What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-05-26 compared with 2022-05-31 · 234 added, 262 removed, 1537 unchanged (24% of the section changed)

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Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Cash Flows

Consolidated Statements of Shareholders’ Equity

Consolidated Statements of Shareholder's Equity

Notes to Consolidated Financial Statements

Financial Statement Schedule:

Schedule II – Valuation and Qualifying Accounts

Schedule II - Valuation of Qualifying Accounts

Report of Independent Registered Public Accounting Firm

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of STERIS plc and subsidiaries (the Company) as of March 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended March 31, 2022, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of STERIS plc and subsidiaries (the Company) as of March 31, 2023 and 2022, the related consolidated statements of income, comprehensive (loss) income, shareholders' equity and cash flows for each of the three years in the period ended March 31, 2023, and the related notes and the financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2023, in conformity with U.S.

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We also evaluated the adequacy of the Company’s disclosures included in Note 8 to the consolidated financial statements in relation to these matters.

Description of the Matter Valuation of the Dental and Healthcare customer relationships intangible assets related to the Cantel acquisition

As discussed in Note 2 to the consolidated financial statements, on June 2, 2021, the Company acquired all of the outstanding units and equity of Cantel Medical Corp.

(“Cantel”) for cash and ordinary shares equaling approximately $3.6 billion.

The acquisition of Cantel has been accounted for using the acquisition method of accounting which requires, among other things, the assets acquired, liabilities assumed and noncontrolling interests be recognized at their respective fair values as of the acquisition date.

The Company preliminarily allocated $2.3 billion of the purchase price to the fair value of the acquired Dental and Healthcare customer relationships intangible assets.

The purchase price allocation for Cantel is preliminary.

The finalization of the purchase accounting assessment may result in changes in the valuation of assets acquired and liabilities assumed.

Auditing management’s preliminary valuation of the Dental and Healthcare customer relationships intangible assets in the Cantel acquisition was complex and judgmental due to the significant estimation uncertainty in the Company’s determination of the preliminary fair value of the customer relationships intangible assets under an income approach using discounted cash flows.

The significant estimation uncertainty was primarily due to the sensitivity of the fair value to underlying assumptions including forecasted revenue growth rates, forecasted profit margins, and customer attrition rate.

These significant assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s accounting process for the Dental and Healthcare customer relationships intangible assets, including controls over management’s review of the significant assumptions in the determination of fair value under the income approach.

To test the estimated fair value of the acquired Dental and Healthcare customer relationships intangible assets, our audit procedures included, among others, evaluating the Company's selection of the valuation method, testing significant assumptions used by the Company and testing the completeness and accuracy of the underlying data.

For example, we performed analyses to evaluate the sensitivity of changes in assumptions to the fair value of the customer relationships intangible assets and compared the significant assumptions to current industry, market, and economic trends, and historical results of the acquired business.

In addition, we involved our valuation specialists to assist with our evaluation of the methodology and significant assumptions used by the Company to determine the preliminary fair value estimate of the Dental and Healthcare customer relationship intangible assets, including the forecasted revenue growth rates, forecasted profit margins, and customer attrition rates.

Description of the Matter Goodwill impairment assessment of the Dental Reporting Unit

As discussed in Notes 1 and 3 of the consolidated financial statements, the Company’s goodwill balance was $3,879.2 million as of March 31, 2023.

Management tests goodwill for impairment at least annually in the third quarter at the reporting unit level, or when evidence of potential impairment exists.

This requires management to estimate the fair value of the reporting units with goodwill allocated to them.

As a result of the deteriorating macroeconomic conditions including rising interest rates and inflationary pressures on material and labor costs, as well as uncertainty regarding the impact such economic strains will have on patient and Customer behavior in the short-term, management performed an interim discounted cash flow analysis for the Dental reporting unit as of September 30, 2022.

Consequently, management determined that the estimated fair value of the Company’s Dental reporting no longer exceeded it’s carrying value.

Management recognized a goodwill impairment charge of $490.6 million and the Company has no remaining goodwill associated to the Dental reporting unit.

Auditing management’s quantitative impairment test for the Dental reporting unit goodwill was complex and judgmental due to the significant estimation uncertainty in the Company’s determination of the fair value of the reporting unit using the income approach.

Elements of these significant assumptions are forward looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process.

For example, we tested controls over the estimation of the fair value of the reporting unit, including the Company’s controls over the valuation model, the mathematical accuracy of the valuation model and development of underlying assumptions used to estimate fair value of the reporting unit.

To test the estimated fair value of the reporting unit, our audit procedures included, among others, assessing the valuation methodology and the underlying data used by the Company in its analysis, including testing the significant assumptions discussed above.

We compared the significant assumptions used by management to current industry and economic trends, changes to the Company’s business model and other relevant factors.

We assessed the historical accuracy of management’s assumptions of future expected net cash flows and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.

We involved valuation specialists to assist in our evaluation of the valuation methodology and the significant assumptions, including the discount rate used in determining the fair value of the reporting unit.

We have served as the Company’s auditor since 1989.

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Selling, general, and administrative 1,298,876 1,502,752 731,320

Goodwill impairment loss 490,565 — —

Research and development 101,581 87,944 66,326

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Fair value adjustment related to convertible debt, premium liability — 27,806 —

Interest income and miscellaneous expense ( 6,284 ) ( 6,345 ) ( 1,987 )

Interest income and miscellaneous expense (income) 2,848 ( 6,284 ) ( 6,345 )

Total non-operating expenses, net 110,837 111,115 30,835

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Net income 105,813 242,870 396,870

Net (loss) income attributable to noncontrolling interests ( 1,018 ) ( 530 ) 200

Net loss attributable to noncontrolling interests ( 1,217 ) ( 1,018 ) ( 530 )

Net income attributable to shareholders $ 107,030 $ 243,888 $ 397,400

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STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

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Net income $ 105,813 $ 242,870 $ 396,870

Net (loss) income attributable to noncontrolling interests ( 1,018 ) ( 530 ) 200

Net loss attributable to noncontrolling interests ( 1,217 ) ( 1,018 ) ( 530 )

Net income attributable to shareholders $ 107,030 $ 243,888 $ 397,400

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Total other comprehensive (loss) income attributable to shareholders ( 110,902 ) ( 148,565 ) 174,220

Comprehensive income attributable to shareholders $ 95,323 $ 571,620 $ 331,974

Comprehensive (loss) income attributable to shareholders $ ( 3,872 ) $ 95,323 $ 571,620

See notes to consolidated financial statements.

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and intangibles, net 22,193 15,117 ( 1,982 )

Loss (gain) on sale of businesses ( 874 ) 2,030 1,770

(Gain) loss on sale of businesses ( 67 ) ( 874 ) 2,030

Fair value adjustment related to convertible debt, premium liability — 27,806 —

Amortization of inventory fair value adjustments 7,363 66,663 —

Goodwill impairment loss 490,565 — —

Other items ( 24,832 ) ( 21,639 ) 24,273

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Payments on convertible debt — ( 371,361 ) —

Payments under credit facilities, net ( 190,174 ) ( 30,461 ) ( 26,500 )

Proceeds (payments) under credit facilities, net 241,657 ( 190,174 ) ( 30,461 )

Deferred financing fees and debt issuance costs — ( 17,472 ) ( 12,846 )

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Stock option and other equity transactions, net 1,828 10,071 26,726

Net cash provided by (used in) financing activities 115,830 345,620 ( 163,146 )

Net cash (used in) provided by financing activities ( 498,718 ) 115,830 345,620

Effect of exchange rate changes on cash and cash equivalents ( 14,862 ) ( 6,293 ) 19,849

Increase (decrease) in cash and cash equivalents 127,789 ( 99,050 ) 98,948

(Decrease) increase in cash and cash equivalents ( 139,963 ) 127,789 ( 99,050 )

Cash and cash equivalents at beginning of period 348,320 220,531 319,581

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STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

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Comprehensive income:

Net income — — 407,659 — 200 407,859

Other comprehensive loss — — — ( 75,685 ) — ( 75,685 )

Net income (loss) — — 397,400 — ( 530 ) 396,870

Other comprehensive income — — — 174,220 — 174,220

Repurchases of ordinary shares ( 127 ) ( 31,830 ) 17,184 — — ( 14,646 )

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Net income (loss) — — 243,888 — ( 1,018 ) 242,870

Other comprehensive income — — — 174,220 — 174,220

Other comprehensive (loss) — — — ( 148,565 ) — ( 148,565 )

Repurchases of ordinary shares ( 353 ) ( 34,894 ) ( 20,883 ) — — ( 55,777 )

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— — ( 163,169 ) — — ( 163,169 )

Issuance of shares for acquisition of Cantel Medical LLC ("Cantel") 14,297 2,689,317 — — — 2,689,317

Consideration related to equity component of Cantel convertible debt — 175,555 — — — 175,555

Consideration related to Cantel equity compensation programs — 18,173 — — — 18,173

Reclassification to Cantel convertible debt, premium liability — ( 175,555 ) — — — ( 175,555 )

Distributions to noncontrolling interest holders — — — — ( 997 ) ( 997 )

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— — ( 183,498 ) — — ( 183,498 )

Issuance of shares for acquisition of Cantel Medical LLC ("Cantel") 14,297 2,689,317 — — — 2,689,317

Consideration related to equity component of Cantel convertible debt — 175,555 — — — 175,555

Consideration related to Cantel equity compensation programs — 18,173 — — — 18,173

Reclassification to Cantel convertible debt, premium liability — ( 175,555 ) — — — ( 175,555 )

Distributions to noncontrolling interest holders — — — — ( 794 ) ( 794 )

Contributions from noncontrolling interest holders — — — — 3,672 3,672

Other changes in noncontrolling interest — — — — ( 296 ) ( 296 )

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WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare, life sciences and dental products and services.

We offer our Customers a unique mix of innovative consumable products, such as detergents, gastrointestinal (“GI”) endoscopy accessories, barrier product solutions, and other products and services, including:

We offer our Customers a unique mix of innovative consumable products, such as detergents, endoscopy accessories, barrier products, and other products and services, including:

equipment installation and maintenance, microbial reduction of medical devices, dental instruments and tools, instrument and scope repair, laboratory testing services, outsourced reprocessing, and capital equipment products, such as sterilizers and surgical tables, automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.

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Healthcare, Applied Sterilization Technologies, Life Sciences, and Dental.

We describe our business segments in Note 11 to our consolidated financial statements titled, "Business Segment Information."

We describe our business segments in Note 11 titled, "Business Segment Information."

Our fiscal year ends on March 31.

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Therefore, the accompanying consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries.

We eliminate inter-company accounts and transactions when we consolidate these accounts.

We eliminate intercompany accounts and transactions when we consolidate these accounts.

Investments in equity of unconsolidated affiliates, over which the Company has significant influence, but not control, over the financial and operating polices, are accounted for primarily using the equity method.

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Cash equivalents are all highly liquid investments with a maturity of three months or less when purchased.

We invest our excess cash in short-term instruments including money market funds and time deposits with major banks and financial institutions.

We invest our excess cash in short-term instruments including money market funds, money market deposit accounts, bank savings accounts, and time deposits with major banks and financial institutions.

We select investments in accordance with the criteria established in our investment policy.

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Revenue Recognition and Associated Liabilities.

We adopted Accounting Standards Update ("ASU") 2014-09 “Revenue from Contracts with Customers” and the subsequently issued amendments on April 1, 2018.

At the time of adoption, certain of our capital equipment contracts were comprised of a single integrated performance obligation, which resulted in the deferral of the corresponding capital equipment revenue and cost of revenues until installation was complete.

Since the adoption of the standard, there have been changes made in our selling philosophy, product architecture, and manufacturing processes with respect to this product line, that impact whether the promises to transfer the individual goods or services to the Customer are separately identifiable from other promises in the contract.

After review of these changes, we have concluded that these contracts consist of multiple performance obligations that are capable of being distinct and meet the criteria for revenue to be recognized when the Customer obtains control of the asset, which is upon delivery of each performance obligation.

Revenues and costs of revenues related to these contracts totalin g $ 14,609 and $ 7,560 , r espectively, that had previously been deferred were recognized in our fiscal 2021 first quarter.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Revenue is recognized when obligations under the terms of the contract are satisfied and control of the promised products or services have transferred to the Customer.

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Revenues are reported net of sales and value-added taxes collected from Customers.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

We have individual Customer contracts that offer discounted pricing.

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Within our Healthcare and Life Sciences segments, service revenues include revenue generated from parts and labor associated with the maintenance, repair and installation of capital equipment.

These contracts are primarily based on a Customer’s purchase order and may include a Distributor, Dealer, or Group Purchasing Organization ("GPO") agreement.

These contracts are primarily based on a Customer’s purchase order and may include a Distributor, Dealer, or GPO agreement.

For maintenance, repair and installation of capital equipment, revenue is recognized upon completion of the service.

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We also offer preventive maintenance and separately priced extended warranty agreements to our Customers, which require us to maintain and repair our products over the duration of the contract.

Generally, these contract terms are cancellable

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

without penalty and range from one to five years.

Generally, these contract terms are cancellable without penalty and range from one to five years.

Amounts received under these Customer contracts are initially recorded as a service liability and are recognized as service revenue ratably over the contract term using a time-based input measure.

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Sales contracts for contract sterilization and laboratory services are primarily based on a Customer’s purchase order and associated Customer agreement and revenues are generally recognized upon completion of the service.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Contract Liabilities

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Repairs and maintenance are charged to expense as they are incurred.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Land is not depreciated and construction in progress is not depreciated until placed in service.

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Depletion of radioisotope is computed using the annual decay factor of the material, which is similar to the sum-of-the-years-digits method.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

We generally depreciate or deplete property, plant, and equipment over the useful lives presented in the following table:

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Investments in marketable securities are stated at fair value and are included in Other assets on the Consolidated Balance Sheets.

Changes in the fair value of these investments are recorded in the "Interest income and miscellaneous expense line" of the Consolidated Statement of Income.

Changes in the fair value of these investments are recorded in the Interest income and miscellaneous expense (income) line of the Consolidated Statements of Income.

Asset Impairment Losses.

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estimating the present value of a liability and offsetting asset, the subsequent accretion of that liability and depletion of the asset, and a periodic review of the ARO liability estimates and discount rates used in the analysis.

We provide additional information about our asset retirement obligations in Note 5 to our consolidated financial statements titled, “Property, Plant and Equipment.”

We provide additional information about our asset retirement obligations in Note 5 titled, “Property, Plant, and Equipment.”

Acquisitions of Business.

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Costs related to the acquisition are expensed as incurred.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

We perform our annual impairment test for goodwill in the third quarter of each year.

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Assumptions used in our impairment evaluations, such as forecasted growth rates and cost of capital, are consistent with internal projections, strategic plans, and operating plans.

We believe such assumptions and estimates are also comparable to those that would be used by other market place participants.

We believe such assumptions and estimates are also comparable to those that would be used by other marketplace participants.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Self-Insurance Liabilities.

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We measure plan assets and obligations as of the balance sheet date.

We provide additional information about our pension and other post-retirement benefits plans in Note 9 to our consolidated financial statements titled, “Benefit Plans.”

We provide additional information about our pension and other post-retirement benefits plans in Note 9 titled, “Benefit Plans.”

Fair Value of Financial Instruments.

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Translation adjustments for subsidiaries whose local currency is their functional currency are recorded as a component of accumulated other comprehensive income (loss) within equity.

Transaction gains and losses resulting from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized as incurred in the accompanying Consolidated Statement of Income, except for certain inter-company balances designated as long-term in nature.

Transaction gains and losses resulting from fluctuations in currency exchange rates on transactions denominated in currencies other than the functional currency are recognized as incurred in the accompanying Consolidated Statements of Income, except for certain intercompany balances designated as long-term in nature.

Forward and Swap Contracts.

We enter into foreign currency forward contracts to hedge assets and liabilities denominated in foreign currencies, including inter-company transactions.We may also enter into commodity swap contracts to hedge price changes in nickel that impact raw materials included in our cost of revenues.

We enter into foreign currency forward contracts to hedge assets and liabilities denominated in foreign currencies, including intercompany transactions.We may also enter into commodity swap contracts to hedge price changes in nickel that impact raw materials included in our Cost of revenues.

We may also hold forward foreign exchange contracts to hedge a portion of our expected non-U.S.

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Shipping and handling costs charged to Customers are recorded as revenues in the period the product revenues are recognized.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Advertising Expenses.

Costs incurred for communicating, advertising and promoting our products are generally expensed when incurred as a component of Selling, General and Administrative Expense.

Costs incurred for communicating, advertising and promoting our products are generally expensed when incurred as a component of Selling, general, and administrative expenses.

We incurred $ 21,668 , $ 15,599 , and $ 6,795 of advertising costs during the years ended March 31, 2023, 2022, and 2021, respectively.

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If a Customer reimburses us for research and development costs, the costs are charged to the related contracts as costs of revenues.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Income Taxes.

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Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold are derecognized in the first subsequent financial reporting period in which the threshold is no longer met.

We describe income taxes further in Note 8 to our consolidated financial statements titled, “Income Taxes.”

We describe income taxes further in Note 8 titled, “Income Taxes.”

Share-Based Compensation.

We describe share-based compensation in Note 14 to our consolidated financial statements titled, “Share-Based Compensation.” We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

We describe share-based compensation in Note 14 titled, “Share-Based Compensation.” We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

We record liability awards at fair value each reporting period and the change in fair value is reflected as share-based compensation expense in our Consolidated Statements of Income.

The expense is classified as cost of goods sold, selling, general and administrative expenses or research and development expenses in a manner consistent with the employee’s compensation and benefits.

These costs are recognized in the Consolidated Statement of Income over the period during which an employee is required to provide service in exchange for the award.

The expense is classified as Cost of revenues, Selling, general, and administrative expenses or Research and development expenses in a manner consistent with the employee’s compensation and benefits.

These costs are recognized in the Consolidated Statements of Income over the period during which an employee is required to provide service in exchange for the award.

Restructuring.

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Asset impairment and accelerated depreciation expenses primarily relate to inventory write-downs for rationalized products and adjustments in the carrying value of the related facilities and machinery and equipment to their estimated fair value.

In addition, the remaining useful lives of other property, plant, and equipment associated with the related operations are reevaluated based on the respective restructuring plan, which may result in the acceleration of depreciation and amortization of certain assets.

In addition, the remaining useful lives of other property, plant, and equipment associated with the related operations are re-evaluated based on the respective restructuring plan, which may result in the acceleration of depreciation and amortization of certain assets.

STERIS PLC AND SUBSIDIARIES

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Standards that have been adopted in fiscal 2023.

ASU 2019-12 "Income Taxes (Topic 740)" December 2019 The standard provides final guidance that simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

The guidance simplifies accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill.

ASU 2021-08 "Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers." October 2021 The standard provides guidance to improve the accounting for acquired revenue contracts with Customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer.

First Quarter Fiscal 2023 We adopted this standard effective April 1, 2022 with no material impact to our consolidated financial statements.

ASU 2020-06 "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)" August 2020 This standard simplifies the accounting for convertible instruments and its application of the derivatives scope exception for contracts in an entity’s own equity.

The standard reduces the number of accounting models that require separating embedded conversion features from convertible instruments.

As a result, only conversion features accounted for under the substantial premium model and those that require bifurcation will be accounted for separately.

For contracts in an entity’s own equity, the new standard eliminates some of the current requirements for equity classification.

The standard also addresses how convertible instruments are accounted for in the diluted earnings per share calculation and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity.

First Quarter Fiscal 2022 We adopted this standard effective April 1, 2021 and applied it to our accounting for the convertible debt assumed in the acquisition of Cantel Medical LLC ("Cantel").

Standards that have not yet been adopted.

ASU 2021-08 "Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

October 2021 The standard provides guidance to improve the accounting for acquired revenue contracts with Customers in a business combination by addressing diversity in practice and inconsistency related to the recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer.

The standard is effective for annual periods beginning after December 15, 2022 including interim periods within that year and early adoption is permitted.

ASU 2022-04 "Liabilities - Supplier Finance Programs (Subtopic 405-50) Disclosure of Supplier Finance Program Obligations September 2022 The standard provides guidance to enhance the transparency of disclosures for entities that utilize supplier finance programs to include information about the key terms of the programs and present a rollforward of any obligations under the program where those obligations are presented in the balance sheet.

NA We are in the process of evaluating the impact that the standard will have on our consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

BUSINESS ACQUISITIONS AND DIVESTITURES

Fiscal 2023Acquisitions

During fiscal 2023, we completed several tuck-in acquisitions which continued to expand our product and service offerings in the Applied Sterilization Technologies and Healthcare segments.

Total aggregate consideration was approximately $ 49,842 , including potential contingent consideration of $ 7,269 .

Purchase price allocations will be finalized within the measurement period not to exceed one year from closing.

Fiscal 2022 Acquisition of Cantel Medical LLC

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We believe that the acquisition will strengthen STERIS’s leadership in infection prevention by bringing together two complementary businesse s able to offer a broader set of Customers a more diversified selection of infection prevention, endoscopy and sterilization products and services.

Cantel’s Dental business extends our business into a new Customer segment where there is an increasing focus on infection prevention protocols and processes.

Cantel’s Dental business extended our business into a new Customer segment where there is an increasing focus on infection prevention protocols and processes.

This business is reported as the Dental segment.

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Additionally, the acquisition is expected to result in cost savings from optimizing global back-office infrastructure, leveraging best-demonstrated practices across locations and eliminating redundant public company costs.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Total Purchase Consideration

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The process for estimating the fair values of identifiable intangible assets and certain tangible assets and assumed liabilities requires the use of judgment in determining the appropriate assumptions and estimates.

The purchase price has been allocated based on the latest draft valuations and remains preliminary.

As we finalize the fair value of assets acquired and liabilities assumed, additional purchase price adjustments and associated deferred taxes will be recorded during the remaining measurement period.

Fair value estimates are based on a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions.

The judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our results of operations.

The finalization of the purchase accounting assessment in the first quarter of fiscal 2023 may result in additional changes in the valuation of assets acquired and liabilities assumed and that may impact our results of operations and financial position.

Goodwill has been allocated to the Healthcare, Dental and Life Sciences segments.

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Goodwill recognized as a result of the acquisition is not deductible for tax purposes.

The table below presents the preliminary estimated fair values of assets acquired and liabilities assumed on the acquisition date.

These preliminary estimates will be revised during the measurement period as third-party valuations are finalized, additional information becomes available and as additional analyses are performed, and these differences could have a material impact on our results of operations and financial position.

During the second quarter of fiscal 2023, in connection with the preparation of our quarterly consolidated financial statements, we identified and recognized a goodwill impairment loss of $ 490,565 related to goodwill that arose with respect to assets acquired in the Cantel acquisition.

For more information on the impairment loss, see Note 3 to our consolidated financial statements titled, "Goodwill and Intangible Assets."

STERIS PLC AND SUBSIDIARIES

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(dollars in thousands, except per share amounts and as noted)

The table below presents the allocation of the purchase price to the net assets acquired based on the fair values at the acquisition date.

March 31, 2022

(As Previously Reported) Adjustments Final

Cash $ 169,073 $ — $ 169,073

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Net assets acquired $ 3,599,471 $ — $ 3,599,471

(1) Purchase price allocation is preliminary as of March 31, 2022, as valuations have not been finalized.

Cantel Other Intangible Assets

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Actual and Pro Forma Impact

Our consolidated financial statements include Cantel's results of operations from the date of acquisition on June 2, 2021 through March 31, 2022.

Our consolidated financial statements for fiscal 2022 include Cantel's results of operations from the date of acquisition on June 2, 2021 through March 31, 2022.

Net sales and operating income attributable to Cantel from the date of acquisition and included in our consolidated financial statements for the fiscal year ended March 31, 2022 total $ 974,408 and $ 41,757 , respectively.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

The following unaudited pro forma information gives effect to our acquisition of Cantel as if the acquisition had occurred on April 1, 2020 and Cantel had been included in our consolidated results of operations for the fiscal years ended March 31, 2022 and 2021.

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Net income from continuing operations 449,382 5,849

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

The historical consolidated financial information of STERIS and Cantel has been adjusted in the pro forma information to give effect to pro forma events that are directly attributable to the transaction and factually supportable.

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Total aggregate consideration for these transactions was approximately $ 20,909 , net of cash acquired and including deferred consideration of approximately $ 1,194 .

Fiscal 2020 Acquisitions

During fiscal 2020, we completed several tuck-in acquisitions which continued to expand our product and service offerings in the Healthcare, Applied Sterilization Technologies and Life Sciences segments.

The aggregate purchase price associated with these transactions was approximately $ 128,860 , net of cash acquired and including contingent and deferred consideration.

STERIS PLC AND SUBSIDIARIES

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Fiscal Year 2022 Fiscal Year 2021 (2)

(dollars in thousands) Other Acquisitions (Excluding Cantel) Key Surgical Other Acquisitions All Acquisitions

(dollars in thousands) All Acquisitions Other Acquisitions (Excluding Cantel) Key Surgical Other Acquisitions

Cash $ — $ — $ 12,615 $ 9,159

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Net assets $ 49,842 $ 3,146 $ 865,818 $ 108,111

(1) Purchase price allocation is still preliminary as of March 31, 2022, as valuations have not been finalized, pending further analyses of the significant drivers of fair value.

(2) Includes $ 315,575 , related to the fair value of the Customer relationships intangible asset, obtained in the acquisition of Key Surgical.

( 1) Purchase price allocation is still preliminary as of March 31, 2023 for certain acquisitions, as valuations have not been finalized, pending further analyses of the significant drivers of fair value.

(2) The Fiscal 2021 amount includes $ 315,575 , related to the fair value of the Customer relationships intangible asset obtained in the acquisition of Key Surgical.

The estimation of fair value was determined under an income approach using discounted cash flows.

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Goodwill is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce.

The deductible portion of goodwill for tax purposes recognized as a result of the fiscal 2022 and fiscal 2021 acqu isitions was $ 427,035 and $ 197,344 , respectively.

Acquisition related transaction and in tegration costs totaled $ 205,788 , $ 35,634 , and $ 8,225 for the fiscal years ended March 31, 2022, 2021, and 2020, respectively.

The deductible portion of goodwill for tax purposes recognized as a result of the fiscal 2023, 2022 and fiscal 2021 acqu isitions wa s $ 4,863 , $ 427,035 and $ 197,344 , respectively.

Acquisition related transaction and integration costs totaled $ 24,196 , $ 205,788 , and $ 35,634 for the fiscal years ended March 31, 2023 , 2022, and 2021, respectively.

Fiscal 2022 acquisition and integration expenses were primarily related to the acquisition of Cantel.

Fiscal 2021 acquisition and integration expenses were primarily related to the acquisitions of Key Surgical LLC and Cantel.

These costs are included in Selling, general, and administrative expenses in the Consolidated Statements of Income.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Divestitures.

In April 2022, we entered into an Asset Purchase Agreement to sell certain assets of our Animal Health business to Veterinary Orthopedic Implants, LLC.

We recorded net proceeds of $ 5,228 and recognized a pre-tax loss on the sale of $ 4,852 in the Selling, general, and administrative expenses line of the Consolidated Statements of Income.

The business generated annual revenues of approximately $ 12,000 .

In December 2021, we entered into an Asset Purchase Agreement to sell our Renal Care business to Evoqua Water Technologies Corp., for cash consideration of approximately $ 196,000 , subject to certain potential adjustments, including a customary working capital adjustment and contingent consideration of $ 12,300 .

We recognized a gain on the sale of $ 950 .

We recognized a pre-tax gain on the sale of $ 4,919 .

The transaction closed on January 3, 2022.

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The proceeds from the sale received at closing were used to repay outstanding debt.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

During the third quarter of fiscal 2023, we received an additional $ 1,396 in working capital settlements related to the sale of this business.

During fiscal 2021, we sold an Applied Sterilization Technologies laboratory that was located in the Netherlands.

We recorded proceeds of $ 518 , net of cash divested, and recognized a pre-tax loss on the sale of $ 2,024 in the selling, general and administrative expense line of the Consolidated Statements of Income.

The business generated annual revenues of approximately $ 6,000 .

During fiscal 2020, we sold the operations of our Healthcare services business that were located in China.

We recorded proceeds of $ 439 , net of cash divested, and recognized a pre-tax loss on the sale of $ 2,365 in the selling, general and administrative expense line of the Consolidated Statements of Income.

We recorded proceeds of $ 518 , net of cash divested, and recognized a pre-tax loss on the sale of $ 2,024 in the Selling, general, and administrative expenses line of the Consolidated Statements of Income.

The business generated annual revenues of approximately $ 6,000 .

Loans Receivable

In connection with an equity investment of $ 4,955 , we agreed to provide a credit facility of up to approximately $ 11,606 for a term of up to seven years ending in 2025.

The loan carried an interest rate of 4 % compounded daily and interest was payable annually.

Outstanding borrowings under the agreement totaled $ 7,084 at March 31, 2020.

During fiscal 2021, we purchased the remaining shares of the equity investment.

In addition to the purchase price, the acquisition agreement included the capitalization of the outstanding principal and accumulated interest under this credit facility in the amount of $ 11,708 .

In connection with the fiscal 2017 divestiture of Synergy Health Netherlands Linen Management Services, we entered into a loan agreement to provide financing of up to € 15,000 for a term of up to 15 years.

The loan carried an interest rate of 4 % for the first four years and 12 % thereafter.

The loan was renegotiated during the third quarter of fiscal 2020.

According to the new terms of the loan agreement, the outstanding balance at October 31, 2019, of € 7,300 , will be repaid in six equal annual installments beginning on October 18, 2022.

The loan carries an interest rate of 4 % for the first four years and 8 % thereafter.

Outstanding principal borrowings under the agreement totaled $ 8,129 (or € 7,300 ) at March 31, 2022, and $ 8,568 (or € 7,300 ) at March 31, 2021.

Amounts for loan receivables as noted above are recorded in the "Other assets" line of our Consolidated balance sheets.

Interest income is not material.

3.GOODWILL AND INTANGIBLE ASSETS

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Balance at March 31, 2021 1,384,763 1,492,239 149,047 — 3,026,049

Goodwill acquired or allocated 536,713 33,770 — — 570,483

Foreign currency translation adjustments and other 20,784 78,207 490 — 99,481

Balance at March 31, 2021 $ 1,384,763 $ 1,492,239 $ 149,047 $ — $ 3,026,049

Cantel goodwill acquired 1,019,332 — 30,356 472,693 1,522,381

1,019,332 — 30,356 472,693 1,522,381

Measurement period adjustments to acquired goodwill ( 6,533 ) ( 9,286 ) — — ( 15,819 )

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Balance at March 31, 2022 $ 2,326,830 $ 1,432,858 $ 179,288 $ 465,367 $ 4,404,343

(1) Amounts are still preliminary, as Cantel acquisition valuations have not been finalized.

Goodwill acquired 6,221 803 — — 7,024

Measurement period adjustments to acquired goodwill ( 21,624 ) — 3,147 40,565 22,088

Impairment — — — ( 490,565 ) ( 490,565 )

Divestiture ( 2,358 ) — — — ( 2,358 )

Foreign currency translation adjustments and other ( 7,796 ) ( 37,527 ) ( 623 ) ( 15,367 ) ( 61,313 )

Balance at March 31, 2023 $ 2,301,273 $ 1,396,134 $ 181,812 $ — $ 3,879,219

See Note 2 titled, "Business Acquisitions and Divestitures," for additional information regarding our recent business acquisitions and divestitures.

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(dollars in thousands, except per share amounts and as noted)

We evaluate the recoverability of recorded goodwill amounts annually during the third fiscal quarter, or when evidence of potential impairment exists.

We evaluate the recoverability of recorded goodwill annually at the reporting unit level during the third fiscal quarter, or when evidence of potential impairment exists.

The Company's reporting units are equivalent to the reportable operating segments.

In connection with the preparation of our second quarter consolidated financial statements, we considered the risk of impairment due to deteriorating macroeconomic conditions including rising interest rates and inflationary pressures on material and labor costs, as well as uncertainty regarding the impact such economic strains will have on patient and Customer behavior in the short-term.

Our conclusion, based on the qualitative assessment of these factors, was that it was more likely than not that the goodwill allocated to the Dental segment as of September 30, 2022 was impaired.

Our quantitative analysis to measure the extent of goodwill impairment compared the estimated fair value to the carrying value of the Dental segment.

The fair value is estimated as the present value of future cash flows.

Future cash flow projections are consistent with those used in our forecasting and strategic planning processes.

The determination of the discount rate requires judgement and assumptions to be developed about the weighted average cost of capital that market participants would employ in evaluating the current fair value of the business.

The macroeconomic factors that triggered the interim review are also the drivers of the increase in the weighted average cost of capital assumption.

In connection with the preparation of our second quarter consolidated financial statements, we identified that the estimated fair value of the Dental segment was below the carrying value and recognized a non-cash goodwill impairment charge of $ 490,565 .

The impairment charge was recorded within "Goodwill impairment loss" in the Consolidated Statements of Income during the second quarter of fiscal 2023.

Our review as of the second quarter of fiscal 2023 did not indicate that impairment of goodwill was more likely than not for any of the remaining segments during the period.

The annual goodwill impairment review was conducted in the third quarter of fiscal 2023 as planned.

No additional goodwill impairment was identified during this review.

As a result of our annual impairment review of goodwill for fiscal years 2022 and 2021, no indicators of impairment were identified.

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March 31, Gross

Amount Accumulated

Amortization Gross

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Total $ 4,181,098 $ 1,225,318 $ 4,185,318 $ 856,781

(1) The increase in fiscal 2022 was primarily due to the Cantel acquisition.

See Note 2, titled "Business Acquisitions and Divestitures", for additional information.

Certain trademarks and tradenames obtained as a result of business combinations are indefinite-lived assets.

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The estimated annual amortization expense presented in the preceding table has been calculated based upon March 31, 2023 currency exchange rates.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

4.INVENTORIES, NET

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Inventories, net $ 695,493 $ 574,999

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

5.PROPERTY, PLANT, AND EQUIPMENT

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the present value of a liability and offsetting asset, the subsequent accretion of that liability and depletion of the asset, and the periodic review of the ARO liability estimates and discount rates used in the analysis.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

The following table summarizes the activity in the liability for asset retirement obligations.

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Balance at March 31, 2023 $ 13,131

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Indebtedness as of March 31, 2023 and 2022 was as follows:

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The Revolver matures on the date that is five years after March 19, 2021, and all unpaid borrowings, together with accrued and unpaid interest thereon, are repayable on that date.

The Revolver bears interest from time to time, at either the Base Rate , Eurocurrency Rate, or the Adjusted Daily Simple RFR, as defined in and calculated under and as in effect from time to time under the Revolving Credit Agreement, plus the Applicable Margin, as defined in the Revolving Credit Agreement.

The Revolver bears interest from time to time, at either the Base Rate, the applicable Relevant Rate, or the applicable Adjusted Daily Simple RFR, as defined in and calculated under and as in effect from time to time under the Revolving Credit Agreement, plus the Applicable Margin, as defined in the Revolving Credit Agreement.

The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Credit Agreement.

Interest on Base Rate Advances is payable quarterly in arrears, and interest on Eurocurrency Rate Advances is payable at the end of the relevant interest period therefor, but in no event less frequently than every three months, and interest on RFR Advances is payable monthly after the date of borrowing.

Swingline borrowings bear interest at a rate to be agreed by the applicable swingline lender and the applicable borrower, subject to a cap in the case of swingline borrowings denominated in U.S.

Interest on Base Rate Advances is payable quarterly in arrears, interest on Term Benchmark Advances is

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

payable at the end of the relevant interest period therefor, but in no event less frequently than every three months, and interest on RFR Advances is payable monthly after the date of borrowing.

Swingline borrowings bear interest at a rate to be agreed upon by the applicable swingline lender and the applicable borrower, subject to a cap in the case of swingline borrowings denominated in U.S.

Dollars equal to the Base Rate plus the Applicable Margin for Base Rate Advances plus the Facility Fee.

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The proceeds of the Term Loan were used to refinance the Existing Term Loan Agreement.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

The Term Loan matures on the date that is five years after March 19, 2021 (the “Term Loan Closing Date”).

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The remaining unpaid principal is due and payable on the maturity date.

The Term Loan bears interest from time to time, at either the Base Rate or the Eurocurrency Rate, as defined in and calculated under and as in effect from time to time under the Term Loan Agreement, plus the Applicable Margin, as defined in the Term Loan Agreement.

The Term Loan bears interest from time to time, at either the Base Rate or the Adjusted Term SOFR Rate, as defined in and calculated under and as in effect from time to time under the Term Loan Agreement, plus the Applicable Margin, as defined in the Term Loan Agreement.

The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Term Loan Agreement.

Base Rate Advances are payable quarterly in arrears and Eurocurrency Rate Advances are payable at the end of the relevant interest period therefor, but in no event less frequently than every three months.

Interest on Base Rate Advances is payable quarterly in arrears and interest on Term Benchmark Advances is payable in arrears at the end of the relevant interest period therefor, but in no event less frequently than every three months.

Also on March 19, 2021, the Company, STERIS Corporation, Limited, and FinCo, each as a borrower and guarantor, entered into a delayed draw term loan agreement with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent (the “Delayed Draw Term Loan Agreement”) providing for a delayed draw term loan facility of up to $ 750,000 (the “Delayed Draw Term Loan”) in connection with STERIS’s acquisition of Cantel.

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The remaining unpaid principal is due and payable on the maturity date.

The Delayed Draw Term Loan bears interest from time to time, at either the Base Rate or the Eurocurrency Rate, as defined in and calculated under and as in effect from time to time under the Delayed Draw Term Loan Agreement, plus the Applicable Margin, as defined in the Delayed Draw Term Loan Agreement.

The Delayed Draw Term Loan bears interest from time to time, at either the Base Rate or the Adjusted Term SOFR Rate, as defined in and calculated under and as in effect from time to time under the Delayed Draw Term Loan Agreement, plus the Applicable Margin, as defined in the Delayed Draw Term Loan Agreement.

The Applicable Margin is determined based on the Debt Rating of STERIS, as defined in the Delayed Draw Term Loan Agreement.

Interest on borrowings made at the Base Rate (“Base Rate Advances”) is payable quarterly in arrears and interest on borrowings made at the Eurocurrency Rate (“Eurocurrency Rate Advances”) is payable at the end of the relevant interest period therefor, but in no event less frequently than every three months.

There is no premium or penalty for prepayment of Base Rate Advances, but prepayments of Eurocurrency Rate Advances are subject to a breakage fee.

Interest on Base Rate Advances is payable

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

quarterly in arrears and interest on Term Benchmark Advances is payable in arrears at the end of the relevant interest period therefor, but in no event less frequently than every three months.

On May 3, 2023, in connection with the upcoming replacement of U.S.

dollar LIBOR with SOFR, the Borrower, Guarantors, Lenders, and JPMorgan Chase Bank, N.A., each as defined in each of the agreements, amended the Revolving Credit Agreement, the Term Loan Agreement, and the Delayed Draw Term Loan Agreement.

The amendments concern pricing, technical, administrative, and operational changes related to borrowings in U.S.

The above descriptions reflect those amendments.

Senior Public Notes

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Interest on the Senior Public Notes is payable on March 15 and September 15 of each year, beginning on September 15, 2021, until their respective maturities.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Cantel's Convertible Debt

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At the consummation of the Mergers, holders of Cantel common stock received $ 16.93 in cash and 0.33787 ordinary shares, par value $ 0.001 per share, of the Parent (“Parent Shares”) for each share of Cantel common stock (each a “unit of Reference Property”).

Because each of the consummation of the Mergers and the delisting of Cantel common stock from the NYSE constituted a “Make-Whole Fundamental Change” under the Cantel Indenture, any Notes surrendered for conversion from and including June 2, 2021 until July 2, 2021 (the “Make-Whole Conversion Period”) were subject to conversion at the conversion rate of 25.0843 units of Reference Property (the “Make-Whole Conversion Rate”), which corresponded to 8.4752 Parent Shares and approximately $ 424.68 in cash per one thousand dollars in principal amount of Cantel Notes.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

approximately $ 424.68 in cash per one thousand dollars in principal amount of Cantel Notes.

The Make-Whole Conversion Rate was based on an increase in the Conversion Rate by 0.9931 Additional Shares (as defined in the Indenture) based on a Make-Whole Effective Date of June 2, 2021 and a Stock Price (each as defined in the Indenture) of $ 81.3520 .

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The fluctuation in fair value during such Observation Periods is reported in the statement of income as a component of “Non-operating expense, net.”

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Our outstanding Private Placement Senior Notes at March 31, 2023 and 2022 were as follows:

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The agreement governing these notes contains leverage and interest coverage covenants.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

In December 2012, and in February 2013 STERIS Corporation issued and sold $ 200,000 of senior notes, in a private placement to certain institutional investors in offerings that were exempt from the registration requirements of the Securities Act of 1933.

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At March 31, 2023, we were in compliance with all financial covenants associated with our indebtedness.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

The combined annual aggregate amount of maturities of our outstanding debt by fiscal year is as follows:

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Total $ 3,100,100

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

7.ADDITIONAL CONSOLIDATED BALANCE SHEET INFORMATION

Additional information related to our Consolidated Balance Sheet is as follows:

Additional information related to our Consolidated Balance Sheets is as follows:

March 31, 2023 2022

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Asset retirement obligation-current portion 543 1,181

Accrued interest 9,243 10,014

Other 87,611 78,390

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Total other liabilities $ 76,137 $ 75,579

We consider the tax expense recorded for the Tax Cuts and Jobs Act ("TCJA") to be complete at this time.

However, it is possible that additional legislation, regulations, interpretations and/or guidance may be issued in the future that may result in additional adjustments to the tax expense recorded related to the TCJA.

We will continue to monitor and assess the impact of any new developments.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

8.INCOME TAXES

Income from continuing operations before income taxes was as follows:

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$ 157,348 $ 314,503 $ 517,533

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

The components of the provision for income taxes related to income from continuing operations consisted of the following:

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National statutory tax rate 12.5 % 12.5 % 12.5 %

Increase (decrease) in accruals for uncertain tax positions 0.2 % ( 0.1 ) % ( 0.3 ) %

(Decrease) increase in accruals for uncertain tax positions ( 0.1 ) % 0.2 % ( 0.1 ) %

state and local taxes, net of federal income tax benefit ( 10.8 ) % 1.4 % 2.4 %

Increase in valuation allowances 0.9 % 0.3 % 0.5 %

(Decrease) increase in valuation allowances ( 0.1 ) % 0.9 % 0.3 %

research and development credit ( 1.8 ) % ( 0.8 ) % ( 0.5 ) %

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federal audit adjustments — % — % 2.1 %

Impairment of nondeductible goodwill 29.0 % — % — %

Excess tax benefit for equity compensation ( 2.7 ) % ( 5.1 ) % ( 1.9 ) %

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The IRS adjustments would result in a cumulative tax liability of approximately $ 50,000 .

We are contesting the IRS’s assertions and intend to pursue available remedies such as appeals and litigation, if necessary.

We are contesting the IRS’s assertions.

We have not established reserves related to these notices.

An unfavorable outcome is not expected to have a material adverse impact on our consolidated financial position but could be material to our consolidated results of operations and cash flows for any one period.

An unfavorable outcome is not expected to have a material adverse impact on our consolidated financial position but it could be material to our consolidated results of operations and cash flows for any one period.

We estimate that the tax benefit from our Costa Rican Tax Holiday is $ 2,000 (or $ 0.02 per fully diluted share), annually.

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Bad debt 3,763 2,187

Pension — 1,574

Research & experimental expenditures 15,382 —

Operating leases (1)

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A valuation allowance of $ 20,315 has been applied to a portion of the net deferred tax assets because we do not believe it is more-likely-than-not that we will receive future benefit.

The valuation allowance increased during fiscal 2022 by $ 10,548 .

The valuation allowance decreased during fiscal 2023 by $ 4,376 .

Other than the tax expense previously recorded for the one-time transition tax on unremitted earnings of non-US subsidiaries, no additional provision has been made for income taxes on undistributed earnings of foreign subsidiaries as the Company’s position is that these amounts continue to be indefinitely reinvested.

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It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on the remittance of such undistributed earnings.

In October 2015, the Organization for Economic Cooperation and Development (OECD), in conjunction with the G20, finalized broad-based international tax policy guidelines that involve transfer pricing and other international tax subjects.

On October 8, 2021, the Organization for Economic Co-operation and Development ("OECD") announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting which agreed to a two-pillar solution to address tax challenges arising

STERIS PLC AND SUBSIDIARIES

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(dollars in thousands, except per share amounts and as noted)

some member jurisdictions automatically adopt the new OECD guidelines, most member countries can adopt the guidelines only by new law or regulations.

We are currently adopting processes to comply with the reporting requirements specified by the guidelines and are evaluating the other parts of the guidelines.

from digitalization of the economy.

On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%.

The OECD continues to release additional guidance on the two-pillar framework with widespread implementation anticipated by 2024.

We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by individual countries.

The legislation is anticipated to be effective for our fiscal year beginning April 1, 2024.

9.BENEFIT PLANS

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The Synergy Daniken Scheme is a defined benefit funded pension scheme.

As a result of our fiscal 2018 acquisition of Harwell Dosimeters Ltd, we also sponsor in the Harwell Dosimeters Ltd Retirement Benefits Scheme which is a defined benefit funded pension scheme.

As a result of our fiscal 2018 acquisition of Harwell Dosimeters Ltd, we also sponsor the Harwell Dosimeters Ltd Retirement Benefits Scheme which is a defined benefit funded pension scheme.

We recognize the funded status of our defined benefit pension and post-retirement benefit plans in our Consolidated Balance Sheets, with a corresponding adjustment to accumulated other comprehensive income, net of tax.

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2028 6,845 731

2028-2033 33,250 2,871

2029 and thereafter 37,315 2,620

The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) provides a prescription drug benefit for Medicare beneficiaries, a benefit we provide to Medicare eligible retirees covered by our post-retirement benefits plan.

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We hold investments in mutual funds to satisfy future obligations of the plan.

We account for these assets as available-for-sale securities and they are included in “Other assets” on our accompanying Consolidated Balance Sheets, with a corresponding liability for the plan’s obligation recorded in “Accrued expenses and other.” The aggregate value of the assets was $ 1,061 and $ 1,682 at March 31, 2022 and March 31, 2021, respectively.

Realized gains and losses on these investments are recorded in “Interest and miscellaneous income” within “Non-operating expenses” on our accompanying Consolidated Statements of Income.

Changes in the fair value of the assets are recorded in other comprehensive income on our accompanying balance sheets.

The aggregate value of the assets was $ 938 and $ 1,061 at March 31, 2023 and March 31, 2022, respectively.

Realized gains and losses on these investments are recorded in Interest income and miscellaneous expense (income) within Non-operating expenses, net on our accompanying Consolidated Statements of Income.

Changes in the fair value of the assets are recorded in Accumulated other comprehensive income (loss) on our accompanying Balance Sheets.

10.COMMITMENTS AND CONTINGENCIES

We are, and will likely continue to be, involved in a number of legal proceedings, government investigations, and claims, which we believe generally arise in the course of our business, given our size, history, complexity, and the nature of our business, products, Customers, regulatory environment, and industries in which we participate.

These legal proceedings, investigations and claims generally involve a variety of legal theories and allegations, including, without limitation, personal injury (e.g., slip and falls, burns, vehicle accidents), product liability or regulation (e.g., based on product operation or claimed malfunction, failure to warn, failure to meet specification, or failure to comply with regulatory requirements), product exposure (e.g., claimed exposure to chemicals, asbestos, contaminants, radiation), property damage (e.g., claimed damage due to leaking equipment, fire, vehicles, chemicals), commercial claims (e.g., breach of contract, economic loss, warranty, misrepresentation), financial (e.g., taxes, reporting), employment (e.g., wrongful termination, discrimination, benefits matters), and other claims for damage and relief.

These legal proceedings, investigations and claims generally involve a variety of legal theories and allegations, including, without limitation, personal injury (e.g., slip and falls, burns, vehicle accidents), product liability or regulation (e.g., based on product operation or claimed malfunction, failure to warn, failure to meet specification, or failure to comply with regulatory requirements), product exposure (e.g., claimed exposure to chemicals, gases, asbestos, contaminants, radiation), property damage (e.g., claimed damage due to leaking equipment, fire, vehicles, chemicals), commercial claims (e.g., breach of contract, economic loss, warranty, misrepresentation), financial (e.g., taxes, reporting), employment (e.g., wrongful termination, discrimination, benefits matters), and other claims for damage and relief.

We believe we have adequately reserved for our current litigation and claims that are probable and estimable, and further believe that the ultimate outcome of these pending lawsuits and claims will not have a material adverse effect on our consolidated financial position or results of operations taken as a whole.

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The components of operating lease expense are as follows:

Year Ended March 31, 2022 Year Ended March 31, 2021

Year Ended Year Ended

March 31, 2023 March 31, 2022

Fixed operating lease expense $ 45,249 $ 45,158

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Supplemental cash flow information related to operating leases is as follows:

Year Ended March 31, 2022 Year Ended March 31, 2021

Year Ended Year Ended

March 31, 2023 March 31, 2022

Cash paid for amounts included in the measurement of operating lease liabilities $ 45,249 $ 45,144

$ 45,144 $ 29,808

Right-of-use assets obtained in exchange for operating lease obligations, net $ 53,099 $ 79,241

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11.BUSINESS SEGMENT INFORMATION

As a result of the acquisition of Cantel, we have reassessed the organization of our business and have added a new segment called Dental.

We now operate and report our financial information in four reportable business segments:

We operate and report our financial information in four reportable business segments:

Healthcare, Applied Sterilization Technologies, Life Sciences and Dental.

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to outsourced instrument reprocessing services.

In addition, our procedural solutions also include single-use devices and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas.

In addition, our procedural solutions also include endoscopy accessories and capital equipment infrastructure used primarily in operating rooms, ambulatory surgery centers, endoscopy suites, and other procedural areas.

Our Applied Sterilization Technologies ("AST") segment is a third-party service provider for contract sterilization, as well as testing services needed to validate sterility services for medical device and pharmaceutical manufacturers.

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The accounting policies for reportable segments are the same as those for the consolidated Company.

For the year ended March 31, 2022, revenues from a single Customer did not represent ten percent or more of the Healthcare, Applied Sterilization Technologies or Life Sciences segment revenues.

Certain prior period costs were reallocated from the Healthcare segment to Corporate to conform with current year presentation.

The prior period segment operating income measure has been recast for comparability.

For the year ended March 31, 2023, revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.

Three Customers collectively and consistently account for more than 40.0 % of our Dental segment revenue.

The percentage associated with these three Customers collectively in any one period may vary due to the buying patterns of these three Customers as well as other Dental Customers.

These three Customers collectively accounted for appr oxi mately 45.1 % o f our Dental segment revenues for the year ended March 31, 2022.

These three Customers collectively accounted for appr oxi mately 47.4 % and 45.1 % o f our Dental segment revenues for the years ended March 31, 2023 and 2022, respectively.

STERIS PLC AND SUBSIDIARIES

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24,196 205,788 35,634

Redomiciliation and tax restructuring costs (3)

Tax restructuring costs (3)

661 301 1,592

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485 48 ( 3,029 )

Goodwill impairment loss (6)

Total operating income $ 268,185 $ 425,618 $ 548,368

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(5) For more information regarding our restructuring efforts, refer to our Annual Report on Form 10-K for the year ended March 31, 2021, dated May 28, 2021.

(6) For more information regarding our goodwill impairment loss, refer to Note 3 titled, "Goodwill and Intangible Assets."

Assets include the current and long-lived assets directly attributable to the segment based on the management of the location or on utilization.

Certain corporate assets were allocated to the reportable segments based on revenues.

Assets attributed to sales and distribution locations are only allocated to the Healthcare Products and Life Sciences segments.

Assets attributed to sales and distribution locations are only allocated to the Healthcare and Life Sciences segments.

STERIS PLC AND SUBSIDIARIES

1 unchanged sentence

(dollars in thousands, except per share amounts and as noted)

Individual facilities, equipment, and intellectual properties are utilized for production by both the Healthcare Products and Life Sciences segments at varying levels over time.

As a result, an allocation of total assets, capital expenditures, and depreciation and amortization is not meaningful to the individual performance of the Healthcare Products and Life Sciences segments.

Individual facilities, equipment, and intellectual properties are utilized for production by both the Healthcare and Life Sciences segments at varying levels over time.

As a result, an allocation of total assets, capital expenditures, and depreciation and amortization is not meaningful to the individual performance of the Healthcare and Life Sciences segments.

Therefore, their respective amounts are reported together.

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Total Depreciation, Depletion, and Amortization $ 552,897 $ 553,104 $ 219,237

(1) Amounts are still preliminary, as Cantel acquisition valuations have not been finalized.

(1) Fiscal 2022 totals include approximately $ 229,052 , $ 35,531 and $ 113,099 for Healthcare and Life Sciences, Applied Sterilization Technologies, and Dental, respectively, of amortization of acquired intangible assets and amortization of property "step-up" to fair value.

9 unchanged sentences

Property, Plant, and Equipment, Net $ 1,705,512 $ 1,552,576

(1) Amounts are still preliminary, as Cantel acquisition valuations have not been finalized.

Years Ended March 31, 2023 2022 2021

11 unchanged sentences

Total Healthcare Revenues $ 3,085,131 $ 2,845,467 $ 1,954,055

Applied Sterilization Technologies:

Capital equipment $ 26,460 $ 24,394 $ —

Service $ 887,971 $ 828,578 $ 685,912

Total Applied Sterilization Technologies Service Revenues $ 914,431 $ 852,972 $ 685,912

1 unchanged sentence

Capital equipment $ 147,420 $ 142,281 $ 128,356

$ 142,281 $ 128,356 $ 112,747

Consumables 241,114 239,365 215,005

18 unchanged sentences

The Company has an additional authorized share capital of 50,000,000 preferred shares of $ 0.001 par value each, plus 25,000 deferred ordinary shares of € 1.00 par value each, in order to satisfy minimum statutory capital requirements for all Irish public limited companies.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

13.REPURCHASES OF ORDINARY SHARES

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The share repurchase program has no specified expiration date.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share amounts and as noted)

Under the authorization, the Company may repurchase its shares from time to time through open market purchases, including 10b5-1 plans.

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The suspension was lifted effective February 10, 2022, enabling the Company to resume stock repurchases pursuant to the prior authorizations.

From February 14, 2022, through March 31, 2022, we repurchased 108,368 of our ordinary shares for the aggregate amount of $ 25,000 (net of fees and commissions) pursuant to the authorizations.

During fiscal 2023, we repurchased 1,563,983 of our ordinary shares for the aggregate amount of $ 295,000 (net of fees and commissions) pursuant to the authorizations.

From February 14, 2022, through March 31, 2022, we repurchased 108,368 of our ordinary shares for the aggregate amount of $ 25,000 (net of fees and commissions) pursuant to the authorizations.

During fiscal 2021, we repurchased 35,000 of our ordinary shares for the aggregate amount of $ 5,047 (net of fees and commissions) pursuant to the authorizations.

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During fiscal 2021, we obtained 91,567 of our ordinary shares in the aggregate amount of $ 9,599 in connection with share-based compensation award programs.

On May 3, 2023, our Board of Directors terminated the existing share repurchase program and authorized a new share repurchase program for the purchase of up to $ 500,000 (net of taxes, fees and commissions).

We have not made any repurchases under the new share repurchase program to date.

14.SHARE-BASED COMPENSATION

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The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Consolidated Statements of Income.

The expense is classified as cost of goods sold or selling, general and administrative expenses in a manner consistent with the employee’s compensation and benefits.

The expense is classified as Cost of revenues or Selling, general, and administrative expenses in a manner consistent with the employee’s compensation and benefits.

The following weighted-average assumptions were used for options granted during fiscal 2023, fiscal 2022 and fiscal 2021:

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The weighted average grant date fair value of stock option grants was $ 50.72 , $ 37.52 and $ 27.66 for the years ended March 31, 2023, 2022 and 2021, respectively.

Stock appreciation rights (“SARS”) carry generally the same terms and vesting requirements as stock options except that they are settled in cash upon exercise and therefore, are classified as liabilitie s.

As of May 24, 2021, we no longer have outstanding SARS.

The fair value of the outstanding SARS as of March 31, 2021 and 2020 was $ 494 , and $ 544 , respectively.

The fair value of outstanding SARS is revalued at each reporting date and the related liability and expense were adjusted appropriately.

A summary of the non-vested restricted share and restricted share unit activity is presented below:

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Non-vested at March 31, 2022 45,722 $ 191.18

Granted 280,402 191.18

Vested ( 25,470 ) 191.18

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16.DERIVATIVES AND HEDGING

From time to time, we enter into forward contracts to hedge potential foreign currency gains and losses that arise from transactions denominated in foreign currencies, including inter-company transactions.

We may also enter into commodity swap contracts to hedge price changes in nickel that impact raw materials included in our cost of revenues.

Further, we may hold forward foreign exchange contracts to hedge a portion of our expected non-U.S.

dollar denominated earnings against our reporting currency, the U.S dollar.

During fiscal 2023, we also held forward foreign currency contracts to hedge a portion of our expected non-U.S.

dollar-denominated earnings against our reporting currency, the U.S.

These foreign currency exchange contracts matured during fiscal 2023.

We did not elect hedge accounting for these forward foreign currency contracts;

however, we may seek to apply hedge accounting in future scenarios.

We do not use derivative financial instruments for speculative purposes.

1 unchanged sentence

therefore, changes in their fair value are not deferred but are recognized immediately in the Consolidated Statements of Income.

At March 31, 2022, we held a foreign currency forward contract to sell 11.0 million euros.

At March 31, 2023, we held foreign currency forward contracts to buy 19.5 million British pounds sterling;

and to sell 150.0 million Mexican pesos, and 7.0 million Singapore dollars and 6.0 million euros.

At March 31, 2023, we held commodity swap contracts to buy 753.0 thousand pounds of nickel.

48 unchanged sentences

We also hold an investment in the common stock of Servizi Italia, S.p.A, a leading provider of integrated linen washing and outsourced sterile processing services to hospital Customers.

Changes in the fair value of these investments are recorded in the "Interest income and miscellaneous expense line" of the Consolidated Statement of Income .

During fiscal 2022 and fiscal 2021, we recorded (losses) gains of $( 775 ) and $ 594 , respectively, related to these investments.

Changes in the fair value of these investments are recorded in the Interest income and miscellaneous expense (income) line of the Consolidated Statement of Income.

During fiscal 2023 and fiscal 2022, we recorded losses of $( 1,176 ) and $( 775 ), respectively, related to these investments.

(3) We estimate the fair value of our debt using discounted cash flow analyses, based on our current incremental borrowing rates for similar types of borrowing arrangement s.

9 unchanged sentences

Balance at March 31, 2021 $ 19,642

Liabilities assumed in acquisition of Cantel 25,000

Additions 601

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Balance at March 31, 2022 $ 10,550

Liabilities assumed in acquisition of Cantel 25,000

Additions 8,302

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Additions and payments of contingent consideration obligations during fiscal year 2023 and 2022 were primarily related to our fiscal year 2023 and 2022 acquisitio ns.

Adjustments are recorded in the selling, general and administrative line of the Consolidated Statements of Income.

Refer to Note 2, "Business Acquisitions and Divestitures" for more information.

RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Adjustments are recorded in the Selling, general, and administrative expenses line of the Consolidated Statements of Income.

Refer to Note 2 titled, "Business Acquisitions and Divestitures" for more information.

18.RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Amounts in Accumulated Other Comprehensive Income (Loss) are presented net of the related tax.

6 unchanged sentences

Beginning Balance $ 1,276 $ ( 5,519 ) $ ( 6,813 ) $ ( 211,084 ) $ ( 55,724 ) $ ( 228,650 ) $ ( 209,808 ) $ ( 61,243 ) $ ( 235,463 )

Other Comprehensive Income (Loss) before reclassifications 11,148 4,622 1,505 ( 155,360 ) 172,926 ( 73,076 ) ( 144,212 ) 177,548 ( 71,571 )

Reclassified from Accumulated Other Comprehensive Income (Loss) ( 4,353 ) ( 3,328 ) ( 4,114 ) — — — ( 4,353 ) ( 3,328 ) ( 4,114 )

Net current-period Other Comprehensive Income (Loss) 6,795 1,294 ( 2,609 ) ( 155,360 ) 172,926 ( 73,076 ) ( 148,565 ) 174,220 ( 75,685 )

Other Comprehensive (Loss) Income before reclassifications ( 799 ) 11,148 4,622 ( 109,638 ) ( 155,360 ) 172,926 ( 110,437 ) ( 144,212 ) 177,548

Reclassified from Accumulated Other Comprehensive Loss ( 465 ) ( 4,353 ) ( 3,328 ) — — — ( 465 ) ( 4,353 ) ( 3,328 )

Net current-period Other Comprehensive (Loss) Income ( 1,264 ) 6,795 1,294 ( 109,638 ) ( 155,360 ) 172,926 ( 110,902 ) ( 148,565 ) 174,220

Ending Balance $ 12 $ 1,276 $ ( 5,519 ) $ ( 320,722 ) $ ( 211,084 ) $ ( 55,724 ) $ ( 320,710 ) $ ( 209,808 ) $ ( 61,243 )

(1) Amortization (gain) of defined benefit plan items are reported in the Interest income and miscellaneous expense line of our Consolidated Statements of Income.

(1) Amortization (gain) of defined benefit plan items are reported in the Interest income and miscellaneous expense (income) line of our Consolidated Statements of Income.

(2) The effective portion of gain or loss on net debt designated as non-derivative net investment hedging instruments is recognized in Accumulated Other Comprehensive Income and is reclassified to income in the same period when a gain or loss related to the net investment is included in income.

2 unchanged sentences

(dollars in thousands, except per share amounts and as noted)

QUARTERLY RESULTS (UNAUDITED)

Quarters Ended March 31, December 31, September 30, June 30,

Product $ 684,508 $ 697,256 $ 685,238 $ 489,279

Service 526,178 511,715 511,747 479,143

Total Revenues 1,210,686 1,208,971 1,196,985 968,422

Cost of Revenues:

Product 347,242 373,793 427,484 271,406

Service 291,822 297,064 289,157 270,734

Total Cost of Revenues 639,064 670,857 716,641 542,140

Gross Profit 571,622 538,114 480,344 426,282

Percentage of Revenues 47.2 % 44.5 % 40.1 % 44.0 %

Net Income Attributable to Shareholders $ 52,261 $ 143,623 $ 69,811 $ ( 21,807 )

Basic Income Per Ordinary Share Attributable to Shareholders:

Net income $ 0.52 $ 1.44 $ 0.70 $ ( 0.24 )

Diluted Income Per Ordinary Share Attributable to Shareholders:

Net income $ 0.52 $ 1.42 $ 0.69 $ ( 0.24 )

Product $ 427,614 $ 375,314 $ 339,504 $ 301,108

Service 445,917 433,610 416,628 367,824

Total Revenues 873,531 808,924 756,132 668,932

Cost of Revenues:

Product 231,658 202,881 175,798 154,739

Service 262,055 260,182 250,297 226,809

Total Cost of Revenues 493,713 463,063 426,095 381,548

Gross Profit 379,818 345,861 330,037 287,384

Percentage of Revenues 43.5 % 42.8 % 43.6 % 43.0 %

Net Income Attributable to Shareholders $ 87,443 $ 114,501 $ 105,858 $ 89,598

Basic Income Per Ordinary Share Attributable to Shareholders:

Net income $ 1.02 $ 1.34 $ 1.24 $ 1.05

Diluted Income Per Ordinary Share Attributable to Shareholders:

Net income $ 1.02 $ 1.33 $ 1.23 $ 1.05

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

6 unchanged sentences

Deducted from asset accounts:

Allowance for trade accounts receivable (1)

Allowance for credit losses (1)

$ 24,371 $ 6,972 $ 598 (3) $ ( 8,514 ) (4) $ 23,427

5 unchanged sentences

Deducted from asset accounts:

Allowance for trade accounts receivable (1)

Allowance for credit losses (1)

$ 11,355 $ 16,442 $ 1,840 (3) $ ( 5,266 ) (4) $ 24,371

11 unchanged sentences

Casualty loss reserves $ 23,228 $ 5,550 $ 2,542 $ ( 8,037 ) $ 23,283

(1) Net allowance for doubtful accounts and allowance for sales and returns.

(1) Net allowance for credit losses and allowance for sales and returns.

(2) Provision for excess and obsolete inventory, net of inventory written off.

3 unchanged sentences

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-K

Item 8. Financial Statements and Supplementary Data