made by payroll deductions or in lump-sum repayments and are invested in the same manner as current contributions. Plan Expenses All expenses incurred in connection with acquisition or disposition of securities for and the operation of the investment funds as well as the mutual funds offered under the Plan are charged directly against those funds and their investment returns. All other administrative expenses of the Plan, such as recordkeeping and disbursing expenses, trustee fees, counsel and accountant expenses, and communication charges incurred by the Company for the plan operations, are charged to and paid by the Plan and allocated against the participant accounts. The maximum administration charge against participant accounts is limited to $60 per plan year in addition to specific transaction charges directed by participants. 2. Summary of Significant Accounting Policies Basis of Accounting Plan accounting records are maintained on the accrual basis. Investments Investments in mutual funds are valued at quoted market prices. Investments in the other funds except for the Stable Value Fund are valued at the quoted market prices of the underlying securities. Investments in the Stable Value Fund include insurance contracts valued at contract value, which approximates market value. Page 14 Investment Plan for Employees of Mallinckrodt Inc. 2. Summary of Significant Accounting Policies (continued) Investment in the Stable Value Fund At June 30, 1998, the Stable Value Fund includes investments in the American Express Trust Income Fund II and a guaranteed interest contract with Transamerica Occidental Life Insurance Company (Transamerica). At June 30, 1997, the stable value fund was invested in guaranteed interest contracts with Transamerica and Metropolitan Life Insurance Company (Metropolitan). The contract with Transamerica, dated November 2, 1989, provides guaranteed rates of interest to be set annually on all new monies invested over the contract term. The rate for each of the contract years beginning January 1, 1998 and 1997 is 6.5 percent, net of investment management fees. The contract with Metropolitan dated October 18, 1991 provided guaranteed rates of interest to be set annually on all new monies invested over the contract term. The rate for the contract year beginning January 1, 1997 was 6.08 percent, net of investment management fees. Because of limitations contained within insurance contracts held in the Stable Value Fund, the plan administrator may be required to limit transfers from that fund to minimize adverse market value adjustments. Also, the Stable Value Fund prohibits direct transfers to the AMEX Trust Money Market Fund II. Transfers from the Stable Value Fund to the AMEX Trust Money Market Fund II must be directed through another fund for 90 days before final transfer to the AMEX Trust Money Market Fund II. Security Transactions Purchases and sales of securities are accounted for on the trade date (date the order to buy or sell is executed). Dividend income is recorded on the ex- dividend date. Income from other investments is recorded as earned on an accrual basis. Plan Termination Although Mallinckrodt has not expressed any intent to terminate the Plan, it is free to do so at any time. In the event the Plan terminates, participants will be entitled to receive a complete distribution of the balances held in their respective plan accounts. Because all plan assets are allocated to plan participants and a participant's benefit under the Plan equals the value of the participant's account balance, the Plan is not subject to the insurance provisions of the Pension Benefit Guarantee Corporation. Page 15 Investment Plan for Employees of Mallinckrodt Inc. 2. Summary of Significant Accounting Policies (continued) Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts within the financial statements, as well as amounts disclosed in the notes. While the Company uses its best estimates and judgments, actual results could differ from those estimates. 3. Federal Income Tax Status On September 26, 1995, the Internal Revenue Service advised that the Plan, as amended, qualifies under Section 401(a) of the Internal Revenue Code (IRC) and that the Investment Trust for Employees of Mallinckrodt Inc., as amended, established thereunder is exempt from federal income taxation under Section 501(a). Once qualified, the Plan is required to operate in conformity with the IRC in order to maintain its qualification. The plan administrator and Mallinckrodt's legal counsel are not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. 4. Transactions With Parties-in-Interest The only transactions with parties-in-interest were purchases and sales of assets through AMEX and The Northern Trust Company. AMEX's and Northern Trust's fees are based on customary and reasonable rates for such services and are paid by the Plan. Page 16 Investment Plan for Employees of Mallinckrodt Inc. Supplemental Schedules Investment Plan for Employees of Mallinckrodt Inc. Line 27(a) Schedule of Assets Held for Investment Purposes June 30, 1998
Identity of Issuer, Fair or Party Involved Description Cost Value - ------------------------------------------------------------------------------ American Express Trust Money Market Fund II 2,765,731 shares $2,765,731 $2,765,731 American Express Trust Equity Index Fund II 2,879,777 shares 68,276,633 87,556,750 State Street Daily Bond Fund Series C 276,054 shares 3,111,129 3,245,846 State Street International Index Fund 274,039 shares 3,121,578 3,307,374 Dodge & Cox Fund 120,574 shares 11,727,268 12,104,456 Fidelity Low-Price Stock Fund 364,705 shares 9,190,201 9,890,810 IDS New Dimensions Fund 351,191 shares 8,730,608 9,784,526 Mallinckrodt Stock Fund 4,062,070 units 30,831,111 27,528,650 Stable Value Fund 7,052,049 units 75,775,139 76,289,061 AMEX Conservative Fund 123,787 units 1,395,079 1,498,321 AMEX Moderate Fund 369,247 units 4,072,794 4,498,910 AMEX Aggressive Fund 816,992 units 9,166,650 10,372,529 PBHG Growth Fund 293,130 shares 7,588,843 7,964,331 Participant Loans Interest from 6.0% - 9,498,150 to 10.5% due through 2008 ------------------------- Total investments $235,752,764 $266,305,445 =========================
See independent auditors' report. Page 18 Investment Plan for Employees of Mallinckrodt Inc. Line 27(d) -- Schedule of Reportable Transactions Year Ended June 30, 1998 Category (i) Single Transaction Exceeding 5% of the Current Value of Plan Assets at the Beginning of the Year
Selling/ Maturity Current Value on Net Gain Identity of Party Involved Description of Asset Purchase Price Price Cost of Asset Transaction Date (Loss) - ------------------------------------------------------------------------------------------------------------------------------------ Metropolitan Life Insurance Guaranteed Interest $18,433,059 $18,433,059 $18,433,059 - Company Contract American Express Trust Fixed Income Fund $18,560,000 18,560,000 18,560,000 - Income Fund II American Express Trust Fixed Income Fund 17,951,184 17,951,184 17,951,184 - Income Fund II
See independent auditors' report. Page 19 Investment Plan for Employees of Mallinckrodt Inc. Line 27(d) -- Schedule of Reportable Transactions (Continued) Year Ended June 30, 1998 Category (iii) Series of Transactions in excess of 5% of the Current Value of Plan Assets at the Beginning of the Year
Number Selling/ Identity of Party Of Purchase Maturity Involved Description of Asset Transactions Price Price - -------------------------------------------------------------------------------------------------------- Dodge & Cox Stock Stock Mutual Fund 500 purchases $11,418,316 Fund 410 sales $2,772,085 American Express Trust Fixed Income Fund 5 purchases 26,392,018 Income II 10 sales 26,626,092 American Express Trust Stock Fund 265 purchases 7,342,052 Equity Index II 391 sales 21,733,989 American Express Trust Money Market Fund 145 purchases 20,953,189 Company Money 190 sales 20,242,378 Market I American Express Trust Money Market Fund 276 purchases 16,027,741 Company Money 229 sales 30,561,777 Market II
Current Value Identity of Party on Transaction Net Gain Involved Description of Asset Cost of Asset Date (Loss) - ----------------------------------------------------------------------------------------------------------- Dodge & Cox Stock Stock Mutual Fund $11,418,316 $11,418,316 Fund 2,598,901 2,772,085 $173,184 American Express Trust Fixed Income Fund 26,392,018 26,392,018 Income II 26,407,128 26,626,092 218,964 American Express Trust Stock Fund 7,342,052 7,342,052 Equity Index II 16,318,327 21,733,989 5,415,662 American Express Trust Money Market Fund 20,953,189 20,953,189 Company Money 20,242,378 20,242,378 -- Market I American Express Trust Money Market Fund 16,027,741 16,027,741 Company Money 30,561,777 30,561,777 -- Market II
See independent auditors' report. Page 20 EX-23.1 2 CONSENT OF INDEPENDENT AUDITORS Exhibit 23.1 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-34489) pertaining to the Investment Plan for Employees of Mallinckrodt Inc. and in the related Prospectus of our report dated November 24, 1998, with respect to the financial statements and schedules of the Investment Plan for Employees of Mallinckrodt Inc. included in this Annual Report (Form 11- K) for the year ended June 30, 1998. /s/ Stone Carlie & Company, L.L.C. St. Louis, Missouri December 14, 1998 EX-23.2 3 CONSENT OF INDEPENDENT AUDITORS Exhibit 23.2 Consent of Independent Auditors We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-34489) pertaining to the Investment Plan for Employees of Mallinckrodt Inc. and in the related Prospectus of our report dated October 29, 1997, with respect to the financial statements and schedules of the Investment Plan for Employees of Mallinckrodt Inc. included in this Annual Report (Form 11- K) for the year ended June 30, 1998. /s/ Ernst & Young LLP St. Louis, Missouri December 11, 1998 -----END PRIVACY-ENHANCED MESSAGE-----