UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                         ------------------------------   

                                FORM 10-K/A No. 1
        x
       ---   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                  For the fiscal year ended June 30, 1998
                                                
       ---   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                      For the transition period from     to
                           Commission file number 1-483
                         --------------------------------

                                 MALLINCKRODT INC.
            (Exact name of Registrant as specified in its charter)
                New York                            36-1263901
     (State or other jurisdiction               (I.R.S. Employer
      of incorporation or organization)          Identification No.)

         675 McDonnell Boulevard
           St. Louis, Missouri                         63134
        (Address of principal                       (Zip Code)
         executive offices)
   Registrant's telephone number, including area code: 314-654-2000
                         -----------------------------
      Securities registered pursuant to Section 12(b) of the Act:

                                            Name of each exchange
        Title of each class                  on which registered
        -------------------                 ---------------------
   4% Cumulative Preferred Stock,
    par value $100 per share                New York Stock Exchange
    Common Stock, par value $1 per share    New York Stock Exchange
                                            Chicago Stock Exchange
                                            Pacific Stock Exchange

  Securities registered pursuant to Section 12(g) of the Act: None
                         ------------------------------             
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2)has been subject to such filing requirements for the
past 90 days.  Yes  X  No
                   ---    ---     
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K/A No. 1 or any amendment to this Form 10-K/A No 1. --- 
                         ------------------------------ 
State the aggregate market value of the voting stock held by
non-affiliates of the Registrant: $1,673,807,983 as of August 31,
1998. Market value is based on the August 31, 1998 closing prices of
Registrant's Common Stock and 4% Cumulative Preferred Stock.

Applicable Only To Corporate Registrants:  Indicate the number of
shares outstanding of each of the Registrant's classes of common
stock: 72,859,212 shares as of August 31, 1998. 

Documents Incorporated By Reference:  Information required by Items
10, 11, 12 and 13 of Part III is incorporated by reference from pages
2 through 5, and 11; pages 6 and 7, 10 and 11, and 14 through 23;
pages 8 and 9; and page 7, respectively, of the Registrant's
definitive Proxy Statement for the Annual Meeting of Stockholders to
be held on October 21, 1998.

<PAGE>

1998 FORM 10-K/A No. 1 CONTENTS

ITEM                                                           Page
----                                                           ----
Part I:
  1.  Business...............................................    1
      Introduction...........................................    1
      General Factors Related to the Business................    2
      International and Economic Risk Factors................    2
      Operations.............................................    3
      Other Actions..........................................   10
      Other Activities.......................................   10
 
Part II:
  6.  Selected Financial Data................................   13
  7.  Management's Discussion and Analysis of Financial
       Condition and Results of Operations...................   14
  8.  Financial Statements and Supplementary Data............   24
 
Part IV:
 14.  Exhibits, Financial Statement Schedules, and Reports
       on Form 8-K...........................................   52

Signatures...................................................   59

<PAGE>

This Form 10-K/A No. 1 is hereby filed with respect to that certain
Annual Report on Form 10-K for the fiscal year ended June 30, 1998 of
Mallinckrodt Inc. filed with the Securities and Exchange Commission
on September 25, 1998 (the Form 10-K).  Part I, Item 1 "Business,"
Part II, Item 6 "Selected Financial Data," Part II, Item 7
"Management's Discussion and Analysis of Financial Condition and
Results of Operations," Part II, Item 8 "Financial Statements and
Supplementary Data," and Part IV, Item 14 "Exhibits, Financial
Statement Schedules, and Reports on Form 8-K" of the Form 10-K are
hereby amended and restated in their entirety due to the change in
the amount of the purchase price of Nellcor Puritan Bennett
Incorporated that was allocated to purchased research and development
and to provide additional disclosures as follows.

Part I.

ITEM 1.  BUSINESS

INTRODUCTION

Company Profile
---------------

Mallinckrodt Inc. (Mallinckrodt, the Company, or the Corporation) is
a global company serving selected healthcare markets with products
used primarily for respiratory care, diagnostic imaging and pain
relief.

The Company was incorporated in New York in 1909 under the name
International Agricultural Corporation. The corporate headquarters is
located at 675 McDonnell Boulevard, St. Louis, Missouri 63134, and
the telephone number is (314) 654-2000.

Transition of the Company
-------------------------

During the past several years, many significant steps have been taken
to transform the composition of the Company.  During the past three
years the transition has involved the following:

     -  In December 1995, the Company announced a Strategic Change    
        Initiative which eliminated the management and administrative 
        structures of the three former operating companies:           
        Mallinckrodt Chemical, Inc., Mallinckrodt Medical, Inc. and   
        Mallinckrodt Veterinary, Inc. 

     -  On October 16, 1996, the shareholders approved changing the   
        Company's name from Mallinckrodt Group Inc. to Mallinckrodt   
        Inc.

     -  On March 31, 1997, the Company disposed of Fries & Fries,     
        Inc., a wholly owned subsidiary which owned the Company's 50  
        percent interest in Tastemaker, which was the flavors joint   
        venture with Hercules Incorporated.  The transaction          
        generated a net value to the Company of $550 million.

     -  On June 30, 1997, the Company sold the animal health segment  
        for $405 million cash.  The Company retained certain          
        liabilities.

     -  On August 28, 1997, the Company acquired Nellcor Puritan      
        Bennett Incorporated (Nellcor) through an agreement to        
        purchase for cash all of the outstanding shares of common     
        stock of Nellcor for $28.50 per share.  The aggregate         
        purchase price of the Nellcor acquisition was approximately   
        $1.9 billion.  Nellcor is the worldwide market leader in      
        providing products that monitor, diagnose and treat           
        respiratory impaired patients.

     -  During 1998, the Company sold, or committed to sell, its      
        catalysts and chemical additives and Aero Systems divisions.  
        The completed actions resulted in net cash proceeds of $308   
        million. 

-------------------------------
CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995:  Our discussion and analysis in this annual report
contain some forward-looking statements.  Forward-looking statements
do not relate strictly to historical or current facts, but rather
give our current expectations or forecasts of future events. 
Forward-looking statements may be identified by their use of words
such as "plans," "expects," "will," "anticipates," "believes," and
other words of similar meaning.  Such statements may address, among
other things, the Company's strategy for growth, product development,
regulatory approvals, the outcome of contingencies such as legal
proceedings, market position, expenditures, and financial results.   

Forward-looking statements are based on current expectations of
future events.  Such statements involve risks and uncertainties and
actual results could differ materially from those discussed.  Among
the factors that could cause actual results to differ materially from
those projected in any such forward-looking statements are as
follows:  the effect of business and economic conditions; the impact
of competitive products and continued pressure on prices realized by
the Company for its products; constraints on supplies of raw
materials used in manufacturing certain of the Company's products;
capacity constraints limiting the production of certain products;
difficulties or delays in the  development, production, testing, and
marketing of products; difficulties or delays in receiving required
governmental or regulatory approvals; market acceptance issues,
including the failure of products to generate anticipated sales
levels; difficulties in rationalizing acquired businesses and in
realizing related cost savings and other benefits; the effects of and
changes in trade, monetary, and fiscal policies, laws, and
regulations; foreign exchange rates and fluctuations in those rates;
the costs and effects of legal and administrative proceedings,
including environmental proceedings and patent disputes involving the
Company; difficulties or delays in addressing "Year 2000" problems
(as discussed in Item 7, Management's Discussion and Analysis of
Financial Condition and Results of Operations); and the risk factors
reported from time to time in the Company's SEC reports.  The Company
undertakes no obligation to update any forward-looking statements as
a result of future events or developments.

<PAGE>
 
Other recent acquisitions, divestitures and continuing investments in
each of Mallinckrodt's businesses are described in the discussions of
the business groups in Management's Discussion and Analysis of
Financial Condition and Results of Operations in Item 7, and Note 2
of the Notes to Consolidated Financial Statements in Item 8. 

General Points
--------------

In this report:

Mallinckrodt Inc. and its subsidiaries, collectively, are called the
"Company," the "Corporation" or "Mallinckrodt," unless otherwise
indicated by the context.  The Company now operates predominantly in
the healthcare industry and is comprised of three groups -
Respiratory, Imaging and Pharmaceuticals.

The term "operating earnings" of a business represents revenues less
all operating expenses.  Operating expenses of a business do not
include interest expense, corporate income or expense, and taxes on
income. 

All references to years are to fiscal years ended June 30 unless
otherwise stated. 

Registered trademarks are indicated by an asterisk (*). 

GENERAL FACTORS RELATED TO THE BUSINESS

In general, Mallinckrodt's businesses, including related working
capital requirements, are not materially affected by seasonal
factors. 

Mallinckrodt's businesses do not routinely extend long-term credit to
customers.  The Company believes this credit policy, as well as its
working capital requirements, are not materially different from the
credit policies and working capital requirements of its competitors. 

Competition with manufacturers and suppliers in Mallinckrodt's
businesses involves price, service, quality and technological
innovation.  Competition is strong in all markets served.

The Company's operations are subject to numerous U.S. and
international regulations which involve development, testing,
manufacturing, packaging, distribution and marketing of its products.

Financial information about the businesses is in Item 7, Management's
Discussion and Analysis of Financial Condition and Results of
Operations, and in Item 8, Financial Statements and Supplementary
Data.  Financial information about foreign and domestic operations
and export sales is included in Note 19 of the Notes to Consolidated
Financial Statements in Item 8. 

INTERNATIONAL AND ECONOMIC RISK FACTORS

The Company operates globally, with manufacturing and distribution
facilities in various countries, and is subject to certain
opportunities and risks, including foreign currency fluctuations and
government actions.  Various operational initiatives are employed to
help manage business risks.  In the ordinary course of business,
Mallinckrodt purchases materials and sells finished products
denominated in approximately 25 different currencies.  The Company is
primarily exposed to changes in exchange rates of the German deutsche
mark and other European currencies highly correlated with the German
deutsche mark and the Japanese yen.  Overall, the Company is a net
beneficiary when the U.S. dollar weakens and is adversely affected by
a stronger U.S. dollar relative to the major currencies identified. 
To minimize exposure to foreign currency exchange rates, which occur
in the ordinary course of business, the Company purchases currency
options.

The Company's interest income and expense are most sensitive to
changes in the general level of U.S. interest rates.  In this regard,
changes in U.S. interest rates affect the interest earned on the
Company's cash equivalents and short-term investments as well as
interest paid on its short-term debt.  To manage the interest rate
characteristics of its outstanding debt to a more desirable fixed or
variable rate basis or to limit the Company's exposure to rising
interest rates, the Company periodically enters into interest rate
swaps and option contracts. 

For more information on the Company's risk management strategy, see
Item 7, Management's Discussion and Analysis of Financial Condition
and Results of Operations, and Item 8, Financial Statements and
Supplementary Data.

The Company does not consider the present overall rate of inflation
to have a significant impact on the businesses in which it operates;
however, general price declines in hospital and alternate care
products on a global basis due to healthcare cost containment have
had a negative effect on operating results, and this trend is
expected to continue.

While future economic events cannot be predicted, the Company
believes its current operations and future expansion plans will not
result in a significantly different risk profile.

Mallinckrodt sales to customers outside the U.S. represented
approximately 33, 36 and 37 percent of consolidated net sales in
1998, 1997 and 1996, respectively.  Products are manufactured and
marketed through a variety of subsidiaries and affiliates around the
world.  For additional information, see discussions of individual
business groups included below; under Item 7, Management's Discussion
and Analysis of Financial Condition and Results of Operations; and in
Item 8, Note 19 of the Notes to Consolidated Financial Statements.

OPERATIONS

The Company provides advanced, innovative products for respiratory
care, anesthesiology, radiology, cardiology, nuclear medicine, and
pharmaceuticals.  Principal products are oxygen monitoring, critical
care ventilation, airway management, contrast media for various
imaging modalities, radiopharmaceuticals for nuclear medicine, bulk
and dosage pharmaceuticals used primarily for pain relief, peptides,
and laboratory analysis and microelectronic chemicals.

The Company is comprised of three business groups - Respiratory,
Imaging and Pharmaceuticals.

Net sales by group were (in millions):

                                     1998       1997       1996  
                                    ------     ------     ------
    Respiratory................     $  991     $  321     $ 338
    Imaging....................        760        802       716
    Pharmaceuticals............        616        575       543
                                    ------     ------     ------ 
                                    $2,367     $1,698     $1,597
                                    ======     ======     ======

On August 28, 1997, the Company acquired Nellcor through an agreement
to purchase for cash all of the outstanding shares of common stock of
Nellcor for $28.50 per share.  The aggregate purchase price of the
Nellcor acquisition was approximately $1.9 billion.  Nellcor is the
worldwide market leader in providing products that monitor, diagnose
and treat respiratory impaired patients.  Product lines include pulse
oximetry monitors and sensors, critical care and portable
ventilators, home oxygen therapy products, sleep apnea diagnostic and
therapy products, and medical gases.

The acquisition was accounted for under the purchase method of
accounting and, accordingly, the results of operations of Nellcor
have been included in the Company's consolidated financial statements
since September 1, 1997.  The purchase price of the acquisition was
allocated to the assets acquired and liabilities assumed based upon
generally accepted accounting principles and estimated fair values at
the date of acquisition.  The excess of the purchase price over the
fair value of the net identifiable assets, totaling $814.2 million,
was allocated to goodwill and is being amortized on a straight-line
basis over 30 years. 

The Company's products are instrumental in the delivery of healthcare
services and are sold to hospital and alternate care sites, clinical
laboratories, pharmaceutical manufacturers and other customers on a
worldwide basis.  Healthcare products are influenced by a high degree
of innovation and technology, by regulation from agencies such as the
U.S. Food and Drug Administration (FDA), industry standards and by
markets served.  They are significantly affected by conditions within
the healthcare industry, including continuing legislative initiatives
and public and private healthcare insurance and reimbursement
programs.  An aging population and demand for technologically
superior products to extend and improve the quality of life are two
major factors fueling growth within the industry. 

The healthcare industry is experiencing extensive change.  All
markets served by the Company are highly competitive in the United
States and overseas.  Legislative bodies, in all likelihood, will
continue to review and assess alternative healthcare delivery systems
and payment methodologies, and ongoing public debate of these issues
can be expected.  Cost containment initiatives, market pressures and
proposed changes in applicable laws and regulations may significantly
affect pricing or demand for medical products, the relative costs
associated with doing business and the amount of reimbursement by
both government and third-party payors.  In particular, the industry
is experiencing market-driven reforms from forces within the industry
that are exerting pressure on healthcare providers and product
manufacturers to reduce healthcare costs.  These market-driven
reforms are resulting in industry-wide consolidation that is expected
to increase the downward pressure on healthcare product margins, as
larger buyer and supplier groups exert pricing pressure on providers
of medical devices and other healthcare products.  Managed care and
other healthcare provider organizations have grown substantially in
terms of the percentage of the population in the United States that
receives medical benefits through such organizations and in terms of
the influence and control that they are able to exert over an
increasingly large portion of the healthcare industry.  These
organizations are continuing to consolidate and grow, which may
increase the ability of the organizations to influence the practices
and pricing involved in the purchase of medical products, including
those products sold by the Company.  Both cost containment and
regulatory reform may have an adverse impact on the Company's results
of operations.

The demand for price reductions from healthcare customer buying
groups continued throughout 1998.  This trend, which is expected to
continue, had its most significant impact on the Company's Imaging
business, where the potential for generic competitive products and
available manufacturing capacity continue to lower prices.  In
response to this market trend, in 1996, the Company entered into a
multi-year agreement, with prices subject to periodic renegotiation,
with Premier, Inc. (Premier), the largest healthcare purchasing group
in the United States.  Effective July 1, 1997, Premier named
Mallinckrodt a corporate partner and, accordingly, Premier's 1,650
member hospitals are provided incentives to use Mallinckrodt
products.  For 1998 and 1997, net sales to hospitals under the
Premier agreement represented approximately 13 percent and 9 percent
of net sales, respectively.  No individual customer, either through
Premier or otherwise, represented more than 10 percent of net sales
for any of the three years in the period ended June 30, 1998.

With the acquisition of Nellcor in August 1997, Mallinckrodt is a
more significant supplier to healthcare providers.  Customers will
benefit from the combined companies' expanded product lines and
strengthened position as a full service, single source for hospitals
and national and regional purchasing organizations.

After the acquisition of Nellcor was consummated, management of the
combined Company formulated an integration plan to combine
Mallinckrodt and Nellcor into one company.  Since both companies
(Mallinckrodt and Nellcor) had global healthcare operations, senior
management, through transition teams, assessed which activities
should be consolidated.  Management finalized and approved a Nellcor
integration plan during the year.  Accordingly, the Company recorded
additional purchase liabilities of $50.1 million, $30.8 million net
of related tax benefit, which were included in the acquisition cost
allocation and related goodwill.  The principal actions of the plan
include the involuntary severance of approximately 450 Nellcor
employees as a result of work force reduction primarily in U.S.
administrative areas ($37.2 million), relocation of Nellcor employees
($3.8 million), and the elimination of contractual obligations of
Nellcor which have no future economic benefit ($9.1 million).  These
actions are to be completed in 1999 and, although none are expected,
reductions in the estimated liability for these integration
activities will be offset against the related goodwill. 

During 1998, the Company recorded a pretax charge to selling,
administrative and general expenses of $19.1 million associated with
exiting certain activities related to Mallinckrodt operations.  The
charge included severance costs of $17.1 million related to the
involuntary severance of approximately 130 Mallinckrodt employees as
a result of work force reduction primarily in the Europe
administration function and U.S. sales force, and facility exit costs
of $2 million.  In addition, the Company recorded a pretax charge to
selling, administrative and general expenses of $49.5 million in 1998
related to employee transition bonuses of $16.6 million, increased
asset valuation reserves of $12.8 million, and other integration
costs of $20.1 million.

Substantial cost savings are expected to be realized by the combined
operations through procurement and economies of scale in dealing with
healthcare purchasing organizations, and the elimination of redundant
activities.  No assurance can be made as to the amount of cost
savings that will actually be realized; however, the Company 
will apply substantial management resources in order to achieve
operating efficiencies from integrating the companies.

See Item 7, Management's Discussion and Analysis of Financial
Condition and Results of Operations; and Item, 8 Note 2 of Notes to
Consolidated Financial Statements for additional information about
business activities.

Respiratory
-----------

The Respiratory Group, which includes Nellcor and Critical Care,
develops and markets products that help diagnose, monitor and treat
respiratory disorders, wherever patients receive care. Nellcor, which
was acquired by Mallinckrodt in August 1997, had established the
strategic objectives of focusing on the diagnosis, monitoring and
treatment of the respiratory-impaired patient across the global
continuum of care and of growing through product line extensions, new
product development, acquisitions, and strategic combinations which
would broaden its product line and enhance its competitive position. 
The most significant event occurred in 1995 when Nellcor
Incorporated, with its core competency in pulse oximetry, joined with
Puritan-Bennett Corporation, the leader in acute care ventilation.

Today, the Company's product line is the broadest in the industry and
is composed of 7 businesses - anesthesia and respiratory devices;
oximetry, including monitors and sensors; critical care and portable
ventilators; medical gas, oxygen therapy and spirometry; sleep
diagnostic and therapy; blood analysis products; and maintenance
services.
 
Anesthesia and respiratory devices include continuous core
temperature monitoring systems, fluid warming and convective warm air
temperature management systems, and airway management products.
Continuous core temperature monitoring and temperature management
systems are utilized both in surgical procedures and post-
operatively. The airway management product line consists of basic and
specialty tracheal tubes, and a full range of  disposables used in
hospitals to connect the airway management products to anesthesia and
ventilation machines, and tracheostomy tubes which are used in
hospitals and alternate site facilities for maintaining airways
during respiratory care. The Company's endotracheal and tracheostomy
tubes are by far the world market leaders.

Pulse oximetry products, including monitors and sensors, allow
clinicians to monitor both oxygen saturation levels in the
bloodstream and pulse rates of patients in a variety of clinical
settings and the home. The Company is the world leader in pulse
oximetry.

The Company's fetal pulse oximeter is already approved in Europe and
is undergoing clinical trials in the United States.  It is believed
this product will help lower the risks involved in childbirth by
reducing unnecessary Caesarean section deliveries. The Company
believes that fetal pulse oximetry can help clinicians make better-
informed decisions regarding the status of a fetus during labor and
delivery by providing information that helps them determine if the
fetus is adequately oxygenated when the heart-rate pattern is non-
reassuring.

The Company's OEM oximetry modules are sold to manufacturers of
multi-parameter monitoring systems which incorporate the Company's
oximetry technology into their own systems.  Mallinckrodt currently
has agreements with 76 OEMs and licensees.  These customers include
medical equipment manufacturers in the United States, Europe, Asia,
Japan and Latin America. 

During 1998, Mallinckrodt received 510(k) premarket notification
clearance for its new stand-alone bedside pulse oximetry product
line, including the NPB 190, NPB 195, NPB 290, and NPB 295.

The critical care and portable ventilators business currently offers
the world's most popular ventilator, the Puritan-Bennett 7200*
ventilator system. The 7200* Series ventilator system is a critical
care ventilator purchased primarily by hospitals to assist or manage
patient respiration in a variety of acute care settings. The 7200*
Series ventilator is designed to ease the work of patient breathing
and lessen patient discomfort. 

During the fourth quarter of 1998, the Company received marketing
clearance from the FDA to sell its new 840* ventilator, which is
designed to become the world's leading infant-pediatric-adult
critical care ventilator.  During the second quarter of 1998, the
Company received marketing clearance from the FDA to sell its new,
state-of-the-art 740* ventilator. The low operating and maintenance
costs of the 740* ventilator make it ideal for use in developing
countries and in subacute care facilities.

The medical gas, oxygen therapy and spirometry product family covers
the entire range of oxygen therapy functions, from oxygen
concentrators to portable liquid oxygen, to high-pressure oxygen
cylinder systems and conservation devices.  The Company is the
largest producer of nitrous oxide in North America, and distributes
this along with other medical and specialty gases through a
nationwide system of 32 branches. The Company's spirometry system
measures lung capacity and performance through a complete line of
devices targeted at hospital pulmonologists and primary care
physicians.  The Company also received 510(k) premarket clearance for
its new spirometry system, the Simplicity.  This small, lightweight,
handheld system is designed for primary care physicians.  The Company
also markets peak flow meters and other devices to help patients with
asthma or other forms of chronic obstructive pulmonary disease (COPD)
better manage their disease.
 
Diagnostic and therapeutic sleep products are used in hospital sleep
laboratories to diagnose sleep problems and in a variety of other
settings to monitor and treat sleep disorders.

HemoCue products include blood hemoglobin and glucose analysis
systems for use in hospitals and alternate site facilities. 

The Company's service programs support customers during all stages of
product ownership and assist healthcare providers in merging the most
appropriate technology with the most cost-effective methods,
including CliniVision, the market-leading handheld computing tool
used in respiratory therapy. 

Mallinckrodt's customers have traditionally been physicians and
healthcare professionals in clinical settings such as critical care
units of hospitals. However, with the increasing pressure to lower
health care costs, more patients are being treated in lower-cost
areas in and outside the hospital. The Company's products are now
purchased for use throughout the hospital, including intermediate
care and step-down units, labor and delivery rooms, emergency rooms
and general care floors, and are marketed and sold into the alternate
site care market, including surgicenters, subacute care and skilled
nursing facilities, physicians' offices, clinics, ambulatory care
settings, and the growing alternate care setting in the home.

The Company's products are sold in the major markets of the world,
principally through a direct sales force, assisted by clinical
consultants and specialists, corporate account managers, and
distributors in the United States and internationally.

During 1996, the Company entered into an agreement with Hewlett-
Packard Company (HP) whereby it licensed to HP for the European
market its proprietary fetal oximetry technology. Under the
agreement, HP will use the Company's software algorithms,
calibrations and fetal sensors for measuring fetal oxygen saturation
in future integrated HP fetal/maternal monitors.

In June 1995, the Company acquired Alton Dean, Inc. of Salt Lake
City, Utah to complement its temperature management business. Alton
Dean's products include in-line sterile fluid warmers, pressure
infusers, and irrigation pumps used in operating rooms and intensive
care units. These products are marketed through distributors in the
U.S. and Europe. This acquisition has since been integrated into the
Juarez, Mexico operation under the Warm Flo brand name.

In 1994, Mallinckrodt acquired DAR S.p.A. of Mirandola, Italy to
complement its tracheal and tracheostomy tube business and expand the
airway management business into related anesthesia and respiratory
disposables.  DAR products include disposable filters, heat/moisture
exchangers, masks and breathing circuits used in operating rooms and
intensive care units to provide respiratory support to critically ill
patients. 

In 1994, Juarez, Mexico became the new production base for the
temperature monitoring systems products used in emergency and
critical care settings. The Company capitalized on the rapid
conversion to disposable tracheal tubes in Europe by expanding its
anesthesiology products plant in Athlone, Ireland.  In 1996, a new
facility to manufacture tracheal tubes in Juarez, Mexico was fully
operational and the Argyle, New York manufacturing facility was
closed.

On September 30, 1996, the Company sold Mallinckrodt Sensor Systems,
Inc. to Instrumentation Laboratory Company.  The financial statements
include the results of this business prior to sale; however, the
associated earnings and assets were not material to the healthcare
segment or to Mallinckrodt Inc.

Respiratory manufacturing facilities are located in Angelholm,
Sweden; Argyle, New York; Athlone, Ireland; Carlsbad, California;
Irvine, California; Galway, Ireland; Johannesburg, South Africa;
Juarez, Mexico; Tijuana, Mexico; Indianapolis, Indiana; Mirandola,
Italy; Nancy, France; Plymouth, Minnesota; and St. Charles, Missouri. 
The company also operates 32 branches which transfill and distribute
medical gases.  Mallinckrodt owns the Argyle, Athlone, Carlsbad,
Galway, Mirandola and Nancy facilities.  The remainder are leased. 
The Argyle, New York facility is no longer in production and efforts
are underway to divest this facility.

For information about legal activities involving the Respiratory
Group, see the Other Litigation section of Legal Proceedings in Item
3.

Imaging
-------

The Imaging Group includes the manufacture, sale and distribution of
products used in radiology, cardiology and nuclear medicine.

Radiology and cardiology products include iodinated contrast media
(ionic and nonionic), ultrasound contrast agents, magnetic resonance
imaging agents (MRI), and catheters for use in studies of the
cardiovascular system, brain, abdominal organs, renal system,
peripheral vascular system, and other areas of the body to aid in
diagnosis and therapy.  These products are marketed in the U.S.
principally by a geographically organized sales force, and
internationally through direct sales forces and distributors.  

Since its introduction in the U.S. in 1989, Optiray*, a low osmolar,
nonionic x-ray medium, has been widely accepted in both radiology and
cardiology procedures.  Optiray* began to be introduced outside the
U.S. in 1991.  To provide capacity for growing Optiray* volumes in
the international market, the Company opened a new production
facility in Dublin, Ireland during 1994 for the manufacture of
Optiray* in its bulk drug form.  Capacity expansion projects at
Mallinckrodt's existing plant in St. Louis, Missouri were completed
in 1994 and again in June 1997.  In addition, the Company developed a
new process for the synthesis of Ioversol, the key compound in the
production of Optiray*, which will result in lower cost and
additional capacity.  The process change was completed at the Dublin
facility in February 1998 and is expected to be completed at the St.
Louis manufacturing site in January 2000.

In June 1990, Mallinckrodt introduced Ultraject*, a patented
innovation in contrast media agent administration.  This prefilled
syringe provides a more efficient, convenient and safer method of
delivering contrast agents.  Ultraject* allows Mallinckrodt to
differentiate its contrast media offering by providing advantages
over traditional glass bottles and vials because it reduces handling
hazards and the potential for dosage error.  In January 1996,
Mallinckrodt acquired Liebel-Flarsheim Company of Cincinnati, Ohio to
enhance its position in the contrast imaging arena.  Liebel-
Flarsheim's products include contrast media power injectors for
angiography and CT, x-ray components, and specialized equipment for
diagnostic urology procedures.

In September 1996, Mallinckrodt signed a collaboration agreement with
Epix Medical Inc., formerly known as METASYN, Inc., to co-develop a
blood pool MRI agent.  Mallinckrodt has worldwide manufacturing
rights for the products developed and has selling and marketing
rights to them for all countries, except Japan.  In April 1997,
Mallinckrodt introduced GastroMARK*, an oral GI bowel marker used in
magnetic resonance imaging procedures.  This product was licensed
from Advanced Magnetics, Inc. of Cambridge, Massachusetts and is
distributed exclusively by Mallinckrodt in the U.S., Canada, Mexico,
Japan, Australia and New Zealand.

The cardiology business is directed toward meeting the needs of both
invasive and non-invasive cardiology in diagnosing and treating
diseases of the heart and the cardiovascular system.  The business
currently offers both ionic and nonionic contrast agents, ultrasound
contrast agents, and interventional catheters and related supplies. 
These products are sold directly to hospitals, primarily by a
dedicated sales organization within Mallinckrodt's geographically
organized sales force.  

In addition to selling Imaging products to individual hospitals and
integrated healthcare networks, a significant amount of sales occurs
through various group purchasing organizations.  In 1996,
Mallinckrodt won a five-year agreement (since extended to seven
years) with Premier.  Premier is the largest healthcare purchasing
group in the U.S., representing approximately 30 percent of all x-ray
contrast media purchased.  In April 1997, Nuclear Medicine products
were added to the Premier contract.

During 1989, Mallinckrodt acquired an equity position of less than
two percent of the then outstanding common shares of Molecular
Biosystems, Inc. (MBI) of San Diego, California, and obtained
exclusive marketing rights in the Western Hemisphere for Albunex*, a
new ultrasound contrast agent.  Albunex* was unanimously recommended
for approval by a Devices and Radiology Advisory Panel of the FDA in
July 1992.  MBI received an approvable letter for Albunex* from the
FDA in April 1994.  Final approval was received early in August 1994,
with Mallinckrodt's launch of the product occurring in the second
quarter of 1995.  On September 7, 1995, Mallinckrodt entered into a
new distribution and investment agreement for Albunex* and
OPTISON*(FS069), a major new ultrasound contrast agent in
development.  Under the September 7, 1995 agreement, Mallinckrodt
made an additional equity investment of $13 million in MBI.  In
addition, the agreement also provides for Mallinckrodt to partially
fund OPTISON* clinical development and make various milestone
payments.  Mallinckrodt's total equity position in MBI pursuant to
this agreement is under ten percent of that Company's outstanding and
publicly traded common stock.  In December 1996, Mallinckrodt
extended the agreement with MBI to exclusively distribute in Europe,
Africa, most of Asia, Australia and New Zealand.  Albunex* received
FDA approval in June 1997 for the diagnosis of fallopian tube patency
as part of infertility workup.

On October 17, 1996, MBI submitted a premarket approval application
to the FDA's Center for Devices and Radiologic Health (CDRH) for
OPTISON*.  In February 1997, OPTISON* received unconditional
recommendation for approval from the CDRH advisory panel of the FDA. 
Then as a result of a citizens petition and subsequent court request,
the FDA reconsidered whether OPTISON* should continue to be reviewed
as a device while other ultrasound contrast agents were regulated as
drugs.  On July 29, 1997, the FDA decided that all ultrasound
contrast agents are drugs, not medical devices.  Therefore, the
OPTISON* premarket approval application to the CDRH was transferred
to the Center for Drug Evaluation and Research (CDER).  The FDA's
decision did not affect the marketing of Albunex*.  In a related
matter, MBI and Mallinckrodt have taken legal action to preempt any
competitor allegation regarding patent infringement by requesting the
United States Patent Office to reexamine patents granted.  For
additional information about the legal action, see the Other
Litigation section of Legal Proceedings in Item 3.

On December 31, 1997, OPTISON* received final FDA approval.  The
product was launched in the United States on January 2, 1998. 
OPTISON*, the first of the perflourocarbon-containing ultrasound
agents to reach the market, enables physicians to enhance resolution
of anatomical structure where ultrasound alone is inadequate.  The
product is specifically indicated for use in patients with suboptimal
echocardiograms to opacify the left ventricle and to improve the
delineation of the left ventricular endocardial borders.  Ultrasound
cardiac imaging has several advantages over other imaging methods. 
It is minimally invasive, relatively inexpensive and can provide a
real-time image.  OPTISON* helps increase the effectiveness of
echocardiography in diagnosing heart disease by introducing gas-
filled microspheres into the blood.  The microspheres travel in the
bloodstream to the left ventricle of the heart, where the
microspheres reflect the soundwaves generated from ultrasound
equipment, enabling the development of a clearer, more diagnostic
ultrasound image.  

On May 19, 1998, Mallinckrodt announced that OPTISON*, the world's
first and only commercially available next-generation cardiac
ultrasound contrast imaging agent, had received final marketing
authorization by the European Commission for use in patients with
suspected or known cardiovascular disease.  The authorization covers
all 15 member states of the European Union. 

Nuclear medicine products consist of radiopharmaceuticals used to
provide images of numerous body organs, anatomy and function, and to
diagnose and treat diseases.  Nuclear medicine products are sold to
hospitals and clinics in the U.S. by both a direct geographically
organized sales force and through a nationwide network of nuclear
pharmacies.  Internationally, nuclear medicine products are marketed
through direct sales forces and distributors.

In 1995, Mallinckrodt signed an agreement with Medi+Physics to
distribute healthcare proprietary radiopharmaceutical products
through Medi+Physics' radiopharmacies in the U.S. and Canada. 
Additionally, in 1997, the Company signed a five-year co-marketing
agreement with Medi+Physics to market Myoview* in the U.S.

In June 1994, the FDA authorized U.S. marketing of OctreoScan*.  This
unique radiopharmaceutical assists physicians in diagnosing and
determining the extent of spread of certain types of cancers, using a
non-invasive procedure instead of surgical biopsy.  OctreoScan* is
manufactured at facilities in St. Louis, Missouri and Petten, the
Netherlands.  Introduction of the product began in June 1994 through
key hospitals specializing in cancer treatment.  Marketing of the
product was expanded in 1995 upon FDA approval of promotional
material.

In 1992, Mallinckrodt signed an agreement with the Netherlands Energy
Research Foundation to construct a plant in Petten, the Netherlands
dedicated to the manufacture of molybdenum-99 (Mo99), a key raw
material used in the production of the nuclear medicine imaging
product technetium-99m.  The Mo99 production facility, which began
operation in June 1996, is a new facility adjacent to the existing
manufacturing site.

To meet growing worldwide demand for cyclotron-produced products,
Mallinckrodt brought a new cyclotron on-line at Petten, the
Netherlands in 1993 and expanded cyclotron capacity at its
radiopharmaceutical production facility in Maryland Heights, Missouri
in 1995.  The Company expanded the Maryland Heights, Missouri
manufacturing facility to introduce an improved technetium-99m
generator product in early 1997.

Imaging manufacturing facilities are located in Angleton, Texas;
Cincinnati, Ohio; Maryland Heights, Missouri; Mexico City, Mexico;
Mulhuddart, Ireland; Petten, the Netherlands; Pointe Claire, Canada;
Raleigh, North Carolina; and St. Louis, Missouri.  Mallinckrodt owns
these facilities.  The Company also operates 37 nuclear pharmacies
located in leased facilities throughout the U.S. 

Pharmaceuticals
---------------

Pharmaceuticals Group products include analgesics such as
acetaminophen (APAP) used to control pain and fever; codeine salts,
morphine and other opium-based narcotics and synthetic narcotics used
to treat pain and coughs; and peptides which are used in many new
pharmaceuticals.  Other Pharmaceuticals Group products include
laboratory chemicals used in analysis and microelectronic chemicals
used in the semiconductor industry; Toleron brand of ferrous fumarate
which stimulates the formation of red blood cells; magnesium stearate
for use as a tableting aid in pharmaceuticals; potassium chloride for
use as a potassium supplement in pharmaceuticals and nutritionals;
and other salts, chemicals and reagents used in the production of
pharmaceutical and food products.

Most pharmaceutical products are sold through distributors and by a
direct sales force to the pharmaceutical industry for use in the
manufacture of dosage form drugs.  Narcotic prescription chemicals
are sold directly to pharmaceutical manufacturers and pharmaceutical
dosage products are sold directly to drug wholesalers and chain
pharmacies, while opiate addiction products are sold primarily to
clinics.  Laboratory chemical products, which include thousands of
high-purity reagent chemicals used in research and development and
analytical laboratories, are sold primarily through distributors to
medical, industrial, educational and governmental laboratories.  A
direct sales force is used to offer microelectronic chemicals and
photoresist strippers to worldwide semi-conductor chip producers.

Mallinckrodt expanded its product offering in healthcare by acquiring
an analgesic pharmaceutical product line from King Pharmaceuticals,
Inc. in 1996.  In November 1996, Mallinckrodt acquired D.M. Graham
Laboratories, Inc. of Hobart, New York.  Graham Laboratories is a
contract manufacturer of both tablet and capsule dosage
pharmaceuticals and a licensed producer of a variety of medicinal
narcotic substances.  The Company expanded its capacity at its St.
Louis, Missouri site to manufacture pharmaceutical intermediates and
additives with the addition of an FDA registered facility in 1997. 
The APAP manufacturing at the Raleigh, North Carolina facility has
been incrementally expanded over the past few years, while costs have
been reduced.  Capacity of the Derbyshire, England para-aminophenol
(PAP, a precursor of APAP) manufacturing plant has also been
significantly increased.  Mallinckrodt also upgraded its Compap*
production facility in Greenville, Illinois in 1997.  In addition,
the Company continues to work on several projects to expand and
upgrade the narcotics facility in St. Louis, Missouri to meet growing
worldwide demand.

Pharmaceuticals are manufactured in Derbyshire, England;  Deventer,
the Netherlands; Greenville, Illinois; Hayward, California; Hobart,
New York; Mexico City, Mexico; Paris, Kentucky; Phillipsburg, New
Jersey; Raleigh, North Carolina; St. Louis, Missouri; and Torrance,
California.

The Company has distribution locations in the U.S. in Carlsbad,
California; Mission Viejo, California; Plymouth, Minnesota; St.
Charles, Missouri; St. Louis, Missouri; Cincinnati, Ohio; and El
Paso, Texas.

The Company leases space for its international operations in
Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, China,
Columbia, France, Germany, Ireland, Italy, Japan, Korea, Malaysia,
Mexico, the Netherlands, Philippines, Poland, Portugal, Puerto Rico,
Singapore, South Africa, and Switzerland. 

OTHER ACTIONS

Discontinued Operations
-----------------------

In 1998, the Company sold or committed to sell the catalysts and
chemical additives and Aero Systems divisions.  Certain liabilities
for environmental, litigation and employee benefits remain with the
Company.

On June 30, 1997, the Company sold its animal health segment for cash
plus the assumption of certain liabilities.  Environmental
liabilities, certain facility leases, and certain liabilities for
employee benefits, including postretirement benefits, were retained
by the Company.

On March 31, 1997, the Company disposed of Fries & Fries, Inc., a
wholly owned subsidiary which owned the Company's 50 percent interest
in Tastemaker, which was the flavors joint venture with Hercules
Incorporated.

In October 1995, the Company disposed of its feed ingredients
business.  Discontinued operations for 1997 and 1996 also included
other charges, primarily for environmental and litigation costs
related to previously divested operations. 

The results of these transactions and the results of operations from
these businesses have been reclassified to discontinued operations,
and prior year results have also been reclassified.  For additional
information about discontinued operations, see Management's
Discussion and Analysis of Financial Condition and Results of
Operations in Item 7, and Note 2 of the Notes to Consolidated
Financial Statements in Item 8.

OTHER ACTIVITIES

Research and Development
------------------------

The Company performs applied research directed at development of new
products, development of new uses for existing products, and
improvement of existing products and processes.  Research and
development programs include laboratory research as well as product
development and application.  The Company's development activities
are focused on market-place needs.  Internal research efforts in each
of its business groups are supplemented with third-party and
university technical agreements.  Research and development expenses,
excluding purchased research and development as a result of the
Nellcor acquisition in 1998, were $149.0 million, $100.5 million and
$80.6 million in 1998, 1997 and 1996, respectively.

Research and development activities for the Imaging Group are
performed primarily in Angleton, Texas; Cincinnati, Ohio; Petten, the
Netherlands; and St. Louis, Missouri.  Research and development
activities for the Pharmaceuticals Group are carried on in St. Louis. 
Technical personnel for process support are located at each
manufacturing location.

The Respiratory Group's research and development functions are
individually aligned with each of the seven business units within the
organization: anesthesia and respiratory devices; oximetry, including
monitors and sensors; critical care and portable ventilators; medical
gas, oxygen therapy and spirometry; sleep diagnostic and therapy;
blood analysis products; and maintenance services.  The research and
development functions are housed most frequently near a primary
manufacturing site, which are principally located in Carlsbad,
California; Pleasanton, California; Hazelwood, Missouri; Irvine,
California; Mirandola, Italy; Plymouth, Minnesota; St. Charles,
Missouri; and Angelholm, Sweden.

Patents, Trademarks and Licenses
--------------------------------

Mallinckrodt owns a number of patents and trademarks, has a
substantial number of patent applications pending, and is licensed
under patents owned by others.  No single patent is considered to be
essential to the Company as a whole, but in the aggregate, the
patents are of material importance to the Company. 

Government Regulation
---------------------

Drug and Medical Device Regulation -- Most of the Company's
businesses are subject to varying degrees of governmental regulation
in the countries in which operations are conducted, and the general
trend is toward regulation of increasing stringency.  In the United
States, the drug and device industries have long been subject to
regulation by various federal, state and local agencies, primarily as
to product safety, efficacy, advertising and labeling. The exercise
of broad regulatory powers by the FDA continues to result in
increases in the amounts of testing and documentation required for
FDA clearance of new drugs and devices and a corresponding increase
in the expense of product introduction. Similar trends toward product
and process regulation are also evident in a number of major
countries outside of the United States, especially in the European
Economic Community where efforts are continuing to harmonize the
internal regulatory systems.  In 1997, the Food and Drug
Administration Modernization Act was passed in the United States and
was the culmination of a comprehensive legislative reform effort
designed to streamline regulatory procedures within the FDA and to
improve the regulation of drugs and medical devices. The legislation
was principally designed to ensure the timely availability of safe
and effective drugs and medical devices by expediting the premarket
review process for new products.

The regulatory agencies under whose purview the Company operates have
administrative powers that may subject the Company to such actions as
product recalls, seizure of products, and other civil and criminal
sanctions. In some cases, the Company may deem it advisable to
initiate product recalls voluntarily. 

Puritan-Bennett Corporation (Puritan-Bennett), which became a wholly
owned subsidiary of Mallinckrodt as a result of the acquisition of
Nellcor in August 1997, had entered into a consent decree with the
FDA in January 1994, pursuant to which Puritan-Bennett agreed to
maintain systems and procedures complying with the FDA's good
manufacturing practices regulation and medical device reporting
regulation in all of its device manufacturing facilities.  Burton A.
Dole, Jr., who currently serves as the sole director and the sole
officer of Puritan-Bennett, is a party to the consent decree.

Puritan-Bennett has experienced and will continue to experience
incremental operating costs due to ongoing regulatory compliance
requirements and quality assurance programs initiated in part as a
result of the FDA consent degree.  The amount of these incremental
costs currently cannot be completely predicted and will depend upon a
variety of factors, including future changes in statutes and
regulations governing medical device manufacturers, and the manner in
which the FDA continues to enforce and interpret the requirements of
the consent decree.

There can be no assurance that the Company will not experience
problems associated with FDA regulatory compliance, including
increased general costs of ongoing regulatory compliance and specific
costs associated with the Puritan-Bennett consent decree.  The
Company could experience a material adverse effect on business,
operations, profitability and outlook from, among other things:  (i)
requirements associated with the Puritan-Bennett consent decree; (ii)
requirements arising from continuing company-wide adherence to
quality assurance and good manufacturing practices; (iii) the results
of future FDA inspections of the operations and facilities of the
Company; and (iv) any modification, extension or adverse
interpretation of the Puritan-Bennett consent decree or any product
recall, plant closure or other FDA enforcement activity with respect
to the Company.

Environmental Regulation -- The Company's operations are subject to a
variety of federal, state and local environmental laws and
regulations that govern, among other things, the generation,
handling, storage, transportation, treatment and disposal of
hazardous substances, discharges to water, and air emissions from
equipment and facilities.

Most of the Company's environmental-related capital expenditures are
in response to provisions of the Federal Clean Air Act; Water
Pollution Control Act; Resource Conservation and Recovery Act;
Comprehensive Environmental Response, Compensation, and Liability
Act; and land use, air and water protection regulations of the
various localities and states, and their foreign counterparts. 
Capital expenditures worldwide relating to air emission control,
wastewater purification, land reclamation and solid waste disposal
totaled approximately $6 million in 1998 and $6 million in 1997.  The
Company currently estimates that environmental capital expenditures
during 1999 and 2000 will be $21 million and $14 million,
respectively.

During 1996, the Company assumed certain liabilities to remediate
various sites in the future and was compensated by the previous owner
of the applicable properties for certain remediation costs to be
incurred.  The Company established additional environmental reserves
for discontinued operations.

The Company had accruals, included in current accrued liabilities and
other noncurrent liabilities and deferred credits, of $126.2 million
at June 30, 1998 for costs associated with the study and remediation
of Superfund sites and for the Company's current and former operating
sites.  Any claims for potential recovery from any sources have not
been valued against the accrued environmental liabilities.  While
ongoing litigation may eventually result in recovery of costs
expended at certain of the environmental sites, any recovery is
contingent upon a successful outcome and has not been accrued.

The Company has established accruals only for those matters that are
in its view probable and estimable.  Based upon information currently
available, management believes that existing accruals are sufficient
and that it is not reasonably possible at this time that any
additional liabilities will result from the resolution of these
matters that would have a material adverse effect on the Company's
consolidated results of operations or financial position.

Compliance -- Mallinckrodt endeavors to comply with all applicable
laws and regulations, but there can be no assurance that its
compliance efforts will always be acceptable.  Instances of
non-compliance have occurred in the past and, although they have not
had a material adverse impact on the Company, such instances could
occur in the future and possibly have a material adverse impact.  In
particular, the Company is unable to predict the extent to which it
may be adversely affected by future regulatory developments such as
new or changed laws or regulations. 

See also the Environmental Matters section of Legal Proceedings in
Item 3, Management's Discussion and Analysis of Financial Condition
and Results of Operation in Item 7, and Note 21 of the Notes to
Consolidated Financial Statements in Item 8 for additional
information. 

Employees
---------

Mallinckrodt had 12,823 employees at June 30, 1998, consisting of
7,706 U.S. based employees and 5,117 employees outside the U.S.

Labor Relations
---------------

In the U.S., the Company has ten collective bargaining agreements
with nine international unions or their affiliated locals covering
969 employees.  Three agreements covering 348 employees were
negotiated during 1998, with no work stoppages.  Five agreements
covering 527 employees will expire in 1999.  Eight operating
locations outside the U.S. have collective bargaining agreements
and/or work counsel agreements covering approximately 1,210
employees.  Recent wage and benefit increases were consistent with
competitive industry and community patterns.

PART II.

<PAGE>
<TABLE>

ITEM 6.   SELECTED FINANCIAL DATA
(Dollars in millions, except per share amounts)
<CAPTION>

                                         Years Ended June 30,                  
                        ------------------------------------------------------
                         1998 (1)     1997       1996       1995     1994 (2)
                        ---------   ---------  ---------  ---------  ---------
<S>                     <C>         <C>        <C>        <C>        <C>
SUMMARY OF OPERATIONS
Net sales.............  $2,367.0    $1,698.1   $1,596.9   $1,433.8   $1,244.0  
Earnings (loss)
 from continuing
 operations...........    (268.4)      175.2      143.6      127.0       73.9
Discontinued
 operations (3).......      72.4        14.9       68.3       53.3       29.9
Cumulative effect
 of accounting
 change (4)...........      (8.4)
                         --------   --------   --------   --------   ---------

Net earnings (loss)...    (204.4)      190.1      211.9      180.3      103.8
Preferred stock
 dividends............       (.4)        (.4)       (.4)       (.4)       (.4)
                        ---------   ---------  ---------  ---------  ---------
Available for common
 shareholders.........  $ (204.8)   $  189.7   $  211.5   $  179.9   $  103.4   
                        =========   =========  =========  =========  =========

PER COMMON SHARE DATA                        
Diluted earnings
 (loss) from continuing
 operations...........  $  (3.69)   $   2.33   $   1.88   $   1.63   $    .95
Diluted net
 earnings (loss)......     (2.81)       2.53       2.77       2.32       1.33
Dividends declared....       .66         .65        .61        .55        .49  
Book value............     13.60       17.16      16.44      15.12      13.05

OTHER DATA
Total assets..........  $3,873.1    $2,975.4   $3,017.6   $2,488.6   $2,258.2
Working capital.......  $   (8.8)   $  963.1   $  359.1   $  271.9   $  261.3
Current ratio.........     1.0:1       2.5:1      1.4:1      1.5:1      1.5:1
Total debt (5)........  $1,255.9    $  555.9   $  666.1   $  584.0   $  616.8
Shareholders' equity..  $1,005.9    $1,251.2   $1,232.2   $1,171.5   $1,015.9
Return on shareholders'
 equity (5)...........     (24)%         14%        12%        12%         8%
Capital
 expenditures (5).....  $  142.7    $  104.4   $  116.6   $  124.3   $  140.9
Total dividends paid..  $   48.5    $   48.2   $   45.7   $   42.2   $   37.7
Weighted average
 common shares
 (in millions)........      73.5        75.1       76.4       77.5       77.7 
Common shares
 outstanding
 (in millions)........      73.2        72.3       74.3       76.8       77.0
Number of
 employees (5)........    12,800       8,000      8,000      7,800      7,400

 </TABLE>

(1)  See Note 2 of Notes to Consolidated Financial Statements for     
     information concerning the Company's restatement of its 1998     
     consolidated financial statements.  Financial data for 1998      
     reflect the information from the Company's restated consolidated 
     financial statements.

     On August 28, 1997, the Company acquired Nellcor Puritan Bennett 
     Incorporated (Nellcor) through an agreement to purchase for cash 
     all of the outstanding shares of common stock of Nellcor for     
     $28.50 per share.  The aggregate purchase price of the Nellcor   
     acquisition was approximately $1.9 billion.  Approximately       
     $308.3 million of the purchase price was allocated to purchased  
     research and development.  This intangible asset, which had no   
     tax benefit, was charged to results of operations during 1998.   
     Of the total charge of $308.3 million, $2.0 million related to   
     the Aero Systems division which was sold and reclassified to     
     discontinued operations in 1998.

     The sale of Nellcor inventories, which were stepped up to fair   
     value in connection with allocation of purchase price, decreased 
     earnings by $75.4 million, $46.7 million net of taxes for 1998.  
     After-tax charges to the Respiratory Group, which are included   
     in earnings (loss) from continuing operations, were $46.1        
     million.  After-tax charges to discontinued operations related   
     to the Aero Systems division were $.6 million.

     Costs of exiting certain activities related to Mallinckrodt      
     operations plus integration costs of the combined Mallinckrodt   
     and Nellcor operations were $68.6 million, $46.4 million net of  
     taxes.  See the Acquisitions section of Note 2 of the Notes to   
     Consolidated Financial Statements for additional disclosure.

(2)  Results for 1994 included restructuring charges of $93.9         
     million, $58.8 million after taxes, or 76 cents per share.       
     Pretax charges included in healthcare and discontinued           
     operations related to animal health were $73.9 million and $20.0 
     million, respectively.

     Results for 1994 also included favorable tax adjustments of $3.0 
     million, or 4 cents per share, resulting from U.S. and foreign   
     tax law changes.

(3)  See Note 2 of Notes to Consolidated Financial Statements for     
     information on discontinued operations in 1998, 1997 and 1996.   
     Results for 1995 and 1994 represent earnings from the catalysts  
     and chemical additives division, animal health segment, Fries &  
     Fries, Inc., and the feed ingredients business, partially offset 
     by environmental and related litigation charges.

(4)  In April 1998, the American Institute of Certified Public        
     Accountants (AICPA) issued SOP 98-5, "Reporting on the Costs of  
     Start-Up Activities" (SOP 98-5), which requires that costs       
     related to start-up activities be expensed as incurred.  Prior   
     to 1998, the Company capitalized its preoperating costs incurred 
     in connection with opening a new facility.  The Company elected  
     to early adopt the provisions of SOP 98-5 in its financial       
     statements for 1998.  The effect of adoption of SOP 98-5 was to  
    record a charge of $8.4 million, net of taxes, for the            
    cumulative effect of an accounting change to expense costs that   
    had previously been capitalized prior to July 1, 1997.

(5)  Excludes discontinued operations.

<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
          AND RESULTS OF OPERATIONS.

All references to years are to fiscal years ended June 30 unless
otherwise stated.  Certain amounts in prior years have been
reclassified to conform to the current year presentation.  All
earnings per share amounts are calculated on a diluted basis unless
otherwise stated.

OVERVIEW

In connection with the Company's filing of a shelf registration for
debt securities in December 1997, Mallinckrodt was engaged in
discussions with the staff of the Securities and Exchange Commission
(SEC) regarding the purchase price allocation related to the
acquisition of Nellcor Puritan Bennett Incorporated (Nellcor).  On
January 26, 1999, the Company concluded these discussions with the
SEC and, as a result, has agreed to recalculate and restate the
amount of purchase price allocated to purchased research and
development under a methodology preferred by the SEC as articulated
publicly in an SEC letter to the American Institute of Certified
Public Accountants in September 1998.  The amount of purchased
research and development charged to operations in the first quarter
of 1998 of $398.3 million has been reduced by $90 million to $308.3
million.  A corresponding $90 million increase in goodwill will be
amortized over the previously established 30-year amortization period
beginning in September 1997.  The effects of this change on
previously reported consolidated financial statements for 1998 are
shown in Note 2 of Notes to Consolidated Financial Statements.  The
following discussion and analysis have been changed to reflect this
restatement.

1998 vs. 1997
-------------

During the past two years, Mallinckrodt completed the largest
acquisition in its history and divested certain businesses to improve
the strategic position and focus of the Company.

On August 28, 1997, the Company acquired Nellcor through an agreement
to purchase for cash all of the outstanding shares of common stock of
Nellcor for $28.50 per share.  The aggregate purchase price of the
Nellcor acquisition was approximately $1.9 billion.  Nellcor is the
worldwide market leader in providing products that monitor, diagnose
and treat respiratory impaired patients.  The product lines include
pulse oximetry monitors and sensors, critical care and portable
ventilators, home oxygen therapy products, sleep apnea diagnostic and
therapy products, and medical gas products and distribution systems.

The acquisition was accounted for under the purchase method of
accounting and, accordingly, the results of operations of Nellcor
have been included in the Company's consolidated financial statements
since September 1, 1997.

The purchase price of the acquisition was allocated to the assets
acquired and liabilities assumed based upon generally accepted
accounting principles and estimated fair values at the date of
acquisition.  Identifiable intangible assets were purchased research
and development, technology, trademarks and trade names, and the
assembled work force.  The purchased research and development of
$308.3 million was charged to expense in 1998.  Technology, also
referred to as core or base technology and which represents that
portion of the existing technology that provides a basis for future
generation products as well as existing products, was recorded at
$374.2 million and is being amortized on a straight-line basis over
15 years.  The remaining identifiable intangible assets of $152.9
million are being amortized on a straight-line basis over 10 to 25
years (weighted average life of 24 years).  Goodwill, which
represents the excess of the purchase price over the fair value of
the net assets acquired, was $814.2 million and is being amortized on
a straight-line basis over 30 years.  The amortization of
identifiable intangible assets and goodwill directly associated with
the Nellcor acquisition was $48.9 million for 1998.  Since the
results of Nellcor have only been included in the Company's
consolidated results since September, the amortization for 1998
represents ten months of activity.  The Company also recorded a
deferred tax liability of $211.0 million, representing the tax effect
of timing differences recorded as part of the acquisition.

The Company's most significant divestitures were the animal health
business and flavors joint venture in 1997 and the sale of the
catalysts and chemical additives and Aero Systems divisions in 1998
and early in 1999.  The Company now operates predominantly in the
healthcare industry and is comprised of three business groups -
Respiratory, Imaging and Pharmaceuticals.

The Company incurred a loss from continuing operations of $268.4
million, or $3.69 per share, for 1998 due to nonrecurring acquisition
and integration charges related to the acquisition of Nellcor which
totaled $449.3 million, $398.8 million net of taxes or $5.47 per
share.  The nonrecurring noncash acquisition charges are purchased
research and development and inventory stepped up to fair value.

The purchased research and development valued at $308.3 million was
charged to operations during the first quarter of 1998.  The
components of purchased research and development by business are
pulse oximetry including perinatal - $194 million;  hospital
ventilators - $45 million; oxygen therapy - $20 million; and sleep,
alternate care and other - $49 million.  Of this amount, $306.3
million related to the Respiratory Group and $2.0 million related to
the Aero Systems division, which was sold and reclassified to
discontinued operations in the fourth quarter of 1998.

The purchased research and development represents the value of
numerous new medical devices and other products/technologies in all
major product lines that were in various stages of development and
had not reached technological feasibility at the transaction date. 
No alternative future uses were identified prior to reaching
technological feasibility because of the uniqueness of the projects. 
Additionally, no identifiable alternate markets  were established for
projects that were in early stages of development. 

The most significant acquired projects, based upon discounted cash
flows, that were in-process at the date of acquisition were in pulse
oximetry and hospital ventilation.  Pulse oximetry, which includes
monitors, sensors, OEM and licensing, and related service for all
types of patients and environments including perinatal, generated
approximately 63 percent of purchased research and development value. 
Pulse oximetry products provide the continuous measurement of
arterial oxygen saturation, pulse rate and pulse strength in a
variety of settings and for a spectrum of patients.  The most
significant of the pulse oximetry projects underway at the date of
acquisition included a new family of monitors and sensors that
incorporate new light emitting diode and detector component designs
with enhanced motion tolerance capability, packaging and integration
of data storage features to allow advanced performance, cost
reduction, production automation, size reduction and reduced power
requirements.  In the area of fetal pulse oximetry, the major
products in development are expected to help lower the risks involved
in childbirth by reducing unnecessary caesarean section deliveries. 
The Company believes fetal pulse oximetry can help clinicians make
better informed decisions regarding the status of a fetus during
labor and delivery by providing information that helps them determine
if the fetus is adequately oxygenated when the heart rate pattern is
non-reassuring.  These projects are expected to be complete and the
related products commercially available in the U.S. within three
years of the acquisition date with an expected cost to complete of
approximately $20 million.  

The hospital ventilation projects generated approximately 15 percent
of the purchased research and development value.  Hospital
ventilators provide ventilation to patients requiring respiratory
support.  The most significant projects that were underway at the
date of acquisition were Models 840* and 740*/760* which were to
provide continuous respiratory support for a wide range of pediatric
to adult patients for a wide variety of clinical conditions.  The
Model 840* is a dual microprocessor controlled critical care
ventilator for infant, pediatric and adult patients who require
either invasive or noninvasive ventilation with features that include
a graphic user interface for viewing patient data and setting
parameters and alarm values.  The Model 740*/760* is a low cost
critical care ventilator with a new engine capable of operating with
low power consumption.  The Model 760*, built on the 740* platform,
has pressure and volume control features.  The products were expected
to be commercially available within two years of the acquisition date
with an estimated cost to complete of approximately $8 million.  All
three models received FDA market clearance by December 1998.

Oxygen therapy represents the third largest business category of
projects in terms of purchased research and development value. 
Oxygen therapy covers the entire range of functions from oxygen
concentrators to portable liquid oxygen, to high pressure oxygen
cylinder systems and conservation devices.  The most significant
projects underway at the date of acquisition were liquid oxygen
systems using cryogenics to reduce the frequency of deliveries, and
new oxygen concentrators with features which include reduced noise
levels, fewer parts, lighter weight and lower cost to manufacture. 
These projects are expected to be complete and the related products
commercially available within four years of the acquisition date with
an expected cost to complete of approximately $12 million.

The major risks associated with timely completion and
commercialization of these products are to transform concepts into
designs that meet customer requirements, gain regulatory approval and
market clearance in the key markets, and ramp up the manufacturing
process once regulatory approval is obtained.  

While the assembled work force was valued using the cost approach,
the Company took the following steps to determine the purchased
research and development, developed technology, and trademarks and
trade name values.  The projected net cash flows from each product
line and new product in development were determined based upon
management's estimates of future revenues and expected profitability
related to the product portfolio.  These cash flows were then
discounted to their present values.  The discount rate includes a
rate of return which accounts for the time value of money as well as
the investment risk factors to appropriately reflect the risks of
realization of the cash flows.  The projected net cash flows were
discounted to present value utilizing discount rates of 15 percent,
16 percent and 20 percent for developed technology, purchased
research and development, and trademarks and trade names,
respectively.  For the purchased research and development, the
discounted cash flows from in-process projects were then reduced to
reflect only the accomplishments made by Nellcor toward the products'
ultimate completion through the acquisition date.  

The projected net cash flows were developed in the following manner. 
Revenue assumptions were based upon the growth rates for markets
served and the estimated life of each product's technology. 
Significant aggregate revenue growth as projected by the Company's
strategic marketing units for developed and in-process products
assumed increasing demand for medical devices, and the Company's
ability to maintain a significant share of the market.  The revenues
associated with in-process technology increase to $937 million in
2004 and then decline over subsequent years, while revenue
assumptions for the developed products remain relatively flat in 1999
as compared to 1998 and then begin to decline gradually in subsequent
periods.  The trademark and trade name cash flows were based upon the
revenues of both developed and in-process products and a 2 percent
royalty rate.  Costs of goods sold, expressed as a percent of
revenue, were expected to decrease from current projections of 48
percent to 43 percent over time.  Gross margins, as they relate
inversely to costs of goods sold as a percentage of revenue, were
assumed to increase, in the aggregate, over time due mainly to
improving efficiency in the manufacturing processes and more
profitable products having a greater impact on total sales.  Selling,
general and administration expenses, excluding depreciation and
amortization, expressed as a percent of revenues were estimated at 24
percent for all periods.  Maintenance research and development
expense, which includes routine changes, additions and modifications
undertaken after a product is introduced to the market, was
established at 2 percent of revenue for both developed and in-process
technologies for all periods.  An after-tax cash flow was then
calculated by deducting income tax expense and contributory asset
charges from operating income.

Results to date have been consistent with the underlying projections
and assumptions of revenues to be generated, estimated costs to
complete and completion dates for the in-process projects and
acquired technologies.  Material negative variations from the
projected results would impact the Company's expected return on its
investment in Nellcor, its future results of operations and financial
position.  In 1998, the Company received market approval and launched
the Model 740 and Model 840 ventilators.  These products, although
delayed approximately three months from expected launch date, have
been well accepted in the market place.

The sale of Nellcor inventories, which as part of the purchase price
allocation were stepped up to fair value, decreased earnings by $75.4
million, $46.7 million net of taxes.  The pretax charges to the
Respiratory Group and Aero Systems division, which was sold and
reclassified to discontinued operations in the fourth quarter, were
$74.4 million and $1.0 million, respectively.

With the acquisition complete, the Company began integrating the
operations of Nellcor with those of Mallinckrodt's other businesses. 
Management finalized and approved a Nellcor integration plan during
the year.  Accordingly, the Company recorded additional purchase
liabilities of $50.1 million, $30.8 million net of related tax
benefit, which were included in the acquisition cost allocation and
related goodwill.  In addition, the Company recorded pretax charges
to operations during 1998 of $68.6 million, $46.4 million net of
taxes, associated with exiting certain activities related to the
operation of Mallinckrodt prior to the acquisition of Nellcor and
other integration costs of the combined Company.  See Note 2 of the
Notes to Consolidated Financial Statements for additional
information.     

Excluding the nonrecurring acquisition and integration charges in
1998, the Company had earnings from continuing operations of $130.4
million, or $1.77 per share.  Included in these results are after-tax
charges of $8.5 million, or 12 cents per share, primarily to increase
reserves for Nellcor trade receivables and inventory.  Earnings from
continuing operations for 1997 were $175.2 million, or $2.33 per
share.

The year to year decline in earnings from continuing operations,
after excluding nonrecurring acquisition and integration charges, is
primarily attributable to the dilutive effect of the Nellcor
acquisition-related intangible and goodwill amortization expense and
interest expense, and selling price reductions.  The aggregate
purchase price of Nellcor of approximately $1.9 billion was paid
through use of available cash and cash equivalents and additional
borrowings.  The resulting higher interest expense exceeded the
operating earnings of the Nellcor operations during 1998.  The
competitive demand for selling price reductions from healthcare
customer buying groups continued throughout 1998.  This trend, which
is expected to continue, had its most significant impact on the
Company's Imaging business where the potential for generic
competitive products and available manufacturing capacity continue to
lower prices.

The Company recorded a net loss for 1998 of $204.4 million, or $2.81
per share as compared to net earnings of $190.1 million, or $2.53 per
share during the prior year.  During 1998, the Company sold, or
committed to sell, its catalysts and chemical additives and Aero
Systems divisions.  The completed actions resulted in an after-tax
gain of $68.9 million.  The sale of the remainder of the catalysts
and chemical additives division on July 31, 1998 will result in a
gain to be included in the 1999 results of discontinued operations. 
The gains on the completed sales and the results of operations for
these divisions have been reclassified to discontinued operations in
the fourth quarter and, accordingly, prior year results have also
been reclassified.  Earnings, net of taxes, of these discontinued
operations were $11.4 million and $10.5 million for 1998 and 1997,
respectively.  During the third quarter of 1998, the Company recorded
an after-tax charge of $7.9 million related to settlement costs from
the sale of the animal health business in the prior year.  The net
loss for 1998 also included an after-tax noncash charge of $8.4
million, or 11 cents per share, for the early adoption of a new
standard of accounting related to previously capitalized start-up
costs.  The cumulative effect of the accounting change was recorded
in the fourth quarter, but was effective as of July 1, 1997. 
Operating earnings would have been reduced by $2.3 million after
taxes or 3 cents per share had the Company not adopted the accounting
change.

Net earnings for 1997 included a $270.6 million after-tax gain from
discontinued operations resulting from the March 31, 1997 disposition
of Fries & Fries, Inc., a wholly owned subsidiary which owned the
Company's 50 percent interest in Tastemaker, the flavors joint
venture, and a $269.4 million after-tax loss from discontinued
operations resulting from the sale of the animal health segment on
June 30, 1997.

Net sales for the year increased 39 percent to $2.37 billion compared
with $1.70 billion in 1997.  Sales to customers outside the U.S. were
$792 million or 33 percent of total 1998 sales.  Excluding sales of
Nellcor, which was acquired at the end of August 1997, sales were
$1.69 billion which is equal to the prior year.  Excluding the
acquisition and integration charges discussed above, operating
earnings were $286.3 million, a decrease of $11.2 million or 3
percent from the prior year.  Excluding the results of Nellcor and
the acquisition and integration charges discussed above, operating
earnings were $248.1 million or 17 percent below the 1997 results of
$297.5 million.  The decline in operating earnings is driven by
competitive price pressure in the Imaging and Critical Care
businesses.

1997 vs. 1996
-------------

The Company's earnings from continuing operations for 1997 were
$175.2 million, or $2.33 per share.  This represented a 24 percent
increase in per share earnings from continuing operations compared
with $143.6 million, or $1.88 per share during the same period in
1996.  The strong performance improvement was attributable to growth
in operating earnings, higher interest income, global tax strategies
and common stock share repurchase activities.    

Net earnings for 1997 were $190.1 million, or $2.53 per share,
compared with $211.9 million, or $2.77 per share, in 1996.  In the
fourth quarter of 1998, the Company reclassified the catalysts and
chemical additives division to discontinued operations.  The after-
tax operating results from this division, which were $10.5 million
and $10.1 million for 1997 and 1996, respectively, were also
reclassified.  On March 31, 1997, the Company disposed of Fries &
Fries, Inc., a wholly owned subsidiary which owned a 50 percent
interest in Tastemaker, the flavors joint venture.  This action
resulted in an after-tax gain of $270.6 million.  On June 30, 1997,
the Company disposed of the animal health segment, which resulted in
an after-tax loss of $269.4 million.  The results of these
transactions and the results of operations from these businesses were
reclassified to discontinued operations and, accordingly, prior
years' results were also reclassified.  Net earnings for 1997 and
1996 included after-tax earnings of $5.8 million and $41.9 million,
respectively, from the divested Fries & Fries, Inc., animal health
segment and, for 1996, feed ingredients business.

Net earnings for 1996 included a $35.4 million after-tax gain in
discontinued operations due to the disposition of the feed
ingredients business in the second quarter, partially offset by $19.1
million after-tax adjustment of provisions for environmental and
litigation costs related to discontinued operations. 

Net sales for 1997 were up 6 percent to $1.70 billion, compared to
$1.60 billion in 1996.  Operating earnings were $297.5 million, an
increase of 6 percent compared to $279.5 million in 1996.  The
markets in which the Company conducts business are highly
competitive, and in many instances regulated.  Global efforts toward
healthcare cost containment exerted pressure on product pricing and
the resultant demand for price discounts from customer buying groups
adversely affected earnings growth.

OPERATING RESULTS
 (In millions)
                                     1998        1997        1996
                                    -------     -------     -------
Net sales
  Respiratory.................      $  991      $  321      $  338
  Imaging.....................         760         802         716
  Pharmaceuticals.............         616         575         543
                                    -------     -------     -------
                                    $2,367      $1,698      $1,597
                                    =======     =======     =======
Operating earnings
  Respiratory...............        $  1022     $   76      $   74 
  Imaging...................           124         164         179
  Pharmaceuticals...........            83          82          67
                                    -------     -------     -------
                                       309         322         320
  Corporate expense.........           (23)        (25)        (41)
  Acquisition and
   integration expense......          (449)
                                    -------     -------     -------
                                    $ (163)     $  297      $  279
                                    =======     =======     =======

1998 vs. 1997
-------------

Healthcare is comprised of three business groups - Respiratory,
Imaging and Pharmaceuticals.

Operating earnings excluding charges related to acquisition and
integration activities and corporate expenses were $309 million,
which represents a 4 percent decline when compared to the prior year. 
Excluding the results of Nellcor, acquired in August 1997, the
acquisition and integration charges, and corporate expenses,
operating earnings would have been $271 million or 16 percent below
1997.  This earnings decline is attributable to lower selling prices
which were only partially offset by higher volume.  The competitive
pressures and the demand for price discounts from customer buying
groups adversely affected earnings, and this trend is expected to
continue.  In response to this market trend, the Company entered into
a multi-year agreement in 1996 with Premier, Inc. (Premier), the
largest healthcare purchasing group in the United States.  Effective
July 1, 1997, Premier named Mallinckrodt a corporate partner and,
accordingly, Premier's 1,650 member hospitals are provided incentives
to use Mallinckrodt products.

The Respiratory Group, which includes Nellcor and Critical Care,
reported operating earnings of $102 million, an increase of 34
percent over the results for 1997.  Excluding Nellcor, operating
earnings were $64 million, a 16 percent decrease from prior year. 
The year to year earnings decline was attributable to sales decline
of $16 million resulting from the negative impact of exchange rate
movements caused by the strengthening of the U.S. dollar versus major
European currencies and the Japanese yen, $8 million due to price
declines and another $6 million attributable to the divestiture of a
product line in September 1996.  These sales shortfalls were only
partially offset by volume increases of $14 million and $11 million
in disposable respiratory and anesthesiology product lines,
respectively.

The Imaging Group had operating earnings of $124 million, which was a
decline of $40 million or 24 percent from the prior year.  The
decline in profitability was directly attributable to a sales decline
of $42 million - from $802 million in 1997 to $760 million in 1998. 
All product lines had volume increases which represented an increase
of $85 million over the prior year.  In spite of these increases,
erosion of selling price accounted for a $102 million sales decline. 
The remainder of the shortfall in 1998 when compared to 1997 was
attributable to the impact of exchange rate movements caused by the
strengthening of the U.S. dollar versus major European currencies and
the Japanese yen.  Iodinated contrast media, the Group's most
significant product line, had sales volume increases of $44 million,
but price erosion reduced sales by $85 million.  The pricing
pressures were most significant in the U.S. where the Company and its
contrast media competitors utilize price concessions to maintain or
grow their shares in a market dominated by large customer buying
groups.  The agreement with Premier aligns the Company with the
largest healthcare purchasing group in the U.S., representing 30
percent of all contrast media purchased.  The Premier agreement is
believed to be the largest contract ever written for these products. 
In spite of cost reductions in contrast media manufacturing and lower
operating expenses, the price erosion reduced profitability, and is
expected to reduce profitability in future periods but at a lower
rate of decline than was experienced in 1998 and 1997.

The Pharmaceuticals Group, which now includes bulk and dosage
pharmaceuticals, peptides, and process, laboratory and
microelectronic chemicals, had operating earnings of $83 million,
which was $1 million or 1 percent above results for the prior year. 
In spite of higher sales, product mix, lower than expected sales of
high margin dosage and other specialty products, and the related
impact on plant efficiencies negatively impacted operating earnings. 
Sales were $616 million, which represented an increase of $41 million
or 7 percent above 1997 results.  The sales increase was partially
generated by a $19 million increase in dosage analgesic volume, of
which approximately $7 million was attributable to the full year
impact from an acquisition in November 1996.  The remainder of the
sales increase was attributable to volume growth in all other product
lines.  The impact of buying groups is less evident in the
Pharmaceuticals Group businesses.  Overall, this group was able to
maintain pricing at prior year levels.

1997 vs. 1996
-------------

Operating earnings, excluding corporate expense, for 1997 were $322
million, as compared with $320 million in 1996.  The flat operating
earnings in 1997 when compared to the prior year was attributable to
continued reduction of selling prices in several product lines offset
by increased sales volumes, and a $20 million or 25 percent increase
in research and development expenses.  Net sales increased 6 percent
to $1.70 billion in 1997 as compared to $1.60 billion during the
prior year. 

The Critical Care business, now a component of the Respiratory Group,
had operating earnings of $76 million, which was $2 million or 3
percent greater than in 1996.  The improved profitability was the
result of product mix.   The operation had sales of $321 million,
which is $17 million or 5 percent below prior year.  The Critical
Care business experienced increased demand for respiratory therapy
products and HemoCue blood hemoglobin and glucose analysis systems. 
These sales gains were more than offset by lower prices of existing
products and lost revenue associated with the blood gas and
electrolyte business which was sold on September 30, 1996.  

The Imaging Group's operating earnings were $164 million, which was
$15 million or 8 percent below the prior year.  The decline in
profitability was the result of selling price erosion, which was only
partially offset by volume increases, and higher research and
development expenditures.  The Imaging Group was affected
significantly by the demand for price discounts.  The business had
sales of $802 million, which was an increase of $86 million or 12
percent over the prior year level of $716 million.  The sales
increase was driven primarily by increased market share in iodinated
contrast media ($41 million) and the acquisition of Liebel-Flarsheim
during 1996 ($29 million).  The growth of iodinated contrast media
sales was most significant in the U.S. market where sales volume
increased 49 percent, but prices declined 39 percent when compared to
the prior year.  Contrast media competitor strategies with regard to
pricing were driven by customer consolidation and patent expiration
of a competitor's second generation x-ray contrast product resulting
in the potential for competitive generic products.  In response to
these market changes, the Company entered into a supply agreement
with Premier, Inc., the largest hospital healthcare alliance in the
U.S.  The agreement is believed to be the largest contract ever
written for contrast media products.

The Pharmaceuticals Group, which includes bulk and dosage
pharmaceuticals, peptides, and process, laboratory and
microelectronic chemicals, had operating earnings of $82 million,
which is $15 million or 22 percent greater than in 1996.  The
improvement in earnings was directly attributable to a sales increase
of $32 million, or 6 percent, to $575 million as compared to the
prior year.  The sales increase was generated by a $24 million growth
in bulk and dosage analgesic sales, partially the result of the
acquisition of D.M. Graham Laboratories, Inc. in November 1996.  The
business also benefited from net price increases of approximately $14
million, which were generated by bulk sales of acetaminophen and
narcotics in spite of somewhat lower prices of dosage products.

D.M. Graham Laboratories, Inc. is a contract manufacturer of dosage
pharmaceuticals and is also licensed to produce a variety of
medicinal narcotics.  This acquisition was another key step in the
continuing growth of the Pharmaceuticals business.  

In December 1996, the Company acquired expanded sales and marketing
rights for Molecular Biosystems, Inc.'s ultrasound imaging agents. 
As a result of this and earlier agreements, Mallinckrodt now has
marketing rights for Albunex and OPTISON throughout the world except
Japan, South Korea and Taiwan.

In January 1996, the Company acquired Liebel-Flarsheim Company, a
leading manufacturer of contrast media power injector systems for
diagnostic imaging procedures and equipment for urology procedures. 
The acquisition enhanced sales performance but modestly impaired
operating earnings.

CORPORATE MATTERS

Corporate expenses in 1998, excluding nonrecurring acquisition and
integration charges, were $23 million as compared to $25 million in
the prior year.  Corporate expenses in 1997 were 40 percent below the
1996 level because the prior year included consulting and employee
related actions of a nonrecurring nature.

Excluding the one-time noncash write-off of purchased research and
development which had no tax benefit, the Company's effective tax
rate was 32.7 percent, compared to last year's 35.5 percent and the
1996 rate of 37.0 percent.  See Note 10 of the Notes to Consolidated
Financial Statements for additional information about income taxes.

Net interest and nonoperating income/expense increased $61 million in
1998 as compared with the prior year because of lower interest income
and higher borrowing costs to acquire Nellcor in August 1997.  Net
interest and nonoperating income/expense decreased $26 million in
1997 from 1996 because cash proceeds from 1997 divestitures were used
to repay debt and were invested in interest bearing securities. 

FINANCIAL CONDITION

The Company's financial resources are expected to continue to be
adequate to support existing businesses.  Since June 30, 1997, cash
and cash equivalents decreased $752.8 million, primarily as a result
of the acquisition of the outstanding common shares of Nellcor in
August 1997.  Operations provided $208.4 million of cash, while
acquisition and capital spending totaled $1.93 billion.  The Company
received $308.2 million in proceeds from asset disposals.  The
catalyst business and Aero Systems division were sold in the fourth
quarter for cash proceeds of $210.0 million and $69.7 million,
respectively.  Debt as a percentage of invested capital was 55.5
percent at June 30, 1998.  

The current ratio had declined to 0.7:1 at the end of the second
quarter as a result of short-term borrowings during the first quarter
of fiscal 1998 to acquire the outstanding shares of Nellcor common
stock.  During the third quarter, the Company issued $400 million in
long-term debt, with the proceeds used to reduce short-term
borrowing.  See Note 13 of the Notes to Consolidated Financial
Statements for additional information.  The current ratio improved to
1.0:1 at June 30, 1998.

On August 28, 1997, the Company acquired Nellcor through an agreement
to purchase for cash all the outstanding shares of common stock of
Nellcor for $28.50 per share.  The aggregate purchase price of the
Nellcor acquisition was approximately $1.9 billion.  The Company
completed the acquisition using cash and cash equivalents and
borrowed approximately $1.1 billion under a $2.0 billion credit
facility established in July 1997, and amended and restated in
September 1997.  The credit facility consisted of a $400 million term
loan, which was repaid in March 1998, and a $1.6 billion five-year
revolving credit facility.  Under this facility, interest rates on
borrowings are based upon the London Interbank Offered Rate, plus a
margin dependent on the Company's senior debt rating.  There was no
borrowing outstanding under the revolving credit facility at June 30,
1998.

In December 1997, the Company filed a $500 million shelf debt
registration statement which has not, as yet, been declared
effective.  The unused portions of shelf registrations filed in 1995
and 1992 have been canceled.

At June 30, 1998, the Company had a $1.0 billion private-placement
commercial paper program.  The program is backed by the $1.6 billion
five-year U.S. revolving credit facility available until September
2002.  At June 30, 1998, there were $285.8 million commercial paper
borrowings outstanding.  Non-U.S. lines of credit totaling $141.9
million were also available and borrowings under these lines amounted
to $17.2 million at June 30, 1998.  The non-U.S. lines are cancelable
at any time.

The Company's Board of Directors previously authorized repurchase of
47 million shares of common stock and additional repurchases not to
exceed cash outlays of $250 million.  Share repurchases under these
authorizations  have totaled 36.8 million shares, including 242
thousand shares during the current year prior to the acquisition of
Nellcor.

Estimated capital spending for the year ending June 30, 1999 is
approximately $185 million.

Impact of Year 2000
-------------------
The Year 2000 issue is the result of date-sensitive devices, systems
and computer programs that were deployed using two digits rather than
four to define the applicable year.  Any such technologies may
recognize a year containing "00" as the year 1900 rather than the
year 2000.  This could result in a system failure or miscalculations
causing disruptions of operations including, among other things, a
temporary inability to process transactions or engage in similar
normal business activities.

The Company has completed its assessment of its information systems
which support business applications and is in the process of
modifying or replacing those portions of the software that are
required.  The assessment of products sold to customers has also been
completed and the necessary remediation plans are being developed. 
The assessment of research and development, manufacturing processes
and facility management systems is underway and is expected to be
substantially complete by January 1999.  The Company is also
assessing the readiness of its key suppliers and business partners to
be Year 2000 compliant.  Information requests have been distributed
and replies are being evaluated.  If the risk is deemed material, the
Company is prepared to perform on-site visits to those businesses to
verify the adequacy of the information received.  All of these
efforts should be substantially complete during the first quarter of
calendar 1999, which is prior to any anticipated significant impact
on Mallinckrodt's operations.  

Based upon the accomplishments to date, no contingency plans are
expected to be needed and therefore none have been developed. 
However, because of substantial progress to date and plans that
contemplate being substantially complete in the early part of
calendar 1999, we believe adequate time will be available to insure
alternatives can be developed, assessed and implemented prior to a
Year 2000 issue having a material negative impact on the operations
of the Company.  However, if such modifications and conversions are
not made or are not completed timely, the Year 2000 issue could have
a material impact on the operations of the Company.

Both internal and external resources are being used to reprogram or
replace non-compliant technologies, and to appropriately test Year
2000 modifications.  Such modifications are being funded through
operating cash flows.  The project to address Year 2000 has been
underway since February 1997.  The pretax costs incurred to date for
this effort were approximately $7 million and $1 million in 1998 and
1997, respectively.  The Company anticipates expenses of
approximately $13 million will be incurred in 1999 to substantially
complete the effort.   

The cost of the project and the date on which the Company believes it
will substantially complete Year 2000 modifications are based on
management's best estimates.  Such estimates were derived using
software surveys and programs to evaluate calendar date exposures and
numerous assumptions of future events, including the continued
availability of certain resources and other factors.  Because none of
these estimates can be guaranteed, actual results could differ
materially from those anticipated.  Specific factors that might cause
such differences include, but are not limited to, the availability
and cost of personnel trained in this area, the ability to locate and
correct all relevant computer codes, and similar uncertainties.

European Monetary Union (EMU)
-----------------------------
The euro is scheduled to be introduced on January 1, 1999, at which
time the eleven participating EMU member countries will establish
fixed conversion rates between their existing currencies (legacy
currencies) and the euro.   The legacy currencies will continue to be
used as legal tender through January 1, 2002; thereafter, the legacy
currencies will be canceled and euro bills and coins will be used for
cash transactions in the participating countries.

The Company's European sales offices and various manufacturing and
distribution facilities affected by the euro conversion have
established plans to address the systems issues raised by the euro
currency conversion and are cognizant of the potential business
implications of converting to a common currency.  The Company is
unable to determine the ultimate financial impact of the conversion
on its operations, if any, given that the impact will be dependent
upon the competitive situations which exist in the various regional
markets in which the Company participates and the potential actions
which may or may not be taken by the Company's competitors and
suppliers.

ENVIRONMENTAL MATTERS

The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the
ordinary course of its business activities.  In addition, the Company
is in varying stages of active investigation or remediation of
alleged or acknowledged contamination at 19 currently or previously
owned or operated sites and at 16 off-site locations where its waste
was taken for treatment or disposal.

Once the Company becomes aware of its potential environmental
liability at a particular site, the measurement of the related
environmental liabilities to be recorded is based on an evaluation of
currently available facts such as the extent and types of hazardous
substances at a site, the range of technologies that can be used for
remediation, evolving standards of what constitutes acceptable
remediation, presently enacted laws and regulations, engineers and
environmental specialists' estimates of the range of expected clean-
up costs that may be incurred, prior experience in remediation of
contaminated sites, and the progress to date on remediation in
process.  While the current law potentially imposes joint and several
liability upon each party at a Superfund site, the Company's
contribution to clean up these sites is expected to be limited, given
the number of other companies which have also been named as
potentially responsible parties and the volumes of waste involved.  A
reasonable basis for apportionment of costs among responsible parties
is determined and the likelihood of contribution by other parties is 
established.  If it is considered probable that the Company will only
have to pay its expected share of the total clean-up, the recorded
liability reflects the Company's expected share.  In determining the
probability of contribution, the Company considers the solvency of
the parties, whether responsibility is disputed, existence of an
allocation agreement, status of current action, and experience to
date regarding similar matters.  Current information and developments
are regularly assessed by the Company, and accruals are adjusted on a
quarterly basis, as required, to provide for the expected impact of
these environmental matters.  

Most of the Company's environmental-related capital expenditures are
in response to provisions of the Federal Clean Air Act; Water
Pollution Control Act; Resource Conservation and Recovery Act;
Comprehensive Environmental Response, Compensation, and Liability
Act; and land use, air and water protection regulations of the
various localities and states, and their foreign counterparts. 
Capital expenditures worldwide relating to air emission control,
wastewater purification, land reclamation and solid waste disposal
totaled approximately $6 million in 1998 and $6 million in 1997.  The
Company currently estimates that environmental capital expenditures
during 1999 and 2000 will be $21 million and $14 million,
respectively.

During 1996, the Company assumed certain liabilities to remediate
various sites in the future and was compensated by the previous owner
of the applicable properties for certain remediation costs to be
incurred.  The Company established additional environmental reserves
for discontinued operations.

The Company had accruals, included in current accrued liabilities and
other noncurrent liabilities and deferred credits, of $126.2 million
at June 30, 1998 for costs associated with the study and remediation
of Superfund sites and for the Company's current and former operating
sites.  Any claims for potential recovery from any sources have not
been valued against the accrued environmental liabilities.  While
ongoing litigation may eventually result in recovery of costs
expended at certain of the environmental sites, any gain is
contingent upon a successful outcome and has not been accrued.

The Company has established accruals only for those matters that are
in its view probable and estimable.  Based upon information currently
available, management believes that existing accruals are sufficient
and that it is not reasonably possible at this time that any
additional liabilities will result from the resolution of these
matters that would have a material adverse effect on the Company's
consolidated results of operations or financial position.

RISK MANAGEMENT STRATEGIES

The Company operates globally, with manufacturing and distribution
facilities in various countries throughout the world, and is subject
to certain opportunities and risks, including foreign currency
fluctuations and government actions.  Various operational initiatives
are employed to help manage business risks.  In the ordinary course
of business, Mallinckrodt purchases materials and sells finished
products denominated in approximately 25 different currencies.  The
Company is primarily exposed to changes in exchange rates of the
German deutsche mark and other European currencies highly correlated
with the German deutsche mark and the Japanese yen.  Overall, the
Company is a net beneficiary when the U.S. dollar weakens and is
adversely affected by a stronger U.S. dollar relative to the major
currencies identified.

Operations in each country are monitored so that the Company can
quickly respond to changing economic and political environments as
well as changes in foreign currency exchange rates and interest
rates.  The Company enters into forward foreign exchange contracts
and currency swaps to minimize the exposure on intercompany loans. 
To minimize the impact of anticipated foreign currency exposures
which arise from probable purchases of raw materials or other
inventory, collection of accounts receivable, settlement of accounts
payable, and periodic debt service by international subsidiaries
which occur in the ordinary course of business, the Company hedges a
portion of its non-U.S. dollar denominated exposures by purchasing
currency options which generally have terms of two years or less, and
which have little or no intrinsic value at time of purchase.  The
Company uses the options with an objective of limiting negative
foreign exchange rate effects on overall performance for both budget
and prior year comparisons over a rolling 18- to 24-month horizon. 
The Company seeks to have effective coverage levels over such 18- to
24-month horizon of 50 to 80 percent of currency exposures that
subject the Company to risk.  The hedges are designed to satisfy the
requirements for deferral accounting treatment at inception.  Gains
and losses in the hedges are expected to be systematically monetized
with concurrent reinvestment to replace monetized hedges and maintain
overall hedging coverage targets.  The net impact of foreign exchange
activities on earnings was immaterial for 1998, 1997 and 1996,
including conversion of certain currencies into functional currencies
and the costs of hedging certain transactions and balance sheet
exposures.  The foreign currency translation loss included in
shareholders' equity, and resulting from the translation of the
financial statements of most of the Company's international
affiliates into U.S. dollars, increased by $21.1 million in 1998 due
to the strengthening of the U.S. dollar against the functional
currency of many of the Company's international affiliates.

The Company's interest income and expense are most sensitive to
changes in the general level of U.S. interest rates.  In this regard,
changes in U.S. interest rates affect the interest earned on the
Company's cash equivalents and short-term investments as well as
interest paid on its short-term debt.  To manage the interest rate
characteristics of its outstanding debt to a more desirable fixed or
variable rate basis or to limit the Company's exposure to rising
interest rates, the Company periodically enters into interest rate
swaps and option contracts. 

The Company does not consider the present rate of inflation to have a
significant impact on the businesses in which it operates.

While future economic events cannot be predicted, the Company
believes its current operations and future expansion plans will not
result in a significantly different risk profile.

<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


Report of Independent Auditors.................................  25
Responsibility for Financial Reporting.........................  26
Consolidated Statements of Operations..........................  27
Consolidated Balance Sheets....................................  28
Consolidated Statements of Cash Flows..........................  29
Consolidated Statements of Changes in Shareholders' Equity.....  30
Notes to Consolidated Financial Statements.....................  31
Quarterly Results..............................................  51


<PAGE>

REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Directors of Mallinckrodt Inc.

We have audited the accompanying consolidated balance sheets of
Mallinckrodt Inc. as of June 30, 1998 and 1997, and the related
consolidated statements of operations, changes in shareholders'
equity, and cash flows for each of the three years in the period
ended June 30, 1998.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based
on our audits.

We conducted our audits 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 audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Mallinckrodt Inc. at June 30, 1998 and 1997,
and the consolidated results of its operations and its cash flows for
each of the three years in the period ended June 30, 1998, in
conformity with generally accepted accounting principles.

As discussed more fully in Note 2, the Company and the staff of the
Securities and Exchange Commission have had discussions with respect
to the methodology used by the Company to value purchased research
and development.  As a result of these discussions, the Company has
recalculated and restated the purchased research and development
charged to expense in connection with the Company's acquisition of
Nellcor Puritan Bennett Incorporated and, accordingly, has restated
the consolidated financial statements for the year ended June 30,
1998 to reflect this change.

As discussed in Note 1 to the consolidated financial statements, in
the year ended June 30, 1998, the Company adopted Statement of
Position 98-5, "Reporting on the Costs of Start-Up Activities."



Ernst & Young LLP
St. Louis, Missouri
August 12, 1998, except for the restatement
   related to purchased research and
   development referred to in Note 2 as
   to which the date is January 26, 1999

<PAGE>

RESPONSIBILITY FOR FINANCIAL REPORTING

The consolidated financial statements included in this report are the
responsibility of management.  The statements have been prepared in
conformity with generally accepted accounting principles and include
amounts based on our best estimates and judgments.  Financial
information appearing elsewhere in this report is consistent with
that in the financial statements.

Management is also responsible for maintaining systems of internal
accounting control with the objectives of providing reasonable
assurance at reasonable cost that the Company's assets are
safeguarded against material loss from unauthorized use or
disposition and that transactions are properly authorized and
recorded to permit reliance on the Company's financial data and
records.  In addition, the Company maintains a program for
communicating corporate policy throughout the organization and, as a
further safeguard, an internal audit staff monitors compliance with
policies and systems of internal accounting control.

Mallinckrodt's consolidated financial statements have been audited by
Ernst & Young LLP.  To express their opinion as to the fairness of
the statements in conformity with generally accepted accounting
principles, the independent auditors review and evaluate
Mallinckrodt's accounting controls and conduct such tests and other
procedures as they deem necessary.  The Audit Committee of the Board
of Directors regularly meets with the independent auditors, without
management present, to review financial reporting matters, and audit
and control functions.



Douglas A. McKinney
Vice President and Controller
August 12, 1998



Michael A. Rocca
Senior Vice President and Chief Financial Officer
August 12, 1998

<PAGE>

<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
<CAPTION>

                                                  Years Ended June 30,
                                            ---------------------------------
                                              1998                        
                                            Restated      1997        1996
                                            ---------   ---------   ---------
<S>                                         <C>         <C>         <C>
Net sales...............................    $2,367.0    $1,698.1    $1,596.9

Operating costs and expenses:
  Cost of goods sold....................     1,368.8       897.9       837.9
  Selling, administrative and
   general expenses.....................       715.0       409.7       403.4
  Purchased research and development....       306.3
  Research and development expenses.....       149.0       100.5        80.6
  Other operating income, net...........        (9.1)       (7.5)       (4.5)
                                            ---------   ---------   ---------  
Total operating costs and expenses......     2,530.0     1,400.6     1,317.4
                                            ---------   ---------   --------- 

Operating earnings (loss)...............      (163.0)      297.5       279.5
Interest income and other nonoperating
 income (expense), net..................        14.8        22.0         (.3)
Interest expense........................      (101.8)      (48.0)      (51.3)
                                            ---------   ---------   ---------

Earnings (loss) from continuing
 operations before income taxes.........      (250.0)      271.5       227.9
Income tax provision....................        18.4        96.3        84.3
                                            ---------   ---------   ---------

Earnings (loss) from continuing
 operations.............................      (268.4)      175.2       143.6
Discontinued operations.................        72.4        14.9        68.3
                                            ---------   ---------   ---------

Earnings (loss) before cumulative
 effect of accounting change............      (196.0)      190.1       211.9
Cumulative effect of accounting change..        (8.4)
                                            ---------   ---------   ---------
     
Net earnings (loss).....................      (204.4)      190.1       211.9
Preferred stock dividends...............         (.4)        (.4)        (.4)
                                            ---------   ---------   ---------  

Available for common shareholders.......    $ (204.8)   $  189.7    $  211.5
                                            =========   =========   =========  

Basic earnings per common share:
 Earnings (loss) from continuing
  operations............................    $  (3.69)   $   2.37    $   1.90
 Discontinued operations................         .99         .20         .91
 Cumulative effect of accounting
  change................................        (.11)
                                            ---------   ---------   ---------
 Net earnings (loss)....................    $  (2.81)   $   2.57    $   2.81
                                            =========   =========   =========
Earnings per common share -
  assuming dilution:
 Earnings (loss) from continuing
  operations............................    $  (3.69)   $   2.33    $   1.88 
 Discontinued operations................         .99         .20         .89
 Cumulative effect of accounting
  change................................        (.11)
                                            ---------   ---------   ---------    
 Net earnings (loss)....................    $  (2.81)   $   2.53    $   2.77
                                            =========   =========   ========= 

(The accompanying Notes are an integral part of the Consolidated Financial
Statements.)
</TABLE>
<PAGE>

<TABLE>
CONSOLIDATED BALANCE SHEETS
(In millions, except share and per share amounts)
<CAPTION>


                                                               June 30,
                                                       ----------------------
                                                         1998             
                                                       Restated       1997
                                                       ---------    ---------
<S>                                                    <C>           <C>
ASSETS
Current assets:
  Cash and cash equivalents........................    $   55.5     $  808.3
  Trade receivables, less allowances of
   $16.7 in 1998 and $8.2 in 1997..................       486.3        335.8
  Inventories......................................       470.0        291.8
  Deferred income taxes............................        95.2         36.8
  Other current assets.............................        61.5         99.4
  Net current assets of discontinued operations....         4.8         33.3
                                                       ---------    --------- 
Total current assets...............................     1,173.3      1,605.4
Investments and other noncurrent assets,
 less allowances of $5.8 in 1998 and $8.1 in 1997..       154.5        145.1
Property, plant and equipment, net.................       894.9        741.3
Goodwill, net......................................       987.0        222.5
Technology, net....................................       364.3         24.4
Other intangible assets, net.......................       282.1        144.4
Net noncurrent assets of discontinued operations...        12.4         91.5
Deferred income taxes..............................         4.6           .8
                                                       ---------    ---------
Total assets                                           $3,873.1     $2,975.4
                                                       =========    =========  



LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Short-term debt..................................    $  311.4     $   11.6
  Accounts payable.................................       215.0        162.9
  Accrued liabilities..............................       532.0        391.2
  Income taxes payable.............................       122.3         76.4
  Deferred income taxes............................         1.4           .2
                                                       ---------    ---------  
Total current liabilities..........................     1,182.1        642.3
Long-term debt, less current maturities............       944.5        544.3
Deferred income taxes..............................       396.2        248.7
Postretirement benefits............................       169.2        161.9
Other noncurrent liabilities and
 deferred credits..................................       175.2        127.0
                                                       ---------    ---------
Total liabilities..................................     2,867.2      1,724.2
                                                       ---------    ---------
Shareholders' equity:
  4 Percent cumulative preferred stock.............        11.0         11.0
  Common stock, par value $1, authorized
   300,000,000 shares; issued 87,116,289 shares....        87.1         87.1
  Capital in excess of par value...................       315.2        305.9
  Reinvested earnings..............................     1,039.7      1,292.6
  Foreign currency translation.....................       (71.1)       (50.0)
  Unrealized gain (loss) on investments............        (1.5)          .1 
  Treasury stock, at cost..........................      (374.5)      (395.5)
                                                       ---------    ---------
Total shareholders' equity.........................     1,005.9      1,251.2
                                                       ---------    ---------
Total liabilities and shareholders' equity             $3,873.1     $2,975.4
                                                       =========    ========= 


(The accompanying Notes are an integral part of the Consolidated Financial
Statements.)

</TABLE>

<PAGE>
<TABLE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
<CAPTION>

                                                    Years Ended June 30,
                                            -----------------------------------
                                              1998
                                            Restated      1997         1996
                                             ---------   ---------   ---------
<S>                                         <C>         <C>         <C>
CASH FLOWS - OPERATING ACTIVITIES
Net earnings (loss).......................  $ (204.4)   $  190.1    $  211.9
Adjustments to reconcile net earnings
 to net cash provided by operating
 activities:
  Depreciation............................     114.3        97.5       109.6
  Amortization............................      75.3        30.2        39.5
  Postretirement benefits.................       6.3         7.9        10.9
  Undistributed equity in earnings of
   joint venture..........................                 (17.0)      (25.0)
  Gains on asset disposals................    (114.3)     (182.5)      (55.1)
  Deferred income taxes...................     (75.8)      144.1        30.5
  Write-off of purchased research
   and development........................     308.3
  Sale of inventory stepped up to fair
   value at acquisition ..................      75.4
  Write-off of pre-operating costs........      12.5
                                            ---------   ---------   ---------
                                               197.6       270.3       322.3
  Changes in operating assets and
   liabilities:
    Trade receivables.....................     (15.6)      (34.3)      (62.5)
    Inventories...........................     (18.1)       17.8       (49.5)
    Other current assets..................      63.8       (62.0)      ( 2.7)
    Accounts payable, accrued liabilities
     and income taxes payable, net........     (35.6)      111.6        22.8
    Net assets of discontinued
     operations...........................       (.4)        9.8       (68.6)
    Other noncurrent liabilities and
     deferred credits.....................      30.6        (4.3)       49.7
    Other, net............................     (13.9)       (5.1)      (41.1)
                                            ---------   ---------   ---------  
Net cash provided by operating activities.     208.4       303.8       170.4
                                            ---------   ---------   ---------
CASH FLOWS - INVESTING ACTIVITIES
Capital expenditures......................    (142.7)     (109.5)     (169.2)
Acquisition spending......................  (1,790.9)      (16.8)     (153.9)
Proceeds from asset disposals.............     308.2       412.8       120.5
Other, net................................       7.0        (6.7)        5.1
                                            ---------   ---------   --------- 
Net cash provided (used) by
 investing activities.....................  (1,618.4)      279.8      (197.5)
                                            ---------   ---------   --------- 
CASH FLOWS - FINANCING ACTIVITIES
Increase (decrease) in short-term debt....     279.5      (103.8)      511.7
Proceeds from long-term debt..............     399.8         1.1       199.5
Payments on long-term debt................      (3.9)      (10.2)     (103.7)
Issuance of Mallinckrodt common stock.....      40.0        39.6        31.0
Acquisition of treasury stock.............      (9.7)     (149.9)     (130.5)
Dividends paid............................     (48.5)      (48.2)      (45.7)
                                            ---------   ---------   ---------
Net cash provided (used) by financing
 activities...............................     657.2      (271.4)      462.3
                                            ---------   ---------   ---------
Increase (decrease) in cash and
 cash equivalents.........................    (752.8)      312.2       435.2
Cash and cash equivalents at
 beginning of year........................     808.3       496.1        60.9
                                            ---------   ---------   ---------   
Cash and cash equivalents at end of year..  $   55.5      $808.3      $496.1
                                            =========   =========   =========


(The accompanying Notes are an integral part of the Consolidated Financial
Statements.)

</TABLE>

<PAGE>
<TABLE>

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In millions, except per share amounts)
<CAPTION>
                                          Capital in  Reinvested
                       Preferred  Common  Excess of   Earnings       Treasury
                         Stock    Stock   Par Value   Restated  Other   Stock
                         -----    ------  ---------   --------  -----  -------  
<S>                      <C>      <C>      <C>       <C>       <C>    <C>
BALANCE, JUNE 30, 1995.  $11.0    $87.1     $274.1   $984.5    $(9.3) $(175.9)
Net earnings...........                               211.9
Dividends:
  4 Percent cumulative
   preferred stock
   ($4.00 per share)...                                 (.4)
  Common stock
   ($.605 per share)...                               (45.3)
Stock option exercises.                        8.1                       21.6
Income tax benefit
 from stock options
 exercised ............                        1.3 
Acquisition of
 treasury stock........                                                (130.5)
Translation adjustment.                                         (7.5)
Unrealized gain on
 investments...........                                          1.5
                         -----    ------    ------  --------   ------   -------

BALANCE, JUNE 30, 1996.   11.0     87.1      283.5   1,150.7   (15.3)  (284.8)
Net earnings...........                                190.1
Dividends:
  4 Percent cumulative
   preferred stock
   ($4.00 per share)...                                  (.4)
  Common stock
   ($.65 per share)....                                (47.8)
Stock option exercises.                        6.7                       27.2
Income tax benefit
 from stock options
 exercised.............                        5.7
Acquisition of
 treasury stock........                                                (149.9)
Issuance of stock
 related to an
 acquisition...........                       10.0                       12.0
Translation adjustment,
 net of $9.3 translation
 loss included in
 discontinued
 operations............                                        (35.2)
Unrealized gain on
 investments...........                                           .6 
                         -----    ------    ------  --------   ------  -------

BALANCE, JUNE 30, 1997.   11.0     87.1      305.9   1,292.6   (49.9)  (395.5)
Net loss...............                               (204.4)
Dividends:
  4 Percent cumulative
  preferred stock
  ($4.00 per share)....                                  (.4)
  Common stock
  ($.66 per share).....                                (48.1)
Stock option exercises.                        1.6                       16.5
Income tax benefit from
 stock options
 exercised.............                        2.1
Acquisition of
 treasury stock........                                                  (9.7)
Investment plan match..                        2.4                        7.3
Restricted stock award.                        3.2                        6.9
Translation adjustment.                                        (21.1)
Unrealized loss on
 investments...........                                         (1.6)
                         -----    ------    ------  --------  ------- --------
BALANCE, JUNE 30, 1998.  $11.0    $87.1     $315.2  $1,039.7  $(72.6) $(374.5)
                         =====    ======    ======  ========  ======= ========

(The accompanying Notes are an integral part of the Consolidated Financial
Statements.)

(/TABLE>
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

All references to years are to fiscal years ended June 30 unless
otherwise stated.  Certain amounts in prior years have been
reclassified to conform to the current year presentation.  All
earnings per share amounts are calculated on a diluted basis unless
otherwise stated.

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

Financial statements of all majority owned subsidiaries are
consolidated.  Investments in 20 to 50 percent owned affiliates are
reported on the equity method.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements, and the revenues and expenses
during the reporting period, as well as amounts included in the
Notes.  While the Company uses its best estimates and judgments,
actual results could differ from these estimates.

FOREIGN CURRENCY TRANSLATION

The financial statements of most of the Company's international
affiliates are translated into U.S. dollars using current exchange
rates for balance sheets and weighted average rates for income
statements.  Unrealized translation adjustments are included in
shareholders' equity in the Consolidated Balance Sheets.

The financial statements of international affiliates that operate in
hyperinflationary economies in certain Latin American countries are
translated at current and historical exchange rates, as appropriate. 
Unrealized translation adjustments are included in operating results
for these affiliates.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist primarily of certificates of
deposit, time deposits and other short-term securities with
maturities of three months or less from the date of purchase.

INVENTORIES

Inventories are valued at the lower of cost or market.  Cost for
inventories is determined on either an average or first-in, first-out
basis.

INVESTMENTS

The Company's investments in marketable equity securities are
classified as "available-for-sale" and are carried at fair market
value, with the unrealized gains and losses included, net of income
taxes, in shareholders' equity in the Consolidated Balance Sheets. 
Interest, dividends and realized gains and losses on the sale of such
securities are included in interest income and other nonoperating
income (expense), net.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recorded at cost.  Depreciation is
based upon estimated useful lives of 10 to 45 years for buildings and
3 to 15 years for machinery and equipment, using principally the
straight-line method. 

The Company recognizes impairment losses for long-lived assets to be
held and used whenever events or changes in circumstances indicate
that the carrying amount of the assets exceeds the sum of the
expected undiscounted future cash flows associated with such assets. 
The measurement of the impairment losses to be recognized is based on
the difference between the fair values and the carrying amounts of
the assets.  Long-lived assets held for sale are reported at the
lower of carrying amount or fair value less cost to sell.

INTANGIBLE ASSETS

The cost of product line or business acquisitions accounted for using
the purchase method is allocated first to identifiable assets and
liabilities based on estimated fair values.  The excess of cost over
identifiable assets and liabilities is recorded as goodwill. 

Goodwill is amortized on a straight-line basis over 4 to 40 years
(weighted average life of 29 years).  Technology is amortized on a
straight-line basis over 15 to 25 years (weighted average life of 16
years).  Other intangible assets, consisting primarily of trademarks,
trade names, and manufacturing and distribution agreements, are
amortized primarily on a straight-line basis over 3 to 40 years
(weighted average life of 20 years).

The carrying amounts of intangible assets and goodwill are reviewed
if facts and circumstances suggest that they may be impaired.  If
this review indicates that the carrying amounts of intangible assets
and goodwill will not be recoverable, as determined based on the
estimated undiscounted cash flows of the entity acquired over the
remaining amortization period, the carrying amounts of the intangible
assets and goodwill are reduced by the estimated shortfall of cash
flows.  In addition, intangible assets and goodwill associated with
assets acquired in a purchase business combination are included in
impairment evaluations when events and circumstances exist that
indicate the carrying amount of those assets may not be recoverable.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses interest rate swaps and options to manage the
interest rate characteristics of its outstanding debt to a more
desirable fixed or variable rate basis or to limit the Company's
exposure to rising interest rates; forward foreign exchange
agreements and currency swaps to minimize the exposure on
intercompany loans; and foreign exchange option contracts to minimize
the impact of anticipated foreign currency exposures which arise from
probable purchases of raw materials or other inventory, collection of
accounts receivable, settlement of accounts payable, and periodic
debt service by international subsidiaries which occur in the
ordinary course of business.

Interest rate differentials to be paid or received as a result of an
interest rate swap are accrued and recognized as an adjustment of
interest expense related to the designated debt.  Interest rate
option premiums paid are amortized to interest expense ratably during
the life of the agreement.  Amounts related to interest rate swaps
and the intrinsic value of terminated option agreements are deferred
and amortized as an adjustment to interest expense over the original
period of interest exposure, provided the designated liability
continues to exist or is probable of occurring.

The Company uses forward foreign exchange contracts and currency
swaps to hedge intercompany financial activity denominated in
currencies other than the functional currency of the entity involved. 
Forward foreign exchange contracts and currency swaps are carried
off-balance-sheet with unrealized and realized gains and losses
included in the measurement and recording of the hedged transactions. 

The Company hedges a portion of its anticipated foreign currency
exchange exposure using certain derivative financial instruments,
primarily purchased options to sell foreign currencies with little or
no intrinsic value at time of purchase.  These contracts are
designated and effective as hedges of the Company's consolidated
foreign currency exchange exposures.  Gains on option contracts that
are designated as hedges (including open, matured and terminated
contracts), and which have nominal intrinsic value at the time of
purchase, are deferred and recognized in earnings at the time the
underlying hedged exposure occurs.  Premiums on purchased options are
recorded as assets and amortized over the lives of the options. 
Realized and unrealized gains on options relating to exposures that
are no longer probable of occurring are included as foreign exchange
gains in the accompanying Consolidated Statements of Operations.

REVENUE RECOGNITION AND PRODUCT WARRANTY

The Company recognizes revenue at the time of product shipment and
provides currently for estimated discounts, rebates and product
returns and the cost to repair or replace products under the warranty
provisions in effect at the time of sale.

STOCK-BASED COMPENSATION

The Company accounts for its stock-based compensation plans using the
intrinsic value method prescribed by  Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees." Financial
Accounting Standards Board (FASB) Statement No. 123, "Accounting for
Stock-Based Compensation" (SFAS 123), requires that companies
electing to continue using the intrinsic value method make pro forma
disclosures of net earnings and earnings per share as if the fair-
value-based method of accounting had been applied.  See Note 16 for
the fair value disclosures required under SFAS 123.

ADVERTISING COSTS

All advertising costs are expensed as incurred and included in
selling, administrative and general expenses.  Advertising expense
was $20.1 million, $20.5 million and $19.0 million in 1998, 1997 and
1996, respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

ADOPTED

In April 1998, the American Institute of Certified Public Accountants
(AICPA) issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities" (SOP 98-5), which requires that costs related to start-up
activities be expensed as incurred.  Prior to 1998, the Company
capitalized its pre-operating costs incurred in connection with
opening a new facility.  In the fourth quarter of 1998, the Company
elected to early adopt the provisions of SOP 98-5 in its consolidated
financial statements for the year ended June 30, 1998.  The effect of
adoption of SOP 98-5 was to record a charge of $8.4 million, net of
taxes, for the cumulative effect of an accounting change to expense
costs that had previously been capitalized prior to July 1, 1997.

In March 1998, the AICPA issued SOP 98-1, "Accounting For the Costs
of Computer Software Developed For or Obtained For Internal-Use" (SOP
98-1), which the Company early adopted effective July 1, 1997.  SOP
98-1 requires the capitalization of certain costs incurred after the
date of adoption in connection with developing or obtaining software
for internal-use.  The Company previously maintained a policy similar
to SOP 98-1 and, therefore, the adoption of SOP 98-1 did not have a
material impact on the Company's consolidated results of operations
or financial position.

In February 1997, the FASB issued Statement No. 128, "Earnings per
Share" (SFAS 128), which replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per
share.  Unlike primary earnings per share, basic earnings per share
excludes any dilutive effects of options, warrants and convertible
securities.  Diluted earnings per share is very similar to the
previously reported fully diluted earnings per share.  All earnings
per share amounts for all periods have been presented and, where
appropriate, restated to conform to the SFAS 128 requirements.  See
Note 3 for a reconciliation of the numerators and the denominators of
the basic and diluted per share computations for earnings from
continuing operations.

In October 1996, the AICPA issued SOP 96-1, "Environmental
Remediation Liabilities" (SOP 96-1), which requires the accrual of
environmental remediation liabilities when the criteria of FASB
Statement No. 5, "Accounting for Contingencies," are met.  SOP 96-1
provides benchmarks to aid in the determination of when environmental
remediation liabilities should be recognized and specific guidance as
to how they should be measured.  The Company adopted SOP 96-1
effective July 1, 1997.  SOP 96-1 did not have a material impact on
the Company's consolidated results of operations or financial
position.

YET-TO-BE-ADOPTED

In June 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS 133), which is
required to be adopted in years beginning after June 15, 1999.  The
Company has not determined when it will adopt SFAS 133, which may be
early adopted as of the beginning of any fiscal quarter after its
issuance.  SFAS 133 will require the Company to recognize all
derivatives on the balance sheet at fair value.  Derivatives that are
not hedges must be adjusted to fair value through income.  If the
derivatives are hedges and depending on the nature of the hedges,
changes in the fair value of derivatives which offset the change in
fair value of the hedged assets, liabilities or firm commitments will
either be recorded in earnings or deferred in shareholders' equity
until the hedged item is recognized in earnings.  The ineffective
portion of a derivative's change in fair value will be immediately
recognized in earnings.  The Company has not yet determined what the
effect of SFAS 133 will be on the future consolidated results of
operations or financial position of the Company.

In February 1998, the FASB issued Statement No. 132, "Employers'
Disclosures about Pensions and Other Postretirement Benefits" (SFAS
132), which is effective for fiscal years beginning after
December 15, 1997.  SFAS 132 addresses disclosure issues only and
does not change the measurement or recognition provisions for
pensions and postretirement benefits other than pensions. 
Accordingly, the Company's adoption of SFAS 132 in 1999 will have no
impact on its consolidated results of operations or financial
position.

In June 1997, the FASB issued Statement No. 131, "Disclosures About
Segments of an Enterprise and Related Information" (SFAS 131), which
is effective for fiscal years beginning after December 15, 1997. 
SFAS 131 changes the method of determining segments from that
currently required, and requires the reporting of certain information
about such segments.  The Company has not determined how its segments
will be reported or whether and to what extent segment information
will differ from that currently presented.

In June 1997, the FASB issued Statement No. 130,"Reporting
Comprehensive Income" (SFAS 130), which is effective for fiscal years
beginning after December 15, 1997.  SFAS 130 establishes new rules
for the reporting and display of comprehensive income and its
components; however, adoption in 1999 will have no impact on the
Company's consolidated results of operations or shareholders' equity. 
 

NOTE 2 - CHANGES IN BUSINESS

ACQUISITIONS

NELLCOR PURITAN BENNETT INCORPORATED

On August 28, 1997, the Company acquired Nellcor Puritan Bennett
Incorporated (Nellcor) through an agreement to purchase for cash all
of the outstanding shares of common stock of Nellcor for $28.50 per
share.  The aggregate purchase price of the Nellcor acquisition was
approximately $1.9 billion.  Nellcor manufactures and markets
products that monitor, diagnose and treat respiratory impaired
patients.  The product lines include pulse oximetry monitors and
sensors, critical care and portable ventilators, home oxygen therapy
products, sleep apnea diagnostic and therapy products, and medical
gas products and distribution systems.  The Company completed the
acquisition using cash and cash equivalents and borrowed
approximately $1.1 billion under a $2.0 billion credit facility
established in July 1997, and amended and restated in September 1997. 

In connection with the Company's filing of a shelf registration for
debt securities in December 1997, Mallinckrodt was engaged in
discussions with the staff of the Securities and Exchange Commission
(SEC) regarding the purchase price allocation related to the
acquisition of Nellcor.  On January 26, 1999, the Company concluded
these discussions with the SEC and, as a result, has agreed to
recalculate and restate the amount of purchase price allocated to
purchased research and development under a methodology preferred by
the SEC as articulated publicly in an SEC letter to the American
Institute of Certified Public Accountants in September 1998.  The
amount of purchased research and development charged to operations in
the first quarter of 1998 of $398.3 million has been reduced by $90
million to $308.3 million.  A corresponding $90 million increase in
goodwill will be amortized over the previously established 30-year
amortization period beginning in September 1997.  The accompanying
1998 consolidated financial statements have been restated to reflect
this change.  The effects of this change on previously reported
Consolidated Statements of Operations and Consolidated Balance Sheets
are as follows:


</TABLE>
<TABLE>
<CAPTION>

(In millions, except per share amounts)             Year Ended June 30, 1998
                                                    ------------------------
                                                    As Reported     Restated

                                                    -----------     --------
<S>                                                 <C>             <C> 
Consolidated Statements of Operations
  Selling, administrative and general expenses       $   712.5      $  715.0
  Purchased research and development                     396.3         306.3
  Total operating costs and expenses                   2,617.5       2,530.0
  Operating earnings (loss)                             (250.5)       (163.0)
  Earnings (loss) from continuing operations
   before income taxes                                  (337.5)       (250.0)
  Earnings (loss) from continuing operations            (355.9)       (268.4)
  Earnings (loss) before cumulative effect of
   accounting change                                    (283.5)       (196.0)
  Net earnings (loss)                                   (291.9)       (204.4)
  Available for common shareholders                  $  (292.3)     $ (204.8)

  Basic earnings per common share:
   Earnings (loss) from continuing operations        $   (4.89)     $  (3.69)
   Net earnings (loss)                               $   (4.01)     $  (2.81)

  Diluted earnings per common share:
   Earnings (loss) from continuing operations        $   (4.89)     $  (3.69)
   Net earnings (loss)                               $   (4.01)     $  (2.81)


                                                         June 30, 1998
                                                    ------------------------
                                                    As Reported     Restated
                                                    -----------     --------
Consolidated Balance Sheets
  Goodwill, net                                      $   899.5      $  987.0  
  Total assets                                         3,785.6       3,873.1
  Reinvested earnings                                    952.2       1,039.7
  Total shareholders' equity                             918.4       1,005.9
  Total liabilities and shareholders' equity           3,785.6       3,873.1

</TABLE>

The acquisition was accounted for under the purchase method of
accounting and, accordingly, the results of operations of Nellcor
have been included in the Company's consolidated financial statements
since September 1, 1997.  The purchase price of the acquisition was
allocated to the assets acquired and liabilities assumed based upon
generally accepted accounting principles and estimated fair values at
the date of acquisition.  The excess of the purchase price over the
fair value of the net identifiable assets, totaling $814.2 million,
was allocated to goodwill and is being amortized on a straight-line
basis over 30 years.  The Company also recorded a deferred tax
liability of $211.0 million, representing the tax effect of timing
differences recorded as part of the acquisition.

Approximately $835.4 million of the purchase price was allocated to
identifiable intangible assets including purchased research and
development ($308.3 million), technology ($374.2 million), and
trademarks and trade names and assembled work force ($152.9 million). 
(See Note 1 for amortization periods and methods for intangible
assets.)

The purchased research and development represents the value of
numerous new medical devices and other  products/technologies in all
major product lines that were in various stages of development and
had not reached technological feasibility at the transaction date. 
No alternative future uses were identified prior to reaching
technological feasibility because of the uniqueness of the projects. 
Additionally, no identifiable alternate markets  were established for
projects that were in early stages of development.  Management is
primarily responsible for estimating the fair value of purchased
research and development.  To determine the value of the purchased
research and development, the expected future net cash flows of the
in-process technology were determined based on forecasts of future
results as of the acquisition date for each project that management
believed at the acquisition date were likely to occur.  Revenue
projections, which are the most significant and uncertain assumptions
that affect the valuation, were based primarily upon the growth rates
for markets served and the estimated life of each product's
technology provided by management based upon their knowledge at the
acquisition date.  Significant projected aggregate revenue growth
assumed increasing demand for medical devices, and the Company's
ability to maintain a significant share of the markets.  The products
generated by these projects were expected to be commercially
available within one to four years after the acquisition date.  Costs
of goods sold, expressed as a percent of revenue, were expected to
decrease from current projections of 48 percent to 43 percent over
time.  Gross margins, as they relate inversely to costs of goods sold
as a percentage of revenue, were assumed to increase, in the
aggregate, over time due mainly to improving efficiency in the
manufacturing processes and more profitable products having a greater
impact on total sales.  Selling, general and administration expenses,
excluding depreciation and amortization, expressed as a percent of
revenues were estimated at 24 percent for all periods.  Such expense
levels were expected to be achieved through the elimination of
redundant administrative functions and administration and selling
personnel, and lower infrastructure costs for international
expansion.  The future net cash flows were discounted at 16 percent,
taking into account the time value of money as well as investment
risk factors to appropriately reflect the risks of realization of the
cash flows.  The major risks associated with timely completion and
commercialization are to transform concepts into designs that meet
customer requirements, gain regulatory approval and market clearance
in the key markets, and ramp up the manufacturing process once
regulatory approval is obtained. The discounted cash flows were then
reduced to reflect only the accomplishment made by Nellcor toward the
products' ultimate completion through the acquisition date.  The
assumptions used in determining the value of purchased research and
development represent management's good faith best estimates of the
in-process products' likely performance as of the acquisition date. 
The purchased research and development intangible asset, which had no
tax benefit, was charged to results of operations during the first
quarter of 1998.  Of the total charge of $308.3 million, $2.0 million
related to the Aero Systems division, which was sold and reclassified
to discontinued operations in the fourth quarter of 1998.

The sale of Nellcor inventories, which were stepped up to fair value
in connection with allocation of purchase price, decreased earnings
by $75.4 million, $46.7 million net of taxes for 1998.  Pretax
charges to the Respiratory Group and Aero Systems division, which was
divested and reclassified to discontinued operations in the fourth
quarter, were $74.4 million and $1.0 million, respectively.

The following unaudited pro forma financial information presents the
combined results of operations of Mallinckrodt and Nellcor as if the
acquisition had occurred as of the beginning of 1997, after giving
effect to certain adjustments, including amortization of goodwill and
intangible assets, additional depreciation expense, increased
interest payments on debt related to the acquisition, reduced
interest income from cash utilized to complete the acquisition, and
the related tax effects.  The pro forma financial information does
not necessarily reflect the results of operations that would have
occurred had Mallinckrodt and Nellcor operated as a combined entity
during such periods.

(In millions, except per share amounts)          1998        1997
                                               --------    --------
Net sales                                      $2,462.3    $2,436.8
Net earnings from continuing operations          $109.3      $108.7
Net earnings per share from continuing
 operations
  Basic                                           $1.49       $1.47
  Diluted                                         $1.48       $1.44

The pro forma financial information presented above does not include
nonrecurring charges for purchased research and development, the sale
of inventory stepped up to fair value at the date of acquisition, and
integration activities.  These charges are included in the actual
results of operations for 1998.

Immediately after the acquisition was consummated, management of the
combined Company began to formulate an integration plan to combine
Mallinckrodt and Nellcor into one successful company.  Since both
companies (Mallinckrodt and Nellcor) had global healthcare
operations, senior management, through transition teams, assessed
which activities should be consolidated.  Management finalized and
approved a Nellcor integration plan during the year.  Accordingly,
the Company recorded additional purchase liabilities of $50.1
million, $30.8 million net of related tax benefit, which were
included in the acquisition cost allocation and related goodwill. 
The principal actions of the plan include the involuntary severance
of approximately 450 Nellcor employees as a result of work force
reduction primarily in U.S. administrative areas ($37.2 million),
relocation of Nellcor employees ($3.8 million), and the elimination
of contractual obligations of Nellcor which have no future economic
benefit ($9.1 million).  Approximately $27.9 million of cash
expenditures were incurred through June 30, 1998 and liabilities of
$22.2 million related to the Nellcor integration plan remained in
accrued liabilities at June 30, 1998.  The majority of the remaining
cash expenditures will occur in 1999 with the largest single category
related to severance for previously terminated employees.  These
actions are to be completed in 1999 and, although none are expected,
reductions in the estimated liability for these integration
activities will be offset against the related goodwill. 

During 1998, the Company recorded a pretax charge to selling,
administrative and general expenses of $19.1 million associated with
exiting certain activities related to Mallinckrodt operations.  The
charge included severance costs of $17.1 million related to the
involuntary severance of approximately 130 Mallinckrodt employees as
a result of work force reduction primarily in the Europe
administration function and U.S. sales force, and facility exit costs
of $2 million.  Payments made during 1998 relating to the above
totaled $3.5 million.  The majority of the remaining $15.6 million
cash expenditures will occur in 1999.  Restructuring actions are to
be complete in 1999 and no material adjustments to the original
reserve are anticipated.

The Company recorded a pretax charge to selling, administrative and
general expenses of $49.5 million in 1998 related to employee
transition bonuses of $16.6 million, increased asset valuation
reserves of $12.8 million, and other integration costs of $20.1
million.  Charges to the reserve during 1998 were $25.0 million.  The
remaining reserve of $24.5 million consists primarily of employee
transition bonuses to be paid in 1999.

OTHERS

In November 1996, the Company acquired D.M. Graham Laboratories,
Inc., a contract manufacturer of dosage pharmaceuticals and a
licensed producer of a variety of medicinal narcotics, for $22
million of the Company's common stock.

In January 1996, the Company acquired Liebel-Flarsheim Company, a
manufacturer of contrast media power injector systems for diagnostic
imaging procedures, x-ray components and specialized equipment for
diagnostic urology procedures, for $70.3 million.  In December 1995,
King Pharmaceuticals' product line of specialty analgesic
pharmaceuticals was acquired for $32.4 million. 

The above acquisitions were accounted for as purchases, and results
of operations were included in the consolidated financial statements
from their respective acquisition dates.  Results of operations for
the periods prior to acquisition were not material to Mallinckrodt.

DISCONTINUED OPERATIONS

The Company sold certain chemical additive product lines in the
second quarter of 1998, and recorded a gain on sale, net of taxes, of
$8.7 million.  In the fourth quarter of 1998, the Company sold its
catalyst business and Aero Systems division.  The catalyst sale
resulted in a gain, net of taxes, of $60.2 million.  No gain or loss
was recognized on the sale of the Aero Systems division, and there
were no earnings from operations.  In June 1998, the Company
committed to the sale of the remaining chemical additives business of
the catalysts and chemical additives division, and closing of the
sale occurred on July 31, 1998.  Certain liabilities for
environmental, litigation and employee benefits remained with the
Company, and reserves were established to address these liabilities
as deemed appropriate.  Earnings, net of taxes, from the catalysts
and chemical additives division for 1998, 1997 and 1996 were $11.4
million, $10.5 million and $10.1 million, respectively.

On March 31, 1997, the Company disposed of Fries & Fries, Inc., a
wholly owned subsidiary which owned the Company's 50 percent interest
in Tastemaker, the flavors joint venture with Hercules Incorporated. 
The Company recorded a gain on divestiture, net of taxes, of $270.6
million.  Earnings, net of taxes, from the divested business for 1997
and 1996 were zero and $18.6 million, respectively.  The disposition
included the assumption of $510 million of debt of Fries & Fries,
Inc. by the buyer.  Interest expense related to the assumed debt of
$22.4 million and $2.5 million for 1997 and 1996, respectively, is
included in the above Fries & Fries, Inc. net after-tax results of
operations reclassified as discontinued operations. 

On June 30, 1997, the Company sold the animal health segment for cash
plus the assumption of certain liabilities.  The Company recorded a
loss on sale, including taxes, of $269.4 million.  Environmental
liabilities, certain facility leases, and certain liabilities for
employee benefits, including postretirement benefits, remained with
the Company.  Reserves were established to address the remaining
liabilities.  Earnings, net of taxes, from the animal health segment
for 1997 and 1996 were $5.8 million and $18.9 million, respectively. 
Interest expense related to debt assumed by the buyer of $5.6 million
and $5.0 million for 1997 and 1996, respectively, was included in the
above animal health segment net after-tax results reclassified to
discontinued operations.  During the third quarter of 1998, the
Company recorded a one-time, after-tax charge of $7.9 million to
discontinued operations related to settlement costs from the sale of
the animal health segment.

In October 1995, the Company disposed of its feed ingredients
business.  The gain on disposition, net of taxes, was $35.4 million
and earnings, net of taxes, from the divested business for 1996 were
$4.4 million.  

Discontinued operations for 1997 and 1996 also included other
charges, primarily for environmental and litigation costs related to
previously divested operations, of $2.6 million and $19.1 million,
respectively.

The following schedule summarizes the components, net of tax, of
discontinued operations presented in the Consolidated Statements of
Operations (in millions).

<TABLE>
<CAPTION>
                                       
                                                  1998       1997       1996
                                                 ------     ------     ------
<S>                                              <C>        <C>        <C>
Catalysts and chemical additives division
   Gain on sale..............................    $ 68.9
   Earnings from operations..................      11.4     $ 10.5     $ 10.1
Fries & Fries, Inc.
   Gain on divestiture.......................                270.6
   Earnings from operations..................                            18.6
Animal health segment
   Loss on sale..............................      (7.9)    (269.4)
   Earnings from operations..................                  5.8       18.9
Feed ingredients business
   Gain on divestiture.......................                            35.4
   Earnings from operations..................                             4.4
Environmental costs/other....................                 (2.6)     (19.1)
                                                 -------    -------    -------
Discontinued operations                          $ 72.4     $ 14.9     $ 68.3
                                                 =======    =======    =======

</TABLE>
         
The catalysts and chemical additives and Aero Systems divisions were
reclassified to discontinued operations effective June 30, 1998. 
Fries & Fries, Inc. and the animal health segment were reclassified
to discontinued operations effective December 31, 1996 and March 31,
1997, respectively.  The feed ingredients business was reclassified
to discontinued operations effective September 30, 1995.  All prior
periods of the Consolidated Statements of Operations and Consolidated
Balance Sheets were reclassified to reflect this presentation. 
Disclosures included in the Notes to Consolidated Financial
Statements relate to continuing operations, unless otherwise
indicated.

NOTE 3 - EARNINGS PER COMMON SHARE

The following table sets forth the computation of basic and diluted
earnings (loss) from continuing operations per common share (in
millions, except share and per share amounts).

<TABLE>
<CAPTION>

                                                 1998        1997      1996
                                               --------    -------    ------- 
<S>                                            <C>         <C>        <C>
Numerator:
 Earnings (loss) from continuing operations..  $(268.4)    $175.2     $143.6
 Preferred stock dividends...................      (.4)       (.4)       (.4)
                                               --------    -------    ------- 
 Numerator for basic earnings (loss) per
  share and diluted earnings (loss)per
  share--income (loss) available to common
  shareholders...........                      $(268.8)    $174.8     $143.2
                                               ========    =======    =======  
Denominator:
 Denominator for basic earnings per share--
  weighted-average shares................. 72,920,659  73,837,424  75,183,729

 Potential dilutive common shares--
  employee stock options..................              1,270,405   1,172,234
                                           ----------  ----------  ---------- 
 Denominator for diluted earnings (loss)
  per share--adjusted weighted-average
  shares and assumed conversions.......... 72,920,659  75,107,829  76,355,963
                                           ==========  ==========  ==========

Basic earnings (loss) from continuing
 operations per common share...............     $(3.69)     $2.37      $1.90
                                                =======     =====      =====

Diluted earnings (loss) from
 continuing operations per common share.......  $(3.69)     $2.33      $1.88
                                                =======     =====      =====

</TABLE>

The diluted share base for the twelve months ended June 30, 1998
excludes incremental shares of 612,285 related to employee stock
options.  These shares are excluded due to their antidilutive effect
as a result of the Company's loss from continuing operations during
1998.


NOTE 4 - SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>

(In millions)                                       1998       1997     1996
                                                  --------   -------   ------- 
<S>                                               <C>        <C>       <C>
Interest paid.................................    $ 83.7     $ 69.1    $ 48.6
Income taxes paid.............................      73.3       82.2      65.0
Noncash investing and financing activities:
 Assumption of liabilities related
  to acquisitions.............................     465.6        2.3      21.5
 Principal amount of debt assumed by
  buyers in conjunction with divestitures.....       1.0      530.6
 Preferred stock received related to a 
  divestiture.................................                 88.9
 Issuance of stock related to an acquisition..                 22.0   

</TABLE>

The interest paid and income taxes paid presented above include
amounts related to discontinued operations.

NOTE 5 - INVENTORIES

 
AT JUNE 30, (in millions)                          1998       1997
                                                  ------     ------
Raw materials and supplies....................    $208.4     $107.4
Work in process...............................      46.4       39.9
Finished goods................................     215.2      144.5
                                                  ------     ------
                                                  $470.0     $291.8
                                                  ======     ======   
            
NOTE 6 - INVESTMENTS AND OTHER NONCURRENT ASSETS

AT JUNE 30, (in millions)                          1998       1997
                                                  ------     ------   
Preferred stock received related
 to a divestiture.............................    $ 86.1     $ 88.9
Other investments, net........................      42.9       32.9
Other noncurrent assets, net..................      25.5       23.3
                                                  ------     ------   
                                                  $154.5     $145.1
                                                  ======     ======

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

AT JUNE 30, (in millions)                         1998        1997
                                                ---------  --------- 
Land..........................................  $   69.1   $   50.6
Buildings and leasehold improvements..........     354.2      300.1
Machinery and equipment.......................     916.9      778.5
Construction in progress......................      71.3       59.2
                                                --------   ---------  
                                                 1,411.5    1,188.4
Accumulated depreciation......................    (516.6)    (447.1)
                                                ---------  ---------
                                                $  894.9   $  741.3
                                                =========  =========
  
Capitalized interest costs were $.8 million in 1998, $.7 million in
1997 and $1.6 million in 1996.

NOTE 8 - INTANGIBLE ASSETS

AT JUNE 30, (in millions)                           1998      1997
                                                  ---------  -------
Goodwill......................................    $1,079.4   $280.5
Accumulated amortization......................       (92.4)   (58.0)
                                                  ---------  -------
Goodwill, net.................................      $987.0   $222.5
                                                  =========  =======  

Technology....................................    $  390.4   $ 30.3
Accumulated amortization......................       (26.1)    (5.9)
                                                  ---------  -------
Technology, net...............................    $  364.3   $ 24.4
                                                  ========   =======
                                              
Other intangible assets.......................    $  337.4   $187.2
Accumulated amortization......................       (55.3)   (42.8)
                                                  ---------  ------- 
Other intangible assets, net                      $  282.1   $144.4
                                                  ========   =======

NOTE 9 - FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

In the ordinary course of business, Mallinckrodt purchases materials
and sells finished products denominated in approximately 25 different
currencies.  The Company is primarily exposed to changes in exchange
rates of the German deutsche mark and other European currencies
highly correlated with the German deutsche mark and the Japanese yen. 
Overall, the Company is a net beneficiary when the U.S. dollar
weakens and is adversely affected by a stronger U.S. dollar relative
to the major currencies identified.

The Company enters into forward foreign exchange contracts and
currency swaps to minimize the exposure on intercompany loans.  To
mitigate the short-term effect of changes in foreign currency
exchange rates on the Company's consolidated performance, the Company
hedges a portion of its non-U.S. dollar denominated exposures by
purchasing currency options which generally have terms of two years
or less.  The Company uses the currency options with an objective of
limiting negative foreign exchange rate effects on overall
performance for both budget and prior year comparisons over a rolling
18- to 24-month horizon.  The Company seeks to have effective
coverage levels over such 18- to 24-month horizon of 50 to 80 percent
of currency exposures that subject the Company to risk.  There are no
hedging gains or losses that are explicitly deferred at June 30,
1998.

The Company's interest income and expense are most sensitive to
changes in the general level of U.S. interest rates.  In this regard,
changes in U.S. interest rates affect the interest earned on the
Company's cash equivalents and short-term investments as well as
interest paid on its short-term debt.  To mitigate the impact of
fluctuations in U.S. interest rates, the Company periodically enters
into interest rate swaps and option contracts. 

Information on the duration by expected maturity, notional value,
purpose and fair value of instruments outstanding as of June 30, 1998
is provided below (in millions, except average strike price and
exchange rate):

<TABLE>
<CAPTION>

                                                                     Fair Value
                                                                       (Loss)
                                                                        As of
                                      1999    2000    2001   Total     6/30/98
                                     ------  ------  ------  -----   ---------- 
<S>                                  <C>     <C>     <C>     <C>     <C>
Purchased option contracts to sell
 for U.S.$ related to anticipated
 foreign currency exposures
  German deutsche mark
   Notional value..................  $ 28.5  $ 55.0          $ 83.5    $  3.9
   Average strike price............    1.71    1.75
  Japanese yen
   Notional value..................  $ 10.0  $ 37.5          $ 47.5    $  6.7
   Average strike price............   114.2   112.8

Forward contracts and currency
 swaps related to inter-company
 financial transactions
  Sale of Canadian dollar
   Notional value..................  $  2.4                  $  2.4    $  0.0
   Exchange rate....................   1.46
  Sale of French franc
   Notional value................... $ 12.0                  $ 12.0    $  0.0
   Exchange rate....................    6.1
  Sale of Polish zloty
   Notional value................... $  0.4                  $  0.4    $  0.0
   Exchange rate....................    4.1
  Purchase of British pounds
   Notional value................... $  5.1                  $  5.1    $  0.0
   Exchange rate....................    0.6
  Swap of Japanese yen
   Notional value...................                 $ 12.9  $ 12.9    $ (0.1)
   Exchange rate....................                  140.0
Interest rate swaps            
  Related to U.S.$ leases, the
   Company pays fixed (9.9%)/
    receives variable (LIBOR + 0.70%)
   Notional value...................         $ 35.6          $ 35.6    $ (2.2)
  Related to 6.3% debentures, the
   Company pays variable
    (LIBOR + .3419%)/receives
     fixed (6.3%)
   Notional value...................                 $200.0  $200.0    $  0.5

</TABLE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

Non-derivative financial instruments included in the Consolidated
Balance Sheets are cash, short-term investment vehicles, short-term
debt and long-term debt.  In the aggregate, these instruments were
carried at amounts approximating fair value at June 30, 1998 and
1997.  The fair value of long-term debt was estimated based on future
cash flows discounted at current interest rates available to the
Company for debt with similar maturities and characteristics.  See
Note 13 for the disclosure of fair value of long-term debt.

CONCENTRATIONS OF CREDIT RISK

Financial instruments which expose Mallinckrodt to credit risk are
short-term investments (cash equivalents), trade receivables and
derivatives.  The Company mitigates the risk that counterparties to
short-term investments and derivatives will fail to perform by
contracting only with major financial institutions having high credit
ratings.  Mallinckrodt considers the likelihood of counterparty
failure to be remote.

Trade receivables stem from the Company's worldwide operations and
reflect Mallinckrodt's diverse customer base.  The Company
periodically assesses the financial strength of its customers and
obtains proof of creditworthiness, as necessary, prior to extending
credit.  Consequently, Mallinckrodt does not have a material
concentration of credit risk, either by transaction type, product
line or geographic region.

NOTE 10 - INCOME TAXES

Income taxes included in the Consolidated Statements of Operations
were (in millions):

<TABLE>
<CAPTION>

                                                   1998       1997     1996
                                                  --------   -------   ------- 
<S>                                               <C>        <C>       <C>
Continuing operations.........................    $ 18.4     $ 96.3    $ 84.3 
Discontinued operations:
  Sale of catalysts and chemical additives
   division...................................      45.4
  Catalysts and chemical additives division
   operations.................................       5.3        6.0       5.7 
  Divestiture of Fries & Fries, Inc...........                158.9
  Fries & Fries, Inc. operations..............                  (.5)     10.8 
  Sale of animal health segment...............      (4.2)      21.9 
  Animal health segment operations............                 11.4      11.0 
  Divestiture of feed ingredients business....                           19.3
  Feed ingredients business operations........                            2.2
  Other.......................................      (8.4)      (1.4)    (10.3)
                                                  -------    -------   -------
  Total discontinued operations...............      38.1      196.3      38.7
                                                  -------    -------   -------  
Cumulative effect of accounting change........      (4.1)
                                                  -------    -------   -------
                                                  $ 52.4     $292.6    $123.0
                                                  =======    =======   =======
</TABLE>


The geographical sources of earnings (loss) from continuing
operations before income taxes were (in millions):

                                     1998         1997      1996
                                    --------    -------    -------
U.S...........................      $(355.8)    $161.7     $123.0 
Outside U.S...................        105.8      109.8      104.9
                                    --------    -------    -------
                                    $(250.0)    $271.5     $227.9
                                    ========    =======    ======= 

The components of the income tax provision charged to continuing
operations follow (in millions):

                                     1998         1997      1996
                                    --------     -------   -------
Current:
  U.S. Federal................      $  53.3      $ 41.5    $ 26.1 
  U.S. state and local........          4.4         7.0       4.1
  Outside U.S.................         29.5        26.3      27.5
                                    --------     ------    ------ 
                                       87.2        74.8      57.7
                                    --------     ------    ------ 

Deferred:
  U.S. Federal................        (87.5)        8.8      20.5
  U.S. state and local........         14.2         2.7       2.6
  Outside U.S.................          4.5        10.0       3.5
                                    --------     ------    ------
                                      (68.8)       21.5      26.6
                                    --------     ------    ------
                                     $ 18.4      $ 96.3    $ 84.3
                                    ========     ======    ======

The Company had the following deferred tax balances at June 30, 1998
and 1997 (in millions):

                                                 1998       1997
                                                -------    -------
Deferred tax assets:
  Restructuring accruals.....................   $ 16.2     $ 21.0
  Pensions and deferred compensation.........     20.2       15.4
  Net operating losses.......................     11.4        6.4 
  Environmental accruals.....................     28.2       24.0
  Other, net.................................     44.1
                                                -------    -------
Gross deferred tax assets....................    120.1       66.8
  Valuation allowance........................    (30.4)     (22.8)
                                                -------    -------
Total deferred tax assets....................     89.7       44.0
                                                -------    -------
Deferred tax liabilities:
  Property, plant and equipment..............    133.9      126.6
  Receivables................................     18.8       47.8
  Intangible assets..........................    234.8       55.6
  Other, net.................................                25.3
                                                -------    -------
Total deferred tax liabilities...............    387.5      255.3
                                                -------    -------
Net deferred tax liabilities.................   $297.8     $211.3
                                                =======    =======

The tax benefit of the Company's net operating loss carryforwards of
$11.4 million relates primarily to its non-U.S. operations, and $5.6
million of the tax benefit will expire in years 2000 through 2010. 
The remaining $5.8 million of the tax benefit relates to net
operating loss carryforwards with indefinite carryforward periods.

Factors causing the effective tax rate for continuing operations to
differ from the U.S. Federal statutory rate were (in millions):

                                     1998         1997      1996
                                    --------    -------    -------
Computed tax at the U.S.
 Federal statutory rate..........   $(87.5)     $ 95.0     $ 79.8
State income taxes, net of
 Federal benefit.................      12.1        6.6        4.6
Effect of foreign operations.....     (14.4)     (15.8)     (11.6)
Purchase accounting                   115.0
Other items......................      (6.8)      10.5       11.5
                                    --------    -------    -------    
Income tax provision.............   $  18.4     $ 96.3     $ 84.3
                                    ========    =======    ======= 

Effective tax rate                   (7.4)%      35.5%      37.0%

Undistributed earnings of certain subsidiaries outside the U.S. are
considered to be permanently invested.  Accordingly, no provision for
income taxes was made for undistributed earnings of such
subsidiaries, which aggregated $298.1 million at June 30, 1998.


NOTE 11 - ACCRUED LIABILITIES

AT JUNE 30, (in millions)                        1998       1997
                                                ------     ------ 
Compensation and benefits....................   $118.1     $ 98.0
Environmental liabilities....................     79.5       73.5
Other........................................    334.4      219.7
                                                ------     ------ 
                                                $532.0     $391.2
                                                ======     ====== 
NOTE 12 - LINES OF CREDIT

The Company has a $1.0 billion private placement commercial paper
program.  The program is backed by a $1.6 billion revolving credit
facility expiring September 12, 2002.  Under this facility, interest
rates on borrowings are based upon the London Interbank Offered Rate,
plus a margin dependent on the Company's senior debt rating.  There
was no borrowing outstanding under the revolving credit facility at
June 30, 1998.  Commercial paper borrowings under this program were
$285.8 million as of June 30, 1998.

Non-U.S. lines of credit totaling $141.9 million were also available,
and borrowings under these lines amounted to $17.2 million at
June 30, 1998.  These non-U.S. lines are cancelable at any time.

NOTE 13 - DEBT

The components of short-term debt at June 30, 1998 and 1997 were (in
millions):

                                                 1998       1997
                                                ------     ------ 
Notes payable................................   $303.4     $  5.6
Current maturities of long-term debt.........      8.0        6.0
                                                ------     ------
                                                $311.4      $11.6
                                                ======     ======
  
The components of long-term debt at June 30, 1998 and 1997 were (in
millions):

<TABLE>
<CAPTION>


                                   Fair Value              Carrying Amount
                                ----------------        --------------------
                                 1998     1997            1998        1997
                                -------  -------        --------    --------
<S>                             <C>      <C>            <C>         <C>  
9.875% debentures with
 initial payment of $.9
 million due 2002 and
 annual installments of
 $15.0 million beginning
 in 2003, with final
 payment in 2011..............  $150.9    $153.7        $135.1      $135.0
7% debentures due 2013........   104.1      98.3          98.7        98.7
6.75% notes due 2005..........   103.8     102.0          99.5        99.4
6.5% notes due 2007..........    102.0      98.6          98.8        98.6
6.3% debentures due 2011.....    204.6                   200.9
6% notes due 2003............    100.1      98.2          99.6        99.5
5.99% debentures due 2010....    205.0                   203.0
Other........................     16.9      19.1          16.9        19.1
                                                        ------      ------  
                                                         952.5       550.3
Less current maturities......                              8.0         6.0
                                                        ------      ------    
                                                        $944.5      $544.3
                                                        ======      ======    

</TABLE>

On August 28, 1997, the Company acquired Nellcor through an agreement
to purchase for cash all of the outstanding shares of common stock of
Nellcor for $28.50 per share.  The aggregate purchase price of the
Nellcor acquisition was approximately $1.9 billion.  The Company
completed the acquisition using cash and cash equivalents and
borrowed approximately $1.1 billion under a $2.0 billion credit
facility established in July 1997, and amended and restated in
September 1997.  The credit facility consisted of a $400 million term
loan, which was repaid in March 1998, and a $1.6 billion five-year
revolving credit facility.  Under this facility, interest rates on
borrowings are based upon the London Interbank Offered Rate, plus a
margin dependent on the Company's senior debt rating.  There was no
borrowing outstanding under the revolving credit facility at June 30,
1998.

In January 1998, the Company issued $200 million aggregate principal
amount of notes maturing January 14, 2010.  The notes bear interest
at 5.99 percent until January 14, 2000, at which time the interest
rate will be reset at a fixed annual rate of 5.64 percent plus the
Company's then incremental borrowing rate above the rate quoted on
U.S. Treasury ten-year notes.  The notes are redeemable at the
election of the holder, in whole but not in part, at 100 percent of
the principal amount on January 14, 2000.

In March 1998, the Company issued $200 million aggregate principal
amount of notes maturing March 15, 2011.  The notes bear interest at
6.3 percent until March 15, 2001, at which time the interest rate
will be reset at a fixed annual rate of 5.6219 percent plus the
Company's then incremental borrowing rate above the rate quoted on
U.S. Treasury ten-year notes.  The notes are redeemable at the
election of the holder, in whole but not in part, at 100 percent of
the principal amount on March 15, 2001.  In conjunction with this
issue, the Company entered into an interest rate swap transaction
whereby the effective periodic interest payment is equal to three-
month LIBOR plus .3419 percent.  The rate is adjusted every three
months starting June 15, 1998.  The swap contract expires on
March 15, 2001.

Proceeds of both of the above transactions were used to repay
commercial paper borrowings.

Maturities of long-term debt for the next five years are:  1999-$8.0
million; 2000-$203.9 million; 2001-$201.7 million; 2002-$1.6 million;
and 2003-$118.3 million.  The 9.875 percent debentures are redeemable
at the option of Mallinckrodt at 100 percent in 2001 and thereafter.

The weighted average interest rates on short-term borrowings at June
30, 1998 and 1997 were 5.8 percent and 4.5 percent, respectively.

NOTE 14 - PENSION AND INVESTMENT PLANS

The Company has defined benefit pension plans covering a majority of
its U.S. employees.  The majority of these plans provide for
retirement benefits based on years of service and the level of
compensation for the highest three to five years occurring generally
within a period of up to 10 years prior to retirement.  Contributions
to the U.S. plans meet ERISA minimum funding requirements.

The components of net periodic defined benefit pension costs are as
follows (in millions):

                                      1998       1997       1996
                                    --------    -------    -------
Service cost......................    $21.1      $24.1      $20.4
Interest cost on projected
 benefit obligation...............     34.8       35.8       35.3
Earnings on plan assets...........   (104.5)     (36.4)     (64.3)
Net amortization and deferral.....     71.0        7.1       35.4
Special termination benefits and
 curtailment gains/losses, net....      7.5        8.0        2.2
                                    --------    -------    -------
                                      $29.9      $38.6      $29.0
                                    ========    =======    ======= 

U.S. pension expense in 1998, 1997 and 1996 was $24.2 million, $34.4
million and $25.8 million, respectively.

Assumptions used in determining the actuarial present value of
benefit obligations for U.S. pension plans follow:

                                      1998       1997       1996
                                    --------    -------    -------
Discount rate.....................     7.0%       8.0%       7.75%
Long-term rate of return
 on plan assets...................     9.5%       9.5%        9.0%
Compensation increase rate........     4.5%       5.0%        5.0%

The plans' assets primarily relate to U.S. plans and consist
principally of corporate equities, U.S. government debt securities
and units of participation in a collective short-term investment
fund.

The Company also sponsors seven defined contribution investment plans
for U.S. employees.  Participation in these plans is voluntary. 
Substantially all U.S. employees are eligible to participate. 
Expenses related to the plans consist primarily of Company
contributions, which are based on percentages of certain employee
contributions, plus discretionary amounts determined on an annual
basis.  Defined contribution investment plan expense for 1998, 1997
and 1996 was $12.6 million, $12.5 million and $14.0 million,
respectively.

The funded status of U.S. and significant non-U.S. defined benefit
pension plans and amounts recognized in the Consolidated Balance
Sheets at June 30, 1998 and 1997 follow (in millions):


<TABLE>
<CAPTION>


                                     1998                     1997             
                           -----------------------   ------------------------
                           Plans with   Plans with   Plans with   Plans with
                           Assets in    Accumulated  Assets in    Accumulated
                           Excess of    Benefits     Excess of    Benefits 
                           Accumulated  in Excess    Accumulated  in Excess
                           Benefits     of Assets    Benefits     of Assets
                           -----------  -----------  -----------  ----------- 
<S>                        <C>          <C>          <C>          <C>
Assets at fair value......   $427.2       $  9.7        $356.9        $34.5
Actuarial present value
 of benefit obligation:
  Vested benefits.........    332.1         43.5         251.0         67.1
  Nonvested benefits......     33.0         10.4          39.3          5.9
                           -----------  -----------  -----------  -----------
  Accumulated benefit
   obligation.............    365.1         53.9         290.3         73.0
  Projected future
   salary increases.......     96.6         11.7          79.2         11.5
                           -----------  -----------  -----------  -----------
  Projected benefit
   obligation.............    461.7         65.6         369.5         84.5
                           -----------  -----------  -----------  -----------
Projected benefit
 obligation in excess
 of plan assets...........     34.5         55.9          12.6         50.0
Items not yet recognized
 in earnings:
  Unrecognized prior
   service cost...........     (5.4)        (2.9)         (0.3)        (8.9)
  Unrecognized net
   gain (loss)............      5.3         (1.0)          7.5          7.8
  Unamortized transition
   asset (liability)......      0.9         (3.7)          1.3         (5.6)
                           -----------  -----------  -----------  ----------- 
Accrued pension
 liability................   $ 35.3        $48.3        $ 21.1        $43.3
                           ===========  ===========  ===========  ===========

</TABLE>

The pension and investment plan information presented above includes
related amounts for the businesses sold in 1998, 1997 and 1996,
except for 1997 pension expense, assets and liabilities of non-U.S.
animal health segment pension plans that were assumed by the buyer. 
Mallinckrodt retained all pension assets and liabilities relating to
the frozen pension benefits of U.S. employees of the businesses sold
in 1998, 1997 and 1996.

NOTE 15 - POSTRETIREMENT BENEFITS

Mallinckrodt provides certain healthcare benefits for a majority of
its U.S. salaried and hourly retired employees through various self-
insured and fully-insured programs.  Employees may become eligible
for healthcare benefits if they retire after attaining specified age
and service requirements while working for the Company. 

The postretirement benefit information presented below includes
related amounts for the businesses sold in 1998, 1997 and 1996,
except for the accrued postretirement benefit cost of certain active
animal health segment employees which was assumed by the buyer.

The components of periodic postretirement benefits costs are as
follows (in millions):

                                      1998       1997       1996
                                     -------    -------    -------
Service cost for benefits
 earned during the year...........    $ 3.1      $ 5.2      $ 4.8
Interest cost on benefit
 obligation.......................     10.0       11.6       13.0
Amortization of unrecognized
 net (gain) loss and prior
 service cost.....................     (1.9)        .2
                                     -------    -------    -------    
                                      $11.2      $17.0      $17.8
                                     =======    =======    =======
                                    
The following table presents the plans' funded status reconciled with
amounts recognized in the Company's Consolidated Balance Sheets at
June 30, 1998 and 1997 (in millions):

                                                 1998       1997
                                                ------     ------ 
Accumulated postretirement
 benefit obligation (APBO):
  Retirees...................................   $ 85.5     $ 79.7
  Fully eligible active employees............     10.7       12.5
  Other active employees.....................     41.4       33.7
                                                ------     ------ 
Accumulated postretirement benefit
 obligation in excess of plan assets.........    137.6      125.9
Unrecognized net gain........................     16.2       18.1
Unrecognized prior service cost..............     15.4       17.9
                                                ------     ------ 
Accrued postretirement benefit cost..........   $169.2     $161.9
                                                ======     ======
The discount rates used in determining the APBO for 1998 and 1997
were 7.0 percent and 8.0 percent, respectively.  Changes in plan
provisions for both retirees and active employees reduced the APBO by
$24.6 million in 1997.

The assumed medical plan cost trend rates used in measuring the APBO
were 8.0 percent and 8.5 percent for 1998 and 1997, respectively,
gradually declining to 4.75 percent in 2006 and thereafter.  A one
percentage point increase in the healthcare cost trend rate would
increase the APBO for 1998 by $11.4 million and the aggregate service
and interest cost by $1.2 million. 

A $1.4 million curtailment gain relating to the sale of the catalyst
business in the fourth quarter of 1998 was included in the gain on
sale recorded in discontinued operations.  A $1.3 million curtailment
gain relating to the sale of the animal health segment was included
in the loss on sale recorded in discontinued operations in 1997.

NOTE 16 - STOCK PLANS

The Company authorized a new non-qualified stock option plan in
October 1997.  This plan provides for granting stock options at
prices not less than 100 percent of market price (as defined) at the
date of grant.  Options are exercisable over nine years beginning one
year after the date of grant and are limited for the first and second
year of eligibility to 33-1/3 percent and 66-2/3 percent,
respectively.  Options granted under previous non-qualified stock
option plans are exercisable over nine years beginning one year after
the date of grant and are limited to 50 percent during the first year
of eligibility.

The pro forma information regarding net earnings and earnings per
share required by SFAS 123 has been determined as if the Company had
accounted for its employee stock options under the fair value method. 
The fair value for these options was estimated at the date of grant
using the Black-Scholes option pricing model with the following
weighted average assumptions:

                                         1998       1997       1996
                                        ------     ------     ------
Risk free interest rate.............     5.95%      6.32%      5.46%
Expected dividend yield of stock....     1.58%      1.53%      1.53%
Expected volatility of stock........     23.8%      25.4%      30.0%
Expected life of option (years).....      4.6        4.5        4.1

The weighted average fair values of options granted during 1998, 1997
and 1996 were $9.39, $11.09 and $10.06, respectively.

The estimated fair value of the options is amortized to expense over
the options' vesting period.  Because the SFAS 123 method of
accounting has been applied only to grants after June 30, 1995, the
following effects on net earnings and EPS may not be representative
of the effects on reported net earnings for future years.  The
Company's pro forma information follows (in millions, except per
share amounts):

                                      1998       1997       1996
                                    --------    -------    -------
Net earnings (loss):
  As reported.................      $(204.4)     $190.1    $211.9
  Pro forma...................       (215.3)      183.6     209.9
Earnings (loss) per share:
  As reported.................      $ (2.81)     $ 2.53    $ 2.77
  Pro forma...................        (2.96)       2.44      2.74

A summary of the Company's stock option activity and related
information follows:

                                                  1998                
                                      -----------------------------
                                        Number       Weighted Avg.
                                      of Options     Exercise Price
                                      ----------     --------------   
Outstanding-beginning of year.......   5,821,316         $32.96
Granted.............................   2,601,227          35.68
Exercised...........................    (614,320)         29.40
Canceled............................    (589,997)         35.44
                                       ----------
Outstanding-end of year.............   7,218,226          34.04
                                       ==========
Exercisable at end of year..........   4,394,493          32.64
Reserved for future option grants...   2,768,000

                                                  1997                
                                      -----------------------------
                                        Number       Weighted Avg.
                                      of Options     Exercise Price
                                      ----------    ---------------   
Outstanding-beginning of year.......   6,262,753         $31.54
Granted.............................   1,118,170          38.54
Exercised...........................  (1,143,868)         29.60
Canceled............................    (415,739)         35.77
                                       ----------
Outstanding-end of year.............   5,821,316          32.96
                                       ==========
Exercisable at end of year..........   4,275,547          31.40
Reserved for future option grants...   1,939,615

                                                  1996                
                                     ------------------------------
                                        Number       Weighted Avg.
                                      of Options     Exercise Price
                                      ----------    ---------------   
Outstanding-beginning of year.......   6,126,649         $30.14
Granted.............................   1,449,622          34.97
Exercised...........................  (1,071,373)         27.75
Canceled............................    (242,145)         33.38
                                       ----------
Outstanding-end of year.............   6,262,753          31.54
                                       ==========
Exercisable at end of year..........   4,300,204          30.60
Reserved for future option grants...   2,642,164

Outstanding stock options will expire over a period ending no later
than June 15, 2008.  The average exercise price of outstanding stock
options at June 30, 1998 was based on an aggregate exercise price of
about $246 million.  The weighted average remaining contractual life
of outstanding stock options is 6.9 years.  Further breakdown of
outstanding stock options by price range follows:

                       Options Currently Outstanding
                -----------------------------------------------
                 Number        Weighted Avg.     Weighted Avg.   
  Price Range    of Options    Exercise Price    Remaining Life
--------------  -----------    --------------    --------------
$13.06 - 29.98   1,396,566        $25.76              4.6
 30.13 - 34.79   1,152,298         33.85              6.6
 35.01 - 44.47   4,669,362         36.57              7.6

                     Options Exercisable
                 ----------------------------          
                 Number        Weighted Avg.
  Price Range    of Options    Exercise Price
--------------  -----------    --------------
$13.06 - 29.98   1,346,766        $25.61
 30.13 - 34.79   1,152,298         33.85
 35.01 - 44.47   1,895,429         37.05

NOTE 17 - CAPITAL STOCK

The Company has authorized and issued 100,000 shares, 98,330
outstanding at June 30, 1998, of par value $100, 4 percent cumulative
preferred stock.  This stock, with voting rights, is redeemable at
the Company's option at $110 a share.  During the three years ended
June 30, 1998, the number of issued and outstanding shares did not
change.  The Company has authorized 1,400,000 shares, par value $1,
of series preferred stock, none of which was outstanding during the
three years ended June 30, 1998.

Each outstanding common share includes a non-voting common stock
purchase right.  If a person or group acquires or has the right to
acquire 20 percent or more of the common stock or commences a tender
offer for 30 percent or more of the common stock, the rights become
exercisable by the holder, who may then purchase $320 worth of common
stock for $160 unless, in lieu thereof, the Board of Directors causes
the exchange of each outstanding right for one share of common stock
(in either case, exclusive of the rights held by the acquiring person
or group which are voided).  In the event of a merger or sale of 50
percent or more of the Company's assets, the rights may in certain
circumstances entitle the holder to purchase $320 worth of stock in
the surviving entity for $160.  The rights may be redeemed by the
Board at a price of 5 cents per right at any time before they become
exercisable and, unless exercised, they will expire February 28,
2006. 

The Company has a long-term incentive award program for executive
officers.  There are 1,000,000 shares reserved for this plan. 

Common shares reserved at June 30, 1998 consisted of the following: 

Exercise of common stock purchase rights..................84,235,877
Exercise of stock options and granting of stock awards....11,061,226
                                                          ---------- 
                                                          95,297,103
                                                          ========== 

The Company's Board of Directors previously authorized repurchase of
47 million shares of common stock and additional repurchases not to
exceed cash outlays of $250 million.  Share repurchases under these
authorizations have totaled 36.8 million shares.  Changes in the
number of shares of common stock issued and in treasury were as
follows:

<TABLE>
<CAPTION>

 
                                          1998          1997          1996
                                       ----------    ----------    ---------- 
<S>                                    <C>           <C>           <C>
Common stock issued..............      87,116,289    87,116,289    87,116,289 
Treasury common stock:
  Balance, beginning of year.....      14,843,847    12,835,721    10,365,203
  Stock options exercised........        (614,320)   (1,143,868)   (1,071,373)
  Purchased......................         241,753     3,654,995     3,540,018
  Issuance of stock related
   to an acquisition.............                      (503,001)
  Restricted stock awards........        (252,136)
  401(k) supermatch..............        (272,739)
  Directors' stock award plan....          (4,767)
  Cancellations of restricted
   shares........................                                       1,873
                                       ----------    ----------    ---------- 
  Balance, end of year                 13,941,638    14,843,847    12,835,721
                                       ----------    ----------    ---------- 
Common stock outstanding,
 end of year.....................      73,174,651    72,272,442    74,280,568
                                       ==========    ==========    ==========   


</TABLE>


NOTE 18 - BUSINESS SEGMENT

The Company operates globally primarily in one industry segment -
healthcare.  Healthcare develops, manufactures and markets healthcare
products to hospitals, clinical laboratories, pharmaceutical
manufacturers and other customers on a worldwide basis.  The Company
markets and distributes its products directly through its
geographically organized sales force, through various group
purchasing organizations, and through distributors in the U.S. and
internationally.  Healthcare consists of three businesses: 
Respiratory, Imaging and Pharmaceuticals.  The Respiratory business
includes products for respiratory care, anesthesiology and blood
analysis.  Such products include oxygen monitoring, critical care
ventilation, continuous core temperature monitoring systems, fluid
warming and convective warm air temperature management systems, and
airway management products.  The Imaging business includes products
used in radiology, cardiology and nuclear medicine.  Principal
products include iodinated contrast media (ionic and nonionic),
ultrasound contrast agents and interventional catheters and related
supplies, and radiopharmaceuticals used to provide images of numerous
body organs' anatomy and function, and to diagnose and treat
diseases.  Pharmaceuticals products include analgesics such as
acetaminophen (APAP); codeine salts, morphine and other opium-based
narcotics and synthetic narcotics used to treat pain and coughs; and
peptides which are used in many new pharmaceuticals.  Other
Pharmaceuticals products include laboratory and microelectronic
chemicals; Toleron brand of ferrous fumarate which stimulates the
formation of red blood cells; magnesium stearate for use as a
tableting aid in pharmaceuticals; potassium chloride for use as a
potassium supplement in pharmaceuticals and nutritionals; and other
salts, chemicals and reagents used in the production of
pharmaceutical and food products.

In July 1996, Mallinckrodt began supplying Premier, Inc. (Premier)
with x-ray contrast media under a five-year contract.  Subsequently,
Mallinckrodt entered into sole-source agreements to supply Premier
member hospitals with tracheostomy tubes, temperature monitoring
systems, and radiopharmaceuticals and related products.  Effective
July 1, 1997, Premier named Mallinckrodt a corporate partner,
extending all supply agreements to seven years.  Premier's 1,650
member hospitals are provided incentives to use Mallinckrodt
products.  For 1998 and 1997, net sales to hospitals under the
Premier agreement represented approximately 13 percent and 9 percent
of net sales, respectively.  No individual customer, either through
Premier or otherwise, represented more than 10 percent of net sales
for any of the three years in the period ended June 30, 1998.

NOTE 19 - INTERNATIONAL OPERATIONS

Export sales to unaffiliated customers included in U.S. sales were
(in millions):

                                      1998       1997       1996
                                    -------     ------     ------
Europe .....................        $ 36.4      $ 23.4     $ 24.9
Asia/Pacific................          67.2        52.6       46.8
Latin America...............          42.0        26.2       23.0
Canada......................           2.8         2.1        1.4
                                    -------     ------     ------
Total.......................        $148.4      $104.3     $ 96.1
                                    =======     ======     ======  

Net sales, earnings (loss) from continuing operations before income
taxes, and identifiable assets by geographic areas follow (in
millions):

<TABLE>
<CAPTION>


1998                United             Asia/     Latin
                    States    Europe   Pacific   America   Canada     Total 
                   --------   ------   -------   -------   ------    --------  
<S>                <C>        <C>      <C>       <C>       <C>       <C>
Gross sales......  $1,929.2   $607.1   $121.6    $41.3      $116.2   $2,815.4
Intercompany.....     205.6    162.5      2.4     14.1        63.8      448.4
                    --------   ------   -------   -------   -------   -------- 
Net sales........  $1,723.6   $444.6   $119.2    $27.2     $  52.4   $2,367.0
                   ========   ======   =======   =======   =======   ======== 

1997
Gross sales......  $1,305.4   $473.8   $102.2    $37.7      $107.3   $2,026.4
Intercompany.....     117.0    124.4      3.1     10.3        73.5      328.3
                   --------   ------   -------   -------    ------   -------- 
Net sales........  $1,188.4   $349.4   $ 99.1    $27.4      $ 33.8   $1,698.1
                   ========   ======   =======   =======    ======   ========

1996
Gross sales......  $1,187.8   $445.2   $107.4    $20.7      $ 86.3   $1,847.4
Intercompany.....      87.4    102.8      1.8      2.6        55.9      250.5
                   --------   ------   ------    -------    ------   --------  
Net sales........  $1,100.4   $342.4   $105.6    $18.1      $ 30.4   $1,596.9
                   ========   ======   ======    =======    ======   ========

EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

                                                   1998      1997       1996
                                                ---------   -------  ---------  
 
United States...............................     $(236.8)   $215.9     $215.9 
Europe......................................        96.9      84.9       94.4
Asia/Pacific................................          .8       4.7        6.1
Latin America...............................         4.0       4.8        2.7
Canada......................................         6.4       8.0        6.1
Corporate...................................       (26.6)    (24.7)     (41.4)
Eliminations................................        (7.7)      3.9       (4.3)
                                                ---------   -------  ---------
Operating earnings (loss)...................      (163.0)    297.5      279.5
Interest income and other nonoperating
 income (expense), net......................        14.8      22.0        (.3)
Interest expense............................      (101.8)    (48.0)     (51.3)
                                                ---------   -------  ---------
Consolidated................................     $(250.5)   $271.5     $227.9
                                                =========   =======  =========

ASSETS
United States...............................    $2,962.4   $1,245.5  $1,228.7
Europe......................................       539.9      480.0     518.0
Asia/Pacific................................        58.9       45.3      59.8
Latin America...............................        36.1       33.7      23.4
Canada......................................        60.6       42.0      51.8
Corporate...................................       198.0    1,004.1     531.9
Discontinued operations.....................        17.2      124.8     604.0
                                                ---------  --------  ---------
Consolidated................................    $3,873.1   $2,975.4  $3,017.6
                                                =========  ========  =========

</TABLE>

 
Transfers of products between geographic areas are at prices
approximating those charged to unaffiliated customers.  All such
transfers are fully eliminated.

Net foreign exchange translation gains or losses from businesses in
hyperinflationary economies were not material in 1998, 1997 and 1996,
and have been included in other operating income, net in the
Consolidated Statements of Operations.

NOTE 20 - COMMITMENTS

The Company leases office space, data processing equipment, land,
buildings, and machinery and equipment.  Rent expense for continuing
operations in 1998, 1997 and 1996 related to operating leases was
$31.5 million, $20.2 million and $22.4 million, respectively. 

Minimum rent commitments for continuing operations at June 30, 1998
under operating leases with an initial or remaining noncancelable
period exceeding one year follow: 

<TABLE>
<CAPTION>
                                                             After
(In millions)    1999     2000     2001     2002     2003     2003     Total
                ------   ------   ------   ------   ------   ------   -------
<S>             <C>      <C>      <C>      <C>      <C>      <C>      <C>
                $22.4    $16.6    $13.7    $10.6    $9.8     $45.4    $118.5

</TABLE>

NOTE 21 - CONTINGENCIES

The Company is subject to various investigations, claims and legal
proceedings covering a wide range of matters that arise in the
ordinary course of its business activities.

On October 6, 1994, Augustine Medical, Inc. (Augustine) commenced a
patent infringement litigation against Mallinckrodt Inc. and its
wholly owned subsidiary, Mallinckrodt Medical, Inc. (collectively,
the Company) in the U.S. District Court for the District of
Minnesota.  Specifically, Augustine alleged that the Company's sale
of all five models of its convective warming blankets infringes
certain claims of one or more of its patents.  The Company filed
counterclaims against Augustine in connection with the above actions
alleging unfair competition, antitrust violations, and invalidity of
the asserted patents, among other things.

The liability phase of the case was tried to a jury in August 1997
and the verdict was that the Company's blankets infringe certain
Augustine patents under the doctrine of equivalents, but do not
literally infringe the patents.  There was also a finding of no
willful infringement.  On  September 22, 1997, the jury awarded
damages in the amount of $16.8 million for the period ended September
30, 1997 and the judge put in place an injunction which stopped the
Company from manufacturing and selling blankets in the United States. 
The Company appealed the jury verdicts of liability and damages to
the Court of Appeals for the Federal Circuit (a special court for
patent appeals that does not involve a jury).  The Court of Appeals
has stayed the injunction pending the outcome of the Company's
appeal, and the Company continues to sell and manufacture blankets in
the United States.  With the advice of outside counsel, the Company
believes there was insufficient evidence of equivalents presented
and, consequently, for this and other reasons the verdicts were in
error.  The Company is working vigorously in the Appeals Court to
overturn the verdicts and believes that it has strong arguments that
its blankets do not infringe Augustine's patents.  Based on all the
facts available to management, the Company believes that it is
probable that the jury verdict and the trial court injunction will be
overturned on appeal.  If damages were assessed in the same manner as
determined by the jury for sales subsequent to September 30, 1997
plus interest on the estimated total, the total liability would
approximate $22.4 million at June 30, 1998.  The Company has not
recorded an accrual for payment of the damages, because an
unfavorable outcome in this litigation is, in management's opinion,
reasonably possible but not probable.

In connection with laws and regulations pertaining to the protection
of the environment, the Company is a party to several environmental
remediation investigations and clean-ups and, along with other
companies, has been named a "potentially responsible party" for
certain waste disposal sites.  The Company accrues for losses
associated with environmental remediation obligations when such
losses are probable and reasonably estimable.  Accruals for estimated
losses from environmental remediation obligations generally are
recognized no later than completion of the remedial feasibility
study.  Such accruals are adjusted as further information develops or
circumstances change.  Accruals for future expenditures for
environmental remediation are not discounted to their present value.
Recoveries, of which none exist at June 30, 1998 and 1997, of
environmental remediation costs from other parties are recognized as
assets when their receipt is deemed probable.

At June 30, 1998 and 1997, the Company had accruals, included in
current accrued liabilities and other noncurrent liabilities and
deferred credits, of $126.2 million and $115.7 million, respectively,
for costs associated with the study and remediation of Superfund
sites and the Company's current and former operating sites for
matters that meet the policy set forth above.  Based upon currently
available information, the Company has concluded that it is not
reasonably possible at this time that additional liabilities will
result from the resolution of these matters that would have a
material adverse effect on the Company's consolidated results of
operations or financial position.

<PAGE>
<TABLE>

QUARTERLY RESULTS
(In millions, except per share amounts)
<CAPTION>
FISCAL 1998
                                              Quarter (Unaudited)
                                 --------------------------------------------
                                        First                   Second
                                 Reported    Restated    Reported    Restated  
                                 --------    --------    --------    --------   
<S>                              <C>         <C>         <C>         <C>       
Net sales..................      $ 454.6     $ 454.6     $607.3      $607.3 
Gross margins..............        178.8       178.8      211.5       211.5    
Earnings (loss) from
 continuing operations.....       (380.7)     (290.9)     (18.6)      (19.4)
Discontinued operations....                                14.5        14.5    
Cumulative effect of
 accounting change.........         (8.4)       (8.4)                      
                                 --------    --------    -------     ------- 
Net earnings (loss)........       (389.1)     (299.3)      (4.1)       (4.9)  
Preferred stock dividends..          (.1)        (.1)       (.1)        (.1)   
                                 --------    --------    -------     -------    
Available for common
 shareholders..............      $(389.2)    $(299.4)    $ (4.2)     $ (5.0)   
                                 ========    ========    =======     =======  
Basic earnings per common
 share:
  Earnings (loss) from
   continuing operations...      $ (5.26)    $ (4.02)    $ (.26)     $ (.27)
  Discontinued operations..                                 .20         .20 
  Cumulative effect of
   accounting change.......         (.11)       (.11)
                                 --------    --------    -------     -------     
   Net earnings (loss)......     $ (5.37)    $ (4.13)    $ (.06)     $ (.07)   
                                 ========    ========    =======     =======    
Diluted earnings 
 common share:
  Earnings (loss) from
   continuing operations...      $ (5.26)    $ (4.02)    $ (.26)     $ (.27)     
  Discontinued operations..                                . 20         .20    
  Cumulative effect of
   accounting change....            (.11)       (.11)                         
                                 --------    --------    -------     -------     
  Net earnings (loss)......      $ (5.37)    $ (4.13)    $ (.06)     $ (.07)  
                                 ========    ========    =======     ======= 


                                              Quarter (Unaudited)
                                 --------------------------------------------
                                        Third                   Fourth      
                                 Reported    Restated    Reported    Restated  
                                 --------    --------    --------    --------   
<S>                              <C>         <C>         <C>         <C>       
Net sales..................      $ 649.8     $ 649.8     $655.3      $655.3 
Gross margins..............        305.2       305.2      302.7       302.7    
Earnings (loss) from
 continuing operations.....         32.7        31.9       10.7        10.0 
Discontinued operations....         (4.0)       (4.0)      61.9        61.9    
Cumulative effect of
 accounting change.........                                                
                                 --------    --------    -------     ------- 
Net earnings (loss)........         28.7        27.9       72.6        71.9   
Preferred stock dividends..          (.1)        (.1)       (.1)        (.1)   
                                 --------    --------    -------     -------    
Available for common
 shareholders..............      $ 28.6      $ 27.8      $ 72.5     $  71.8    
                                 ========    ======      =======     =======  
Basic earnings per common
 share:
  Earnings (loss) from
   continuing operations...      $  .45      $  .44      $  .14      $  .13 
  Discontinued operations..        (.06)       (.06)        .85         .85 
  Cumulative effect of
   accounting change.......                          
                                 --------    --------    -------     -------     
   Net earnings (loss)......     $  .39      $   .38     $  .99      $  .98    
                                 ========    ========    =======     =======    
Diluted earnings 
 common share:
  Earnings (loss) from
   continuing operations...      $  .44      $   .43     $  .14      $  .13      
  Discontinued operations..        (.05)        (.05)       .85         .85    
  Cumulative effect of
   accounting change....             
                                 --------    --------    -------     -------     
  Net earnings (loss)......      $  .39      $   .38     $  .99      $  .98   
                                 ========    ========    =======     ======= 

</TABLE>

See Note 2 of Notes to Consolidated Financial Statements for
information concerning the Company's restatement of its 1998
consolidated financial statements, which impacted previously reported
quarterly financial information as indicated above.

On August 28, 1997, the Company acquired Nellcor Puritan Bennett
Incorporated (Nellcor) through an agreement to purchase for cash all
of the outstanding shares of common stock of Nellcor for $28.50 per
share.  The aggregate purchase price of the Nellcor acquisition was
approximately $1.9 billion.  Approximately $308.3 million of the
purchase price was allocated to purchased research and development. 
This intangible asset, which had no tax benefit, was charged to
results of operations during the first quarter of 1998.  Of the total
charge of $308.3 million, $2.0 million related to the Aero Systems
division which was sold and reclassified to discontinued operations
in the fourth quarter of 1998. 

The sale of Nellcor inventories, which were stepped up to fair value
in connection with allocation of purchase price, decreased earnings
by $75.4 million, $46.7 million net of taxes for 1998.  After-tax
charges to the Respiratory Group, which are included in earnings
(loss) from continuing operations, were $11.5 million and $34.6
million for the first and second quarters, respectively.  After-tax
charges to discontinued operations related to the Aero Systems
division were $.2 million and $.4 million for the first and second
quarters, respectively.

Costs of exiting certain activities related to Mallinckrodt
operations plus integration costs of the combined Mallinckrodt and
Nellcor operations were $68.6 million, $46.4 million net of taxes. 
The after-tax charge increased the loss from continuing operations in
the second quarter by $4.3 million, and reduced earnings from
continuing operations by $8.3 million and $33.8 million in the third
and fourth quarters, respectively.  See the Acquisitions section of
Note 2 of the Notes to Consolidated Financial Statements for
additional disclosure.

The Company sold certain chemical additive product lines in the
second quarter of 1998, and recorded a gain on sale, net of taxes, of
$8.7 million.  In the fourth quarter, the Company sold its catalyst
business and Aero Systems division.  The catalyst sale resulted in a
gain, net of taxes, of $60.2 million.  No gain or loss was recognized
on sale of the Aero Systems division.  In June 1998, the Company
committed to the sale of the remaining chemical additives business of
the catalysts and chemical additives division, and closing of the
sale occurred on July 31, 1998.  The net gain on sale of these
businesses and their results of operations were accounted for as
discontinued operations and, accordingly, prior year results have
been restated.  See the Discontinued Operations section of Note 2 of
the Notes to Consolidated Financial Statements for additional
disclosure.

In the fourth quarter of 1998, the Company elected to early adopt the
provisions of AICPA SOP 98-5, "Reporting on the Costs of Start-Up
Activities" (SOP 98-5), in its financial statements for the year
ended June 30, 1998.  The effect of adoption of SOP 98-5 was to
record a charge of $8.4 million, net of taxes, for the cumulative
effect of an accounting change to expense costs that had previously
been capitalized prior to July 1, 1997.  The approximate effect of
the accounting change for each quarter of the year ended June 30,
1998 was to increase the net loss $7.7 million or 11 cents per share
in the quarter ended September 30, 1997; reduce the net loss $.6
million or 1 cent per share in the quarter ended December 31, 1997;
increase net earnings $.6 million or 1 cent per share in the quarter
ended March 31, 1998; and increase net earnings $.4 million or 1 cent
per share in the quarter ended June 30, 1998.

Net earnings per share for the four quarters of 1998 were less than
full year per share results by three cents due to increases in common
shares outstanding during 1998.

<PAGE>

QUARTERLY RESULTS (continued)
(In millions, except per share amounts)

<TABLE>
<CAPTION>

FISCAL 1997
                                       Quarter (Unaudited)
                              -------------------------------------
                                First    Second    Third    Fourth               
                              --------  --------  -------  --------
<S>                            <C>       <C>      <C>       <C>          
Net sales..................    $404.6    $414.3   $429.6    $449.6
Gross margins..............     191.5     195.5    199.2     214.0
Earnings from
 continuing operations.....      35.5      37.8     46.2      55.7
Discontinued operations....       (.1)      5.7      2.4       6.9
                              --------  --------  -------  --------
Net earnings...............      35.4      43.5     48.6      62.6
Preferred stock dividends..       (.1)      (.1)     (.1)      (.1)
                              --------  --------  -------  --------             
Available for common
 shareholders..............    $ 35.3    $ 43.4   $ 48.5    $ 62.5
                              ========  ========  =======  ========
Basic earnings per common
 share:
  Earnings from continuing
   operations..............    $  .48    $  .51   $  .63    $  .76
  Discontinued operations..                 .08      .03        09               
                               --------  --------  -------  --------
  Net earnings.............    $ . 48    $  .59   $  .66    $  .85
                              ========  ========  =======  ========   
  Diluted earnings per
   common share:
  Earnings from continuing
   operations..............    $  .47    $  .50   $  .61    $  .75
  Discontinued operations..                 .07      .04       .09
                              --------  --------  -------  --------
  Net earnings.............    $  .47    $  .57   $  .65    $  .84
                              ========  ========  =======  ========  
</TABLE>

During 1998, the Company sold, or committed to sell, its catalysts
and chemical additives division.  The results of operations for this
division were reclassified to discontinued operations in the fourth
quarter of 1998 and, accordingly, results of operations for 1997 were
also reclassified.  See the Discontinued Operations section of
Note 2 of the Notes to Consolidated Financial Statements for
additional disclosure.

On March 31, 1997, the Company disposed of Fries & Fries, Inc., a
wholly owned subsidiary which owned the Company's interest in
Tastemaker, the flavors joint venture.  The Company recorded a net
after-tax gain of $270.6 million on the divestiture.  Results for the
third quarter also included an estimated net after-tax loss of $275.3
million related to the planned sale of the animal health segment.  On
June 30, 1997, the sale of the animal health segment was completed
and the net after-tax loss was adjusted to $269.4 million.  The net
gain on disposal of these businesses and their results of operations
were accounted for as discontinued operations.  See the Discontinued
Operations section of Note 2 of the Notes to Consolidated Financial
Statements for additional disclosure.

Earnings from continuing operations for the first quarter included a
one-time research and development charge of $6.0 million, $3.8
million after taxes, or 5 cents per share, resulting from a strategic
alliance to develop new magnetic resonance imaging technology.

Basic net earnings per share for the four quarters of 1997 were more
than full year per share results by one cent due to decreases in
common shares outstanding during 1997.

PART IV.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON     
          FORM 8-K

(a)    Financial Statements, Financial Statement Schedules and        
       Exhibits

(1)(2) See index on page 59 for a listing of financial statements and 
       financial statement schedules filed with this report.

(3)    Exhibits filed with this report.

Exhibit
Number                          Description
-------   -----------------------------------------------------------
2.1       Agreement dated February 4, 1997 among Mallinckrodt,        
          Hercules Incorporated, Roche Holdings, Inc. and Givaudan-   
          Roure (International) SA (incorporated herein by reference  
          to Exhibit 2.1 to Form 8-K, dated March 31, 1997)

2.2       First Amendment to Agreement dated March 28, 1997 among     
          Mallinckrodt, Hercules Incorporated, Roche Holdings, Inc.   
          and Givaudan-Roure (International) SA (incorporated herein  
          by reference to Exhibit 2.2 to Form 8-K, dated March 31,    
          1997)

2.3       Contribution Agreement dated February 4, 1997 among         
          Mallinckrodt, Roche Holdings, Inc. and Givaudan-Roure       
          (United States) Inc. (incorporated herein by reference to   
          Exhibit 2.3 to Form 8-K, dated March 31, 1997)

2.4       Stock Purchase Agreement, dated May 19, 1997, among         
          Mallinckrodt Inc., Mallinckrodt Veterinary, Inc.,           
          Mallinckrodt Veterinary International, Inc. and Schering-   
          Plough Corporation (incorporated herein by reference to     
          Exhibit 2.1 to Form 8-K, dated June 30, 1997)

2.5       Amendment No. 1 dated June 30, 1997 to the Stock Purchase   
          Agreement among Mallinckrodt Inc., Mallinckrodt Veterinary, 
          Inc., Mallinckrodt Veterinary International, Inc. and       
          Schering-Plough Corporation, which amendment was also       
          executed for certain purposes by Mallinckrodt Veterinary    
          Holdings, Inc. (incorporated herein by reference to Exhibit 
          2.2 to Form 8-K, dated June 30, 1997)

2.6       Agreement and Plan of Merger, dated as of July 23, 1997,    
          among Nellcor Puritan Bennett Incorporated ("Nellcor"),     
          Mallinckrodt Inc. and NPB Acquisition Corp. (incorporated   
          herein by reference to Nellcor's Current Report on Form 8-K 
          (File No. 0-14980) filed on August 5, 1997)

3.1(a)    Restated Certificate of Incorporation of Mallinckrodt,      
          dated June 22, 1994 (incorporated herein by reference to    
          Exhibit 3.1 to 1994 Form 10-K)

3.1(b)    Certificate of Amendment of the Certificate of              
          Incorporation of Mallinckrodt, dated October 16, 1996       
          (incorporated herein by reference to Exhibit 3.3 to         
          September 30, 1996 Form 10-Q)

3.2       By-Laws of Mallinckrodt as amended through April 15, 1992   
          (incorporated herein by reference to Exhibit 3.2 to 1998    
          Form 10-K)

4.1       Form 8-A Registration Statement under Section 12 of the     
          Securities Exchange Act of 1934, dated April 10, 1987       
          defining the rights of holders of Mallinckrodt's 4%         
          Cumulative Preferred Stock and Common Stock (incorporated   
          herein by reference to Exhibit 4.6 to 1989 Form 10-K,       
          Commission File No. 1-483)

4.2(a)    Amended and Restated Rights Agreement dated as of
          February 19, 1996, between the Company and The First        
          National Bank of Chicago, as Rights Agent (incorporated     
          herein by reference to Exhibit 2 to Amendment to            
          Registration Statement on Form 8-A/A dated February 26,     
          1996)

4.2(b)    First Amendment, dated as of August 11, 1998, between the   
          Company and The First National Bank of Chicago, as Rights   
          Agent (incorporated herein by reference to Exhibit 1 to     
          Amendment to Registration Statement on Form 8-A/A dated     
          September 2, 1998)

4.3       Indenture dated as of March 15, 1985, as amended and        
          restated as of February 15, 1995, between Mallinckrodt and  
          First Trust of New York, National Association (incorporated 
          herein by reference to Exhibit 4.1 to Form S-3 Registration 
          Statement No. 33-57821)

4.4       The Company hereby agrees to file on request of the         
          Commission a copy of all instruments not otherwise filed    
          with respect to long-term debt of the Company or any of its 
          subsidiaries for which the total amount of securities       
          authorized under such instruments does not exceed 10% of    
          the total assets of the Company and its subsidiaries on a   
          consolidated basis

10.1      Form of Executive Life Insurance Plan Participation         
          Agreement, as entered into with the Company's executive     
          officers and certain other key employees (1) (incorporated  
          herein by reference to Exhibit 10.24 to 1996 Form 10-K)

10.2      Restated Mallinckrodt Executive Long-Term Disability Plan   
          effective January 1, 1987 (1) (incorporated herein by       
          reference to Exhibit 10.3 to 1989 Form 10-K, Commission     
          File No. 1-483)

10.3(a)   Supplemental Benefit Plan for Participants in the           
          Mallinckrodt Retirement Plan as amended and restated        
          effective January 1, 1980 (1) (incorporated herein by       
          reference to Exhibit 10.6(a) to 1989 Form 10-K, Commission  
          File No. 1-483)

10.3(b)   Amendment No. 1 dated June 20, 1989 to Supplemental Benefit 
          Plan for Participants in the Retirement Plan for Salaried   
          Employees of Mallinckrodt (1) (incorporated herein by       
          reference to Exhibit 10.6(b) to 1989 Form 10-K, Commission  
          File No. 1-483)

10.3(c)   Amendment No. 2 dated April 20, 1990 to Supplemental        
          Benefit Plan for Participants in the Mallinckrodt           
          Retirement Plan (1) (incorporated herein by reference to    
          Exhibit 10.6(c) to 1990 Form 10-K, Commission File
          No. 1-483)

10.4(a)   Mallinckrodt Supplemental Executive Retirement Plan         
          restated effective April 19, 1988 (1) (incorporated herein  
          by reference to Exhibit 10.7(a) to 1989 Form 10-K,          
          Commission File No. 1-483)

10.4(b)   Amendment No. 1 effective December 6, 1989, to Supplemental 
          Executive Retirement Plan (1) (incorporated herein by       
          reference to Exhibit 10.7(c) to 1990 Form 10-K, Commission  
          File No. 1-483)

10.4(c)   Amendment No. 2 effective April 19, 1996, to Supplemental   
          Executive Retirement Plan (1) (incorporated herein by       
          reference to Exhibit 10.6(c) to 1996 Form 10-K)

10.5      Supplemental Executive Retirement and Supplemental Life     
          Plan of Mallinckrodt Inc. effective July 15, 1984 (1)       
          (incorporated herein by reference to Exhibit 10.20 to 1989  
          Form 10-K, Commission File No. 1-483)

10.6(a)   Mallinckrodt Management Incentive Compensation Program as   
          amended and restated effective July 1, 1991 (1)             
          (incorporated herein by reference to Exhibit 10.9(b) to     
          1991 Form 10-K, Commission File No. 1-483)

10.6(b)   Amendment No. 1 to the Management Incentive Compensation    
          Plan, effective April 19, 1996 (1) (incorporated herein by  
          reference to Exhibit 10.7(b) to 1996 Form 10-K)

10.7(a)   Mallinckrodt 1973 Stock Option and Award Plan as amended    
          effective February 21, 1990 (1) (incorporated herein by     
          reference to Post-Effective Amendment No. 1 to Form S-8     
          Registration Statement No. 33-32109)

10.7(b)   Amendment No. 1 to the Mallinckrodt 1973 Stock Option and   
          Award Plan dated June 19, 1991 (1) (incorporated herein by  
          reference to Form S-8 Registration Statement No. 33-43925)

10.8(a)   Mallinckrodt 1981 Stock Option Plan as amended through      
          April 19, 1988 (1) (incorporated herein by reference to     
          Post-Effective Amendment No. 3 to Form S-8 Registration     
          Statement No. 2-80553)

10.8(b)   Amendment to the 1981 Stock Option Plan effective
          February 15, 1989 (1) (incorporated herein by reference to  
          Exhibit 10.12(b) to 1989 Form 10-K, Commission File
          No. 1-483) 

10.8(c)   Amendment to the 1981 Stock Option Plan effective June 19,  
          1991 (1) (incorporated herein by reference to Exhibit       
          10.12(c) to 1991 Form 10-K, Commission File No. 1-483)

10.9(a)   Long-Term Incentive Compensation Plan, effective July 1,    
          1994 (1) (incorporated herein by reference to Exhibit 10.30 
          to 1994 Form 10-K)

10.9(b)   Amendment No. 1 to Long-Term Incentive Plan, effective      
          April 16, 1997 (1) (incorporated herein by reference to     
          Exhibit 10.9(b) to 1997 Form 10-K)

10.10(a)  Management Compensation and Benefit Assurance Program (1)   
          (incorporated herein by reference to Exhibit 10.30 to 1988  
          Form 10-K, Commission File No. 1-483)

10.10(b)  Amendments to Management Compensation and Benefit Assurance 
          Program (1) (incorporated herein by reference to Exhibit    
          10.12(b) to 1996 Form 10-K)

10.11     Agreement of Trust dated August 16, 1996, between           
          Mallinckrodt and Wachovia Bank of North Carolina, N.A.,     
          incident to the program described in Exhibits 10.10(a) and  
          10.10(b) (1) (incorporated herein by reference to Exhibit   
          10.13 to 1996 Form 10-K) 

10.12(a)  Corporate Staff Employee Severance and Benefit Assurance    
          Policy (1) (incorporated herein by reference to Exhibit     
          10.33 to 1988 Form 10-K, Commission File No. 1-483)

10.12(b)  Mallinckrodt Inc. Corporate Staff Change in Control         
          Severance Plan (1) (incorporated herein by reference to     
          Exhibit 10.14(b) to 1996 Form 10-K)

10.13     Form of Severance Agreement referenced in Exhibit 10.10(b), 
          as entered into with the Company's executive officers and   
          certain other key employees (1) (incorporated herein by     
          reference to Exhibit 10.23 to 1996 Form 10-K)

10.14(a)  Executive Incentive Compensation Agreement with Paul D.     
          Cottone dated as of October 24, 1996 (1) (incorporated      
          herein by reference to Exhibit 10.25 to March 31, 1997
          Form 10-Q)

10.14(b)  Severance and Separation Agreement with Paul D. Cottone     
          dated as of October 24, 1996 (1) (incorporated herein by    
          reference to Exhibit 10.26 to March 31, 1997 Form 10-Q)

10.15(a)  Agreement effective June 30, 1997 with Robert G. Moussa (1) 
          (incorporated herein by reference to Exhibit 10.15(a) to    
          1997 Form 10-K)

10.15(b)  Consulting Agreement effective July 1, 1997 with Robert G.  
          Moussa (1) (incorporated herein by reference to Exhibit     
          10.15(b) to 1997 Form 10-K)

10.16     Mallinckrodt Directors Retirement Services Plan as amended  
          and restated effective April 21, 1993 (1) (incorporated     
          herein by  reference to Exhibit 10.10 to 1993 Form 10-K)

10.17     Mallinckrodt Directors' Stock Option Plan effective
          October 17, 1990 (1) (incorporated herein by reference to   
          Exhibit 4(a) to Form S-8 Registration Statement No.
          33-40246)

10.18(a)  Consulting Agreement with Ronald G. Evens, M.D., for the    
          period from January 1, 1987, through December 31, 1989;     
          extended for the calendar years 1990, 1991 and 1992 (1)     
          (incorporated herein by reference to Exhibit 10.27 to       
          Amendment No. 1 to 1992 Form 10-K, Commission File
          No. 1-483)

10.18(b)  Amendment dated December 17, 1992 to Consulting Agreement   
          with Ronald G. Evens, M.D. (1) (incorporated herein by      
          reference to Exhibit 10.26(b) to 1993 Form 10-K)

10.18(c)  Amendment dated January 7, 1994 to Consulting Agreement     
          with Ronald G. Evens, M.D., extending Agreement through     
          December 31, 1994 (1) (incorporated herein by reference to  
          Exhibit 10.9 to December 31, 1994 Form 10-Q)

10.18(d)  Amendment dated February 1, 1995 to Consulting Agreement    
          with Ronald G. Evens, M.D., extending Agreement through     
          December 31, 1995 (1) (incorporated herein by reference to  
          Exhibit 10.10 to December 31, 1994 Form 10-Q)

10.18(e)  Amendment dated January 10, 1996 to Consulting Agreement    
          with Ronald G. Evens, M.D., extending Agreement through     
          December 31, 1996 (1) (incorporated herein by reference to  
          Exhibit 10.2 to December 31, 1995 Form 10-Q)

10.18(f)  Amendment dated February 20, 1997 to Consulting Agreement   
          with Ronald G. Evens, M.D., extending Agreement through     
           December 31, 1997 (1) (incorporated herein by reference to 
           Exhibit 10.17(f) to March 31, 1997 Form 10-Q)

10.19(a)  Deferral Election Plan for Non-Employee Directors,          
          effective June 30, 1994 (1) (incorporated herein by         
          reference to Exhibit 10.29 to 1994 Form 10-K)

10.19(b)  Amendment of Deferral Election Plan for Non-Employee        
          Directors, effective February 15, 1995 (1) (incorporated    
          herein by reference to Exhibit 10.22(b) to 1995 Form 10-K)

10.20     Directors Stock Award Plan of Mallinckrodt Inc., effective  
          October 15, 1997 (1) (incorporated herein by reference to   
          Appendix A to Definitive Proxy Statement (Schedule 14A) for 
          the Company's 1997 Annual Meeting of Stockholders, filed    
          with the Commission on September 12, 1997)

10.21     The Mallinckrodt Inc. Equity Incentive Plan, effective      
          April 16, 1997 (1) (incorporated herein by reference to     
          Appendix B to Definitive Proxy Statement (Schedule 14A) for 
          the Company's 1997 Annual Meeting of Stockholders, filed    
          with the Commission on September 12, 1997)

10.22     Employment Agreement dated September 5, 1997 between the    
          Company and C. Raymond Larkin (1) (incorporated herein by   
          reference to Exhibit 10.22 to Form 10-K)

10.23     Terms of Separation dated December 15, 1997 between the     
          Company and C. Raymond Larkin (1) (incorporated herein by   
          reference to Exhibit 10.23 to 1998 Form 10-K)

10.24(a)  Credit Agreement dated May 22, 1996, among Mallinckrodt and 
          Morgan Guaranty Trust Company of New York, as               
          Administrative Agent and Citibank, N.A., as Documentation   
          Agent ($550 million facility) (incorporated herein by       
          reference to Exhibit 10.18 to 1996 Form 10-K)     

10.24(b)  Amendment No. 1 to Credit Agreement, dated as of
          January 24, 1997 among Mallinckrodt, the Banks listed       
          therein, Morgan Guaranty Trust Company of New York, as      
          Administrative Agent and Citibank, N.A., as Documentation   
          Agent (incorporated herein by reference to Exhibit 10.18-A  
          to March 31, 1997 Form 10-Q) 

10.25(a)  Credit Agreement dated May 22, 1996 among Fries & Fries,    
          Inc. with Mallinckrodt and Morgan Guaranty Trust Company of 
          New York, as Administrative Agent and Co-Agent and          
          Citibank, N.A., as Documentation Agent ($600 million        
          facility) (incorporated herein by reference to Exhibit      
          10.19 to 1996 Form 10-K)

10.25(b)  Amendment No. 1 to Credit Agreement, dated as of
          January 24, 1997 among Fries & Fries, Inc. as Borrower,     
          Mallinckrodt as Guarantor, the Banks listed therein, Morgan 
          Guaranty Trust Company of New York, as Administrative Agent 
          and Citibank, N.A., as Documentation Agent (incorporated    
          herein by reference to Exhibit 10.19-A to March 31,1997     
          Form 10-Q)

10.25(c)  Consent and Waiver dated as of March 21, 1997, to the       
          Credit Agreement dated as of May 22, 1996, among Fries &    
          Fries, Inc. as Borrower, Mallinckrodt as Guarantor, the     
          Banks listed therein, Morgan Guaranty Trust Company of New  
          York, as Administrative Agent, and Citibank, N.A., as       
          Documentation Agent (incorporated herein by reference to    
          Exhibit 10.19-B to March 31, 1997 Form 10-Q)

10.26(a)  Credit Agreement dated as of January 24, 1997, among        
          Tastemaker as Borrower, Fries & Fries, Inc. and             
          Mallinckrodt as Guarantors, the Banks listed therein,       
          Morgan Guaranty Trust Company of New York, as               
          Administrative Agent, and Citibank, N.A., as Documentation  
          Agent (incorporated herein by reference to Exhibit 10.27(a) 
          to March 31, 1997 Form 10-Q)

10.26(b)  Agreement dated as of March 21, 1997, comprising, inter
                                                            -----
          alia, an Amendment and Waiver to the Credit Agreement dated 
          ---- 
          as of January 24, 1997 among Tastemaker as Borrower, Fries  
          & Fries, Inc. and Mallinckrodt as Guarantors, the Banks     
          listed therein, Morgan Guaranty Trust Company of New York   
          as Administrative Agent, and Citibank, N.A., as             
          Documentation Agent (incorporated herein by reference to    
          Exhibit 10.27(b) to March 31,1997 Form 10-Q)

10.27     Amended and Restated Credit Agreement dated as of
          September 12, 1997, among Mallinckrodt, the Banks listed    
          therein, Morgan Guaranty Trust Company of New York, as      
          Administration Agent, Goldman Sachs Credit Partners L.P.    
          and Citibank, N.A. as Co-Syndication Agents, and Citibank,  
          N.A., Goldman Sachs Credit Partners L.P., and NationsBank,  
          N.A., as Co-Documentation Agents (incorporated herein by    
          reference to Exhibit 10.24 to September 30, 1997 Form 10-Q)

10.28     Offering Memorandum by J.P. Morgan for sale of the          
          commercial paper (CP) notes of Mallinckrodt.  The CP        
          program is backed by the credit agreement filed as Exhibit  
          10.27 (incorporated herein by reference to Exhibit 10.29 to 
          1993 Form 10-K)

21        Subsidiaries of the Registrant (incorporated herein by      
          reference to Exhibit 21 to 1998 Form 10-K)

23.1      Consent of Ernst & Young LLP (filed with this electronic    
          submission)

27(a)     Financial data schedule for the year ended June 30, 1998    
          (filed with this electronic submission)

27(b)     Financial data schedule for the year ended June 30, 1997    
          (incorporated herein by reference to Exhibit 27(b) to 1998
          Form 10-K)

27(c)     Financial data schedule for the year ended June 30, 1996    
          (incorporated herein by reference to Exhibit 27(c) to 1998
          Form 10-K)

-------------------------------
(1)       Management contract or compensatory plan required to be     
          filed pursuant to Item 601 of Regulation S-K.

(b)       Reports on Form 8-K

During the quarter and through the date of this report, the following
reports on Form 8-K were filed.

-   Report dated April 22, 1998 under Item 5 regarding near-term      
    outlook in conjunction with third quarter earnings report.

-   Report dated May 6, 1998 under Item 5 regarding completion of the 
    sale of the catalyst business.

-   Report dated May 26, 1998 under Item 5 regarding European         
    approval of OPTISON*.

-   Amended report dated June 17, 1998 under Item 5 regarding         
    presentation of Nellcor Puritan Bennett Incorporated financial    
    statements for the three years ended July 7, 1996 and for the     
    three months and nine months ended April 6, 1997 and March 31,    
    1996 and pro forma statement of operations and balance sheet for  
    the combined results of Mallinckrodt Inc. and Nellcor Puritan     
    Bennett Incorporated.

-   Amended report dated June 17, 1998 under Item 5 to provide pro    
    forma statement of operations of the combined results of          
    Mallinckrodt Inc. and Nellcor Puritan Bennett Incorporated for    
    the six months ended December 31, 1997.

-   Amended report dated June 17, 1998 under Item 5 regarding         
    presentation of consolidated financial statements for Nellcor     
    Puritan Bennett Incorporated for the periods ended July 6, 1997   
    and July 7, 1996. 

-   Report dated June 19, 1998 under Item 5 regarding announcement of 
    the new president of Respiratory Group.

-   Report dated June 25, 1998 under Item 5 regarding expectations    
    for fiscal year l999.

-   Report dated July 6, 1998 under Item 5 regarding the closure of   
    Nellcor Puritan Bennett Incorporated facilities in Lenexa,        
    Kansas.
<PAGE>

INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                                               Page
                                                              ------
Consolidated Balance Sheets at June 30, 1998 and 1997.....      28   
For the years ended June 30, 1998, 1997 and 1996:
  Consolidated Statements of Operations...................      27
  Consolidated Statements of Cash Flows...................      29
  Consolidated Statements of Changes in
   Shareholders' Equity...................................      30
  Notes to Consolidated Financial Statements..............    31-50  
  Quarterly Results.......................................    51-52

-----------

All other schedules are omitted as the required information is not
present in sufficient amounts or the required information is included
in the consolidated financial statements or notes thereto.

Financial statements and schedules and summarized financial
information of 50 percent or less owned entities are omitted, as none
of such entities are individually or in the aggregate significant
under the tests specified in Regulation S-X under Article 3-09 of
General Instructions as to Financial Statements.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.


     Mallinckrodt  Inc.
----------------------------
         Registrant

By: /s/  MICHAEL A. ROCCA          By: /s/  DOUGLAS A. MCKINNEY
   -------------------------          --------------------------
         Michael A. Rocca                   Douglas A. McKinney
   Senior Vice President and          Vice President and Controller
   Chief Financial Officer             

Date: February 15, 1999