What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-10-27 compared with 2023-04-28 · 212 added, 416 removed, 817 unchanged (43% of the section changed)

3 unchanged sentences

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

September 30,

2023 June 30,

1 unchanged sentence

Cash and cash equivalents $ 209,100 $ 227,891

Accounts receivable, net of allowances of $ 24,852 and $ 23,259 at March 31, 2023 and June 30, 2022, respectively

Accounts receivable, net of allowances of $ 20,532 and $ 23,603 at September 30, 2023 and June 30, 2023, respectively

692,388 704,909

17 unchanged sentences

Deferred revenue 146,718 138,072

Income taxes payable (note 6) 78,368 44,893

Income taxes payable 67,073 72,224

Short-term debt, net (note 7) 9,905 9,902

6 unchanged sentences

Long-term debt, net (note 7) 1,351,511 1,431,234

Long-term income taxes payable (note 6) 37,183 48,882

Long-term income taxes payable 12,157 37,183

Total non-current liabilities 1,719,608 1,863,272

4 unchanged sentences

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

188,760,643 issued and 146,924,409 outstanding at March 31, 2023 and 188,246,955 issued and 146,410,721 outstanding at June 30, 2022

188,921,316 issued and 147,085,082 outstanding at September 30, 2023 and 188,900,583 issued and 147,064,349 outstanding at June 30, 2023

Additional paid-in capital 1,791,351 1,772,083

Retained earnings 4,401,841 4,253,016

Treasury stock, at cost, 41,836,234 shares at March 31, 2023 and June 30, 2022

Treasury stock, at cost, 41,836,234 shares at September 30, 2023 and June 30, 2023

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

8 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

Net revenue - Sleep and Respiratory Care products $ 963,037 $ 844,443

12 unchanged sentences

Amortization of acquired intangible assets 12,479 7,950

Acquisition related expenses — — 9,157 —

Total operating expenses 311,063 265,071

20 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

Net income $ 219,422 $ 210,478

19 unchanged sentences

Stock-based compensation costs — — 18,510 — — — — 18,510

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

Other comprehensive loss — — — — — — ( 47,620 ) ( 47,620 )

Net income — — — — — 219,422 — 219,422

3 unchanged sentences

188,921 $ 588 $ 1,791,351 ( 41,836 ) $ ( 1,623,256 ) $ 4,401,841 $ ( 320,148 ) $ 4,250,376

Common stock issued on exercise of options 77 — 5,120 — — — — 5,120

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 265 1 ( 29,655 ) — — — — ( 29,654 )

Common stock issued on employee stock purchase plan 100 1 16,935 — — — — 16,936

Stock-based compensation costs — — 16,464 — — — — 16,464

Other comprehensive income — — — — — — 135,960 135,960

Net income — — — — — 224,914 — 224,914

Dividends declared ($ 0.44 per common share)

— — — — — ( 64,500 ) — ( 64,500 )

Balance, December 31, 2022

188,737 $ 588 $ 1,710,766 ( 41,836 ) $ ( 1,623,256 ) $ 3,920,197 $ ( 270,168 ) $ 3,738,127

Common stock issued on exercise of options 18 — 983 — — — — 983

Common stock issued on vesting of restricted stock units, net of shares withheld for tax 6 — ( 584 ) — — — — ( 584 )

Stock-based compensation costs — — 17,832 — — — — 17,832

Other comprehensive income — — — — — — 8,291 8,291

Net income — — — — — 232,500 — 232,500

Dividends declared ($ 0.44 per common share)

— — — — — ( 64,640 ) — ( 64,640 )

Balance, March 31, 2023 188,761 $ 588 $ 1,728,997 ( 41,836 ) $ ( 1,623,256 ) $ 4,088,057 $ ( 261,877 ) $ 3,932,509

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 (loss) — — — — — — ( 23,516 ) ( 23,516 )

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

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

3 unchanged sentences

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

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 (loss) — — — — — — ( 6,092 ) ( 6,092 )

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

Dividends declared ($ 0.42 per common share)

— — — — — ( 61,245 ) — ( 61,245 )

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 (loss) — — — — — — ( 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.

3 unchanged sentences

(In US$ and in thousands)

Nine Months Ended

Three Months Ended

September 30,

Cash flows from operating activities:

16 unchanged sentences

Patent registration and acquisition costs ( 10,831 ) ( 3,317 )

Business acquisitions, net of cash acquired (note 12) ( 1,011,225 ) ( 35,915 )

Business acquisitions, net of cash acquired ( 103,183 ) ( 19,100 )

Purchases of investments (note 5) ( 3,680 ) ( 4,291 )

9 unchanged sentences

Dividends paid ( 70,597 ) ( 64,431 )

Net cash (used in) / provided by financing activities

Net cash used in financing activities

( 151,132 ) ( 41,880 )

9 unchanged sentences

Goodwill on acquisition 74,416 19,281

Previously held equity interest — ( 4,078 )

Deferred payments

21 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, 2024.

The condensed consolidated financial statements for the three and nine months ended March 31, 2023 and March 31, 2022 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.

The condensed consolidated financial statements for the three months ended September 30, 2023 and September 30, 2022 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, 2023.

Revenue Recognition

10 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

U.S., Canada and Latin America

28 unchanged sentences

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

September 30,

2023 June 30,

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

Device rental contracts are classified as 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.

Operating lease revenue was $ 22.1 million and $ 66.2 million for the three and nine months ended March 31, 2023 and $ 19.8 million and $ 69.4 million for the three and nine months ended March 31, 2022.

Operating lease revenue was $ 22.7 million for the three months ended September 30, 2023 and $ 23.7 million for the three months ended September 30, 2022.

Provision for Warranty

15 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.

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

2023 2022 2023 2022

September 30,

Net revenue by segment

Total Sleep and Respiratory Care $ 980,116 $ 763,358 $ 2,741,541 $ 2,365,697

Sleep and Respiratory Care

$ 963,037 $ 844,443

Software as a Service 139,284 105,851

12 unchanged sentences

Amortization of acquired intangible assets 21,387 14,324

Acquisition related expenses

Astral field safety notification expenses (1)

Interest expense (income), net 14,957 7,134

3 unchanged sentences

Income before income taxes $ 272,191 $ 261,793

(1) The Astral field safety notification expenses relate to estimated costs associated with the replacement of a certain component in some of our Astral ventilation devices that were manufactured between 2013 to 2019.

PART I – FINANCIAL INFORMATION Item 1

3 unchanged sentences

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

Inventories March 31,

Inventories September 30,

2023 June 30,

3 unchanged sentences

Total inventories $ 958,233 $ 998,012

Prepaid expenses and other current assets March 31,

Prepaid expenses and other current assets September 30,

2023 June 30,

3 unchanged sentences

Total prepaid expenses and other current assets $ 444,864 $ 437,018

Property, Plant and Equipment March 31,

Property, Plant and Equipment September 30,

2023 June 30,

2 unchanged sentences

Property, plant and equipment, net $ 533,985 $ 537,856

Other Intangible Assets March 31,

Other Intangible Assets September 30,

2023 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, 2023

Three Months Ended September 30, 2023

Respiratory Care SaaS Total

18 unchanged sentences

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

Measurement category March 31,

Measurement category September 30,

2023 June 30,

3 unchanged sentences

Total $ 143,660 $ 146,537

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, 2023

Three Months Ended September 30, 2023

Non-marketable securities Marketable securities Equity method investments Total

1 unchanged sentence

Additions to investments 1,180 — 2,500 3,680

21,738 4,991 60,233 86,962

Observable price adjustments on non-marketable equity securities 12,612 — — 12,612

Unrealized losses on marketable equity securities — ( 602 ) — ( 602 )

Realized gains on marketable and non-marketable equity securities 3,937 — — 3,937

Proceeds from exits of investments ( 250 ) — — ( 250 )

Impairment of investments ( 3,000 ) — — ( 3,000 )

Loss attributable to equity method investments — — ( 3,895 ) ( 3,895 )

1 unchanged sentence

Carrying value at the end of the period $ 69,678 $ 11,821 $ 62,161 $ 143,660

(1) Includes additions from purchases and an equity method investment acquired and measured at fair value via our acquisition of MEDIFOX DAN.

Refer to Note 12 herein.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

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 (2)

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

Observable price adjustments on non-marketable equity securities

Additions to investments

4,291 — — 4,291

1 unchanged sentence

— ( 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

(2) 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.

Net unrealized gains recognized for equity investments in non-marketable and marketable securities held as of March 31, 2023 for the three and nine months ended March 31, 2023 were $ 2.5 million and $ 7.6 million.

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.

(6) Income Taxes

In accordance with ASC 740 Income Taxes , each interim reporting period is considered integral to the annual period, and tax expense is measured using an estimated annual effective tax rate.

An entity is required to record income tax expense each quarter based on its annual effective tax rate estimated for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, adjusted for discrete taxable events that occur during the interim period.

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.

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 unrealized losses recognized for equity investments in non-marketable and marketable securities held as of September 30, 2023 for the three months ended September 30, 2023 were $ 0.6 million.

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.

(6) Product Warranties

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 $ 27,621 $ 25,889

3 unchanged sentences

Balance at the end of the period $ 28,146 $ 24,093

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Debt consisted of the following (in thousands):

September 30,

2023 June 30,

6 unchanged sentences

Total debt $ 1,361,416 $ 1,441,136

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Credit Facility

13 unchanged sentences

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 March 31, 2023, the interest rate that was being charged on the outstanding principal amounts was 5.8 %.

At September 30, 2023, the interest rate that was being charged on the outstanding principal amounts was 6.3 %.

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 March 31, 2023, we had $ 605.0 million available for draw down under the revolving credit facility.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

As of September 30, 2023, we had $ 825.0 million 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 Adjusted Term SOFR plus the spreads described above, its carrying amount is equivalent to its fair value as at March 31, 2023 and June 30, 2022, which was $ 1,090.0 million and $ 280.0 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, 2023 and June 30, 2023, which was $ 865.0 million and $ 945.0 million, respectively.

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 (collectively referred to as the “Senior Notes”).

2 unchanged sentences

The net proceeds from this transaction were used to pay down borrowings on our Revolving Credit Agreement.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Under the terms of the Note Purchase Agreement, we agreed to customary covenants including with respect to our corporate existence, transactions with affiliates, and mergers and other extraordinary transactions.

2 unchanged sentences

As of March 31, 2023 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 $ 471.5 million and $ 477.7 million, respectively.

As of September 30, 2023 and June 30, 2023, the Senior Notes had a carrying amount of $ 500.0 million, excluding deferred borrowing costs, and an estimated fair value of $ 451.7 million and $ 462.2 million, respectively.

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

At March 31, 2023, we were in compliance with our debt covenants and there was $ 1,590.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

At September 30, 2023, we were in compliance with our debt covenants and there was $ 1,365.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

(8) Earnings Per Share

1 unchanged sentence

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 403,736 and 307,368 for the three months ended March 31, 2023 and 2022, respectively, and 290,639 and 52,599 for the nine months ended March 31, 2023 and 2022, respectively, as the effect would have been anti-dilutive.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The weighted average number of outstanding stock options and restricted stock units not included in the computation of diluted earnings per share were 417,364 and 113,167 for the three months ended September 30, 2023 and 2022, 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

2023 2022 2023 2022

September 30,

Net income $ 219,422 $ 210,478

12 unchanged sentences

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.

According to the complaint, the NYU patents are directed to systems and methods for diagnosis and treating sleeping

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

disorders during different sleep states.

The complaint seeks monetary damages and attorneys’ fees.

23 unchanged sentences

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

The parties have returned to the district

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

court for further proceedings.

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

The parties have returned to the district court for further proceedings.

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

The first trial in these cases is set for August 12, 2024.

On June 16, 2022, Cleveland Medical Devices Inc.

4 unchanged sentences

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;

that motion is pending.

On March 23, 2023, we filed a petition with the Patent Trial and Appeals Board (“PTAB”) of the Patent and Trademark Office seeking review of the validity of Cleveland Medical U.S.

We moved to dismiss the action because Cleveland Medical sued the wrong ResMed entity, and to dismiss the indirect and willful infringement allegations by Cleveland Medical.

On October 2, 2023, the court granted a portion of the motion, dismissing all Cleveland Medical claims for indirect and willful infringement, and declined the rest of the motion.

On March 23, 2023, we filed a petition with the Patent Trial and Appeals Board of the Patent and Trademark Office seeking review of the validity of Cleveland Medical U.S.

Patent 10,076,269.

The PTAB will decide whether to review the validity of the ‘269 patent by September 2023.

The parties are engaged in discovery in the Delaware action.

The case is set for trial in August 2024.

On September 25, 2023, the PTAB exercised its discretion to deny our petition challenging the validity of the ‘269 patent in light of the August 2024 trial date in the Delaware District Court case;

that decision does not impact the merits of our invalidity challenge in that trial.

On March 23, 2023, ResMed Corp.

2 unchanged sentences

patent number 11,602,284 recently issued to Cleveland Medical.

Cleveland Medical has asked the court to dismiss the California case or to move it to Delaware or Cleveland for the convenience of the parties.

We are opposing that request.

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.

2 unchanged sentences

Under these arrangements, if the customer qualifies under the financing institutions’ credit criteria and finances the transaction, the customers repay the financing institution on a fixed payment plan.

For some of these arrangements, the customer’s receivable balance is with limited recourse whereby we are responsible for repaying the financing company should the customer default.

For some of these arrangements, the

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

customer’s receivable balance is with limited recourse whereby we are responsible for repaying the financing company should the customer default.

We record a contingent provision, which is estimated based on historical default rates.

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

During the nine months ended March 31, 2023 and March 31, 2022, receivables sold with limited recourse were $ 131.8 million and $ 126.2 million, respectively.

As of March 31, 2023, the maximum exposure on outstanding receivables sold with recourse and the associated contingent provision were $ 29.7 million and $ 1.0 million, respectively.

During the three months ended September 30, 2023 and September 30, 2022, receivables sold with limited recourse were $ 47.7 million and $ 39.9 million, respectively.

As of September 30, 2023, the maximum exposure on outstanding receivables sold with recourse and the associated contingent provision were $ 28.9 million and $ 0.8 million, respectively.

As of June 30, 2023, the maximum exposure on outstanding receivables sold with recourse and contingent provision were $ 32.6 million and $ 0.6 million, respectively.

12 unchanged sentences

Any difference between the change in the fair value of the hedge components excluded from the assessment of effectiveness and the amounts recognized in earnings is recorded as a component of other comprehensive income.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The purpose of the cross-currency swaps for the net investment hedge is to mitigate foreign currency risk associated with changes in spot rates on the net asset balances of our foreign functional subsidiaries.

1 unchanged sentence

The initial fair value of components excluded from the assessment of hedge effectiveness will be recognized in interest (expense) income, net.

The notional value of outstanding foreign cross-currency swaps was $ 1,042.2 million at March 31, 2023.

The notional value of outstanding foreign cross-currency swaps was $ 1,014.8 million and $ 1,046.6 million at September 30, 2023 and June 30, 2023, respectively.

These contracts mature at various dates prior to December 31, 2029.

8 unchanged sentences

All movements in the fair value of the foreign currency instruments are recorded within other, net in our condensed consolidated statements of income.

The notional value of the outstanding non-designated hedges was $ 1,080.9 million and $ 602.0 million at March 31, 2023 and June 30, 2022, respectively.

These contracts mature at various dates prior to December 15, 2024.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The notional value of the outstanding non-designated hedges was $ 1,363.3 million and $ 954.7 million at September 30, 2023 and June 30, 2023, respectively.

These contracts mature at various dates prior to March 15, 2025.

Fair Values of Derivative Instruments

The following table presents our assets and liabilities related to derivative instruments on a gross basis within the condensed consolidated balance sheets (in thousands):

September 30,

2023 June 30,

13 unchanged sentences

Total derivative liabilities $ 52,847 $ 70,699

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Fair Value Hedge Gains (Losses)

1 unchanged sentence

Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

Gain (loss) recognized in other comprehensive income (loss) $ 588 $ —

5 unchanged sentences

Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

Gain (loss) recognized in cumulative translation adjustment within other comprehensive income (loss) $ 23,436 $ —

2 unchanged sentences

We recognized the following gains (losses) in the condensed consolidated statement of operations on derivatives not designated as hedging instruments (in thousands):

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

Gain (loss) recognized on foreign currency hedging instruments in other, net $ ( 15,073 ) $ ( 20,522 )

3 unchanged sentences

We are exposed to credit-related losses in the event of non-performance by counter parties to financial instruments.

We minimize counterparty credit risk by entering into derivative transactions with major financial institutions and we do not expect material losses as a result of default by our counterparties.

(12) Business Combinations

On November 21, 2022, we completed our acquisition of 100 % of the shares in MediFox-Dan Investment GmbH and its subsidiaries (“MEDIFOX DAN”), a German leader in software solutions for a wide variety of out-of-hospital care providers, for $ 997.5 million.

This acquisition has been accounted for as a business combination using purchase accounting and included in our condensed consolidated financial statements from November 21, 2022.

The acquisition was paid for using funds drawn down from our Revolving Credit Agreement.

PART I – FINANCIAL INFORMATION Item 1

AND SUBSIDIARIES

Notes to the Condensed Consolidated Financial Statements

The total purchase price was allocated to MEDIFOX DAN's tangible and identifiable intangible assets and liabilities based upon preliminary estimated fair values as of the November 21, 2022 closing date, as follows (in thousands):

Preliminary Intangible assets - useful life

Accounts receivable 16,096

Property, plant and equipment 7,731

Equity method investment 57,298

Other assets 18,523

Accounts payable and accrued expenses ( 19,358 )

Deferred revenue ( 18,349 )

Other liabilities ( 11,623 )

Identifiable intangible assets:

Developed technology 43,081 6 - 7 years

Customer relationships 175,445 11 - 13 years

Trade names 32,050 10 years

Deferred tax liabilities ( 94,826 )

Goodwill 784,076

Purchase price $ 997,516

We have not finalized the purchase price allocation in relation to this acquisition as certain appraisals associated with the valuation of intangible assets and income tax positions are not yet complete.

We do not believe that the completion of this work will materially modify the preliminary purchase price allocation.

We expect to complete our purchase price allocation during the quarter ending June 30, 2023.

The cost of the acquisition was allocated to the assets acquired and liabilities assumed based on estimates of their fair values at the date of acquisition.

The goodwill recognized as part of the acquisition is reflected in our SaaS segment and is not deductible for tax purposes.

It mainly represents the synergies that are unique to our combined businesses and the potential for new products and services to be developed in the future.

Pro forma results of operations have not been presented because the effects of this acquisition were not material to our condensed consolidated statements of operations.

We did not incur material acquisition related expenses during the three months ended March 31, 2023.

During the nine months ended March 31, 2022, we recorded acquisition related expenses of $ 9.2 million related to the MEDIFOX DAN acquisition.

We did not have material acquisition related expenses during the three and nine months ended March 31, 2022.

We minimize counterparty credit risk by entering into derivative transactions with major financial institutions.

PART I – FINANCIAL INFORMATION Item 2

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All statements other than statements regarding historical facts are forward-looking statements.

The words “believe,” “expect,” “intend,” “anticipate,” “will continue,” “will,” “estimate,” “plan,” “future” and other similar expressions, and negative statements of such expressions, generally identify forward-looking statements, including, in particular, statements regarding expectations of future revenue or earnings, expenses, new product development, new product launches, new markets for our products, litigation, tax outlook and the effects of competition and public health crises (including the COVID-19 pandemic) on our business .

The words “believe,” “expect,” “intend,” “anticipate,” “will continue,” “will,” “estimate,” “plan,” “future” and other similar expressions, and negative statements of such expressions, generally identify forward-looking statements, including, in particular, statements regarding expectations of future revenue or earnings, expenses, new product development, new product launches, new markets for our products, the integration of acquisitions, our supply chain, domestic and international regulatory developments, litigation, tax outlook, the impact of COVID-19, its variants, and similar epidemics or pandemics and macroeconomic conditions on our business.

These forward-looking statements are made in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

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Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources.

In addition, important factors to consider in evaluating such forward-looking statements include changes or developments in healthcare reform, social, economic, market, legal or regulatory circumstances, including the impact of public health crises such as the novel strain of coronavirus (COVID-19) that has spread globally, changes in our business or growth strategy or an inability to execute our strategy due to changes in our industry or the economy generally, the emergence of new or growing competitors, the actions or omissions of third parties, including suppliers, customers, competitors and governmental authorities and various other factors.

In addition, important factors to consider in evaluating such forward-looking statements include changes or developments in healthcare reform, social, macroeconomic, market, legal or regulatory circumstances, including the public health crises such as COVID-19 and its variants;

changes in our business or growth strategy or an inability to execute our strategy due to changes in our industry or the economy generally, the emergence of new or growing competitors, the actions or omissions of third parties, including suppliers, customers, competitors and governmental authorities and various other factors.

If any one or more of these risks or uncertainties materialize, or underlying estimates or assumptions prove incorrect, actual results may vary significantly from those expressed in our forward-looking statements, and there can be no assurance that the forward-looking statements contained in this report will in fact occur.

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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, 2023.

The following is an overview of our results of operations for the three months ended September 30, 2023.

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, 2023, we invested $76.4 million on research and development activities, which represents 6.8% 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, 2023, 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 our global offering of devices including 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 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, MatrixCare in November 2018, and MEDIFOX DAN in November 2022, our operations 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, 2023, we invested $75.7 million on research and development activities, which represents 6.9% 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, 2023, 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 2016, HEALTHCAREfirst and MatrixCare in 2018, and MEDIFOX DAN in 2022, our operations 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, 2023 was $1,116.9 million, an increase of 29% compared to the three months ended March 31, 2022.

Gross margin was 55.3% for the three months ended March 31, 2023 compared to 56.8% for the three months ended March 31, 2022.

Diluted earnings per share was $1.58 for the three months ended March 31, 2023, compared to diluted earnings per share of $1.22 for the three months ended March 31, 2022.

At March 31, 2023, our cash and cash equivalents totaled $227.9 million, our total assets were $6.7 billion and our stockholders’ equity was $3.9 billion.

Net revenue for the three months ended September 30, 2023 was $1.1 billion, an increase of 16% compared to the three months ended September 30, 2022.

Gross margin was 54.4% for the three months ended September 30, 2023 compared to 56.9% for the three months ended September 30, 2022.

Diluted earnings per share was $1.49 for the three months ended September 30, 2023, compared to diluted earnings per share of $1.43 for the three months ended September 30, 2022.

At September 30, 2023, our cash and cash equivalents totaled $209.1 million, our total assets were $6.7 billion and our stockholders’ equity was $4.3 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

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

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

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, 2023 Compared to the Three Months Ended March 31, 2022

Net revenue for the three months ended March 31, 2023 increased to $1,116.9 million from $864.5 million for the three months ended March 31, 2022, an increase of $252.4 million or 29% (a 31% increase on a constant currency basis).

Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022

Net revenue for the three months ended September 30, 2023 increased to $1,102.3 million from $950.3 million for the three months ended September 30, 2022, an increase of $152.0 million or 16% (a 15% 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, 2023 was $980.1 million, an increase of 28% compared to net revenue for the three months ended March 31, 2022.

Movements in international currencies against the U.S.

dollar negatively impacted net revenue by approximately $19.6 million for the three months ended March 31, 2023.

Excluding the impact of currency movements, total Sleep and Respiratory Care net revenue for the three months ended March 31, 2023 increased by 31% compared to the three months ended March 31, 2022.

The increase in net revenue associated with our devices was primarily attributable to increased demand as well as reduced competitive supply.

The increase in masks was primarily due to an increase in unit sales.

Net revenue from our Sleep and Respiratory Care business in the U.S., Canada and Latin America for the three months ended March 31, 2023 increased to $629.1 million from $475.4 million for the three months ended March 31, 2022, an increase of $153.7 million or 32%.

The increase in devices was primarily attributable to increased demand as well as reduced competitive supply.

The increase in masks was primarily due to an increase in unit sales.

Net revenue in combined Europe, Asia and other markets increased for the three months ended March 31, 2023 to $351.0 million from $287.9 million for the three months ended March 31, 2022, an increase of $63.1 million or 22% (a 28% increase on a constant currency basis).

The constant currency increase in device sales in combined Europe, Asia and other was primarily attributable to increased demand as well as reduced competitive supply.

The increase in masks was primarily due to an increase in unit sales.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

Net revenue from devices for the three months ended March 31, 2023 increased to $607.9 million from $433.1 million for the three months ended March 31, 2022, an increase of $174.8 million or 40%, including an increase of 48% in the U.S., Canada and Latin America and an increase of 29% in combined Europe, Asia and other markets (a 36% increase on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the three months ended March 31, 2023 increased by 43%.

Net revenue from masks and other for the three months ended March 31, 2023 increased to $372.2 million from $330.3 million for the three months ended March 31, 2022, an increase of $41.9 million or 13%, including an increase of 14% in the U.S., Canada and Latin America and an increase of 9% in combined Europe, Asia and other markets (a 15% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales for the three months ended March 31, 2023 increased by 15%.

Software as a Service

Net revenue from our SaaS business for the three months ended March 31, 2023 increased to $136.8 million from $101.1 million for the three months ended March 31, 2022, an increase of $35.6 million or 35%.

The increase was predominantly due to our recent acquisition of MEDIFOX DAN, which was acquired on November 21, 2022.

Excluding the MEDIFOX DAN acquisition, SaaS revenue increased 9% and was driven by continued growth in the HME vertical within our SaaS business.

Nine Months Ended March 31, 2023 Compared to the Nine Months Ended March 31, 2022

Net revenue for the nine months ended March 31, 2023 increased to $3,100.9 million from $2,663.4 million for the nine months ended March 31, 2022, an increase of $437.5 million or 16% (a 20% 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 $ 1,057,141 $ 771,475 37 %

Masks and other 765,364 681,803 12

Total U.S., Canada and Latin America

$ 1,822,505 $ 1,453,278 25

Combined Europe, Asia and other markets

Devices $ 611,123 $ 608,268 Nil% 9 %

Masks and other 307,913 304,151 1 12

Total Combined Europe, Asia and other markets

$ 919,036 $ 912,419 1 10

Global revenue

Total Devices $ 1,668,264 $ 1,379,743 21 % 25 %

Total Masks and other 1,073,277 985,954 9 12

Total Sleep and Respiratory Care $ 2,741,541 $ 2,365,697 16 20

Software as a Service 359,395 297,693 21

Total $ 3,100,936 $ 2,663,390 16 20

Sleep and Respiratory Care

Net revenue from our Sleep and Respiratory Care business for the nine months ended March 31, 2023 was $2,741.5 million, an increase of 16% compared to net revenue for the nine months ended March 31, 2022.

Net revenue from our Sleep and Respiratory Care business for the three months ended September 30, 2023 was $963.0 million, an increase of 14% compared to net revenue for the three months ended September 30, 2022.

Movements in international currencies against the U.S.

dollar negatively impacted net revenue by approximately $92.5 million for the nine months ended March 31, 2023.

Excluding the impact of currency movements, total Sleep and Respiratory Care net revenue for the nine months ended March 31, 2023 increased by 20% compared to the nine months ended March 31, 2022.

The increase in net revenue associated with our devices was primarily attributable to increased demand, reduced

dollar positively impacted net revenue by approximately $9.6 million for the three months ended September 30, 2023.

Excluding the impact of currency movements, total Sleep and Respiratory Care net revenue for the three months ended September 30, 2023 increased by 13% compared to the three months ended September 30, 2022.

The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales.

Net revenue from our Sleep and Respiratory Care business in the U.S., Canada and Latin America for the three months ended September 30, 2023 increased to $638.4 million from $578.1 million for the three months ended September 30, 2022, an increase of $60.3 million or 10%.

The increase in net revenue associated with our devices and masks was primarily attributable to increased demand and unit sales.

Net revenue in combined Europe, Asia and other markets increased for the three months ended September 30, 2023 to $324.7 million from $266.3 million for the three months ended September 30, 2022, an increase of $58.3 million or 22% (an 18% increase on a constant currency basis).

The constant currency increase in device and mask sales in combined Europe, Asia and other was primarily attributable to increased demand and unit sales.

Net revenue from devices for the three months ended September 30, 2023 increased to $564.7 million from $517.6 million for the three months ended September 30, 2022, an increase of $47.2 million or 9%, including an increase of 2% in the U.S., Canada and Latin America and an increase of 23% in combined Europe, Asia and other markets (a 20% increase on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the three months ended September 30, 2023 increased by 8%.

PART I – FINANCIAL INFORMATION Item 2

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

competitive supply, and incremental sales of the C2C devices.

The increase in masks was primarily due to an increase in unit sales .

Net revenue from our Sleep and Respiratory Care business in the U.S., Canada and Latin America for the nine months ended March 31, 2023 increased to $1,822.5 million from $1,453.3 million for the nine months ended March 31, 2022, an increase of $369.2 million or 25%.

The increase in net revenue associated with our devices was primarily attributable to increased demand, reduced competitive supply, and incremental sales of the C2C devices.

The increase in masks was primarily due to an increase in unit sales .

Net revenue in combined Europe, Asia and other markets increased for the nine months ended March 31, 2023 to $919.0 million from $912.4 million for the nine months ended March 31, 2022, an increase of $6.6 million or 1% (a 10% increase on a constant currency basis).

The constant currency increase in device sales in combined Europe, Asia and other was primarily attributable to increased demand as well as reduced competitive supply.

The increase in masks was primarily due to an increase in unit sales.

Net revenue from devices for the nine months ended March 31, 2023 increased to $1,668.3 million from $1,379.7 million for the nine months ended March 31, 2022, an increase of $288.5 million or 21%, including an increase of 37% in the U.S., Canada and Latin America and consistent sales in combined Europe, Asia and other markets (a 9% increase on a constant currency basis).

Excluding the impact of foreign currency movements, device sales for the nine months ended March 31, 2023 increased by 25%.

Net revenue from masks and other for the nine months ended March 31, 2023 increased to $1,073.3 million from $986.0 million for the nine months ended March 31, 2022, an increase of $87.3 million or 9%, including an increase of 12% in the U.S., Canada and Latin America and an increase of 1% in combined Europe, Asia and other markets (a 12% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales increased by 12%, compared to the nine months ended March 31, 2022.

Net revenue from masks and other for the three months ended September 30, 2023 increased to $398.3 million from $326.9 million for the three months ended September 30, 2022, an increase of $71.4 million or 22%, including an increase of 23% in the U.S., Canada and Latin America and an increase of 20% in combined Europe, Asia and other markets (a 15% increase on a constant currency basis).

Excluding the impact of foreign currency movements, masks and other sales for the three months ended September 30, 2023 increased by 21%.

Software as a Service

Net revenue from our SaaS business for the nine months ended March 31, 2023 increased to $359.4 million from $297.7 million for the nine months ended March 31, 2022, an increase of $61.7 million or 21%.

Net revenue from our SaaS business for the three months ended September 30, 2023 increased to $139.3 million from $105.9 million for the three months ended September 30, 2022, an increase of $33.4 million or 32%.

The increase was predominantly due to our recent acquisition of MEDIFOX DAN, which was acquired on November 21, 2022.

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Gross Profit and Gross Margin

Gross profit increased for the three months ended March 31, 2023 to $617.8 million from $491.2 million for the three months ended March 31, 2022, an increase of $126.6 million or 26%.

Gross margin, which is gross profit as a percentage of net revenue, for the three months ended March 31, 2023 was 55.3% compared to 56.8% for the three months ended March 31, 2022.

The decrease in gross margin for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was due primarily to unfavorable product mix, higher component costs, and higher warehouse related costs, partially offset by increases in average selling prices and a decrease in the amortization of acquired intangible assets.

Gross profit increased for the nine months ended March 31, 2023 to $1,738.3 million from $1,501.8 million for the nine months ended March 31, 2022, an increase of $236.5 million or 16%.

Gross margin for the nine months ended March 31, 2023 was 56.1% compared to 56.4% for the nine months ended March 31, 2022.

The decrease in gross margin for the nine months ended March 31, 2023 compared to the nine months ended March 31, 2022 was due primarily to unfavorable product mix, higher component costs, higher warehouse related costs, and unfavorable foreign currency movements, partially offset by increases in average selling prices and a decrease in the amortization of acquired intangible assets.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

Gross profit increased for the three months ended September 30, 2023 to $600.1 million from $540.8 million for the three months ended September 30, 2022, an increase of $59.3 million or 11%.

Gross margin, which is gross profit as a percentage of net revenue, for the three months ended September 30, 2023 was 54.4% compared to 56.9% for the three months ended September 30, 2022.

The decrease in gross margin for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was due primarily to a $7.9 million provision of expected costs associated with a field safety notification on Astral devices, in addition to higher component and manufacturing costs, partially offset by a favorable product mix and favorable foreign currency movements.

The Astral field safety notification relates to estimated expenses associated with the replacement of a certain component in some of our Astral ventilation devices that were manufactured between 2013 to 2019.

Operating Expenses

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Three Months Ended

March 31, Change % Change Constant Currency

Selling, general, and administrative $ 228,457 $ 182,401 $ 46,056 25 % 28 %

as a % of net revenue 20.5 % 21.1 %

Research and development 76,436 66,801 9,635 14 % 16 %

as a % of net revenue 6.8 % 7.7 %

Amortization of acquired intangible assets 12,188 7,730 4,458 58 % 56 %

Nine Months Ended

March 31, Change % Change Constant Currency

September 30, Change % Change Constant Currency

Selling, general, and administrative $ 222,874 $ 193,933 $ 28,941 15 % 14 %

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Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased for the three months ended March 31, 2023 to $228.5 million from $182.4 million for the three months ended March 31, 2022, an increase of $46.1 million or 25%.

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 $5.5 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, 2023 increased by 28% compared to the three months ended March 31, 2022.

As a percentage of net revenue, selling, general, and administrative expenses were 20.5% for the three months ended March 31, 2023, compared to 21.1% for the three months ended March 31, 2022.

The constant currency increase in selling, general, and administrative expenses during the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily due to increases in employee-related costs, increases in travel and entertainment expenses, and additional expenses associated with the consolidation of recent acquisitions.

Selling, general, and administrative expenses increased for the nine months ended March 31, 2023 to $633.3 million from $544.5 million for the nine months ended March 31, 2022, an increase of $88.8 million or 16%.

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 $25.7 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, 2023 increased by 21% compared to the nine months ended March 31, 2022.

As a percentage of net revenue, selling, general, and administrative expenses were 20.4% for the nine months ended March 31, 2023, compared to 20.4% for the nine months ended March 31, 2022.

The constant currency increase in selling, general, and administrative expenses during the nine months ended March 31, 2023 compared to the nine months ended March 31, 2022 was primarily due to increases in employee-related costs, increases in travel and entertainment expenses, and additional expenses associated with the consolidation of recent acquisitions.

Research and Development Expenses

Research and development expenses increased for the three months ended March 31, 2023 to $76.4 million from $66.8 million for the three months ended March 31, 2022, an increase of $9.6 million, or 14%.

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

dollar, which decreased

Selling, general, and administrative expenses increased for the three months ended September 30, 2023 to $222.9 million from $193.9 million for the three months ended September 30, 2022, an increase of $28.9 million or 15%.

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

dollar, which increased our expenses by approximately $2.1 million, as reported in U.S.

Excluding the impact of foreign currency movements, selling, general, and administrative expenses for the three months ended September 30, 2023 increased by 14% compared to the three months ended September 30, 2022.

As a percentage of net revenue, selling, general, and administrative expenses were 20.2% for the three months ended September 30, 2023, compared to 20.4% for the three months ended September 30, 2022.

The constant currency increase in selling, general, and administrative expenses during the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was primarily due to increases in employee-related costs and additional expenses associated with the consolidation of recent acquisitions.

PART I – FINANCIAL INFORMATION Item 2

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

our expenses by approximately $1.2 million for the three months ended March 31, 2023, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses increased by 16% compared to the three months ended March 31, 2022.

As a percentage of net revenue, research and development expenses were 6.8% for the three months ended March 31, 2023 compared to 7.7% for the three months ended March 31, 2022.

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 as well as additional expenses associated with the consolidation of recent acquisitions.

Research and development expenses increased for the nine months ended March 31, 2023 to $209.5 million from $189.3 million for the nine months ended March 31, 2022, an increase of $20.2 million, or 11%.

Research and Development Expenses

Research and development expenses increased for the three months ended September 30, 2023 to $75.7 million from $63.2 million for the three months ended September 30, 2022, an increase of $12.5 million, or 20%.

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

dollar, which decreased our expenses by approximately $5.0 million for the nine months ended March 31, 2023, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses increased by 13% compared to the nine months ended March 31, 2022.

As a percentage of net revenue, research and development expenses were 6.8% for the nine months ended March 31, 2023, compared to 7.1% for the nine months ended March 31, 2022.

dollar, which decreased our expenses by approximately $0.6 million for the three months ended September 30, 2023, as reported in U.S.

Excluding the impact of foreign currency movements, research and development expenses increased by 21% compared to the three months ended September 30, 2022.

As a percentage of net revenue, research and development expenses were 6.9% for the three months ended September 30, 2023 compared to 6.6% for the three months ended September 30, 2022.

Amortization of Acquired Intangible Assets

Amortization of acquired intangible assets for the three months ended March 31, 2023 totaled $12.2 million compared to $7.7 million for the three months ended March 31, 2022.

The increase in amortization expense was primarily attributable to our acquisition of MEDIFOX DAN.

Amortization of acquired intangible assets for the nine months ended March 31, 2023 totaled $29.7 million compared to $23.2 million for the nine months ended March 31, 2022.

Amortization of acquired intangible assets for the three months ended September 30, 2023 totaled $12.5 million compared to $8.0 million for the three months ended September 30, 2022.

The increase in amortization expense was primarily attributable to our acquisition of MEDIFOX DAN.

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Three Months Ended

2023 2022 Change

Interest (expense) income, net $ (14,964) $ (5,462) $ (9,502)

Loss attributable to equity method investments (183) (2,627) 2,444

Gain (loss) on equity investments 6,418 (1,735) 8,153

Other, net (2,564) 1,878 (4,442)

Total other income (loss), net $ (11,293) $ (7,946) $ (3,347)

Six Months Ended

September 30,

2023 2022 Change

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Total other income (loss), net $ (16,806) $ (13,946) $ (2,860)

Total other income (loss), net for the three months ended March 31, 2023 was a loss of $11.3 million compared to a loss of $7.9 million for the three months ended March 31, 2022.

Interest expense, net, increased to $15.0 million for the three months ended March 31, 2023 compared to $5.5 million for the three months ended March 31, 2022 due to higher debt levels associated with the acquisition of MEDIFOX DAN, which was funded by our Revolving Credit Agreement.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

Increases in interest expense, net, were partially offset by gains associated with our investments in marketable and non-marketable equity securities, which were a gain of $6.4 million for the three months ended March 31, 2023 compared to a loss of $1.7 million for the three months ended March 31, 2022.

In addition, we recorded lower losses attributable to equity method investments for the three months ended March 31, 2023 of $0.2 million compared to $2.6 million for the three months ended March 31, 2022.

Total other income (loss), net for the nine months ended March 31, 2023 was a loss of $31.7 million compared to a loss of $22.5 million for the nine months ended March 31, 2022.

Interest expense, net, increased to $32.4 million for the nine months ended March 31, 2023 compared to $16.8 million for the nine months ended March 31, 2022 due to higher debt levels associated with the acquisition of MEDIFOX DAN, which was funded by our Revolving Credit Agreement.

Increases in interest expense, net, were partially offset by gains associated with our investments in marketable and non-marketable equity securities, which were a gain of $11.5 million for the nine months ended March 31, 2023 compared to a loss of $0.5 million for the nine months ended March 31, 2022.

In addition, we recorded lower losses attributable to equity method investments for the nine months ended March 31, 2023 of $5.0 million compared to $5.9 million for the nine months ended March 31, 2022.

Our effective income tax rate for the three and nine months ended March 31, 2023 was 19.7% and 19.0% as compared to 20.9% and 19.1% for the three and nine months ended March 31, 2022.

Our effective rate of 19.7% for the three months ended March 31, 2023 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 and nine months ended March 31, 2023 was primarily due to a shift in the geographic mix of earnings.

Total other income (loss), net for the three months ended September 30, 2023 was a loss of $16.8 million compared to a loss of $13.9 million for the three months ended September 30, 2022.

Interest expense, net, increased to $15.0 million for the three months ended September 30, 2023 compared to $7.1 million for the three months ended September 30, 2022 due to higher debt levels associated with the acquisition of MEDIFOX DAN, which was funded by our Revolving Credit Agreement.

In addition, we recorded higher losses attributable to equity method investments for the three months ended September 30, 2023 of $3.9 million compared to $2.0 million for the three months ended September 30, 2022.

Increases in interest expense, net, and losses attributable to equity method investments were partially offset by foreign exchange net gains for the three months ended September 30, 2023 of $2.6 million compared to foreign exchange net losses of $1.4 million for the three months ended September 30, 2022, as well as lower losses associated with our investments in marketable and non-marketable equity securities, which were a loss of $0.6 million for the three months ended September 30, 2023 compared to a loss of $3.3 million for the three months ended September 30, 2022.

Our effective income tax rate for the three months ended September 30, 2023 was 19.4% as compared to 19.6% for the three months ended September 30, 2022.

Our effective rate of 19.4% for the three months ended September 30, 2023 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, 2023 was primarily due to a shift in the geographic 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 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.

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.

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

Net Income and Earnings per Share

As a result of the factors above, our net income for the three months ended March 31, 2023 was $232.5 million compared to $179.0 million for the three months ended March 31, 2022, an increase of $53.5 million, or 30%.

Our net income for the nine months ended March 31, 2023 was $667.9 million compared to $584.4 million for the nine months ended March 31, 2022, an increase of $83.5 million, or 14%.

Our diluted earnings per share for the three months ended March 31, 2023 was $1.58 per diluted share compared to $1.22 for the three months ended March 31, 2022, an increase of 30%.

Our diluted earnings per share for the nine months ended March 31, 2023 was $4.53 per diluted share compared to $3.97 for the nine months ended March 31, 2022, an increase of 14%.

As a result of the factors above, our net income for the three months ended September 30, 2023 was $219.4 million compared to $210.5 million for the three months ended September 30, 2022, an increase of $8.9 million, or 4%.

Our diluted earnings per share for the three months ended September 30, 2023 was $1.49 per diluted share compared to $1.43 for the three months ended September 30, 2022, an increase of 4%.

Summary of Non-GAAP Financial Measures

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We believe that these non-GAAP financial measures, when reviewed in conjunction with GAAP financial measures, can provide investors better insight when evaluating our performance from core operations and can provide more consistent financial reporting across periods.

For these reasons, we use non-GAAP information internally

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

in planning, forecasting, and evaluating the results of operations in the current period and in comparing it to past periods.

For these reasons, we use non-GAAP information internally in planning, forecasting, and evaluating the results of operations in the current period and in comparing it to past periods.

These non-GAAP financial measures should be considered in addition to, and not superior to or as a substitute for, 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.

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 Astral field safety notification expenses.

The Astral field safety notification expenses relate to estimated costs associated with the replacement of a certain component in some of our Astral ventilation devices that were manufactured between 2013 to 2019.

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.

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Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

GAAP Net revenue $ 1,102,321 $ 950,294

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(8,908) (6,374)

Astral field safety notification expenses

Non-GAAP cost of sales $ 485,442 $ 403,110

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Non-GAAP gross margin 56.0 % 57.6 %

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.

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, acquisition-related expenses, and Astral field safety notification expenses.

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

Three Months Ended

March 31, Nine Months Ended

2023 2022 2023 2022

September 30,

GAAP income from operations $ 288,997 $ 275,739

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Acquisition-related expenses 483 745

Astral field safety notification expenses 7,911 —

Non-GAAP income from operations $ 318,778 $ 290,808

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 (net of tax) and reserve for disputed tax positions.

The measure “non-GAAP net income” is equal to GAAP net income once adjusted for amortization of acquired intangibles, acquisition related expenses, Astral field safety notification expenses, and associated tax effects.

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

These non-GAAP measures

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

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

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

2023 2022 2023 2022

September 30,

GAAP net income $ 219,422 $ 210,478

Amortization of acquired intangibles - cost of sales, net of tax 6,207 8,374 16,531 25,373

Amortization of acquired intangibles - operating expenses, net of tax 9,090 5,894 22,317 17,673

Acquisition related expenses, net of tax — — 7,527 —

Reserve for disputed tax positions — — — 4,111

Amortization of acquired intangibles - cost of sales 8,908 6,374

Amortization of acquired intangibles - operating expenses 12,479 7,950

Acquisition related expenses 483 745

Astral field safety notification expenses 7,911 —

Income tax effect on non-GAAP adjustments (8,019) (3,458)

Non-GAAP net income $ 241,184 $ 222,089

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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, 2023 and June 30, 2022, we had cash and cash equivalents of $227.9 million and $273.7 million, respectively.

Our cash and cash equivalents held within the United States at March 31, 2023 and June 30, 2022 were $45.2 million and $70.0 million, respectively.

Our remaining cash and cash equivalent balances at March 31, 2023 and June 30, 2022, were $182.7 million and $203.7 million, respectively.

As of September 30, 2023 and June 30, 2023, we had cash and cash equivalents of $209.1 million and $227.9 million, respectively.

Our cash and cash equivalents held within the United States at September 30, 2023 and June 30, 2023 were

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

$41.0 million and $49.3 million, respectively.

Our remaining cash and cash equivalent balances at September 30, 2023 and June 30, 2023, were $168.1 million and $178.6 million, respectively.

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

As of March 31, 2023, we had $605.0 million available for draw down under the revolver credit facility and a combined total of $832.9 million in cash and available liquidity under the revolving credit facility.

As of September 30, 2023, we had $825.0 million available for draw down under the revolver credit facility and a combined total of $1,034.1 million in cash and available liquidity under the revolving credit facility.

As a result of the U.S.

Tax Act, we treated all non-U.S.

historical earnings as taxable during the year ended June 30, 2018, which resulted in additional tax expense of $126.9 million which was payable over the proceeding eight years.

historical earnings as taxable, which resulted in additional tax expense of $126.9 million which was payable over the proceeding eight years.

Therefore, future repatriation of cash held by our non-U.S.

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

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

additional amount equal to the greater of $1,000.0 million or 1.00 times the EBITDA for the trailing twelve-month measurement period.

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 or 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”).

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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 March 31, 2023, we had $605.0 million available for draw down under the revolving credit facility.

As of September 30, 2023, we had $825.0 million 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, 2023, there was a total of $1,590.0 million outstanding under the Revolving Credit Agreement, Term Credit Agreement and Senior Notes.

On September 30, 2023, there was a total of $1,365.0 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

Three Months Ended

September 30,

Net cash provided by operating activities $ 286,283 $ 44,662

Net cash used in investing activities (148,980) (58,806)

Net cash (used in) / provided by financing activities 611,465 (185,862)

Net cash used in financing activities (151,132) (41,880)

Effect of exchange rate changes on cash (4,962) (10,523)

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Operating Activities

Cash provided by operating activities was $455.9 million for the nine months ended March 31, 2023, compared to cash provided of $271.7 million for the nine months ended March 31, 2022.

The $184.2 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 nine months ended March 31, 2022, partially offset by increased purchases of inventory to secure adequate components for increasing sales demand and other net changes in working capital balances during the nine months ended March 31, 2023 compared to the nine months ended March 31, 2022.

Cash provided by operating activities was $286.3 million for the three months ended September 30, 2023, compared to cash provided of $44.7 million for the three months ended September 30, 2022.

The $241.6 million increase in cash flow from operations was primarily due to lower cash outflows on inventory purchases and greater cash inflows from customer payments during the three months ended September 30, 2023 compared to the three months ended September 30, 2022.

Investing Activities

Cash used in investing activities was $1,113.3 million for the nine months ended March 31, 2023, compared to cash used of $174.7 million for the nine months ended March 31, 2022.

The $938.6 million decrease in cash flow from investing activities was primarily due to cash used to acquire MEDIFOX DAN.

Financing Activities

Cash provided by financing activities was $611.5 million for the nine months ended March 31, 2023, compared to cash used of $185.9 million for the nine months ended March 31, 2022.

The $797.3 million increase in cash flow from financing activities was primarily due to borrowing activity under our Revolving Credit Agreement in order to finance our acquisition of MEDIFOX DAN.

During the three months ended March 31, 2023, we paid cash dividends of $0.44 per common share totaling $64.6 million.

On April 27, 2023, our board of directors declared a cash dividend of $0.44 per common share, to be paid on June 15, 2023, to shareholders of record as of the close of business on May 11, 2023.

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

Cash used in investing activities was $149.0 million for the three months ended September 30, 2023, compared to cash used of $58.8 million for the three months ended September 30, 2022.

The $90.2 million increase in cash flow used in

PART I – FINANCIAL INFORMATION Item 2

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

Since the inception of our share repurchase programs and through March 31, 2023, 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 March 31, 2023 and 2022.

investing activities was primarily due to cash used to acquire Somnow are, a leader in digital sleep and respiratory care diagnostics software for sleep labs and physicians.

Financing Activities

Cash used in financing activities was $151.1 million for the three months ended September 30, 2023, compared to cash used of $41.9 million for the three months ended September 30, 2022.

The $109.3 million increase in cash flow used in financing activities was primarily due to borrowing activity under our Revolving Credit Agreement in order to finance our acquisition of Somnoware.

During the three months ended September 30, 2023, we paid cash dividends of $0.48 per common share totaling $70.6 million.

On October 26, 2023, our board of directors declared a cash dividend of $0.48 per common share, to be paid on December 14, 2023, to shareholders of record as of the close of business on November 9, 2023.

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

On February 21, 2014, our board of directors approved our current share repurchase program, authorizing us to acquire up to an aggregate of 20.0 million shares of our common stock.

Since approval of the share repurchase program in 2014 through September 30, 2023, we have repurchased a total of 7.1 million shares under this repurchase program for an aggregate of $413 million.

We did not repurchase any shares during the three months ended September 30, 2023 and 2022.

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, 2023, 12.9 million additional shares can be repurchased under the approved share repurchase program.

We are authorized to continue repurchasing shares through June 30, 2024, provided that the program may be accelerated, suspended, delayed or discontinued at any time at the discretion of our board of directors.

At September 30, 2023, 12.9 million additional shares remain available for us to repurchase under the approved share repurchase program.

Critical Accounting Principles and Estimates

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For a full discussion of our critical accounting policies, see our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

In addition to the critical accounting policies and estimates previously disclosed in our Form 10-K for the fiscal year ended June 30, 2022, due to recent transactions and events, we also consider the following to be part of our critical accounting policies and estimates due to the high degree of judgment and complexity in its application:

Business Combinations.

The MEDIFOX DAN acquisition was accounted for using the acquisition method of accounting, or acquisition accounting, in accordance with ASC Topic 805, Business Combinations.

The acquisition method of accounting involved the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed.

This allocation process involves the use of estimates and assumptions made in connection with determining the fair value of assets acquired and liabilities assumed including cash flows expected to be derived from the use of the asset, the timing of such cash flows, the remaining useful life of assets and applicable discount rates.

Acquisition accounting allows up to one year to obtain the information necessary to finalize the fair value of all assets acquired and liabilities assumed on the November 21, 2022 acquisition date.

As of April 27, 2023, we have recorded a preliminary allocation of consideration to net tangible and intangible assets acquired, which is subject to revision as we obtain additional information necessary to complete the fair value studies and acquisition accounting.

In the event that actual results vary from the estimates or assumptions used in the valuation or allocation process, we may be required to record an impairment charge or an increase in depreciation or amortization in future periods, or both.

Refer to Note 12, Business Combinations, to the accompanying condensed consolidated financial statements for additional information about accounting for the MEDIFOX DAN acquisition.

Recently Issued Accounting Pronouncements

Contractual Obligations and Commitments

Other than for purchase obligations, debt, interest on debt, and MEDIFOX DAN acquisition consideration, which was paid in full during the nine months ended March 31, 2023, 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

PART I – FINANCIAL INFORMATION Item 2

AND SUBSIDIARIES

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

Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022.

Details of our purchase obligations, debt and associated interest as of March 31, 2023 were as follows:

Payments Due by March 31,

Total 2024 2025 2026 2027 2028 Thereafter

Purchase obligations $ 1,430,111 $ 1,084,436 $ 339,479 $ 3,051 $ 1,321 $ — $ 1,824

Debt 1,592,328 12,328 10,000 10,000 260,000 1,050,000 250,000

Interest on debt 345,930 79,898 79,289 78,702 72,715 23,826 11,500

Total $ 3,368,369 $ 1,176,662 $ 428,768 $ 91,753 $ 334,036 $ 1,073,826 $ 263,324

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, 2023.

Off-Balance Sheet Arrangements

As of March 31, 2023, 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, 2023, 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 initial fair value of components excluded from the assessment of hedge effectiveness will be recognized in interest (expense) income, net.

The notional value of outstanding foreign cross-currency swaps was $1,042.2 million at March 31, 2023.

The notional value of outstanding foreign cross-currency swaps was $1,014.8 million and $1,046.6 million at September 30, 2023 and June 30, 2023, respectively.

These contracts mature at various dates prior to December 31, 2029.

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We do not designate these foreign currency contracts as hedges.

All movements in the fair value of the foreign currency instruments are recorded within other, net in our condensed consolidated statements of income.

The notional value of the outstanding non-designated hedges was $1,080.9 million and $602.0 million at March 31, 2023 and June 30, 2022, respectively.

These contracts mature at various dates prior to December 15, 2024.

All movements in the fair value of the foreign currency instruments are recorded within other, net in our condensed consolidated statements of operations.

The notional value of the outstanding non-designated hedges was $1,363.3 million and $954.7 million at September 30, 2023 and June 30, 2023, respectively.

These contracts mature at various dates prior to March 15, 2025.

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, 2023 (in thousands):

dollars) on our foreign currency denominated operating assets and liabilities and after considering our foreign currency hedging activities as of September 30, 2023 (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, forward contracts and cross-currency swaps held at March 31, 2023.

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.

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Fair Value Assets / (Liabilities)

Total March 31,

Total September 30,

2023 June 30,

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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, 2023, we held cash and cash equivalents of $227.9 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, 2023, there was $1,090.0 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 March 31, 2023, would not have had a material impact on pretax income.

At September 30, 2023, we held cash and cash equivalents of $209.1 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, 2023, there was $865.0 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, 2023, would not have had a material impact on pretax income.

We have no interest rate hedging agreements.

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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