What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-05-29 compared with 2023-05-26 · 550 added, 402 removed, 1369 unchanged (41% of the section changed)

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Consolidated Statements of Income

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Cash Flows

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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, 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”).

We have audited the accompanying consolidated balance sheets of STERIS plc and subsidiaries (the Company) as of March 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), cash flows and shareholders' equity for each of the three years in the period ended March 31, 2024, and the related notes and 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2024, in conformity with U.S.

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We also evaluated the adequacy of the Company’s disclosures included in Note 10 to the consolidated financial statements in relation to these matters.

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.

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 the discount rate.

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.

Description of the Matter Valuation of the customer relationships intangible asset related to the acquisition of the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from Becton Dickinson (BD)

As discussed in Note 3 to the consolidated financial statements, on August 2, 2023, the Company purchased the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from BD for $539,758 thousand.

The acquisition 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 $238,000 thousand of the purchase price to the fair value of the acquired customer relationships intangible asset.

The purchase price allocation for BD 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 customer relationships intangible asset associated with this 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 asset under an income approach using discounted cash flows.

The significant estimation uncertainty was primarily due to the sensitivity of the fair value to the underlying assumption related to the customer attrition rate.

This significant assumption is 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 customer relationships intangible asset, including controls over management’s review of the significant assumption in the determination of fair value under the income approach.

To test the estimated fair value of the acquired customer relationships intangible asset, our audit procedures included, among others, evaluating the Company’s selection of the valuation method, testing the significant assumption 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 the assumption to the fair value of the customer relationships intangible asset and compared the significant assumption 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 assumption used by the Company to determine the preliminary fair value estimate of the customer relationships intangible asset, including the customer attrition rate.

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

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Prepaid expenses and other current assets 174,349 176,107

Current assets held for sale 804,904 157,580

Total current assets 2,869,123 2,011,442

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Other assets 66,199 77,892

Non-current assets held for sale — 977,259

Total assets $ 11,063,697 $ 10,821,839

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Accrued expenses and other 319,744 298,032

Current liabilities held for sale 64,012 50,642

Total current liabilities 931,127 861,844

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Other liabilities 71,546 76,137

Non-current liabilities held for sale — 20,936

Total liabilities $ 4,748,351 $ 4,734,667

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Accumulated other comprehensive loss

( 328,657 ) ( 320,710 )

Total shareholders’ equity 6,302,164 6,077,198

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Selling, general, and administrative 1,252,318 1,090,663 1,318,481

Goodwill impairment loss 490,565 — —

Research and development 103,679 98,477 86,663

Restructuring expenses (credit) 485 48 ( 2,914 )

Restructuring expenses 26,045 485 48

Total operating expenses 1,382,042 1,189,625 1,405,192

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

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

Interest and miscellaneous (income) expense ( 11,043 ) 2,879 ( 6,284 )

Total non-operating expenses, net 133,308 110,835 111,012

Income before income tax expense 157,348 314,503 517,533

Income from continuing operations before income tax expense

702,810 680,266 366,803

Income tax expense 149,530 124,069 82,344

Income from continuing operations, net of income tax

553,280 556,197 284,459

Loss from discontinued operations, net of income tax

( 173,201 ) ( 450,384 ) ( 41,589 )

Net income 380,079 105,813 242,870

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

Net income (loss) attributable to noncontrolling interests

1,840 ( 1,217 ) ( 1,018 )

Net income attributable to shareholders $ 378,239 $ 107,030 $ 243,888

Net income per share attributable to shareholders:

Basic $ 1.07 $ 2.50 4.66

Diluted $ 1.07 $ 2.48 4.63

Net income (loss) per share attributable to shareholders - Basic:

Continuing Operations $ 5.58 $ 5.59 2.93

Discontinued Operations $ ( 1.75 ) $ ( 4.52 ) ( 0.43 )

Total $ 3.83 $ 1.07 $ 2.50

Net income (loss) per share attributable to shareholders - Diluted:

Continuing Operations $ 5.55 $ 5.56 2.90

Discontinued Operations $ ( 1.74 ) $ ( 4.49 ) ( 0.42 )

Total $ 3.81 $ 1.07 $ 2.48

Cash dividends declared per ordinary share outstanding $ 2.03 $ 1.84 $ 1.69

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STERIS PLC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

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Net income $ 380,079 $ 105,813 $ 242,870

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

Net income (loss) attributable to noncontrolling interests

1,840 ( 1,217 ) ( 1,018 )

Net income attributable to shareholders $ 378,239 $ 107,030 $ 243,888

Other comprehensive (loss) income

Pension and postretirement benefit plan changes (net of taxes of $ 521 $ 507 , and $ 667 , respectively)

Other comprehensive loss

Defined benefit plan changes (net of tax (benefit) expense of $( 155 ), $ 521 , and $ 507 , respectively)

( 736 ) ( 1,264 ) 6,795

Change in cumulative foreign currency translation adjustment

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

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

( 7,211 ) ( 109,638 ) ( 155,360 )

Total other comprehensive loss attributable to shareholders

( 7,947 ) ( 110,902 ) ( 148,565 )

Comprehensive income (loss) attributable to shareholders

$ 370,292 $ ( 3,872 ) $ 95,323

See notes to consolidated financial statements.

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Share-based compensation expense 56,535 38,951 57,660

Loss (gain) on the disposal of property, plant, equipment,

Loss on the disposal of property, plant, equipment,

and intangibles, net 24,997 22,193 15,117

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

Loss on classification as held for sale

Loss (gain) on sale of businesses

873 ( 67 ) ( 874 )

Gain on sale of investments ( 546 ) — —

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

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Proceeds from the sale of businesses 9,458 6,624 169,712

Purchases of investments — — ( 4,400 )

Proceeds from the sale of investments 3,882 — —

Investment in convertible notes ( 1,500 ) — —

Acquisition of businesses, net of cash acquired ( 546,256 ) ( 42,572 ) ( 550,449 )

Other — — ( 2,392 )

Net cash used in investing activities ( 887,361 ) ( 383,330 ) ( 666,559 )

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Payments on term loans ( 60,000 ) ( 156,875 ) ( 345,000 )

Payments on long-term obligations ( 91,000 ) ( 721,284 ) ( 35,000 )

Payments on Private Placement Senior Notes — ( 91,000 ) ( 721,284 )

Payments on convertible debt — — ( 371,361 )

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Comprehensive

Income (Loss) Non-controlling

Non-controlling

Interest Total

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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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Comprehensive income:

Net income (loss) — — 107,030 — ( 1,217 ) 105,813

— — 378,239 — 1,840 380,079

Other comprehensive loss — — — ( 7,947 ) — ( 7,947 )

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Distributions to noncontrolling interest holders — — — — ( 1,562 ) ( 1,562 )

Contributions from noncontrolling interest holders — — — — 2,994 2,994

Other changes in noncontrolling interest — — — — ( 64 ) ( 64 )

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STERIS is a leading global provider of products and services that support patient care with an emphasis on infection prevention.

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, 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.

We operate and report in four reportable business segments:

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

WE HELP OUR CUSTOMERS CREATE A HEALTHIER AND SAFER WORLD by providing innovative healthcare and life science products and services around the globe.

We offer our Customers a unique mix of innovative products and services.

These include:

consumable products, such as detergents, endoscopy accessories, barrier products, instruments and tools;

and services, including equipment installation and maintenance, microbial reduction of medical devices, instrument and scope repair, laboratory testing, outsourced reprocessing;

and capital equipment, such as sterilizers, surgical tables, and automated endoscope reprocessors, and connectivity solutions such as operating room (“OR”) integrati on.

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

Healthcare, Applied Sterilization Technologies ("AST"), and Life Sciences.

Previously, we had four reportable business segments, however, as a result of the agreement to divest our Dental segment, Dental is presented as discontinued operations.

Historical information has been retrospectively adjusted to reflect these changes for comparability purposes, as required.

We describe our business segments in Note 13 titled "Business Segment Information."

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These investments are immaterial to the Company's consolidated financial statements.

Discontinued Operations.

On April 11, 2024, the Company announced its plan to sell substantially all of the net assets of its Dental segment for total cash consideration of $ 787,500 , subject to customary adjustments, and up to an additional $ 12.5 million in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025.

The transaction is structured as an equity sale.

A component of an entity is reported in discontinued operations after meeting the criteria for held for sale classification if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results.

We analyzed the quantitative and qualitative factors relevant to the divestiture of our Dental segment and determined that those conditions for discontinued operations presentation had been met prior to March 31, 2024.

The Dental segment results of operations have been reclassified to income (loss) from discontinued operations in the Consolidated Statements of Income, and we have classified the Dental segment's assets and liabilities as held for sale for all periods presented in the accompanying Consolidated Balance Sheets.

The transaction is anticipated to close in the first quarter of fiscal 2025.

Therefore, the held for sale assets and liabilities are classified as current as of March 31, 2024.

Our Consolidated Statements of Cash Flows include the financial results of the Dental segment for all periods presented.

For additional information regarding this transaction and its effect on our financial reporting, refer to Note 4 titled, "Discontinued Operations" and Note 13 titled, "Business Segment Information."

Use of Estimates.

We make certain estimates and assumptions when preparing financial statements according to U.S.

We make certain estimates and assumptions when preparing financial statements according to accounting principles generally accepted in the United States ("U.S.

GAAP") that affect the reported amounts of assets and liabilities at the financial statement dates and the reported amounts of revenues and expenses during the periods presented.

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Our investment policy specifies, among other things, maturity, credit quality and concentration restrictions with the objective of preserving capital and maintaining adequate liquidity.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Information supplementing our Consolidated Statements of Cash Flows is as follows:

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

We recognize revenue for sales of product when control passes to the Customer, which generally occurs either when the products are shipped or when they are received by the Customer.

We recognize revenue for sales of products when control passes to the Customer, which generally occurs either when the products are shipped or when they are received by the Customer.

Revenue related to capital equipment products is deferred until installation is complete if the capital equipment and installation are highly integrated and form a single performance obligation.

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Contracts for outsourced reprocessing services are primarily based on an agreement with a Customer, ranging in length from several months to 15 years.

Outsourced reprocessing services revenue is recognized ratably over the contract term using a time-based input measure, adjusted for volume and other performance metrics, to the extent that it is probable that a significant reversal of revenue will not occur.

Outsourced reprocessing services revenue is

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

recognized ratably over the contract term using a time-based input measure, adjusted for volume and other performance metrics, to the extent that it is probable that a significant reversal of revenue will not occur.

Contracts for instrument repairs are primarily based on a Customer’s purchase order, and the associated revenue is recognized upon completion of the repair.

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.

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

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.

Within our Applied Sterilization Technologies segment, service revenues include contract sterilization and laboratory services.

Within our AST segment, service revenues include contract sterilization and laboratory services.

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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Remaining performance obligations reflect only the performance obligations related to agreements for which we have a firm commitment from a Customer to purchase, and exclude variable consideration related to unsatisfied performance obligations.

With regard to products, these remaining performance obligations include capital equipment and consumable orders which have not shipped.

With regard to products, these remaining performance obligations include orders for capital equipment and consumables where control of the products has not passed to the customer.

With regard to service, these remaining performance obligations primarily include installation, certification, and outsourced reprocessing services.

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Accounts receivable consist of amounts billed and currently due from Customers and amounts earned but unbilled.

We generally obtain and perfect security interest in products sold in the United States when we have a concern with the Customer's risk profile.

We may obtain and perfect a security interest in products sold in the United States when we have a concern with the Customer's risk profile.

We maintain an allowance for uncollectible accounts receivable for estimated losses in the collection of amounts owed by Customers.

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Inventories, net.

Inventories are stated at the lower of their cost and net realizable value determined by the first-in, first-out (“FIFO”) cost method.

Inventories are stated at the lower of their cost and net realizable value determined by the first-in, first-out cost method.

Inventory costs include material, labor, and overhead.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

We review inventory on an ongoing basis, considering factors such as deterioration, obsolescence, and other items.

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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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We record these assets at cost, or when acquired as part of a business acquisition, at estimated fair value.

Determining the fair value of identifiable intangible requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to forecasted revenue growth rates, forecasted profit margins, and Customer attrition rates, among other items.

Determining the fair value of identifiable intangible assets requires management’s judgment and often involves the use of significant estimates and assumptions, including assumptions with respect to forecasted revenue growth rates, forecasted profit margins, and Customer attrition rates, among other items.

We generally amortize identifiable intangible assets over periods ranging from 5 to 20 years using the straight-line method.

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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 (income) line of the Consolidated Statements of Income.

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

Asset Impairment Losses.

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We record initial liabilities for the asset retirement obligations ("ARO") at fair value.

Recognition of ARO includes:

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.

Recognition of ARO includes 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 7 titled, “Property, Plant, and Equipment.”

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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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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 use our historical loss experience and actuarial methods to calculate the liability.

This liability includes estimates for both losses and incurred but not reported claims.

This liability includes estimates for both known losses and incurred but not reported claims.

We review the assumptions used to calculate the estimated liability at least annually to evaluate the adequacy of the amount recorded.

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We estimate a liability for incurred but not reported claims based upon recent claims experience.

Liability amounts are recorded in the "Accrued expenses and other" and "Other liabilities" line of our Consolidated Balance Sheets.

Benefit Plans.

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Forward and Swap Contracts.

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 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.

We record shipping and handling costs in costs of revenues.

We record shipping and handling costs in Cost of revenues.

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.

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We incur research and development costs associated with commercial products and expense these costs as incurred.

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)

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

Income Taxes.

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Restructuring.

We recognize restructuring expenses as incurred.

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 re-evaluated based on the respective restructuring plan, which may result in the acceleration of depreciation and amortization of certain assets.

We recognize restructuring expenses associated with actions designed to enhance profitability and improve efficiency of our operations.

Severance and other compensation related costs include severance, medical benefits, and other termination benefits.

For ongoing benefit arrangements, a liability is recognized when it is probable that employees will be entitled to benefits and the amount can be reasonably estimated.

For one-time benefit arrangements, a liability is incurred and must be accrued at the date the plan is communicated to employees, unless they will be retained beyond a minimum retention period.

In this case, the liability is calculated at the date the plan is communicated to employees and is accrued ratably over the future service period.

Asset impairment expenses primarily relate to adjustments in the carrying value of facilities and machinery and equipment associated with restructuring actions to their estimated fair value.

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

Other restructuring expenses are expensed as incurred.

Product rationalization charges relate to inventory write-downs and are recognized in Cost of revenues in the Consolidated Statements of Income .

For additional information regarding our recent restructurings, refer to Note 2 titled, "Restructuring."

STERIS PLC AND SUBSIDIARIES

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Standards that have been adopted in fiscal 2024

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.

Standards that have not yet been adopted.

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.

We adopted this standard in fiscal 2024 with no material impact to our consolidated financial statements.

Standards that have not yet been adopted.

ASU 2023-07 "Segment Reporting (Topic 280)

Improvements to Reportable Segment Disclosures." November 2023 The standard provides guidance to enhance disclosures related to reportable segment expenses, including requirements to disclose significant segment expenses that are regularly provided to the Chief Operating Decision Maker ("CODM"), the title and position of the CODM and a description of how the CODM uses the information to make decisions regarding the allocation of resources.

The standard also requires disclosure of certain segment information currently required annually to be reported on an interim basis.

The amendments in this standard are effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

NA We are currently assessing the impact of this standard update on our disclosures in the notes to the consolidated financial statements.

ASU 2023-09 "Income Taxes (Topic 740) Improvements to Income Tax Disclosures." December 2023 The standard provides guidance to enhance disclosures related to income taxes paid (net of refunds), requiring disaggregation by federal, state, and foreign, and disclosure of income taxes paid (net of refunds received) by individual jurisdictions that represent greater than 5% of the total.

The standard also requires disclosure of income (loss) from continuing operations before income taxes, disaggregated between domestic and foreign, and income tax expense (or benefit) disaggregated by federal, state, and foreign.

Finally, the standard removes the requirement for certain disclosures related to changes in unrecognized tax benefits and certain amounts of temporary differences.

The amendments in this standard are effective for annual periods beginning after December 15, 2024.

NA We are currently assessing the impact of this standard update on our disclosures in the notes to the consolidated financial statements.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

RESTRUCTURING

We adopted and announced a targeted restructuring plan (the "Restructuring Plan").

This plan includes a strategic shift in our approach to the Healthcare surgical business in Europe, as well as other actions including the impairment of an internally developed X-ray accelerator, product rationalizations and facility consolidations.

Less than 300 positions are being eliminated.

These restructuring actions are designed to enhance profitability and improve efficiency, and we expect to be substantially complete with the actions by the end of fiscal 2025.

We have incurred pre-tax expenses totaling $ 44,390 related to these restructurings in fiscal 2024, of which $ 26,070 was recorded as restructuring expenses and $ 18,320 was recorded in Cost of revenues.

A total of $ 18,995 and $ 25,355 was related to the Healthcare and AST segments, respectively, while a total of $ 40 was related to Corporate.

We expect to incur additional restructuring expenses related to this plan of approximately $ 55,300 , which includes approximately $ 51,300 related to Healthcare, $ 3,000 related to AST, $ 800 related to Life Sciences, and $ 200 related to Corporate.

The expected additional restructuring charges of $ 55,300 is comprised of approximately $ 36,200 related to severance and other compensation related costs, $ 15,300 related to lease and other contract termination and other costs, and $ 3,800 related to accelerated depreciation and amortization.

The following table summarizes our total pre-tax restructuring expenses recorded in fiscal 2024 related to the Restructuring Plan:

Year Ended March 31, 2024 Restructuring Plan

Asset impairment

Product rationalization (1)

Severance and other compensation related costs

Total Restructuring Expense

(1) Recorded in Cost of revenues on the Consolidated Statements of Income.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

BUSINESS ACQUISITIONS AND DIVESTITURES

Fiscal 2024 Acquisitions

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.

On August 2, 2023 we purchased the surgical instrumentation, laparoscopic instrumentation and sterilization container assets from Becton, Dickinson and Company (BD) (NYSE:

The acquired assets from BD are being integrated into our Healthcare segment.

The acquisition is being accounted for as a business combination in accordance with ASC 805.

The purchase price of the acquisition was $ 539,758 .

The acquisition also qualified for a tax benefit related to tax deductible goodwill, with a present value of approximately $ 60,000 .

The purchase price of the acquisition was financed with borrowings from our existing credit facility.

For more information, refer to Note 8 titled, " Debt."

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

September 30, 2023

(As Previously Reported)

March 31, 2024

Inventory 27,006 4,821 $ 31,827

Property, plant, and equipment 6,755 1,109 7,864

Lease right-of-use assets, net — 1,737 1,737

Intangible assets (1)

303,598 ( 598 ) 303,000

Goodwill 202,399 ( 5,332 ) 197,067

Total assets acquired 539,758 1,737 541,495

Lease obligations — 1,737 1,737

Total liabilities assumed — 1,737 1,737

Net assets acquired $ 539,758 $ — $ 539,758

(1) Includes estimated fair values of $ 238,000 for Customer relationships ( 13 years estimated useful life), $ 50,000 for Patents and technology ( 13 years estimated useful life), and $ 15,000 for Trademarks and tradenames ( 15 years estimated useful life) as of March 31, 2024.

In addition to the acquisition of BD, we completed two other tuck-in acquisitions during fiscal 2024, which expanded our product and service offerings in the AST and Healthcare segments.

Total aggregate consideration was approximately $ 6,498 , net of cash acquired.

Purchase price allocations are based on the latest draft valuations and remain preliminary.

As we finalize the fair value of assets acquired and liabilities assumed, additional purchase price adjustments and associated deferred taxes may be recorded during the remaining measurement period, not to exceed one year from closing.

Fiscal 2023 Acquisitions

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

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

Fiscal 2022 Acquisition of Cantel Medical LLC

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Cantel, formerly headquartered in Little Falls, New Jersey, with approximately 3,700 employees, is a global provider of infection prevention products and services primarily to endoscopy and dental Customers.

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 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.

We believe that the acquisition has strengthened 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.

Additionally, the integration has resulted in cost savings from optimizing global back-office infrastructure, leveraging best-demonstrated practices across locations and eliminating redundant public company costs.

Cantel’s Dental business extended our business into a new Customer segment.

This business was reported as the Dental segment, but has since been reclassified as held for sale and is presented as a discontinued operation.

The rest of Cantel was integrated into our existing Healthcare and Life Sciences segments.

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

13 unchanged sentences

We funded the cash portion of the transaction consideration and repayment of a significant amount of Cantel’s existing debt obligations with a portion of the proceeds from new debt, which is described in Note 8 titled, " Debt.

Fair Value of Assets Acquired and Liabilities Assumed

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

Acquisition accounting is dependent upon certain valuations and other studies.

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.

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.

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

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.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(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

Accounts receivable 172,226 — 172,226

Inventory 249,221 — 249,221

Property, plant, and equipment 267,360 ( 1,282 ) 266,078

Lease right-of-use assets 59,720 — 59,720

Other assets 72,864 — 72,864

Intangible assets 2,942,000 — 2,942,000

Goodwill 1,522,381 22,088 1,544,469

Total assets acquired 5,454,845 20,806 5,475,651

Convertible debt, par value 168,000 — 168,000

Other current liabilities 247,549 5,595 253,144

Long-term lease obligations 47,856 — 47,856

Deferred income taxes, net 670,685 15,211 685,896

Long-term indebtedness 721,284 — 721,284

Total liabilities assumed 1,855,374 20,806 1,876,180

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

Cantel Other Intangible Assets

The estimated fair values of identifiable intangible assets were prepared using income valuation methodologies, which require a forecast of expected future cash flows using either the relief-from-royalty method or the multi-period excess earnings method.

The estimated useful lives are based on the historical experience of STERIS, available similar industry data and assumptions made by management.Values and useful lives are presented in the table below.

Customer relationships $ 2,278,000 9 - 10 years

Trade names 422,000 11 years

Developed technology 222,000 9 years

Non-compete agreements 20,000 2 years

Total intangible assets acquired $ 2,942,000

Contingent liabilities assumed totaled $ 25,000 and were related to contingent consideration associated with a prior acquisition completed by Cantel.

Payment was made in June, 2021.

Actual and Pro Forma Impact

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.

Fiscal Year Ended March 31,

Net revenues $ 4,790,161 $ 4,190,244

Net income from continuing operations 449,382 5,849

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.

The unaudited pro forma results include adjustments to reflect the amortization of the inventory step-up and the incremental depreciation and amortization to be reported based on the latest draft of valuations of assets acquired.

Adjustments to financing costs and income tax expense also were made to reflect the capital structure and anticipated effective tax rate of the combined entity.

These pro forma amounts are not necessarily indicative of the results that would have been obtained if the acquisition had occurred as of the beginning of the period presented or that may occur in the future, and does not reflect future synergies, integration costs, or other such costs or savings.

Additional information regarding the Cantel acquisition is included in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2023, which was filed with the SEC on May 26, 2023.

Other Fiscal 2022 Acquisitions

1 unchanged sentence

Total aggregate consideration for these transactions was approximately $ 3,146 , net of cash acquired and including deferred consideration of $ 50 .

Fiscal 2021 Acquisitions

On January 4, 2021 , we purchased the remaining outstanding shares of an entity in which we had initially made an equity investment in fiscal 2019.

Total consideration was approximately $ 78,045 , net of cash acquired and subject to any working capital adjustments.

Total non-cash consideration for this transaction was $ 41,771 , which consisted of the settlement of outstanding principal and interest on a loan receivable, the initial equity investment, and receivables related to capital equipment purchases that existed at the acquisition date.

The business has been integrated into our Applied Sterilization Technologies business segment and we funded the transaction through a combination of cash on hand and credit facility borrowings.

On November 18, 2020, we acquired all of the outstanding units and equity of Key Surgical, LLC ("Key Surgical").

Key Surgical is a global provider of sterile processing, operating room and endoscopy consumable products serving hospitals and surgical facilities.

Key Surgical has been integrated into our Healthcare segment.

The total purchase price of the acquisition was $ 853,203 , net of cash acquired and remains subject to customary working capital adjustments.

The purchase price for the acquisition was financed with a combination of cash on hand, credit facility borrowings and proceeds from borrowings under a then new Term loan agreement.

Please refer to Note 6 titled, "Debt" for more information.

We also completed two other tuck-in acquisitions during fiscal 2021, which continued to expand our product and service offerings in the Healthcare segment.

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

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Fair Value of Assets Acquired and Liabilities Assumed

1 unchanged sentence

Fiscal Year 2024 (1)

Fiscal Year 2022 Fiscal Year 2021 (2)

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

Fiscal Year 2023 (2)

(dollars in thousands) Other Acquisitions

(Excluding BD)

All Acquisitions

Cash $ 417 $ —

5 unchanged sentences

Intangible assets 2,602 30,185

27,576 1,578 356,999 28,188

Goodwill 2,369 4,863

4 unchanged sentences

Net assets $ 6,915 $ 50,127

( 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.

The estimate requires assumptions including forecasted revenue growth rates, forecasted profit margins, and Customer attrition rates.

( 1) Purchase price allocation is preliminary as of March 31, 2024, as valuations have not been finalized.

(2) The purchase price allocation for fiscal 2023 acquisitions include certain measurement period adjustments recorded during fiscal 2024, increasing net assets acquired by $ 200 .

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

1 unchanged sentence

Acquisition related transaction and integration costs totaled $ 25,526 , $ 23,486 , and $ 201,905 for the fiscal years ended March 31, 2024 , 2023, and 2022, respectively.

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

Fiscal 2024 acquisition and integration expenses were primarily related to the acquisition of assets from BD while fiscal 2023 and 2022 acquisition and integration expenses were primarily related to the acquisition of 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.

On April 11, 2024, the Company announced its plan to sell its Dental segment for total cash consideration of $ 787,500 , subject to customary adjustments.

The transaction is structured as an equity sale.

The sale is expected to close in the first quarter of fiscal 2025.

The disposal of the Dental segment met the criteria to be presented as a discontinued operation during the fourth quarter of fiscal 2024.

For more information refer to Note 4 titled "Discontinued Operations."

On April 1, 2024, we completed the sale of the Controlled Environment Certification Services business.

In fiscal 2025, we recorded net proceeds of $ 41,546 .

The business generated approximately $ 35,000 in revenues during fiscal 2024.

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

8 unchanged sentences

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 expenses line of the Consolidated Statements of Income.

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

During the second quarter of fiscal 2024, we received an additional $ 9,458 out of escrow.

DISCONTINUED OPERATIONS

The Company concluded that our Dental segment met the criteria to be classified as held for sale.

On April 11, 2024, the Company announced its plan to sell its Dental segment for total cash consideration of $ 787,500 , subject to customary adjustments, and up to an additional $ 12,500 in contingent payment should the Dental business achieve certain revenue targets in fiscal 2025.

The transaction is structured as an equity sale.

The Dental segment results of operations have been reclassified to income (loss) from discontinued operations in the Consolidated Statements of Income (Loss), and we have classified our Dental segment assets and liabilities as held for sale for all periods presented in the accompanying Consolidated Balance Sheets.

Our Consolidated Statements of Cash Flows include the financial results of the Dental segment for all periods presented.

Proceeds received from the sale will be used to pay off existing debt.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following tables summarize the major classes of assets and liabilities of the Dental segment that were classified as held for sale in the Consolidated Balance Sheets as of March 31, 2024 and 2023:

Assets held for sale:

Accounts receivable, net 48,590 63,327

Inventories, net 89,345 91,083

Property, plant, and equipment, net 73,395 72,737

Lease right-of-use assets, net 22,822 25,188

Intangibles, net 770,731 879,081

Prepaid expenses and other assets 2,953 3,423

Loss accrued on classification as held for sale

( 202,932 ) —

Total assets held for sale

$ 804,904 $ 1,134,839

Liabilities held for sale:

Accounts payable $ 10,580 $ 15,455

Accrued income taxes 433 3,327

Accrued payroll and other related liabilities 13,683 7,179

Lease obligations 23,722 25,832

Accrued expenses and other 15,594 19,785

Total liabilities held for sale

$ 64,012 $ 71,578

Assets held for sale:

Current $ 804,904 $ 157,580

Non-current — 977,259

Liabilities held for sale:

Current $ 64,012 $ 50,642

Non-current — 20,936

As of March 31, 2024, the Dental segment met the held for sale criteria, and the sale is expected to be completed in the first quarter of fiscal 2025.

As a result, all assets and liabilities during the period are reported as current.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The following table summarizes the major line items constituting income (loss) of discontinued operations associated with the Dental segment for the years ended March 31, 2024, 2023, and 2022:

Years Ended March 31, 2024 2023 2022

Product $ 407,027 $ 421,573 $ 361,661

Cost of revenues:

Product 226,934 242,607 228,306

Gross profit:

180,093 178,966 133,355

Operating expenses:

Selling, general, and administrative 199,511 208,213 184,271

Goodwill impairment loss — 490,565 —

Research and development 2,960 3,104 1,281

Loss from operations

( 22,378 ) ( 522,916 ) ( 52,197 )

Non-operating expenses, net ( 10 ) 2 103

Pre-tax loss on classification as held for sale (1)

( 206,444 ) — —

Loss before income tax expense

( 228,812 ) ( 522,918 ) ( 52,300 )

Income tax benefit

( 55,611 ) ( 72,534 ) ( 10,711 )

Loss from discontinued operations, net of income tax

$ ( 173,201 ) $ ( 450,384 ) $ ( 41,589 )

(1) Amount includes additional transaction costs and the estimated accrued loss totaling $ 202,932 included in held for sale as of March 31, 2024

In connection with the preparation of our second quarter consolidated financial statements in fiscal 2023, 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.

We concluded 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 effective income tax rates for the years ended March 31, 2024, 2023, and 2022 were 24.3 %, 13.9 %, and 20.5 %, respectively.

In fiscal 2023, the impairment of goodwill impacted the operations in the United States and other locations by $ 441,643 and $ 48,922 , respectively.

Approximately $ 207,367 of this impairment was non-deductible.

Significant non-cash operating items and capital expenditures related to discontinued operations are reflected in the statement of cash flows as follows:

2024 2023 2022

Operating activities of discontinued operations:

Depreciation, depletion, and amortization (1)

$ 115,177 $ 130,367 $ 120,957

Goodwill impairment loss — 490,565 —

Investing activities of discontinued operations:

Purchases of property, plant, equipment, and intangibles, net $ ( 9,150 ) $ ( 9,470 ) $ ( 4,726 )

(1) We concluded that the criteria to report assets held for sale was met on March 2, 2024, as such we did not depreciate or amortize related property, plant, equipment and intangible assets subsequent to this date.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

GOODWILL AND INTANGIBLE ASSETS

Changes to the carrying amount of goodwill for the years ended March 31, 2024 and 2023 were as follows:

Segment Applied Sterilization Technologies Segment Life Sciences

Segment Dental Total

Segment AST Segment Life Sciences

Segment Total

Balance at March 31, 2022 2,326,830 1,432,858 179,288 3,938,976

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

Goodwill acquired 6,221 803 — 7,024

Measurement period adjustments to acquired goodwill ( 21,624 ) — 3,147 ( 18,477 )

Divestitures ( 7,000 ) — — — ( 7,000 )

( 2,358 ) — — ( 2,358 )

Foreign currency translation adjustments and other ( 7,796 ) ( 37,527 ) ( 623 ) ( 45,946 )

2 unchanged sentences

Measurement period adjustments to acquired goodwill ( 2,573 ) — — ( 2,573 )

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

Divestiture ( 2,358 ) — — — ( 2,358 )

Foreign currency translation adjustments and other 2,758 ( 9,139 ) 361 ( 6,020 )

1 unchanged sentence

See Note 3 titled, "Business Acquisitions and Divestitures," for additional information regarding our recent business acquisitions and divestitures.

We evaluate the recoverability of recorded goodwill and indefinite-lived intangible assets annually during the third fiscal quarter, or when indicators of potential impairment exist.

Our goodwill is assessed at the reporting unit level which is equivalent to the Company's reportable operating segments.

During our annual reviews for fiscal 2024, 2023, and 2022, there were no indicators that impairment of goodwill or indefinite-lived intangible assets was more likely than not.

Identifiable intangible assets are also reviewed for impairment when events and circumstances indicate that the carrying value of such assets may not be recoverable.

Impaired assets are recorded at the lower of carrying value or estimated fair value.

We conduct this review on an ongoing basis, and, if impairment exists, we record the loss in the Consolidated Statements of Income during that period.

STERIS PLC AND SUBSIDIARIES

1 unchanged sentence

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

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 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.

When we evaluate these assets for impairment, we make certain judgments and estimates, including interpreting current economic indicators and market valuations, evaluating our strategic plans with regards to operations, historical and anticipated performance of operations, and other factors.

It is possible that unfavorable developments related to these factors in the near term could result in an impairment loss relative to intangible assets.

Such an impairment loss may be material to our results of operations in the period recorded.

Information regarding our intangible assets is as follows:

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The estimated annual amortization expense presented in the preceding table has been calculated based upon March 31, 2024 currency exchange rates.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

INVENTORIES, NET

6 unchanged sentences

Inventories, net $ 674,535 $ 604,410

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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.

11 unchanged sentences

Balance at March 31, 2024 $ 13,658

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Indebtedness as of March 31, 2024 and 2023 was as follows:

3 unchanged sentences

Delayed draw term loan, current portion 44,688 32,500

Private Placement Senior Notes — 91,000

Total short-term debt $ 85,938 $ 60,000

14 unchanged sentences

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, 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.

Interest on Base Rate Advances is payable quarterly in arrears, interest on Term Benchmark 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 upon by the applicable swingline lender and the applicable borrower, subject to a cap in the case of swingline borrowings denominated in U.S.

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

No principal payments are due on the Term Loan for the period beginning from the first full fiscal quarter ended after the Term Loan Closing Date to and including the fourth full fiscal quarter ended after the Term Loan Closing Date.

No principal payments are due on the Term Loan for the period beginning from the first full fiscal quarter ended after the Term Loan Closing

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Date to and including the fourth full fiscal quarter ended after the Term Loan Closing Date.

For the period beginning from the fifth full fiscal quarter ended after the Term Loan Closing Date to and including the twelfth full fiscal quarter ended after the Term Loan Closing Date, quarterly principal payments, each in the amount of 1.25 % of the original principal amount of the Term Loan, are due on the last business day of each fiscal quarter.

15 unchanged sentences

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

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.

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.

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

9 unchanged sentences

The 2031 Notes will mature on March 15, 2031 and the 2051 Notes will mature on March 15, 2051.

The Senior Public Notes will bear interest at the rates set forth above.

The Senior Public Notes will bear interest at the

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

rates set forth above.

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.

2 unchanged sentences

The initial conversion price was $ 41.51 per share of Cantel common stock (based on an initial conversion rate of 24.0912 shares of Cantel common stock per one thousand dollars in principal amount of Notes) and was, along with the conversion rate, subject to adjustment if certain events occurred.

On June, 3, 2021, Cantel (a) delivered a notice to holders of its Notes pursuant to the indenture governing the Notes (as supplemented, the "Cantel Indenture”), notifying holders that, as a result of each of (i) the consummation of the series of mergers (the “Mergers”) contemplated by the Agreement and Plan of Merger, dated as of January 12, 2021 (as amended by Amendment to Agreement and Plan of Merger, dated as of March 1, 2021), among Cantel, STERIS plc (“Parent”), Solar New US Holding Co, LLC (now known as Solar New US Holding Corporation) (“US Holdco”), an indirect and wholly owned subsidiary of Parent, and Crystal Merger Sub 1, LLC, a direct and wholly owned subsidiary of US Holdco, and (ii) the delisting of Cantel common stock from the New York Stock Exchange (the “NYSE”), a “Fundamental Change” and a “Make-Whole Fundamental Change,” each as defined in the Cantel Indenture, had occurred effective as of June 2, 2021 and (b) commenced an offer to purchase any and all outstanding Notes as a result of the Fundamental Change.

A tender offer statement on Schedule TO (“Schedule TO”) was filed by Cantel with the U.S.

Securities and Exchange Commission ("SEC") with respect to the right of each holder (each, a “Holder”) of the Notes to require Cantel to repurchase, at the Holder’s option, 100% of the principal amount of the Notes, plus accrued and unpaid interest thereon to, but excluding the settlement date of July 6, 2021 (as such date was amended by Amendment No.

1 to Schedule TO (“Amendment No.

1”), dated June 29, 2021).

The offer to purchase the Notes expired at 11:59 p.m.

New York City time, on July 1, 2021 (the “Expiration Time,” as such date was amended by Amendment No.

1), and was not extended.

Wells Fargo Bank, National Association, as paying agent and trustee under the Indenture (the “Cantel Trustee”), informed Cantel that as of the Expiration Time, none of the Notes had been validly tendered (and not properly withdrawn) for purchase.

Pursuant to the terms of the Cantel Indenture, in connection with the consummation of the Mergers, Cantel, Parent and the Cantel Trustee entered into a supplemental indenture providing that, following the Mergers, each holder’s right to convert each one thousand dollar principal amount of Notes into shares of Cantel common stock was changed into a right to convert such principal amount of Notes into the kind and amount of cash, stock, other securities, other property or assets, subject to settlement method election provisions of the Indenture, that a holder of Cantel common stock was entitled to receive upon consummation of the Mergers.

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

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 .

Cantel settled all conversions of Notes in connection with the Make-Whole Fundamental Changes that constituted the Mergers and delisting of Cantel common stock from the NYSE pursuant to the Cash Settlement provisions of the Cantel Indenture.

Because each of the consummation of STERIS's acquisition of Cantel and the delisting of Cantel common stock from the New York Stock Exchange (the "NYSE") constituted a “Make-Whole Fundamental Change” under the indenture governing the notes (as supplemented, 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 (as defined in the Cantel Indenture) (the “Make-Whole Conversion Rate”), which corresponded to 8.4752 STERIS ordinary shares and 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 based on a Make-Whole Effective Date of June 2, 2021 and a Stock Price (each as defined in the Cantel Indenture) of $ 81.3520 .

Cantel settled all conversions of Notes in connection with the Make-Whole Fundamental Changes that constituted STERIS's acquisition of Cantel and the delisting of Cantel common stock from the NYSE pursuant to the Cash Settlement provisions of the Cantel Indenture.

The Cantel Trustee, acting as conversion agent, informed Cantel that holders of 100% of the outstanding Notes elected to convert their Notes during the Make-Whole Conversion Period.

The fair value of the Notes exceeded their aggregate par value of $ 168,000 at the date of consummation of the Mergers.

The fair value was estimated utilizing the closing price of Parent Shares on June 2, 2021.

The fair value of the Notes exceeded their aggregate par value of $ 168,000 at the date of consummation of STERIS's acquisition of Cantel.

The fair value was estimated utilizing the closing price of STERIS ordinary shares on June 2, 2021.

A premium of approximately $ 175,555 in excess of the aggregate par value of the Notes represented purchase consideration and was initially classified in additional paid-in capital in accordance with ASC 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)."

Because all Holders elected to convert during the Make-Whole Conversion Period, the aggregate par value outstanding was reclassified to current liabilities in the balance sheet.

The premium initially recorded as additional paid in capital at the effective time of the Mergers was reclassified to "Convertible debt, premium liability," also classified as a current liability, and was settled in cash.

The premium initially recorded as additional paid in capital at the effective time of STERIS's acquisition of Cantel was reclassified to "Convertible debt, premium liability," also classified as a current liability, and was settled in cash.

The final total Cash Settlement value of the Notes was approximately $ 371,361 , comprised of the aggregate par value of $ 168,000 and the fair value of the liability representing the premium over par of approximately $ 203,361 .

The liability representing the premium over par value increased between the effective date of the Mergers and settlement because of the movement in trading prices of Parent Shares during the Observation Periods.

The liability representing the premium over par value increased between the effective date of STERIS's acquisition of Cantel and settlement because of the movement in trading prices of STERIS Ordinary Shares during the Observation Periods (as defined in the Cantel Indenture).

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, 2024 and 2023 were as follows:

3 unchanged sentences

$ 80,000 Senior notes at 3.35 %

2012 Private Placement December 2022 — 91,000

$ 80,000 Senior notes at 3.35 %

2012 Private Placement December 2024 80,000 80,000

2012 Private Placement

December 2024 80,000 80,000

$ 25,000 Senior notes at 3.55 %

2012 Private Placement December 2027 25,000 25,000

2012 Private Placement

December 2027 25,000 25,000

$ 125,000 Senior notes at 3.45 %

2015 Private Placement May 2025 125,000 125,000

2015 Private Placement

May 2025 125,000 125,000

$ 125,000 Senior notes at 3.55 %

2015 Private Placement May 2027 125,000 125,000

2015 Private Placement

May 2027 125,000 125,000

$ 100,000 Senior notes at 3.70 %

2015 Private Placement May 2030 100,000 100,000

2015 Private Placement

May 2030 100,000 100,000

$ 50,000 Senior notes at 3.93 %

2017 Private Placement February 2027 50,000 50,000

2017 Private Placement

February 2027 50,000 50,000

€ 60,000 Senior notes at 1.86 %

2017 Private Placement February 2027 65,254 66,815

2017 Private Placement

February 2027 64,708 65,254

$ 45,000 Senior notes at 4.03 %

2017 Private Placement February 2029 45,000 45,000

2017 Private Placement

February 2029 45,000 45,000

€ 20,000 Senior notes at 2.04 %

2017 Private Placement February 2029 21,752 22,271

2017 Private Placement

February 2029 21,569 21,752

£ 45,000 Senior notes at 3.04 %

2017 Private Placement February 2029 55,579 59,089

2017 Private Placement

February 2029 56,799 55,579

€ 19,000 Senior notes at 2.30 %

2017 Private Placement February 2032 20,664 21,158

2017 Private Placement

February 2032 20,491 20,664

£ 30,000 Senior notes at 3.17 %

2017 Private Placement February 2032 37,053 39,393

2017 Private Placement

February 2032 37,866 37,053

Total Senior Notes $ 751,433 $ 750,302

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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.

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

The private placement note purchase agreements specify increases to the coupon interest rates while the ratio of Consolidated Total Debt to Consolidated EBITDA, as defined in the note purchase agreements, exceeds certain thresholds.

Beginning September 1, 2021 and through March 31, 2023, the coupon rates on the 2012 private placement notes were increased by 0.50%.

On March 19, 2021, STERIS Corporation as issuer, and the Company, Limited and FinCo, as guarantors, entered into (1) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated December 4, 2012) per the 2012 and 2013 senior notes (the “2012 Amendment”), and (2) a First Amendment to Amended and Restated Note Purchase Agreement dated March 5, 2019 (which had amended and restated certain note purchase agreements originally dated March 31, 2015) for the 2015 senior notes (the “2015 Amendment”).

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At March 31, 2024, 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 other liabilities $ 71,546 $ 76,137

8.INCOME TAXES

Income from continuing operations before income taxes was as follows:

Years Ended March 31, 2023 2022 2021

United States operations $ ( 16,759 ) $ 79,662 $ 326,991

Ireland operations 62,664 88,078 73,442

Other locations operations 111,443 146,763 117,100

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

STERIS PLC AND SUBSIDIARIES

1 unchanged sentence

(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:

Years Ended March 31, 2023 2022 2021

United States federal $ 138,208 $ 88,158 $ 57,550

United States state and local 33,234 21,438 16,272

Ireland 8,837 12,002 9,244

Other locations 61,446 53,354 36,699

241,725 174,952 119,765

United States federal ( 114,523 ) ( 73,833 ) 7,523

United States state and local ( 50,530 ) ( 17,124 ) ( 550 )

Ireland ( 864 ) ( 739 ) ( 787 )

Other locations ( 24,273 ) ( 11,623 ) ( 5,288 )

( 190,190 ) ( 103,319 ) 898

Total Provision for Income Taxes $ 51,535 $ 71,633 $ 120,663

The total provision for income taxes can be reconciled to the tax computed at the Ireland statutory tax rate as follows:

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National statutory tax rate 12.5 % 12.5 % 12.5 %

(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 %

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

Increase in accruals for uncertain tax positions

— % — % 0.1 %

state and local taxes, net of federal income tax expense (benefit)

2.2 % ( 1.1 ) % 1.6 %

Increase in valuation allowances

0.9 % — % 0.7 %

research and development credit ( 0.7 ) % ( 0.4 ) % ( 0.7 ) %

2 unchanged sentences

federal audit adjustments 0.1 % — % — %

Impairment of nondeductible goodwill 29.0 % — % — %

Excess tax benefit for equity compensation ( 0.7 ) % ( 0.6 ) % ( 4.3 ) %

1 unchanged sentence

tax reform impact, GILTI and FDII

( 0.2 ) % ( 0.3 ) % ( 0.8 ) %

Capitalized acquisition, redomiciliation costs — % — % 1.5 %

1 unchanged sentence

Total Provision for Income Taxes 21.3 % 18.2 % 22.4 %

Our effective tax rate is affected by i) the tax rates in Ireland (our country of domicile), the United States, and other jurisdictions in which we operate, and ii) the relative amount of income before income taxes by geography.

Income before income taxes by geography are based on the geographic location of our operations to which such earnings are attributable.

Transactions between two or more of the entities within our group occur routinely and involve the sale of goods and services, loans and related interest, intellectual property and related royalties, and shared costs.

The pricing used in these transactions is consistent with the prices that would be charged between unrelated parties in accordance with our interpretation of current tax regulations.

Income before income taxes by geography includes the transfer of income before income taxes that results from these transactions.

We operate a global financing structure using a wholly-owned financing company domiciled in Ireland, STERIS Irish FinCo, which has a material impact on the relative amount of income before income taxes by geography.

In each of the years presented, STERIS Irish FinCo contributed more than 90% of the pre-tax income of Ireland operations.

Its activities are driven by funding needs for acquisitions, capital investments, and working capital.

A significant majority of STERIS Irish FinCo’s income before income taxes during the years presented was driven by loans to our operations in the United States in response to such funding needs.

Significant transactions not indicative of operating trends that impacted the amount of income before income taxes by geography and resulting provision for income tax and effective tax rate include:

• In fiscal 2024, income from continuing operations before income taxes, in the United States and Other locations, was impacted by $ 44,390 of expenses associated with restructuring.

This resulted in approximately $ 2,600 of an increase to our valuation allowance in Other locations.

• In fiscal 2023, there was a $ 23,389 favorable tax impact from changes in U.S.

state and local tax rates applied to existing deferred tax assets and liabilities.

• In fiscal 2022, income in the United States was affected by costs associated with the completion of the Cantel Medical acquisition.

These include $ 205,788 of acquisition and integration related expenses and the negative impact of a fair value adjustment of $ 27,806 related to the premium liability associated with the Cantel Medical convertible debt.

Approximately $ 67,000 of these costs were non-deductible.

STERIS PLC AND SUBSIDIARIES

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

Income from continuing operations before income taxes of our domestic and foreign operations based on the geographic locations of our operations was as follows:

Years Ended March 31, 2024 2023 2022

United States operations $ 491,890 $ 451,901 $ 127,507

Ireland operations 51,510 62,664 88,078

Other locations operations 159,410 165,701 151,218

$ 702,810 $ 680,266 $ 366,803

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

Years Ended March 31, 2024 2023 2022

United States federal $ 133,498 $ 128,793 $ 81,111

United States state and local 26,230 31,073 20,925

Ireland 7,639 8,837 12,002

Other locations 51,283 59,422 54,581

218,650 228,125 168,619

United States federal ( 43,484 ) ( 39,030 ) ( 63,087 )

United States state and local ( 11,222 ) ( 43,843 ) ( 15,108 )

Ireland ( 923 ) ( 864 ) ( 739 )

Other locations ( 13,491 ) ( 20,319 ) ( 7,341 )

( 69,120 ) ( 104,056 ) ( 86,275 )

Total Provision for Income Taxes $ 149,530 $ 124,069 $ 82,344

Unrecognized Tax Benefits.

We classify uncertain tax positions and related interest and penalties as long-term liabilities within “Other liabilities” in our accompanying Consolidated Balance Sheets, unless they are expected to be paid within 12 months, in which case, the uncertain tax positions would be classified as current liabilities within “Accrued income taxes.” We recognize interest and penalties related to unrecognized tax benefits within “Income tax expense” in our accompanying Consolidated Statements of Income.

We classify uncertain tax positions and related interest and penalties as long-term liabilities within “Other liabilities” in our accompanying Consolidated Balance Sheets, unless they are expected to be paid within 12 months, in which case, the uncertain tax positions would be classified as Current liabilities within the "Accrued income taxes" line in our accompanying Consolidated Balance Sheets.

We recognize interest and penalties related to unrecognized tax benefits within the “Income tax expense” line in our accompanying Consolidated Statements of Income.

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:

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Decreases for tax provisions of prior year ( 80 ) —

Balances related to acquired/disposed businesses ( 503 ) 746

Other, including currency translation 21 —

Unrecognized Tax Benefits Balance at March 31 $ 2,150 $ 2,230

2 unchanged sentences

If all unrecognized tax benefits were recognized, the net impact on the provision for income tax expense would be $ 2,293 .

The increase in unrecognized tax benefits from prior year is due to the additions of new positions.

The decrease in unrecognized tax benefits from prior year is due to the expiration of old positions.

It is reasonably possible that during the next 12 months, there will be no material reductions in unrecognized tax benefits as a result of the expiration of various statutes of limitations or other matters.

We operate in numerous t axing jurisdictions and are subject to regular examinations by various United States federal, state and local, as well as foreign jurisdictions.

We are no longer subject to United States federal examinations for years before fiscal 2018 and, with limited exceptions, we are no longer subject to United States state and local, or non-United States, income tax examinations by tax authorities for years before fiscal 2017.

W e remain subject to tax authority audits in various jurisdictions wherever we do business.

We operate in numerous taxing jurisdictions and are subject to regular examinations by various United States federal, state and local, as well as foreign jurisdictions.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

examinations by tax authorities for years before fiscal 2018.

We remain subject to tax authority audits in various jurisdictions wherever we do business.

In the fourth quarter of fiscal 2021, we completed an appeals process with the U.S.

Internal Revenue Service (the “IRS”) regarding proposed audit adjustments related to deductibility of interest paid on intercompany debt for fiscal years 2016 through 2017.

An agreement was reached on final interest rates, which also impacts subsequent years through 2020.

We estimate the total federal, state, and local tax impact of the settlement to be approximately $ 12,000 , for the fiscal years 2016 through 2020, of which approximately $ 7,500 has been paid through March 31, 2023.

In May 2021, we received two notices of proposed tax adjustment from the IRS regarding deemed dividend inclusions and associated withholding tax.

An agreement was reached on final interest rates, which also impacted subsequent years through 2020.

The total federal, state, and local tax impact of the settlement including interest is approximately $ 12,000 for the fiscal years 2016 through 2020, materially all of which has been paid through March 31, 2024.

In November 2023, we received two Notices of Deficiency from the IRS regarding the previously disclosed deemed dividend inclusions and associated withholding tax matter.

The notices relate to the fiscal and calendar year 2018.

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

We are contesting the IRS’s assertions.

We are contesting the IRS’s assertions and have filed petitions with the U.S.

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 it 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 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 $ 4,800 (or $ 0.05 per fully diluted share), annually.

The Tax Holiday runs fully exempt from income tax through 2025, and partially exempt through 2029.

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Tax Holiday runs fully exempt from income tax through 2031.

Deferred Taxes.

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Total Deferred Tax Liabilities 664,277 780,854

Net Deferred Tax Assets (Liabilities) $ ( 595,336 ) $ ( 772,172 )

Net Deferred Tax Liabilities

$ ( 462,381 ) $ ( 595,336 )

(1) For more information regarding our operating leases, see Note 12 titled, "Commitments and Contingencies."

5 unchanged sentences

carryforwards have indefinite expiration periods, those carryforwards that have definite expiration periods will expire if unused between fiscal years 2025 and 2045.

In addition, we have recorded pre-valuation allowance tax benefits of $ 3,391 related to state operating loss carryforwards.

In addition, we have recorded pre-valuation allowance tax benefits of $ 2,269

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

related to U.S.

state operating loss carryforwards.

If unused, these state operating loss carryforwards will expire between fiscal years 2025 and 2045.

3 unchanged sentences

A valuation allowance of $ 26,374 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 decreased during fiscal 2023 by $ 4,376 .

The valuation allowance increased during fiscal 2024 by $ 6,059 .

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.

1 unchanged sentence

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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%.

5 unchanged sentences

Benefits under this plan include retiree life insurance and retiree medical insurance, including prescription drug coverage.

During the second quarter of fiscal 2009, we amended our United States post-retirement welfare benefits plan, reducing the benefits to be provided to retirees under the plan and increasing their share of the costs.

The amendments resulted in a decrease of $ 46,001 in the accumulated post-retirement benefit obligation.

The impact of this change was recognized in our Consolidated Balance Sheets in fiscal 2009 and is being amortized as a component of the annual net periodic benefit cost over a period of approximately thirteen years.

We sponsor several defined benefit pension schemes outside the United States:

27 unchanged sentences

Interest cost 4,120 3,054 313 256

Actuarial loss (gain) ( 27,046 ) ( 12,177 ) ( 807 ) ( 640 )

Actuarial gain

( 140 ) ( 27,046 ) ( 441 ) ( 807 )

Benefits and expenses ( 4,327 ) ( 5,817 ) ( 910 ) ( 783 )

141 unchanged sentences

We contribute amounts to our defined benefit pension plans at least equal to the minimum amounts required by applicable employee benefit laws and local tax laws.

We expect to make contributions of approximately $ 3,955 during fiscal 2024.

As of March 31, 2024, we were no longer in a position where future contributions are required.

Planned contribution amounts for fiscal 2025 have been cancelled.

Based upon the actuarial assumptions utilized to develop our benefit obligations at March 31, 2024, the following benefit payments are expected to be made to plan participants:

34 unchanged sentences

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.

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

COMMITMENTS AND CONTINGENCIES

4 unchanged sentences

For certain types of claims, we presently maintain insurance coverage for personal injury and property damage and other liability coverages in amounts and with deductibles that we believe are prudent, but there can be no assurance that these coverages will be applicable or adequate to cover adverse outcomes of claims or legal proceedings against us.

Civil, criminal, regulatory or other proceedings involving our products or services could possibly result in judgments, settlements or administrative or judicial decrees requiring us, among other actions, to pay damages or fines or effect recalls, or be subject to other governmental, Customer or other third party claims or remedies, which could materially effect our business, performance, prospects, value, financial condition, and results of operations.

Civil, criminal, regulatory or other proceedings involving our products or services could possibly result in judgments, settlements or administrative or judicial decrees requiring us, among other actions, to pay damages or fines or effect recalls, or be subject to other governmental, Customer or other third party claims or remedies, which could materially affect our business, performance, prospects, value, financial condition, and results of operations.

For additional information regarding these matters, see the risks and uncertainties described under the title "product and service related regulations and claims" in Item 1A.

29 unchanged sentences

When accounting for leases, we combine payments for leased assets, related services and other components of a lease.

The components of operating lease expense are as follows:

Year Ended Year Ended

March 31, 2023 March 31, 2022

The components of operating lease expense recognized in income from continuing operations in the consolidated statements of income are as follows:

Year Ended Year Ended Year Ended

March 31, 2024 March 31, 2023 March 31, 2022

Fixed operating lease expense $ 41,330 $ 39,473 $ 40,513

2 unchanged sentences

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

Year Ended Year Ended

March 31, 2023 March 31, 2022

Year Ended Year Ended Year Ended

March 31, 2024 March 31, 2023 March 31, 2022

Cash paid for amounts included in the measurement of operating lease liabilities $ 46,946 $ 45,249 $ 45,144

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BUSINESS SEGMENT INFORMATION

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

Healthcare, Applied Sterilization Technologies, Life Sciences and Dental.

Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.

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

Healthcare, AST, and Life Sciences.

Previously, we had four reportable business segments, however, as a result of the agreement to divest our Dental segment, Dental is presented as discontinued operations.

Historical information has been retrospectively adjusted to reflect these changes for comparability, as required.

For more information, refer to Note 4 titled, "Discontinued Operations." Non-allocated operating costs that support the entire Company and items not indicative of operating trends are excluded from segment operating income.

Our Healthcare segment provides a comprehensive offering for healthcare providers worldwide, focused on sterile processing departments and procedural centers, such as operating rooms and endoscopy suites.

2 unchanged sentences

to outsourced instrument reprocessing services.

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.

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

Our AST segment supports medical device and pharmaceutical manufacturers through a global network of contract sterilization and laboratory testing facilities, and integrated sterilization equipment and control systems.

Our technology-neutral offering supports Customers every step of the way, from testing through sterilization.

Our Life Sciences segment provides a comprehensive offering of products and services that support pharmaceutical manufacturing, primarily for vaccine and other biopharma Customers focused on aseptic manufacturing.

These solutions include a full suite of consumable products, equipment maintenance and specialty services, and capital equipment.

Our Dental segment provides a comprehensive offering for dental practitioners and dental schools, offering instruments, infection prevention consumables and instrument management systems.

Our Life Sciences segment provides a comprehensive offering of products and services designed to support biopharmaceutical and medical device research and manufacturing facilities, in particular those focused on aseptic manufacturing.

Our portfolio includes a full suite of capital equipment, consumable products, equipment maintenance and specialty services.

We d isclose a measure of segment income that is consistent with the way management operates and views the business.

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

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 47.4 % and 45.1 % o f our Dental segment revenues for the years ended March 31, 2023 and 2022, respectively.

For the three years ended March 31, 2024, revenues from a single Customer did not represent ten percent or more of the Healthcare, AST or Life Sciences segment revenues.

STERIS PLC AND SUBSIDIARIES

4 unchanged sentences

Healthcare $ 3,613,019 $ 3,085,131 $ 2,845,467

Applied Sterilization Technologies 914,431 852,972 685,912

AST 953,980 914,431 852,972

Life Sciences 571,702 536,704 524,964

Dental 421,573 361,661 —

Total revenues $ 5,138,701 $ 4,536,266 $ 4,223,403

1 unchanged sentence

Healthcare 871,358 706,020 649,704

Applied Sterilization Technologies 429,020 410,101 310,648

AST 439,744 429,020 410,101

Life Sciences 221,349 210,225 216,188

Dental 89,527 84,441 —

Corporate ( 348,497 ) ( 264,974 ) ( 283,665 )

5 unchanged sentences

Tax restructuring costs (3)

661 301 1,592

Gain on fair value adjustment of acquisition related contingent consideration (1)

— ( 3,100 ) ( 2,350 )

Net (gain) loss on divestiture of businesses (1)

Net loss (gain) on divestiture of businesses (1)

873 ( 67 ) ( 874 )

1 unchanged sentence

10,032 11,370 53,139

COVID-19 incremental costs (4)

Restructuring charges (credit) (5)

Restructuring charges (4)

44,365 485 48

Goodwill impairment loss (6)

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

Income from Operations $ 836,118 $ 791,101 $ 477,815

(1) For more information regarding our recent acquisitions and divestitures, refer to Note 3 titled, "Business Acquisitions and Divestitures."

1 unchanged sentence

(3) Costs incurred in tax restructuring.

(4) COVID-19 incremental costs includes the additional costs attributable to COVID-19 such as enhanced cleaning protocols, personal protective equipment for our employees, event cancellation fees, and payroll costs associated with our response to COVID-19, net of any government subsidies available.

(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 and Life Sciences segments.

(4) For more information regarding our restructuring efforts, refer to Note 2 titled, "Restructuring ."

STERIS PLC AND SUBSIDIARIES

1 unchanged sentence

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

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 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.

3 unchanged sentences

Healthcare and Life Sciences $ 7,055,576 $ 6,557,742

Applied Sterilization Technologies 3,124,341 3,053,116

Dental 1,159,228 1,765,585

Total assets $ 10,821,839 $ 11,423,594

AST 3,203,217 3,129,258

Assets excluding assets held for sale

$ 10,258,793 $ 9,687,000

Years Ended March 31, 2024 2023 2022

1 unchanged sentence

Healthcare and Life Sciences $ 114,164 $ 98,585 $ 84,487

Applied Sterilization Technologies 253,914 198,350 164,816

Dental 9,470 4,726 —

AST 237,012 253,914 198,350

Total Capital Expenditures $ 351,176 $ 352,499 $ 282,837

1 unchanged sentence

Healthcare and Life Sciences $ 322,244 $ 306,377 $ 316,222

Applied Sterilization Technologies 116,153 115,925 112,971

Dental 130,367 120,957 —

AST 127,823 116,153 115,925

Total Depreciation, Depletion, and Amortization $ 450,067 $ 422,530 $ 432,147

(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.

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

For more information regarding our recent acquisitions and divestitures see Note 3 titled, "Business Acquisitions and Divestitures."

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Total Healthcare Revenues $ 3,613,019 $ 3,085,131 $ 2,845,467

Applied Sterilization Technologies:

Capital equipment $ 14,519 $ 26,460 $ 24,394

Service $ 939,461 $ 887,971 $ 828,578

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

Total AST Revenues $ 953,980 $ 914,431 $ 852,972

Life Sciences:

3 unchanged sentences

Total Life Sciences Revenues $ 571,702 536,704 524,964

Dental Revenues $ 421,573 $ 361,661 $ —

Total Revenues $ 5,138,701 $ 4,536,266 $ 4,223,403

3 unchanged sentences

We calculate diluted earnings per share based upon the weighted average number of shares outstanding plus the dilutive effect of share equivalents calculated using the treasury stock method.

Income from continuing operations is used as the benchmark to determine whether share equivalents are dilutive or anti-dilutive.

The following is a summary of shares and share equivalents outstanding used in the calculations of basic and diluted earnings per share:

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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.

REPURCHASES OF ORDINARY SHARES

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

As of March 31, 2024, there was $ 500,000 (net of taxes, fees and commissions) of remaining availability under the Board authorized share repurchase program.

The share repurchase program has no specified expiration date.

STERIS PLC AND SUBSIDIARIES

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

13.REPURCHASES OF ORDINARY SHARES

On May 7, 2019, our Board of Directors authorized a share repurchase program resulting in a share repurchase authorization of approximately $ 78,979 (net of taxes, fees and commissions).

On July 30, 2019, our Board of Directors approved an increase in the May 7, 2019 authorization of an additional amount of $ 300,000 (net of taxes, fees and commissions).

As of March 31, 2023, there was approximately $ 13,932 (net of taxes, fees and commissions) of remaining availability under the Board authorized share repurchase program.

The share repurchase program has no specified expiration date.

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

2 unchanged sentences

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

During fiscal 2024, we had no share repurchase activity pursuant to share repurchase program 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 authorizations under the share repurchase program.

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 under the share repurchase program.

During fiscal 2024, we obtained 76,645 of our ordinary shares in the aggregate amount of $ 11,765 in connection with share-based compensation award programs.

1 unchanged sentence

During fiscal 2022, we obtained 244,395 of our ordinary shares in the aggregate amount of $ 30,775 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.

SHARE-BASED COMPENSATION

1 unchanged sentence

We satisfy share award incentives through the issuance of new ordinary shares.

Stock options provide the right to purchase our shares at the market price on the date of grant, or for options granted to employees in fiscal 2019 and thereafter, 110% of the market price on the date of grant, subject to the terms of the plan and agreements.

Generally, one-fourth of the stock options granted to employees become exercisable for each full year of employment following the grant date.

Stock options granted generally expire 10 years after the grant date, or in some cases earlier if the option holder is no longer employed by us.

Restricted shares and restricted share units generally cliff vest after a four year period or vest in tranches of one-fourth of the number granted for each year of employment after the grant date.

Stock option awards to employees generally vest and become nonforfeitable in increments of 25% per year over a four-year period, with full vesting four years after the date of grant.

Historically, restricted stock awards to employee recipients generally cliff vested on the fourth anniversary of the grant date if the recipient remained in continuous employment through that date.

Beginning with fiscal 2024 grants, Company restricted stock (and restricted stock units) generally cliff vest over a three year period after the grant date.

However, employees who are grantees of restricted stock and have attained age 55 and been employed for at least 5 years at the time of the grant or meet these criteria during the term of the grant and are employed in the U.S.

or in a few other foreign jurisdictions, or employees who have 25 years of service at the time of grant or meet that criterion during the term of the grant, will be subject to installment vesting rules over the applicable vesting period.

Awards to certain employees in the U.S.

or a few other jurisdictions may provide for continued vesting after “retirement,” if certain conditions are met.

As of March 31, 2024, 2,370,422 shares remained available for grant under the long-term incentive plan.

47 unchanged sentences

Restricted shares and restricted share unit grants are valued based on the closing stock price at the grant date.

The value of restricted shares and units that vested during fiscal 2023 was $ 21,154 .

The value of restricted shares and units at the time of grant that vested during fiscal 2024 was $ 27,149 .

As of March 31, 2024, there was a total of $ 60,130 in unrecognized compensation cost related to non-vested share-based compensation granted under our share-based compensation plans.

5 unchanged sentences

In connection with the June 2, 2021 acquisition of Cantel, outstanding, non-vested Cantel restricted share units were replaced with STERIS restricted share units.

A total 280,402 STERIS restricted share units replaced Cantel awards based on a ratio of one Cantel restricted share unit to 0.4262 STERIS restricted share units.

These Cantel awards consisted of time and performance based awards.

Cantel time based restricted share units were replaced with STERIS restricted share units with the same three-year pro-rata vesting terms based on the original award date.

Performance based Cantel restricted share units were replaced with time based STERIS restricted share units that vest pro rata over the remaining one, two or three anniversaries from the original Cantel award date.

The number of performance restricted share units was replaced based on the original target achievement level.

All replacement restricted share units retained dividend accumulation rights.

The fair value of each STERIS restricted share unit awarded on June 2, 2021 to replace outstanding non-vested Cantel restricted share units was $ 191.18 based on the closing price of STERIS ordinary shares on June 2, 2021.

Approximately $ 18,173 of the total $ 53,607 grant date fair value was attributable to pre-acquisition services provided and was recorded as a component of purchase consideration in connection with the acquisition of Cantel.

During fiscal 2022, recognition of unamortized share-based compensation expense totaling $ 20,200 was accelerated in connection with the termination of certain Cantel employees in fiscal 2022.

As a result of the formal notices provided and the terms of the Cantel share-based compensation plans and Cantel Executive Severance and Change of Control Plan, the restricted share units vested requiring acceleration of the remaining related compensation cost.

As of March 31, 2024, there was a total of $ 3 in unrecognized compensation cost related to non-vested STERIS restricted share units awarded to replace Cantel restricted share units.

We expect to recognize the cost over a weighted average period of 0.6 years.

We expect to recognize the remaining cost in fiscal 2025.

A summary of the non-vested restricted share units activity associated with the Cantel share-based compensation plans is presented below:

32 unchanged sentences

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

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, 2024, we held foreign currency forward contracts to buy 48.0 million British pounds sterling and 4.0 million euros;

and to sell 150.0 million Mexican pesos, and 18.0 million Australian dollars.

At March 31, 2024, we held commodity swap contracts to buy 789.0 thousand pounds of nickel.

47 unchanged sentences

Employees who made deferrals are entitled to receive distributions of their hypothetical account balances (amounts deferred, together with earnings (losses)).

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 (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.

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

During fiscal 2024 and fiscal 2023, we recorded gains (losses) of $ 1,060 and $( 1,176 ), respectively, related to these investments.

In addition, during fiscal 2024 we sold one of our equity investments which had a value of $ 3,342 .

(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, 2022 $ 10,550

Liabilities assumed in acquisition of Cantel 25,000

Additions 8,302

5 unchanged sentences

Payments ( 5,967 )

Adjustments ( 3,100 )

Foreign currency translation adjustments ( 24 )

Balance at March 31, 2024 $ 11,000

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.

Additions of contingent consideration obligations during fiscal year 2024 and 2023 were primarily related to our fiscal year 2024 and 2023 acquisitio ns.

Payments of contingent consideration obligations during fiscal year 2024 were primarily related to payouts from prior period acquisitions.

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

9 unchanged sentences

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

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 )

Other Comprehensive Income (Loss) before reclassifications

615 ( 799 ) 11,148 ( 7,211 ) ( 109,638 ) ( 155,360 ) ( 6,596 ) ( 110,437 ) ( 144,212 )

Amounts reclassified from Accumulated Other Comprehensive Loss

( 1,351 ) ( 465 ) ( 4,353 ) — — — ( 1,351 ) ( 465 ) ( 4,353 )

Net current-period Other Comprehensive (Loss) Income ( 736 ) ( 1,264 ) 6,795 ( 7,211 ) ( 109,638 ) ( 155,360 ) ( 7,947 ) ( 110,902 ) ( 148,565 )

Ending Balance $ ( 724 ) $ 12 $ 1,276 $ ( 327,933 ) $ ( 320,722 ) $ ( 211,084 ) $ ( 328,657 ) $ ( 320,710 ) $ ( 209,808 )

(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.

(1) The a mortization (gain) of defined benefit plan costs is 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)

As a result of the agreement to divest our Dental segment, Dental is presented as discontinued operations.

Historical information has been retrospectively adjusted to reflect these changes for comparability, as required.

Quarters Ended Full Year

March 31, December 31, September 30, June 30,

Revenues $ 5,138,701 $ 1,419,387 $ 1,297,724 $ 1,238,204 $ 1,183,386

Cost of revenues 2,920,541 836,485 737,698 691,976 654,382

Gross profit 2,218,160 582,902 560,026 546,228 529,004

Percentage of Revenues 43.2 % 41.1 % 43.2 % 44.1 % 44.7 %

Income from continuing operations before income tax expense 702,810 190,575 189,602 155,852 166,781

Income tax expense 149,530 37,276 40,999 35,055 36,200

Income from continuing operations 553,280 153,299 148,603 120,797 130,581

Loss from discontinued operations ( 173,201 ) ( 154,301 ) ( 7,658 ) ( 4,451 ) ( 6,791 )

Net income (loss) 380,079 ( 1,002 ) 140,945 116,346 123,790

Net income (loss) attributable to shareholders $ 378,239 $ ( 1,377 ) $ 140,743 $ 115,319 $ 123,554

Basic earnings per ordinary share attributable to shareholders

Continuing Operations $ 5.58 $ 1.55 $ 1.50 $ 1.21 $ 1.32

Discontinued Operations $ ( 1.75 ) $ ( 1.56 ) $ ( 0.08 ) $ ( 0.04 ) $ ( 0.07 )

Total $ 3.83 $ ( 0.01 ) $ 1.42 $ 1.17 $ 1.25

Diluted earnings per ordinary share attributable to shareholders

Continuing Operations $ 5.55 $ 1.54 $ 1.49 $ 1.20 $ 1.31

Discontinued Operations $ ( 1.74 ) $ ( 1.55 ) $ ( 0.08 ) $ ( 0.04 ) $ ( 0.07 )

Total $ 3.81 $ ( 0.01 ) $ 1.42 $ 1.16 $ 1.25

Revenues $ 4,536,266 $ 1,281,252 $ 1,112,431 $ 1,090,939 $ 1,051,644

Cost of revenues 2,555,540 734,850 634,244 608,627 577,819

Gross profit 1,980,726 546,402 478,187 482,312 473,825

Percentage of Revenues 43.7 % 42.6 % 43.0 % 44.2 % 45.1 %

Income from continuing operations before income tax expense 680,266 203,402 171,539 159,325 146,000

Income tax expense 124,069 21,203 40,534 35,417 26,915

Income (loss) from continuing operations 556,197 182,199 131,005 123,908 119,085

Income (loss) from discontinued operations ( 450,384 ) 4,765 ( 7,680 ) ( 439,139 ) ( 8,330 )

Net income (loss) 105,813 186,964 123,325 ( 315,231 ) 110,755

Net income (loss) attributable to shareholders $ 107,030 $ 187,225 $ 123,828 $ ( 315,285 ) $ 111,262

Basic Income Per Ordinary Share Attributable to Shareholders:

Continuing Operations $ 5.59 $ 1.84 $ 1.32 $ 1.24 $ 1.19

Discontinued Operations $ ( 4.52 ) $ 0.05 $ ( 0.08 ) $ ( 4.39 ) $ ( 0.08 )

Total $ 1.07 $ 1.89 $ 1.24 $ ( 3.15 ) $ 1.11

Diluted Income Per Ordinary Share Attributable to Shareholders:

Continuing Operations $ 5.56 $ 1.83 $ 1.31 $ 1.24 $ 1.19

Discontinued Operations $ ( 4.49 ) $ 0.05 $ ( 0.08 ) $ ( 4.39 ) $ ( 0.08 )

Total $ 1.07 $ 1.88 $ 1.24 $ ( 3.15 ) $ 1.10

STERIS PLC AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

34 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