What changed in this filing

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Item 1. Financial Statements

2022-10-28 compared with 2022-04-29 · 253 added, 420 removed, 681 unchanged (50% of the section changed)

3 unchanged sentences

(In US$ and in thousands, except share and per share data)

September 30,

2022 June 30,

1 unchanged sentence

Cash and cash equivalents $ 207,163 $ 273,710

Accounts receivable, net of allowances of $ 24,411 and $ 32,138 at March 31, 2022 and June 30, 2021, respectively

Accounts receivable, net of allowances of $ 23,867 and $ 23,259 at September 30, 2022 and June 30, 2022, respectively

620,483 575,950

Inventories (note 3) 864,852 743,910

Prepaid taxes 108,898 72,409

Prepaid expenses and other current assets 220,110 135,745

Prepaid expenses and other current assets (note 3) 341,199 337,908

Total current assets 2,033,697 1,931,478

30 unchanged sentences

Common stock, $ 0.004 par value, 350,000,000 shares authorized;

188,102,293 issued and 146,266,059 outstanding at March 31, 2022 and 187,484,592 issued and 145,648,358 outstanding at June 30, 2021

188,295,266 issued and 146,459,032 outstanding at September 30, 2022 and 188,246,955 issued and 146,410,721 outstanding at June 30, 2022

Additional paid-in capital 1,701,902 1,682,432

Retained earnings 3,759,783 3,613,736

Treasury stock, at cost, 41,836,234 shares at March 31, 2022 and June 30, 2021

Treasury stock, at cost, 41,836,234 shares at September 30, 2022 and June 30, 2022

( 1,623,256 ) ( 1,623,256 )

8 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

Net revenue - Sleep and Respiratory Care products $ 844,443 $ 806,499

12 unchanged sentences

Amortization of acquired intangible assets 7,950 7,707

Restructuring expenses (note 11) — — — 8,673

Total operating expenses 265,071 244,376

8 unchanged sentences

Income taxes 51,315 55,175

Net income (loss) $ 179,012 $ ( 78,481 ) $ 584,376 $ 279,405

Basic earnings (loss) per share (note 9) $ 1.22 $ ( 0.54 ) $ 4.00 $ 1.92

Diluted earnings (loss) per share (note 9) $ 1.22 $ ( 0.54 ) $ 3.97 $ 1.91

Net income $ 210,478 $ 203,613

Basic earnings per share (note 9) $ 1.44 $ 1.40

Diluted earnings per share (note 9) $ 1.43 $ 1.39

Dividend declared per share $ 0.44 $ 0.42

7 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

Net income (loss) $ 179,012 $ ( 78,481 ) $ 584,376 $ 279,405

September 30,

Net income $ 210,478 $ 203,613

Other comprehensive income (loss):

Foreign currency translation (loss) gain adjustments ( 93,381 ) ( 23,516 )

Comprehensive income (loss) $ 177,966 $ ( 111,303 ) $ 553,722 $ 367,414

Comprehensive income $ 117,097 $ 180,097

See the accompanying notes to the unaudited condensed consolidated financial statements.

14 unchanged sentences

Stock-based compensation costs — 16,919 — — — — 16,919

Other comprehensive income — — — — — — ( 23,516 ) ( 23,516 )

Other comprehensive income (loss) — — — — — — ( 93,381 ) ( 93,381 )

Net income — — — — — 210,478 — 210,478

2 unchanged sentences

Balance, September 30, 2022

Common stock issued on exercise of options 39 — 2,378 — — — — 2,378

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 361 2 ( 49,832 ) — — — — ( 49,830 )

Common stock issued on employee stock purchase plan 101 — 16,723 — — — — 16,723

Stock-based compensation costs — — 16,101 — — — — 16,101

Other comprehensive income — — — — — — ( 6,092 ) ( 6,092 )

Net income — — — — — 201,751 — 201,751

Dividends declared ($ 0.42 per common share)

188,295 $ 586 $ 1,701,902 ( 41,836 ) $ ( 1,623,256 ) $ 3,759,783 $ ( 406,128 ) $ 3,432,887

Balance, December 31, 2021

188,048 $ 585 $ 1,629,031 ( 41,836 ) $ ( 1,623,256 ) $ 3,362,570 $ ( 223,095 ) $ 3,145,835

Common stock issued on exercise of options 49 — 2,814 — — — — 2,814

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 5 — ( 2,253 ) — — — — ( 2,253 )

Stock-based compensation costs — — 15,861 — — — — 15,861

Other comprehensive income — — — — — — ( 1,046 ) ( 1,046 )

Net income — — — — — 179,012 — 179,012

Dividends declared ($ 0.42 per common share)

— — — — — ( 61,419 ) — ( 61,419 )

Balance, March 31, 2022 188,102 $ 585 $ 1,645,453 ( 41,836 ) $ ( 1,623,256 ) $ 3,480,163 $ ( 224,141 ) $ 3,278,804

See the accompanying notes to the unaudited condensed consolidated financial statements.

15 unchanged sentences

Other comprehensive income (loss) — — — — — — ( 23,516 ) ( 23,516 )

Cumulative effect adjustment from adoption of the credit loss standard, net of tax — — — — — ( 1,143 ) — ( 1,143 )

Net income — — — — — 203,613 — 203,613

2 unchanged sentences

Balance, September 30, 2021

Common stock issued on exercise of options 29 — 1,857 — — — — 1,857

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 451 2 ( 46,734 ) — — — — ( 46,732 )

Common stock issued on employee stock purchase plan 116 — 15,729 — — — — 15,729

Stock-based compensation costs — — 15,370 — — — — 15,370

Other comprehensive income — — — — — — 77,040 77,040

Net income — — — — — 179,514 — 179,514

Dividends declared ($ 0.39 per common share)

187,547 $ 583 $ 1,643,661 ( 41,836 ) $ ( 1,623,256 ) $ 3,222,064 $ ( 217,003 ) $ 3,026,049

Balance, December 31, 2020

187,340 $ 582 $ 1,574,240 ( 41,836 ) $ ( 1,623,256 ) $ 3,076,569 $ ( 163,151 ) $ 2,864,984

Common stock issued on exercise of options 1 — 139 — — — — 139

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 12 — ( 3,431 ) — — — — ( 3,431 )

Common stock issued on employee stock purchase plan — — 6 — — — — 6

Stock-based compensation costs — — 15,591 — — — — 15,591

Other comprehensive income — — — — — — ( 32,822 ) ( 32,822 )

Net income (loss) — — — — — ( 78,481 ) — ( 78,481 )

Dividends declared ($ 0.39 per common share)

— — — — — ( 56,752 ) — ( 56,752 )

Balance, March 31, 2021 187,353 $ 582 $ 1,586,545 ( 41,836 ) $ ( 1,623,256 ) $ 2,941,336 $ ( 195,973 ) $ 2,709,234

See the accompanying notes to the unaudited condensed consolidated financial statements.

3 unchanged sentences

(In US$ and in thousands)

Nine Months Ended

Three Months Ended

September 30,

Cash flows from operating activities:

6 unchanged sentences

(Gain) loss on equity investments (note 5) 3,280 ( 5,612 )

Restructuring expenses (note 11) — 8,673

Changes in operating assets and liabilities:

3 unchanged sentences

Accounts payable, accrued expenses, income taxes payable and other 8,041 ( 293,303 )

Net cash provided by operating activities 271,661 510,193

Net cash (used in) / provided by operating activities

44,662 ( 65,657 )

Cash flows from investing activities:

3 unchanged sentences

Purchases of investments (note 5) ( 4,291 ) ( 6,600 )

Proceeds from sale of investment 6,802 —

(Payments) / proceeds on maturity of foreign currency contracts ( 3,042 ) ( 3,481 )

3 unchanged sentences

Taxes paid related to net share settlement of equity awards ( 59 ) ( 195 )

Payments of business combination contingent consideration — ( 3,500 )

Proceeds from borrowings, net of borrowing costs 50,000 150,000

1 unchanged sentence

Dividends paid ( 64,431 ) ( 61,189 )

Net cash used in financing activities ( 185,862 ) ( 650,596 )

Net cash (used in) / provided by financing activities

( 41,880 ) 92,970

Effect of exchange rate changes on cash ( 10,523 ) ( 4,568 )

8 unchanged sentences

Goodwill on acquisition 19,281 —

Previously held equity interest ( 4,078 ) —

Deferred payments

Fair value of contingent consideration

( 2,856 ) $ —

Cash paid for acquisitions $ 19,100 $ —

18 unchanged sentences

The results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2023.

The condensed consolidated financial statements for the three and nine months ended March 31, 2022 and March 31, 2021 are unaudited and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K (our “Form 10-K”) for the year ended June 30, 2021.

The condensed consolidated financial statements for the three months ended September 30, 2022 and September 30, 2021 are unaudited and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K (our “Form 10-K”) for the year ended June 30, 2022.

Revenue Recognition

10 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

U.S., Canada and Latin America

26 unchanged sentences

The following table summarizes our contract balances (in thousands):

September 30,

2022 June 30,

36 unchanged sentences

We lease Sleep and Respiratory Care medical devices to customers primarily as a means to comply with local health insurer requirements in certain foreign geographies.

Device rental contracts include sales-type and operating leases, and contract terms vary by customer and include options to terminate or extend the contract.

Device rental contracts include operating leases, and contract terms vary by customer and include options to terminate or extend the contract.

When lease contracts also include the sale of masks and accessories, we allocate contract consideration to those items on a relative standalone price basis and recognize revenue when control transfers to the customer.

The components of lease revenue were as follows (in thousands):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

Sales-type lease revenue $ 946 $ 2,031 $ 6,598 $ 5,854

Operating lease revenue 19,797 22,746 69,380 72,551

Total lease revenue $ 20,743 $ 24,777 $ 75,978 $ 78,405

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Operating lease revenue was $ 23.7 million for the three months ended September 30, 2022 and $ 25.2 million for the three months ended September 30, 2021.

Provision for Warranty

4 unchanged sentences

Should actual product failure rates or estimated costs to repair those product failures differ from our estimates, we would be required to revise our estimated warranty provision.

Recently adopted accounting pronouncements

2021-08 “Business Combinations:

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”

In October 2021, the FASB issued ASU No.

2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (Topic 805), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers , as if it had originated the contracts.

This approach differs from the current requirement to measure contract assets and contract liabilities acquired in a business combination at fair value.

The guidance is effective for us beginning in the first quarter of the year ending June 30, 2024 and early adoption is permitted.

We elected to early adopt this standard in the second quarter of our fiscal year ending June 30, 2022.

We do not expect the adoption of ASU 2021-08 to have a material impact on our consolidated financial statements.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(2) Segment Information

6 unchanged sentences

We neither discretely allocate assets to our operating segments, nor does our Chief Operating Decision Maker evaluate the operating segments using discrete asset information.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Additionally, effective in the first quarter of fiscal year 2023, we updated the extent of allocation and method of attribution of certain shared costs that are principally managed at the corporate level as part of our evaluation of segment operating performance.

As a result, certain shared administrative costs, including shared IT, legal and other administrative functions, which were previously included in segment operating results, are now reported in Corporate costs within our reconciliation of segment operating profit to income before income taxes.

The financial information presented herein reflects the impact of the preceding reporting change for all periods presented.

The table below presents a reconciliation of net revenues and net operating profit by reportable segments (in thousands):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

Net revenue by segment

14 unchanged sentences

Amortization of acquired intangible assets 14,324 18,766

Restructuring expenses — — — 8,673

Interest expense (income), net 7,134 5,360

3 unchanged sentences

Income before income taxes $ 261,793 $ 258,788

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(3) Supplemental Balance Sheet Information

Components of selected captions in the condensed consolidated balance sheets consisted of the following (in thousands):

Inventories March 31,

Inventories September 30,

2022 June 30,

3 unchanged sentences

Total inventories $ 864,852 $ 743,910

Property, Plant and Equipment March 31,

Prepaid expenses and other current assets September 30,

2022 June 30,

Prepaid taxes $ 92,226 $ 99,352

Prepaid inventories 122,839 107,291

Other prepaid expenses and current assets 126,134 131,265

Total prepaid expenses and other current assets $ 341,199 $ 337,908

Property, Plant and Equipment September 30,

2022 June 30,

Property, plant and equipment, at cost $ 1,107,564 $ 1,131,295

1 unchanged sentence

Property, plant and equipment, net $ 487,376 $ 498,181

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Other Intangible Assets March 31,

Other Intangible Assets September 30,

2022 June 30,

12 unchanged sentences

A reconciliation of changes in our goodwill by reportable segment is as follows (in thousands):

Nine Months Ended March 31, 2022

Three Months Ended September 30, 2022

Respiratory Care SaaS Total

3 unchanged sentences

Balance at the end of the period $ 644,125 $ 1,294,718 $ 1,938,843

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

(5) Investments

9 unchanged sentences

Under this method, we record our share of gains or losses attributable to equity method investments as a component of other income (loss), net on the condensed consolidated statements of operations.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Equity investments by measurement category were as follows (in thousands):

Measurement category March 31,

Measurement category September 30,

2022 June 30,

3 unchanged sentences

Total $ 57,358 $ 58,375

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The following tables show a reconciliation of the changes in our equity investments (in thousands):

Nine Months Ended March 31, 2022

Three Months Ended September 30, 2022

Non-marketable securities Marketable securities Equity method investments Total

Balance at the beginning of the period $ 39,290 $ 9,167 $ 9,918 $ 58,375

Net additions (reductions) to investments (1)

7,665 ( 3,202 ) 1,250 5,713

Observable price adjustments on non-marketable equity securities 5,367 — — 5,367

Additions to investments 4,291 — — 4,291

Unrealized losses on marketable equity securities — ( 3,280 ) — ( 3,280 )

Realized gains on marketable and non-marketable equity securities 2,355 1,626 — 3,981

Impairment of investments ( 209 ) — — ( 209 )

Loss attributable to equity method investments — — ( 2,028 ) ( 2,028 )

Carrying value at the end of the period $ 43,581 $ 5,887 $ 7,890 $ 57,358

(1) Net additions (reductions) to investments includes additions from purchases, reductions due to exits of securities, or reclassifications due to our acquisition of an investee in which we held a prior equity interest.

Nine Months Ended March 31, 2021

Three Months Ended September 30, 2021

Non-marketable securities Marketable securities Equity method investments Total

4 unchanged sentences

Unrealized gains on marketable equity securities — 454 — 454

Reclassifications (2)

Impairment of investments

( 209 ) — — ( 209 )

1 unchanged sentence

Carrying value at the end of the period $ 31,160 $ 33,138 $ 15,768 $ 80,066

(2) During the nine months ended March 31, 2021, one of our investments, which was previously accounted for under the measurement alternative, completed its initial public offering which resulted in a change of accounting methodology to fair value.

Net unrealized losses recognized for equity investments in non-marketable and marketable securities held as of March 31, 2022 for the three and nine months ended March 31, 2022 were $ 1.7 million and $ 4.5 million, respectively.

Net unrealized gains recognized for equity investments in non-marketable and marketable securities held as of March 31, 2021 for the three and nine months ended March 31, 2021 were $ 4.7 million and $ 9.4 million, respectively.

Net unrealized losses recognized for equity investments in non-marketable and marketable securities held as of September 30, 2022 for the three months ended September 30, 2022 were $ 3.3 million.

Net unrealized gains recognized for equity investments in non-marketable and marketable securities held as of September 30, 2021 for the three months ended September 30, 2021 were $ 5.6 million.

(6) Income Taxes

3 unchanged sentences

The ATO settlement fully resolved the dispute for all prior years, with no admission of liability and provides clarity in relation to certain future taxation principles.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The final net impact of the ATO settlement was $ 238.7 million, which represents a gross amount of $ 381.7 million, including interest and penalties of $ 48.1 million, and adjustments for credits and deductions of $ 143.0 million.

As a result of the ATO settlement and due to movements in foreign currencies, we recorded a benefit of $ 14.1 million within other comprehensive income, and a $ 4.1 million reduction of tax credits, which was recorded to income tax expense.

As a result of the ATO settlement, we reversed our previously recorded uncertain tax position.

On September 28, 2021, we remitted final payment to the ATO of $ 284.8 million, consisting of the agreed settlement amount of $ 381.7 million less prior remittances made to the ATO of $ 96.9 million.

1 unchanged sentence

Changes in the liability for warranty costs, which is included in accrued expenses in our condensed consolidated balance sheets, are as follows (in thousands):

Nine Months Ended

Three Months Ended

September 30,

Balance at the beginning of the period $ 25,889 $ 22,032

3 unchanged sentences

Balance at the end of the period $ 24,093 $ 22,960

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Debt consisted of the following (in thousands):

September 30,

2022 June 30,

Short-term debt $ 10,000 $ 10,000

Deferred borrowing costs $ ( 94 ) $ ( 84 )

Short-term debt, net $ 9,906 $ 9,916

Long-term debt $ 790,000 $ 770,000

3 unchanged sentences

Credit Facility

On April 17, 2018, we entered into an amended and restated credit agreement (the “Revolving Credit Agreement”), as borrower, with lenders MUFG Union Bank, N.A., as administrative agent, joint lead arranger, joint book runner, swing line lender and letter of credit issuer, and Westpac Banking Corporation, as syndication agent, joint lead arranger and joint book runner.

The Revolving Credit Agreement, among other things, provided a senior unsecured revolving credit facility of $ 800.0 million, with an uncommitted option to increase the revolving credit facility by an additional $ 300.0 million.

Additionally, on April 17, 2018, ResMed Limited entered into a Syndicated Facility Agreement (the “Term Credit Agreement”), as borrower, with lenders MUFG Union Bank, N.A., as administrative agent, joint lead arranger and joint book runner, and Westpac Banking Corporation, as syndication agent, joint lead arranger and joint book runner.

The Term Credit Agreement, among other things, provides ResMed Limited a senior unsecured term credit facility of $ 200.0 million.

On November 5, 2018, we entered into a first amendment to the Revolving Credit Agreement to, among other things, increase the size of our senior unsecured revolving credit facility from $ 800.0 million to $ 1.6 billion, with an uncommitted option to increase the revolving credit facility by an additional $ 300.0 million.

On June 29, 2022, we entered into a second amended and restated credit agreement (the “Revolving Credit Agreement”), as borrower, with lenders MUFG Union Bank, N.A., as administrative agent, joint lead arranger, sole book runner, swing line lender and letter of credit issuer, Westpac Banking Corporation, as syndication agent and joint lead arranger, HSBC Bank USA, National Association, as syndication agent and joint lead arranger, and Wells Fargo Bank, National Association, as documentation agent.

The Revolving Credit Agreement, among other things, provided a senior unsecured revolving credit facility of $ 1,500.0 million, with an uncommitted option to increase the revolving credit facility by an additional amount equal to the greater of $ 1,000.0 million and 1.00 times the EBITDA (as defined in the Revolving Credit Agreement) for the trailing twelve-month measurement period.

The Revolving Credit Agreement amends and restates that certain Amended and Restated Credit Agreement, dated as of April 17, 2018, among ResMed, MUFG Union Bank, N.A., Westpac Banking Corporation and the lenders party thereto.

Additionally, on June 29, 2022, ResMed Pty Limited entered into a Second Amendment to the Syndicated Facility Agreement and First Amendment to Unconditional Guaranty Agreement (the “Term Credit Agreement”), as borrower, with lenders MUFG Union Bank, N.A., as administrative agent, joint lead arranger and joint book runner, and Westpac Banking Corporation, as syndication agent, joint lead arranger and joint book runner, which amends that certain Syndicated Facility Agreement dated as of April 17, 2018.

The Term Credit Agreement, among other things, provides ResMed Pty a senior unsecured term credit facility of $ 200.0 million.

Our obligations under the Revolving Credit Agreement are guaranteed by certain of our direct and indirect U.S.

subsidiaries, and ResMed Limited’s obligations under the Term Credit Agreement are guaranteed by us and certain of our direct and indirect U.S.

subsidiaries, and ResMed Pty Limited’s obligations under the Term Credit Agreement are guaranteed by us and certain of our direct and indirect U.S.

subsidiaries.

The Revolving Credit Agreement and Term Credit Agreement contain customary covenants, including, in each case, a financial covenant that requires that we maintain a maximum leverage ratio of funded debt to EBITDA (as defined in the Revolving Credit Agreement and Term Credit Agreement, as applicable).

The entire principal amounts of the revolving credit facility and term credit facility, and, in each case, any accrued but unpaid interest may be declared immediately due and payable if an event of default occurs, as defined in the Revolving Credit Agreement and the Term Credit Agreement, as applicable.

Events of default under the Revolving Credit Agreement and the Term Credit Agreement include, in each case, failure to make payments when due, the occurrence of a default in the performance of any covenants in the respective agreements or related documents, or certain changes of control of us, or the respective guarantors of the obligations borrowed under the Revolving Credit Agreement and Term Credit Agreement.

The Revolving Credit Agreement and Term Credit Agreement each terminate on June 29, 2027, when all unpaid principal and interest under the loans must be repaid.

Amounts borrowed under the Term Credit Agreement will also amortize on a semi-annual basis, with a $ 5.0 million principal payment required on each such semi-annual amortization date.

The outstanding principal amounts will bear interest at a rate equal to the Adjusted Term SOFR (as defined in the Revolving Credit Facility) plus 0.75 % to 1.50 % (depending on the then-applicable leverage ratio) or the Base Rate (as defined in the Revolving Credit Agreement and the Term Credit Agreement, as applicable) plus 0.0 % to 0.50 % (depending on the then-applicable leverage ratio).

At September 30, 2022, the interest rate that was being charged on the outstanding principal amounts was 3.5 %.

An applicable commitment fee of 0.075 % to 0.150 % (depending on the then-applicable leverage ratio) applies on the unused portion of the revolving credit facility.

As of September 30, 2022, we had $ 1.4 billion available for draw down under the revolving credit facility.

PART I – FINANCIAL INFORMATION Item 1

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements

principal amounts of the revolving credit facility and term credit facility, and, in each case, any accrued but unpaid interest may be declared immediately due and payable if an event of default occurs, as defined in the Revolving Credit Agreement and the Term Credit Agreement, as applicable.

The Revolving Credit Agreement and Term Credit Agreement each terminate on April 17, 2023, when all unpaid principal and interest under the loans must be repaid.

Amounts borrowed under the Term Credit Agreement also amortize on a semi-annual basis, with a $ 6.0 million principal payment required on each such semi-annual amortization date.

The outstanding principal amounts bear interest at a rate equal to LIBOR plus 0.75 % to 1.50 % (depending on the then-applicable leverage ratio) or the Base Rate (as defined in the Revolving Credit Agreement and the Term Credit Agreement, as applicable) plus 0.0 % to 0.50 % (depending on the then-applicable leverage ratio).

At March 31, 2022, the interest rate that was being charged on the outstanding principal amounts was 1.1 %.

An applicable commitment fee of 0.100 % to 0.175 % (depending on the then-applicable leverage ratio) applies on the unused portion of the revolving credit facility.

As of March 31, 2022, we had $ 1.6 billion available for draw down under the revolving credit facility.

We are required to disclose the fair value of financial instruments for which it is practicable to estimate the value, even though these instruments are not recognized at fair value in the consolidated balance sheets.

As the Revolving Credit and Term Credit Agreements’ interest rate is calculated as LIBOR plus the spreads described above, its carrying amount is equivalent to its fair value as at March 31, 2022 and June 30, 2021, which was $ 182.0 million and $ 158.0 million, respectively.

As the Revolving Credit and Term Credit Agreements’ interest rate is calculated as Adjusted Term SOFR plus the spreads described above, its carrying amount is equivalent to its fair value as at September 30, 2022 and June 30, 2022, which was $ 300.0 million and $ 280.0 million, respectively.

Quoted market prices in active markets for similar liabilities based inputs (Level 2) were used to estimate fair value.

7 unchanged sentences

As of March 31, 2022 and June 30, 2021 the Senior Notes had a carrying amount of $ 500.0 million, excluding deferred borrowing costs, and an estimated fair value of $ 495.9 million and $ 530.4 million, respectively.

As of September 30, 2022 and June 30, 2022, the Senior Notes had a carrying amount of $ 500.0 million, excluding deferred borrowing costs, and an estimated fair value of $ 455.7 million and $ 477.7 million, respectively.

Quoted market prices in active markets for similar liabilities based inputs (Level 2) were used to estimate fair value.

At March 31, 2022, we were in compliance with our debt covenants and there was $ 682.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

(9) Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing the net income available to common stockholders by the weighted average number of shares of common stock outstanding.

For purposes of calculating diluted earnings (loss) per share, the denominator includes both the weighted average number of shares of common stock outstanding and the number of dilutive common stock equivalents such as stock options and restricted stock units.

At September 30, 2022, we were in compliance with our debt covenants and there was $ 800.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

(9) Earnings Per Share

Basic earnings per share is computed by dividing the net income available to common stockholders by the weighted average number of shares of common stock outstanding.

For purposes of calculating diluted earnings per share, the denominator includes both the weighted average number of shares of common stock outstanding and the number of dilutive common stock equivalents such as stock options and restricted stock units.

The weighted average number of outstanding stock options and restricted stock units not included in the computation of diluted earnings per share were 113,167 and 1,322 for the three months ended September 30, 2022 and 2021, respectively, as the effect would have been anti-dilutive.

PART I – FINANCIAL INFORMATION Item 1

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements

The calculation of diluted weighted average shares for the three months ended March 31, 2021 excluded 857,799 potentially dilutive common shares because we reported a net loss.

The weighted average number of outstanding stock options and restricted stock units not included in the computation of diluted earnings (loss) per share were 307,368 and 225,580 for the three months ended March 31, 2022 and 2021, respectively, and 52,599 and 200,341 for the nine months ended March 31, 2022 and 2021, respectively, as the effect would have been anti-dilutive.

Basic and diluted earnings per share are calculated as follows (in thousands except per share data):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

Net income (loss) $ 179,012 $ ( 78,481 ) $ 584,376 $ 279,405

September 30,

Net income $ 210,478 $ 203,613

Basic weighted-average common shares outstanding 146,431 145,680

2 unchanged sentences

Diluted weighted average shares 147,134 146,860

Basic earnings (loss) per share $ 1.22 $ ( 0.54 ) $ 4.00 $ 1.92

Diluted earnings (loss) per share $ 1.22 $ ( 0.54 ) $ 3.97 $ 1.91

(10) Legal Actions and Contingencies

Basic earnings per share $ 1.44 $ 1.40

Diluted earnings per share $ 1.43 $ 1.39

(10) Legal Actions, Contingencies and Commitments

In the normal course of business, we are subject to routine litigation incidental to our business.

While the results of this litigation cannot be predicted with certainty, we believe that their final outcome will not, individually or in aggregate, have a material adverse effect on our consolidated financial statements taken as a whole.

On June 2, 2021, New York University filed a complaint for patent infringement in the United States District Court, District of Delaware against ResMed Inc., case no.

1:21-cv-00813 (CFC).

The complaint alleges that the AutoSet and AutoRamp features of ResMed’s AirSense 10 AutoSet flow generators infringe one or more claims of various patents.

According to the complaint, the patents are directed to systems and methods for diagnosing and treating patient sleeping disorders during different sleep states.

On June 2, 2021, New York University ("NYU") filed a complaint for patent infringement in the United States District Court, District of Delaware against ResMed Inc., case no.

1:21-cv-00813 (JPM).

The complaint alleges that the AutoSet or AutoRamp features of ResMed’s AirSense 10 AutoSet flow generators infringe one or more claims of various NYU patents, including U.S.

and 10,384,024.

According to the complaint, the NYU patents are directed to systems and methods for diagnosis and treating sleeping disorders during different sleep states.

The complaint seeks monetary damages and attorneys’ fees.

ResMed answered the complaint on September 30, 2021 and filed a motion to dismiss the complaint on the basis that the patents are invalid because the subject matter of the patents is not patentable under the Supreme Court and Federal Circuit precedent.

We answered the complaint on September 30, 2021 and filed a motion to dismiss the complaint on the basis that the patents are invalid because the subject matter of the patents is not patentable under the Supreme Court and Federal Circuit precedent.

The motion to dismiss was granted in part and denied in part.

The matter is proceeding to discovery.

On January 27, 2021, the International Trade Commission instituted In Re Certain UMTS and LTE Cellular Communications Modules and Products Containing the Same, Investigation No.

We have also requested that the court dismiss the case based on NYU’s license of the patents to Fisher & Paykel and Fisher & Paykel’s prior settlement with us.

The matter is proceeding to discovery while the court considers our request.

We have also filed petitions for inter partes review with the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office seeking to invalidate the asserted claims of the patents-in-suit.

A determination by the PTAB whether to institute the petitions is expected by early December 2022.

If the petitions are instituted by the PTAB, a final written decision determining the invalidity of the challenged claims is expected by December 2023.

On January 27, 2021, the International Trade Commission ("ITC") instituted In Re Certain UMTS and LTE Cellular Communications Modules and Products Containing the Same, Investigation No.

337-TA-1240, by complainants Philips RS North America, LLC and Koninklijke Philips N.V.

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The administrative law judge issued an initial determination on April 1, 2022, finding no violation of any of the Philips' patents asserted in the ITC.

Philips is seeking review by the full International Trade Commission, and the Commission is expected to issue its final determination on or about August 1, 2022.

Philips sought review by the full ITC.

On July 6, 2022, the Commission affirmed the administrative law judge’s determination that there was no violation of asserted Philips' patents.

The Commission terminated the ITC proceedings.

Philips did not appeal the ITC’s decision.

On December 17, 2020, Philips filed companion cases for patent infringement against the same defendants in the United States District Court for the District of Delaware, case nos.

1:20-cv-01707, 01708, 01709, 01710, 01711, and 01713 (CFC) seeking damages, an injunction, and a declaration from the court on the amount of a fair reasonable and non-discriminatory license rate for the standard essential patents it is asserting against the defendants.

The district court cases have been stayed pending the resolution of the ITC proceedings.

ResMed is not a party to the ITC investigation or the district court cases but sells products that incorporate some of the communications modules at issue in the cases.

Philips has not yet moved to lift

PART I – FINANCIAL INFORMATION Item 1

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Notes to the Condensed Consolidated Financial Statements

On October 1, 2021 ResMed acquired Ectosense, manufacturer of the NightOwl device used for home sleep testing.

Prior to the acquisition, Ectosense was named as a defendant in a trademark and false advertising complaint filed by Itamar Medical Ltd.

in the district court for the Southern District of Florida, case no.

20-cv-60719-WPD, based on Ectosense’s description of the NightOwl’s measurement of peripheral arterial tone and use of the acronym “PAT” in its advertising.

Ectosense filed a counterclaim for cancellation of Itamar’s “PAT” trademark and for false advertising by Itamar.

Each party seeks damages and injunctive relief against the other.

The matter was resolved on April 5, 2022, in a confidential settlement agreement to the mutual satisfaction of the parties.

the stay following the termination of the ITC Investigation.

We are not a party to the ITC investigation or the district court cases, but we sell products that incorporate some of the communications modules at issue in the cases.

On June 16, 2022, Cleveland Medical Devices Inc.

("Cleveland Medical") filed suit for patent infringement against ResMed Inc.

in the United States District Court for the District of Delaware, case no.

1:22-cv-00794.

Cleveland Medical asserts that numerous ResMed connected devices, when combined with certain ResMed data platforms and/or software, including AirView and ResScan, infringe one or more of eight Cleveland Medical patents, including U.S.

and 11,234,637.

We have moved to dismiss the action because Cleveland Medical sued the wrong ResMed entity.

We have also moved to dismiss all claims based on U.S.

10,076,269, as well as indirect and willful infringement allegations as to the remaining patents asserted against ResMed.

Based on currently available information, we are unable to make a reasonable estimate of loss or range of losses, if any, arising from matters that remain open.

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This is applied to receivables sold with recourse and is recorded in accrued expenses.

During the nine months ended March 31, 2022 and March 31, 2021, receivables sold with limited recourse were $ 126.2 million and $ 112.2 million, respectively.

As of March 31, 2022, the maximum exposure on outstanding receivables sold with recourse and contingent provision were $ 47.0 million and $ 3.4 million, respectively.

During the three months ended September 30, 2022 and September 30, 2021, receivables sold with limited recourse were $ 39.9 million and $ 49.5 million, respectively.

As of September 30, 2022, the maximum exposure on outstanding receivables sold with recourse and contingent provision were $ 22.4 million and $ 1.2 million, respectively.

As of June 30, 2022, the maximum exposure on outstanding receivables sold with recourse and contingent provision were $ 24.2 million and $ 2.1 million, respectively.

(11) Restructuring Expenses

In November 2020, we closed our Portable Oxygen Concentrator business, which was part of the Sleep and Respiratory Care segment.

During the three and nine months ended March 31, 2021, we recognized restructuring expenses of $ 13.9 million primarily related to inventory write-downs of $ 5.2 million, accelerated amortization of acquired intangible assets of $ 5.1 million, asset impairments of $ 2.3 million, employee-related costs of $ 0.7 million and contract cancellation costs of $ 0.6 million.

Of the total expense recognized during the three and nine months ended March 31, 2021, the inventory write-down of $ 5.2 million is presented within cost of sales and the remaining $ 8.7 million in restructuring costs is separately disclosed as restructuring expenses on the condensed consolidated statements of income.

We did not incur additional material expenses in connection with this activity after March 31, 2021, and the restructure was completed as of June 30, 2021.

In June 2022 we signed a definitive agreement to acquire MEDIFOX DAN which is expected to close during our fiscal year 2023.

The MEDIFOX DAN acquisition remains subject to regulatory clearances and other customary closing conditions.

Upon closing, acquisition consideration of EUR 950 million will be paid, in part, with funds available for draw under our Revolving Credit Agreement.

PART I – FINANCIAL INFORMATION Item 2

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is an overview of our results of operations for the three and nine months ended March 31, 2022.

The following is an overview of our results of operations for the three months ended September 30, 2022.

Management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition.

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We are committed to ongoing investment in research and development and product enhancements.

During the three months ended March 31, 2022, we invested $66.8 million on research and development activities, which represents 7.7% of net revenues, with a continued focus on the development and commercialization of new, innovative products and solutions that improve patient outcomes, create efficiencies for our customers and help physicians and providers better manage chronic disease and lower healthcare costs.

During the three months ended March 31, 2022 we continued the launch of AirSense 11, which introduces new features such as a touch screen, algorithms for patients new to therapy and digital enhancements and over-the-air update capabilities.

Due to multiple acquisitions, including Brightree in April 2016, HEALTHCAREfirst in July 2018 and MatrixCare in November 2018, our operations now include out-of-hospital software platforms designed to support the professionals and caregivers who help people stay healthy in the home or care setting of their choice.

During the three months ended September 30, 2022, we invested $63.2 million on research and development activities, which represents 6.6% of net revenues, with a continued focus on the development and commercialization of new, innovative products and solutions that improve patient outcomes, create efficiencies for our customers and help physicians and providers better manage chronic disease and lower healthcare costs.

During the three months ended September 30, 2022 we continued the launch of AirSense 11, which introduces new features such as a touch screen, algorithms for patients new to therapy and digital enhancements and over-the-air update capabilities as well as continued to expand our global offering of devices to include Card-to-Cloud ("C2C") versions of our prior model AirSense 10 and AirCurve 10 products that do not incorporate a communications module.

We introduced these C2C models to address the growing backlog of patients waiting for therapy with our devices due to the global semiconductor supply shortage.

Due to multiple acquisitions, including Brightree in April 2016, HEALTHCAREfirst in July 2018 and MatrixCare in November 2018, and our pending acquisition of MEDIFOX DAN which is expected to close during fiscal year 2023 subject to regulatory clearances, our operations now include out-of-hospital software platforms designed to support the professionals and caregivers who help people stay healthy in the home or care setting of their choice.

These platforms comprise our SaaS business.

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We have determined that we have two operating segments, which are the sleep and respiratory disorders sector of the medical device industry (“Sleep and Respiratory Care”) and the supply of business management software as a service to out-of-hospital health providers (“SaaS”).

Net revenue for the three months ended March 31, 2022 was $864.5 million, an increase of 12% compared to the three months ended March 31, 2021.

Gross margin was 56.8% for the three months ended March 31, 2022 compared to 58.2% for the three months ended March 31, 2021.

Diluted earnings per share was $1.22 for the three months ended March 31, 2022, compared to diluted loss per share of $0.54 for the three months ended March 31, 2021.

At March 31, 2022, our cash and cash equivalents totaled $201.8 million, our total assets were $4.9 billion and our stockholders’ equity was $3.3 billion.

Net revenue for the three months ended September 30, 2022 was $950.3 million, an increase of 5% compared to the three months ended September 30, 2021.

Gross margin was 56.9% for the three months ended September 30, 2022 compared to 56.0% for the three months ended September 30, 2021.

Diluted earnings per share was $1.43 for the three months ended September 30, 2022, compared to diluted loss per share of $1.39 for the three months ended September 30, 2021.

At September 30, 2022, our cash and cash equivalents totaled $207.2 million, our total assets were $5.2 billion and our stockholders’ equity was $3.4 billion.

In order to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency fluctuations, we provide certain financial information on a “constant currency” basis, which is in addition to the actual financial information presented.

In order to calculate our constant currency information, we translate the current period financial information using the foreign currency exchange rates that were in effect during the previous comparable period.

However, constant currency measures should not be considered in isolation or as an alternative to U.S.

dollar measures that reflect current period exchange rates, or to other financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”).

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Key Trends and Economic Factors Affecting Our Business

Supply Chain Disruptions

The COVID-19 pandemic has continued to impact the global supply chain, primarily through a lack of availability of raw materials and electronic components.

The lack of raw materials and electronic components is also impacting companies outside of our direct industry, which is resulting in a competitive supply environment causing higher costs, requiring us to commit to minimum purchase obligations as well as make upfront payments to our suppliers.

Additionally, we have observed a reduction in both inbound and outbound transportation capacity as a result of port closures and delays associated with the pandemic, which is causing longer lead times in receiving raw materials into and distributing finished goods out of our manufacturing facilities, in addition to increased freight costs.

These highly competitive and constrained supply chain conditions are increasing our cost of sales, which has and may continue to decrease our gross margin.

Given the ongoing uncertainty regarding the duration and extent of the COVID-19 pandemic, we are uncertain as to the duration and extent of constraint on our supply chain.

Competitor Recall

An ongoing product recall by one of our competitors, Philips, has resulted in increased demand for our sleep and respiratory care devices.

The supply chain disruptions outlined above have constrained and restricted our ability to meet this increased demand and w e expect these constraints will continue for the remainder of the fiscal year ending June 30, 2022.

Although there is still substantial uncertainty associated with the COVID-19 pandemic, we believe the global demand for ventilators and other respiratory support devices used to treat COVID-19 patients has largely been met.

We did not observe material incremental demand for our ventilator devices and masks associated with the pandemic during the three months ended March 31, 2022 and do not expect material COVID-19-generated demand for our ventilator products for the remainder of the fiscal year ending June 30, 2022.

In most markets, diagnostic pathways for sleep apnea treatment, including physician practices, home medical equipment (“HME”) distributors, and sleep clinics have largely recovered towards pre-pandemic levels as vaccines and boosters roll out globally.

Likewise, we have continued to observe stabilizing patient flow in our out-of-hospital care settings within our SaaS business.

Our ability to continue to operate without any significant negative impacts will in part depend on our ability to protect our employees.

We have endeavored and continue to follow recommended actions of government and health authorities to protect our employees worldwide as we progressively reopen our offices around the world.

The pandemic has not negatively impacted our liquidity position.

Impact on Our Business

As a result of these trends, we were not able to meet all the demand available in the market during the three months ended March 31, 2022.

We are being allocated components from our suppliers, particularly semiconductor chips, and we are thus being forced to allocate our outbound products to our customers.

We have established an allocation process with clear guiding principles that give priority to the production and delivery of devices to meet the needs of the highest acuity patients first.

In addition to component supply issues, the ongoing freight challenges are impacting our ability to respond as rapidly as we would like to the demand for our products.

In order to calculate our constant currency information, we translate the current

PART I – FINANCIAL INFORMATION Item 2

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

period financial information using the foreign currency exchange rates that were in effect during the previous comparable period.

However, constant currency measures should not be considered in isolation or as an alternative to U.S.

Results of Operations

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Net revenue for the three months ended March 31, 2022 increased to $864.5 million from $768.8 million for the three months ended March 31, 2021, an increase of $95.7 million or 12% (a 14% increase on a constant currency basis).

Three Months Ended September 30, 2022 Compared to the Three Months Ended September 30, 2021

Net revenue for the three months ended September 30, 2022 increased to $950.3 million from $904.0 million for the three months ended September 30, 2021, an increase of $46.3 million or 5% (a 9% increase on a constant currency basis).

The following table summarizes our net revenue disaggregated by segment, product and region (in thousands):

Three Months Ended

March 31, % Change Constant Currency*

September 30, % Change Constant Currency*

U.S., Canada and Latin America

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Sleep and Respiratory Care

Net revenue from our Sleep and Respiratory Care business for the three months ended March 31, 2022 was $763.4 million, an increase of 13% compared to net revenue for the three months ended March 31, 2021.

Movements in international currencies against the U.S.

dollar negatively impacted net revenue by approximately $14.4 million for the three months ended March 31, 2022.

Excluding the impact of currency movements, total Sleep and Respiratory Care net revenue for the three months ended March 31, 2022 increased by 15% compared to the three months ended March 31, 2021.

The increase in net revenue was primarily attributable to an increase in unit sales of our devices and masks, including increased demand following a recent product recall by one of our competitors.

Net revenue from our Sleep and Respiratory Care business in the U.S., Canada and Latin America for the three months ended March 31, 2022 increased to $475.4 million from $402.9 million for the three months ended March 31, 2021, an increase of $72.6 million or 18%.

The increase was primarily due to an increase in unit sales of our devices and masks, including increased demand following a recent product recall by one of our competitors.

Net revenue in combined Europe, Asia and other markets increased for the three months ended March 31, 2022 to $287.9 million from $272.1 million for the three months ended March 31, 2021, an increase of $15.9 million or 6% (an 11% increase on a constant currency basis).

The constant currency increase in sales in combined Europe, Asia and other markets predominantly reflects an increase in unit sales of our devices and masks, including increased demand following a recent product recall by one of our competitors.

Net revenue from devices for the three months ended March 31, 2022 increased to $433.1 million from $365.7 million for the three months ended March 31, 2021, an increase of $67.3 million or 18%, including an increase of 30% in the U.S., Canada and Latin America and an increase of 5% in combined Europe, Asia and other markets (a 10% increase on a

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

constant currency basis).

Excluding the impact of foreign currency movements, device sales for the three months ended March 31, 2022 increased by 21%.

Net revenue from masks and other for the three months ended March 31, 2022 increased to $330.3 million from $309.2 million for the three months ended March 31, 2021, an increase of $21.1 million or 7%, including an increase of 7% in the U.S., Canada and Latin America and an increase of 6% in combined Europe, Asia and other markets (a 13% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales increased by 9%, compared to the three months ended March 31, 2021.

Software as a Service

Net revenue from our SaaS business for the three months ended March 31, 2022 was $101.1 million, an increase of 8% compared to the three months ended March 31, 2021.

The increase was predominantly due to continued growth in our HME and Home Health and Hospice segments, in addition to stabilizing patient flow in our out-of-hospital care settings.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Nine Months Ended March 31, 2022 Compared to the Nine Months Ended March 31, 2021

Net revenue for the nine months ended March 31, 2022 increased to $2,663.4 million from $2,320.7 million for the nine months ended March 31, 2021, an increase of $342.7 million or 15% (a 15% increase on a constant currency basis).

The following table summarizes our net revenue disaggregated by segment, product and region (in thousands):

Nine Months Ended

March 31, % Change Constant Currency*

U.S., Canada and Latin America

Devices $ 771,475 $ 595,287 30 %

Masks and other 681,803 637,507 7

Total Sleep and Respiratory Care $ 1,453,278 $ 1,232,794 18

Software as a Service 297,693 277,813 7

Total $ 1,750,971 $ 1,510,607 16

Combined Europe, Asia and other markets

Devices $ 608,268 $ 536,856 13 % 15 %

Masks and other 304,151 273,259 11 14

Total Sleep and Respiratory Care $ 912,419 $ 810,115 13 15

Global revenue

Devices $ 1,379,743 $ 1,132,143 22 % 23 %

Masks and other 985,954 910,766 8 9

Total Sleep and Respiratory Care $ 2,365,697 $ 2,042,909 16 16

Software as a Service 297,693 277,813 7 7

Total $ 2,663,390 $ 2,320,722 15 15

Sleep and Respiratory Care

Net revenue from our Sleep and Respiratory Care business for the nine months ended March 31, 2022 was $2,365.7 million, an increase of 16% compared to net revenue for the nine months ended March 31, 2021.

Net revenue from our Sleep and Respiratory Care business for the three months ended September 30, 2022 was $844.4 million, an increase of 5% compared to net revenue for the three months ended September 30, 2021.

Movements in international currencies against the U.S.

dollar negatively impacted net revenue by approximately $14.3 million for the nine months ended March 31, 2022.

Excluding the impact of currency movements, total Sleep and Respiratory Care net revenue for the nine months ended March 31, 2022 increased by 16% compared to the nine months ended March 31, 2021.

The increase in net revenue was primarily attributable to an increase in unit sales of our devices and masks, including recovery of core sleep patient flow that was previously impacted by the pandemic and increased demand following a recent product recall by one of our competitors, partially offset by decreased COVID-19 related demand for our ventilators.

Net revenue from our Sleep and Respiratory Care business in the U.S., Canada and Latin America for the nine months ended March 31, 2022 increased to $1,453.3 million from $1,232.8 million for the nine months ended March 31, 2021, an increase of $220.5 million or 18%.

The increase was primarily due to an increase in unit sales of our devices and masks, including recovery of core sleep patient flow that was previously impacted by the pandemic and increased demand following a recent product recall by one of our competitors, partially offset by decreased COVID-19 related demand for our ventilators.

Net revenue in combined Europe, Asia and other markets increased for the nine months ended March 31, 2022 to $912.4 million from $810.1 million for the nine months ended March 31, 2021, an increase of $102.3 million or 13% (a 15% increase on a constant currency basis).

The constant currency increase in sales in combined Europe, Asia and other markets predominantly reflects an increase in unit sales of our devices and masks, including recovery of core sleep patient flow that was previously impacted by the pandemic and increased demand following a recent product recall by one of our competitors, partially offset by decreased COVID-19-related demand for our ventilators.

Net revenue from devices for the nine months ended March 31, 2022 increased to $1,379.7 million from $1,132.1 million for the nine months ended March 31, 2021, an increase of $247.6 million or 22%, including an increase of 30% in the U.S.,

dollar negatively impacted net revenue by approximately $36.2 million for the three months ended September 30, 2022.

Excluding the impact of currency movements, total Sleep and Respiratory Care net revenue for the three months ended September 30, 2022 increased by 9% compared to the three months ended September 30, 2021.

The increase in net revenue was primarily attributable to an increase in unit sales of our devices and masks.

Net revenue from our Sleep and Respiratory Care business in the U.S., Canada and Latin America for the three months ended September 30, 2022 increased to $578.1 million from $491.0 million for the three months ended September 30, 2021, an increase of $87.1 million or 18%.

The increase was primarily due to an increase in unit sales of our devices, including incremental sales of the C2C devices, and masks.

Net revenue in combined Europe, Asia and other markets decreased for the three months ended September 30, 2022 to $266.3 million from $315.5 million for the three months ended September 30, 2021, a decrease of $49.1 million or 16% (a 6% decrease on a constant currency basis).

The constant currency decrease in sales in combined Europe, Asia and other

PART I – FINANCIAL INFORMATION Item 2

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

Canada and Latin America and an increase of 13% in combined Europe, Asia and other markets (a 15% increase on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the nine months ended March 31, 2022 increased by 23%.

Net revenue from masks and other for the nine months ended March 31, 2022 increased to $986.0 million from $910.8 million for the nine months ended March 31, 2021, an increase of $75.2 million or 8%, including an increase of 7% in the U.S., Canada and Latin America and an increase of 11% in combined Europe, Asia and other markets (a 14% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales increased by 9%, compared to the nine months ended March 31, 2021.

markets predominantly reflects a decrease in unit sales of our devices, which have been negatively impacted by the continued shortages in electronic components.

Net revenue from devices for the three months ended September 30, 2022 increased to $517.6 million from $494.2 million for the three months ended September 30, 2021, an increase of $23.4 million or 5%, including an increase of 23% in the U.S., Canada and Latin America and a decrease of 18% in combined Europe, Asia and other markets (a 10% decrease on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the three months ended September 30, 2022 increased by 9%.

Net revenue from masks and other for the three months ended September 30, 2022 increased to $326.9 million from $312.3 million for the three months ended September 30, 2021, an increase of $14.5 million or 5%, including an increase of 11% in the U.S., Canada and Latin America and a decrease of 9% in combined Europe, Asia and other markets (a 3% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales increased by 8%, compared to the three months ended September 30, 2021.

Software as a Service

Net revenue from our SaaS business for the nine months ended March 31, 2022 was $297.7 million, an increase of 7% compared to the nine months ended March 31, 2021.

The increase was predominantly due to continued growth in our HME and Home Health and Hospice segments, in addition to stabilizing patient flow in our out-of-hospital care settings.

Net revenue from our SaaS business for the three months ended September 30, 2022 was $105.9 million, an increase of 9% compared to the three months ended September 30, 2021.

The increase was predominantly due to continued growth in the HME vertical within our SaaS business.

Gross Profit and Gross Margin

Gross profit increased for the three months ended March 31, 2022 to $491.2 million from $447.3 million for the three months ended March 31, 2021, an increase of $43.9 million or 10%.

Gross margin, which is gross profit as a percentage of net revenue, for the three months ended March 31, 2022 was 56.8% compared to 58.2% for the three months ended March 31, 2021.

The decrease in gross margin for the three months ended March 31, 2022 compared to the three months ended March 31, 2021 was due primarily to higher logistics and manufacturing costs, partially offset by favorable changes in product mix and average selling prices.

Gross profit increased for the nine months ended March 31, 2022 to $1,501.8 million from $1,348.4 million for the nine months ended March 31, 2021, an increase of $153.4 million or 11%.

Gross margin, which is gross profit as a percentage of net revenue, for the nine months ended March 31, 2022 was 56.4% compared to 58.1% for the nine months ended March 31, 2021.

The decrease in gross margin for the nine months ended March 31, 2022 compared to the nine months ended March 31, 2021 was due primarily to higher logistics and manufacturing costs, partially offset by favorable changes in product mix and average selling prices.

Gross profit increased for the three months ended September 30, 2022 to $540.8 million from $506.3 million for the three months ended September 30, 2021, an increase of $34.5 million or 7%.

Gross margin, which is gross profit as a percentage of net revenue, for the three months ended September 30, 2022 was 56.9% compared to 56.0% for the three months ended September 30, 2021.

The increase in gross margin for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 was due primarily to increases in average selling prices and a decrease in the amortization of acquired intangible assets, partially offset by unfavorable product mix and foreign currency movements.

Operating Expenses

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Three Months Ended

March 31, Change % Change Constant Currency

Selling, general, and administrative $ 182,401 $ 160,446 $ 21,955 14 % 17 %

as a % of net revenue 21.1 % 20.9 %

Research and development 66,801 55,941 10,860 19 % 22 %

as a % of net revenue 7.7 % 7.3 %

Amortization of acquired intangible assets 7,730 7,445 285 4 % 4 %

Nine Months Ended

March 31, Change % Change Constant Currency

September 30, Change % Change Constant Currency

Selling, general, and administrative $ 193,933 $ 176,719 $ 17,214 10 % 16 %

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Amortization of acquired intangible assets 7,950 7,707 243 3 % 4 %

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased for the three months ended March 31, 2022 to $182.4 million from $160.4 million for the three months ended March 31, 2021, an increase of $22.0 million or 14%.

Selling, general, and administrative expenses were favorably impacted by the movement of international currencies against the U.S.

dollar, which decreased our expenses by approximately $5.7 million, as reported in U.S.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the three months ended March 31, 2022 increased by 17% compared to the three months ended March 31, 2021.

As a percentage of net revenue, selling, general, and administrative expenses were 21.1% for the three months ended March 31, 2022, compared to 20.9% for the three months ended March 31, 2021.

The constant currency increase in selling, general, and administrative expenses was primarily due to increases in employee-related costs during the three months ended March 31, 2022 compared to the three months ended March 31, 2021.

Selling, general, and administrative expenses increased for the nine months ended March 31, 2022 to $544.5 million from $488.9 million for the nine months ended March 31, 2021, an increase of $55.6 million or 11%.

Selling, general, and administrative expenses increased for the three months ended September 30, 2022 to $193.9 million from $176.7 million for the three months ended September 30, 2021, an increase of $17.2 million or 10%.

Selling, general, and administrative expenses were favorably impacted by the movement of international currencies against the U.S.

dollar, which decreased our expenses by approximately $10.2 million, as reported in U.S.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the nine months ended March 31, 2022 increased by 13% compared to the nine months ended March 31, 2021.

As a percentage of net revenue, selling, general, and administrative expenses were 20.4% for the nine months ended March 31, 2022, compared to 21.1% for the nine months ended March 31, 2021.

The constant currency increase in selling, general, and administrative expenses was primarily due to increases in employee-related costs during the nine months ended March 31, 2022 compared to the nine months ended March 31, 2021.

Research and Development Expenses

Research and development expenses increased for the three months ended March 31, 2022 to $66.8 million from $55.9 million for the three months ended March 31, 2021, an increase of $10.9 million, or 19%.

Research and development expenses were favorably impacted by the movement of international currencies against the U.S.

dollar, which decreased our expenses by approximately $1.5 million for the three months ended March 31, 2022, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses increased by 22% compared to the three months ended March 31, 2021.

As a percentage of net revenue, research and development expenses were 7.7% for the three months ended March 31, 2022, compared to 7.3% for the three months ended March 31, 2021.

The increase in research and development expenses in constant currency terms was primarily due to increased investment in our digital health technologies and SaaS solutions.

Research and development expenses increased for the nine months ended March 31, 2022 to $189.3 million from $165.4 million for the nine months ended March 31, 2021, an increase of $23.8 million, or 14%.

Research and development expenses were favorably impacted by the movement of international currencies against the U.S.

dollar, which decreased our expenses by approximately $0.9 million for the nine months ended March 31, 2022, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses increased by 15% compared to the nine months ended March 31, 2021.

As a percentage of net revenue, research and development expenses were 7.1% for the nine months ended March 31, 2022, compared to 7.1% for the nine months ended March 31, 2021.

The increase in research and development expenses in constant currency terms was primarily due to increased investment in our digital health technologies and SaaS solutions.

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets for the three months ended March 31, 2022 totaled $7.7 million compared to $7.4 million for the three months ended March 31, 2021.

Amortization of acquired intangible assets for the nine months ended March 31, 2022 totaled $23.2 million compared to $23.4 million for the nine months ended March 31, 2021.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the three months ended September 30, 2022 increased by 16% compared to the three months ended September 30, 2021.

As a percentage of net revenue, selling, general, and administrative expenses were 20.4% for the three months ended September 30, 2022, compared to 19.5% for the three months ended September 30, 2021.

PART I – FINANCIAL INFORMATION Item 2

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Restructuring Expenses

In November 2020, we closed our Portable Oxygen Concentrator business, which was part of the Sleep and Respiratory Care segment.

During the three and nine months ended March 31, 2021, we recognized restructuring expenses of $13.9 million primarily related to inventory write-downs of $5.2 million, accelerated amortization of acquired intangible assets of $5.1 million, asset impairments of $2.3 million, employee-related costs of $0.7 million and contract cancellation costs of $0.6 million.

Of the total expense recognized during the three and six months ended December 31, 2020, the inventory write-down of $5.2 million is presented within cost of sales and the remaining $8.7 million in restructuring costs is separately disclosed as restructuring expenses on the condensed consolidated statements of income.

We did not incur additional material expenses in connection with this activity after March 31, 2021.

The constant currency increase in selling, general, and administrative expenses was primarily due to increases in employee-related costs and travel and entertainment expenses during the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Research and Development Expenses

Research and development expenses increased for the three months ended September 30, 2022 to $63.2 million from $60.0 million for the three months ended September 30, 2021, an increase of $3.2 million, or 5%.

Research and development expenses were favorably impacted by the movement of international currencies against the U.S.

dollar, which decreased our expenses by approximately $2.0 million for the three months ended September 30, 2022, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses increased by 9% compared to the three months ended September 30, 2021.

As a percentage of net revenue, research and development expenses were consistent at 6.6% for the three months ended September 30, 2022 and September 30, 2021.

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets for the three months ended September 30, 2022 totaled $8.0 million compared to $7.7 million for the three months ended September 30, 2021.

Total Other Income (Loss), Net

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Three Months Ended

2022 2021 Change

Interest (expense) income, net $ (5,462) $ (5,823) $ 361

Loss attributable to equity method investments (2,627) (4,969) 2,342

Gain (loss) on equity investments (1,735) 4,666 (6,401)

Other, net 1,878 705 1,173

Total other income (loss), net $ (7,946) $ (5,421) $ (2,525)

Nine Months Ended

September 30,

2022 2021 Change

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Total other income (loss), net $ (13,946) $ (3,125) $ (10,821)

Total other income (loss), net for the three months ended March 31, 2022 was a loss of $7.9 million compared to a loss of $5.4 million for the three months ended March 31, 2021.

The increase in loss was primarily due to losses associated with our investments in marketable and non-marketable equity securities, which were a loss of $1.7 million for the three months ended March 31, 2022 compared to a gain of $4.7 million for the three months ended March 31, 2021.

This was offset by lower losses attributable to equity method investments for the three months ended March 31, 2022 of $2.6 million compared to $5.0 million for the three months ended March 31, 2021.

Additionally, interest expense, net, decreased to $5.5 million for the three months ended March 31, 2022 compared to $5.8 million for the three months ended March 31, 2021.

Total other income (loss), net for the nine months ended March 31, 2022 was a loss of $22.5 million compared to a loss of $17.6 million for the nine months ended March 31, 2021.

The increase in loss was primarily due to losses associated with our investments in marketable and non-marketable equity securities, which were a loss of $0.5 million for the nine months ended March 31, 2022 compared to a gain of $9.4 million for the nine months ended March 31, 2021.

This was offset by lower losses attributable to equity method investments for the nine months ended March 31, 2022 of $5.9 million compared to $9.9 million for the nine months ended March 31, 2021.

Additionally, interest expense, net, decreased to $16.8 million for the nine months ended March 31, 2022 compared to $18.3 million for the nine months ended March 31, 2021.

Our effective income tax rate for the three and nine months ended March 31, 2022 was 20.9% and 19.1% as compared to 136.0% and 56.6% for the three and nine months ended March 31, 2021.

Our effective rate of 19.1% for the nine months ended March 31, 2021 differs from the statutory rate of 21.0% primarily due to research credits, foreign operations and windfall tax benefits related to the vesting or settlement of employee share-based awards.

The decrease in our effective tax

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

rate for the three and nine months ended March 31, 2022 was primarily related to the decrease in unrecognized tax benefits recorded in connection with the Australian Tax Office ("ATO") transfer pricing dispute, outlined below.

Total other income (loss), net for the three months ended September 30, 2022 was a loss of $13.9 million compared to a loss of $3.1 million for the three months ended September 30, 2021.

The increase in loss was primarily due to losses associated with our investments in marketable and non-marketable equity securities, which were a loss of $3.3 million for the three months ended September 30, 2022 compared to a gain of $5.6 million for the three months ended September 30, 2021.

We recorded higher losses attributable to equity method investments for the three months ended September 30, 2022 of $2.0 million compared to $1.4 million for the three months ended September 30, 2021.

Additionally, interest expense, net, increased to $7.1 million for the three months ended September 30, 2022 compared to $5.4 million for the three months ended September 30, 2021.

Our effective income tax rate for the three months ended September 30, 2022 was 19.6% as compared to 21.3% for the three months ended September 30, 2021.

Our effective rate of 19.6% for three months ended September 30, 2022 differs from the statutory rate of 21.0% primarily due to research credits, foreign operations and windfall tax benefits related to the vesting or settlement of employee share-based awards.

The decrease in our effective tax rate for the three months ended September 30, 2022 was primarily related to a change in the Company’s global mix of earnings.

Our Singapore operations operate under certain tax holidays and tax incentive programs that will expire in whole or in part at various dates through June 30, 2030.

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federal tax, if repatriated.

On September 19, 2021, we concluded the settlement agreement with the ATO in relation to the previously disclosed transfer pricing dispute for the tax years 2009 through 2018 (“ATO settlement”).

On September 19, 2021, we concluded the settlement agreement with the Australian Taxation Office (“ATO") in relation to the previously disclosed transfer pricing dispute for the tax years 2009 through 2018 (“ATO settlement”).

The ATO settlement fully resolved the dispute for all prior years, with no admission of liability and provides clarity in relation to certain future taxation principles.

The final net impact of the ATO settlement was $238.7 million, which represents a gross amount of $381.7 million, including interest and penalties of $48.1 million, and adjustments for credits and deductions of $143.0 million.

As a result of the ATO settlement and due to movements in foreign currencies, we recorded a benefit of $14.1 million within other comprehensive income, and a $4.1 million reduction of tax credits, which was recorded to income tax expense.

As a result of the ATO settlement, we reversed our previously recorded uncertain tax position.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

On September 28, 2021, we remitted final payment to the ATO of $284.8 million, consisting of the agreed settlement amount of $381.7 million less prior remittances made to the ATO of $96.9 million.

Net Income (Loss) and Earnings (Loss) per Share

As a result of the factors above, our net income for the three months ended March 31, 2022 was $179.0 million compared to a net loss of $78.5 million for the three months ended March 31, 2021, an increase of $257.5 million.

Our net income for the nine months ended March 31, 2022 was $584.4 million compared to net income of $279.4 million for the nine months ended March 31, 2021, an increase of $305.0 million, or 109%.

Our diluted earnings per share for the three months ended March 31, 2022 was $1.22 per diluted share compared to diluted loss per share of $0.54 for the three months ended March 31, 2021.

Our diluted earnings per share for the nine months ended March 31, 2022 was $3.97 per diluted share compared to diluted earnings per share of $1.91 for the nine months ended March 31, 2021, an increase of 108%.

Net Income and Earnings per Share

As a result of the factors above, our net income for the three months ended September 30, 2022 was $210.5 million compared to a net income of $203.6 million for the three months ended September 30, 2021, an increase of $6.9 million, or 3%.

Our diluted earnings per share for the three months ended September 30, 2022 was $1.43 per diluted share compared to diluted earnings per share of $1.39 for the three months ended September 30, 2021, an increase of 3%.

Summary of Non-GAAP Financial Measures

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Non-GAAP financial measures as presented herein may not be comparable to similarly titled measures used by other companies.

The measure “non-GAAP cost of sales” is equal to GAAP cost of sales less amortization of acquired intangible assets relating to cost of sales and restructuring expense associated with inventory write-downs following the closure of the portable oxygen concentrator business.

The measure “non-GAAP cost of sales” is equal to GAAP cost of sales less amortization of acquired intangible assets relating to cost of sales.

The measure “non-GAAP gross profit” is the difference between GAAP net revenue and non-GAAP cost of sales, and “non-GAAP gross margin” is the ratio of non-GAAP gross profit to GAAP net revenue.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

These non-GAAP measures are reconciled to their most directly comparable GAAP financial measures below (in thousands, except percentages):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

GAAP Net revenue $ 950,294 $ 904,015

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(6,374) (11,059)

Restructuring - cost of sales

— — — (5,232)

Non-GAAP cost of sales $ 403,110 $ 386,667

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Non-GAAP gross margin 57.6 % 57.2 %

The measure “non-GAAP income from operations” is equal to GAAP income from operations once adjusted for amortization of acquired intangibles and restructuring expense associated with the closure of the portable oxygen concentrator business.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The measure “non-GAAP income from operations” is equal to GAAP income from operations once adjusted for amortization of acquired intangibles and acquisition-related expenses.

Non-GAAP income from operations is reconciled with GAAP income from operations below (in thousands):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

September 30,

GAAP income from operations $ 275,739 $ 261,913

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Amortization of acquired intangibles - operating expenses 7,950 7,707

Restructuring - cost of sales — — — 5,232

Restructuring - operating expenses — — — 8,673

Acquisition-related expenses 745 —

Non-GAAP income from operations $ 290,808 $ 280,679

The measure “non-GAAP net income” is equal to GAAP net income once adjusted for amortization of acquired intangibles (net of tax), reserve for disputed tax positions, restructuring expenses (net of tax) and (gain) loss on equity investments.

The measure “non-GAAP net income” is equal to GAAP net income once adjusted for amortization of acquired intangibles (net of tax), acquisition-related expenses and reserve for disputed tax positions.

The measure “non-GAAP diluted earnings per share” is the ratio of non-GAAP net income to diluted shares outstanding.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

These non-GAAP measures are reconciled to their most directly comparable GAAP financial measures below (in thousands, except for per share amounts):

Three Months Ended

March 31, Nine Months Ended

2022 2021 2022 2021

GAAP net income (loss) $ 179,012 $ (78,481) $ 584,376 $ 279,405

September 30,

GAAP net income $ 210,478 $ 203,613

Amortization of acquired intangibles - cost of sales, net of tax 4,835 8,435

Amortization of acquired intangibles - operating expenses, net of tax 6,031 5,878

Acquisition-related expenses 745 —

Reserve for disputed tax positions — 4,111

Restructuring - cost of sales, net of tax — — — 4,663

Restructuring - operating expenses, net of tax — — — 7,730

(Gain) loss on equity investments — — — (8,476)

Non-GAAP net income $ 222,089 $ 222,037

GAAP diluted shares outstanding 146,962 145,513 147,034 146,394

Anti-dilutive shares excluded from GAAP — 858 — —

Non-GAAP diluted shares outstanding 146,962 146,371 147,034 146,394

GAAP diluted earnings (loss) per share $ 1.22 $ (0.54) $ 3.97 $ 1.91

Diluted shares outstanding 147,134 146,860

GAAP diluted earnings per share $ 1.43 $ 1.39

Non-GAAP diluted earnings per share $ 1.51 $ 1.51

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Our primary uses of cash have been for research and development activities, selling and marketing activities, capital expenditures, strategic acquisitions and investments, dividend payments and repayment of debt obligations.

We expect that cash provided by operating activities may fluctuate in future periods as a result of several factors, including fluctuations in our operating results, which include impacts from the COVID-19 pandemic, supply chain disruptions, working capital requirements and capital deployment decisions.

Our future capital requirements will depend on many factors including our growth rate in net revenue, third-party reimbursement of our products for our customers, the timing and extent of spending to support research development efforts, the expansion of selling, general and administrative activities, the timing of introductions of new products, the expenditures associated with possible future acquisitions, investments or other business combination transactions, and impacts from the COVID-19 pandemic.

We expect that cash provided by operating activities may fluctuate in future periods as a result of several factors, including fluctuations in our operating results, which include impacts from supply chain disruptions, working capital requirements and capital deployment decisions.

Our future capital requirements will depend on many factors including our growth rate in net revenue, third-party reimbursement of our products for our customers, the timing and extent of spending to support research development efforts, the expansion of selling, general and administrative activities, the timing of introductions of new products, and the expenditures associated with possible future acquisitions, investments or other business combination transactions, including our pending acquisition of MEDIFOX DAN.

As we assess inorganic growth strategies, we may need to supplement our internally generated cash flow with outside sources.

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As part of our liquidity strategy, we will continue to monitor our current level of earnings and cash flow generation as well as our ability to access the market considering those earning levels.

As of March 31, 2022 and June 30, 2021, we had cash and cash equivalents of $201.8 million and $295.3 million, respectively.

Our cash and cash equivalents held within the United States at March 31, 2022 and June 30, 2021 were $57.2 million and $106.7 million, respectively.

Our remaining cash and cash equivalent balances at March 31, 2022 and June 30, 2021, were $144.6 million and $188.6 million, respectively.

As of September 30, 2022 and June 30, 2022, we had cash and cash equivalents of $207.2 million and $273.7 million, respectively.

Our cash and cash equivalents held within the United States at September 30, 2022 and June 30, 2022 were $60.6 million and $70.0 million, respectively.

Our remaining cash and cash equivalent balances at September 30, 2022 and June 30, 2022, were $146.6 million and $203.7 million, respectively.

Our cash and cash equivalent balances are held at highly rated financial institutions .

As of March 31, 2022, we had $1.6 billion available for draw down under the revolver credit facility and a combined total of $1.8 billion in cash and available liquidity under the revolving credit facility.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

As of September 30, 2022, we had $1.4 billion available for draw down under the revolver credit facility and a combined total of $1.6 billion in cash and available liquidity under the revolving credit facility.

As a result of the U.S.

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We believe that our current sources of liquidity will be sufficient to fund our operations, including expected capital expenditures, for the next 12 months and beyond.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Revolving Credit Agreement, Term Credit Agreement and Senior Notes

On April 17, 2018, we entered into an amended and restated credit agreement (as amended from time to time, the “Revolving Credit Agreement”).

The Revolving Credit Agreement, among other things, provided a senior unsecured revolving credit facility of $800.0 million, with an uncommitted option to increase the revolving credit facility by an additional $300.0 million.

Additionally, on April 17, 2018, ResMed Limited entered into a Syndicated Facility Agreement (the “Term Credit Agreement”).

On June 29, 2022, we entered into a second amended and restated credit agreement (as amended from time to time, the “Revolving Credit Agreement”).

The Revolving Credit Agreement, among other things, provided a senior unsecured revolving credit facility of $1,500.0 million, with an uncommitted option to increase the revolving credit facility by an additional amount equal to the greater of $1,000.0 million and 1.00 times the EBITDA for the trailing twelve-month measurement period.

Additionally, on June 29, 2022, ResMed Pty Limited entered into a Second Amendment to the Syndicated Facility Agreement (the “Term Credit Agreement”).

The Term Credit Agreement, among other things, provides ResMed Limited a senior unsecured term credit facility of $200.0 million.

On November 5, 2018, we entered into a first amendment to the Revolving Credit Agreement to, among other things, increase the size of our senior unsecured revolving credit facility from $800.0 million to $1.6 billion, with an uncommitted option to increase the revolving credit facility by an additional $300.0 million.

The Revolving Credit Agreement and Term Credit Agreement each terminate on April 17, 2023, when all unpaid principal and interest under the loans must be repaid.

As of March 31, 2022, we had $1.6 billion available for draw down under the revolving credit facility.

The Revolving Credit Agreement and Term Credit Agreement each terminate on June 29, 2027, when all unpaid principal and interest under the loans must be repaid.

As of September 30, 2022, we had $1.4 billion available for draw down under the revolving credit facility.

On July 10, 2019, we entered into a Note Purchase Agreement with the purchasers to that agreement, in connection with the issuance and sale of $250.0 million principal amount of our 3.24% senior notes due July 10, 2026, and $250.0 million principal amount of our 3.45% senior notes due July 10, 2029 (“Senior Notes”).

On March 31, 2022, there was a total of $682.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

On September 30, 2022, there was a total of $800.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

We expect to satisfy all of our liquidity and long-term debt requirements through a combination of cash on hand, cash generated from operations and debt facilities.

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The following table summarizes our cash flow activity (in thousands):

Nine Months Ended

Net cash provided by operating activities $ 271,661 $ 510,193

Three Months Ended

September 30,

Net cash (used in) / provided by operating activities $ 44,662 $ (65,657)

Net cash used in investing activities (58,806) (41,874)

Net cash used in financing activities (185,862) (650,596)

Net cash (used in) / provided by financing activities (41,880) 92,970

Effect of exchange rate changes on cash (10,523) (4,568)

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Operating Activities

Cash provided by operating activities was $271.7 million for the nine months ended March 31, 2022, compared to cash provided of $510.2 million for the nine months ended March 31, 2021.

The $238.5 million decrease in cash flow from operations was primarily due to the payment of our tax settlement with the ATO of $284.8 million and greater purchases and prepayments of inventory to secure adequate components for the increasing sales demand, partly offset by an increase in operating profit and other net changes in working capital balances compared to the nine months ended March 31, 2021.

Cash provided by operating activities was $44.7 million for the three months ended September 30, 2022, compared to cash used of $65.7 million for the three months ended September 30, 2021.

The $110.3 million increase in cash flow from operations was primarily due to the payment of our tax settlement with the ATO of $284.8 million during the three months ended September 30, 2021, partially offset by greater purchases of inventory to secure adequate components for increasing sales demand and other net changes in working capital balances during the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Investing Activities

Cash used in investing activities was $174.7 million for the nine months ended March 31, 2022, compared to cash used of $110.4 million for the nine months ended March 31, 2021.

The $64.3 million decrease in cash flow from investing activities was primarily due to an increase in purchases of property, plant and equipment and an increase in payments on maturity of foreign currency contracts compared to the nine months ended March 31, 2021.

Financing Activities

Cash used in financing activities was $185.9 million for the nine months ended March 31, 2022, compared to cash used of $650.6 million for the nine months ended March 31, 2021.

The $464.7 million increase in cash flow from financing activities was primarily due to borrowing activity under our Revolving Credit Agreement.

Proceeds from borrowings, net of repayments, for the nine months ended March 31, 2022 were $24.0 million compared to net repayments of $446.0 million during the nine months ended March 31, 2021.

Cash used in investing activities was $58.8 million for the three months ended September 30, 2022, compared to cash used of $41.9 million for the three months ended September 30, 2021.

The $16.9 million decrease in cash flow from investing activities was primarily due to cash used to acquire Germany-based digital health company mementor.

PART I – FINANCIAL INFORMATION Item 2

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

During the three months ended March 31, 2022, we paid cash dividends of $0.42 per common share totaling $61.4 million.

On April 28, 2022, our board of directors declared a cash dividend of $0.42 per common share, to be paid on June 16, 2022, to shareholders of record as of the close of business on May 12, 2022.

Financing Activities

Cash used in financing activities was $41.9 million for the three months ended September 30, 2022, compared to cash provided of $93.0 million for the three months ended September 30, 2021.

The $134.9 million decrease in cash flow from financing activities was primarily due to borrowing activity under our Revolving Credit Agreement.

During the three months ended September 30, 2022, we paid cash dividends of $0.44 per common share totaling $64.4 million.

On October 27, 2022, our board of directors declared a cash dividend of $0.44 per common share, to be paid on December 15, 2022, to shareholders of record as of the close of business on November 10, 2022.

Future dividends are subject to approval by our board of directors.

Since the inception of our share repurchase programs and through March 31, 2022, we have repurchased a total of 41.8 million shares for an aggregate of $1.6 billion.

We have temporarily suspended our share repurchase program due to recent acquisitions, and more recently, as a response to the COVID-19 pandemic.

Accordingly, we did not repurchase any shares during the three and nine months ended March 31, 2022 and 2021.

Since the inception of our share repurchase programs and through September 30, 2022, we have repurchased a total of 41.8 million shares for an aggregate of $1.6 billion.

We have temporarily suspended our share repurchase program due to recent acquisitions and as a response to the COVID-19 pandemic.

Accordingly, we did not repurchase any shares during the three months ended September 30, 2022 and 2021.

Shares that are repurchased are classified as treasury stock pending future use and reduce the number of shares of common stock outstanding used in calculating earnings (loss) per share.

There is no expiration date for this program, and the program may be accelerated, suspended, delayed or discontinued at any time at the discretion of our board of directors.

At March 31, 2022, 12.9 million additional shares can be repurchased under the approved share repurchase program.

At September 30, 2022, 12.9 million additional shares can be repurchased under the approved share repurchase program.

Critical Accounting Principles and Estimates

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Contractual Obligations and Commitments

Purchase obligations as of March 31, 2022 were as follows:

Payments Due by March 31,

Purchase obligations as of September 30, 2022 were as follows:

Payments Due by September 30,

Total 2023 2024 2025 2026 2027 Thereafter

Purchase obligations $ 1,777,740 $ 1,422,612 $ 336,783 $ 14,122 $ 1,983 $ 415 $ 1,825

MEDIFOX DAN acquisition consideration 929,843 929,843 — — — — —

Total $ 2,707,583 $ 2,352,455 $ 336,783 $ 14,122 $ 1,983 $ 415 $ 1,825

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Other than for purchase obligations, there have been no material changes outside the ordinary course of business in our outstanding contractual obligations from those disclosed within “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022.

Off-Balance Sheet Arrangements

As of March 31, 2022, we are not involved in any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC.

As of September 30, 2022, we are not involved in any significant off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated by the SEC.

PART I – FINANCIAL INFORMATION Item 3

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The table below provides information (in U.S.

dollars) on our foreign currency denominated operating assets and liabilities and after considering our foreign currency hedging activities as of March 31, 2022 (in thousands):

dollars) on our foreign currency denominated operating assets and liabilities and after considering our foreign currency hedging activities as of September 30, 2022 (in thousands):

(EUR) Canadian

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dollar equivalents.

The table summarizes information on instruments and transactions that are sensitive to foreign currency exchange rates, including foreign currency call options, collars and forward contracts held at March 31, 2022.

The table presents the notional amounts and weighted average exchange rates by contractual maturity dates for our foreign currency derivative financial instruments, including the forward contracts used to hedge our foreign currency denominated assets and liabilities.

1 unchanged sentence

Fair Value Assets / (Liabilities)

Foreign Exchange Contracts Year 1 Year 2 Total March 31,

Foreign Exchange Contracts Year 1 Year 2 Total September 30,

2022 June 30,

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contractual exchange rate AUD 1 =

Euro 0.6864 AUD 1 =

EUR 0.6933 AUD 1 =

Contract amount 9,788 29,363 39,151 107 71

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Euro 0.7117 SGD 1 =

Euro 0.7435 SGD 1 =

Contract amount 475,000 — 475,000 (13,364) (1,172)

6 unchanged sentences

contractual exchange rate USD 1 =

Contract amount 20,028 — 20,028 83 (44)

contractual exchange rate USD 1 =

CAD 1.2902 USD 1 =

1 unchanged sentence

We are exposed to risk associated with changes in interest rates affecting the return on our cash and cash equivalents and debt.

At March 31, 2022, we held cash and cash equivalents of $201.8 million principally comprised of bank term deposits and at-call accounts and are invested at both short-term fixed interest rates and variable interest rates.

At March 31, 2022, there was $182.0 million outstanding under the Revolving Credit Agreement and Term Credit Agreement, which are subject to variable interest rates.

A hypothetical 10% change in interest rates during the three and nine months ended March 31, 2022, would not have had a material impact on pretax income.

At September 30, 2022, we held cash and cash equivalents of $207.2 million, principally comprised of bank term deposits and at-call accounts, and are invested at both short-term fixed interest rates and variable interest rates.

At September 30, 2022, there was $300.0 million outstanding under the Revolving Credit Agreement and Term Credit Agreement, which are subject to variable interest rates.

A hypothetical 10% change in interest rates during the three months ended September 30, 2022, would not have had a material impact on pretax income.

We have no interest rate hedging agreements.

Inflationary factors such as increases in the cost of our products, freight, overhead costs or wage rates may adversely affect our operating results.

Sustained inflationary pressures in the future may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of net revenue if we are unable to offset such higher costs through price increases.

PART I – FINANCIAL INFORMATION Item 4

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements